SEC EB Case No. 06-21-484JESUS M. MELEGRITO et. al., Appellant, v. GA TOWER 1 CONDOMINIUM CORPORATION et. al., Appellee.

Securities and Exchange Commission COMMISSION EN BANC Republic of the Philippines Department of Finance

JESUS M.MELEGRITO, et.al. Petitioners-Appellees,

-versus- SEC En Banc Case No. 06-21-484

CORPORATION,et.al. GA TOWER 1 CONDOMINIUM

Respondents-Appellants.

X

DECISION

20 May 2021theAppealfiled by GA Tower 1 Condominium Corporation 2021 Resolution of the Office of the General Counsel OGC, the dispositive portion of the Assailed Decision and Resolution reads: the Corporationpraying for the reversal and setting aside of the Decision dated 8 October 2020(theAssailed Decision)and Resolution dated 12 May Before the Commission En Banc is the Appeal Memorandum dated

WHEREFORE,premises considered,the Petition is hereby GRANTED members meeting within thirty (30 days from receipt of this Decision, (b designate from among them a presiding officer, and (c conduct an election Secretary,is thereafter DIRECTED to file with this Office a Manifestation members' meeting. The Petitioners are hereby DIRECTED to (a call and conduct the annual of the Board of Trustees. GA Tower I, through its duly elected Corporate and Compliance within ten (10 days from the conduct of the annual

Office stays. "WHEREFORE, Reconsideration is hereby DENIED for lack of merit and for having become moot and academic. The Decision dated 08 October 2020 of this premises considered the instant Motion for

PARTIES

registered with the Securities and Exchange Commission (the"Commission under SEC Registration No.CN200600330.4 The Corporation is joined by Appellant Corporation is a non-stock, non-profit corporation duly

Resolution dated 12 May 2021. Registered on 6 January 2006 Filed on 24 May 2021. Decision dated 8 October 2020

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Director,and Tbram G.Cuyugan (CFO for 2012 and 2013;OIC,Vice President Globe Asiatique Realty Holdings Corp.), who are members of its (CFO,Angeline Lourdes C.Mallillin(Corporate Secretary),Christina Sagun Appellants Delfin S.Lee President,Dexter L.Lee CEO, Irene M.Santos

Board of Directors and Officers.

Banal, and Jaime F. Tiongson are all unit owners of GA Tower Condominium and members of the Corporation. Appellees Jesus M. Melegrito, Rocela D. Cayanan Rose Anna R.

RELEVANT FACTS

Corporation and send the required notices in accordance with the of the relevant provisions of the Corporation Code. and Election of Officers (thePetition)praying,among others, that the OGC issues an order directing them to call and conduct the regular meeting of the Corporation's by-laws. In support thereof, Appellees alleged that the Corporation has not conducted a meeting and election since 2006, in violation On 3 January 2018,Appellees filed the Petition for Calling of Meeting

defense, Appellants alleged that the Corporation has called and conducted a 2018, Appellants prayed for the dismissal of the Petition on the ground that the Commission has no jurisdiction over intra-corporate controversies, and for failure of Appellees to state a cause of action. By way of an affirmative meeting on 15 June 2017 as indicated in the General Information Sheet GISsubmitted to the Commission on 30 June 2017. In their Answer with Compulsory-Counter Claim filed on 18 June

Conference that was called and conducted by the OGC, where Appellees On 16 August 2018, the parties appeared during the Preliminary

maintained that no meeting and election were conducted on 15 June 2017 and 5 February 2018. Appellants on the other hand, were directed to produce the Preliminary Conference, the parties were informed that allegations or matters that are intra-corporate in nature will not be addressed and passed Angeline Lourdes Mallillin Ms.Mallillin),the Corporate Secretary of the Corporation, and to submit the minutes of the 2017 and 2018 meetings. During upon by the Office as the same are outside the jurisdiction of the Commission.

