G.R. No. 79902 May 30, 1989
METRO MANILA TRANSIT CORPORATION, petitioner, vs. HON. CONCHITA C. MORALES, Presiding Judge Regional Trial Court, Branch 110, Pasay City, PEDRO M. SAN JUAN JR., et al., respondents.

FACTS

Private respondents, the sole stockholders of CBL Transit Incorporated (CBLT), filed a derivative suit against petitioner Metro Manila Transit Corporation (MMTC) before the Regional Trial Court. They sought to regain management and control of CBLT from MMTC, alleging that MMTC’s takeover of CBLT’s operations in November 1982 was illegal and done without their consent, making MMTC an intruder. The RTC assumed jurisdiction and the proceedings had progressed past the midway point. MMTC contested the RTC’s jurisdiction, asserting the dispute was intracorporate and thus within the exclusive original jurisdiction of the Securities and Exchange Commission (SEC) under P.D. 902-A.

ISSUE

Whether the dispute between the CBLT stockholders and MMTC is an intracorporate controversy falling within the exclusive jurisdiction of the SEC.

RULING

Yes. The Supreme Court denied the motion for reconsideration and affirmed its prior resolution, holding the dispute is intracorporate and within the SEC’s exclusive jurisdiction. The legal logic rests on establishing an intracorporate relationship between the parties, which negates the claim that MMTC was a mere outsider or intruder. First, MMTC was a stockholder of CBLT from the execution of a Lease-Purchase Agreement, holding five shares and entitled to a board seat. Second, a Voting Trust Agreement dated November 25, 1982, transferred title and voting rights of private respondents’ 7,475 shares to MMTC as trustee. This agreement was still in effect when the suit was filed. Thus, the action between CBLT stockholders and their trustee is inherently a matter of corporate relations.
The Court rejected the argument that lack of consent to the 1982 takeover made MMTC an intruder, thereby removing the case from SEC jurisdiction. Even assuming the initial takeover lacked consent, private respondents’ subsequent conduct constituted acquiescence and estoppel. Two private respondents accepted positions in the MMTC-dominated board. More critically, they raised no overt protest or legal action to disavow the takeover and the election of MMTC nominees for nearly five years, only filing suit after MMTC notified them of massive unpaid rentals. Their prolonged silence and inaction estopped them from later denying the corporate relationship and labeling the directors as interlopers. The doctrine of estoppel treats the apparent state of affairs as real.
Consequently, the allegations demonstrate an intracorporate dispute involving stockholders and the corporation’s control and management. The Court emphasized that the proper forum is a jurisdictional imperative, not a mere technicality to be waived for expediency, despite the advanced stage of the RTC trial. The specialized competence of the SEC in resolving such technical corporate matters is paramount.