GR L 57707; (November, 1982) (Digest)
G.R. No. L-57707 November 19, 1982
PHILEX MINING CORPORATION, petitioner, vs. HON. DOMINGO CORONEL REYES, Presiding Judge, Court of First Instance of Albay, and RICHARD HUENEFELD, respondents.
FACTS
Private respondent Richard Huenefeld, a stockholder of petitioner Philex Mining Corporation, was issued Stock Certificate No. 190579 for 80,000 shares as a stock dividend. The certificate was sent via Philex’s transfer agent, but Huenefeld claimed non-receipt. The corporation, through its agent, requested Huenefeld to comply with the procedure for lost certificates under Republic Act No. 201 , requiring an affidavit of loss and publication. Huenefeld submitted an affidavit but refused further compliance, arguing the law was inapplicable and demanding a replacement certificate at the corporation’s expense.
Huenefeld filed a suit for Specific Performance with Damages against Philex in the Court of First Instance of Albay to compel issuance of a replacement certificate. Philex moved to dismiss, asserting that the dispute was intra-corporate and thus within the exclusive original jurisdiction of the Securities and Exchange Commission under Presidential Decree No. 902-A. The respondent judge denied the motion to dismiss and a subsequent motion for reconsideration, prompting Philex to elevate the case via certiorari.
ISSUE
Whether the Court of First Instance has jurisdiction over the controversy, or if it is an intra-corporate dispute falling under the exclusive jurisdiction of the Securities and Exchange Commission.
RULING
The Supreme Court ruled that the SEC has exclusive jurisdiction. The legal logic hinges on the broad and unequivocal language of Section 5 of P.D. No. 902-A, which grants the SEC original and exclusive jurisdiction over controversies arising out of intra-corporate relations between a stockholder and the corporation. The Court emphasized that the provision makes no distinctions or exemptions; it encompasses all kinds of controversies between these parties.
The core issue—a corporation’s obligation to replace a stockholder’s allegedly lost stock certificate—is intrinsically a matter concerning their corporate relationship. Huenefeld’s claim for damages was deemed merely incidental to this primary intra-corporate matter. The Court rejected his restrictive interpretation that intra-corporate controversies are limited to specific governance issues like election of directors or amendment of bylaws. The legislative intent is to centralize such corporate disputes within the specialized competence of the SEC, analogous to how labor disputes are vested in labor tribunals. The SEC itself, in a related case, had already affirmed its jurisdiction over the dispute. Consequently, the respondent court acted without jurisdiction, and its orders were annulled. The civil case was dismissed, with Huenefeld directed to seek relief in the pending SEC case.