Gonzales v. GJH Land Inc.

Jurisdiction versus the exercise of jurisdiction

G.R. No. Ponente Date
202664 PERLAS-BERNABE, J. November 20, 2015
Petitioners Respondents
MANUEL LUIS C. GJH LAND, INC. (FORMERLY KNOWN AS S.J. LAND, INC.),
GONZALES AND CHANG HWAN JANG A.K.A. STEVE JANG, SANG RAK KIM,
FRANCIS MARTIN D. MARIECHU N. YAP, AND ATTY. ROBERTO P. MALLARI II,.
GONZALES

DOCTRINE: Raffle of Cases; Regional Trial Courts; Special Commercial Courts; The erroneous
raffling to a regular branch instead of to a Special Commercial Court is only a matter of procedure
— that is, an incident related to the exercise of jurisdiction — and, thus, should not negate the
jurisdiction which the Regional Trial Court (RTC) of Muntinlupa City had already acquired. In such a
scenario, the proper course of action was not for the commercial case to be dismissed; instead,
Branch 276 should have first referred the case to the Executive Judge for re-docketing as a
commercial case; thereafter, the Executive Judge should then assign said case to the only
designated Special Commercial Court in the station, i.e., Branch 256.—The Court nonetheless
deems that the erroneous raffling to a regular branch instead of to a Special Commercial Court is
only a matter of procedure — that is, an incident related to the exercise of jurisdiction — and, thus,
should not negate the jurisdiction which the RTC of Muntinlupa City had already acquired. In such a
scenario, the proper course of action was not for the commercial case to be dismissed; instead,
Branch 276 should have first referred the case to the Executive Judge for re-docketing as a
commercial case; thereafter, the Executive Judge should then assign said case to the only
designated Special Commercial Court in the station, i.e., Branch 256. Note that the procedure would
be different where the RTC acquiring jurisdiction over the case has multiple special commercial court
branches; in such a scenario, the Executive Judge, after re-docketing the same as a commercial
case, should proceed to order its re-raffling among the said special branches.

Same; Same; Same; If the Regional Trial Court (RTC) acquiring jurisdiction has no branch
designated as a Special Commercial Court, then it should refer the case to the nearest RTC with a
designated Special Commercial Court branch within the judicial region.—If the RTC acquiring
jurisdiction has no branch designated as a Special Commercial Court, then it should refer the case
to the nearest RTC with a designated Special Commercial Court branch within the judicial region.
Upon referral, the RTC to which the case was referred to should re-docket the case as a commercial
case, and then: (a) if the said RTC has only one branch designated as a Special Commercial Court,
assign the case to the sole special branch; or (b) if the said RTC has multiple branches designated
as Special Commercial Courts, raffle off the case among those special branches.

Same; Same; Same; Jurisdiction; The designation of Special Commercial Courts was merely
intended as a procedural tool to expedite the resolution of commercial cases in line with the court’s
exercise of jurisdiction.—The Court finds it apt to point out that the same principles apply to the
inverse situation of ordinary civil cases filed before the proper RTCs but wrongly raffled to its
branches designated as Special Commercial Courts. In such a scenario, the ordinary civil case
should then be referred to the Executive Judge for re-docketing as an ordinary civil case; thereafter,
the Executive Judge should then order the raffling of the case to all branches of the same RTC,
subject to limitations under existing internal rules, and the payment of the correct docket fees in case
of any difference. Unlike the limited assignment/raffling of a commercial case only to branches
designated as Special Commercial Courts in the scenarios stated above, the re-raffling of an ordinary
civil case in this instance to all courts is permissible due to the fact that a particular branch which
has been designated as a Special Commercial Court does not shed the RTC’s general jurisdiction
over ordinary civil cases under the imprimatur of statutory law, i.e., Batas Pambansa Bilang (BP)
129. To restate, the designation of Special Commercial Courts was merely intended as a procedural
tool to expedite the resolution of commercial cases in line with the court’s exercise of jurisdiction.
This designation was not made by statute but only by an internal Supreme Court rule under its
authority to promulgate rules governing matters of procedure and its constitutional mandate to
supervise the administration of all courts and the personnel thereof. Certainly, an internal rule
promulgated by the Court cannot go beyond the commanding statute. But as a more fundamental
reason, the designation of Special Commercial Courts is, to stress, merely an incident related to the
court’s exercise of jurisdiction, which, as first discussed, is distinct from the concept of jurisdiction
over the subject matter. The RTC’s general jurisdiction over ordinary civil cases is therefore not
abdicated by an internal rule streamlining court procedure.
 I. Facts of the case

