Case Summary (G.R. No. 80879)
Petitioners’ Claims
Petitioners filed a petition seeking to reverse two SEC orders dated November 23, 1987, and December 11, 1987, and to prohibit the SEC from proceeding with Case No. 3257. The private respondents accused the petitioners of failing to make a final payment of P1.2 million for shares in Pine Philippine Inc., as stipulated in a Memorandum of Agreement. The sale included clauses allowing for automatic rescission if payments were not made on time.
SEC Proceedings
On November 20, 1987, private respondents filed their complaint with the SEC, which led to the issuance of a Temporary Restraining Order on November 23, 1987, to prevent petitioners from disposing of corporate assets. The petitioners responded by filing a Motion to Dismiss on December 2, 1987, arguing the SEC lacked jurisdiction over the dispute, which was opposed by the private respondents.
SEC’s Jurisdiction
The SEC denied the Motion to Dismiss on December 11, 1987, affirming its jurisdiction over what was characterized as an intracorporate dispute. The SEC's recognition of its authority in this matter is grounded in Presidential Decree No. 902-A, particularly Section 5(b), which grants it original and exclusive jurisdiction over controversies that arise between stockholders of a corporation.
Nature of the Dispute
The dispute is defined as an intracorporate controversy involving rights among stockholders regarding unpaid shares and the legitimacy of share transfers. This aligns with the broader mandate given to the SEC to handle all matters involving stockholder relationships and corporate governance, as expressed in relevant legal precedents like Abejo vs. de la Cruz.
Legal Precedents and Policy
Court decisions reaffirm the notion that the SEC has broad authority to resolve intracorporate disputes. The ruling in the Abejo case reiterates the SEC's role in promoting investment and equitable wealth distribution, highlighting the importance of allowing administrative agencies
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Case Overview
- The case revolves around a dispute between the petitioners (Honorio Saavedra, Jr., Ester Saavedra, Cesar Saavedra, and Roel Bejasa) and the respondents (Securities and Exchange Commission, Gregorio Ramos, Napolen Ramos, Celso Tingcungco, Armando Domingo, and Carolina Sebastian).
- Petitioners seek to reverse SEC orders dated November 23, 1987, and December 11, 1987, and to prohibit the SEC from proceeding with case number 3257 titled "Gregorio Ramos, et al. vs. Honorio Saavedra, et al."
- The case involves the sale of shares in Pine Philippine Inc. and subsequent allegations of non-payment by the petitioners.
Background of the Case
- On July 2, 1987, the private respondents sold all their stocks and interests in Pine Philippine Inc. to the petitioners for P1.2 million, payable in installments.
- The sale was documented through a Memorandum of Agreement and a Deed of Assignment, which included a clause for automatic rescission upon failure of payment.
- The private respondents claimed they rescinded the sale due to the petitioners' failure to pay the final installment and sought judicial relief from the SEC.
SEC Proceedings
- The SEC issued a Temporary Restraining Order on November 23, 1987, preventing the petitioners from disposing of company assets.