Case Digest (G.R. No. L-50449)
Facts:
On May 27, 2008, Manila Electric Company (Meralco) scheduled its annual stockholders’ meeting. Under Meralco’s by-laws and the Securities Regulation Code (SRC), proxies had to be submitted by May 17 and validated on May 22. The corporate secretary, Camilo Quiason, had resigned, and on May 15 the board appointed retired Justice Jose Vitug as acting secretary for the meeting. Yet on May 22 proxy validation was presided over by Meralco’s assistant secretary, Anthony Rosete, whom management regarded as acting secretary. Major shareholder Government Service Insurance System (GSIS) objected to Rosete’s certification of proxies favoring Meralco’s management slate. On May 23, GSIS filed in the Pasay City Regional Trial Court (RTC) a complaint to invalidate certain proxies, then dismissed it on May 26. That same day, GSIS sought relief from the Securities and Exchange Commission (SEC), requesting a Cease and Desist Order (CDO) and annulment of the proxy certifications. The SEC’s Officer-Case Digest (G.R. No. L-50449)
Facts:
- Meralco Annual Meeting and Proxy Process
- The annual stockholders’ meeting of Manila Electric Company (Meralco) was set for 27 May 2008. Proxies were to be submitted by 17 May, with validation on 22 May.
- Following corporate secretary Camilo Quiason’s resignation, Jose Vitug was designated on 15 May, but Assistant Corporate Secretary Anthony Rosete presided over the 22 May proxy validation.
- GSIS Challenges and SEC Intervention
- Major shareholder Government Service Insurance System (GSIS) filed on 23 May 2008 a complaint in the Pasay City RTC to invalidate certain proxies, then dismissed it on 26 May.
- On 26 May GSIS filed an urgent petition with the Securities and Exchange Commission (SEC) for a cease‐and‐desist order (CDO) and annulment of the proxies; the SEC issued the CDO ex parte the same day.
- Court of Appeals Proceedings
- During the 28 May annual meeting Rosete ignored the CDO, and the SEC issued a show cause order (SCO) on 28 May. Respondents filed a certiorari and prohibition petition in the Court of Appeals (CA) on 29 May 2008.
- On 23 July 2008 the CA Eighth Division:
- Dismissed GSIS’s complaint before the SEC for lack of jurisdiction;
- Declared the CDO and SCO void ab initio;
- Barred GSIS from filing an election contest in the RTC;
- Recommended disciplinary sanctions against GSIS counsel.
- Supreme Court Filings and Course of Action
- The Office of the Solicitor General (OSG) filed G.R. No. 183933 for SEC but did not pursue it, leading to its termination.
- GSIS filed a Rule 65 certiorari petition in G.R. No. 183905; the SEC and its officers filed another certiorari petition in G.R. No. 184275.
Issues:
- Whether the SEC had jurisdiction to hear and decide GSIS’s petition challenging proxy validation in the Meralco director election.
- Whether the SEC’s cease‐and‐desist order (CDO) and show cause order (SCO) were validly issued.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)