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ALMA MAGALAD v PREMIERE FINANCING CORP Facts: RTC-QC ordered Premiere (appellant) to pay Magalad P50k (principal obligation

on plus interest from Sep 1983), P10k (moral & exemplary damages), and P5k (attorneys fees and costs of suit). Premiere is a financing company. On Sep 12 1983, Premiere induced Magalad to make a money market placement of P50k @ 22% int. pa. Premiere issued a receipt, 2 PDCs (P51,079) and assigned its receivable from David Saman to Magalad. Premieres permit to issue commercial papers had already expired at that time. The checks were subsequently dishonored for lack of sufficient funds. And Premiere rejected Magalads demands for payment. On Jan 10 1984, Magalad filed a complaint for damages. RTC rendered judgment against Premiere. Premiere filed MFR alleging that SEC has exclusive jurisdiction over a corporation under a state of suspension of payments. Case was certified by CA to SC as it contains purely questions of law. WON RTC has jurisdiction - NO WON PD 902-A Reorg of SEC w/ Addl Powers is applicable - YES

Issue: Sub issue: Held:

Magalad claims that the legal suit she filed is an ordinary action for damages and is therefore under RTC. PD 902-A Sec 3 provides that SEC shall have absolute jurisdiction, supervision and control over all corporations who are grantees of primary franchises Sec 5 provides that in addition to the regulatory and adjudicative functions, SEC shall have original and exclusive jurisdiction over cases involving (a) Devises or schemes employed by the BOD, business associates, officers/partners amounting to fraud and misrepresentation which may be detrimental to the public Court stated that SEC can take cognizance of controversies pertaining to the following relationships: o between corporation, partnership or association and (a) the public, (b) its stockholders, partners, members or officers, (c) the State so far as its franchise, permit or license to operate is concerned; and o (d) among the stockholders, partners or associates themselves Court held that SEC has jurisdiction because o Magalads complaint alleges fraud and misrepresentation - Premiere induced her to make a placement despite their expired license. o SEC had already appointed a Rehabilitation Receiver for Premiere. Under PD 902-A Sec 6c, upon appointment of a rehabilitation receiver all actions for claims against corporations under receivership pending before any court shall be suspended

Union Glass is not controlling because the facts are not the same. Union Glass was a third party corpo and had no intra-corporate relationship with Pioneer and Hofilena.

Appeal is granted. Order of RTC set aside without prejudice to Magalad filing a complaint with the proper court.