G.R. No. 140687 - China Banking Corp. vs. Court of Appeals

On August 21, 1974, stockholder Galicano Calapatia, Jr. pledged Stock Certificate No. 1219 to China Banking Corporation (CBC); Valley Golf & Country Club, Inc. (VGCCI) acknowledged and noted the pledge in its books on September 27, 1974.
On August 3, 1983, Calapatia obtained a P20,000 loan from CBC secured by the existing pledge. On April 12, 1985, CBC filed for extrajudicial foreclosure; a public auction was held on September 17, 1985, where CBC was the highest bidder and received a certificate of sale.

Between November 1985 and November 1986, VGCCI sent Calapatia multiple notices demanding payment of his overdue club account. On December 4, 1986, VGCCI published a notice of auction of delinquent shares, including Certificate No. 1219, with the sale held on December 10, 1986.
On May 5, 1989, CBC requested VGCCI to issue a new stock certificate in its name. On March 2, 1990, VGCCI replied that the share had been sold at the December 1986 auction for P25,000.

September 1990: The RTC of Makati dismissed CBC’s suit for nullifying the December 1986 auction, citing lack of jurisdiction over intra-corporate disputes; motion for reconsideration denied.
September 1990–April 1992: CBC filed with the SEC; the Hearing Officer dismissed the complaint. June–December 1993: SEC en banc reversed, nullified VGCCI’s December 1986 auction, and ordered issuance of a new certificate to CBC.
August–October 1994: The Court of Appeals nullified the SEC orders for lack of jurisdiction and dismissed CBC’s complaint; denied CBC’s motions for reconsideration. March 26, 1997: The Supreme Court granted CBC’s petition for review on certiorari.

Did the Court of Appeals gravely err in nullifying the SEC orders and dismissing CBC’s complaint for lack of subject-matter 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?