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ALMA MAGALAD v PREMIERE FINANCING CORP

Facts:

RTC-QC ordered Premiere (appellant) to pay Magalad P50k (principal obligation plus interestfrom Sep 1983), P10k (moral & exemplary damages), and P5k (attorneys fees and costs of suit).

Premiere is a financing company. On Sep 12 1983, Premiere induced Magalad to make a moneymarket placement of P50k @ 22% int. pa. Premiere issued a receipt, 2 PDCs (P51,079) and

assigned its receivable from David Saman to Magalad. Premieres permit to issue commercial

papers had already expired at that time.

The checks were subsequently dishonored for lack of sufficient funds. And Premiere rejectedMagalads demands for payment.

On Jan 10 1984, Magalad filed a complaint for damages. RTC rendered judgment againstPremiere. Premiere filed MFR alleging that SEC has exclusive jurisdiction over a corporation

under a state of suspension of payments. Case was certified by CA to SC as it contains purely

questions of law.

Issue: WON RTC has jurisdiction - NO

Sub issue: WON PD 902-A Reorg of SEC w/ Addl Powers is applicable - YES

Held:

Magalad claims that the legal suit she filed is an ordinary action for damages and is thereforeunder RTC.

PD 902-A Sec 3 provides that SEC shall have absolute jurisdiction, supervision and control overall corporations who are grantees of primary franchises

Sec 5 provides that in addition to the regulatory and adjudicative functions, SEC shall haveoriginal and exclusive jurisdiction over cases involving (a) Devises or schemes employed by the

BOD, business associates, officers/partners amounting tofraud and misrepresentation which

may be detrimental to the public

Court stated that SEC can take cognizance of controversies pertaining to the followingrelationships:

o between corporation, partnership or association and (a) the public, (b) its stockholders,partners, members or officers, (c) the State so far as its franchise, permit or license to

operate is concerned; and

o(d) among the stockholders, partners or associates themselves

Court held that SEC has jurisdiction becauseo Magalads complaint alleges fraud and misrepresentation - Premiere induced her to

make a placement despite their expired license.

o SEC had already appointed a Rehabilitation Receiver for Premiere. Under PD 902-A Sec6c, uponappointment of a rehabilitation receiver all actions for claims against

corporations under receivership pending before any court shall be suspended

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Union Glass is not controlling because the facts are not the same. Union Glass was a third partycorpo and had no intra-corporate relationship with Pioneer and Hofilena.

Appeal is granted. Order of RTC set aside without prejudice to Magalad filing a complaint with the

proper court.