Tumagan vs KairuzG.R. No. 198124September 12, 2018

FACTS:
Mariam Kairuz filed an ejectment case before the MCTC against Tumagan, Halil and
Padilla. Mariam alleged that she had been in actual and physical possession of the
property in Benguet when Tumagan, Halil and Padilla took possession of the property
by means of force, threat, intimidation, strategy, stealth, and with the aid of armed men.
In the answers of petitioners, they averred that Mariam could not bring the action for
forcible entry because the property was already sold by her husband to Bali Irisan
Resources, Inc. (BIRI), through a Memorandum of Agreement (MOA). Tumagan is the
branch manager of BIRI while Halil and Padilla were geodetic engineers hired by BIRI to
survey the property. The petitioners alleged that Mariam is a shareholder of BIRI and
also succeeded her husband’s seat in the Board of Directors after her husband died.
Thus, the petitioners alleged that the issue involves management of corporate property
to which MCTC has no jurisdiction.

ISSUE:
Whether or not the issue involves an intra-corporate controversy.
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RULING:
Yes, the issue involves an intra-corporate controversy. The Court considers two
elements in determining the existence of an intra-corporate controversy, namely:
a. the status or relationship of the parties; and
b. the nature of the question that is the subject of their controversy.
In order that the RTC can take cognizance of a case, the controversy must pertain to
any of the following relationships:
a. between the corporation, partnership, or association and the public;
b. between the corporation, partnership, or association and its stockholders,
partners, members, or officers;
c. between the corporation, partnership, or association and the State as far as its
franchise, permit, or license to operate is concerned; and
d. among the stockholders, partners, or associates themselves.
However, not every conflict between a corporation and its stockholders involves
corporate matters. Here, the parties involved in the controversy is between a
corporation and one of its shareholders. Further, the true nature of the controversy is
not one for forcible entry, but with regard to the shareholder, Mariam, who is seeking
relief from the court to contest the management’s decision due to her alleged default on
the provisions of the MOA. The true controversy is with regard to the management of,
and access to, the corporate property subject of the MOA. Therefore, the MCTC never
acquired jurisdiction over the ejectment case, as it should have been brought before the
RTC for involving intra-corporate controversy.