GR L 59070; (March, 1982) (Digest)
G.R. No. L-59070 March 15, 1982
PHILIPPINE PACIFIC FISHING CO., INC., CHENG YONG, LILIA GAW and CHEN GUAT, petitioners, vs. HON. ARTEMON D. LUNA, Judge of the Court of First Instance of Manila; YOSHIO YAMAMOTO and MARILYN A. JAVIER, respondents.
FACTS
The controversy originated from a corporate dispute involving Philippine Pacific Fishing Co., Inc. Private respondents Yamamoto and Javier, as corporate officers, mortgaged company vessels to secure a corporate debt. Upon default, the creditor bank initiated foreclosure. To prevent this, an agreement was made with petitioner Cheng Yong, who paid the debt in exchange for a chattel mortgage on the vessels executed by the officers. Upon the corporation’s subsequent default to Cheng Yong, he foreclosed. Yamamoto and Javier then filed a complaint with the Securities and Exchange Commission (SEC), alleging the matter was an intra-corporate dispute (SEC Case No. 002042). The SEC assumed jurisdiction, issued restraining orders against the foreclosure, and later, the parties agreed to form a Management Committee with powers to take custody of corporate assets, including the vessels.
ISSUE
Whether the Court of First Instance (CFI) of Manila acted without jurisdiction in issuing a restraining order against the SEC and the parties to desist from further proceedings in the SEC case.
RULING
The Supreme Court ruled that the respondent CFI judge acted without jurisdiction. The legal logic is anchored on the exclusive and original jurisdiction of the SEC over intra-corporate controversies under Presidential Decree No. 902-A. Once the SEC validly assumes jurisdiction over a case, as it did here based on the complaint alleging intra-corporate matters, its orders are not subject to review, interference, or restraint by a Court of First Instance. The CFI and the SEC are, at the very least, co-equal bodies; one cannot control or enjoin the proceedings of the other. The proper remedy for any allegedly erroneous order of the SEC is within the SEC itself or ultimately via appeal to the Supreme Court, not through a collateral action in a regular court. Furthermore, the Court noted that a Manila CFI’s injunctive writ could not bind the SEC, whose offices are outside Manila. The challenged order was therefore a patent and manifest act in excess of jurisdiction and was annulled.