June 2014 Philippine Supreme Court Decisions on Commercial 

Law

Posted on July 3, 2014 by Hector M. de Leon Jr. • Posted in Commercial Law

• Tagged corporation •
Here are select June 2014 ruling of the Supreme Court of the Philippines on commercial law:

Corporations; capacity to sue  of dissolved corporations. The trustee of a corporation may

continue to prosecute a case commenced by the corporation within three years from its
dissolution until rendition of the final judgment, even if such judgment is rendered beyond the
three-year period allowed by Section 122 of the Corporation Code. However, there is nothing in
the said cases which allows an already defunct corporation to initiate a suit after the lapse of the
said three-year period. On the contrary, the factual circumstances in the abovecited cases would
show that the corporations involved therein did not initiate any complaint after the lapse of the
three-year period. In fact, as stated above, the actions were already pending at the time that they
lost their corporate existence.
In the present case, petitioner filed its complaint not only after its corporate existence was
terminated but also beyond the three-year period allowed by Section 122 of the Corporation
Code. Thus, it is clear that at the time of the filing of the subject complaint petitioner lacks the
capacity to sue as a corporation. To allow petitioner to initiate the subject complaint and pursue
it until final judgment, on the ground that such complaint was filed for the sole purpose of
liquidating its assets, would be to circumvent the provisions of Section 122 of the Corporation
Code. Alabang Development Corporation v. Alabang Hills Village Association and Rafael
Tinio, G.R. No. 187456, June 2, 2014.
Corporations; refusal to allow inspection is a criminal offense. We find inaccurate the
pronouncement of the RTC that the act of refusing to allow inspection of the stock and transfer
book is not a punishable offense under the Corporation Code. Such refusal, when done in
violation of Section 74( 4) of the Corporation Code, properly falls within the purview of Section
144 of the same code and thus may be penalized as an offense. Aderito Z. Yujuico and Bonifacio
C. Sumbilla v. Cezar T. Quiambao and Eric C. Pilapil, G.R. No. 180416, June 2, 2014.
Corporations; persons who may be held liable under Section 74. A perusal of the second and
fourth paragraphs of Section 74, as well as the first paragraph of the same section, reveal that
they are provisions that obligates a corporation: they prescribe what books or records a
corporation is required to keep; where the corporation shall keep them; and what are the other
obligations of the corporation to its stockholders or members in relation to such books and
records. Hence, by parity of reasoning, the second and fourth paragraphs of Section 74, including
the first paragraph of the same section, can only be violated by a corporation. It is clear then that
a criminal action based on the violation of the second or fourth paragraphs of Section 74 can
only be maintained against corporate officers or such other persons that are acting on behalf of
the corporation. Violations of the second and fourth paragraphs of Section 74 contemplates a
situation wherein a corporation, acting thru one of its officers or agents, denies the right of any of
its stockholders to inspect the records, minutes and the stock and transfer book of such
corporation.
The problem with the petitioners’ complaint and the evidence that they submitted during
preliminary investigation is that they do not establish that respondents were acting on behalf of
STRADEC. Quite the contrary, the scenario painted by the complaint is that the respondents are
merely outgoing officers of STRADEC who, for some reason, withheld and refused to tum-over
the company records of STRADEC; that it is the petitioners who are actually acting on behalf of
STRADEC; and that STRADEC 1s actually merely trying to recover custody of the withheld
records. In other words, petitioners are not actually invoking their right to inspect the records and
the stock and transfer book of STRADEC under the second and fourth paragraphs of Section 74.
What they seek to enforce is the proprietary right of STRADEC to be in possession of such
records and book. Such right, though certainly legally enforceable by other means, cannot be
enforced by a criminal prosecution based on a violation of the second and fourth paragraphs of
Section 74. That is simply not the situation contemplated by the second and fourth paragraphs of
Section 74 of the Corporation Code. Aderito Z. Yujuico and Bonifacio C. Sumbilla v. Cezar T.
Quiambao and Eric C. Pilapil, G.R. No. 180416, June 2, 2014.
(Hector thanks Mark Xavier D. Oyales for his assistance to Lexoterica.
G.R. No. 187456               June 2, 2014
ALABANG DEVELOPMENT CORPORATION, Petitioner, 
vs.
ALABANG HILLS VILLAGE ASSOCIATION and RAFAEL TINIO, Respondents.

Ponente: Peralta, J.

