CRISOSTOMO V. SEC, G.R.

NO 89095-89555 (1989)
FACTS: Sixto Crisostomo, Felipe Crisostomo, Juanito Crisostomo et al were the original
stockholders of the United Doctors Medical Center (UDMC), which was organized in
1968 with authorized capital stock of P1 million (later increased to P15 million in 1972).
They owned 40% of the outstanding stock while the majority belonged to the members
of the United Medical Staff Association (UMSA)
1. Despite their minority status, the Crisostomo group has managed UDMC from its
inception with Juanito Crisostomo as president and petitioner Sixto Crisostomo as
director and legal counsel
2. In 1988, UDMC defaulted in its obligation to pay P55 million to DBP. In the last
quarter of 1987, UDMCs assets and those of the Crisostomos which had been
given to DBP as collateral, faced foreclosure by the Asset Privatization Trust (APT),
which had taken over UDMCs loan.
3. As such, UDMC, through Ricardo Alfonso and Juanito Crisostomo, persuaded the
Yamadas and Enatsu (Shoji Yamada and Tomatada Enatsu are Japanese
doctors) to invest fresh capital in UDMC. The wife of Enatsu is a Filipina. They
invested P57 million in UDMC
4. The investment was effected by means of a stock purchase agreement and an
amended memorandum of agreement whereby the private respondents
subscribed to 82.09% of the outstanding shares of UDMC. Both transactions were
authorized by the BOD and stockholders of UDMC, and approved by BSP and
SEC
5. The said capital not only saved the assets of UDMC from foreclosure but also
freed the Crisostomos group their individual and solidary liabilities as sureties for
the DBP loan
6. However, petitioner Sixto Crisostomo filed an SEC case against Juanito
Crisostomo, Yamada and Enatsu to stop the holding of the stockholders and
BOD meeting and to disqualify the Japanese investors from holding a controlling
interest in UDMC
7. Subsequently, petitioner filed a case with RTC Makati seeking a preliminary
injunction and identical reliefs prayed for by him in the SEC case.
8. Petitioner alleged that Yamada and Enatsu violated the Constitutional
prohibition against foreigners practicing a profession in the Philippines (Sec 14,
Art XII 1987 Constitution
ISSUE: WON the investments made by Yamada and Enatsu constitute illegal practice of
profession by foreigners in the Philippines

HELD: No. The investments in UDMC of Doctors Yamada and Enatsu do not violate the

Constitutional prohibition against foreigners practicing a profession in the Philippines

(Sec 14, Art XII, 1987 Constitution) for they do not practice their profession (medicine) in
the Philippines, neither have they applied for a license to do so. They only own shares of
stock in a corporation that operates a hospital. No law limits the sale of hospital shares
of stock to doctors only. The ownership of such shares does not amount to engaging
(illegally) in the practice of medicine, or, nursing. If it were otherwise, the petitioner's
stockholding in UDMC would also be illegal.