G.R. No. 132358 - April 12, 2002
MILA YAP SUMNDAD, Petitioner, v. JOHN WILLIAM HARRIGAN and BORACAY BEACH CLUB HOTEL, INC., (BBCHI), respondents.
This petition for review on certiorari seeks to annul and set aside the decision promulgated on October 1, 1997, by the Court of Appeals, affirming the decision of the Regional Trial Court of Makati, Branch 61, which ruled in favor of respondent John William Harrigan, ordering respondent Boracay Beach Club Hotel Inc. to pay P8 million plus interest, attorney's fees and costs.
The facts of this case disclose that on February 6, 1995, Harrigan filed a complaint docketed as Civil Case No. 95-223 for collection of a sum of money with prayer for preliminary attachment with the RTC Makati against respondent BBCHI.1
Harrigan prayed for the issuance of a writ of preliminary attachment pending the hearing of the case, which was granted by the trial court on March 2, 1995, after he posted an attachment bond of P2 million.2
On March 6, 1995, Harrigan filed an amended complaint3 impleading the management committee of BBCHI through its acting chairman, Corazon T. Tirol. The following material facts were alleged in the complaint, as amended:4
The trial court admitted the amended complaint and issued an amended order for the issuance of writ of attachment.6
On March 29, 1995, petitioner Mila Yap Sumndad filed an "Urgent Motion for Leave to Intervene with Prayer for Status Quo Order and/or Suspension" praying that she be allowed to intervene either as plaintiff or defendant.7 The trial court granted said motion on June 8, 1995 and gave petitioner ten days to file either a complaint or an answer in intervention.8
Instead of filing an answer, petitioner moved to dismiss the amended complaint based on the following grounds: (1) forum shopping; (2) lack of jurisdiction; (3) failure to state a cause of action; and (4) litis pendentia.9 This was denied by the RTC in its order dated October 17, 1995.10 Thereafter, Sumndad filed 6 motions for additional time to file an answer.11
Upon motion of Harrigan, petitioner was declared in default on March 21, 1996, for failure to answer within the reglementary period and the trial court proceeded with the ex-parte presentation of evidence.12
On April 18, 1996, Harrigan filed a Motion for Judgment on the Pleadings.13
On several occasions, petitioner attempted to regain her standing in court by filing numerous pleadings and motions. On October 1, 1996, the trial court resolved her motions in this wise:
On the same date, the trial court, acting on Harrigan's motion for judgment on the pleadings, decreed:
A perusal of the ANSWERS filed by the defendants in this case for a SUM OF MONEY evidently failed to tender an issue and therefore, pursuant to Section 1, Rule 19, Rules of Court, JUDGMENT ON THE PLEADINGS is hereby rendered in favor of plaintiff and as against defendant BORACAY BEACH CLUB HOTEL, INC. (BBCHI), who is hereby ordered to:
Not satisfied with the decision, petitioner moved for reconsideration.16 In the meantime, Harrigan moved for the execution of judgment.17 By order dated March 11, 1997, the trial court denied petitioner's motion for reconsideration and granted Harrigan's motion for execution of judgment.18
Thereafter, a writ of execution was issued.19
On May 7, 1997, petitioner filed with the Court of Appeals, a petition for certiorari, prohibition and mandamus, docketed as CA-G.R. SP No. 44088.20 On October 1, 1997, the CA dismissed the petition for lack of merit.21
Petitioner again moved for reconsideration. This, too, was denied in a resolution dated January 21, 1998.22
Hence this petition for review on certiorari ascribing the following errors to the appellate court below:
The central issue raised in the petition is: Is it the regular court or the Securities and Exchange Commission (SEC) that has jurisdiction over the subject matter of the case?
Petitioner insists that it is the SEC that has jurisdiction by virtue of Presidential Decree No. 902-A (Reorganization of the Securities and Exchange Commission with Additional Powers) because the complaint alludes to fraud committed by respondent corporation, and the complainant is a stockholder of the respondent corporation.
Private respondent, on the other hand, maintains that jurisdiction is lodged with the regular courts, it being a simple collection case.
The petition is unmeritorious.
First. The rule is that jurisdiction over the subject matter of the case is conferred by law and determined by the allegations of the complaint.27 Therefore, to resolve the issue raised to us, an interpretation and application of the law on jurisdiction, must be made vis-à-vis the averments of the petitioner's complaint.
