Eduardo Doles Dy, et al. vs. Provident Securities Corp.

[SEC-SICD * CASE NO. 1659. October 31, 1990.] EDUARDO DOLES DY, ET AL. , complainants , vs . PROVIDENT SECURITIES CORP. , respondent . D E C I S I O N In a complaint filed by Eduardo Doles Dy and Felisa Dy against Provident Securities Corporation and for the grounds stated therein, among which are fraud on the part of the respondent in entering into a Contract to Sell dated February 27, 1968, with complainant Eduardo Doles Dy and fraud in entering in another Contract to Sell dated May 3, 1967 with one Pedro Murillo who, after having paid in full the consideration of the sale, assigned his right to complainant Felisa Dy, prayed for 1) an Order requiring the respondent to submit to the Commission all reports required under the Rules of the Commission, including its latest General Information Sheet and Financial Statement and pending compliance with the same, to suspend the Certificate of Registration of the respondent and to order the respondent to cease and desist from selling lots of Holy Family Village and St. Joseph Village, Marikina, Metro Manila; 2) the revocation of the certificate of Registration of respondent for serious misrepresentation amounting to fraud in its operation, to the detriment of the general public and 3) the imposition of the corresponding fines and/or penalties by the Commission for violations of the laws and decrees implemented by it. On January 19, 1979, respondent filed its answer and on February 1, 1979, at the preliminary conference, only the complainants appeared, notwithstanding due notice to both parties. In the said preliminary conference, complainants marked their Exhibits "A" to "N-1". Originally, this case was assigned to Hearing Officer Daisy C. Barcelona. Then it was re-assigned to Hearing Officer Maria Elena Francisco-Saysay and finally, to this hearing Officer. Hearings were conducted wherein complainants presented their evidence. Respondent, for reason of its own, opted not to present any evidence whatsoever. A perusal of the complaint will readily show that basically, it is for revocation of the Certificate of Registration of the respondent. Such being the case the New Rules of Procedure in the Securities & Exchange Commission, particularly Rule XX should apply. Section 1, of Rule XX of said New Rules of Procedure provides for the grounds in instituting an action against a corporation (quo warranto). Section 2 of Rule XX , likewise, provides for the grounds for suspension or revocation of franchise of corporations, partnerships or associations. Then, Section 3 of Rule XX , enumerates the persons who can bring such action for revocation of franchise. Thus, it provides that action for quo warranto and suspension or revocation of franchise "shall be commenced by the Commission or by the Solicitor General or a fiscal, when directed by the President of the Philippines or when upon complaint or otherwise, he has good reason to believe that any case under said section ca be established by proof." The same section further provides that "the Solicitor General or fiscal may bring such an action at the request and upon the relation of another person . . .." With the adoption and approval of the Revised Rules of Procedure in the Securities and Exchange Commission on October 29, 1989, it is now the Prosecution and Enforcement Department of this Commission that must initiate such action for quo-warranto or suspension or revocation of the Certificate of Registration of a corporation. Considering that as heretofore stated, the present case is for revocation of the Certificate of Registration of the respondent, complainants are not the proper parties to institute the action. As to the prayer for an order to require the respondent to submit all reports required under the Rules and Regulations of the Commission and the imposition of penalties for violation of decrees, laws and rules implemented by the Commission, under the present set-up in the Commission, the Supervision and Monitoring Department, was precisely created, together with the Prosecution and Enforcement Department, to monitor all corporations to see to it that all decrees, laws and rules and regulations of the Commission are complied with and it is also the Supervision and Monitoring Department that determines whether corporations are to be penalized. Stated otherwise, such prayer in the complaint properly belong to the Supervision and Monitoring Department of this Commission. WHEREFORE, the above-entitled case is hereby DISMISSED, without prejudice to the verification by the Supervision and Monitoring Department of the respondent Corporation's compliance of the reportorial requirements and such other requirements of the Commission, the imposition of proper fines and penalties, if any, and such other actions as may be warranted thereto. Let copy of this decision be furnished the Supervision and Monitoring Department, for its proper guidance and information. SO ORDERED. (SGD.) JUANITO B. ALMOSA, JR. Hearing Officer