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Yujuico V Quiambao Digest

The Supreme Court ruled that the RTC, not the SEC, has jurisdiction over intra-corporate controversies under the Securities Regulation Code. Specifically, the RTC has the power to hear disputes between shareholders and order special shareholder meetings to resolve intra-corporate issues. While the SEC previously had this authority, the Code transferred jurisdiction over intra-corporate cases to the RTC to be decided in courts of general jurisdiction. As such, the RTC judge properly exercised authority in ordering a special shareholder meeting between disputing parties in this case.

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426 views1 page

Yujuico V Quiambao Digest

The Supreme Court ruled that the RTC, not the SEC, has jurisdiction over intra-corporate controversies under the Securities Regulation Code. Specifically, the RTC has the power to hear disputes between shareholders and order special shareholder meetings to resolve intra-corporate issues. While the SEC previously had this authority, the Code transferred jurisdiction over intra-corporate cases to the RTC to be decided in courts of general jurisdiction. As such, the RTC judge properly exercised authority in ordering a special shareholder meeting between disputing parties in this case.

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Jun Jun
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We take content rights seriously. If you suspect this is your content, claim it here.
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YUJUICO vs.

QUIAMBAO
G.R. No. 168639, January 29, 2007
TOPIC: SEC JURISDICTION

FACTS: On July 27, 1998, the Securities and Exchange Commission (SEC) approved the amendment of
STRADEC’s Articles of Incorporation authorizing the change of its principal office from Pasig City to
Bayambang, Pangasinan.3

On March 1, 2004, STRADEC held its annual stockholders’ meeting in its Pasig City office as indicated in the
notices sent to the stockholders.4 At the said meeting, herein petitioners and respondents were elected
members of the Board of Directors.

After five (5) months, or on August 16, 2004, respondents filed with the Regional Trial Court (RTC), San Carlos
City, Pangasinan a Complaint against STRADEC (represented by herein petitioners as members of its Board
of Directors) praying that: (1) the March 1, 2004 election be nullified on the ground of improper venue, pursuant
to Section 51 of the Corporation Code; (2) all ensuing transactions conducted by the elected directors be
likewise nullified; and (3) a special stockholders’ meeting be held anew.

On November 25, 2004, RTC Judge Meliton G. Emuslan acting as pairing judge, issued an Order10 granting
respondents’ application for preliminary injunction ordering the holding of a special stockholders’ meeting of
STRADEC on December 10, 2004 "in the principal office of the corporation in Bayambang, Pangasinan

A Petition for Certiorari was filed with the Court of Appeals assailing Judge Emuslan’s Order contending that
only the SEC, not the RTC, has jurisdiction to order the holding of a special stockholders’ meeting involving an
intra-corporate controversy. The CA dismissed the Petition for Certiorari. Petitioners’ motion for reconsideration
was likewise denied.

Hence, the instant Petition for Review on Certiorari.

ISSUE: WON the RTC has jurisdiction to order the holding of a special stockholders’ meeting involving an
intra-corporate controversy.

RULING: Yes.

Upon the enactment of R.A. No. 8799, otherwise known as "The Securities Regulation Code" which took effect
on August 8, 2000,17 the jurisdiction of the SEC over intra-corporate controversies and other cases
enumerated in Section 5 of P.D. No. 902-A has been transferred to the courts of general jurisdiction, or the
appropriate RTC. Section 5.2 of R.A. No. 8799 provides:

5.2. The Commission’s jurisdiction over all cases enumerated in Section 5 of Presidential Decree No. 902-A is
hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court, Provided, That
the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall
exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving
intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the
enactment of this Code. The Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.

Clearly, the RTC has the power to hear and decide the intra-corporate controversy of the parties herein.
Concomitant to said power is the authority to issue orders necessary or incidental to the carrying out of the
powers expressly granted to it. Thus, the RTC may, in appropriate cases, order the holding of a special
meeting of stockholders or members of a corporation involving an intra-corporate dispute under its supervision.

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