Ceferino Zaide, Jr. v. Court Of Appeals
REITERATIONFacts
The Antecedents: Sta. Lucia Landless Association, Inc. (Association), a non-stock corporation organized by landless occupants to acquire land for distribution among its members, purchased a parcel of land. Prior to the purchase, the Association entered into sales agreements with its members, including Ceferino Zaide, Sr. and Lucita Gacutan, for specific portions of the land. Zaide, Sr. and Gacutan fully paid for their respective lots. After the Association purchased the land, Zaide and Gacutan demanded the transfer of ownership and possession, but the Association failed to comply, citing unpaid contributions for subdivision, survey, documentation, and registration expenses. Procedural History: Zaide and Gacutan filed a complaint against the Association and its officers in the Court of First Instance (CFI) of Rizal (now Regional Trial Court) to compel the execution of deeds of absolute sale and for damages. The defendants were declared in default, and the CFI rendered a default judgment in favor of the plaintiffs. The Association and its officers appealed to the Intermediate Appellate Court (IAC), which annulled the CFI's judgment, holding that the CFI lacked jurisdiction and that the dispute was an intra-corporate matter exclusively cognizable by the Securities and Exchange Commission (SEC). The Petition: Petitioners Ceferino Zaide, Jr. (representing Ceferino Zaide, Sr., deceased) and Lucita Gacutan sought reversal of the IAC's decision, arguing that the dispute was not intra-corporate because they were not members of the Association and that the CFI's judgment had become final and executory.
Issue(s)
Whether the Regional Trial Court has jurisdiction over the claim of members (or their heirs) against a non-stock corporation for the transfer of lots they have fully paid for, or if such dispute falls under the exclusive jurisdiction of the Securities and Exchange Commission. Whether the judgment rendered by the Regional Trial Court, after the defendants were declared in default, had become final and executory despite the alleged lack of jurisdiction.
Ruling
The Supreme Court affirmed the decision of the Intermediate Appellate Court, holding that the dispute is an intra-corporate controversy exclusively cognizable by the Securities and Exchange Commission. The Court ruled that a judgment rendered without jurisdiction over the subject matter is void and may be assailed at any stage.
Ratio Decidendi
On the jurisdiction of the SEC vs. RTC: The Supreme Court reiterated that disputes between a corporation and its members concerning the sale and distribution of lots are intra-corporate disputes. The Court emphasized that the Sta. Lucia Landless Association, Inc. was not a business corporation selling to the public but a non-stock corporation organized to acquire land for its members. The fact that Ceferino Zaide, Sr. had died and his son, Ceferino Zaide, Jr., was pursuing the claim did not alter the nature of the dispute, as the rights sought to be enforced were those acquired by the father as a member and occupant. Similarly, Lucita Gacutan's claim, whether as a member or not, was deemed an intra-corporate controversy. The Court cited Presidential Decree No. 902-A, which grants the SEC "absolute jurisdiction, supervision and control over all corporations" and empowers it to prevent, correct, and adjudicate matters detrimental to the interest of the public or members of an organization. The Court found that the nature of the transaction, involving the distribution of corporate assets to its members, clearly fell within the SEC's exclusive jurisdiction. On the finality of the RTC judgment: The Supreme Court held that the argument that the Regional Trial Court's judgment had become final and executory was untenable. The Court explained that a judgment rendered without jurisdiction over the subject matter is void ab initio and can be assailed at any stage of the proceedings. Therefore, the IAC correctly annulled the default judgment of the CFI because it was rendered without jurisdiction. The nullity of the judgment could be raised at any time, as a void judgment is a nullity from the beginning and produces no legal effect.
Main Doctrine
Disputes between a non-stock corporation and its members concerning the sale and distribution of lots, even if the member has died and is represented by an heir, are considered intra-corporate disputes exclusively cognizable by the Securities and Exchange Commission, not the ordinary courts.