Rebecca Cuello, et al. vs. Ernesto Batac, et al.

[SEC-SICD * CASE NO. 3889. May 20, 1991.] REBECCA CUELLO, ET AL. , petitioners , vs . ERNESTO BATAC, ET AL. , respondents . D E C I S I O N Petitioners, in their petition, alleged inter alia, that the instant case is one of common or general interest to many legitimate members of PNR Medina and these members are numerous that it is impracticable to bring them all to this Commission, and necessarily, only the petitioners appear in the caption of this case in representation of all others, that in accordance with the annual election of the Board of Directors of PNR Medina, respondent Ernesto Batac, then incumbent president, sent a written notice of the annual election to be held on September 30, 1990; that conformably to the notice of election, petitioners together with the other members of the PNR Medina from Caloocan City, numbering about two hundred (200), proceeded to the place of the meeting and the election on September 30, 1990 for the purpose of attending the assembly meeting and to participate in the election; that petitioners and the rest of the members from Caloocan City were not allowed to enter the building where the meeting and election were to take place on the ground that the petitioners and the rest of the members from Caloocan City have been defaulting in the payment of their amortizations, and, therefore, automatically expelled from the PNR Medina; that the petitioners and the rest of the members from Caloocan were taken by surprise of their alleged expulsion when by express provision of the by-laws of the PNR Medina, expulsion therefrom can be made only by two-thirds (2/3) affirmative votes of the entire membership of the PNR Medina; besides no proceeding for expulsion had been commenced against the petitioners, making any expulsion illegal and null and void on a due process issue; that petitioners have not been in default in the payment of their amortizations because no lease purchase agreement of the lot assigned to them have been issued by the National Home Mortgage Finance Corporation, through the Center for Community Assistance and Development, Inc., a non-governmental organization tasked with the implementation of the Community Mortgage Program of the government; and, that petitioners impugn the election of the respondents as members of the Board of Directors on the grounds that the election was without a quorum and the election was highly irregular in the sense that the petitioners, through sheer high-handedness by the respondents and fraud and deceit, were deprived, unjustly and unlawfully, of their rights and prerogative to vote and be voted upon on the September 30, 1990 PNR Medina annual election. On October 16, 1990, summons under SEC "Resolution Providing for a Summary Procedure on Election Cases" was issued to the respondents and in compliance therewith, the latter filed their answer on November 27, 1990. With the filing of the respondents' answer, a preliminary conference was scheduled on January 17, 1991. This preliminary conference however, dragged on for another four (4) settings on February 5, 19 and March 5, & 6, 1991 to give the respondents an opportunity to file their preliminary conference brief but they failed to comply. Consequently, only petitioners' preliminary conference brief witnesses' affidavits and documentary evidence were taken and admitted until the above-entitled case was deemed submitted for decision on March 12, 1991. The principal relief prayed for by the petitioners in their petition is for this Hearing Officer to declare the election of the respondents as members of the Board of Directors of PNR Medina on September 30, 1990 null and void for the simple reason that the said meeting has no quorum. After a thorough evaluation of the pleadings, affidavits and documentary evidence on record, this Hearing Officer finds that the parties to this case are members of PNR Medina, a. community/homeowners' association participating in the community mortgage program of the government. As such, its registration and/or resolution of any controversy between or among its members should fall under the jurisdiction of the Home Insurance and Guaranty Corporation (HIGC) and not with this Commission pursuant to Executive Order No. 535, dated May 3, 1979. Thus, Section 2 (a) and (b) of the said Executive Order provide: "a) to require submission of and register of articles of incorporation of homeowners associations and issue certificate of incorporation/registration upon compliance by the registering associations with the duly promulgated rules and regulations thereon; maintain a registry thereof, and exercise all the powers, authorities and responsibilities that are vested on the Securities and Exchange Commission with respect to homeowners association, the provision of Act 1459, as amended by PD. 902-A, to the contrary notwithstanding; "b) To regulate and supervise the activities and operations of all homeowners associations registered in accordance therewith." cdlex WHEREFORE, premises considered the above-entitled case should be, as it is hereby, DISMISSED for lack of jurisdiction. SO ORDERED. (SGD.) ELPIDIO SARMEN SALGADO Hearing Officer