185. Western Institute of Technology, Inc. vs.

Salas, 278 SCRA 216 (1997)

FACTS: Private respondents Ricardo T. Salas, Salvador T. Salas, Soledad

Salas-Tubilleja, Antonio S. Salas, and Richard S. Salas, belonging to the same
family, are the majority and controlling members of the Board of Trustees of
Western Institute of Technology, Inc., a stock corporation engaged in the
operation, among others, of an educational institution. According to
petitioners, the minority stockholders of WIT, a Special Board Meeting was
held. In attendance were other members of the Board including one of the
petitioners Reginald Villasis. In said meeting, the Board of Trustees passed
Resolution No. 48, s. 1986, granting monthly compensation to the private
respondents as corporate officers retroactive June 1, 1985. A few years later,
petitioners Homero Villasis, Prestod Villasis, Reginald Villasis and Dimas
Enriquez filed an affidavit-complaint against private respondents before the
Office of the City Prosecutor, as a result of which two (2) separate criminal
informations, one for falsification of a public document and the other for
estafa, were filed before the Regional Trial Court. The charge for falsification
of public document was anchored on the private respondents' submission of
WIT's income statement for the fiscal year 1985-1986 with the Securities and
Exchange Commission reflecting therein the disbursement of corporate funds
for the compensation of private respondents based on Resolution No. 4,
series of 1986, making it appear that the same was passed by the board on
March 30, 1986, when in truth, the same was actually passed on June 1,
1986, a date not covered by the corporation's fiscal year 1985-1986.
Thereafter, trial for the two criminal cases was consolidated. After a fullblown hearing, Judge Porfirio Parian handed down a verdict of acquittal on
both counts without imposing any civil liability against the accused therein.
Petitioners filed a Motion for Reconsideration of the civil aspect of the RTC
Decision which was, however, denied in an Order.
ISSUE: Whether or not the case is derivative suit correctly filed in the
Regional Trial Court.
RULING: No. Granting, for purposes of discussion, that this is a derivative
suit as insisted by petitioners, which it is not, the same is outrightly
dismissible for having been wrongfully filed in the regular court devoid of any
jurisdiction to entertain the complaint. The ease should have been filed with
the Securities and Exchange Commission (SEC) which exercises original and
exclusive jurisdiction over derivative suits, they being intra-corporate
disputes, per Section 5 (b) of P.D. No. 902-A: In addition to the regulatory
and adjudicative functions of the Securities and Exchange Commission over
corporations, partnerships and other forms of associations registered with it
as expressly granted under existing laws and decrees, it shall have original
and exclusive jurisdiction to hear and decide cases involving: Controversies

arising out of intra-corporate or partnership relations, between and among

stockholders, members, or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders,
members or associates, respectively; and between such corporation,
partnership or association and the State insofar as it concerns their
individual franchise or right to exist as such entity.

214. Republic vs. Sandiganbayan, 199 SCRA 39 (1991)

FACTS: In a Joint Letter-Complaint to the Ombudsman dated January 8,1989,
Messrs. Arnel Blancaflor and Rodolfo Santos, residents of Kalookan City,
charged respondent Macario Asistio, Jr., who is the incumbent Mayor of
Kalookan City, with having violated the Anti-Graft and Corrupt Practices Act
(R.A. 3019), specifically Section 8 thereof.
In said Joint Sworn Letter-Complaint, they alleged that during his
incumbency as Kalookan City Mayor in 1981, 1982 and 1983, respondent
Asistio acquired wealth in the amounts of P2,142,637.50, P11,463,734.40
and P3,658,351.00, respectively, or a total of P17,264,722.90, which he
deposited in his personal account, CA-4670-00136-3, in the Republic Planters
Bank, Sangandaan Branch, Kalookan City. In support of their allegations, they
attached the original copies of the bank deposits and receipts which
indicated the various sums deposited within the three-year period and which
had been machine validated from January 5, 1981 thru December 20, 1983.
However, in his Sworn Statements of Assets and Liabilities for the period
ending December 31,1982 and December 31, 1984, said respondent had a
total income of only P234,128.68 and P255,324.02, respectively; and as
against its total assets (real and personal properties) of P2,859,327.94 as of
December 31, 1982, he had loans payable in the amount of P2,425,575.60,
and against total assets of P5,143,260.98 as of December 31, 1984, he had
loans payable in the amount of P2,660,094.74. The Preliminary Investigation
was conducted by Special Prosecution Officer Margarito P. Gervacio, Jr.,
before whom authenticated xerox copies of the original ledger cards of CA4670- 00136-3 in the name of respondent Macario Asistio, Jr. were produced
and presented by the officer-in-charge of the Republic Planters Bank,
Sangandaan Branch, Kalookan City.
ISSUE: Whether or not the Sandiganbayan should be the proper court to try
the subject of the case.
RULING: No. A perusal of the law originally creating the Office of the
Ombudsman then (to be known as the Tanodbayan), and the amendatory
laws issued subsequent thereto will show that, at its inception, the Office of
the Ombudsman was already vested with the power to investigate and

