Case 1: INTERNATIONAL BROADCASTING CORPORATION (IBC) vs. Jalandoon G.R. No.

148152 Case 2: SECURITIES AND EXCHANGE COMMISSION vs JOSE T. JALANDOON, G.R. No. 149450 (Consolidated)

Facts: On April 1996, the Corporate Secretary of IBC caused the publication in the newspaper of a Notice enjoining persons who have claims against IBC to present said claims within five days from the date of publication; otherwise, it shall no longer be entertained. Respondent Jalandoon (one of the stockholders of IBC) made a claim but to no avail. This prompted him to file with SEC an amended petition for Accounting, Reconstitution of Records, Mandamus, Nullification of Directors Election, Calling of SHs mtg and Damages against IBC. As shares of IBC were sequestered by the government, Office of the Govt Corporate Counsel appeared as counsel for IBC but failed to present a resolution authorizing them to appear. Hence, IBC was declared in default. Presidential Commission on Good Government (PCGG) filed a special appearance and motion to dismiss, assailing that it was Sandiganbayan who has jurisdiction on the case contending that IBC is an acquired asset of the State (as owner of shares of IBC). SEC ordered lifting of judgment by default and proceeded with trial based on merits. Case was submitted for decision on July 2000. On October 2000, SEC did not dispose of the case but ordered the Republic (as owner of shares of IBC) to be impleaded as an indispensable party . Also, noting on the effectivity of RA 8799 or Securities Regulation Code on August 2000, and the case not being ready for adjudication, SEC transferred the jurisdiction of the case to the regular courts (RA 8799 transferred jurisdiction over intra-corporate disputes from SEC to the Regional Trial Courts). Respondent IBC appealed the SEC Order to CA. CA held that SEC should decide the instant case on the ground that it was already submitted for decision to SEC. Both SEC and IBC filed before SC their respective petitions for review on certiorari the decision of CA. Jalandoon moved for consolidation, hence this case. Issue: 1. 2. 3. Whether or not CA erred in ordering SEC to decide on the case. Does SEC has jurisdiction over respondent Jalandoons claim of interest in IBC or is it to be determined by Sandiganbayan Assuming arguendo that SEC has jurisdiction, was the case ripe for adjudication when RA 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 pursuant to RA 8799

4. Held: 1.

Yes, CA erred. 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. 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

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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. The sequestration proceedings over IBC are over. The Sandiganbayan has ordered the transfer of IBCs shares of stock in the name of the Republic of the Philippines. As ownership of IBC has been vested upon the Republic, the subject matter of the instant suit falls within the definition of intra-corporate controversy over which SEC had jurisdiction at the time this case was initiated.

3.

Note: However, it must be noted that SEC, in its Order on October 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. Stated otherwise, SEC Case No. 12-96-5505, as of August 9, 2000, was not a pending case submitted for final resolution, since the same could not be decided by SEC without including a new party and affording said party the opportunity to be heard, thereby requiring further proceedings. Case is hereby ordered TRANSFERRED to the Regional Trial Court of Makati City

4.

Yes. SEC lost jurisdiction over intra-corporate disputes.

Note: Here, SEC had jurisdiction over the issue of ownership of Jalandoon as it had jurisdiction over this subject matter at the time case was initiated. However, with the effectivity of RA 8799 on August 9, 2000, it transferred its jurisdiction to regular courts for further proceeding as the case was not yet ripe for final resolution on October 2000.