1. Manuel Luis C. Gonzales and Francis Martin D. Gonzales (petitioners) filed a Complaint for
"Injunction with prayer for Issuance of Status Quo Order, Three (3) and Twenty (20)-Day
Temporary Restraining Orders, and Writ of Preliminary Injunction with Damages" against
respondents GJH Land, Inc. (formerly known as S.J. Land, Inc.), Chang Hwan Jang, Sang Rak
Kim, Mariechu N. Yap, and Atty. Roberto P. Mallari II before the RTC Muntinlupa City seeking
to enjoin the sale of S.J. Land, Inc.'s shares which they purportedly bought from S.J. Global, Inc.
on February 1, 2010

2. The case was docketed as Civil Case No. 11-077 and raffled to Branch 276, which is not a
Special Commercial Court. On August 9, 2011, it issued a TRO and later, in an Order dated August
24, 2011, granted the application for a writ of preliminary injunction. After filing their respective
answers to the complaint, respondents filed a motion to dismiss on the ground of lack of
jurisdiction over the subject matter, pointing out that the case involves an intra-corporate dispute
and should, thus, be heard by the designated Special Commercial Court of Muntinlupa City.

3. In an Order dated April 17, 2012, Branch 276 granted the motion to dismiss. It found that the
case involves an intra-corporate dispute that is within the original and exclusive jurisdiction of the
RTCs designated as Special Commercial Courts. It pointed out that ir is Branch 256 was
specifically designated by the Court as the Special Commercial Court, hence, it had no jurisdiction
over the case and cannot lawfully exercise jurisdiction on the matter, including the issuance of a
WPI, thus it dismissed the case.

4. Petitioners filed a Motion for Reconsideration arguing that they filed the case with the RTC-
OCC Muntinlupa which assigned the case by raffled, and it was beyond their control, they should
not be made to suffer the consequences of the wrong assignment of the case, especially after paying
the filing fees in the amount of P235,825.00 that would be for naught if the dismissal is upheld.
5. They further maintained that the RTC has jurisdiction over intra-corporate disputes under
Republic Act No. (RA) 8799, but since the Court selected specific branches to hear and decide
such suits, the case must, at most, be transferred or raffled off to the proper branch. The Motion
for Reconsideration was denied by Branch 276 it held that it has no authority or power to order the
transfer of the case to the proper Special Commercial Court, citing Calleja v. Panday

II. Issue/s

Whether or not RTC Muntinlupa City Branch 276 erred in dismissing the case for lack of
jurisdiction over the subject matter.

Whether or not a commercial case should be dismissed if erroneously raffled to a regular civil
court instead of a special commercial court.

III. Ratio/Legal Basis

• YES, the RTC Muntinlupa City Branch 276 erred in dismissing the case for lack of
jurisdiction over the subject matter
• The Court finds Branch 276 to have correctly categorized Civil Case No. 11-077 as
a commercial case, more particularly, an intra-corporate dispute, considering that
it relates to petitioners' averred rights over the shares of stock offered for sale to
other stockholders, having paid the same in full. Applying the relationship test and
the nature of the controversy test, the suit between the parties is clearly rooted in
the existence of an intra-corporate relationship and pertains to the enforcement
of their correlative rights and obligations under the Corporation Code and the
internal and intra-corporate regulatory rules of the corporation,[24] hence, intra-
corporate, which should be heard by the designated Special Commercial Court as
provided under A.M. No. 03-03-03-SC dated June 17, 2003 in relation to Item 5.2,
Section 5 of RA 8799.
• Petitioners filed a commercial case, i.e., an intra-corporate dispute, with the RTC-
OCC Muntinlupa City, which is the official station of the designated Special
 Commercial Court, in accordance with A.M. No. 03-03-03-SC. It is, therefore, from
the time of such filing that the RTC acquired jurisdiction over the subject matter
or the nature of the action. Unfortunately, the commercial case was wrongly
raffled to a regular branch, instead of being assigned to RTC Branch 256, the
Special Commercial Court for Muntinlupa City, which is Branch 256. This error
may have been caused by a reliance on the complaint's caption, i.e., "Civil Case for
Injunction with prayer for Status Quo Order, TRO and Damages," which, however,
contradicts and more importantly, cannot prevail over its actual allegations that
clearly make out an intra-corporate dispute:
• The nonetheless deems that the erroneous raffling to a regular branch instead of
to a Special Commercial Court is only a matter of procedure - that is, an incident
related to the exercise of jurisdiction - and, thus, should not negate the jurisdiction
which the RTC Muntinlupa City had already acquired. In such a scenario, the
proper course of action was not for the commercial case to be dismissed; instead,
Branch 276 should have first referred the case to the Executive Judge for re-
docketing as a commercial case; thereafter, the Executive Judge should then assign
said case to the only designated Special Commercial Court in the station
• Had the RTC acquiring jurisdiction over the case has multiple special commercial
court branches, the Executive Judge, after re-docketing the same as a commercial
case, should proceed to order its re-raffling among the said special branches. If the
RTC acquiring jurisdiction has no branch designated as a Special Commercial
Court, then it should refer the case to the nearest RTC with a designated Special
Commercial Court branch within the judicial region.
• Upon referral, the RTC to which the case was referred to should re-docket the case
as a commercial case, and then: (a) if the said RTC has only one branch designated
as a Special Commercial Court, assign the case to the sole special branch; or (b) if
the said RTC has multiple branches designated as Special Commercial Courts,
raffle off the case among those special branches.
• In all the above-mentioned scenarios, any difference regarding the applicable
docket fees should be duly accounted for. On the other hand, all docket fees
already paid shall be duly credited, and any excess, refunded
• As a basic premise, let it be emphasized that a court's acquisition of jurisdiction
over a particular case's subject matter is different from incidents pertaining to the
exercise of its jurisdiction. Jurisdiction over the subject matter of a case is
conferred by law, whereas a court's exercise of jurisdiction, unless provided by
the law itself, is governed by the Rules of Court or by the orders issued from time
to time by the Court

