Spouses Gervacio v. Milante

[SEC-SICD * CASE NO. 09-97-5762. January 12, 1998.] MR. & MRS. PABLITO GERVACIO, ET AL. , petitioners , vs . LEONILA MILANTE, ET AL. , respondents . O R D E R Submitted for resolution is the motion to dismiss the instant petition upon the ground that this Commission does not anymore have jurisdiction to hear cases involving intra-corporate disputes between and among officers and members of homeowners' associations. cdll In support of their motion, movants invoke Executive Order No. 535 as amended by Executive Order No. 90 which provides that the registration of articles of incorporation, regulation and supervision of the activities and operations of homeowners' associations, as well as the exercise of all powers, authorities and responsibilities with respect to homeowners' associations, previously vested on the Securities and Exchange Commission, are transferred to the Home Insurance Guaranty Corporation (HIGC). Movants moreover pointed out that the issue on the jurisdiction of this Commission had been squarely raised in Case No. LC-LQ No. 91-206 which the same petitioners filed before this Commission's Prosecution and Enforcement Department (PED) against the herein respondents, whereupon this Commission, in a resolution penned by Atty. Rommel G. Oliva, Attorney III, and Atty. Villamin P. Lam, Chief, Prosecution Division, and approved by then PED Director Elnora E. Adviento, ruled that the Commission lacks jurisdiction over the case, such jurisdiction having been already transferred to the HIGC by virtue of Executive Order No. 535, as amended. Petitioners, in opposing the motion to Dismiss, argue and maintain that the jurisdiction in this case remains with the SEC because no evidence can be shown that the Valley Homes Neighborhood Association, Inc. (VHNAI) was ever registered with the HIGC. And since E.O. No. 535 states that the HIGC has the power "to regulate and supervise the activities and operations of all homeowners' association registered in accordance therewith", therefore, it cannot be rightly said that the jurisdiction over VHNAI falls under the HIGC. To further underscore this point, petitioners cited Rule I Section 1(b) of the 1994 Revised Rules of Procedure of the HIGC which defines a "homeowners association" as "Any housing or community association duly registered with the HIGC . . ." We find petitioners' argument wanting in merit. It is true that VHNAI had been registered with this Commission and for that matter did become subject to the jurisdiction and regulatory power of the SEC. But that was before the issuance of Executive Order No. 535 which vested and transferred unto the Home Insurance Guaranty Corporation (formerly Home Financing Corporation) the regulatory powers previously exercised by this Commission in so far as homeowners associations are concerned. The purpose of the law is to bring all homeowners association and similar organizations within the exclusive supervision and regulation by a specialized agency which is the HIGC. The reason for this is too obvious to emphasize. Petitioners by their argument in effect postulate that a ramification as to the jurisdiction over homeowners associations must be made so that those homeowners association which were originally registered with the SEC shall remain under the jurisdiction and regulatory power of the Commission and should therefore be considered distinct from those which were organized and registered with the HIGC after the effectivity of Executive Order No. 535. Certainly this could not have been the purpose and intendment in the issuance of Executive Order No. 535, for if it were, then it would have been so specifically stated by way of a proviso, absurd though it may be. The Commission, through its Prosecution and Enforcement Department had already stated its stand on this particular issue in its Resolution dated March 9, 1992 in LC-LQ No. 91-206 , and absent any legal basis or justification to abandon that stand, it will not. WHEREOF, in view of the foregoing considerations and for lack of jurisdiction, this case is hereby DISMISSED. SO ORDERED. (SGD.) MALTHIE G. MILITAR Hearing Officer