Facts:
1. Alabang Development Corporation,developer of Alabang Hills Village filed a complaint for
Injunction and Damages against Alabang Hills Village Association Inc., and its president, Rafael
for allegedly starting the construction of a multi-purpose hall and a swimming pool on one of
the parcels of land still owned by ADC, without the latter’s consent and approval, and despite
demand, failed to desist from constructing thereof.

2. In its answer with counter-claim, AHVAI denied ADC’s allegations and made the following
claims:
a. That ADC has no legal capacity to sue because its corporate existence was already dissolved
by the Securities and Exchange Corporation on May 26, 2003.
b. That ADC has no cause of action as it was merely holding the property in trust for AHVAI as
beneficial owner thereof.
c. That the lot is part of the open space required by law to be provided in the subdivision.

3. The RTC dismissed ADC’s complaint holding that:

a. It has no personality to sue and that subject area is a reserved area for the benefit of the
homeowners as required by law.
b. HLURB has exclusive jurisdiction over the dispute between ADC and AHVAI.

4. ADC filed a Notice of Appeal to elevate the case to the CA, which also denied its appeal,
holding that it had no capacity to sue as it was already defunct.

Held:
The Supreme Court:
“Anent the first assigned error, the Court does not agree that the CA erred in relying on the
case of Columbia Pictures, Inc. v. Court of Appeals.

The CA cited the case for the purpose of restating and distinguishing the jurisprudential
definition of the terms “lack of capacity to sue” and “lack of personality to sue;” and of applying
these definitions to the present case. Thus, the fact that, unlike in the instant case, the
corporations involved in the Columbia case were foreign corporations is of no moment. The
definition of the term “lack of capacity to sue” enunciated in the said case still applies to the
case at bar. Indeed, as held by this Court and as correctly cited by the CA in the case
of Columbia: “[l]ack of legal capacity to sue means that the plaintiff is not in the exercise of his
civil rights, or does not have the necessary qualification to appear in the case, or does not have
the character or representation he claims[;] ‘lack of capacity to sue’ refers to a plaintiff’s
general disability to sue, such as on account of minority, insanity, incompetence, lack of
juridical personality or any other general disqualifications of a party. …” In the instant case,
petitioner lacks capacity to sue because it no longer possesses juridical personality by reason of
its dissolution and lapse of the three-year grace period provided under Section 122 of
the Corporation Code, as will be discussed below.

With respect to the second assigned error, Section 122 of the Corporation Code provides
as follows:
SEC. 122. Corporate liquidation. – Every corporation whose charter expires by its own limitation
or is annulled by forfeiture or otherwise, or whose corporate existence for other purposes is
terminated in any other manner, shall nevertheless be continued as a body corporate for three
(3) years after the time when it would have been so dissolved, for the purpose of prosecuting
and defending suits by or against it and enabling it to settle and close its affairs, to dispose of
and convey its property and to distribute its assets, but not for the purpose of continuing the
business for which it was established.

At any time during said three (3) years, said corporation is authorized and empowered
to convey all of its property to trustees for the benefit of stockholders, members, creditors, and
other persons in interest. From and after any such conveyance by the corporation of its
property in trust for the benefit of its stockholders, members, creditors and others in interest,
all interest which the corporation had in the property terminates, the legal interest vests in the
trustees, and the beneficial interest in the stockholders, members, creditors or other persons in
interest.

Upon winding up of the corporate affairs, any asset distributable to any creditor or
stockholder or member who is unknown or cannot be found shall be escheated to the city or
municipality where such assets are located.

Except by decrease of capital stock and as otherwise allowed by this Code, no

corporation shall distribute any of its assets or property except upon lawful dissolution and
after payment of all its debts and liabilities.

This Court has held that:

It is to be noted that the time during which the corporation, through its own officers, may
conduct the liquidation of its assets and sue and be sued as a corporation is limited to three
years from the time the period of dissolution commences; but there is no time limit within
which the trustees must complete a liquidation placed in their hands. It is provided only (Corp.
Law, Sec. 78 [now Sec. 122]) that the conveyance to the trustees must be made within the
three-year period. It may be found impossible to complete the work of liquidation within the
three-year period or to reduce disputed claims to judgment. The authorities are to the effect
that suits by or against a corporation abate when it ceased to be an entity capable of suing or
being sued (7 R.C.L., Corps., par. 750); but trustees to whom the corporate assets have been
conveyed pursuant to the authority of Sec. 78 [now Sec. 122] may sue and be sued as such in all
matters connected with the liquidation…
 In the absence of trustees, this Court ruled, thus:
… Still in the absence of a board of directors or trustees, those having any pecuniary interest in
the assets, including not only the shareholders but likewise the creditors of the corporation,
acting for and in its behalf, might make proper representations with the Securities and
Exchange Commission, which has primary and sufficiently broad jurisdiction in matters of this
nature, for working out a final settlement of the corporate concerns.

