Alendry M. Caviles vs. First Malayan Leasing & Financing Corporation

[SEC-SICD * CASE NO. 2247. January 30, 1987.] ALENDRY M. CAVILES , complainant , vs . FIRST MALAYAN LEASING & FINANCING CORPORATION , respondent . D E C I S I O N This complaint is against IFC Leasing and Acceptance Corporation (now First Malayan Leasing & Financing Corporation), duly organized and existing under and by virtue of the laws of the Republic of the Philippines. The complainant was the former owner of one (1) 1975 Toyota Coaster with Motor No. RU 5R-984292 and Serial No. 18-002499 which he sold to respondent together with one (1) Condominium Unit. These were leased back to him under an Equipment Lease Agreement denominated as Contract No. 3164. Accordingly, he pays a monthly rental under this agreement but with an understanding that upon full payment of the account, the respondent will in turn execute a deed of sale in his favor over the same coaster and condominium. unit. But then he failed to update his monthly rental and a case of replevin with damages over the Toyota Coaster was filed against him. This resulted in a compromise agreement wherein he paid in full his account corresponding to what was due on the Toyota Coaster under OR No. 02393-2 for P20,000.00 dated July 13, 1981 and OR No. 02452-2 for P18,827.68 dated July 14, 1981. By reason of this full payment, he then repeatedly demanded of respondent the execution of a deed of sale in his favor over this Toyota Coaster and the return of pertinent papers relative thereto. This request remained unheeded and so this case alleging a scheme or device to harass and prejudice his interest contrary to their previous understanding that the transactions be treated as a loan. llcd In the motion to dismiss filed by respondent and in its answer, it alleged that there is no stipulation in the lease agreement on lessor's obligation to sell the unit back to complainant. In fact, the "Urgent Motion for Execution of Deed of Sale and Surrender of other Pertinent Papers", Civil Case No. 34103 with the Court of First Instance of Rizal, Branch I, was denied "for lack of factual and legal basis considering that the agreement entered into by parties herein is one of a contract of lease". Even the compromise agreement entered into by the parties made no sale-back stipulation. In fact, it recognized the respondent as the registered owner of the vehicle. The complainant in pressing for the resale of the coaster back to him further alleged discrepancy in the total purchase which he actually received with that which appears in the voucher. The accountant, however, explained in detail how the figure was arrived at: Coaster - P64,000.00, Condominium - P96,000.00, giving a total of P160,000.00, less P39,296.40 (Initial Cost Outlay) and P38,332.70 representing the account of complainant to Heller Industrial Co. of the Philippines which was paid by IFC from the proceeds of the sale) bringing a total of net proceeds in the amount of P82,370.00 (TSN. pp. 6 & 9 October 7, 1985). At this juncture, complainant likened the company to that of the Heller Industrial Co. of the Philippines with which Company he transacted business in exactly the same manner having sold his Isuzu Dump Truck and resold back to him after full payment of the obligation. He insisted it is a sister company of IFC but was denied as such by respondent. Asked whether this type of transactions is legally acceptable, the accountant claimed it is an ordinary practice in the financing industry (TSN. p. 12, Nov. 13, 1983). He also admitted that in this leaseback agreement the corporation has the option to refund the guaranty deposit of the leasee or sell back to the lessee the equipment at the end of the contract. (TSN. pp. 23 & 24, Nov. 13, 1984). Apparently, the respondent has not exercised any option as yet as the contract obligation has not yet been fully satisfied. While there is no quarrel that the Toyota Coaster has already been fully paid, the Condominium unit remains unpaid and since there is only one (1) contract for both, respondent insists on full settlement of the contract. The CFI, Branch I, Rizal, dealt with the Toyota Coaster question and it is the position of this Commission that any matter pertaining to the contract stipulations must necessarily fall within the jurisdiction of the regular courts. Likewise, the failure of respondent to execute a deed of sale over the Toyota Coaster in favor of complainant is not a fraudulent scheme or device as envisioned under Batas Pambansa 178 otherwise known as the Revised Securities Act. This type of transaction is not one of those listed in Sec. 2, Chapter I, of this Act. Clearly, therefore, the Commission is without jurisdiction. prcd WHEREFORE, in view of the foregoing, the case is hereby DISMISSED. No pronouncement as to costs. (SGD.) MINVILUZ C. ASTUDILLO Hearing Officer