The dispute as to the validity of the assessments is purely an intra-corporate matter, thus, within the exclusive original jurisdiction of the SEC

The case before the RTC involved an intra-corporate dispute – the Moreno spouses were asking for an accounting of the association dues and were questioning the manner the petitioner calculated the dues assessed against them.  These issues are alien to the first case that was initiated by Salvacion – a third party to the petitioner-Moreno relationship – to stop the extrajudicial sale on the basis of the lack of the requirements for a valid foreclosure sale. Although the extrajudicial sale of theMoreno properties to the petitioner has been fully effected and the Salvacion petition has been dismissed with finality, the completion of the sale does not bar theMoreno spouses from questioning the amount of the unpaid dues that gave rise to the foreclosure and to the subsequent sale of their properties.  The propriety and legality of the sale of the condominium unit and the parking spaces questioned by Salvacion are different from the propriety and legality of the unpaid assessment dues that theMorenospouses are questioning in the present case.

The facts of this case are similar to the facts in Wack Wack Condominium Corporation, et al. v. Court of Appeals, et al.,[20] where we held that the dispute as to the validity of the assessments is purely an intra-corporate matter between Wack Wack Condominium Corporation and its stockholder, Bayot, and is, thus, within the exclusive original jurisdiction of the Securities and Exchange Commission (SEC).[21]  We ruled in that case that since the extrajudicial sale was authorized by Wack Wack Condominium Corporation’s by-laws and was the result of the nonpayment of the assessments, the legality of the foreclosure was necessarily an issue within the exclusive original jurisdiction of the SEC. We added that:

Just because the property has already been sold extrajudicially does not mean that the questioned assessments have now become legal and valid or that they have become immaterial. In fact, the validity of the foreclosure depends on the legality of the assessments and the issue must be determined by the SEC if only to insure that the private respondent was not deprived of her property without having been heard. If there were no valid assessments, then there was no lien on the property, and if there was no lien, what was there to foreclose? Thus, SEC Case No. 2675 has not become moot and academic and the SEC retains its jurisdiction to hear and decide the case despite the extrajudicial sale.[22]

Based on the foregoing, we affirm the decision of the CA’s First Division dismissing the petitioner’s petition.  The way is now clear for the RTC to continue its proceedings on the Morenocase.

About Erineus

Born on December 28, 1965, Surallah, South Cotabato, Southern Mindanao, Philippines.
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