Gokongwei vs. SEC, 89 SCRA 336 (1979) Facts: Petitioner, stockholder of San Miguel Corp.

filed a petition with the SEC for the declaration of nullity of the by-laws etc. against the majority members of the BOD and San Miguel. It is stated in the by-laws that the amendment or modification of the by-laws may only be delegated to the BODs upon an affirmative vote of stockholders representing not less than 2/3 of the subscribed and paid on capital stock of the corporation, which 2/3 could have been computed on the basis of the capitalization at the time of the amendment. Petitioner contends that the amendment was based on the 1961 authorization, the Board acted without authority and in usurpation of the power of the stockholders n amending the by-laws in 1976. He also contends that the 1961 authorization was already used in 1962 and 1963. He also contends that the amendment deprived him of hisright to vote and be voted upon as a stockholder (because it disqualified competitors from nomination and election in the BOD of SMC), thus the amended by-laws were null and void. While this was pending, the corporation called for a stockholders meeting for the ratification of the amendment to the by-laws. This prompted petitioner to seek for summary judgment. This was denied by the SEC. In another case filed by petitioner, he alleged that the corporation had been using corporate funds in other corps and businesses outside the primary purpose clause of the corporation in violation of the Corporation Code. Issue: Are amendments valid? Held: The validity and reasonableness of a by-law is purely a question of law. Whether the by-law is in conflict with the law of the land, or with the charter of the corporation or is in legal sense unreasonable and therefore unlawful is a question of law. However, this is limited where the reasonableness of a by-law is a mere matter of judgment, and one upon which reasonable minds must necessarily differ, a court would not be warranted in substituting its judgment instead of the judgment of those who are authorized to make by-laws and who have exercised authority. The Court held that a corporation has authority prescribed by law to prescribe the qualifications of directors. It has the inherent power to adopt by-laws for its internal government, and to regulate the conduct and prescribe the rights and duties of its members towards itself and among themselves in reference to the management of its affairs. A corporation, under the Corporation law, may prescribe in its bylaws the qualifications, duties and compensation of directors, officers, and employees. Any person who buys stock in a corporation does so with the knowledge that its affairs are dominated by a majority of the stockholders and he impliedly contracts that the will of the majority shall govern in all matters within the limits of the acts of incorporation and lawfully enacted by-laws and not forbidden by law. Any corporation may amend its by-laws by the owners of the majority of the subscribed stock. It cannot thus be said that petitioners has the vested right, as a stock holder, to be elected director, in the face of the fact that the law at the time such stockholder's right was acquired contained the prescription that the corporate charter and the by-laws shall be subject to amendment, alteration and modification. A Director stands in a fiduciary relation to the corporation and its shareholders, which is characterized as a trust relationship. An amendment to the corporate by-laws which renders a stockholder ineligible to be director, if he be also director in a corporation whose business is in competition with that of the other corporation, has been sustained as valid. This is based upon the principle that where the director is employed in the service of a rival company, he cannot serve both, but must betray one or the other. The amendment in this case serves to advance the benefit of the corporation and is good. Corporate officers are also not permitted to use their position of trust and confidence to further their private needs, and the act done in furtherance of private needs is deemed to be for the benefit of the corporation. This is called the doctrine of corporate opportunity. SEC. vs. PICOP resources The aphorism finds relevance in this petition for review on certiorari[1] of two Resolutions1-a of the Court of Appeals (CA). The first Resolution denied the motion for extension to file a petition for review, the second denied the motion for reconsideration. Facts: On March 26, 2002, respondent PICOP Resources, Inc. (PICOP) filed with petitioner Securities and Exchange Commission (SEC) an application for amendment of its Articles of Incorporation (AOI) extending its corporate existence for another fifty (50) years. PICOP paid the filing fee of P210.00 based on SEC Memorandum Circular No. 2, Series of 1994 (1994 Circular). The SEC, however, informed PICOP of the appropriate filing fee of P12 Million, or 1/5 of 1% of its authorized capital stock of P6 Billion.