Case Digest (G.R. No. 176579)
Facts:
Heirs of Wilson P. Gamboa v. Teves, G.R. No. 176579, October 09, 2012, Supreme Court En Banc, Carpio, J., writing for the Court.
The resolution before the Court disposed of several motions for reconsideration of the Court’s Decision of 28 June 2011 (the “28 June 2011 Decision”) that construes the term “capital” in Section 11, Article XII of the 1987 Constitution and directed the Securities and Exchange Commission (SEC) to apply that construction in determining whether Philippine Long Distance Telephone Company (PLDT) complied with the 60–40 Filipino-foreign ownership requirement.
The petition originated as an original action filed by Wilson P. Gamboa (later substituted by his heirs) seeking, among other reliefs, declaratory relief that “capital” in Section 11, Article XII refers only to voting or common shares and a directive to the SEC and the Philippine Stock Exchange (PSE) to require PLDT to disclose foreign holdings and beneficial owners. In the 28 June 2011 Decision the Court held, as a legal rule, that the constitutional requirement entails both full beneficial ownership of 60% of the outstanding capital stock and 60% of voting rights; it therefore directed the SEC to apply that definition in investigating PLDT’s compliance. The Court did not adjudicate factual questions on whether PLDT actually violated the Constitution, leaving factual fact‑finding to the SEC.
After promulgation of the 28 June 2011 Decision, several parties — notably the PSE President, Manuel V. Pangilinan (PLDT chairman), Napoleon L. Nazareno (PLDT president), and the SEC — filed separate motions for reconsideration. The Office of the Solicitor General (OSG) initially sought reconsideration for the SEC but later filed a consolidated comment stating its agreement with the Court’s definition of “capital.” The SEC nevertheless sought partial reconsideration and clarification on (a) an alleged charge that the SEC unlawfully neglected its duty, and (b) the reckoning period for imposition of sanctions should PLDT be found noncompliant.
The Court conducted oral arguments (including amici and SEC representatives) on 26 June 2012. In the present Resolution the Court (En Banc, Carpio, J.) denied the motions for reconsideration, reaffirmed the 28 June 2011 Decision’s construction of “capital,” treated the original petition as one for mandamus because of the issue’s national importance, and directed the SEC to apply that construction in its investigatory and enforcement functions (while leaving factual determinations and sanctioning to the SEC after due hearing). The Resolution also addressed the SEC’s delegation/authority to issue binding opinions and discussed the scope and prospective application of sancti...(Subscriber-Only)
Issues:
- Procedural: May the Court treat the petition for declaratory relief as one for mandamus given the constitutional and national stakes involved?
- Substantive: Does the term “capital” in Section 11, Article XII of the 1987 Constitution mean the total outstanding capital stock (all classes, voting and non‑voting) or is it limited to shares entitled to vote (common/voting shares) such that the 60% Filipino ownership requirement is satisfied solely by majority of voting stock?
- Administrative-law: Do opinions of SEC legal officers bind the SEC or the courts; who may issue binding SEC opinions or rules (SEC en banc vs. individual officers)?
- Procedural-substantive: Is PLDT an indispensable party for resolving the legal question on the meaning of “capital,” and may the Court direct the SEC to apply its legal construction to PLDT without PLDT being impleaded?
- Remedy/temporal: If the Court’s construction is applied, when may sanctions be ...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)