Aranas v. Court of Appeals
NEW DOCTRINEFacts
The Antecedents: Petitioners Gerardo Aranas and Felina Ravacio Aranas filed a civil case against respondents Iligan Capitol College, Sesenio Rosales, and Laureana Rosales before the Regional Trial Court (RTC) of Lanao del Norte. On August 7, 1975, the RTC rendered a decision ordering the defendants to cause the issuance of a certificate of stock corresponding to the plaintiffs' investment of P5,730.00 in Iligan Capitol College as of May 1964, and to deliver their unrealized profits and/or dividends. Procedural History: On July 25, 1984, petitioners filed a motion to compel the respondents to submit corporate records for examination to facilitate the execution of the judgment. Despite several orders and writs of execution issued by the RTC, the private respondents refused to comply. On April 24, 1989, an alias writ of execution was issued. Private respondents then filed a motion for reconsideration, asserting that the case involved an intra-corporate dispute cognizable by the Securities and Exchange Commission (SEC) pursuant to Presidential Decree (PD) No. 902-A. The RTC, in an order dated June 29, 1989, maintained its jurisdiction to enforce its final judgment. Private respondents filed a petition for certiorari with the Court of Appeals (CA), assailing the RTC's insistence on its jurisdiction. The CA sustained the private respondents' position. The Petition: Petitioners are now before the Supreme Court on a petition for review on certiorari, arguing that the matter at this stage is merely an execution of a final judgment rendered by the RTC, and there is no further controversy between a stockholder and the corporation.
Issue(s)
Whether the Regional Trial Court (RTC) retains jurisdiction to execute a final judgment on an intra-corporate dispute that occurred prior to, but remained outstanding after, the promulgation of PD 902-A. Whether the execution of a final judgment on an intra-corporate dispute should be transferred to the Securities and Exchange Commission (SEC) under PD 902-A.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, ordering the Securities and Exchange Commission (SEC) to cause the execution of the final judgment of the RTC. The entire records of the case were ordered transferred to the SEC for disposition.
Ratio Decidendi
On the jurisdiction over the execution of a final judgment on an intra-corporate dispute: The Court acknowledged the weight of petitioners' argument that once jurisdiction attaches, it continues, especially concerning the execution of a final judgment. However, the Court held that under the circumstances of the case, and conformably with the decision of the Court of Appeals, the execution of the RTC judgment should now be placed under the supervision and control of the Securities and Exchange Commission (SEC). This is despite the fact that the RTC judgment was indeed final and executory and could no longer be modified or altered. The Court emphasized that the clear intent of PD 902-A was to vest exclusive jurisdiction over intra-corporate disputes in the SEC. On the transfer of execution to the SEC under PD 902-A: The Court cited Section 5 of PD 902-A, which grants the SEC original and exclusive jurisdiction over controversies arising out of intra-corporate relations. The Court reiterated the evident purpose of the law in investing a specialized administrative body like the SEC with adjudicatory powers over such disputes, which is to promote dispatch arising from expertise. The Court clarified that it would not matter whether the acts or events giving rise to the litigation occurred before or after the adoption of PD 902-A on March 11, 1976. While there was no indication that private respondents moved for the transfer of proceedings to the SEC right after PD 902-A's promulgation, thus implying acquiescence to the RTC proceedings, the Court maintained that the execution and subsequent incidents must be transferred to the SEC's jurisdiction as per the clear intent of PD 902-A. The SEC was therefore ordered to execute the final judgment, including the issuance of stock certificates and inspection of corporate books to determine profits and rightful shares.
Main Doctrine
Even if a judgment on an intra-corporate dispute has become final and executory, the execution thereof, including subsequent incidents, must be placed under the supervision and control of the Securities and Exchange Commission (SEC) if the dispute falls within its exclusive jurisdiction under Presidential Decree No. 902-A.