[3] PICOP sought clarification of the applicable filing fee and the reduction of the amount of P12 Million prescribed by the SEC.[4] What followed were several exchanges of correspondence on the applicable filing fee for amended AOI extending the corporate term of PICOP.[5] Through Director Benito A. Cataran of the Company Registration and Monitoring Department, the SEC held that the P12 Million assessment[6] is based on Republic Act (RA) No. 3531.[7] This Act provides that in case an amendment of the AOI consists of extending the term of corporate existence, the SEC shall be entitled to collect and receive the same fees collectible under existing law for the filing of AOI.[8]

PICOP elevated the matter to the SEC En Banc.[9] It asked for the reduction of the filing fee from P12 Million to P210.00. The present SEC Revised Schedule of Fees[10] (2001 Circular) does not provide varying filing fees for amended AOI depending on the purpose of the amendment to be introduced.[11] Neither did the previous Schedule of Fees (1994 Circular) allow SEC to collect and receive the same fees for amendment of AOI as an original filing.[12] Under the latter Circular, the examining and filing fee for amended AOI of both stock and non-stock corporations is only P200.00.[13] The SEC En Banc, through Commissioner Jesus E.G. Martinez, denied PICOPs request.[14] He justified the Commissions decision in the following tenor: This Commission maintains the position that there is no legal basis to exempt PICOP Resources, Inc. from paying the filing fee as assessed by the CRMD. The assessed fee is based on the pertinent provisions of R.A. 3531. Although SEC memorandum Circular No. 2, Series of 1994 and the Schedule of Revised Fees approved on 23 July 2001 do not provide for a filing fee for extensions of term, these do not limit the Securities and Exchange Commission from imposing the prevailing fees.[15] PICOP sought a reconsideration[17] of the En Banc ruling. It argued that RA No. 3531 has been repealed by the Corporation Code of 1980 and Presidential Decree 902-A.[18] Section 139[19] of the Corporation Code authorizes the SEC to collect and receive fees as authorized by law or by rules and regulation promulgated by the SEC. Along this line, PICOP posited that SEC Memorandum Circular No. 1, Series of 1986 (1986 Circular) rules on the specific subject matter of Filing Fees for Amended Articles of Incorporation Extending the Term of Corporate Existence. The prescribed fili ng fee is 1/10 of 1% of the authorized capital stock, with the qualification that it should not be less than P200.00 or more than P100,000.00. PICOP pointed out that no equivalent provision appears in any of the subsequent SEC circulars such as the 1994 and 2001 circulars. Hence, the 1986 Circular should prevail.[20] The SEC En Banc denied once more PICOPs request to reconsider the earlier ruling and reverted to the P12 Million assessment.[21] It maintained that the provision on the maximum imposable fee under the 1986 Circular has been amended by the 1994 Circular which removed the maximum imposable fee.[22] Furthermore, the SEC En Banc explained that contentions that its 2001 Circular was not published are erroneous. There was, in fact, due publication in The Manila Standard on July 31, 2001. Accordingly, the 2001 Circular became effective on August 15, 2001. Thus, the public was properly apprised of the changes in fees.[23] On August 12, 2002, PICOP paid under protest the amount of P11,999,790.00. This was in addition to its original payment of P210.00 to cover the SEC-prescribed filing fee.[24] Then PICOP again moved for reconsideration.[25] This was denied by SEC Chairperson Lilia R. Bautista.[26] Dissatisfied, PICOP appealed the matter to the Office of the President (OP).