Case Digest (G.R. No. 85318)
Facts:
Commart (Phils.), Inc., Jesus, Corazon, Alberto, and Bernard All Surnamed Maglutac v. Securities & Exchange Commission and Alice Maglutac, G.R. No. 85318, June 03, 1991, Supreme Court Second Division, Paras, J., writing for the Court.Petitioners are the corporation Commart (Phils.), Inc. and several Maglutac family members (Jesus, Corazon, Alberto, and Bernard). Respondents are the Securities & Exchange Commission (SEC) and Alice M. Maglutac (wife of Mariano), who instituted the administrative complaint. The petition is a Rule 45 petition for review on certiorari seeking reversal of the SEC en banc Order of September 12, 1988 that denied petitioners’ petition for certiorari and remanded SEC Case No. 2673 to the Securities Investigation and Clearing Department for further proceedings.
The underlying facts, as alleged in the complaint (SEC Case No. 2673), are that Jesus T. Maglutac and others diverted substantial portions of Commart’s commission income into private bank accounts abroad. On August 22, 1989, spouses Mariano and Alice Maglutac filed a complaint against Jesus, Corazon and other directors (seeking accounting and recovery of US$2,539,918.97, annulment or rescission of Mariano’s stock sale to Jesus, reinstatement or compensation, and attorneys’ fees). Complainants later filed an amended complaint impleading Commart as party complainant and seeking receivership and attachments.
Several motions to dismiss were filed by the respondents (including motions arguing lack of SEC jurisdiction and lack of capacity of Mariano to sue). On May 10, 1985 Commart filed a Manifestation/Notice of Dismissal withdrawing the action said to have been taken in its behalf. On May 27, 1985, the SEC Hearing Panel denied the motions to dismiss and the notice of dismissal, finding the action to be one for mismanagement and within SEC jurisdiction. On November 12, 1985 the Hearing Panel modified its order by dismissing the case insofar as Mariano T. Maglutac was concerned but otherwise affirmed its prior rulings.
Dissatisfied, petitioners sought relief from the SEC en banc by petition for certiorari, prohibition and mandamus with prayer for preliminary injunction, arguing (a) grave abuse of discretion in denying dismissal for failure of Alice to exhaust intra-corporate remedies and (b) grave abuse in not dismissing because Alice allegedly was not a stockholder at the time of the transactions or because of her alleged conflict of interest. On September 12, 1988 the SEC en banc denied the petition and remanded the case for further proceedings, ruling that exhaustion may be dispensed with when it is unavailable or futile (citing Everett v. Asia Banking Corp. and Republic ...(Subscriber-Only)
Issues:
- Did the SEC commit grave abuse of discretion in denying the petition for certiorari and remanding the case despite Commart’s Notice of Dismissal (i.e., may the corporation withdraw or dismiss a derivative suit instituted by a minority stockholder)?
- Did the SEC commit grave abuse of discretion in its handling of the alleged conflict of interest (i.e., that complainant Alice was a majority stockholder of a rival corporation and that this s...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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