Case Digest (G.R. No. 176579) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
On February 26, 2007, the Heirs of Wilson P. Gamboa filed an original petition in the Supreme Court (G.R. No. 176579) seeking declaratory relief, injunction, and prohibition against: (a) Finance Secretary Margarito B. Teves, Undersecretary John P. Sevilla, and Ricardo Abcede (Privatization Council); (b) Anthoni Salim, Manuel V. Pangilinan, and Napoleon L. Nazareno (Metro Pacific–PLDT executives); and (c) SEC Chair Fe Barin and PSE President Francis Lim. They asked the Court to declare that under Section 11, Article XII of the 1987 Constitution, the 60-percent Filipino-ownership requirement applies solely to voting (common) shares, rendering any foreign acquisition beyond 40 percent invalid; to void all such excess sales of PLDT shares and compel PLDT to disclose all foreign holdings. PLDT’s shareholdings were undisputed: foreigners held 64.27 percent of common shares (35.73 percent by Filipinos), while Filipinos owned 99.44 percent of non-voting preferred shares (which comprised Case Digest (G.R. No. 176579) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Background
- Petitioners: Heirs of Wilson P. Gamboa, heirs and stockholders of Philippine Long Distance Telephone Company (PLDT).
- Respondents: Officials of the Departments of Finance and Privatization Council; PLDT officers (Pangilinan, Nazareno); Securities and Exchange Commission (SEC) en banc and General Counsel; Philippine Stock Exchange (PSE) President; others.
- Procedural History
- February 2007: Gamboa filed a petition for declaratory relief, prohibition, injunction and nullity of sale, challenging whether the term *capital* in Section 11, Article XII of the 1987 Constitution is satisfied only by voting shares (common shares) or by total capital stock (common plus preferred).
- June 28, 2011: The Court issued a Decision interpreting “capital” as voting shares only, directing the SEC (via mandamus) to apply that definition to PLDT and impose sanctions for constitutional violations.
- July 2011–December 2011: Respondents (Pangilinan, Nazareno, PSE, SEC, OSG) moved for reconsideration or clarification.
- June 26, 2012: Oral arguments were held on the motions for reconsideration.
Issues:
- Proper Definition of “Capital” in Section 11, Article XII of the 1987 Constitution:
- Does “capital” cover only voting shares (common shares)?
- Or does it include the entire outstanding capital stock (common + non-voting preferred shares)?
- Power of the Court versus Congress:
- Whether judicial interpretation can redefine a constitutional term that Congress is empowered to implement.
- Effectivity of New Interpretation:
- Should the clarified definition apply retroactively or only prospectively?
- How to protect legitimate expectations and foreign investments made under the prior understanding?
- Jurisdiction and Due Process:
- Whether PLDT and foreign stockholders (indispensable parties) were properly impleaded.
- Whether the Court can issue a personal directive via mandamus without joinder of those affected.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)