[27] It raised the following issues: (1) whether or not the OP has jurisdiction to entertain the appeal; and (2) in the event that the OP has jurisdiction, how much is the filing fee for the amendment of PICOPs AOI to extend the term of its corporate existence? Issues: Petitioner has resorted to the present recourse and ascribes to the CA the following errors: THE HONORABLE COURT OF APPEALS ERRED IN ISSUING THE RESOLUTION DATED MAY 3, 2004 DENYING PETITIONERS MOTION FOR EXTENSION DATED MAY 31, 2004 AND, CONSEQUENTLY, DISMISSING THE PETITION IN CA-G.R. SP NO. 83179.II THE HONORABLE COURT OF APPEALS ERRED IN ISSUING THE RESOLUTION DATED JUNE 30, 2004 DENYING PETITIONERS MOTION FOR RECONSIDERATION (OF THE MAY 3, 2004 RESOLUTION). III THE HONORABLE COURT OF APPEALS ERRED IN FINDING NO PRIMA FACIE ERROR COMMITTED BY THE OFFICE OF THE PRESIDENT IN SETTING ASIDE PETITIONER SECS ORDER DATED AUGUST 15, 2002 (DENYING RESPONDENTS REQUEST FOR RECONSIDERATION OF THE SEC ORDER ASSESSING IT P12,000,000.00 AS FILING FEE FOR THE AMENDMENT OF ITS ARTICLES OF INCORPORATION EXTENDING ITS CORPORATE LIFE). (Underscoring supplied)[56] The petition is DENIED for lack of merit. The SEC erroneously assumed that the appeal period is fifteen (15) days from the denial of its second motion for reconsideration or March 19, 2004. It believed that it has until April 3, 2004 within which to file a petition for review with the CA. It was mistaken. We resolve the question in the affirmative. The 1986 Circular is the proper basis of the computation since it specifically provided for filing fees in cases of extension of corporate term. A proviso of the same nature is wanting in the other circulars relied on by the SEC at the time PICOP filed its request for extension. The SEC violated the due process clause insofar as it denied the public prior notice of the regulations that were supposed to govern them. The SEC can not wield the provisions of the 1990 Circular against PICOP and expect its outright compliance. The

circular was not yet effective during the time PICOP filed its request to extend its corporate existence in 2002. In fact, it was only discovered in 2004, fifteen (15) days before the SEC filed its second motion for reconsideration. the petition is DENIED for lack of merit.

SIXTO CRISOSTOMO VS. SEC 179 SCRA 146 Legal Ethics Duty Against Forum Shopping Crisostomo is a minority stockholder of the United Doctors Medical Center. He is also the director and legal counsel of UDMC. The said hospital was unable to pay its P55 million debt incurred from the Development Bank of the Philippines hence it faced foreclosure. In order to avoid foreclosure, Crisostomo and some others were able to convince Japanese doctors to invest in the hospital. Eventually, these Japanese doctors invested P57 million in said hospital. Pursuant to the Memorandum in lieu of the investment, the Japanese doctors were promised to be part of the hospitals board of directors. But then, instead of holding an election for the new board of directors, Crisostomo opposed the same citing constitutional grounds. The issue reached the Securities and Exchange Commission which ordered UDMC to hold the election. Meanwhile, Crisostomo filed an action to annul the Memorandum agreed with the Japanese doctors before the Regional Trial Court of Makati. The said RTC denied Crisostomos petition. Crisostomo then appealed the two decisions (SECs and the RTCs) before the Court of Appeals. Not only that, while the two cases were pending appeal, he also filed a petition for certiorari directly to the Supreme Court. ISSUE: Whether or not Crisostomo is guilty of forum shopping. HELD: Yes. All three actions he filed raise the same issues that he raised in the different tribunals. There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in the courts but also in connection with litigations commenced in the courts while an administrative proceeding is pending, as in this case, in order to defeat administrative processes and in anticipation of an unfavorable administrative ruling and a favorable court ruling. Forum-shopping makes the Crisostomo subject to disciplinary action and renders his petitions in the Supreme Court and in the Court of Appeals dismissible. He and his counsel are guilty of contempt. Crisosotmo is ordered by the Supreme Court to pay double the costs of the suit.

