11. Lozano vs Delos Santos(1)

FACTS: Reynaldo Lozano was the president of KAMAJDA (Kapatirang Mabalacat-Angeles Jeepn Jeepney ey Drive Drivers rs’’ Asso Associ ciat ation ion,, Inc. Inc.). ). Anto Antonio nio Anda Anda was the the presi presiden dentt of SAMA SAMAJO JODA DA (Samahan (Samahang g Angeles Angeles-Mab -Mabalac alacat at Jeepney Jeepney Operator Operators’ s’ and Drivers’ Drivers’ Associ Associatio ation, n, Inc.). Inc.). In 1995, 1995, the the two agreed agreed to cons consoli olidat date e the the two two corpo corporat ration ions, s, thus thus,, UMAJO UMAJODA DA (Unifi (Unified ed Mabalacat-Angeles Jeepney Operators’ and Drivers Association, Inc.). In the same year, elections for the officers of UMAJODA were held. Lozano and Anda both ran for president. Loza Lozano no won won but but Anda Anda alle allege ged d frau fraud d and and the the elec electi tion ons s and and ther therea eaft fter er he refu refuse sed d to participate with UMAJODA. Anda continued to collect fees from members of SAMAJODA and and refu refuse sed d to reco recogn gniz ize e Loza Lozano no as pres presid iden entt of UMAJ UMAJOD ODA. A. Loza Lozano no then then file filed d a comp complai laint nt for for damage damages s agains againstt Anda Anda with with the the MCTC MCTC of Mabal Mabalac acat at (and (and Magala Magalang) ng),, Pampanga. Anda moved for the dismissal of the case for lack of jurisdiction. The MCTC  judge denied Anda’s motion. On certiorari, Judge Eliezer De Los Santos of RTC Angeles City reversed and ordered the dismissal of the case on the ground that what is involved is an intra-c intra-corpor orporate ate dispute dispute which which should should be under under the jurisdicti jurisdiction on of the Securit Securities ies and Exchange Exchange Commission Commission (SEC).

Whether or not the case involves an intra-corporate dispute. 2. Whether or not the corporation by estoppel is applicable.

No. The grant of jurisdiction to the SEC must be viewed in the light of its nature and func functi tion on unde underr the the law. law. This This juri jurisd sdic icti tion on is dete determ rmin ined ed by a conc concur urre renc nce e of two two elements: (1) the status or relationship of the parties; and (2) the nature of the question that is the subject of their controversy. [8]

[9]

The first element requires that the controversy must arise out of intracorporate or  partnership relations between and among stockholders, members, or  associates; between any or all of them and the corporation, partnership or association of which which they they are stockh stockhold olders ers,, member members s or associ associate ates, s, respec respectiv tively ely;; and betwee between n such corporation, partnership or association and the State in so far as it concerns their  individual franchises.  The second element requires that the dispute among the parties be intr intrin insi sica cally lly conn connec ecte ted d with with the the regu regula lati tion on of the the corp corpor orat atio ion, n, part partne ners rshi hip p or  [10]

association or deal with the internal affairs of the corporation, partnership or  association.  After all, the principal function of the SEC is the supervision and control of corporations, partnerships and associations with the end in view that investments in these entities may be encouraged and protected, and their activities pursued for the promotion of economic development. [11]

[12]

This unified association was, however, still a proposal. It had not been approved by the SEC, neither had its officers and members submitted their articles of  consolidation in accordance with Sections 78 and 79 of the Corporation Code. Consolidation becomes effective not upon mere agreement of the members but only upon issuance of the certificate of consolidation by the SEC.   When the SEC, upon processing and examining the articles of consolidation, is satisfied that the consolidation of the corporations is not inconsistent with the provisions of the Corporation Code and existing laws, it issues a certificate of consolidation which makes the reorganization official. The new consolidated corporation comes into existence and the constituent corporations dissolve and cease to exist. [13]

[14]

[15]

The KAMAJDA and SAMAJODA to which petitioner and private respondent belong are duly registered with the SEC, but these associations are two separate entities.

Jurisdiction is fixed by law and is not subject to the agreement of the parties.   It cannot be acquired through or waived, enlarged or diminished by, any act or omission of the parties, neither can it be conferred by the acquiescence of the court. [17]

[18]

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