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A.M. No. 00-8-10-SC.-Re: Transfer of Cases from the Securities and Exchange Commission to the Regional Trial Courts.

Clarification has been sought on the legal fees to be collected and the period of appeal applicable in cases formerly cognizable by the Securities and Exchange Commission. It appears that the Interim Rules of Procedure on Corporate Rehabilitation and the Interim Rules of Procedure for Intra Corporate Controversies do not provide the basis for the assessment of filing fees and the period of appeal in cases transferred from the Securities and Exchange Commission to particular Regional Trial Courts.cralaw:red

The nature of the above mentioned cases should first be ascertained. Section 3(a), Rule 1 of the 1997 Rules of Civil Procedure defines civil action as one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong. It further states that a civil action may either be ordinary of special, both being governed by the rules for ordinary civil actions subject to the special rules prescribed for special civil actions. Section 3(c) of the same Rule, defines a special proceeding as a remedy by which a party seeks to establish a status, a right or a particular fact.cralaw:red

Applying these definitions, the cases covered by the Interim Rules for Intra-Corporate Controversies should be considered as ordinary civil actions. These cases either seek the recovery of damages/property or specific performance of an act against a party for the violation or protection of a right. These cases are:chanrobles virtual law library

(1) Devices or schemes employed by, or any act of, the board of directors, business associates, officers or partners, amounting to fraud or misrepresentation which may detrimental to the interest of the public and/or of the stockholders, partners, or members of any corporation, partnership, or association;

(2) Controversies arising out of intra-corporate, partnership, or association relations, between and among stockholders, members or associates; and between, any or all of them and the corporation, partnership, or association of which they are stockholders, members, or associates respectively;

(3) Controversies in the election or appointment of directors, trustees, officers, or managers of corporations, partnerships, or associations;

(4) Derivative suits; and cralaw:red

(5) Inspection of corporate books.cralaw:red

On the other hand, a petition for rehabilitation, the procedure for which is provided in the Interim Rules of Procedure on Corporate Recovery, should be considered as a special proceedings. It is one that seeks to establish the status of a party or a particular fact. As provided in section 1, Rule 4 of the Interim Rules on Corporate Recovery, the status or fact sought to be established is the inability of the corporate debtor to pay its debts when they fall due so that a rehabilitation plan, containing the formula for the successful recovery of the corporation, may be approved in the end. It does not seek a relief from an injury caused by another party.

Section 7 of Rule 141 (Legal Fees) of the Revised Rules of Court lays the amount of filing fees to be assessed for actions or proceedings filed with the Regional Trial Court Section 7(a) and (b) apply to ordinary civil actions while 7(d) and (g) apply to special proceedings.cralaw:red

In fine, the basis for computing the filing fees in intra-corporate cases shall be section 7(a) and (b) 1 & 3 of Rule 141. For petitions for rehabilitation, section 7(d) shall be applied.cralaw:red

Notwithstanding the foregoing, cases involving intra-corporate disputes and petitions for rehabilitation shall be entered, recorded and docketed in a single and special docket book separate from civil actions and special proceedings.cralaw:red

As a reminded to the judges and clerks of court, the fees collected shall be allocated between the General Fund and the Judiciary Development Fund in accordance with the guidelines prescribed in Administrative Order No. 3-2000.cralaw:red

Following the discussions above, the period of appeal provided in section 3, Rule 41 of the 1997 Rules of Civil Procedure for ordinary civil actions shall apply to cases involving intra-corporate disputes. Corollarily, the period of appeal provided in paragraph 19(b) of the Interim Rules Relative to the Implementation of B.P. Blg. 129 for special proceedings shall apply to petitions for rehabilitation.cralaw:red

This resolution shall take effect on October 1, 2001, fifteen (15) days after its publication in two (2) newspapers of general circulation.cralaw:red

Promulgated this 4th day of September 2001.