The law on jurisdiction of the SEC, Section 5 of PD 902-A, states that in addition to the regulatory and adjudicative functions of the SEC over corporations, partnerships and other forms of associations registered with it as expressly granted under the existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving devises or schemes employed by or any acts of the Board of Directors, business associates, its officers and partners, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or to the stockholders, partners, members of associations or organizations registered with the Commission.28
Now, from the averments of the amended complaint filed with the trial court as quoted above, Harrigan seeks to collect from BBCHI his advances or loans in the amount of at least P8 million, which are demandable in character pursuant to their agreement,29 including interest at 20% per annum accruing from September 1, 1990. The cause of action of the suit is, clearly, for the collection of a sum of money.
However, petitioner interprets said collection complaint as one involving mainly the issue of fraud committed by respondent corporation, which makes the controversy fall under the ambit of PD 902-A. The particular portion of the amended complaint referred to by petitioner states:
To our mind, from the totality of the complaint filed by Harrigan, the main issue is whether or not he is entitled to collect the loan and not whether or not he was defrauded by BBCHI. The mere use of the phrase "in fraud of creditors" does not, ipso facto, throw the case within SEC's jurisdiction. The amended complaint filed by Harrigan does not sufficiently allege acts amounting to fraud and misrepresentation committed by respondent corporation.
In Alleje vs. CA,31 "fraud" is defined as a generic term embracing all multifarious means which human ingenuity can devise, and which are resorted to by one individual to secure an advantage over another by false suggestions or by suppression of truth and includes all surprise, trick, cunning, dissembling and any unfair way by which another is cheated. Within the context of the complaint as quoted above, the phrase "in fraud of creditors" can only mean, "to the prejudice of creditors" and not to the use of devises or schemes tantamount to fraud and misrepresentation employed by the Board of Directors, business associates or its officers and partners to divert corporate funds and assets for personal use, as contemplated in Section 5 of PD 902-A.
Equally unavailing is petitioner's contention that the case involves an intra-corporate controversy, or one between the corporation and its stockholder transposing it within the domain of the SEC. It should be noted that the issue has become moot and academic because with Republic Act No. 8799, Securities Regulation Code, it is now the Regional Trial Court and no longer the SEC that has jurisdiction. Under Section 5.2 of Republic Act No. 8799,32 original and exclusive jurisdiction to hear and decide cases involving intra-corporate controversies have been transferred to a court of general jurisdiction or the appropriate Regional Trial Court.33
Foregoing given, Harrigan's complaint against petitioner to recoup his financial exposure with BBCHI was properly lodged with the regular court and not with the SEC. This view is in accord with the rudimentary principle that administrative agencies, like the SEC, are tribunals of limited jurisdiction and, as such, could wield only such powers as are specifically granted to them by their enabling statutes.34
Given our disquisition that the complaint for sum of money was instituted with the proper court, petitioner's remedy before the appellate court should have been a timely appeal and not certiorari. Therefore, the appellate court was correct in dismissing petitioner's petition for certiorari for being time-barred. Indeed, certiorari cannot be used as a substitute for lost or lapsed remedy of appeal, especially if such loss was occasioned by one's own neglect or error in the choice of remedies.35 As long as a court acts within its jurisdiction, any alleged errors committed in the exercise of its jurisdiction will amount to nothing more than errors of judgment reviewable by timely appeal and not by a special civil action of certiorari.36
It is now moot and academic to delve into the third assigned error raised by petitioner, i.e., that the CA erred in ruling that three month reglementary period for filing a petition for certiorari has already lapsed.
Neither does petitioner's last assigned error merit our consideration, as any discussion on this issue of "personality" is merely academic. As earlier stated, whether or not petitioner has the personality to question the RTC order against BBCHI is a matter that should have been properly threshed out in an appeal filed with the CA. By allowing said order to become final and executory without interposing an appeal and by having incorrectly availed of the extraordinary remedy of certiorari, we can no longer, at this late hour, deal on this issue. We hasten to add that this issue requires delving into the facts of the case. Basic is the rule that this court is not a trier of facts.
WHEREFORE, the instant petition is DENIED for lack of merit and the challenged decision of the Court of Appeals of October 1, 1997 in CA-G.R. SP No. 44088 is hereby AFFIRMED. Costs against the petitioner.
Bellosillo, (Chairman), Mendoza, and De Leon, Jr., JJ., concur.
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