G.R. No. 130328 - UBS MARKETING CORPORATION AND JOHNNY K.H. UY, VS. THE HONORABLE SPECIAL THIRD DIVISION OF THE COURT OF APPEALS, BAN HUA U. FLORES, BAN HA U. CHUA, AND ROLANDO M. KING.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, on 5 June 1987, several deeds of assignment were executed by the parties wherein all the stockholdings of petitioner Johnny K.H. Uy and his wife, Magdalena Uy in Soon Kee Commercial, Inc. were assigned either to private respondents Ban Hua Uy-Flores, Ban Ha Uy-Chua or other members of the Uy family while all the stockholdings of private respondent Ban Hua Uy-Flores and Ban Ha Uy-Chua in UBS Marketing Corporation were assigned to petitioner Johnny K.H. Uy or the latter's wife. On 1 July 1987 the parties formalized this division of the family business as well as the other terms of the settlement. On 6 April 1988, petitioners Johnny K.H. Uy and UBS Marketing Corporation filed with the Securities and Exchange Commission a complaint (petition) against the private respondents Ban Hua Uy-Flores, Ban Ha Uy-Chua, Roland King and Soon Kee Commercial, Inc. for the recovery of UBS Marketing Corporation's corporate books, books of account, and the accounting and turn over of the funds and properties belonging to UBS Marketing Corporation, docketed therein as SEC Case No. 033 28. [2] As likewise established by this Court, the petition in SEC Case No. 3328 (petition a quo ) alleged that before the segregation of the family business, respondents Ban Hua Uy-Flores and Ban Ha Uy-Chua, aside from being stockholders and directors, were also officers of the UBS Marketing Corporation, who had custody, control and supervision of its records, property and funds; that respondent Roland King was the accountant of all the business concerns of the Uy family including UBS Marketing Corporation; that after the segregation, petitioner demanded for the turn over of the records of the UBS Marketing Corporation but which respondents refused without just cause; and that they held on and refused to account for funds and property, a portion of which should go to or benefit petitioners, in accordance with their settlement agreement made before the Board of Mediators. [3] Instead of filing an answer, respondents filed a motion to dismiss the complaint on the ground that the SEC had no jurisdiction over their person and over the nature of the action because there was no intra-corporate relationship between the parties to the suit. On 30 May 1998, the SEC Hearing Officer Josefina Pasay-Paz issued an order denying respondents' motion to dismiss. On appeal, the CA reversed and set aside the order of the SEC hearing officer ruling that the SEC had no jurisdiction over the controversy in SEC Case No. 3328. This Court, upon petition for review filed by the SEC and petitioners, declared that the controversy subject of SEC Case No. 3328 is an intra-corporate controversy which falls within the original and exclusive jurisdiction of the SEC under Section 5(b) of PD No. 902-A, as amended. [4] When the above decision of this Court became final and executory, petitioners filed with the SEC hearing officer a motion for ex-parte reception of evidence. Said motion was granted and petition