In the instant case, there is no dispute that petitioner’s corporate registration was
revoked on May 26, 2003. Based on the above-quoted provision of law, it had three years, or
until May 26, 2006, to prosecute or defend any suit by or against it. The subject complaint,
however, was filed only on October 19, 2006, more than three years after such revocation.

It is likewise not disputed that the subject complaint was filed by petitioner corporation
and not by its directors or trustees. In fact, it is even averred, albeit wrongly, in the first
paragraph of the Complaint that “[p]laintiff is a duly organized and existing corporation under
the laws of the Philippines, with capacity to sue and be sued. x x x”

Petitioner, nonetheless, insists that a corporation may still sue, even after it has been
dissolved and the three-year liquidation period provided under Section 122 of the Corporation
Code has passed. Petitioner cites the cases of Gelano v. Court of Appeals, Knecht v. United
Cigarette Corporation, and Pepsi-Cola Products Philippines, Inc. v. Court of Appeals, as authority
to support its position. The Court, however, agrees with the CA that in the abovecited cases,
the corporations involved filed their respective complaints while they were still in existence. In
other words, they already had pending actions at the time that their corporate existence was
terminated.

The import of this Court’s ruling in the cases cited by petitioner is that the trustee of a
corporation may continue to prosecute a case commenced by the corporation within three
years from its dissolution until rendition of the final judgment, even if such judgment is
rendered beyond the three-year period allowed by Section 122 of the Corporation Code.
However, there is nothing in the said cases which allows an already defunct corporation to
initiate a suit after the lapse of the said three-year period. On the contrary, the factual
circumstances in the abovecited cases would show that the corporations involved therein did
not initiate any complaint after the lapse of the three-year period. In fact, as stated above, the
actions were already pending at the time that they lost their corporate existence.

In the present case, petitioner filed its complaint not only after its corporate existence
was terminated but also beyond the three-year period allowed by Section 122 of
theCorporation Code. Thus, it is clear that at the time of the filing of the subject complaint
petitioner lacks the capacity to sue as a corporation. To allow petitioner to initiate the subject
complaint and pursue it until final judgment, on the ground that such complaint was filed for
the sole purpose of liquidating its assets, would be to circumvent the provisions of Section 122
of the Corporation Code.
 As to the last issue raised, the basic and pivotal issue in the instant case is petitioner’s
capacity to sue as a corporation and it has already been settled that petitioner indeed lacks
such capacity. Thus, this Court finds no cogent reason to depart from the ruling of the CA
finding it unnecessary to delve on the other issues raised by petitioner.”

WHEREFORE, the subject judgment of the lower court ordering the register of deeds of Metro
Manila, Makati Branch IV to reconstitute from Decree No. 15170 and the plan and technical
descriptions submitted, the alleged certificate of title, original and owner's duplicate copy, in
the name of Manuela Aquial is hereby annulled and set aside, and the petition for
reconstitution is ordered dismissed.

The temporary restraining order of June 27, 1980 issued against respondents is hereby made
and declared permanent. With costs jointly and severally against private respondents.

The Division Clerk of Court is hereby directed to furnish the Honorable Minister of Justice a
copy of the decision at bar (as well as a copy, for ready reference, of the decision of January 27,
1981 in the related Bernal case, G.R. No. L-45168, previously ordered furnished to him) for the
institution of appropriate criminal proceedings against private respondents and all others who
have assisted or conspired with them as may be warranted by the evidence of record.

SO ORDERED.
SEC has no jurisdiction over controversies arising from the validation of proxies for the
election of the directors of a corporation.

G.R. No. 187702               October 22, 2014

SECURITIES AND EXCHANGE COMMISSION, Petitioner,

vs. THE HONORABLE COURT OF APPEALS, OMICO CORPORATION, EMILIO S.
TENG AND TOMMY KIN HING TIA, Respondents.

x-----------------------x

G.R. No. 189014

ASTRA SECURITIES CORPORATION, Petitioner,

vs. OMICO CORPORATION, EMILIO S. TENG AND TOMMY KIN HING
TIA, Respondents.

