Cesar F. Firmeza, Jr., et al. vs. Golden Gate Realty Corporation

[SEC-SICD * CASE NO. 1898. October 9, 1980.] CESAR F. FIRMEZA, JR.,ET AL. , petitioners , vs .GOLDEN GATE REALTY CORPORATION , respondent . O R D E R Submitted for resolution is the motion to dismiss filed by respondent on the grounds that this Commission has no jurisdiction over the subject matter of the case and res judicata bar the instant complaint because a similar case has been decided by the City Court of Iloilo City under Civil Case No. 12804. Petitioners filed an opposition to the said motion to dismiss, alleging that the Commission has in fact original and exclusive jurisdiction over the case and that res judicata will not lie because of lack of identity of parties. A perusal of the petition shows that petitioners are tenants of a building now owned by respondent Golden Gate Realty Corporation. The occupancy by petitioners of the building was by virtue of a verbal agreement entered into by them and the original owner thereof. After the building was sold to respondent Golden Gate Realty Corporation, it demanded from petitioners an increase of the rentals, otherwise they will be ejected. Petitioners are now before this Commission challenging the validity of the sale of the leased premises considering that the consideration of the sale consists of shares of stock of the corporation which is allegedly "in violation of Secs. 16 and 17 of Act 1459, as amended, relative to the issuance of stocks in exchange for actual cash". Petitioners also added " that there is no showing that the said respondent corporation had issued stock Certificates to the alleged vendee of 1,700 shares of stock mentioned in the simulated, unauthorized and fictitious deed of sale and violates Sec . 35 of Act 1459, as amended ".In view of the foregoing allegations, petitioners prayed for an order declaring null and void unauthorized deed of sale of 1,700 shares of stock" of respondent corporation; declaring as void the transfer certificate of title over the property registered in the name of respondent corporation; and allowing the petitioners pre-emptive right to buy the leased premises and/or ordering respondent corporation to convey to petitioners the leased property upon reimbursement of the proportionate value of the property. It is clear from the foregoing that the Commission lacks jurisdiction over the nature of the action. Under Sec. 5 of PD 902-A, the Commission has original and exclusive jurisdiction to hear and decide cases involving: a) Devices or schemes employed by or any acts, of the board of directors, business associations, its officers or partners, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, members of associations or organizations registered with the Commission. b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any and/or all of them and the corporation partnership or association of which they are stockholders, members or associates respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; c) Controversies in the election or appointments of directors trustees, officers or managers of such corporations, partnerships or associations. the main thrust of petitioners' case as evidenced by the reliefs prayed for in their petition is the nullification of the deed of sale executed by the former owner of the property partly leased to petitioners in favor of the respondent. It is evident, therefore, that the nature of the present action is not within the competence of the Commission. WHEREFORE, the motion to dismiss filed by the respondents is hereby GRANTED and this case is DISMISSED without pronouncement as to costs. LLphil SO ORDERED. (SGD.) MARIANO S. APUYA Hearing Officer