Tests in determining intra-corporate controversy
To determine if a case involves an intra-corporate controversy, the courts have
applied two tests: the relationship test and the nature of the controversy test.
Under the relationship test, the existence of any of the following relationships makes the conflict intra-corporate:
On
the other hand, the nature of the controversy test dictates that
"the controversy must not only be rooted in the existence of an intra-
corporate relationship, but must as well pertain to the
enforcement of the parties' correlative rights and obligations
under the Corporation Code and the internal and intra-corporate regulatory
rules of the corporation."[2]
A combined application of the relationship test and the nature of the controversy test has become the norm in determining whether a case is an intra-corporate controversy,[3] to be "heard and decided by the branches of the RTC specifically designated by the [Supreme] Court to try and decide such cases."[4]
Under the relationship test, the existence of any of the following relationships makes the conflict intra-corporate:
(1) Between the corporation, partnership or association and the public;
(2) Between the corporation, partnership or association and the State insofar
as its franchise, permit or license to operate is concerned;
(3) Between the corporation, partnership or association and its stockholders,
partners, members or officers; and
(4) Among the stockholders, partners or associates themselves.[1]On
the other hand, the nature of the controversy test dictates that
"the controversy must not only be rooted in the existence of an intra-
corporate relationship, but must as well pertain to the
enforcement of the parties' correlative rights and obligations
under the Corporation Code and the internal and intra-corporate regulatory
rules of the corporation."[2]A combined application of the relationship test and the nature of the controversy test has become the norm in determining whether a case is an intra-corporate controversy,[3] to be "heard and decided by the branches of the RTC specifically designated by the [Supreme] Court to try and decide such cases."[4]
[1] Medical Plaza Condominium Corp. v. Cullen, G.R. No. 181416, 11
November 2013, 709 SCRA 110, 120. (Citations omitted).
[2] Id. at 120-121, citing Strategic Alliance Development Corporation v.
Star Infrastructure Development Corporation, G.R. No. 187872, 17 November
2010, 635 SCRA 380, 391 and Reyes v. RTC of Makati, Br. 142, 583 Phil. 591,
608 (2008).
[3] Strategic Alliance Development Corporation, v. Star Infrastructure
Development Corporation, G.R. No. 187872, 17 November 2010.
[4] Speed Distributing Corp. v. CA, 469 Phil. 739, 758 (2004).