IV. Disposition

WHEREFORE, the petition is GRANTED. The Orders dated April 17, 2012 and July 9, 2012
of the Regional Trial Court (RTC) of Muntinlupa City, Branch 276 in Civil Case No. 11-077 are
hereby REVERSED and SET ASIDE. Civil Case No. 11-077 is REFERRED to the Executive
Judge of the RTC of Muntinlupa City for re-docketing as a commercial case. Thereafter, the
Executive Judge shall ASSIGN said case to Branch 256, the sole designated Special
Commercial Court in the RTC of Muntinlupa City, which is ORDERED to resolve the case with
reasonable dispatch. In this regard, the Clerk of Court of said RTC shall DETERMINE the
appropriate amount of docket fees and, in so doing, ORDER the payment of any difference
or, on the other hand, refund any excess.

Furthermore, the Court hereby RESOLVES that henceforth, the following guidelines shall be
observed:

1. If a commercial case filed before the proper RTC is wrongly raffled to its regular branch,
the proper courses of action are as follows:
1.1 If the RTC has only one branch designated as a Special Commercial Court, then the case
shall be referred to the Executive Judge for re-docketing as a commercial case, and
thereafter, assigned to the sole special branch;

1.2 If the RTC has multiple branches designated as Special Commercial Courts, then the case
shall be referred to the Executive Judge for re-docketing as a commercial case, and
thereafter, raffled off among those special branches; and

1.3 If the RTC has no internal branch designated as a Special Commercial Court, then the
case shall be referred to the nearest RTC with a designated Special Commercial Court
branch within the judicial region. Upon referral, the RTC to which the case was referred
to should re- docket the case as a commercial case, and then: (a) if the said RTC has only
one branch designated as a Special Commercial Court, assign the case to the sole special
branch; or (b) if the said RTC has multiple branches designated as Special Commercial
Courts, raffle off the case among those special branches.

2. If an ordinary civil case filed before the proper RTC is wrongly raffled to its branch
designated as a Special Commercial Court, then the case shall be referred to the Executive
Judge for re-docketing as an ordinary civil case. Thereafter, it shall be raffled off to all courts
of the same RTC (including its designated special branches which, by statute, are equally
capable of exercising general jurisdiction same as regular branches), as provided for under
existing rules.

3. All transfer/raffle of cases is subject to the payment of the appropriate docket fees in case
of any difference. On the other hand, all docket fees already paid shall be duly credited, and
any excess, refunded.

4. Finally, to avert any future confusion, the Court requires that all initiatory pleadings state
the action's nature both in its caption and body. Otherwise, the initiatory pleading may, upon
motion or by order of the court motu proprio, be dismissed without prejudice to its re-filing
after due rectification. This last procedural rule is prospective in application.

5. All existing rules inconsistent with the foregoing are deemed superseded.

V. Notes