SECURITIES AND EXCHANGE COMMISSION, vs.PROSPERITY.COM, INC., FACTS: Prospvserity.Com, Inc. (PCI) sold computer software and hosted websites without providing internet service. To make a profit, PCI devised a scheme in which a buyer could acquire from it an internet website of a 15-Mega Byte (MB) capacity. At the same time, by referring to PCI his own down-line buyers, a first-time buyer could earn commissions, interest in real estate in the Philippines and in the United States, and insurance coverage. In 2001, disgruntled elements of GVI filed a complaint with the SEC against PCI, alleging that the latter had taken over GVIs operations. After hearing, the SEC, through its Compliance and Enforcement unit, issued a CDO against PCI. The SEC ruled that PCIs scheme constitutes an Investment contract and, following the Securities Regulations Code, it should have first registered such contract or securities with the SEC pursuant to R.A. 8799. PCI filed with the Court of Appeals and CA rendered a decision, granting PCIs petition and setting aside the SEC-issued CDO. The CA ruled that, following the Howey test, PCIs scheme did not constitute an investment contract that needs registration pursuant to R.A. 8799, hence, this petition bythe SEC. ISSUE: Whether or not PCIs scheme constitutes an investment contract that requires registration under R.A.8799. RULING: The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals. PCIs scheme does not require registration under R.A. 8799. The United States Supreme Court held in Securities and Exchange Commission v. W.J. Howey Co that, for an investment contract to exist, the following elements, referred to as the Howey test mustconcur: (1) a contract, transaction, or scheme; (2)an investment of money; (3)investment is made in acommon enterprise; (4)expectation of profits; and (5)profits arising primarily from the efforts of others. Thus, to sustain the SEC position in this case, PCIs scheme or contract with its buyers must have all these elements. Here, PCIs clients do not make such investments. They buy a product of some value to them: an Internet website of a 15-MB capacity. The client can use this website to enable people to have internet access to what he has to offer to them, say, some skin cream. The buyers of the website do not invest money in PCI that it could use for running some business that would generate profits for the investors.The price of US$234.00 is what the buyer pays for the use of the website, a tangible asset that PCI creates, using its computer facilities and technical skills.The CA is right in ruling that the last requisite in the Howey test is lacking in the marketing scheme that PCI has adopted. Evidently, it is PCI that expects profit from the network marketing of its products. PCI is correct in saying that the US$234 it gets from its clients is merely a consideration for the sale of the websites that it provides. UNION BANK VS. SEC Facts: April 4, 1997, petitioner, through its General Counsel and Corporate Secretary, sought the opinion of Chairman Perfecto Yasay, Jr. of respondent Commission as to the applicability and coverage of the Full Material Disclosure Rule on banks, contending that said rules, in effect, amend Section 5 (a) (3) of the Revised Securities Act which exempts securities issued or guaranteed by banking institutions from the registration requirement provided by Section 4 of the same Act. In reply thereto, Chairman Yasay, in a letter dated April 8, 1997, informed petitioner that while the requirements of registration do not apply to securities of banks which are exempt under Section 5(a) (3) of the Revised Securities Act, however, banks with a class of securities listed for trading on the Philippine Stock Exchange, Inc. are covered by certain Revised Securities Act Rules governing the filing of various reports with respondent Commission, i.e., (1) Rule 11(a)-1 requiring the filing of Annual, Quarterly, Current, Predecessor and Successor Reports; (2) Rule 34-(a)-1 requiring submission of Proxy Statements; and (3) Rule 34-(c)-1 requiring submission of Information Statements, among others. (Annex D, P, U, Rollo). Not satisfied, petitioner, per letter dated April 30, 1997, informed Chairman Yasay that they will refer the matter to the Philippine Stock Exchange for clarification. On May 9, 1997, respondent Commission, through its Money Market Operations Department Director, wrote petitioner, reiterating its previous position that petitioner is not exempt from the filing of certain reports. The letter further stated that the

