Prayco v. Officers of CPM Residents Association, Inc.

[SEC-SICD * CASE NO. 10-93-4598. November 3, 1994.] LUDOVICO PRAYCO, ET AL. , complainants , vs . OFFICERS OF CPM RESIDENTS ASSOCIATION, INC. , respondents . D E C I S I O N The instant complaint seeks to (1) direct the respondent to render an accounting of all business transactions, to require the respondents to produce the minutes of the meeting and resolutions of the corporation; and (2) to pay damages. prcd Complainants alleged, among others, that the respondent, through its officers, is engaging in profitable undertaking by means of collecting various amounts from members and residents of the Association, by leasing and selling real properties; that respondents failed to give an explanation or reply when complainants inquired as to the nature and purposes of the collections and business activities; that no resolution was passed by officers and members to collect and to engage in profitable undertaking which is contrary to the articles and by-laws of the Association; that on January 13, 1993 and April 9, 1993 complainants formally asked respondents to allow them to inspect, verify and secure copies of the activities of the officers, particularly the books of accounts, copies of resolutions and minutes of meeting but they were denied and refused by respondents; and that respondents failed and refused to meet and talk to the complainants. Respondents denied the material allegations in the complaint and answered that: complainants are not bonafide members of the Association; complainants were not allowed to inspect, verify and secure copies of the activities of the association because they are not bonafide members of the association; that complainants have no interest to protect since they ceased to be members and/or officers because they failed to pay the approved fees and dues and for not attending association meetings for three (3) consecutive months; complainants filed the same complaint before the Rizal Prosecutor's office but was dismissed by the prosecuting fiscal; and that being a registered homeowners association, jurisdiction falls within the province of the Home Insurance Guaranty Corporation and not the Securities and Exchange Commission. LLpr It appearing that CPM Residents Association, Inc., is an association within the contemplation of Executive Order No. 535, series of 1979, Section 2, which states: "a) to require submission of and register of articles of incorporation of homeowners association and issue certificates of incorporation/registration upon compliance by the registering associations with the duly promulgated rules and regulations therein; maintain a registry thereof; and exercise all the powers, authorities and responsibilities that are vested in the Securities and Exchange Commission with respect to homeowners association, the provision of Act 1459, as amended by P.D. 902-A, to the contrary notwithstanding; b) to regulate and supervise the activities and operations of all homeowners association registered in accordance therewith." and under the Home Insurance and Guaranty Corporation Revised Rules on Registration of Homeowners Associations which took effect on February 1, 1990, this Commission cannot entertain this instant complaint and therefore, as correctly pointed out by respondents, the association is under the exclusive jurisdiction of the Home Insurance and Guaranty Corporation. WHEREFORE, judgment is hereby rendered dismissing this case for lack of jurisdiction. SO ORDERED. (SGD.) MACARIO P. MALLARI Hearing Officer