G.R. No. 146313 ; October 31, 2006
FLORENCIO ORENDAIN, petitioner, vs. BF HOMES, INC., respondent.

FACTS

BF Homes, Inc., a financially distressed corporation, filed a petition for rehabilitation with the Securities and Exchange Commission (SEC). The SEC created a Management Committee and later appointed petitioner Florencio Orendain as the rehabilitation receiver. In 1993, while acting as receiver, Orendain executed a Deed of Absolute Sale, conveying a parcel of land owned by BF Homes to the Franciscan Sisters. In 1994, the SEC approved Orendain’s closing report and relieved him of his duties. Subsequently, in 1996, BF Homes filed a complaint for reconveyance against Orendain and the Sisters before the Regional Trial Court (RTC) of Las Piñas, alleging the sale was fraudulent and executed without authority.
Orendain moved to dismiss the case, arguing that the RTC lacked jurisdiction. He contended that the SEC retained exclusive jurisdiction over the dispute because it arose from the implementation of the rehabilitation plan and involved acts performed by the court-appointed receiver. The RTC denied the motion, asserting it had jurisdiction over the action for reconveyance, a finding affirmed by the Court of Appeals. Orendain elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether the Regional Trial Court or the Securities and Exchange Commission has jurisdiction over the complaint for reconveyance of property filed by BF Homes against its former rehabilitation receiver.

RULING

The Supreme Court ruled that the RTC has jurisdiction. The legal logic hinges on the enactment of Republic Act No. 8799 , the Securities Regulation Code, which took effect in 2000. This law transferred the SEC’s jurisdiction over all cases enumerated in Section 5 of Presidential Decree No. 902-A, including intra-corporate disputes and rehabilitation cases, to the courts of general jurisdiction, specifically the RTCs. Consequently, at the time BF Homes filed its complaint in 1996, the SEC arguably had jurisdiction. However, by the time the Supreme Court resolved the petition in 2006, the jurisdictional landscape had definitively changed under RA 8799.
The Court emphasized that jurisdiction is determined by the law in force at the time of the commencement of the action, but a subsequent statute can divest a tribunal of jurisdiction and transfer it to another. Since RA 8799 had already transferred such jurisdiction to the RTCs, the SEC no longer had authority over the case. The complaint for reconveyance, which essentially alleged fraud and abuse of authority by the former receiver, involved an ordinary civil action for the recovery of property. Such an action, which does not require the specialized expertise of the SEC and involves the adjudication of legal rights between parties, properly falls within the general jurisdiction of the RTC. Therefore, the RTC correctly assumed jurisdiction.