Revised Securities Act Rule 11(a) requires the submission of reports necessary for full, fair and accurate disclosure to the investing public, and not the registration of its shares. (Annex F, p. 23, Rollo). On July 17, 1997, respondent Commission wrote petitioner, enjoining the latter to show cause why it should not be penalized for its failure to submit a Proxy/Information Statement in connection with its annual meeting held on May 23, 1997, in violation of respondent Commissions Full Material Disclosure Rule. Failing to respond to the aforesaid communication, petitioner was given a 2nd Show Cause with Assessment by respondent Commission on July 21, 1997. Petitioner was then assessed a fine of P50,000.00 plus P500.00 for every day that the report [was] not filed, or a total of P91, 000.00 as of July 21, 1997. Petitioner was likewise advised by respondent Commission to submit the required reports and settle the assessment, or submit the case to a formal hearing. Petitioner sought a reconsideration thereof which was denied by respondent Commission per assailed Order dated April 14, 1998, the dispositive portion of which reads:There being no new matters raised in the motion for reconsideration to overcome the denial of the Appeal by the Commission En Banc in its Order of November 5, 1997, and considering that the reasons advanced are [a] mere rehash of its defenses duly addressed in the Appeal, the Motion for Reconsideration is hereby, DENIED. Petitioner then elevated its case to the Court of Appeals which, as already stated, affirmed the questioned Orders. Issues: a. Whether or not petitioner is required to comply with the respondent SECs full disclosure rules. Whether or not the SECs full disclosure rules [are] contrary to and effectively [amend] section 5(a)(3) of the Revised Securities Act. b. Whether or not Respondent Court of Appeals erred in affirming with modification the imposition of excessive fines in violation of the Philippine Constitution.[8] In the main, the Court will determine (1) the applicability of RSA Implementing Rules 11(a)-1, 34(a)-1 and 34(c)-1 to petitioner; and (2) the propriety of the fine imposed upon the latter. The Petition is not meritorious. Held: The Petition is hereby DENIED, and the assailed Decision of the Court of Appeals AFFIRMED. First Issue: Applicability of the Assailed RSA Implementing Rule Because its securities are exempt from the registration requirements under Section 5(a)(3) of the Revised Securities Act, petitioner argues that it is not covered by RSA Implementing Rule11(a)-1, which requires the filing of annual, quarterly, current predecessor and successor reports; Rule 34(a)-1, which mandates the filing of proxy statements and forms of proxy; and Rule 34(c)-1, which obligates the submission of information statements. It must be emphasized that petitioner is a commercial banking corporation listed in the stock exchange. Thus, it must adhere not only to banking and other allied special laws, but also to the rules promulgated by Respondent SEC, the government entity tasked not only with the enforcement of the Revised Securities Act, but also with the supervision of all corporations, partnerships or associations which are grantees of government-issued primary franchises and/or licenses or permits to operate in the Philippines. RSA Rules 11(a)-1, 34(a)-1 and 34(c)-1 require the submission of certain reports to ensure full, fair and accurate disclosure of information for the protection of the investing public. These Rules were issued by respondent pursuant to the authority conferred upon it by Section 3 of the RSA. The said Rules do not amend Section 5(a)(3) of the Revised Securities Act, because they do not revoke or amend the exemption from registration of the securities enumerated thereunder. They are reasonable regulations imposed upon petitioner as a banking corporation trading its securities in the stock market. Second Issue: Propriety of Fine Imposed Contending that both respondent and the CA erred in imposing an excessive fine upon it, petitioner complains that it was not given an opportunity to be heard regarding the matter. It bears stressing that the fine imposed upon petitioner is sanctioned by Section 46(b) of the RSA, which reads as follows: Sec. 46. Administrative sanctions. If, after proper notice and hearing, the Commission finds that there is a violation of this Act, its rules, or its orders or that any registrant has, in a registration statement and its supporting papers and other reports required by law or rules to be filed with the Commission, made any untrue statement of a material fact, or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or refused to permit any lawful examination into its affairs, it shall, in its discretion.

