G.R. No. L-15350. November 30, 1962.
MARIANO G. PINEDA, ARCADIO E. YABYABIN and MAXIMINO PIZARRO, petitioners, vs. HON. GREGORIO T. LANTIN, District Judge of the Court of First Instance of Manila, BACOLOD-MURCIA MILLING CO., INC. and J. AMADO ARANETA, respondents.

FACTS

Minority stockholders of Bacolod-Murcia Milling Co., Inc. filed a letter-complaint with the Securities and Exchange Commission (SEC), alleging corporate mismanagement and violations of law by the corporation and its President, J. Amado Araneta. SEC Commissioner Mariano G. Pineda ordered an investigation and designated petitioners Arcadio E. Yabyabin and Maximino Pizarro as investigators, who subsequently issued a subpoena duces tecum to the respondents. The corporation and Araneta moved to quash the subpoena and discontinue the proceedings, arguing that under Republic Act No. 1143 , the SEC’s investigative power was conditional upon the promulgation of implementing rules, which had not yet been adopted. The SEC denied these motions.
Respondents then filed a petition for prohibition with the Court of First Instance (CFI) of Manila, seeking to enjoin the SEC investigators from proceeding. The petitioners (SEC officials) moved to dismiss the CFI case, asserting that the lower court lacked jurisdiction to review, modify, or enjoin orders of the SEC, as such power was vested exclusively in the Supreme Court. Respondent Judge Gregorio T. Lantin denied the motion to dismiss and a subsequent motion for reconsideration, prompting the petitioners to elevate the case via certiorari and prohibition to the Supreme Court.

ISSUE

Whether a Court of First Instance has jurisdiction to enjoin the Securities and Exchange Commission or to review its interlocutory orders.

RULING

No. The Supreme Court ruled that a Court of First Instance has no jurisdiction to grant injunctive relief against the Securities and Exchange Commission or to review its orders; such power is lodged exclusively with the Supreme Court. The legal foundation is Section 1 of Rule 43 of the Rules of Court, which provides that any party aggrieved by an order or decision of the SEC may file a petition for review with the Supreme Court within thirty days. This exclusive appellate jurisdiction is reinforced by Section 35 of Commonwealth Act No. 83 , as amended.
The Court rejected the respondents’ argument that the CFI action was proper because it sought to challenge the SEC’s jurisdiction and that the appealed order was merely interlocutory. The Court held that the philosophy behind vesting exclusive review power in the Supreme Court would be rendered moot if lower courts could indirectly review SEC orders through writs of prohibition or injunction. Allowing such actions would enable parties to achieve indirectly what they cannot do directly. Furthermore, while interlocutory orders are generally not appealable, an exception exists when the order is grounded on a claim of lack of jurisdiction, in which case the remedy is to appeal to the Supreme Court, not to seek injunctive relief from a lower court.
The Court emphasized the SEC’s vital role in the national economy and the enforcement of corporate laws. To permit inferior courts to enjoin the SEC would impede its functions, substitute the judgment of lower courts for that of the specialized commission, and ultimately harm the public interest. The orders of the respondent judge were set aside, and the respondents were prohibited from proceeding with the civil case in the CFI.