"x x x.

ISSUE

Whether the SEC has jurisdiction over controversies arising from the validation
of proxies for the election of the directors of a corporation.

OUR RULING

About a month after the CA issued the assailed Decision, this Court promulgated GSIS
v. CA,31 which squarely answered the above issue in the negative.
In that case, we observed that Section 632 (g) of Presidential Decree No. (P.D.) 902-A
dated 11 March 1976 conferred on SEC the power "[t]o pass upon the validity of the
issuance and use of proxies and voting trust agreements for absent stockholders
ormembers." Section 6, however, opens thus: "In order to effectively exercise such
jurisdiction x x x." This opening clearly refers to the preceding Section 5. 33 The Court
pointed out therein that the power to pass upon the validity of proxies was merely
incidental or ancillary to the powers conferred on the SEC under Section 5 of the same
decree. With the passage of the SRC, the powers granted to SEC under Section 5 were
withdrawn, together withthe incidental and ancillary powers enumerated in Section 6.

While the regular courts now had the power to hear and decide cases involving
controversies in the election of directors, it was not clear whether the SRC also
transferred to these courtsthe incidental and ancillary powers of the SEC as
enumerated in Section 6 of P.D. 902-A. Thus, in GSIS v. CA, it was necessary for the
Court to determine whether the action to invalidate the proxies was intimately tied to an
election controversy. Hence, the Court pronounced:

Under Section 5(c) of PresidentialDecree No. 902-A, in relation to the SRC, the
jurisdiction of the regular trial courts with respect to election related controversies is
specifically confined to "controversies in the election or appointment of directors,
trustees, officers or managers of corporations, partnerships, or associations." Evidently,
the jurisdiction of the regular courts over so-called election contests or controversies
under Section 5 (c) does not extend toevery potential subject that may be voted on by
shareholders, but only to the election of directors or trustees, in which stockholders are
authorized to participate under Section 24 of the Corporation Code.

This qualification allows for a useful distinction that gives due effect to the statutory right
of the SEC to regulate proxy solicitation, and the statutory jurisdiction of regularcourts
over election contests or controversies. The power of the SEC toinvestigate violations of
its rules on proxy solicitation is unquestioned whenproxies are obtained to vote on
matters unrelated to the cases enumerated under Section 5 of Presidential Decree No.
902-A. However, when proxies are solicited in relation to the election of corporate
directors, the resulting controversy, even if it ostensibly raised the violation of the SEC
rules on proxy solicitation, should be properly seen as an election controversy within the
original and exclusive jurisdiction of the trial courts by virtue of Section 5.2 of the SRC in
relation to Section 5 (c) of Presidential Decree No. 902-A.
The conferment of original and exclusive jurisdiction on the regular courts over such
controversies in the election of corporate directors must be seen as intended to confine
to one body the adjudication of all related claims and controversy arising from the
election of such directors. For that reason, the aforequoted Section 2, Rule 6 of the
Interim Rules broadly defines the term "election contest" as encompassing all plausible
incidents arising from the election ofcorporate directors, including: (1) any controversy
or dispute involving title or claim to any elective office in a stock or nonstock
corporation, (2) the validation of proxies, (3) the manner and validity of elections and (4)
the qualifications of candidates, including the proclamation of winners. If all matters
anteceding the holding of such election which affectits manner and conduct, such as the
proxy solicitation process, are deemed within the original and exclusive jurisdiction of
the SEC, then the prospect of overlapping and competing jurisdictions between that
body and the regular courts becomes frighteningly real. From the languageof Section 5
(c) of Presidential Decree No. 902-A, it is indubitable that controversies as to the
qualification of voting shares, or the validity of votes cast in favor of a candidate for
election to the board of directors are properly cognizable and adjudicable by the regular
courts exercising original and exclusive jurisdiction over election cases. 34 x x x.

The ruling harmonizes the seeming conflict between the Amended SRC Rules
promulgated by the SEC and the Interim Rules of Procedure Governing Intra-Corporate
Disputes promulgated by the Court.

SRC Rule 20(11)(b)(xxi) of the Amended SRC Rules provides:

SRC RULE 20.

