512 Phil. 95
AZCUNA, J.:
The motion to dismiss cannot be sustained on the allegation that IBC was ceded to the government by Roberto S. Benedicto, over the claim of petitioner that he is owner of some shares of stocks in IBC. Whether said shares of stock are subject to sequestration or were sequestered shares, is best determined after trial on the merits.IBC, et al. filed a motion for reconsideration of the Omnibus Order insofar as it denied their motion to dismiss and to nullify the proceedings after declaration of default. The SEC Hearing Officer denied it in an Order dated June 22, 1998.[6]
Also it cannot be argued that the real party in interest is the PCGG.
IBC is an entity separate and distinct from the PCGG. If ever, the PCGG (or the) government owns shares of stocks in IBC, it does so [in] its proprietary character, stepping down from the pedestal of its sovereign power, and engages into private ownership and contracts like an ordinary citizen, thus shedding off its sovereign immunity from suit.[5]
The Commission now holds that the Republic, as the registered owner of 100% of the shares of IBC -13, is a real party in interest, because it stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.Respondent appealed the SEC Order to the Court of Appeals by filing a Petition for Certiorari and Mandamus With Very Urgent Application for the Issuance of a Writ of Preliminary Injunction and/or Temporary Restraining Order.. . .
. . . The petition failed to implead the Republic and is therefore defective in form. Nonetheless, the substantiality being plainly evident, such defect in form can and must be cured, otherwise, no final determination of the case can be had. The impleading of the Republic as party-respondent is thus in order. And in accordance with the constitutional provisions and jurisprudential declarations, the Republic must be accorded due process and given its day in court.
In view of the foregoing determination by the Commission, there is still much left to be done before the case can reach the final disposition stage. Considering the effectivity of the new Securities Regulation Code on August [9], 2000 and the Guidelines of the Commission, and further considering that the case is not yet ripe for final adjudication, the Commission no longer has any jurisdiction to continue to hear the case, receive pertinent pleadings thereto nor render a final judgment therein.
Despite the loss of its jurisdiction and because the Commission cannot render a final decision based on the foregoing discussions on the defect of non-joinder of an indispensable party, the Commission is of the opinion that it must issue this last order, so that "the actual merits of the controversy may speedily be determined." To do otherwise would leave the case in limbo, a situation which the Commission, in the [interest] of justice, cannot allow.
WHEREFORE, foregoing premises considered, and under the circumstances of the present case, the Republic of the Philippines, as represented by PCGG, is hereby ordered impleaded as party-respondent, copy of this decision shall be furnished the Office of the Solicitor General as counsel for the government. The parties are directed to furnish the Solicitor General with copies of all the pertinent pleadings they have filed in the instant case within fifteen (15) days from their receipt hereof. The Solicitor General is hereby directed to file its Comments and Answer to the petitioner's claims within fifteen (15) days from its receipt of said pleadings. And the petitioner is given a like period of time to file his response thereto. Any and all pleadings required to be submitted after this Order is issued shall be filed before the court of proper jurisdiction as may be designated by the Supreme Court.
SO ORDERED. [8]
It is undisputed that per order dated July 28, 2000, (p. 382, rollo), petitioner's (Jalandoon) case before the Commission was �now submitted for decision". Both parties therein, per records, duly submitted the required memorandum within fifteen (15) days from receipt of the order. Clearly, therefore, at the time petitioner's case was being heard and up to the time the same was submitted for decision, it was still governed by the REVISED RULES OF PROCEDURE IN THE SECURITIES AND EXHANGE COMMISSION adopted on August 1, 1989 as amended, on April 26, 1993.The dispositive portion of the Decision of the Court of Appeals reads:
It must also be pointed out that the GUIDELINES which the Commission issued pursuant to par. 5.2, Sec. 5, of R.A. 8799, specifically Sec. 2 thereof provides thus: "The COMMISSION SHALL RETAIN JURISDICTION OVER PENDING INTRA-CORPORATE DISPUTES SUBMITTED FOR FINAL RESOLUTION [PRIOR TO THE EFFECTIVITY OF THE ACT] which shall be resolved within one (1) year from July 19, 2000." Since petitioner's case was submitted for final resolution on July 28, 2000 and since R.A. 8799 took effect only on August 9, 2000, petitioner's case should have remained within the jurisdiction of public respondent Commission and decided by it pursuant to the August 1, 1989 Rules of the Commission, as amended . . . .[9]
Wherefore, foregoing premises considered, the petition is hereby GIVEN DUE COURSE, and the challenged order of public respondent Commission hereby REVERSED and SET ASIDE, and it is hereby DIRECTED to decide the case of petitioner in accordance with its August 1, 1989 Rules, as amended, and based on the evidence duly offered and admitted. No costs.SEC filed a Motion for Reconsideration of the Decision of the Court of Appeals, which was denied in a Resolution promulgated on July 20, 2001.
