JURISDICTION OVER THE SUBJECT MATTER

Commart Phils Inc vs SEC

G.R. No. 85318
June 3 , 1991

FACTS:
Commart , a corporation engaged in brokerage business for the importation of fertilizers, was organized
by two brothers Mariano and Jesus. Mariano sold his share to Jesus but his wife Alice remained a
stockholder of the company. Mariano discovered that for several years, Jesus and his wife Corazon had
been siphoning and diverting to their private bank accounts in US and HK big amouns from the
commissions due to Commart. Mariano and Alice filed a case before the SEC, asking the SEC to order
Jesus and Corazon to account and deliver the said funds to COmmart and to annul the sale of stocks
between Mariano to Jesus and reinstated Mariano to his executive position in Commart. Jesus filed a
motion to dismiss on the ground of lack of jurisdiction for the case is for annulment of sale.

SEC- Commission has jurisdiction. Jurisction over SM. SM/Nature of cause of action is determined from
the facts of the complaint or information. Since the complaint is one of mismanagement to the
prejudice of the corporation, its stockholders and its creditors.
MR- MODIFIED, dismissed in so far as Mariano is concerned.

SEC EN BANC (Petition for certiorari, prohibition and mandamus with preliminary injuction) – Petition
for certiorari denied. Case remanded to Securities Investigtion and Clearing department for further
proceedings.

ISSUE:
WON SEC commited grave abuse of discretion in denying petition for certiorari.

HELD:
NO. SEC correctly held that the case was a minority stockholders derivative suit since the complaint is
the recovery of sum of money in favor of the corporation . Alice is a stockholder so she can validly file a
derivative suit. SEC was correct in remanding the case to its Hearing Panel for further proceedings.