BPI VS. SEC Facts: The Bank of the Philippine Islands (BPI), through its predecessor-in- interest, Far East Bank and Trust Company (FEBTC), extended credit accommodations to the ASB Group with an outstanding aggregate principal amount of P86,800,000.00, secured by a real estate mortgage over two (2) properties located in Greenhills, San Juan. On 2 May 2000, the ASB Group filed a petition for rehabilitation and suspension of payments before the SEC, docketed as SEC Case No. 05-006609.[6] Thereafter, on 18 August 2000, the interim receiver submitted its Proposed Rehabilitation Plan (Rehabilitation Plan)[7] for the ASB Group. The Rehabilitation Plan provides, among others, a dacion en pago by the ASB Group to BPI of one of the properties mortgaged to the latter at the ASB Group as selling value of P84,000,000.00 against the total amount of the ASB Groups exposure to the bank. In turn, ASB Group would require the release of the other property mortgaged to BPI, to be thereafter placed in the asset pool. Specifically, the pertinent portion of the plan reads ASB plans to invoke a dacion en pago for its #35 Eisenhower property at ASBs selling value of P84 million against the total amount of the ASBs exposure to the bank. In return, ASB requests the release of the #27 Annapolis property which will be placed in the ASB creditors asset pool. The dacion would constitute full payment of the entire obligation due to BPI because the balance was then to be considered waived, as per the Rehabilitation Plan BPI opposed the Rehabilitation Plan and moved for the dismissal of the ASB Groups petition for rehabilitation. However, on 26 April 2001, the SEC hearing panel issued an order approving ASB Groups proposed rehabilitation plan and appointed Mr. Fortunato Cruz as rehabilitation receiver. BPI filed a petition for review of the 26 April 2001 order before the SEC en banc, imputing grave abuse of discretion on the part of the hearing panel. It argued that the Order constituted an arbitrary violation of BPIs freedom and right to contract si nce the Rehabilitation Plan compelled BPI to enter into a dacion en pago agreement with the ASB Group. The SEC en banc denied the petition. BPI then filed a petition for review before the Court of Appeals (CA), claiming that the SEC en banc erred in affirming the approval of the Rehabilitation Plan despite being violative of BPIs contractual rights. BPI contended that the terms of the Rehabilitation Plan would impair its freedom to contract, and alleged that the dacion en pago was a mode of payment beneficial to the ASB Group only. The CA dismissed the petition for lack of merit. It held that considering that the dacion en pago transaction could proceed only proceed upon the mutual agreement of the parties, BPIs assertion that it is being coerce d could not be sustained. At no point would the Rehabilitation Plan compel secured creditors such as BPI to agree to a settlement agreement against their will, the CA added. Moreover, BPI could refuse to accept any arrangement contemplated by the receiver and just assert its preferred right in the liquidation and distribution of the assets of the ASB Group.[17] BPI filed a motion for reconsideration, but the same was denied for lack of merit.[18] Issue: W/N BPI asserts that the CA erred in ruling that the approval by the SEC of the ASB Groups Rehabilitation Plan did not violate BPIs rights as a creditor. HELD: Petition must be denied and the decision dated 30 January 2004 of the Court of Appeals in CA-G.R. SP No. 77309 is AFFIRMED. There element of compulsion in the dacion en pago provision of the Rehabilitation Plan. It was not the only solution presented by the ASB to pay its creditors. ICMC vs. Calleja FACTS: As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's communist rule confronted the international community. In response to this crisis, an Agreement was forged between the Philippine Government and the United Nations High Commissioner for Refugees whereby an operating center for processing Indo-Chinese refugees for eventual resettlement to other countries was to be established in Bataan. ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in Morong, Bataan. It was incorporated in New York, USA, at the request of the Holy See, as a non-profit agency involved in international humanitarian and voluntary work. It is duly registered with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II. As an international organization rendering voluntary and humanitarian services in the Philippines. Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and Employment a Petition for Certification Election among the rank and file members employed by ICMC. The latter opposed the petition on the ground that it is an international organization registered with the United Nations and, hence, enjoys diplomatic immunity.Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the Med-Arbiter's Decision and ordered the immediate conduct of a certification election. At that

