Title
Supreme Court
Securities and Exchange Commission vs. GMA Network, Inc.
Case
G.R. No. 164026
Decision Date
Dec 23, 2008
GMA contested SEC's excessive filing fee for corporate term extension; Court ruled invalid due to lack of publication, affirming lower fees under 1986 circular.

Case Digest (A.M. No. P-11-2945)
Expanded Legal Reasoning Model

Facts:

  • Factual Background
    • On August 19, 1995, GMA Network, Inc. filed with the SEC a joint application to amend its Articles of Incorporation and By-Laws, including:
1) Changing its corporate name from “Republic Broadcasting System, Inc.” to “GMA Network, Inc.” 2) Extending its corporate term for 50 years from June 16, 2000.
  • The SEC’s Corporate and Legal Department assessed a separate filing fee of ₱1,212,200.00 for the term-extension application, computed as 1/10 of 1% of authorized capital stock plus 20% thereof, purportedly under Memorandum Circular No. 2, Series of 1994.
  • Procedural History
    • Administrative Proceedings
1) September–October 1995: GMA informed the SEC it would contest the fee assessment but requested approval of other amendments; formally protested the ₱1,212,200.00 assessment on October 20, 1995. 2) February 20, 1996: SEC approved all amendments except the corporate term extension. 3) April 18, 1996: Associate Commissioner Gloria upheld the fee assessment and required payment. 4) September 26, 2001: SEC En Banc dismissed GMA’s appeal for lack of merit.
  • Judicial Proceedings
1) February 20, 2004: Court of Appeals (CA) granted GMA’s petition, ruling that Memorandum Circular No. 2, Series of 1994 was invalid for lack of publication, and that SEC Memorandum Circular No. 1, Series of 1986 applied. 2) June 9, 2004: CA denied SEC’s motion for reconsideration. 3) September 2005: SEC filed its memorandum arguing its delegated power to fix fees required no publication; GMA filed its memorandum asserting MC No. 1, Series of 1986 governed term extensions and MC No. 2 was invalid.

Issues:

  • Whether SEC Memorandum Circular No. 2, Series of 1994 is valid and may be used to compute filing fees for extending a corporation’s term.
  • Whether, in lieu of MC No. 2, SEC Memorandum Circular No. 1, Series of 1986 or the statutory scheme under R.A. No. 3531 governs the fee for term-extension amendments.
  • Whether the fee assessed (₱1,212,200.00) is reasonable and within SEC’s delegated rate-fixing authority, compliant with due process.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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