Case Digest (G.R. No. 75112)
Facts:
In Lim Tay v. Court of Appeals, G.R. No. 126891, decided on August 5, 1998 under the 1987 Philippine Constitution, petitioner Lim Tay advanced two separate loans of ₱40,000 each on January 8, 1980 to Sy Guiok and Alfonso Sy Lim, both shareholders of Go Fay & Co., Inc., evidenced by Contracts of Pledge over 300 shares each in the respondent corporation. The pledgors delivered certificates endorsed in blank, agreeing that upon default the pledgee could foreclose by public or private sale and transfer shares on corporate books. When Guiok and Sy Lim failed to pay within six months, Lim Tay did not foreclose or auction the shares but, in October 1990, filed with the Securities and Exchange Commission (SEC) a petition for a writ of mandamus to compel the corporate secretary to record the alleged transfer in Lim Tay’s name and to issue new stock certificates and dividends. The SEC Hearing Officer dismissed the action for lack of legal basis to enforce the transfer. On March 7, 1996, tCase Digest (G.R. No. 75112)
Facts:
- Contracts of Pledge and Loans
- On January 8, 1980, Lim Tay advanced ₱40,000 to Sy Guiok, who pledged 300 shares of Go Fay & Co., Inc. at 10% per annum interest.
- On the same date, Alfonso Sy Lim borrowed ₱40,000 from Lim Tay and likewise pledged 300 shares of the same corporation under identical terms.
- Default and Mandamus Petition
- Respondents Guiok and Sy Lim defaulted on their loans and interest.
- In October 1990, Lim Tay filed a petition for mandamus with the Securities and Exchange Commission (SEC), seeking an order directing the corporate secretary of Go Fay & Co., Inc. to:
- Register the transfer of the pledged shares to his name.
- Issue new stock certificates in his favor.
- Pay all unclaimed dividends on those shares.
- SEC Proceedings and Appeals
- Go Fay & Co., Inc. and intervenors (Sy Guiok and the estate of Sy Lim) argued:
- Lim Tay was not a stockholder and had no clear ownership.
- No foreclosure or sale of the pledged shares had occurred.
- The SEC lacked jurisdiction over ownership disputes.
- The SEC Hearing Officer dismissed the petition for failure to prove a legal basis to compel stock transfer.
- On March 7, 1996, the SEC en banc affirmed, ruling that mandamus requires a clearly established right and that ownership was a matter for the regular courts.
- The Court of Appeals, on October 24, 1996, denied Lim Tay’s petition for certiorari, effectively affirming the SEC decision.
- Lim Tay filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court before the Supreme Court.
Issues:
- Jurisdiction of the SEC
- Did the SEC have original and exclusive jurisdiction over Lim Tay’s mandamus petition to compel stock transfer?
- Entitlement to Mandamus
- Can Lim Tay, as pledgee, invoke mandamus against Go Fay & Co., Inc. to record and issue certificates of pledged shares?
- Validity of Ownership Claims
- Did Lim Tay acquire ownership of the pledged shares by:
- Operation of the pledge contracts on maturity?
- Extraordinary prescription?
- Novation or dacion en pago?
- Laches against respondents?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)