Disclosures to Stockholders Prior to Meeting

(formerly, SRC Rule 20 – The Proxy Rule)

xxxx

11. Other Procedural Requirements

xxxx

b. Proxy
 xxxx

xxi. In the validation of proxies, a special committee of inspectors shall be designated or

appointed by the Board of Directors which shall be empoweredto pass on the validity of
proxies. Any dispute that may arise pertaining thereto, shall be resolved by the
Securities and Exchange Commission upon formal complaint filed by the aggrieved
party, or by the SEC officer supervising the proxy validation process. (Emphasis
supplied)

On the other hand, these are the provisions of Section 1, Rule 1; and Section 2, Rule 6
of the Interim Rules of Procedure Governing IntraCorporate Disputes:

RULE 1
General Provisions

SECTION 1. (a) Cases Covered– These Rules shall govern the procedure to be
observed in civil cases involving the following:

a) Devices or schemes employed by, or any act of, the board of directors,
business associates, officers or partners, amounting to fraud or
misrepresentation which may be detrimental to the interest of the public and/or of
the stockholders, partners, or members of any corporation, partnership, or
association;

b) Controversies arising out of intra-corporate, partnership, or association

relations, between and among stockholders, members, or associates; and
between, any or all of them and the corporation, partnership, or association of
which they are stockholders, members, or associates, respectively;

c) Controversies in the election or appointment of directors, trustees, officers, or

managers of corporations, partnerships, or associations;

d) Derivative suits; and

e) Inspection of corporate books.

xxxx
 RULE 6
Election Contests

xxxx

SECTION 2. Definition. – An election contest refers to any controversy or dispute

involvingtitle or claim to any elective office in a stock or nonstock corporation, the
validation of proxies, the manner and validity of elections, and the qualifications of
candidates, including the proclamation of winners, to the office of director, trustee or
other officer directly elected by the stockholders in a close corporation or by members of
a non-stock corporation where the articles of incorporation or by-laws so provide.
(Emphases supplied)

The Court explained that the powerof the SEC to regulate proxies remains in place in
instances when stockholders vote on matters other than the election of directors. 35 The
test is whether the controversy relates to such election. All matters affecting the manner
and conduct of the election of directors are properly cognizable by the regular courts.
Otherwise, these matters may be brought before the SEC for resolution based on the
regulatory powers it exercises over corporations, partnerships and associations.

Astra endeavors to remove the instant case from the ambit of GSIS v. CAby arguing
that 1) the validation of proxies in this case relates to the determination of the existence
of a quorum; and 2) no actual voting for the members of the board of directors was
conducted, as the directors were merely elected by motion.

Indeed, the validation of proxies in this case relates to the determination of the
existence of a quorum.1âwphi1 Nonetheless, it is a quorum for the election of the
directors, and, assuch, which requires the presence – in person or by proxy – of the
owners of the majority of the outstanding capital stock of Omico. 36 Also, the fact that
there was no actual voting did not make the election any less so, especially since Astra
had never denied that an election of directors took place.

We find no merit either in the proposal of Astra regarding the "two (2) viable, non-
exclusive and successive legal remedies to question the validity of proxies." 37 It
suggests that the power to pass upon the validity of proxies to determine the existence
of a quorum prior to the conduct of the stockholders’ meeting should lie with the SEC;
but, after the stockholders’ meeting, questions regarding the use of invalid proxies in the
election of directors should be cognizable by the regular courts, since there was already
an election to speak of.
First, this interpretation is akin to the argument struck down by the Court in GSIS v. CA.
If the Court adopts the suggestion, "we would be perpetually confronted with the
spectacle of election controversies being heard and adjudicated by both the SEC and
the regular courts, made possible through a mere allegation that the anteceding x x x
process was errant, but the competing cases [were] filed with one objective in mind - to
affect the outcome of the election of the board of directors." 38

Second, the validation of proxies serves a number of purposes, including determining

the existence of a quorum and ascertaining the authenticity of proxies to be used for the
election of directors at the stockholders' meeting. Section 2, Rule 6, of the Interim Rules
of Procedure Governing Intra-Corporate Disputes provides that an election contest
covers any controversy or dispute involving the validation of proxies, in general. Thus, it
can only refer to all the beneficial purposes that validation of proxies can bring about
when made in connection with a forthcoming election of directors. Thus, there is no
point in making distinctions between who has jurisdiction before and who has
jurisdiction after the election of directors, as all controversies related thereto - whether
before, during or after - shall be passed upon by regular courts as provided by law. The
Court closes with an observation.

