G.R. No. 52361 - Sunset View Condominium Corp. vs. Campos, Jr.

Case Summary (G.R. No. 52361)

Petitioner

Sunset View Condominium Corporation sued for collection of unpaid assessments and related charges assessed against specific condominium units in its project. The corporation asserted its right to collect assessments from occupants or assignees who had not fully paid the purchase price.

Respondents

Aguilar‑Bernares Realty and Lim Siu Leng each defended on jurisdictional grounds, contending that purchasers (even if unpaid in full) are “holders of a separate interest” under Section 2 of R.A. No. 4726 and thereby become shareholders of the condominium corporation; consequently, disputes between such purchasers and the condominium corporation are intra‑corporate and fall under the exclusive original jurisdiction of the Securities and Exchange Commission pursuant to Section 5(b) of P.D. No. 902‑A.

Key Dates and Procedural Steps

Complaints for collection were filed (e.g., Civil Case No. 7303‑P dated June 22, 1979; amended complaint dated July 16, 1979 in City Court docketed as Civil Case No. 14127).
In G.R. No. 52361: Judge granted respondent’s motion to dismiss on December 11, 1979; motion for reconsideration denied; petitioner sought certiorari.
In G.R. No. 52524: Trial court denied motion to dismiss (order dated August 13, 1979), denial of reconsideration dated September 19, 1979; private respondent appealed to the Court of First Instance (Civil Case No. 7530‑P); the trial court later dismissed the appeal and directed the parties to go to the SEC (order dated December 14, 1979), and denied reconsideration on January 14, 1980; petitioner sought certiorari.
The two petitions were consolidated by this Court by resolution dated March 17, 1980.

Applicable Law and Constitutional Basis

Republic Act No. 4726 (The Condominium Act), including its provisions on “separate interests,” the requirement that an enabling or master deed state the exact nature of interests to be acquired (Section 4), transfer of undivided interests and, in proper cases, membership/shareholding (Section 5), and the rule that membership is not transferable separately from the unit and terminates when one ceases to own the unit (Section 10).
The Amended Master Deed for the project (registered at the Register of Deeds), including its provisions that shareholding in the condominium corporation is appurtenant to the unit and that share allocation and transfer are governed by specified conditions.
P.D. No. 902‑A, Section 5(b) (conferring original and exclusive jurisdiction on the SEC over intra‑corporate controversies among stockholders/members and the corporation).
Section 10, Rule 40, Rules of Court (right to appeal from certain interlocutory orders).
Applicable Constitution for the decision: the 1973 Constitution (as the decision predates the 1987 Constitution).

Issues Presented

Whether a purchaser of a condominium unit who has not fully paid the purchase price is automatically a shareholder of the condominium corporation (i.e., a “holder of a separate interest” under Section 2 of R.A. No. 4726).
Whether jurisdiction over collection suits for assessments assessed by the condominium corporation on units whose purchasers have not fully paid the purchase price lies with the regular courts or is within the exclusive original jurisdiction of the Securities and Exchange Commission.

Court’s Analysis on Shareholding and “Separate Interest”

The Court rejected the contention that every purchaser—regardless of full payment—is automatically a shareholder. It emphasized that Section 5 of R.A. No. 4726 contemplates that shareholding in the condominium corporation will be transferred only “in a proper case,” and that Section 4 requires the Master Deed to state the exact nature of the interest acquired. The Amended Master Deeds for the project expressly linked shareholding to ownership and specified conditions for the acquisition and transfer of shares.

Interpretation of the Master Deed and Contracts

The registered Amended Master Deeds provided that stockholding in the condominium corporation is an appurtenance of the unit and cannot be transferred separately from the unit; they also made acquisition of stockholding an “essential condition” to unit ownership and set forth when ownership is acquired. The Contracts to Buy and Sell for the units in question expressly provided that full and absolute title to the unit and the shares pertaining thereto would be conveyed only upon full payment of the total purchase price and full compliance with contractual obligations. Thus, the share of stock appurtenant to a unit is transferred to the purchaser only upon full payment, at which point the purchaser becomes the owner and, concomitantly, a shareholder.

Statutory Reinforcement and Logical Inference

Section 10 of the Condominium Act reinforces the inseparability of membership from unit ownership: membership ceases when one ceases to own the unit. From this, the Court inferred that the “separate inter

Case Syllabus (G.R. No. 52361)

Parties

Petitioner in both consolidated matters: Sunset View Condominium Corporation, the condominium corporation formed under Republic Act No. 4726 and management body holding title to all common and limited common areas of the Sunset View Condominium Project at 2230 Roxas Boulevard, Pasay City; Amended Master Deed with Declaration of Restrictions duly registered.
Private respondent in G.R. No. 52361: Aguilar-Bernares Realty, a sole proprietorship (registered business name) owned and operated by spouses Emmanuel G. Aguilar and Zenaida B. Aguilar; assignee of unit “Solana” from La Perla Commercial, Incorporated.
Private respondent in G.R. No. 52524: Lim Siu Leng; assignee (by assignment dated July 11, 1977) of unit “Alegria” which had been the subject of a Contract to Buy and Sell between Alfonso Uy and Tower Builders, Inc.
Judicial respondent: The Honorable Jose C. Campos, Jr., Presiding Judge of the Court of First Instance, Branch XXX, Pasay City (named in petitions for certiorari alleging grave abuse of discretion).

