Case Digest (G.R. No. 125469) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Philippine Stock Exchange, Inc. v. Securities and Exchange Commission, G.R. No. 125469, decided October 27, 1997, the private respondent Puerto Azul Land, Inc. (PALI), a domestic real estate corporation, obtained on January 1995 a SEC Permit to Sell shares to the public. To facilitate trading, PALI applied on February 8, 1996 for listing of its shares with the Philippine Stock Exchange, Inc. (PSE). The PSE Listing Committee recommended approval, but before the Board acted, heirs of President Marcos claimed ownership of properties alleged as PALI’s assets and requested deferral. PALI denied the claim, explaining those assets belonged to other entities and that the stockholder Ternate Development Corporation held only 1.20% of PALI. The PSE sought comments from the PCGG, which reported a Temporary Restraining Order enjoining the Marcoses from interfering in PALI’s offering. On March 27, 1996 the PSE Board denied listing, citing “serious claims, issues and circumstances” surroun Case Digest (G.R. No. 125469) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Legal Framework
- Petitioner: Philippine Stock Exchange, Inc. (PSE)
- Private Respondent: Puerto Azul Land, Inc. (PALI)
- Government Respondents: Securities and Exchange Commission (SEC) and Court of Appeals (CA)
- Governing Statutes: Revised Securities Act (RA 8799), Presidential Decree No. 902-A
- Chronology of Proceedings
- Initial Listing Application
- January 1995: SEC issues PALI a Permit to Sell shares to the public.
- February 8, 1996: PSE Listing Committee recommends approval of PALI’s listing application.
- Marcos Family Objection and PSE Rejection
- February 14–20, 1996: Marcos heirs claim ownership of certain “Puerto Azul” properties; PALI disputes; PCGG confirms sequestration and a TRO is issued.
- March 27, 1996: PSE Board of Governors rejects PALI’s listing for “serious claims, issues and circumstances” affecting asset ownership.
- SEC Intervention and Subsequent Proceedings
- April 11, 1996: PALI petitions SEC to review PSE’s decision under SEC’s supervisory power (Sec. 3 RSA; Sec. 6(j),(m) PD 902-A).
- April 24, 1996: SEC reverses PSE’s denial and orders immediate listing (subject to additional disclosures).
- May 9, 1996: SEC denies PSE’s motion for reconsideration; orders full material disclosure by PALI.
- May 17, 1996: PSE files a Petition for Review with the CA.
- June 27, 1996: CA dismisses PSE’s petition, upholding SEC.
- August 15, 1996: PSE files Petition for Review on Certiorari with the Supreme Court.
Issues:
- SEC’s Jurisdiction and Authority
- Does the SEC have the power to review and reverse a stock exchange’s listing decision?
- Did the SEC exceed its jurisdiction or act ultra vires in ordering PSE to list PALI shares?
- PSE’s Discretion and Alleged Arbitrary Conduct
- Did PSE act arbitrarily or abusively in denying PALI’s listing application?
- Was there bad faith or moral obliquity in the PSE’s exercise of discretion?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)