As in the instant cases, GSIS v. CA is a consolidation of two cases, one of which was
filed by a private party and the other by the SEC itself. In both cases, the parties were
aggrieved by the CA ruling, so they filed the cases seeking a pronouncement from the
Court that it recognizes the jurisdiction of the SEC over the controversy.

Calling to mind established jurisprudential principles, the Court therein ruled that
quasi-judicial agencies do not have the right to seek the review of an appellate
court decision reversing any of their rulings. 39 This is because they are not real
parties-in-interest. Thus, the Court expunged the petition filed by the SEC for the
latter's lack of capacity to file the suit. So it must be in the instant cases.
SECURITIES AND EXCHANGE COMMISSION, PETITIONER, VS.
THE HONORABLE COURT OF APPEALS, OMICO CORPORATION,
EMILIO S. TENG AND TOMMY KIN HING TIA, RESPONDENTS.
[G.R. NO. 189014]
ASTRA SECURITIES CORPORATION, PETITIONER, VS. OMICO
CORPORATION, EMILIO S. TENG AND TOMMY KIN HING TIA,
RESPONDENTS.
G.R. No. 187702 | 2014-10-22
SERENO, C.J.:
I Facts of the Case
G.R. No. 187702 is a Petition for Certiorari under Rule 65 of the
Rules of Court seeking to nullify the Court of Appeals (CA)
Decision dated 18 March 2009 in CA-G.R. SP No. 106006. G.R. No.
189014 is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court assailing the same Decision, as well as the CA
Resolution dated 9 July 2009. On 12 October 2009, the Court
resolved to consolidate the two cases.
The CA Decision ruled that because controversies involving the
validation of proxies are considered election contests under the
Interim Rules of Procedure Governing Intra-Corporate Controversies,
they are properly cognizable by the regular courts, not by the
Securities and Exchange Commission. The CA Resolution denied the
motion for reconsideration filed by Astra Securities Corporation.
Omico Corporation (Omico) is a company whose shares of stock
are listed and traded in the Philippine Stock Exchange, Inc.
Astra Securities Corporation (Astra) is one of the stockholders of Omico
owning about 18% of the latter’s outstanding capital stock.
Omico scheduled its annual stockholders’ meeting on 3 November
2008. It set the deadline for submission of proxies on 23 October
2008 and the validation of proxies on 25 October 2008.
Astra objected to the validation of the proxies issued in favour of
Tommy Kin Hing Tia (Tia), representing about 38% of the
outstanding capital stock of Omico. Astra also objected to the
inclusion of the proxies issued in favour of Tia and/or Martin Buncio,
representing about 2% of the outstanding capital stock of Omico.
Astra maintained that the proxy issuers, who were brokers, did not
obtain the required express written authorization of their clients when
they issued the proxies in favour of Tia. In so doing, the issuers were
allegedly in violation of SRC Rule 20(11)(b)(xviii) of the Amended
Securities Regulation Code (SRC or Republic Act No. 8799)
Rules. Furthermore, the proxies issued in favour of Tia exceeded 19,
thereby giving rise to the presumption of solicitation thereof under
SRC Rule 20(2)(B)(ii)(b) of the Amended SRC Rules. Tia did not
comply with the rules on proxy solicitation, in violation of Section
20.1 of the SRC.
Despite the objections of Astra, Omico’s Board of Inspectors declared
that the proxies issued in favour of Tia were valid.

On 27 October 2008, Astra filed a Complaint before the Securities

and Exchange Commission (SEC) praying for the invalidation of the
proxies issued in favour of Tia. Astra also prayed for the issuance of a
cease and desist order (CDO) enjoining the holding of Omico’s annual
stockholders’ meeting until the SEC had resolved the issues pertaining
to the validation of proxies.

On 30 October 2008, SEC issued the CDO enjoining Omico from

accepting and including the questioned proxies in determining a
quorum and in electing the members of the board of directors during
the annual stockholders’ meeting on 3 November 2008.
II Issues of the Case
Whether the SEC has jurisdiction over controversies arising from
the validation of proxies for the election of the directors of a
corporation.
III Ruling of the Court
Petition in G.R. No. 187702 is EXPUNGED for lack of capacity
of petitioner to file the suit. Calling to mind established
jurisprudential principles, the Court therein ruled that quasi-judicial
agencies do not have the right to seek the review of an appellate court
decision reversing any of their rulingsThis is because they are not real
parties-in-interest. Thus, the Court expunged the petition filed by the
SEC for the latter’s lack of capacity to file the suit. So it must be in the
instant cases