Sunset View Condominium Corp. v. Campos, Jr.
REITERATIONFacts
1. The Antecedents: The underlying dispute involves two consolidated cases filed by Sunset View Condominium Corporation against unit purchasers who had not fully paid their purchase prices. The corporation sought to collect unpaid assessments and related charges. The core issue is whether these purchasers, who have not completed payment, are considered shareholders of the condominium corporation and if disputes over assessments fall under the jurisdiction of regular courts or the Securities & Exchange Commission. 2. Procedural History: In G.R. No. L-52361, the condominium corporation sued Aguilar-Bernares Realty for unpaid assessments. The respondent judge dismissed the case, ruling it was an intra-corporate dispute within the Securities & Exchange Commission's jurisdiction. In G.R. No. L-52524, a similar collection case against Lim Siu Leng was initially dismissed by the City Court, but the appeal to the Court of First Instance resulted in the dismissal of the appeal and a directive to ventilate the controversy with the Securities & Exchange Commission. Both dismissals were based on the premise that the purchasers were shareholders. 3. The Petition: Sunset View Condominium Corporation filed petitions for certiorari, alleging grave abuse of discretion by the respondent judges. The corporation argues that purchasers who have not fully paid for their units are not yet owners and therefore not shareholders of the condominium corporation. Consequently, disputes over assessments are not intra-corporate matters and fall within the jurisdiction of the regular courts, not the Securities & Exchange Commission. The petitions seek to set aside the orders of dismissal and have the cases remanded for trial on the merits.
Issue(s)
Whether a purchaser of a condominium unit who has not fully paid the purchase price is automatically a shareholder of the condominium corporation. Whether regular courts or the Securities & Exchange Commission have jurisdiction over cases for the collection of assessments assessed by a condominium corporation on units whose full purchase price has not been paid.
Ruling
The Court set aside the questioned orders of the respondent Judges. In G.R. No. 52361, the respondent Judge was ordered to try the case on the merits. In G.R. No. 52524, the case was ordered remanded to the City Court of Pasay City for trial on the merits.
Ratio Decidendi
On Issue 1: The Court held that a purchaser of a condominium unit who has not fully paid the purchase price is not automatically a shareholder of the condominium corporation. Section 5 of Republic Act No. 4726 (The Condominium Act) clearly states that shareholding in the condominium corporation is conveyed only in a proper case, and Section 4 mandates that the Master Deed must specify the exact nature of the interest acquired by the purchaser. The Amended Master Deeds in these cases stipulated that shareholding is an appurtenance of the unit and cannot be transferred separately, and that ownership, along with the corresponding shareholding, is conveyed only upon full payment of the purchase price. Furthermore, Section 10 of the Condominium Act explicitly provides that membership in a condominium corporation is inseparable from the unit and ceases when the owner ceases to own the unit. Therefore, ownership of a unit is a sine qua non for being a shareholder. On Issue 2: Inasmuch as the private respondents are not shareholders of the petitioner condominium corporation, the cases for collection of assessments do not fall under the definition of 'controversies arising out of intra-corporate or partnership relations' under Section 5(b) of Presidential Decree No. 902-A, which grants exclusive jurisdiction to the Securities & Exchange Commission (SEC). The subject matters of the instant cases, as alleged in the complaints, are for the collection of sums of money, which are within the jurisdiction of the regular courts based on the amounts involved. The Court clarified that the 'separate interest' mentioned in Section 2 of the Condominium Act, which entitles the holder to become a shareholder, refers to ownership of a unit, which is only acquired upon full payment of the purchase price. Thus, the regular courts have jurisdiction over these collection cases.
Main Doctrine
A purchaser of a condominium unit who has not yet fully paid the purchase price is not considered the owner of the unit and, therefore, is not a shareholder of the condominium corporation. Consequently, disputes arising from the collection of assessments against such a purchaser fall under the jurisdiction of the regular courts, not the Securities and Exchange Commission, as they do not constitute intra-corporate controversies.