G.R. Nos. 76828-32; January 28, 1991
SIXTO L. OROSA, JR., JOSE URANZA, GERVACIO E. FERIA, WILLIAM T. GUIDO and AZUCENA A. REYES, petitioners, vs. COURT OF APPEALS and MERCANTILE FINANCING CORPORATION, respondents.

FACTS

Petitioners made individual money market placements with private respondent Mercantile Financing Corporation. Upon the corporation’s failure to pay the placements at maturity, petitioners filed separate civil suits for sum of money and damages with prayers for preliminary attachment in the Regional Trial Court (RTC), alleging fraud in the corporation’s representations of financial capacity. The RTC granted the writs, declared the corporation in default for failure to plead, and rendered judgments in favor of petitioners. Execution pending appeal was granted, leading to an auction sale of the corporation’s properties.
During the proceedings, it was revealed that the Securities and Exchange Commission (SEC) had appointed a rehabilitation receiver for the corporation pursuant to P.D. 902-A and directed the suspension of all claims against it. The corporation moved to set aside the execution, arguing the SEC had exclusive jurisdiction. The RTC denied the motion. The Court of Appeals subsequently ruled that the SEC, not the RTC, possessed original and exclusive jurisdiction over the suits, declaring all RTC proceedings null and void.

ISSUE

Whether the Regional Trial Court or the Securities and Exchange Commission has jurisdiction over the petitioners’ suits for recovery of sum of money based on money market placements against a corporation under an SEC-appointed rehabilitation receiver.

RULING

The Supreme Court sustained the jurisdiction of the SEC. The Court held that under Section 3 of P.D. 902-A, the SEC has absolute jurisdiction, supervision, and control over all corporations. This jurisdiction is anchored on the corporation’s certificate of incorporation and juridical personality, which persists regardless of whether another regulatory body, like the Central Bank, revokes a specialized operating license. The causes of action, while ostensibly simple money claims, fell within the SEC’s exclusive domain because the defendant was a corporation under the SEC’s supervisory authority.
Crucially, the SEC had already exercised its jurisdiction under Section 5(d) of P.D. 902-A by placing the corporation under a rehabilitation receiver. Section 6(c) of the same decree mandates the suspension of all actions for claims against a corporation under receivership pending before any court. Therefore, upon the appointment of the receiver, the RTC was divested of jurisdiction, and all proceedings therein, including the default judgments and execution, were void. The Court affirmed the Court of Appeals’ decision, dismissing the complaints without prejudice to their refiling with the SEC.