Testificandum/Duces Tecum directing Ms. Mallillin to appear in the On different occasions, the OGC issued three (3 Subpoena Ad

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succeeding Preliminary Conferences to testify on the factual circumstances relating to the alleged 2017 and 2018 meetings and to submit the minutes of the said meetings. Ms.Mallillin however failed to appear in all the Preliminary Conferences called and conducted by the OGC. Appellees on the other hand presented Mr. Tiongson, Mr. Pablo and Ms. Banal, all of whom are members of the Corporation, who testified that no meeting and election were conducted.

In compliance with the Order dated 21 December 2018 issued by the OGC, Appellees submitted their Memorandum which reiterated, among others, the allegation that the Corporation failed to call and conduct a regular meeting and election in violation of the By-laws of the Corporation and the Corporation Code. Appellees emphasized that the said violation was supported by Appellants' failure to present any evidence showing the conduct of the alleged 2017 and 2018 Meetings

On 17 July 2019,the OGC issued an Order directing Appellants to submit additional documents or evidence to prove that the meeting, which was stated in the GIS submitted by the Corporation, actually transpired. Appellants submitted their Compliance where they attached a Notice dated 2 January 2018,alleged to have been posted in conspicuous places inside GA Tower I, to show that a meeting was conducted.

On 8 October 2020,the OGC issued the Assailed Decision granting the Petition,and directed the conduct of an annual members'meeting on the basis of the finding that the Corporation has failed to comply with the mandatory provisions of Section 50 of the Corporation Code.

2020 (the Motion reiterating their position that the Commission has no Appellants thereafter filed a Motion for Reconsideration on 26 October

jurisdiction over the instant case which is intra-corporate in nature i.e. the allegations and the issue presented in the Petition relates to the validity of the election of the members of the board of trustees.

filed by Castillo Law Office, who furnished Appellants counsel with copies of the same. Appellees (then Petitioners and an Urgent Ex Parte Motion to Resolve were On 16 December 2020,an Entry of Appearance as counsel for

for the Preliminary Conference on 17 October 2018 Annex1of the Comment Ad Cautclam dated 28 June 2021 5 Subpoena dated 24 August 2018 for the Preliminary Conference on 29 August 2018;Subpoena dated 30 August 2018 for the Preliminary Conference on 19 September 2018;Subpoena dated 26 September 2018 Par.9 of the Motion for Reconsideration

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In its Resolution dated 12 May 2021, the OGC denied Appellants Motion for lack of merit and after finding that the issue presented has become moot and academic. The OGC held that the Commission has jurisdiction over the instant case insofar as it relates to the implementation of Section 50 of the Corporation Code, and pointed out that the Assailed Decision only passed upon the issue on the Corporation's failure to hold and conduct a regular meeting and election. Finally, the OGC held that the Motion is also dismissible on the ground of mootness considering that the Corporation has already conducted a meeting and election on 2 November 2020

counsel with a copy thereof. Appelleescounsel, Atty.Venus B. Ambrona, who furnished Appellants On 10 June 2021,a Notice of Withdrawal of Appearance was filed by

Acting on the Appeal, the Commission En Banc issued an Order on 17 June 2021,directing Appellees to file their Comment.

dated 28 June 2021 (the Comment) praying for the dismissal of the Appeal on the ground that the same was not perfect which resulted in the finality of the Assailed Decision. Appellees also argued that the Appeal is dismissible On 30 June 2021,Appellees filed their COMMENT AD CAUTELAM

for utter lack of merit considering that the matters ruled upon by the OGC in the Assailed Decision are within the regulatory power and authority of the Commission.

ISSUES

Commission will pass upon in this Decision: Appellants present the following assignment of errors which the

(2 ( The OGC committed reversible error in taking cognizance of the The OGC committed reversible error in ruling that the issues instant case which is intra-corporate in nature. presented have become moot and academic.

RULING

The Commission finds the Appeal bereft of merit and resolves to deny the same.

