[G.R. NO. 169370 : April 14, 2008]
EUSTACIO ATWEL, LUCIA PILPIL and MANUEL MELGAZO, Petitioners, v. CONCEPCION PROGRESSIVE ASSOCIATION, INC.,**, Respondent.
D E C I S I O N
The present petition under Rule 45 of the Rules of Court assails the decision1 of the Court of Appeals (CA), dated March 17, 2005 in CA-G.R. SP No. 85170, declaring petitioners Eustacio Atwel,2 Lucia Pilpil and Manuel Melgazo estopped from questioning the jurisdiction of Branch 8 of the Regional Trial Court (RTC) of Tacloban City as a special commercial court under Republic Act (RA) No. 8799.3
The facts follow.
In 1948, then Assemblyman Emiliano Melgazo4 founded and organized Concepcion Progressive Association (CPA) in Hilongos, Leyte. The organization aimed to provide livelihood to and generate income for his supporters.
In 1968, after his election as CPA president, Emiliano Melgazo bought a parcel of land in behalf of the association. The property was later on converted into a wet market where agricultural, livestock and other farm products were sold. It also housed a cockpit and an area for various forms of amusement. The income generated from the property, mostly rentals from the wet market, was paid to CPA.
When Emiliano Melgazo died, his son, petitioner Manuel Melgazo, succeeded him as CPA president and administrator of the property. On the other hand, petitioners Atwel and Pilpil were elected as CPA vice-president and treasurer, respectively.
In 1997, while CPA was in the process of registering as a stock corporation, its other elected officers and members formed their own group and registered themselves in the Securities and Exchange Commission (SEC) as officers and members of respondent Concepcion Progressive Association, Inc. (CPAI). Petitioners were not listed either as officers or members of CPAI. Later, CPAI objected to petitioners' collection of rentals from the wet market vendors.
In 2000, CPAI filed a case in the SEC for mandatory injunction.5 With the passage of RA 8799, the case was transferred to Branch 24 of the Southern Leyte RTC and subsequently, to Branch 8 of the Tacloban City RTC. Both were special commercial courts.
In the complaint, CPAI alleged that it was the owner of the property and petitioners, without authority, were collecting rentals from the wet market vendors.
In their answer, petitioners refuted CPAI's claim saying that it was preposterous and impossible for the latter to have acquired ownership over the property in 1968 when it was only in 1997 that it was incorporated and registered with the SEC. Petitioners added that since the property was purchased using the money of petitioner Manuel Melgazo's father (the late Emiliano Melgazo), it belonged to the latter.
On June 9, 2004, the special commercial court ruled that the deed of sale covering the property was in the name of CPA, not Emiliano Melgazo:
In the dispositive portion of the decision, the court, however, considered CPA to be one and the same as CPAI:
Aggrieved, petitioners went to the CA and contested the jurisdiction of the special commercial court over the case. According to them, they were not CPAI members, hence the case did not involve an intra-corporate dispute "between and among members" so as to warrant the special commercial court's jurisdiction over it. CPAI, on the other hand, argued that petitioners were already in estoppel as they had participated actively in the court proceedings.
In its assailed decision of March 17, 2005, although the CA found that the special commercial court should not have tried the case since there was no intra-corporate dispute among CPAI members or officers, it nonetheless held that petitioners were already barred from questioning the court's jurisdiction based on the doctrine of estoppel. Quoting this Court's ruling in Tijam v. Sibonghanoy,8 the CA held:
Petitioners filed a motion for reconsideration but it was denied by the CA.12 Hence, this petition.
Petitioners essentially argue that estoppel cannot apply because a court's jurisdiction is conferred exclusively by the Constitution or by law, not by the parties' agreement or by estoppel.
Originally, Section 5 of Presidential Decree (PD) 902-A13 conferred on the SEC original and exclusive jurisdiction over the following:
Upon the enactment of RA 8799 in 2000, the jurisdiction of the SEC over intra-corporate controversies and other cases enumerated in Section 5 of PD 902-A was transferred to the courts of general jurisdiction. Under this authority, Branch 8 of the Tacloban City RTC, acting as a special commercial court, deemed the mandatory injunction case filed by CPAI an intra-corporate dispute falling under subparagraph (2) of the aforecited provision as it involved the officers and members thereof.
To determine whether a case involves an intra-corporate controversy to be heard and decided by the RTC, two elements must concur:
The first element requires that the controversy must arise out of intra-corporate or partnership relations: (a) between any or all of the parties and the corporation, partnership or association of which they are stockholders, members or associates; (b) between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates and (c) between such corporation, partnership or association and the State insofar as it concerns their individual franchises. On the other hand, the second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation.15 If the nature of the controversy involves matters that are purely civil in character, necessarily, the case does not involve an intra-corporate controversy.16
In the case at bar, these elements are not present. The records reveal that petitioners were never officers nor members of CPAI. CPAI itself admitted this in its pleadings. In fact, petitioners were the only remaining members of CPA which, obviously, was not the CPAI that was registered in the SEC.
Moreover, the issue in this case does not concern the regulation of CPAI (or even CPA). The determination as to who is the true owner of the disputed property entitled to the income generated therefrom is civil in nature and should be threshed out in a regular court. Cases of this nature are cognizable by the RTC under BP 129.17 Therefore, the conflict among the parties here was outside the jurisdiction of the special commercial court.
But did the doctrine of estoppel bar petitioners from questioning the jurisdiction of the special commercial court? No.
In Lozon v. NLRC,18 this Court came up with a clear rule on when jurisdiction by estoppel applies and when it does not:
The ruling was reiterated in Metromedia Times Corporation [(Metromedia)] v. Pastorin,19 where we reversed the CA ruling that Metromedia was already estopped from questioning the jurisdiction of the labor arbiter (LA) after it participated in the proceedings before him. There, an illegal dismissal case was filed by an employee against Metromedia alleging that his transfer to another department20 was tantamount to constructive dismissal. Realizing the issue was properly cognizable by a voluntary arbitrator, Metromedia assailed the LA's jurisdiction in the NLRC and the CA. The CA, also citing Tijam,21 ruled erroneously that Metromedia was already barred from questioning the LA's jurisdiction.
We likewise held in Metromedia that Tijam provided an exceptional circumstance. To void the trial court's decision in Tijam for lack of jurisdiction was not only unfair but patently revolting considering that the question on jurisdiction was raised only after 15 years of tedious litigation.22 We said:
In Calimlim v. Ramirez,23 which we extensively quoted in Metromedia, we spoke of Tijam in this sense:
The rule remains that estoppel does not confer jurisdiction on a tribunal that has none over the cause of action or subject matter of the case.24 Unfortunately for CPAI, no exceptional circumstance appears in this case to warrant divergence from the rule. Jurisdiction by estoppel is not available here.
Consequently, CPAI cannot be permitted to wrest from petitioners (as the remaining CPA officers) the administration of the disputed property until after the parties' rights are clearly adjudicated in the proper courts. It is neither fair nor legal to bind a party to the result of a suit or proceeding in a court with no jurisdiction.25 The decision of a tribunal not vested with the appropriate jurisdiction is null and void.26
WHEREFORE, the petition is hereby GRANTED. The assailed decision of the Court of Appeals in CA-G.R. SP No. 85170 is REVERSED and SET ASIDE. Accordingly, SEC Case No. 2001-07-110 is DISMISSED for lack of jurisdiction.
Puno, C.J., Chairperson, Carpio, Azcuna*, Leonardo-de Castro, JJ., concur.
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