Case Summary (G.R. No. 137934)
Sale and Purchase Agreement
On October 28, 1997, the Potenciano family entered into a Sale and Purchase Agreement with BMB Property Holdings, Inc., represented by Benjamin Bitanga. The Potencianos sold 21,071,114 shares, representing 47.98% of BLTB's capital stock, for P72,076,425. The agreement specified payment terms, including an immediate downpayment and conditions regarding the delivery of certain documentation facilitating the sale.
Election of Directors and Shareholders' Meetings
Subsequent to the transaction, the Bitanga group was elected to the board of BLTB in late 1997, replacing several of the Potenciano family members. Tensions escalated, leading to contested stockholders' meetings and a conflict regarding the legitimacy of those meetings. Particularly contentious was the May 19, 1998 meeting, where the Potenciano family, allegedly holding a majority of shares, sought to reclaim control.
SEC Complaints and Legal Proceedings
In the wake of continuing disputes, both parties filed complaints with the Securities and Exchange Commission (SEC). The Bitanga group initially sought damages and an injunction against the Potencianos, while the latter sought to stop the Bitanga group from claiming board authority, resulting in competing SEC cases.
SEC Hearing and Rulings
Following hearings, the SEC issued a temporary restraining order halting the Bitanga group’s actions as officers and directors. The SEC found merit in the Potencianos' claims regarding the legitimacy of the May 19 meeting, based on issues including the proper notification for the meeting and allegations of quorum requirements not being met.
Court of Appeals' Decision
The Court of Appeals later reversed the SEC's decision, asserting that proper procedures were not observed and that due process rights of the Bitanga group were violated. This judgment led to appeals by both the Potencianos and the SEC En Banc, challenging the Court of Appeals' findings and seeking reinstatement of the SEC's orders.
Supreme Court's Analysis
The Supreme Court reviewed the decisions, focusing on the due process claims made by the Bitanga group. The Court asserted that both parties had ample opportunity to present their cases, making due process claims unfounded. It was underscored that the SEC’s involvement was appropriate and within
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Case Overview
- The case involves the Batangas Laguna Tayabas Bus Company, Inc. (BLTB), historically owned by the Potenciano family for four generations.
- Prior to the controversy, the Potencianos held 87.5% of BLTB's outstanding capital stock.
- On October 28, 1997, the Potenciano family, along with Maya Industries, Inc., sold 21,071,114 shares (47.98% of BLTB) to BMB Property Holdings, Inc. led by Benjamin Bitanga for a total of ₱72,076,425.00.
- The agreement included specific conditions for the downpayment and subsequent payments, requiring various corporate documents and resignations from existing directors.
Background Events Leading to the Dispute
- Following the sale, new directors associated with Bitanga were elected on November 21 and November 28, 1997, replacing several members of the Potenciano family.
- Tensions escalated leading to significant conflict between the two factions, culminating in reported unrest among employees.
- On May 19, 1998, a stockholders meeting was held, where the Potenciano group was re-elected to the board despite the Bitanga group claiming a lack of quorum.
Key Legal Proceedings
- The Bitanga group filed a complaint with the Securities and Exchange Commission (SEC) on May 21, 1998, seeking damages and an injunction against the Potenciano group.
- The Po