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prescribed under the 2016 Rules of The Appeal is infirm for its failure to Procedure of the Securities and Exchange "Rules"). comply with Commission the requirements (the

Before We discuss and rule on the substantive issues, it is necessary that We consider and pass upon the procedural issue presented by Appellees in relation to the filing of the Appeal i.e.there is no perfected appeal for failure of Appellants to furnish the counsel of Appellees with a copy of the Appeal in violation of the Rules.

such remedy to strictly comply with the requirements provided by law or the implementation of the principle settled in jurisprudence that an appeal is a mere statutory privilege which requires party litigants who wish to avail of rules. This principle was amply expounded by the Supreme Court in The importance and propriety of resolving this issue relates to the

Boardwalk Business Ventures, Inc.vs Villareal which held that:

The right to appeal is neither a natural right nor is it a component of due process. It is a mere statutory privilege. and may be exercised only in the manner and in accordance with the provisions of law, This being so, x x x an appealing party must strictly comply with the requisites laid down in the appellants with greater fidelity. Their observance cannot be lef to the Rules of Court. Deviations from the Rules cannot be tolerated. The rationale for this strict attitude is not difficult to appreciate as the Rules are designed to facilitate the orderly disposition of appealed cases. In an age where courts are bedeviled by clogged dockets, the Rules need to be followed by whims and caprices of appellants.(Underscoring supplied)

Relative theretoPart VRule III,Section 3-3 of the Rules provides for the manner and the requirements to perfect an appeal with the Commission. thus:

SEC.3-3.Perfection of Appeal.-The appellant shall perfect an appeal by filing the following with the Commission En Banc, through the Office of the General Counsel, within the period prescribed in the preceding section a copy of the appeal memorandum on the appellee and/or the Director of the Operating Department, the Special Hearing Panel or the Self-Regulatory i an appeal memorandum in six 6 legible copies;ii proof of service of Organization concerned,as the case may be;and (iiipayment of the appeal fee and other applicable fees."

G.R.No.181182,April 10,2013 Par. 1 of the Comment Ad Cautelam

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which requires full compliance on the part of the appellant of the requirements prescribed by the rules, Section 3-5a of the Rules specifically sanctions the Consistent with the principle that an appeal is a statutory privilege

outright dismissal of an appeal that fails to comply with the Rules, thus

SEC.3.5.Action on the Appeal Memorandum.-

a Grounds for Outright Dismissal of an Appeal. - From an initial examination of the allegations or averments in the appeal memorandum and such documents that may be attached thereto, the appeal may be dismissed outright for failure to comply with requirements set forth_under these Rules." underscoring supplied) Emphasis and

In the instant case, the records show that the Appeal was filed on 24 May 2021.The records also show that while Appellees' current counsel on record, Castillo Law Office,filed its Entry of Appearance on 16 December 2020,Appelleesoriginal counsel on record,Atty.Venus Ambrona,only filed her Notice of Withdrawal on 10 June 2021,or after the Appeal was filed. Given this factual backdrop, Appellants cannot be faulted in assuming that Castillo Law Office was collaborating with Atty.Ambrona at the time of filing of the filing of the Appeal since the latter filed her Notice of Withdrawal only after the Appeal was filed. Relative thereto, it should be emphasized that the Supreme Court held in Venterez vs Atty. Cosmel that a counsel's right to withdraw from a case arises only from the client's written consent or from a good cause, thus

terminate the attorney-client relation at any time with or without cause. The sufficientcauseis.howeverconsiderablyrestricted. Amongthe fundamental rules of ethics is the principle that an attorney who undertakes to conduct an action impliedly stipulates to carry it to its conclusion. He is not at liberty to abandon it without reasonable cause. A lawyer's right to "The rule in this jurisdiction is that a client has the absolute right to right of an attorney to withdraw or terminate the relation other than for withdraw from a case before its final adjudication arises only from the client's written consent or from a good cause. (Emphasis supplied)

Atty.Ambrona was only given in the Notice of Withdrawal that was filed on The records show that Appellees' written consent to the withdrawal of

10 June 2021. We thus hold that Appellants substantially complied with the requirement to furnish Appellees counsel with a copy of the Appeal.

Be that as it may, the Commission however finds that Appellants failed to pay the appeal fee required under Section 3-3iii of the Rules within the

IA.C.No. 7421, October 10, 2007

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acquire jurisdiction over the appeal, and in the consequent finality of the period to file an appeal, which resulted in the failure of the Commission to

Assailed Decision.

