Case Digest (G.R. No. 117604)
Facts:
China Banking Corporation v. Court of Appeals, and Valley Golf & Country Club, Inc., G.R. No. 117604, March 26, 1997, the Supreme Court First Division, Kapunan, J., writing for the Court.Petitioner China Banking Corporation (CBC) was pledgee of Stock Certificate No. 1219 belonging to Galicano Calapatia, Jr. (the pledgor). On 21 August 1974 Calapatia executed a deed of pledge in favor of CBC; VGCCI acknowledged the pledge in its books by letter dated 27 September 1974. On 3 August 1983 Calapatia obtained a P20,000 loan from CBC secured by that pledge, and when he defaulted CBC initiated extrajudicial foreclosure, held a public auction on 17 September 1985 where CBC was the highest bidder and was issued a certificate of sale.
Meanwhile, Valley Golf & Country Club, Inc. (VGCCI) sent repeated notices to Calapatia for delinquent dues and, on 4 December 1986, published notice of an auction to be held 10 December 1986 that included Stock Certificate No. 1219; VGCCI sold the share at that auction and later notified Calapatia of termination of membership. CBC learned of VGCCI’s December 1986 sale only after the fact and, on 9 March 1990, protested the sale and filed a complaint in the Regional Trial Court (RTC) of Makati seeking nullification of VGCCI’s auction and issuance of a new stock certificate in CBC’s name.
The RTC of Makati dismissed CBC’s complaint for lack of jurisdiction on 18 June 1990 (and denied reconsideration 27 August 1990). CBC then filed a complaint with the Securities and Exchange Commission (SEC) on 20 September 1990 seeking nullification of VGCCI’s December 1986 sale, cancellation of any new certificate issued thereunder, issuance of a certificate in CBC’s name, and damages. The SEC Hearing Officer dismissed CBC’s complaint on 3 January 1992; reconsideration was denied 14 April 1992. On appeal, the SEC En Banc reversed on 4 June 1993, declared the December 10, 1986 auction null and void, and ordered issuance of a membership certificate in CBC’s name; the SEC denied VGCCI’s motion for reconsideration in a resolution dated 7 December 1993.
VGCCI invoked the jurisdiction of the Court of Appeals, which on 15 August 1994 nullified the SEC orders (and the hearing officer’s decisions) for lack of jurisdiction over the subject matter and dismissed CBC’s...(Subscriber-Only)
Issues:
- Did the Court of Appeals gravely err in nullifying and setting aside the SEC en banc’s order (June 4, 1993) and resolution (December 7, 1993) and in dismissing CBC’s complaint for lack of jurisdiction?
- Did the Court of Appeals err in failing to affirm the SEC en banc’s finding that CBC is the lawful owner of Membership Certificate No. 1219 and in declining to annul VG...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)