Ku vs.
RCBC Securities (2018) the claim, the clerk of court of the lower court involved or his duly-
authorized deputy has the responsibility of making a deficiency
Petitioners: STEPHEN Y. KU assessment. The party filing the case will be required to pay the
Respondents: RCBC SECURITIES, INC. deficiency, but jurisdiction is not automatically lost.
FACTS: Stephen Y. Ku opened an account with RCBC Securities
Ponente: Peralta (Third Division)
on June 5, 2007 for the purchase and sale of securities.
Topic: Remedial Law
On February 22, 2013, Ku filed with the RTC of Makati a
SUMMARY: Ku filed a complaint for sum of money and specific Complaint for Sum of Money and Specific Performance with
performance with damages against RCBC Securities, seeking to Damages against respondent. Pertinent portions of his allegations
recover money and stocks sold without his consent. The CA read as follows:
dismissed the case, holding that Branch 63 (a non-Special
4. Unknown to plaintiff, the name of M.G. Valbuena
Commercial Court) had no jurisdiction over the case, since it ("MGV") was deliberately inserted beside the name of Ivan L.
involved an intra-corporate controversy and insufficient docket fees Zalameda as one of. the agents after plaintiff completed and
were paid. signed the Agreement.
DOCTRINE: 5. As to when the fraudulent insertion was made, plaintiff
has no idea. Plaintiff only discovered this anomaly when plaintiff
An intra-corporate controversy is one which pertains to any recently requested for a copy of his Account Information.
of the following relationships: (I) between the corporation,
partnership or association and the public; (2) between the 6. In the course of plaintiff's trading transactions with
corporation, partnership or association and the State insofar as its RSEC, MGV represented herself as a Sales Director of RSEC,
duly authorized to transact business on behalf of the latter. xxxx
franchise, permit or license to operate is concerned; (3) between
the corporation, partnership or association and its stockholders, 7. With this representation, plaintiff continued to transact
partners, members or officers; and (4) among the stockholders, business with RSEC through MGV, on the honest belief that the
partners or associates themselves. Thus, under the relationship latter was acting for and in behalf of RSEC. xxx
test, the existence of any of the above intra-corporate relations
13. Sometime in January 2012, it came to the knowledge
makes the case intra-corporate.
of plaintiff that his account with RSEC was subject of
Indeed, this Court has held that the ruling in Manchester mismanagement. MGV was blacklisted by RSEC due to
does not apply to cases where insufficient filing fees were paid numerous fraudulent and unauthorized transactions committed by
the former. Worse, MGV allegedly was able to divert investments
based on the assessment made by the clerk of court, and there was
made by "high networth" clients of RSEC into some other
no intention to defraud the government. It was further held that the
accounts. xxx
filing of the complaint or appropriate initiatory pleading and the
payment of the prescribed docket fee vest a trial court with 16. In the same letter, plaintiff made clear to RSEC that it
jurisdiction over the subject matter or nature of the action. If the has never authorized a discretionary account with MGV and
amount of docket fees paid is insufficient considering the amount of requested for all documents relative to plaintiff's audit. xxxx
17. After audit, plaintiff has conclusively determined that The CA reversed and dismissed Ku’s complaint, on the
there were FOUR HUNDRED SIXTY-SEVEN (467) unauthorized ground of lack of jurisdiction by Branch 63. Thus, the case should
transactions in his account. A review of the said transactions have been dismissed.
would show that multiple buying and selling transactions on the
same day were repeatedly done over a period of four (4) years. ISSUES:
Ku prayed for the payment of the amounts and the shares WoN RTC Branch 63 has jurisdiction
of stock resulting from his independent audit after excluding all o YES. The Court finds, and so holds, that the case is
unauthorized trades. Ku also sought the recovery of treble not an intra-corporate dispute and, instead, is an
damages, exemplary damages and attorney's fees. ordinary civil action. There are no intra-corporate
relations between the parties. Ku is neither a
The Complaint, docketed as Civil Case No. 13-171, was
stockholder, partner, member or officer of RCBC
raffled off to Branch 63, RTC of Makati. On May 29, 2013, RCBC
Securities corporation. The parties' relationship is
Securities filed a Motion to Dismiss.
limited to that of an investor and a securities broker.