In the Appeal, Appellants expressly admitted that they received a copy of the Assailed Decision on 14 May 2021 and that they had fifteen (15days or until 29 May 2021 within which to file the same.11 The records however show that Appellants paid the appeal fee only on 3 June 2021,or six 6days

of appeal fees is mandatory and jurisdictional, the mere filing of the Appeal after the period to file an appeal has lapsed.Verily,considering that the filing within the reglementary period, unaccompanied by the payment of the appeal fees within the same period, did not toll the running of the prescriptive period. Hence,the Commission holds that the failure of Appellants to pay the appeal fee within the reglementary period resulted in their failure to perfect an appeal and rendered the Assailed Decision final and executory. In Acacia Homeowners Association, Inc. vs. Purification Fetalcorin the Supreme Court denied a Petition after finding that the docket fees were paid a day after the reglementary period has lapsed,and reiterated the following rule, thus:

"It has been repeatedly held that that the payment of appeal docket fees is both mandatory and jurisdictional. It is mandatory as it is required in all appealed cases, otherwise, the Court does not acquire the authority to hear and decide the appeal. The failure to pay or even the partial payment of the appeal fees does not toll the running of the prescriptive period. hence, will notpreventthejudgment frombecomingfinaland_executory. (Underscoring supplied)

Commission has not acquired the authority to hear and decide on the same On the basis thereof, the Appeal should be dismissed asthe

and on the ground that the Assailed Decision has become final and executory by operation of lawI after Appellants failed to pay the appeal fees within the reglementary period.

1 Pars.2 and 3 of the Appea 1 G.R.No. 251273, June 30, 2020 13 -A judgment becomes final and executory by operation of law.Finality becomes a fact when the reglementary period to appeal lapses and no appeal is perfected within such period. As a consequence, no court (not even this Court can exercise appellate jurisdiction to review a case or modify a decision that has became final. When a final judgment is executory.it becomes immutable and unalterable. It may no longer be modified in any respect either by the court which rendered it or even by this Court. The doctrine is founded on considerations of public policy and sound practice that,at the risk of occasional errors,judgments must become final at some definite point in timeTorres vs Aruego.G.R.No.201271,September 20,2017

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The OGC did not err in taking cognizance of, and passing upon the issue on the Corporation's non. compliance with the RCC.

The Appeal is also dismissible not only on technical grounds but also for lack of merit.

instant case which involved and presented an election contest. This, according to Appellants,is an intra-corporate dispute which is outside the jurisdiction of Appellants maintained that the OGC erred in taking cognizance of the

in the Petition mentioned the commission of material falsehood in the GIS years 2017-2018 were valid.1 Appellants thus posited that the primary the Commission.14 In support thereof, Appellants argued that the allegations that was submitted,15 and presented the issue on whether the elections for the contentious issue is the validity and legality of the provision on proxy and the contested meeting and election of directors which are intra-corporate in nature as they involve devices and schemes employed by,or an act of the board or officers amounting to fraud.1

Appellants' arguments must fail as they are not supported by the evidence on record.

A meticulous review of the factual antecedents borne on the records of the case will show that the Petition alleged that the Corporation has failed to call and conduct its regular meetings and elections since 2006, and that the incumbent members of the board, who were apparently discharging their functions under a hold-over capacity, have allegedly committed abuses. It is in this context that the Petition prayed that the Corporation be directed to call and hold a meeting and election as mandated under its By-laws and the Corporation Code.Clearly, the main issue presented is not an election contest as what Appellants insist, but whether the Corporation has failed to comply with the provisions of the Corporation Code mandating the conduct of annual regular meeting. This is supported by the fact that during the preliminary

respective allegations relating to the holding of meeting and conduct of election. Thus, Appellants were specifically directed to present the Corporation's corporate secretary for purposes of testifying on the conduct of conferences that were conducted, the parties were directed to substantiate their

the meeting and electing, and to submit the minutes thereof.18 The OGC

18 See Pages 4-5 of the Decision 15 Pars.12 and 14 of the Appeal 1 Par.13 of the Appeal 17Par.17 of the Appeal 1 Paragraph 8 of the Appeal

