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

Petitioners and private respondents organized the unregistered Medina People’s Cockpit Association in 1966. In 1975, association funds were used to purchase a lot and construct a building. In 1976, respondent Felomino Delegencia and relatives incorporated the Medina Recreation Center, Inc., to which the association’s properties were transferred in 1977. Alleging irregularities in this transfer, petitioners filed a complaint with the Securities and Exchange Commission (SEC) in 1979, asserting they were stockholders of the corporation. They did not pursue this and instead filed a similar complaint with the Court of First Instance (CFI, now RTC) of Misamis Oriental in 1980, initially including the stockholder allegation but later amending the complaint to delete it. Private respondents moved to dismiss for lack of jurisdiction, arguing the dispute was intra-corporate and thus within the exclusive jurisdiction of the SEC under P.D. No. 902-A.
The trial court denied the motion to dismiss and later placed the properties under receivership. Private respondents elevated the matter via 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 commanded the judge to desist from further proceedings, holding that the SEC had jurisdiction.

ISSUE

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

RULING

The Supreme Court affirmed the Court of Appeals, ruling that the SEC has exclusive jurisdiction. The legal logic centers on the nature of the dispute and the doctrine that jurisdiction over the subject matter is conferred by law and cannot be waived or conferred by consent. The Court found that the transfer of properties from the unregistered association to the corporation, and the allegations of fraud and irregularities in that transfer by the corporate officers, essentially involved an intra-corporate controversy. This is because the dispute arose from the relationship between the association members, who effectively became stockholders or members of the corporation upon the property transfer, and the corporate officers.
Petitioners’ act of first filing with the SEC, where they claimed to be stockholders, was significant. Their subsequent amendment of the CFI complaint to delete the stockholder 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 intra-corporate. The Court emphasized that jurisdiction is determined by the allegations in the complaint and the nature of the relationship between the parties. Since the controversy pertains to the internal affairs of the corporation and involves its officers, P.D. No. 902-A vested original and exclusive jurisdiction in the SEC.
Furthermore, the defense of lack of jurisdiction can be raised at any stage. The private respondents’ failure to persistently assert it earlier did not constitute laches or estoppel, as jurisdiction is a matter of law. The exception in Tijam v. Sibonghanoy regarding estoppel by laches did not apply because the respondents questioned jurisdiction from the outset. Thus, the RTC had no jurisdiction, and the proper forum for resolving the validity of the property transfer is the SEC.