The RTC of Makati, Branch 63, issued its questioned Order Moreover, the questions involved neither pertain to
dated September 12, 2013, to wit: the parties' rights and obligations under the
Corporation Code, if any, nor to matters directly
xxxx After going over plaintiff's [herein Ku's] Complaint relating to the regulation of the corporation.
and defendant's [herein respondent's] Motion to Dismiss and the o On the basis of the foregoing, since the Complaint
Reply that followed, the Court is of the considered view that this
filed by Ku partakes of the nature of an ordinary civil
case involves trading of securities.
action, it is clear that it was correctly raffled-off to
Consequently, the case should be heard and tried before Branch 63. Hence, it is improper for it (Branch 63) to
a Special Commercial Court. Accordingly, the Court's Branch have ordered the re-raffle of the case to another
Clerk of Court is forthwith directed to forward the entire record of branch of the Makati RTC.
the case to the Office of the Clerk of Court for re-raffle. o Nonetheless, the September 12, 2013 Order of
Branch 63, although erroneous, was issued in the
The case was, subsequently, re-raffled to Branch 149 of the
valid exercise of the RTC's jurisdiction. Such
RTC of Makati. Thereafter, in its Order dated October 25, 2013, the
mistaken Order can, thus, be considered as a mere
RTC of Makati, Branch 149, denied the Motion to Dismiss for lack
procedural lapse which does not affect the
of merit. It held that Ku's payment of insufficient docket fees does
jurisdiction which the RTC of Makati had already
not warrant the dismissal of the Complaint and that the trial court
acquired.
still acquires jurisdiction over the case subject to the payment of the
o Moreover, while designated as a Special
deficiency assessment. The RTC, thus, ordered Ku "to pay the
Commercial Court, Branch 149, to which it was
docket fees on the value of the shares of stocks being prayed to be
subsequently re-raffled, retains its general
returned to him, within thirty (30) days from receipt" of the said
jurisdiction to try ordinary civil cases such as Ku's
Order.
Complaint. In addition, after its re-raffle to Branch
149, the case remained docketed as an ordinary civil
case. Thus, the Order dated October 12, 2013 was, would show that there was no deliberate intent to
likewise issued by Branch 149 in the valid exercise defraud the court in the payment of docket fees.
of the RTC's jurisdiction.
WoN the trial court acquired jurisdiction despite payment of NOTES: CA decision REVERSED. Civil Case No. 13-171, entitled
insufficient docket fees Stephen Y. Ku v. RCBC Securities, Inc., is hereby REINSTATED
o YES/NO. In the present case, the Court does not and the Regional Trial Court of Makati City, Branch 149, is
agree with the CA when it ruled that "the intention of DIRECTED to PROCEED WITH THE HEARING of the case, with
[Ku] Ku to evade payment of the correct filing fees[,] utmost dispatch, until its termination. ·
if not to mislead the docket clerk in the assessment
of the filing fees[,] is manifest." The fact alone that
Ku failed to indicate in the body of his Complaint as
well as in his prayer, the value of the shares of
stocks he wishes to recover from RCBC Securities
is not sufficient proof of a deliberate intent to defraud
the court in the payment of docket fees. On the
contrary, there is no dispute that upon filing of his
Complaint, Ku paid docket fees amounting to
P1,465,971.41, which was based on the
assessment made by the clerk of court.
o In a number of cases, this Court has ruled that the
plaintiff's payment of the docket fees based on the
assessment made by the docket clerk negates bad
faith or intent to defraud the government. There is,
likewise, no dispute that, subsequently, when
ordered by Branch 149 to pay additional docket fees
corresponding to the value of the shares of stocks
being recovered, Ku immediately paid an additional
sum of P464,535.83.
o Moreover, unlike in Manchester where the
complainant specified in the body of the complaint
the amount of damages sought to be recovered but
omitted the same in its prayer, Ku in the instant case
consistently indicated both in the body of his
Complaint and in his prayer, the number of shares
sought to be recovered, albeit without their
corresponding values. The foregoing circumstances
