corporations, partnership or associations; (d) Petitioners of corporations, partnerships or associations to be declared in the state of suspension of payment in cases where the corporation, partnership or association possesses sufficient property to cover all its debts but foresees the impossibility of meeting them when they fall due or in cases where the corporation, partnership or assciation has no sufficient assets to cover its liabilities but is under the management of a rehabilitation receiver or management committee created pursuant to this Decree. 30 However, Section 5.2 31 of Rep. Act No. 8799, transferred the erstwhile exclusive and original jurisdiction of the SEC over actions involving intra-corporate controversies to the courts of general jurisdiction, or the appropriate RTC. All intra-corporate cases pending in the SEC were to be transferred to the appropriate RTC. Congress thereby recognized the expertise and competence of the RTC to take cognizance of and resolve cases involving intra-corporate controversies. In compliance with the law, the Court issued, on November 21, 2000 a Resolution designating certain branches of the RTC in the National Capital Region to try and decide cases enumerated in Section 5 of P.D. No. 902-A. For Quezon City cases, the Court designated Branches 46 and 93 of the RTC. Branch 222 of the Quezon City RTC, which dismissed the complaint of the private respondent, was not so designated by the Court. On March 13, 2001, the Court approved the Interim Rules of Procedure for Intra- Corporate Controversies, which took effect on April 1, 2001. To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the Branches of the RTC specifically designated by the Court to try and decide such cases, two elements must concur: (a) the status or relationship of the parties; and (2) the nature of the question that is the subject of their controversy. 32 The first element requires that the controversy must arise out of intra-corporate or partnership relations between any or all of the parties and the corporation, partnership or association of which they are stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the State insofar as it concerns their individual franchises. The second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation. 33 If the nature of the controversy involves matters that are purely civil in character, necessarily, the case does not involve an intra- 13
corporate controversy. The determination of whether a contract is simulated or not is an issue that could be resolved by applying pertinent provisions of the Civil Code. 34 In the present recourse, it is clear that the private respondent’s complaint in the RTC is not an intra- corporate case. For one thing, the private respondent has
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- Spring '16
- atty. baguio
- Civpro, Supreme Court of the United States, Appellate court, Trial court