MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION vs.

CULLEN
G.R. NO. 181416
NOVEMBER 11, 2013

FACTS:

Respondent Robert H. Cullen purchased from MLHI condominium unit no. 1201 of the Medical
Plaza Makati. On September 19, 2002, petitioner demanded from respondent payment for alleged
unpaid association dues and assessments. Respondent claimed that he has been religiously paying his
dues shown by the fact that he was previously elected president and director of petitioner. Petitioner
claimed that the obligation was a carry-over of that of MLHI. As a consequence, respondent was
prevented from exercising his right to vote and be voted for during the 2002 election of petitioner’s
Board of Directors. Respondent clarified from MLHI the veracity of the petitioner’s claim but MLHI
allegedly claimed that the same had been settled. This prompted respondent to demand an explanation
from petitioner but petitioner failed to do so. Hence, respondent filed a Complaint for Damages against
petitioner and MLHI before the RTC. Both petitioner and MLHI filed separate motions to dismiss the
complaint on the ground of lack of jurisdiction. The motions for dismissal were granted by the RTC. The
trial court agreed with MLHI that the action for specific performance filed by respondent clearly falls
within the exclusive jurisdiction of the HLURB. It, likewise, ruled that the issues raised are intra-
corporate between corporation and member. The CA, however, reversed and set aside the trial court’s
decision and remanded the case to the RTC for further proceedings. The appellate court held that the
controversy is an ordinary civil action for damages which falls within the jurisdiction of regular courts.

ISSUE:

Whether or not the controversy involve intra-corporate issues as would fall within the jurisdiction of the
RTC sitting as a special commercial court or an ordinary action for damages within the jurisdiction of
regular courts?

HELD:

In determining whether a dispute constitutes an intra-corporate controversy, the Court uses two tests,
namely, the relationship test and the nature of the controversy test.

An intra-corporate controversy is one which pertains to any of the following relationships: (1) between
the corporation, partnership or association and the public; (2) between the corporation, partnership or
association and the State insofar as its franchise, permit or license to operate is concerned; (3) between
the corporation, partnership or association and its stockholders, partners, members or officers; and (4)
among the stockholders, partners, or associates themselves. Thus, the existence of any of the above
intra-corporate relations makes the case intra-corporate.

In this case, the issue arose from the intra-corporate relations between the parties, and the questions
involved pertain to their rights and obligations under the Corporation Code and matters relating to the
regulation of the corporation. Thus, we find and hold that the case involves intra-corporate controversy.

Being corporate in nature, the issues should be threshed out before the RTC as a special commercial
court. It is still within the jurisdiction of the RTC sitting as a special commercial court and not the HLURB
because a condominium corporation is not covered under RA 9904.