Case Summary (G.R. No. 153832)
Factual Background
The Uy family, including Johnny K. H. Uy and the private respondents, held interlocking stockholder positions and officer roles within UBS Marketing Corporation and Soon Kee Commercial, Inc. Following significant familial disputes and a mediation agreement, the family decided to allocate corporate interests among its members. Consequently, deeds of assignment were executed on June 5, 1987, leading to Johnny K. H. Uy obtaining full control of UBS Marketing Corporation while the other Uy family members, including Ban Hua Uy-Flores and Ban Ha Uy-Chua, retained control of Soon Kee Commercial, Inc.
Legal Proceedings Initiated
After a failure to turn over corporate records and funds post-segregation, petitioners filed a complaint with the SEC on April 6, 1988, seeking the recovery of UBS Marketing Corporation's corporate books and assets. Private respondents challenged the SEC's jurisdiction, arguing that no intra-corporate relationship existed, with their motion to dismiss being denied by Hearing Officer Pasay-Paz on May 30, 1988. This prompted private respondents to escalate the matter to the SEC en banc, where their petition was ultimately dismissed on January 8, 1989.
Court of Appeals Decision
The private respondents subsequently sought redress from the Court of Appeals through a petition for certiorari and prohibition, which culminated in a favorable ruling for them on January 26, 1990. The court concluded that since the petitioners were no longer stockholders of Soon Kee Commercial, Inc. at the time the SEC case was filed, there was no ongoing intra-corporate relationship, and therefore the SEC lacked jurisdiction over the matter.
Legal Analysis of SEC's Jurisdiction
The pivotal legal question revolves around whether the SEC possesses jurisdiction over the dispute in SEC Case No. 03328, which is contingent upon the definition of “intra-corporate controversy.” Under Section 5 of PD No. 902-A, the SEC has the authority to adjudicate matters arising from intra-corporate relationships among stockholders and related entities. The Supreme Court has previously elaborated on this concept, asserting that an intra-corporate controversy occurs directly between stockholders and the corporation.
Ruling of the Supreme Court
In analyzing the pertinent legal precedents, the Court found that the nature of the dispute constituted an intra-corporate controversy since it arose out of the relationships established during the assignments of stockholdings between the parties, which occurred while they were still interlocking stockholders and officers of the corporations involved. Im
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Case Overview
- This case involves petitions for review on certiorari filed by the Securities and Exchange Commission (SEC) and Hearing Officer Josefina Pasay-Paz against the Court of Appeals and several private respondents.
- The petitions stem from a decision of the Court of Appeals dated January 26, 1990, and its resolution dated June 4, 1990, both asserting the lack of jurisdiction of the SEC over the controversy in SEC Case No. 03328.
Factual Background
- The parties involved are members of the Uy family of Bacolod City, specifically Johnny K. H. Uy (petitioner) and his siblings Ban Hua Uy-Flores and Ban Ha Uy-Chua (private respondents).
- The Uy family owns various corporations, including UBS Marketing Corporation and Soon Kee Commercial, Inc., where the private respondents served as managing directors and held custody of corporate records and funds.
- Due to family disputes, they agreed to divide the family business, resulting in the assignment of stockholdings to different family members, formalized in a series of deeds executed on June 5, 1987, and July 1, 1987.
Legal Proceedings
- On April 6, 1988, Johnny K. H. Uy and UBS Marketing Corporation filed a complaint with the SEC for the recovery of corporate books and funds from the private respondents, who allegedly refused to turn over these assets post-settlement.
- The private respondents filed a motion to dismiss the complaint, asserting that the SEC lacked jurisdiction, which was denied by Hearing Officer Pasay-P