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rendered a decision directing the conduct of meeting and election after finding that the Corporation has indeed failed to call and conduct its regular members meeting in violation of the mandatory provisions of Section 50 of the Corporation Code.

upon the issue on the Corporation's non-compliance with the mandatory commit reversible error in taking cognizance of the instant case and in passing provisions of Section 50 of the Corporation as the same is within the exclusive and primary jurisdiction of this Commission.19 On account thereof, the Commission holds that the OGC did not

Commission of its regulatory functions to ensure compliance with laws, rules and regulations may be compelled by a mandamus in case it fails to perform the same, to wit In Gamboa v.Teves2 the Court ruled that the performance by the

functions. Under its regulatory functions, the SEC can be compelled by mandamus to perform its statutory duty when it unlawfully neglects to perform the same, Under its adjudicative or quasi-judicial functions, the SEC can be also be compelled by mandamus to hear and decide a possible to investigate such violation." (Emphasis and underscoring supplied). This Court has held that the SEChas both regulatory and adjudicative violation of any law it administers or enforces when it is mandated by law

corporate dispute, and categorically ruled that jurisdiction over the same is the matters/issues raised by the parties which partook of the nature of an intra- vested in the regular courts,hence,will not be considered in the decision. We Moreover, this Commission particularly notes that the OGC identified

quote the relevant portion of the Assailed Decision, thus:

Deed and Declaration on the ground that the requirement for unit owners to grant an irrevocable proxy for a period of ten10 years from actual physical or constructive turn over of their respective units violates Section 58 of the Petitioners seek the nullification of Section 10, Article 10 of the Master Code which limits the validity of proxies to five(5)years

The Office agrees with GA Tower 1 that the foregoing matter is not within the jurisdiction of the Commission, but with the regular courts. The power and authority to determine whether a contract or a document should be struck down as void for being contrary to law is vested in the regular courts of justice applying the general laws i.e. the Civil Code that do not require any particular expertise or training to interpret and apply.

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19 Section5(d) of the Securities Regulation Code 20 G.R. No. 176579, June 28, 2011.

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In a similar manner, the action secking nullification of the clection of directors or officers or their hold-over status should likewise be dismissed for being an intra-corporate dispute, the jurisdiction over which is now vested in the regular courts under Section 5.2 of the SRC

error in applying the relevant laws, or abused its discretion. findings of the OGC in the absence of any proof showing that it committed On the basis thereof, We do not find any cogent reason to disturb the

Moreover,we agree with the OGC that allegations of intra-corporate dispute in the Petition does not deprive the Commission of jurisdiction to take

interpretation and implementation of the Corporation Code and other laws cognizance of a case and pass upon an issue that solely relates to the

implemented by it. The OGC correctly cited and applied the doctrine in Roman, Jr.v. Securities and Exchange Commission2 where the Supreme Court ruled that the Commission is not stripped-off its power to adjudicate matters which involves the implementation of the laws and rules despite the existence of intra-corporate controversies, thus:

Under the SRC,jurisdiction on matters stated under Section 5 of P.D.No 902-A, which was originally vested in the SEC,has already been transferred to the RTC acting as a special commercial court. Despite the said transfer, jurisdiction over a complaint, which alleged that SBGCCI and UIGDC committed misrepresentations in the sale of their shares. The Court held in however, the SEC still retains sufficient powers to justify its assumption of jurisdiction over matters concerning its supervisory, administrative and regulatory functions.In SEC v.Subic Bay Golf and Country Club,Inc (SBGCCI and Universal International Group Development Corporation UIGDC,24 for instance, the Court affirmed the SEC's assumption of

the said case that nothing prevented the SEC from assuming jurisdiction to determine if SBGCCI and UIGDC committed administrative violations and were liable under the SRC despite the complaint having raised intra- corporate issues. It also ruled that the SEC may investigate activities of corporations to ensure compliance with the law

In ruling that way, the Court cited Sections 5 and 53 of the SRC as justifications, to wit:

have the powers and functions provided by this Code. SECTION 5. Powers and Functions of the Commission 5.1. The Commission shall act with transparency and shall

shall not be disturbed by the Commission unless there are serious errors, thus: 2 Part V,Rule III, Section 3-11 of the 2016 Rules provides that factual findings of an operating department

SEC.3-11.Review Standard-Findings of fact by the Operating Department, the Special Hearing Panel or the Self-Regulatory Organization shall not be disturbed by the Commission En Banc. unless serious errors of fact have been committed. (Emphasis and underscoring supplied) G.R.No. 196329June I,2016.

