CASE DIGEST: JOSE PENEYRA and MILAGROS CALDERON vs. IAC and RILLORAZA G.R. No. L-68935. January 22, 1990

FACTS:

The Board of Trustees of Corregidor College Inc. awarded the management and operation of its canteen at a monthly rental of 80.00 to petitioners who are also stockholders of the said College. However, later on, Dizon, the Chairman of the Board instructed to refuse the rental payments of the petitioners and to effect a partial demolition of the canteen. Consequently, petitioners filed an action for damages and preliminary mandatory injunction against Dizon with the CFI of Nueva Ecija but it was denied because 2 days before they filed their amended petition to include Corregidor College as additional defendant, Dizon died, thus did not survive its civil obligations. Petitioners filed appeal to IAC but the latter also denied and contended that it has no jurisdiction over intracorporate dispute and the case must be filed with SEC.

ISSUE:

Whether SEC has jurisdiction over the case.

RULING:

NO. SEC has no jurisdiction over the case. This case is not an intracorporate dispute or controversy.

As held by the court, although the petitioners are also stockholders of the College, the complaint did not stem directly from such relationship, but rather from the award to petitioners of the management and operation of the canteen at a monthly rental of P80.00. This is outside or merely incidental to the central operations of  an educational institution. Petitioners are not bringing the  case as stockholders of the College, but as operators of the canteen as stipulated in contract they have entered with the Board. This a case of contractual beach which causes damages to the operators. Thus, this case is properly brought to the court. Furthermore, the law does not confer SEC the absolute jurisdiction and control over all matters affecting corporations.