Ku vs. RCBC Securities, Inc., GR No. 219491, October 17, 2018

Doctrine: Intra-corporate controversy
There are no intra-corporate relations between the parties. Petitioner

is neither a stockholder, partner, member or officer of respondent
corporation. The parties' relationship is limited to that of an investor and a
securities broker. Moreover, the questions involved neither pertain to the
parties' rights and obligations under the Corporation Code, if any, nor to
matters directly relating to the regulation of the corporation.
Case title: Ku vs. RCBC Securities, Inc., GR No. 219491, October 17,
2018; J. Peralta
Facts:
Stephen Y. Ku opened an account with RCBC Securities on June 5,
2007 for the purchase and sale of securities.
On February 22, 2013, Ku filed with the RTC of Makati a Complaint
for Sum of Money and Specific Performance with Damages against
respondent. Pertinent portions of his allegations read as follows:
4. Unknown to plaintiff, the name of M.G. Valbuena ("MGV")
was deliberately inserted beside the name of Ivan L. Zalameda as
one of the agents after plaintiff completed and signed the Agreement.
5. As to when the fraudulent insertion was made, plaintiff has
no idea. Plaintiff only discovered this anomaly when plaintiff recently
requested for a copy of his Account Information.
6. In the course of plaintiff's trading transactions with RSEC,
MGV represented herself as a Sales Director of RSEC, duly
authorized to transact business on behalf of the latter.
7. With this representation, plaintiff continued to transact
business with RSEC through MGV, on the honest belief that the latter
was acting for and in behalf of RSEC.
13. Sometime in January 2012, it came to the knowledge of
plaintiff that his account with RSEC was subject of mismanagement.
MGV was blacklisted by RSEC due to numerous fraudulent and
unauthorized transactions committed by the former. Worse, MGV
allegedly was able to divert investments made by "high networth"
clients of RSEC into some other accounts.
16. In the same letter, plaintiff made clear to RSEC that it has
never authorized a discretionary account with MGV and requested for
all documents relative to plaintiff's audit.
17. After audit, plaintiff has conclusively determined that there
were FOUR HUNDRED SIXTY-SEVEN (467) unauthorized
transactions in his account. A review of the said transactions would
show that multiple buying and selling transactions on the same day
were repeatedly done over a period of four (4) years.
Ku prayed for the payment of the amounts and the shares of stock
resulting from his independent audit after excluding all unauthorized trades.
Ku also sought the recovery of treble damages, exemplary damages and
attorney's fees.
The Complaint, docketed as Civil Case No. 13-171, was raffled off to
Branch 63, RTC of Makati. On May 29, 2013, RCBC Securities filed a
Motion to Dismiss.
The RTC of Makati, Branch 63, issued its questioned Order dated
September 12, 2013, to wit:
xxxx After going over plaintiff's [herein Ku's] Complaint and
defendant's [herein respondent's] Motion to Dismiss and the Reply
that followed, the Court is of the considered view that this case
involves trading of securities.
Consequently, the case should be heard and tried before a Special
Commercial Court. Accordingly, the Court's Branch Clerk of Court is
forthwith directed to forward the entire record of the case to the Office of
the Clerk of Court for re-raffle.
The case was, subsequently, re-raffled to Branch 149 of the RTC of
Makati. Thereafter, in its Order dated October 25, 2013, the RTC of Makati,
Branch 149, denied the Motion to Dismiss for lack of merit. It held that Ku's
payment of insufficient docket fees does not warrant the dismissal of the
Complaint and that the trial court still acquires jurisdiction over the case
subject to the payment of the deficiency assessment. The RTC, thus,
ordered Ku "to pay the docket fees on the value of the shares of stocks
being prayed to be returned to him, within thirty (30) days from receipt" of
the said Order.
The CA reversed and dismissed Ku’s complaint, on the ground of
lack of jurisdiction by Branch 63. Thus, the case should have been
dismissed.
Issue/s:
Whether RTC Branch 63 has jurisdiction
Held:
YES, RTC Branch 63 has jurisdiction.
The Court finds, and so holds, that the case is not an intra-corporate
dispute and, instead, is an ordinary civil action. There are no intra-
corporate relations between the parties. Ku is neither a stockholder,
partner, member or officer of RCBC Securities corporation. The parties'
relationship is limited to that of an investor and a securities broker.
Moreover, the questions involved neither pertain to the parties' rights and
obligations under the Corporation Code, if any, nor to matters directly
relating to the regulation of the corporation.
On the basis of the foregoing, since the Complaint filed by Ku
partakes of the nature of an ordinary civil action, it is clear that it was
correctly raffled-off to Branch 63. Hence, it is improper for it (Branch 63) to
have ordered the re-raffle of the case to another branch of the Makati RTC.
Nonetheless, the September 12, 2013 Order of Branch 63, although
erroneous, was issued in the valid exercise of the RTC's jurisdiction. Such
mistaken Order can, thus, be considered as a mere procedural lapse which
does not affect the jurisdiction which the RTC of Makati had already
acquired.
Moreover, while designated as a Special Commercial Court, Branch
149, to which it was subsequently re-raffled, retains its general jurisdiction
to try ordinary civil cases such as Ku's Complaint. In addition, after its re-
raffle to Branch 149, the case remained docketed as an ordinary civil case.
Thus, the Order dated October 12, 2013 was, likewise issued by Branch
149 in the valid exercise of the RTC's jurisdiction.
WHEREFORE, the instant petition for review on certiorari is GRANTED.

Ku vs. RCBC Securities, Inc., GR No. 219491, October 17, 2018

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Doctrine: Intra-corporate controversy

There are no intra-corporate relations between the parties. Petitioner

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