prosecute civil and criminal cases before the Sandiganbayan and even the
regular courts.
Nonetheless, while we do not discount the authority of the
Ombudsman, we believe and so hold that the exercise of his correlative
powers to both investigate and initiate the proper action for the recovery of
ill-gotten and/or unexplained wealth is restricted only to cases for the
recovery of ill-gotten and/or unexplained wealth which were amassed after
February 25, 1986. 18 Prior to said date, the Ombudsman is without authority
to initiate such forfeiture proceedings. We, however, uphold his authority
to investigate cases for the forfeiture or recovery of such ill-gotten and/or
unexplained wealth amassed even before the aforementioned date, pursuant
to his general investigatory power under Section 15(l) of Republic Act No.
6770.
In the case at bar, the alleged unexplained wealth of respondent
Macario Asistio, Jr. was supposed to have been acquired from 1981 to 1983.
Verily, the Ombudsman, like the Special Prosecutor, is without authority to
initiate and file the petition for forfeiture against respondent Asistio.

243. Antam Consolidated, Inc. vs. Court of Appeals, 143 SCRA 534 (1986)
FACTS: On April 9, 1981, respondent Stokely Van Camp. Inc. (Stokely) filed a
complaint against Banahaw Milling Corporation (Banahaw), Antam
Consolidated, Inc., Tambunting Trading Corporation (Tambunting), Aurora
Consolidated Securities and Investment Corporation, and United Coconut Oil
Mills, Inc. (Unicom) for collection of sum of money. In its complaint, Stokely
alleged: 1) That it is a corporation organized and existing under the laws of
the state of Indiana, U.S.A. and 2)It have undertook contract with Comphil to
sell and deliver and Capital City agreed to buy 500 long tons of crude
coconut oil but Comphil failed to deliver the coconut oil and so that Capital
City covered its coconut oil needs in the open market at a price substantially
in excess of the contract and sustained a loss of US$103,600. Subsequent
contracts were undertaken by the parties but still Comphil failed to deliver its
obligation. Capital City sustained damages in the amount of US$175,00. And
that after repeated demands from Comphil to pay the said amount, the latter
still refuses to pay the same. Respondent Stokely further prayed that a writ
of attachment be issued against any and all the properties of the petitioners
in an amount sufficient to satisfy any lien of judgment that the respondent
may obtain in its action. The trial court ordered the issuance of a writ of
attachment in favor of the respondent upon the latter's deposit of a bond in
the amount of P l,285,000.00. Petitioners filed a petition for certiorari before
the Indianapolis intermediate Appellate Court but the same was dismissed.
ISSUE: Whether the respondent has the personality to sue since the

