Lumen Policarpio, et al. vs. Teresita San Buenaventura, et al.

[SEC-SICD * CASE NO. 3301. July 5, 1988.] LUMEN POLICARPIO, ET AL. , plaintiffs , vs . TERESITA SAN BUENAVENTURA, ET AL. , defendants . O R D E R Submitted for resolution is respondents' motion to dismiss and supplemental motion to dismiss as well as the opposition thereto filed by the petitioners. Movants anchored their motion to dismiss the instant case on the ground that the Honorable Commission has no jurisdiction over the subject matter therein and that the alleged incorporation of Sparklers Club, Inc., on January 20, 1988 was placed in issue in view of the criminal case for falsification filed against petitioner Lumen Policarpio. It is respondents' theory that since the alleged election sought to be nullified was held on December 14, 1987, definitely this Commission has no jurisdiction over the persons of the respondents who are not members of petitioners' club which was incorporated only on January 20, 1988; that to show without doubt that petitioners' group is entirely a different group from that of the respondents, the former immediately named themselves as officers of the newly incorporated club after the association's registration with the SEC; and that, respondents are private individuals belonging to a private club which is not registered with the Commission, and therefore, the latter exercises no jurisdiction over the acts of private individuals which is the election of December 14, 1987; and that the veracity/authenticity of the alleged incorporation of Sparklers, Inc., on January 20, 1988 was placed in great doubt when it was found out later on that five (5) signatures of the incorporators were not actually affixed by the persons concerned but they were just made to appear that they actually participated or signed the said articles of incorporation. Additionally, in their supplemental motion to dismiss, respondents submit that this Honorable Commission has no jurisdiction over this case because the complaint does not involve any intra-corporate matter/controversy among members of the association. As culled from the records, respondents Teresita San Buenaventura and Raphael de Ocampo are members of a private club which is not registered. Petitioners, on the other hand, are members of another club which was incorporated on January 20, 1988. Records will show that respondents are not members of the Sparklers, Inc., as shown by the fact that they have not signed any incorporation papers nor the membership roll of said Sparklers, Inc. Petitioners, in opposing the motion to dismiss, maintain that this Honorable Commission has jurisdiction over the instant case; that the same case was filed before the Regional Trial Court of Malabon anchored on the same cause of action but which was dismissed by the court based on a motion to dismiss filed by the respondents; that the motion to dismiss was upheld by the Regional Trial Court on an allegation by the respondents that the case involves an intra-corporate controversy and therefore, falls squarely within the exclusive and original jurisdiction of the Securities and Exchange Commission; that it is not true as alleged that the respondents are not members of the Sparklers, Inc., when the latter was registered with the Commission on January 20, 1988; that the fact of respondents' membership can readily be shown by their membership application signed by both of them on January 6, 1988 (Annex "D" of the petition); that also the list of lady members as well as gentlemen members shows that both respondents were never dismissed and/or expelled although they both stand charge for violation of the Constitution and by-laws of the Sparklers, Inc.; that the respondents' allegation that they belong to a private club run by the private individuals is a brazen lie, the truth of the matter is that "the Sparklers" being referred to is the same club as the Sparklers Club, of the petitioners; that on the matter of the alleged criminal case for falsification filed against petitioner Lumen Policarpio, the same is not within the confines of the Securities and Exchange Commission; that while she was the one who prepared all the corporate papers of the Sparklers, Inc., she has nothing to do with the signatures of the other incorporators and she dares the respondents to prove her participation therein; she caused the registration of the Sparklers, Inc. on January 20, 1988 for the reason that she was dismissed and expelled as member of the said Club by the respondents. cdll At first blush, it may be readily concluded that the present controversy is intra-corporate in nature. This is so because the dispute revolves around the election of the directors and officers of the association. But if we go deeper into the nature of the issue involved, we will find that no intra-corporate relationship exists between the petitioners on the one hand and the respondents on the other. Nowhere in the corporate records of the Sparklers, Inc., could we find any record which will show that the respondents Teresita Buenaventura and Raphael de Ocampo are members of the Sparklers, Inc., as registered with the SEC. Neither was there any showing that they have signed the incorporation papers of said association nor the membership rolls of the said Sparklers, Inc. Petitioners' arguments that respondents are members of the Sparklers, Inc., as registered, as shown by their membership application which they signed on January 6, 1988 and which are marked as Exhibits D and D-1, respectively, of their opposition, cannot be given much weight because a cursory examination of the two documents in question will reveal that the date of the said membership application is not January 6, 1988 as petitioners would like this Commission to believe, but January 6, 1986. Presidential Decree No. 902-A, as amended, vests in the Securities and Exchange Commission: ". . . original and exclusive jurisdiction to hear and decide cases involving: a) . . . 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 stockholders and the State insofar as it concerns their individual franchise or right to exist as such entity; c) . . . Needless to state, where there exists no intra-corporate relationship between the parties, this Commission is bereft of any authority to exercise jurisdiction over them. Jurisdiction, as enunciated in a long line of decisions, is conferred by law and not by the allegations of the petition. While it may be true that respondents Teresita Buenaventura and Raphael de Ocampo are former members of the unregistered Sparklers, Club, they were not made members when the Sparklers, Inc. was registered with the Securities and Exchange Commission. Again petitioners' statement that respondents Teresita Buenaventura and Raphael de Ocampo are members of the Sparklers, Inc. and have never been dismissed or expelled or resigned from the club scarcely deserves serious consideration. In one of the notices they sent to the members of the association, an information was disseminated to the effect that Teresita San Buenaventura and Raphael de Ocampo are not members of the Sparklers, Inc. (Annex "1" of respondents' Supplemental Opposition To Omnibus Motion). In another instance, petitioners issued a press release which was published in the February 17, 1988 issue of the Manila Daily Bulletin (Celebrity World by Crispina Martinez-Belen) which states, among others, that respondents San Buenaventura and Raphael de Ocampo have already lost their membership in the club. These, to us, are overt acts of the petitioners showing clearly beyond doubt that the respondents are not members of the petitioners' Sparklers, Inc. Moreover, even on the assumption that there really exists an intra-corporate relationship between the parties, still the petition must be dismissed because what was put or raised in issue was the election which occurred prior to January 20, 1988, the date when the Sparklers, Inc. was registered in the Securities and Exchange Commission. Definitely, under this set of facts, we cannot exercise or wield authority over the activities of the association concerned which at the time was not yet registered with this Commission. Even with the subsequent registration of Sparklers, Inc., the situation has not changed because as pointed out earlier, respondents are not members of the said registered association. Petitioners' submission that the issue of jurisdiction has already been passed upon by the civil court when the Regional Trial Court, Branch 170 of Malabon issued an Order dismissing the same complaint on a mere adherence to the doctrine laid down by the Supreme Court in the case of Aguizap vs. Basilio, G.R. L-21293, December 29, 1967, cannot be given much weight not only because the said order failed to consider the fact that the respondents in the said civil case are not members of the Sparklers, Inc. when the latter was registered with the Securities and Exchange Commission but more so because it ignored the fact that the acts complained of occurred at the time when the Sparklers, Inc. was not yet registered with this Commission. The above sets of circumstances are decisive factors in the determination of whether or not this Commission has jurisdiction over the subject matter of the instant petition. The same set of circumstances lend credence to respondents' argument that this Commission has no jurisdiction over the case. We find no need to pass upon the other grounds upon which the respondents' motion to dismiss was anchored in the light of the foregoing findings. WHEREFORE, the motion to dismiss should be, as it is hereby GRANTED, and the instant case DISMISSED. SO ORDERED. (SGD.) ALBERTO P. ATAS Hearing Officer