G.R. No. L-57586 October 8, 1986
AQUILINO RIVERA, ISAMU AKASAKO and FUJIYAMA HOTEL & RESTAURANT, INC., petitioners, vs. THE HON. ALFREDO C. FLORENDO, as Judge of the Court of First Instance of Manila (Branch XXXVI), LOURDES JUREIDINI and MILAGROS TSUCHIYA, respondents.

FACTS

Private respondents Lourdes Jureidini and Milagros Tsuchiya purchased shares of stock in petitioner Fujiyama Hotel & Restaurant, Inc., acquiring a total of 3,300 shares out of 5,649 outstanding subscribed shares, thereby becoming majority stockholders. The stock certificates were properly endorsed, with some specifically endorsed to Jureidini and others endorsed in blank. Petitioner Aquilino Rivera, in whose name some shares were held for the benefit of co-petitioner Isamu Akasako, admitted the genuineness of the corporate officers’ signatures and the endorsements. Despite this, the corporation, through its officers, refused to register the transfer of these shares to the private respondents. Consequently, the private respondents filed a special civil action for mandamus with damages and a prayer for a preliminary mandatory injunction in the Court of First Instance to compel the registration and to allow them to manage the corporate property.
The respondent judge granted the application for a preliminary mandatory injunction, ordering petitioners to allow private respondents to manage the hotel and restaurant upon posting a bond, which was later increased. Petitioners moved for reconsideration and to dismiss the petition for lack of jurisdiction, arguing that the case was an intra-corporate dispute falling under the exclusive jurisdiction of the Securities and Exchange Commission (SEC). The respondent judge denied both motions. Petitioners then filed this petition for certiorari and prohibition with the Supreme Court, which issued a preliminary injunction against the enforcement of the lower court’s writ.

ISSUE

The primary issue is whether the respondent Court of First Instance had jurisdiction over the special civil action for mandamus filed by the private respondents.

RULING

The Supreme Court ruled that the respondent judge acted without jurisdiction. The Court explained that the action, although denominated as a special civil action for mandamus, was in substance an intra-corporate controversy. The core of the dispute involved the refusal of the corporate officers to register the transfer of shares to the new majority stockholders and the consequent demand for the management of the corporate property based on that stock ownership. Under Presidential Decree No. 902-A, as amended, such controversies arising from intra-corporate relations, specifically those involving the registration of transfers of corporate shares, fall within the exclusive original jurisdiction of the SEC. A writ of mandamus cannot be used to circumvent this exclusive jurisdiction. Therefore, the lower court’s orders issuing the preliminary mandatory injunction were issued without authority and are null and void. The Supreme Court set aside the assailed orders. However, instead of dismissing the case outright, and considering that all parties were already before the Court, it treated the petition as an ordinary civil action for specific performance and remanded the case to the lower court for trial on the merits. The Court also dismissed the contempt charge against respondent Jureidini, finding her actions did not constitute willful defiance of the Court’s injunction.