respondent should have secured first the requisite license to do business in

the Philippines.
RULING: The Supreme Court held that the transactions entered into by the
respondent with the petitioners are not a series of commercial dealings
which signify an intent on the part of the respondent to do business in the
Philippines but constitute an isolated one which does not fall under the
category of "doing business." The records show that the only reason why the
respondent entered into the second and third transactions with the
petitioners was because it wanted to recover the loss it sustained from the
failure of the petitioners to deliver the crude coconut oil under the first
transaction and in order to give the latter a chance to make good on their
obligation. Instead of making an outright demand on the petitioners, the
respondent opted to try to push through with the transaction to recover the
amount of US$103,600.00 it lost. From these facts alone, it can be deduced
that in reality, there was only one agreement between the petitioners and
the respondent and that was the delivery by the former of 500 long tons of
crude coconut oil to the latter, who in turn, must pay the corresponding price
for the same. We rule that the defect in the original verification was cured
when Renato Calma subsequently executed an affidavit to the effect that the
allegations he made in support of the prayer for attachment were verified by
him from the records of Comphil and the Securities and Exchange
Commission. Moreover, petitioner had the opportunity to oppose the
issuance of the writ. As to the merit of the attachment order itself, we find
that the allegations in the respondent's complaint satisfactorily justify the
issuance of said order.
272. DMRC Enterprises vs. Este Del Sol Mountain Reserve, Inc., 132 SCRA
293 (1984)
FACTS: Petitioner is a partnership engaged in the business of general
construction and leasing heavy equipment and other allied transactions. On
May 12, 1978, the petitioner made an offer in writing to the private
respondent for the lease to it of three (3) units of heavy equipment. As
further conditions of the agreement, respondent was to advance the sum of
P5,000.00 per unit to be deducted from the first collection to be made by the
petitioner; that the payments due to the petitioner shall be made every 15th
and 30th of each calendar month and that an amount equivalent to 30% of
the collection shall be invested in the purchase of shares of stock of the
defendant corporation at the market value of P37,000.00 per share. The offer
was accepted.

As a result of the agreement between petitioner and private

respondent, the former proceeded to perform what was incumbent upon it.
However, despite repeated demands made by the petitioner to the
respondent for the payment of outstanding obligations, the respondent
refused to comply with its obligations to the petitioner. Thus, on March 25,
1980, the petitioner filed a complaint before the court of First Instance of
Rizal, Quezon City, Branch III, against the private respondent Este del Sol
Mountain Resort. The respondent interposed a motion to dismiss on the sole
ground that the respondent court has no jurisdiction over the nature of the
action or suit. The motion was dismissed. Hence, this petition.
ISSUE: Whether the court has jurisdiction over the case.
RULING: The Supreme Court agrees with the contention of the petitioner
that e complaint is simply an action for the collection of money and delivery
of personal property representing unpaid obligations within the competence
of the regular courts. urisdiction of a court is conferred by the Constitution
and by the laws in force at the time of the commencement of the action.
(People v. Mariano, 71 SCRA 600; Villamayor v. Luciano, 88 SCRA 156).
however, whether or not a court has jurisdiction over the subject matter of a
case is determined from the allegations of the complaint Magay v. Estandan
69 SCRA 456; Republic v. Sebastian, 72 SCRA 222). Therefore, to resolve the
issue raised to us, an interpretation and application of the law on jurisdiction,
must be made vis-a-vis the avernments of the petitioner's complaint. It must
be stressed that the plaintiff-petitioner submitted himself to the jurisdiction
of the lower court as creditor and the respondent did so as debtor. The fact
that the case involves shares of stock to be used as payment for lease
rentals does not convert it into an intra-corporate controversy. In fact, the
greater of the petitioner's claim is in terms of cash or money. or pass upon a
money claim under a lease contract would be beyond the competence of the
Securities and Exchange Commission and to separate the claim for money
from the claim for shares of stock would be splitting a single cause of action
resulting in a multiplicity of suits. Respondent cites the case of PAIC
Securities v. Securities and Exchange Commission and Pedro Ong (G.R. No.
53981/ June 11, 1980) claiming that with an almost Identical factual
background to the case at bar, the jurisdiction of the Securities and
Exchange Commission was upheld. The respondent overlooks a singular fact
which distinguishes it from the present controversy. The case of Pedro Ong
was not merely a simple money claim and action for specific performance
arising from a contractual obligation. It emanated from stock transactions

between a stockholder PAIC client client (Pedro Ong). Definitely, such an

action arising from the stock operations of a stockbroker comes within the
jurisdiction and control of the Commission. Said case may not be invoked to
support the respondent's contention.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and
the order of the respondent Presiding Judge of the Court of First Instance of
Rizal, Quezon City, Branch LII dated April 23, 1981 in Civil Case No. Q-29585
REVERSED and SET ASIDE.

