5. MEDICAL PLAZA VS.
CULLEN o 2) between the corporation, partnership/association and the State with regards to its
GR NO. 181416
NOVEMBER 11, 2013
BY: Ryan
TOPIC: SEC POWERS; INTRA-CORPORATE DISPUTES
PETITIONERS: MEDICAL PLAZA MAKATI CONDO CORP.
RESPONDENTS: ROBERT CULLEN
PONENTE: PERALTA, J.
FACTS:
● Cullen bought from Meridien Land Holding Inc (MLHI) Condo Unit 1201 of the Medical Plaza
Makati Condo Corp. (MPMCC). MPMCC, through its corporate secretary, Dr. Dimayuga,
demanded payment from Cullen payment of alleged unpaid association dues and other
assessments amounting to PhP145K.
● Cullen disputed this and maintained that he regularly paid his dues shown by the fact that he
was elected president and director of MPMCC. MPMCC countered that Cullen’s obligation
was a carry-over of that of MLHI.
● Consequently, Cullen was unable to vote and be voted for during the 2002 election of
MPMCC’s Board of Directors. Hence, he clarified from MLHI the veracity of MPMCC’s claims
but MLHI claimed that it was already been settled. With this, Cullen was prompted to
demand from MPMCC an explanation why he was a delinquent payer despite the settlement
of said obligation which was unheeded hence this case for damages.
● MPMCC and MLHI filed their respective MTDs; MLHI argued that the HLURB had exclusive
jurisdiction over the case while MPMCC raised the ff. grounds for dismissal of the case:
o Cullen is estopped as he approved the assessment when he was president;
o Lack of jurisdiction as the case is an intra-corporate controversy;
o Failure of Cullen to exhaust all intra-corporate remedies; and
o Case is moot and academic as the obligation was settled between MPMCC and MLHI.
● RTC: Dismissed Cullen’s complaint. As to MLHI’s claim, it held that HLURB indeed had
jurisdiction while as to MPMCC’s claim, the complaint had no cause of action considering that
Cullen’s obligation was already settled by MLHI and the issues raised were intra-corporate
between corporation and member.
● CA: Reversed the RTC and remanded the proceedings to it. It held that the issue is an
ordinary civil action for damages which can be settled by regular courts as the case was
hinged on MPMCC’s refusal to confirm MLHI’s claim that the obligation has already been
settled. MPMCC and MLHI filed their MRs but were denied.
ISSUE: WoN the case is either an ordinary civil action or an intra-corporate dispute – YES
(PERO HINDI NAKA-SIT AS SPECIAL COMMERCIAL COURT UNG RTC KAYA DISMISSED ANG
KASO AT NA-REMAND ULI)
HELD/RATIO:
● Jurisdiction over the subject matter is determined by the allegations in the complaint and
unaffected by the pleas/theories lodged by the defendant in his Answer or MTD otherwise
jurisdiction will be dependent on the defendant’s will.
● To ascertain the dispute if it is an intra-corporate issue there are 2 tests: 1) relationship test
and 2) nature of the controversy test.
● I. Relationship Test: An intra-corporate issue is one w/c pertains to any of the ff.
relationships:
o 1) between the corporation, partnership/association and the public;
franchise, permit/license to operate;
o 3) between the corporation, partnership/association and its stockholders, partners,
members/officers; and
o 4) among stockholders, partners or associates themselves.
o Hence, under the relationship test, the existence of the aforementioned relations makes
the case intra-corporate.
● II. Nature of controversy test: the controversy must not be rooted in the existence of an
intra-corporate relationship, but must as well pertain to the enforcement of parties’
correlative rights and obligation under the Corporation Code and the internal and intra-
corporate rules of the corporation. Thus, jurisdiction should determined by considering the
parties’ relationship and the nature of the issue.
● With this, SC held that the issue is intra-corporate in nature as it arose from the intra-
corporate relations between the parties and questions involved to the rights and obligations
under the Corporation Code as well as the matters in the corporation.
● I. MPMCC is a corporation under PH Law and manages the Medical Plaza Makati. Cullen is a
registered unit owner hence a stockholder of MPMCC hence there is an intra-corporate
relationship between MPMCC (corporation) and Cullen (stockholder)
● II. Nature of the action is determined in the body of the complaint. Though it is an action for
damages, upon further scrutiny, Cullen’s allegation shows that the case dwells on the
propriety of the assessment done by MPMCC against Cullen as well as the validity of
MPMCC’s actions to prevent Cullen from participating in the Board of Director’s elections.
● P.D. No. 902-A delineates the SEC’s exclusive jurisdiction: 1) issues in intra-corporate
relationships; and 2) issues in election/appointment of officers. To be sure, this action is
intra-corporate in nature hence jurisdiction is with the SEC.
o Pursuant to Sec. 5.2 of R.A. 8799, the SEC’s jurisdiction over all cases enumerated under
the aforementioned cases in P.D. No. 902-A has been transferred to the RTC designated as
Special Commercial Courts.
● While the CA was correct that the RTC has jurisdiction, the case should have been filed with a
regular court but with the RTC branch designated as a special commercial court. Considering
where the case was heard, while it was with the RTC Makati, Br. 58, it was not a special
commercial court hence the CA erred in remanding the case
DISPOSITIVE PORTION: WHEREFORE, we hereby GRANT the petition and REVERSE the Court of
Appeals dated July 10, 2007 and Resolution dated January 25, 2008 in CA-G.R. CV No. 86614.
The Complaint before the Regional Trial Court of Makati City, Branch 58, which is not a special
commercial court, docketed as Civil Case No. 03-1018 is ordered DISMISSED for lack of
jurisdiction. Let the case be REMANDED to the Executive Judge of the Regional Trial Court of
Makati City for re-raffle purposes among the designated special commercial courts.