time, ICMC's request for recognition as a specialized agency was still pending with the Department of Foreign Affairs (DEFORAF). Subsequently, DEFORAF, granted ICMC the status of a specialized agency with corresponding diplomatic privileges and immunities, as evidenced by a Memorandum of Agreement between the Government and ICMC. ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election sustaining the affirmative of the proposition citing: (1) its Memorandum of Agreement with the Philippine Government giving it the status of a specialized agency, (infra); (2) the Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification was signed by the President on 30 August 1949 and deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution, which declares that the Philippines adopts the generally accepted principles of international law as part of the law of the land ISSUE: Whether or not the grant of diplomatic privileges and immunites to ICMC extends to immunity from the application of Philippine labor laws. HELD:The foregoing issue constitute a categorical recognition by the Executive Branch of the Government that ICMC enjoys immunities accorded to international organizations, which determination has been held to be a political question conclusive upon the Courts. ICMC's immunity from local jurisdiction by no means deprives labor of its basic rights, which are guaranteed by Article II, Section 18, Article III, Section 8, and Article XIII, Section 3 (supra), of the 1987 Constitution. For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that "each specialized agency shall make provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of private character to which the specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement between ICMC the the Philippine Government, whenever there is any abuse of privilege by ICMC, the Government is free to withdraw the privileges and immunities accorded. "The immunity covers the organization concerned, its property and its assets. It is equally applicable to proceedings in personam and proceedings in rem." PSE VS. CA 287 SCRA 232 Business Organization Corporation Law Extent of Power of the Securities and Exchange Commission Puerto Azul Land, Inc. (PALI) is a corporation engaged in the real estate business. PALI was granted permission by the Securities and Exchange Commission (SEC) to sell its shares to the public in order for PALI to develop its properties. PALI then asked the Philippine Stock Exchange (PSE) to list PALIs stocks/shares to facilitate exchange. The PSE Board of Governors denied PALIs application on the ground that there were multiple claims on the assets of PALI. Apparently, the Marcoses, Rebecco Panlilio (trustee of the Marcoses), and some other corporations were claiming assets if not ownership over PALI. PALI then wrote a letter to the SEC asking the latter to review PSEs decision. The SEC reversed PSEs decisions and ordered the latter to cause the listing of PALI shares in the Exchange. ISSUE: Whether or not it is within the power of the SEC to reverse actions done by the PSE. HELD: Yes. The SEC has both jurisdiction and authority to look into the decision of PSE pursuant to the Revised Securities Act and for the purpose of ensuring fair administration of the exchange. PSE, as a corporation itself and as a stock exchange is subject to SECs jurisdiction, regulation, and control. In order to insure fair dealing of securities and a fair administration of exchanges in the PSE, the SEC has the authority to look into the rulings issued by the PSE. The SEC is the entity with the primary say as to whether or not securities, including shares of stock of a corporation, may be traded or not in the stock exchange. HOWEVER, in the case at bar, the Supreme Court emphasized that the SEC may only reverse decisions issued by the PSE if such are tainted with bad faith. In this case, there was no showing that PSE acted with bad faith when it denied the application of PALI. Based on the multiple adverse claims against the assets of PALI, PSE deemed that granting PALIs application will only be contrary to the best interest of the general public. It was reasonable for the PSE to exercise its judgment in the manner it deems appropriate for its business identity, as long as no rights are trampled upon, and public welfare is safeguarded.