Forest Hills Golf and Country Club, Inc. vs. Fil-Estate Properties, Inc.

G.R. No. 206649. July 20, 2016

FACTS

Fil-Estate Properties, Inc. (FEPI) entered into an agreement to finance the development of several parcels of land owned by Kingsville Construction and Development Corporation (Kingsville).  Respondent FEPI was tasked to incorporate petitioner Forest Hills Golf and Country Club, Inc. (FHGCCI), a first-class residential area/golf course/commercial center.

Due to delayed construction of the golf course, Rainier Madrid on behalf FHGCCI instituted a derivative suit for specific performance in order to enforce the project agreement between KPC, Kingsville, and respondents FEPI and FEGDI. The complaint was filed with RTC – Antipolo City. However, RTC dismissed the case on the ground of lack of jurisdiction and refer that the case must be refiled in proper special commercial court sitting at Binangonan, Rizal.

Petitioner FHGCCI’s contended that the instant case does not involve an intra-corporate controversy as it was filed against respondents FEPI and FEGDI as developers, and not as shareholders of the corporation, thus, does not fall under the jurisdiction of special commercial courts.

ISSUE

Whether or not FHGCCI’s ordinary civil suit for specific performance with damages  is cognizable by the lower court as a regular court and not by the RTC – Binangonan, a special commercial court for intra-corporate controversies.

RULING

No, the instant derivative suit for specific performance against respondents FEPI and FEGDI falls under the jurisdiction of special commercial courts. The fact that petitioner FHGCCI denominated the Complaint as a derivative suit for specific performance is sufficient reason for the RTC to dismiss it for lack of jurisdiction, as the RTC where the Complaint was raffled is not a special commercial court. Upon the enactment of RA No. 8799, jurisdiction over intra-corporate disputes, including derivatives suits, is now vested in the RTCs designated as special commercial courts by this Court pursuant to A.M. No. 00- 11-03-SC promulgated on November 21, 2000.

If the RTC has no internal branch designated as a Special Commercial Court, the proper recourse is to 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 if the said RTC has only one branch designated as a Special Commercial Court, it should assign the case to the sole special branch.

DOCTRINE

It is a fundamental principle that jurisdiction is conferred by law and is determined by the material allegations of the complaint, containing the concise statement of ultimate facts of a plaintiff’s cause of action.