301. Baviera vs. Standard Chartered Bank, et al. 515 SCRA 170 (2007)
FACTS: Manuel Baviera, petitioner in these cases, was the former head of
the HR Service Delivery and Industrial Relations of Standard Chartered BankPhilippines. SCB did not comply with the conditions set forth by the BSP.
Although unregistered with the SEC, SCB was able to sell securities worth
around P6 billion to some 645 investors. Petitioner entered into an
Investment Trust Agreement with SCB wherein he purchased US$8,000.00
worth of securities upon the banks promise of 40% return on his investment
and a guarantee that his money is safe. After six (6) months, however,
petitioner learned that the value of his investment went down to
US$7,000.00. He tried to withdraw his investment but was persuaded by
Antonette de los Reyes of SCB to hold on to it for another six (6) months in
view of the possibility that the market would pick up. The trend in the
securities market, however, was bearish and the worth of petitioners
investment went down further to only US$3,000.00. On October 26, 2001,
Petitioner then filed with the BSP a letter-complaint demanding
compensation for his lost investment. But SCB denied his demand on the
ground that his investment is "regular." On July 15, 2003, petitioner filed with
the Department of Justice (DOJ), represented herein by its prosecutors, public
respondents, a complaint charging the above-named officers and members
of the SCB Board of Directors and other SCB officials, private respondents,
with syndicated estafa. For their part, private respondents filed the following
as counter-charges against petitioner: (1) blackmail and extortion and
blackmail and perjury. On September 29, 2003, petitioner also filed a
complaint for perjury against private . On February 7, 2004, petitioner also
filed with the DOJ a complaint for violation of Section 8.19 of the Securities
Regulation Code against private respondents, On February 23, 2004, the DOJ
rendered its Joint Resolution dismissing all the complaints and counter-

charges filed the herein parties. Petitioner filed with the Court of Appeals a
petition for certiorari alleging that the DOJ acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in dismissing his
complaint for syndicated estafa and a separate petition for certiorari
assailing the DOJ Resolution dismissing the case for violation of the Securities
Regulation Code. Petitioner claimed that the DOJ acted with grave abuse of
discretion tantamount to lack or excess of jurisdiction in holding that the
complaint should have been filed with the SEC. On January 7, 2005, the Court
of Appeals promulgated its Decision dismissing the petition. It sustained the
ruling of the DOJ that the case should have been filed initially with the SEC.
Meanwhile, on February 21, 2005, the Court of Appeals rendered its Decision
involving petitioners charges and respondents counter charges dismissing
the petitions on the ground that the purpose of a petition for certiorari is not
to evaluate and weigh the parties evidence but to determine whether the
assailed Resolution of the DOJ was issued with grave abuse of discretion
tantamount to lack of jurisdiction. Petitioner moved for a reconsideration but
it was denied . Hence, the instant petitions for review on certiorari.
ISSUE: 1) Whether or not the Court of Appeals erred in concluding that the
DOJ did not commit grave abuse of discretion in dismissing petitioners
complaint for; 2) violation of Securities Regulation Code and for syndicated
estafa.
RULIN : 1) NO. The Court of Appeals held that under Section 53.1 of the said
Code provides, a criminal complaint for violation of any law or rule
administered by the SEC must first be filed with the latter. If the Commission
finds that there is probable cause, then it should refer the case to the DOJ.
Since petitioner failed to comply with the foregoing procedural requirement,
the DOJ did not gravely abuse its discretion in dismissing his complaint.
Under the doctrine of primary jurisdiction, courts will not determine a
controversy involving a question within the jurisdiction of the administrative
tribunal, where the question demands the exercise of sound administrative
discretion requiring the specialized knowledge and expertise of said
administrative tribunal to determine technical and intricate matters of fact
2) NO. Section 5, Rule 110 of the 2000 Rules of Criminal Procedure, as
amended, provides that all criminal actions, commenced by either a
complaint or an information, shall be prosecuted under the direction and
control of a public prosecutor. This mandate is founded on the theory that a
crime is a breach of the security and peace of the people at large, an outrage
against the very sovereignty of the State. It follows that a representative of

the State shall direct and control the prosecution of the offense. A public
prosecutor is in a peculiar and very definite sense a servant of the law, the
twofold aim of which is that guilt shall not escape or innocence suffers.