Ku vs RCBC Securities, Oct. 17, 2018

FACTS:
Respondent RCBC Securities, Inc. is a corporation duly organized and existing
under the laws of the Philippines. It is primarily engaged in the brokerage business,
specifically for the purpose of buying and selling any and all kinds of shares, bonds,
debentures, securities, products, commodities, gold bullion, monetary exchange, and
any and all other kinds of properties in the Philippines or in any foreign country
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:
Stephen Y. Ku discovered that M.G. Valbuena's name was fraudulently added to an
agreement after he signed it. He became aware of this discrepancy when he requested
his account information. Throughout his trading transactions with RCBC Securities, MGV
presented herself as a sales Director, leading Ku to believe she was authorized to act on
behalf of RCBC Securities. Subsequently, Ku learned of mismanagement in his account,
leading to his realization that MGV had engaged in unauthorized transactions. After an
audit, Ku found 467 unauthorized transactions, including multiple buying and selling
transactions on the same day over four years.
Ku sought reimbursement for his losses resulting from unauthorized trades, as well as
treble damages, exemplary damages, and attorney's fees. His case, filed as Civil Case No.
13-171, was initially assigned to Branch 63 of the RTC of Makati. However, Branch 63
ruled that the case involved securities trading and should be heard by a Special
Commercial Court. The case was then transferred to Branch 149. Branch 149 denied
RCBC Securities' motion to dismiss, stating that Ku's payment of insufficient docket fees
did not warrant dismissal. Instead, Ku was ordered to pay the deficiency assessment
within 30 days. The Court of Appeals later reversed and dismissed Ku's complaint, citing
lack of jurisdiction by Branch 63.

ISSUE:
WON the complaint partakes the nature of an intra corporate controversy.
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RULLING:
The court ruled affirmatively, stating that the dispute was not an intra-corporate one
but rather an ordinary civil action. Since Ku was not directly affiliated with RCBC
Securities and the matters in question did not involve corporate rights or regulations,
Branch 63 was deemed appropriate for the case. Despite Branch 63's procedural error in
ordering the case's re-raffle, it did not affect the court's jurisdiction. Moreover, Branch
149, where the case was subsequently re-raffled, retained jurisdiction over ordinary civil
cases. Therefore, both branches had valid jurisdiction over the matter.
also, the court did not agree with the Court of Appeals' ruling that Ku intended to
evade paying the correct fees or mislead the docket clerk. Ku initially paid fees based on
the clerk's assessment and promptly paid additional fees when ordered by Branch 149.
Moreover, Ku consistently indicated the number of shares sought for recovery in both
the body and prayer of the complaint, showing no deliberate intent to defraud the
court. Therefore, the court concluded that there was no deliberate attempt to evade
payment of docket fees.