Erich Ekkehard Geiling vs. Imelda Manalaysay Pilapil-Geiling, et al.

[SEC CASE NO. 3128. August 10, 1987.] ERICH EKKEHARD GEILING, and in behalf of OLOTAYAN REALTY AND DEVELOPMENT CORPORATION , petitioners , vs . IMELDA MANALAYSAY PILAPIL-GEILING, ET AL. , respondents . O R D E R Submitted for resolution is the motion to dismiss filed by respondent Imelda Pilapil alleging, inter alia, that the SEC has no jurisdiction over the nature of the petition; that the petition states no cause of action; and, that there is another action pending between the same parties for the same cause. By way of opposition, petitioners alleged, among other things, that the Commission has the exclusive jurisdiction over the issues raised in the petition questioning the acts of mismanagement and fraudulent transfer of the corporate house and lot by respondents as officers and directors of the corporation in favor of their president/chairman of the Board; that under P.D. No. 902-A, Section 5, paragraph (a) and (b), the Commission has the exclusive jurisdiction over cases involving devices or schemes amounting to fraud which may be detrimental to stockholders' interests or controversies arising out of intra-corporate relations; that contrary to the allegations of respondent Imelda Pilapil-Geiling, the prayer for the annulment of the deed of sale purportedly executed by respondents Marilen C. Ramiro and Bella M. Pilapil in behalf of the corporation and the cancellation of title in the name of Imelda Pilapil-Geiling are necessary to give effect to the express powers granted to this Commission to decide cases within its exclusive jurisdiction; that a stockholder may bring an action in behalf of the corporation to annul the anomalous acts of the board of directors; and, that for the petitioners to exhaust intra-corporate remedies before filing this petition would be a futile exercise of a pro forma requirement that would only needlessly delay the proceedings and necessarily thwart the relief sought. In reply thereto, respondent Imelda Pilapil averred that while petitioner is admittedly questioning certain acts of respondent officers and directors of the corporation, he is actually doing so as a creditor and not as a stockholder of the corporation; that the annulment of the contract prayed for by petitioner is a remedy he is seeking as a creditor and not as a stockholder of the corporation; and, that the petition failed to cite any concrete damage or prejudice suffered by the corporation giving it a cause of action against respondents. Absent such corporate cause of action, petitioner cannot pretend that the instant case is in the nature of a derivative suit. Upon thorough consideration of the aforesaid motion to dismiss, petitioner's opposition, as well as, respondents' reply thereto, the Commission resolves to deny said motion. IcHSCT As per allegations of the complaint, which for purposes of disposing the instant motion should be hypothetically admitted, respondents were charged of resorting to series of conceited and systematic actions designed to terminate the prosecution or conduct of the legitimate business operation of petitioner corporation to defraud and prejudice herein petitioner. Moreover, it was averred in the complaint that the remaining properties of the corporation are also being "systematically dissipated and is depreciating in value due to the mismanagement, neglect and abandonment by the respondents, effectuating accordingly the unabated insolvency of the now financially embarrassed corporation. Another case in point is the fact that both parties are stockholders of the same corporation. All told, the nature of action of the case at hand, thus falls within the ambit of the Commission's jurisdiction that is to hear and decide the same pursuant to the provisions of Pres. Decree No. 902-A, as amended. WHEREFORE, the instant motion to dismiss is hereby DENIED. SO ORDERED. (SGD.) ANTERO F.L. VILLAFLOR, JR. Hearing Officer