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have, among others, the following powers and functions: Presidential Decree No. 902-A, the Corporation Code, the Investment Houses Law, the Financing Company Act and other existing laws. Pursuant thereto the Commission shall

a Have jurisdiction and supervision over all corporations, partnerships or associations who are the grantees of primary franchises and/or a license or permit issued by the Government;

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d Regulate, investigate or supervise the activities of persons to ensure compliance;

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n Exercise such other powers as may be provided by law as well as those which may be implied from, or which are necessary or incidental to the carrying out of, the express powers granted the Commission to achieve the objectives and purposes of these laws.

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provision of this Code any rule, regulation or order SECTION 53.Investigations, Injunctions and Prosecution of make such investigations as it deems necessary to determine whether any person has violated or is about to violate any thereunder, or any rule of an Exchange, registered securities organization, and may require or permit any person to file with it a statement in writing, under oath or otherwise, as the Commission shall determine as to all circumstances concerning the matter to be investigated... Offenses.-53.1.The Commission may, in its discretion association, clearingagencyotherself-regulatory facts and

Beyond doubt, therefore is the authority of the SEC to hear cases regardless of whether an action involves issues cognizable by the RTC, provided that the SEC could only act upon those which are merely administrative and regulatory in character. In other words, the SEC was even if these are riddled with intra-corporate allegations, if their invocation of authority is confined only to the extent of ensuring compliance with the law and the rules, as well as to impose fines and penalties for violation thereof: and to_investigate even motu proprio whether corporations comply with the Corporation Code, the SRC and the implementing rules and regulations. never dispossessed of the power to assume jurisdiction over complaints. supplied) Emphasisandunderscoring

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the case has already become moot and The OGC did not err in holding that

academic following the conduct of the annual meeting on 2 November 2020

become moot and academic with the conduct of the annual meeting and the denial of the Motion for Reconsideration (the Motion on the basis election on 2 November 2020 (the November Meeting and Election), and Appellants finally assailed the finding of the OGC that the case has

thereof. Appellants argued that the November Meeting and Election is void and should be invalidated as the same was made pursuant to the Assailed Decision that has not yet attained finality.

In its Resolution, the OGC justified the denial of the Motion on the evidence presented by Appellees showing that the Corporation already conducted the November Meeting and Election, and ruled that the same was a supervening event that mooted the instant case as the issue on the Corporations non-compliance with Section 50 of the Corporation Code has already been addressed.The OGC likewise held that validity of the November Meeting and Election which Appellants were questioning is an intra-corporate dispute, the jurisdiction over which belongs to the Regional Trial Court (RTC).

reversible error in ruling that the matter relating to the validity of the The Commission finds and so holds that the OGC did not commit

November Meeting and Election is an intra-corporate dispute which is now within the exclusive jurisdiction of the RTC; and in dismissing the Motion on the basis of a finding that the November Meeting and Election has rendered the issues of the instant case moot and academic.

