Case Digest (G.R. No. L-23004) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Makati Stock Exchange, Inc. v. Securities and Exchange Commission and Manila Stock Exchange (G.R. No. L-23004, June 30, 1965), the petitioner Makati Stock Exchange, Inc. sought registration and a license to operate a stock exchange under the Securities Act (Commonwealth Act No. 83, as amended). By resolution dated May 7, 1964, the Securities and Exchange Commission (SEC) conditioned the grant of such license on Makati’s agreement not to list any securities already listed on the Manila Stock Exchange. Makati objected, asserting that the SEC possessed no statutory authority for this rule against double listing, and that the requirement was illegal, discriminatory, and created a de facto monopoly. The petition was filed directly with the Supreme Court to review the SEC’s resolution. There was no prior judicial forum; the challenge was to the administrative order itself. The decision on appeal was rendered on June 30, 1965, under the 1935 Philippine Constitution.Issues:
- Does t
Case Digest (G.R. No. L-23004) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Case Background
- Makati Stock Exchange, Inc. (Makati) petitions for review of a Securities and Exchange Commission (SEC) resolution denying it permission to operate a stock exchange unless it agrees not to list securities already on the Manila Stock Exchange (MSE).
- Makati contends the SEC lacks power to impose this “no double-listing” rule and that it is illegal, discriminatory, and effectively prohibitive.
- Statutory Framework
- Under the Securities Act (Commonwealth Act No. 83, as amended), no stock exchange may operate without prior SEC registration by filing a statement as required by Section 17.
- The SEC’s challenged rule provides: “nor shall a security already listed in any securities exchange be listed anew in any other securities exchange.”
- Commission’s Rationale and Effects
- The SEC asserts the rule serves the public interest, ensures uniform trading regulations, and protects investors by avoiding price disparities.
- In practice, as MSE was the sole operating exchange, the rule would prevent Makati from listing any significant securities, rendering its operation commercially unviable.
Issues:
- Does the SEC have statutory authority to impose a prohibition against listing securities already on another exchange as a condition for registration?
- Is the “no double-listing” rule legal, discriminatory, or violative of constitutional rights (equal protection, freedom of trade, investors’ choice)?
- Can the doctrine of res judicata bar Makati’s challenge, given it did not appeal an earlier SEC “conditional approval” order of May 27, 1963?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)