Atty. Teresita C. Marbibi

December 23, 1985 Atty. Teresita C. Marbibi Alejandro, Gargantiel, Aranzaso and Associates Suite 230-C Regina Bldg. Escolta, Manila Madam: This refers to your letter dated December 5, 1985 inquiring on whether unregistered partnerships fall within the jurisdiction of the Securities and Exchange Commission. llcd In connection therewith, it has to be emphasized that jurisdiction over the subject matter is conferred by the Constitution or law. (De Jesus, et al vs. Garcia, G.R. No. L-26816, Feb. 28, 1967). Jurisdiction, cannot be resumed as the same "must appear clearly from statutes or it will not be held to exist." (Africa vs. Gronke, GR No. 10649, March 1, 1916, 34 Phil. 50). Moreover, jurisdiction cannot be broadened upon "doubtful inference" from statutes and, absent a statutory grant, neither convenience nor assumed justice or propriety of the exercise thereof in a particular class of cases "can justify the assumption of jurisdiction by said courts" (Tuason vs. Crossfield, G.R. No. 9453, March 30, 1915, 30 Phil, 543) Applying the above rules, in relation to P.D. 902-A, as amended, Section 3 thereof provides thus: "SECTION 3. The Commission shall have the absolute jurisdiction, supervision and control over all corporations, partnerships or associations who are the grantees of primary franchise and/or a license or permit issued by the government to operate in the Philippines, and in the exercise of its authority, it shall have the power to enlist the aid and support of and to deputize any and all enforcement agencies of the government civil or military as well as any private institution, corporation, firm, association or person." The scope and limitation of the Commission's jurisdiction is further clearly defined under Section 5 of P.D. 902-A, as amended which provides: "SECTION 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporation, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees , it shall have original and exclusive jurisdiction to hear and decide cases involving:" (emphasis supplied) The primary jurisdiction of the Commission of supervision and control over partnerships emanates from its authority under Article 1772 of the Civil Code of the Philippines which reads: "ARTICLE 1772. Every contract of partnership having a capital of three thousand pesos or more , in money or property, shall appear in a public instrument which must be recorded in the Office of the Securities and Exchange Commission ." (emphasis supplied) Accordingly, the Commission has jurisdiction over partnerships registered with it pursuant to the aforecited provision of law and/or grantees of primary franchises. With regard to unregistered partnerships with a capital of P3,000.00 or more, the law is silent as to who has the jurisdiction over the same. Article 1768 of the Civil Code, however, provides: "ARTICLE 1768. The partnership has a juridical personality separate and distinct from that of each of the partners even in case of failure to comply with the requirements of Article 1772 , first paragraph." (emphasis supplied) The registration requirement under Article 1772 of the Civil Code, is therefore not a pre-requisite for the acquisition of juridical personality by the partnership. Thus, even if not registered, the partnership having a capital of P3,000.00 or more is still a valid one, and therefore has legal personality. Registration thereof is merely a "condition for the issuance of licenses to engage in business or trade. In this way, the tax liabilities of big partnerships cannot be evaded and the public can also determine more accurately their membership and capital before dealing with them." (Paras, Civil C od e of the Philippines Annotated Vol. V p. 416, Ninth Edition citing Dean Capistrano, member of the Civil C od e Commission , Capistrano Civil C od e of the Philippines, Vol. IV, p. 260). Considering that jurisdiction over unregistered partnerships is not expressly vested with the SEC, the Commission, in accordance with the foregoing ruling, should not assume jurisdiction over the same. To include unregistered partnerships within its jurisdiction would be arrogating into the Commission the power and authority to broaden/interpret the law which is outside its competence and jurisdiction. Please be advised accordingly. prcd Very truly yours, (SGD.) MANUEL G. ABELLO Chairman