SO ORDERED.[10]
Petitioner IBC, represented by the OGCC, contends that SEC has no jurisdiction over the instant case since it involves the determination of the ownership of its company, which is the subject of Sandiganbayan Case No. 0034 for reversion, reconveyance, restitution, accounting and damages. IBC asserts that issues which arise from and are incidental to said sequestration case before the Sandiganbayan should be raised in the Sandiganbayan, citing Presidential Commission on Good Government v. Peña[11] and Republic of the Philippines v. Sandiganbayan.[12]
- Did the Court of Appeals err in ordering SEC to decide the case filed by respondent Jalandoon, docketed as SEC-SICD Case No. 12-96-5505?
- Does SEC have jurisdiction over respondent's claim of ownership or interest in IBC or is the determination of such ownership properly lodged with the Sandiganbayan in connection with Sandiganbayan Case No. 0034 for reversion, reconveyance, restitution, accounting and damages filed by the Republic/PCGG?
- Assuming arguendo that SEC has jurisdiction over this case, was the case ripe for decision when Republic Act No. 8799 took effect on August 9, 2000, which transferred jurisdiction over intra-corporate disputes from SEC to the Regional Trial Courts?
- Did SEC lose jurisdiction over the instant case pursuant to Republic Act No. 8799?
On July 15, 1998, we issued a Resolution (Third Division) granting the said Joint Motion, thus:WHEREFORE, it is most respectfully prayed that this case be dismissed and that the Temporary Restraining Order be immediately lifted and dissolved and the question on the claim of the petitioner over the 20% equity in IBC be referred to the Securities & Exchange Commission and that the parties be granted such other reliefs to which they may be entitled to law and equity.[14]
- That the claim of the petitioner over the 20% equity in IBC -13 shall be litigated in the Securities & Exchange Commission (SEC), and the release of the said 20% equity shall be conditioned upon the rendition of a final and executory judgment in favor of the person entitled thereto;
- That in consideration for the immediate resolution of this case and the lifting of the Temporary Restraining Order, subject to the above paragraph No. 3, petitioner or his assigns shall be granted the right of first refusal to acquire an additional twenty (20%) percent of IBC equity at PCGG established floor price; provided that this shall be subject to the approval of the Committee on Privatization (COP).
. . . The joint motion, dated March 17, 1998, filed by the Presidential Commission on Good Government Chairman Magtanggol C. Gunigundo and petitioner Jose T. Jalandoon, assisted by their counsels, praying that this case be dismissed and that the temporary restraining order be lifted and dissolved and the question on the claim of petitioner over the 20% equity in IBC be referred to the Securities and Exchange Commission is GRANTED.[15]Next, petitioners contend that the Court of Appeals erred in directing SEC to decide the case since it was not yet ripe for decision when Republic Act No. 8799 took effect. Noted was paragraph 5.2, Section 5 of Republic Act No. 8799, which, in part, provides that "[t]he Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code."[16] Petitioners, however, assert that although the SEC Hearing Officer in an Order dated July 28, 2000 considered the case submitted for decision even before the effectivity of Republic Act No. 8799, the SEC en banc subsequently ordered on October 5, 2000 that the Republic of the Philippines be impleaded as party-respondent as an indispensable party in the case. Hence, petitioners submit that since the Republic is yet to be heard, the case was not yet ripe for decision when Republic Act No. 8799 took effect; therefore, SEC lost jurisdiction over the case.
SEC. 5. Powers and Functions of the Commission . . . .Moreover, the Guidelines on Intra-Corporate Cases Pending Before the SICD and the Commission En Banc of the Securities and Exchange Commission issued by SEC on August 1, 2000 provides:. . .
5.2. The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. . . .
Section 3. The Commission shall retain jurisdiction over pending intra-corporate disputes submitted for final resolution which shall be resolved within one (1) year from July 19, 2000, the enactment of the The Securities Regulation Code.Considering that SEC, in its Order dated October 5, 2000, ordered motu proprio that the Republic of the Philippines, as the registered owner of 100% of the shares of IBC, be impleaded as party-respondent as an indispensable party in this case, and directed the parties to furnish the Solicitor General, as counsel of the Government, with copies of all pertinent pleadings which they have filed within 15 days from receipt of said Order and also directed the Solicitor General to file its Comments and Answer to the claims within 15 days from receipt of the pleadings, the case was clearly not yet ripe for final resolution at the time Republic Act No. 8799 took effect on August 9, 2000.. . .
Section 5. All cases already decided by the Securities Investigation and Clearing Department (SICD) may be elevated to the Commission en banc on appeal provided that the appeal is perfected on or before August 8, 2000.
No appeal shall be accepted by the Commission thereafter.
Section 6. Subject to any circular that may be issued by the Supreme Court on the matter, all cases over which the Commission has not retained jurisdiction under the Securities Regulation Code shall, upon its effectivity on August 9, 2000, be transferred to the Regional Trial Courts.