Nature of the Actions

Both cases are actions filed by the condominium corporation for collection of assessments (and in one case, insurance premiums and interest) levied against condominium units in the Sunset View Condominium Project.
Central legal question: whether purchasers who have not fully paid the purchase price are automatically shareholders/members of the condominium corporation (thus making the controversy intra-corporate and within the exclusive original jurisdiction of the Securities & Exchange Commission under P.D. No. 902-A), or whether such disputes are properly within the jurisdiction of the regular trial courts.

Consolidation and Procedural Posture

The two cases, presenting similar facts and identical legal questions, were consolidated by this Court’s resolution dated March 17, 1980.
Both matters reached this Court by petitions for certiorari alleging grave abuse of discretion on the part of the trial judge for dismissing or directing dismissal of the actions and ordering the parties to litigate before the Securities & Exchange Commission.

Relevant Contracts and Conveyancing Documents (evidence cited)

G.R. No. 52361: Deed of Assignment (Annex “D” in rollo), Contract to Buy and Sell dated September 13, 1977 (Annex “D”, rollo pp. 30–33).
G.R. No. 52524: Contract to Buy and Sell dated May 12, 1976 (Annex “C”, rollo pp. 45–50); Assignment to Lim Siu Leng (Annex “F”, rollo pp. 60–62); other annexes and trial court pleadings cited in the rollo.
Master Deed provisions (Amended Master Deed, duly registered) containing the express terms on stockholding, transfer of shares, and the timing/conditions of ownership transfer (Part I, Sections 6 and 7 quoted in the opinion).

Facts — G.R. No. 52361 (Solana unit)

La Perla Commercial, Incorporated bought unit “Solana” on installment from Tower Builders, Inc.
Aguilar-Bernares Realty is assignee of the “Solana” unit from La Perla.
Sunset View Condominium Corporation filed Civil Case No. 7303-P (complaint dated June 22, 1979) for collection of assessments levied on the “Solana” unit.
Aguilar-Bernares Realty moved to dismiss on grounds: failure to state a cause of action, lack of jurisdiction over subject matter, and existence of another pending action between same parties for same cause.
Trial judge granted the motion to dismiss (order dated December 11, 1979), holding that the assignee is a “holder of a separate interest” under Section 2 of R.A. No. 4726 and thus a shareholder for whom the SEC has exclusive original jurisdiction; motion for reconsideration denied; petitioner filed certiorari alleging grave abuse.

Facts — G.R. No. 52524 (Alegria unit)

Alfonso Uy entered into a Contract to Buy and Sell with Tower Builders, Inc. for unit “Alegria”; on July 11, 1977 the unit was assigned to Lim Siu Leng.
Sunset View Condominium Corporation filed an amended complaint dated July 16, 1979 (Civil Case No. 14127, Branch I, City Court of Pasay City) to collect overdue assessments and insurance premiums plus interest amounting to P6,168.06 as of March 31, 1979.
Lim Siu Leng filed motion to dismiss for lack of jurisdiction, contending the case involves assessments whose correctness and validity would raise intra-corporate disputes because as purchaser she is a holder of a separate interest (per Section 2 of R.A. No. 4726) and thus a stockholder; she invoked exclusive SEC jurisdiction under Section 5 of P.D. No. 902-A.
Trial court denied the motion to dismiss (order dated August 13, 1979) and denied reconsideration (September 19, 1979).
Lim appealed to the Court of First Instance under Section 10 of Rule 40 — appeal docketed as Civil Case No. 7530-P. Petitioner moved to dismiss the appeal as interlocutory; motion denied; parties submitted memoranda. The CFI issued an order dated December 14, 1979 dismissing the appeal, reversing the lower court, dismissing the case, and directing the parties to ventilate their controversy with the SEC. Motion for reconsideration denied January 14, 1980. Petitioner filed certiorari alleging grave abuse.

Issues Presented (identical in both petitions)

Is a purchaser of a condominium unit in the project managed by the petitioner, who has not yet fully paid the purchase price thereof, automatically a stockholder of the petitioner Condominium Corporation?
Is it the regular court or the Securities & Exchange Commission that has jurisdiction over actions for collection of assessments assessed by the Condominium Corporation on condominium units the full purchase price of which has not been paid?

Statutory and Contractual Provisions Considered

Section 2 of Republic Act No. 4726 (Condominium Act) — reference to “holder of a separate interest” (term relied upon by private respondents).
Section 4 of R.A. No. 4726 — requirement that Master/Enabling Deed be recorded and contain “a statement of the exact nature of the interest acquired or to be acquired by the purchaser in the separate units and in the common areas of the condominium project.”
Section 5 of R.A. No. 4726 — provides: “Any transfer or conveyance of a unit or an apartment, office or other space therein, shall include the transfer or conveyance of the undivided interests in the common areas or, in a proper case, the membership or shareholding in the condomin