The OGC correctly ruled that the issue on whether the November Meeting and Election was valid is an intra-corporate dispute which is covered under Section 1 Rule I of the Interim Rules of Procedure for Intra-Corporate Controversies considering that this conflict, which involves the members of

2SECTION 1.aCases coveredThese Rules shall govern the procedure to be observed in civil cases involving the following:

I 2 Devices or schemes employed by, or any act of, the board of directors, business associates, officers or partners, amounting to fraud or misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, or members of any corporation, partnership, or association Controversies arising out of intra-corporate, partnership, or association relations between and among stockholders, members, or associates; and between, any or all of them and the corporation, partnership, or association of which they are stockholders members, or associates,respectively

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relationship test and nature of controversy test established in jurisprudence24 Securities Regulation Code.25 the Corporation,relates to the recognition and enforcement of their correlative rights under their constitutional documents and the Corporation Code. The issue on the validity of the November Meeting and Election thus satisfies the which is now under the jurisdiction of the RTC pursuant to Section 5.2 of the

Motion on the ground of mootness, the concept of which was explained by the Supreme Court in Dominguez v.Mamuela Corporation,thus Moreover, We also hold that the OGC was correct in denying the

a justiciable controversy by virtue of supervening events, so that an adjudication of the case or a declaration on the issue would be of no the dismissal of the petition. Courts generally decline jurisdiction over such case or dismiss it on the ground of mootness. This is because the judgment will not serve any useful purpose or have any practical legal effect because, in the nature of things, it cannot be enforcedEmphasis and A case or issue is considered moot and academic when it ceases to present practical value or use. Consequently, there is no actual substantial relief which a petitioner would be entitled to, and which would be negated by underscoring supplied)

2 The Court then combined the two tests and declared that jurisdiction should be determined by considering not only the status or relationship of the parties, but also the nature of the question under controversy This two-tier test was adopted in the recent case of Speed Distribution Inc.v. Court of Appeals 3 4 S Inspection of corporate books.Emphasis supplied[A.M.No.01-2-04 SC] Controversies in the election or appointment of directors, trustees, officers, or managers of corporations, partnerships, or associations: Derivative suits; and

To determine whether a case involves an intra-corporate controversy,and is to be heard and decided by the branches of the RTC specifically designated by the Court to try and decide such cases, two elements must concura the status or relationship of the parties,and 2 the nature of the question that is the subject of their controversy

between any or all of the parties and the corporation, partnership. or association of which they are not stockholders, members or associates, between any or all of them and the corporation, partnership or corporation partnership, or association and the State insofar as it concerns the individual franchises. The second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation. If the nature of the controversy involves matters that are purely civil in character.necessarily the case does not involve an intra-corporate controversyReal vs Sangu Philippines, Inc.G.R.No.168757 is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court Provided shall exercise jurisdiction over these cases. The Commision shall retain jurisdiction over pending cases involving intra- corporate disputes submitted for final resolution which should be resolved within one I year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of The first clement requires that the controversy must arise out of intra-corporate or partnership relations association of which they are stockholders, members or associates, respectively and between such payments/rehabilitation cases filed as of 30 June 2000 until finally disposed 2 The Commissions jurisdiction over all cases enumerated in Section 5 of Presidential Decree No. 902-A That the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that January 19, 2011) 26 G.R. No. 205545 (Notice), December 2, 2020.

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supervening event that rendered the instant case moot and academic inasmuch province of the RTC as it rendered the Corporation compliant with requirement under Section 50 of the Corporation Code.The Commission's regulatory function in relation to Section 50 of the Corporation Code is limited to ensuring that corporations call and hold their regular meeting pursuant to their by-laws. Once this requirement is complied with, the issue on whether the said meeting is valid or not is already an intra-corporate dispute that is within the exclusive The conduct of the November 2020 Meeting and Election is a

validity of the November 2020 Meeting and Election,a matter which is not for the Commission to decide. Appellants considering that the issue presented therein already relates to the Thus, the OGC was correct in denying the Motion to Expunge filed by

hereby AFFIRMED MEMORANDUM filed by GA Tower 1 Condominium Corporation is hereby DISMISSED as the same was not perfected, and for lack of merit.The Assailed Decision and Resolution of the Office of the General Counsel is WHEREFORE, premises considered, the APPEAL

SO ORDERED.

Pasay City,Philippines;8 February 2022

NMM EMILIO B.AQUINO

Chairperson

EPHYROLUIS B.AMATONG 9Aw Commissioner JAVEYPAUL D.FRANCISCO Commissioner

YL u B KEINLESTERK.LEE Commissioner KARLOS.BELLO Commissioner