G.R. No. 78206 March 19, 1990
PAULINO ZAMORA, ET AL., petitioners, vs. HONORABLE COURT OF APPEALS, MEDINA RECREATION CENTER, INC., ET AL., respondents.

FACTS

The petitioners and private respondents were members of the Medina People’s Cockpit Association, an unregistered partnership formed in 1966. In 1975, the association’s funds were used to purchase a lot and construct a building. In 1976, the Medina Recreation Center, Inc. was incorporated, with respondent Felomino Delegencia and relatives as incorporators. The association’s properties were transferred to this corporation in 1977. Alleging irregularities in this transfer, the petitioners filed a complaint with the Securities and Exchange Commission (SEC) in 1979, wherein they averred they were stockholders of the corporation. Five months later, they filed a similar complaint with the Court of First Instance (CFI) of Misamis Oriental, which they later amended to delete the allegation that they were suing as stockholders.
The private respondents moved to dismiss the CFI case for lack of jurisdiction, arguing it was an intra-corporate dispute under P.D. No. 902-A, falling within the exclusive jurisdiction of the SEC. The trial court denied the motion and proceeded to trial, even appointing a receiver. The private respondents then elevated the issue via a petition for certiorari to the Supreme Court, which referred it to the Court of Appeals. The CA granted the petition, annulled the trial court’s orders, and directed it to desist from further proceedings.

ISSUE

Whether the Regional Trial Court (formerly CFI) or the Securities and Exchange Commission has jurisdiction over the complaint filed by the petitioners.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, holding that jurisdiction lies with the Securities and Exchange Commission. The legal logic is anchored on the nature of the dispute and the principle that jurisdiction over the subject matter is conferred by law and cannot be waived or altered by the parties’ actions. The petitioners initially invoked SEC jurisdiction by filing a complaint there and alleging they were stockholders of the corporation. Their subsequent amendment of the complaint in the CFI to remove this allegation did not divest the SEC of its jurisdiction, as the amendment was made without leave of court and the essential character of the dispute remained. The Court ruled that the controversy, involving the transfer of the unregistered association’s assets to the corporation and the rights of the members, constituted an intra-corporate dispute under P.D. No. 902-A. This law vested the SEC with original and exclusive jurisdiction over controversies arising out of intra-corporate relations.
Furthermore, the defense of lack of jurisdiction can be raised at any stage of the proceedings. The private respondents’ failure to persistently assert it earlier did not constitute laches or estoppel, as jurisdiction is a matter of law and a judgment rendered without it is void. The exception in Tijam v. Sibonghanoy, where a party may be barred by laches from challenging jurisdiction, did not apply because the respondents had questioned jurisdiction from the outset. Thus, the proper forum for resolving the validity of the property transfer is the SEC, not the regular courts.