Asset Privatization Trust v. Sandiganbayan (Second Division)
REITERATIONFacts
The Antecedents: On June 17, 1977, several stockholders of Philippine Journalists, Inc. (PJI), along with the Development Bank of the Philippines (DBP), executed a "Deed of Assignment of Voting Shares." This deed assigned 67% of PJI's total subscribed and outstanding voting shares to DBP as security for a guarantee accommodation. A supplement to this deed dated January 16, 1979, further assigned additional shares, bringing the total assigned to 3,350 shares, representing at least 67% of PJI's subscribed and paid-up common shares. On February 27, 1987, the Asset Privatization Trust (APT) acquired DBP's rights in PJI. APT sought to enforce the deed of assignment. Procedural History: On January 31, 1992, respondent Rosario M. B. Olivares filed an urgent motion with the Sandiganbayan for DBP/APT representatives to vote the 67% shares in the PJI stockholders' meeting scheduled for February 4, 1992. The Sandiganbayan granted the motion, ordering DBP/APT to send representatives and vote the shares, with a warning that failure to do so would be considered a waiver in favor of the assignors. On February 4, 1992, APT sent representatives who elected Paterno Bacani, Jr. to preside over a meeting where a new Board of Directors was elected. Respondent Olivares, however, presided over a separate meeting with only 33% of the shares and elected a different set of officers. On February 1, 1993, the Sandiganbayan issued a resolution upholding the validity of the meeting presided over by Olivares and declaring the APT-led meeting void, ordering the maintenance of the status quo and setting the next meeting for February 2, 1993. The Petition: The Asset Privatization Trust (APT) filed a special civil action for certiorari, seeking to annul the Sandiganbayan's resolution of February 1, 1993, arguing that the Sandiganbayan lacked jurisdiction over the intra-corporate dispute and that its resolution was issued with grave abuse of discretion.
Issue(s)
Whether the assignment to DBP and later to APT of voting shares of PJI was an assignment of voting rights or voting shares, and what rights APT possessed as a result. Whether the Sandiganbayan had jurisdiction to decide who were the duly elected officers of PJI, considering the intra-corporate nature of the dispute and the prior contractual relationship between the parties.
Ruling
The Supreme Court granted the petition, reversed, and set aside the resolution of the Sandiganbayan promulgated on February 1, 1993. The Court remanded the records to the Sandiganbayan for further proceedings with deliberate dispatch, to be completed within six months.
Ratio Decidendi
On the nature of the assignment and APT's rights: The Deed of Assignment clearly indicated that what was assigned to DBP (and subsequently to APT) were "voting shares," not merely "voting rights." The terms of the deed, including the explicit language of "cede, transfer and assign," and the endorsements on the stock certificates, supported this conclusion. The assignment was made as security for a financial accommodation, subject to a resolutory condition (settlement of PJI's loan obligation). The endorsements, while mentioning voting rights, did not negate the transfer and assignment of the shares themselves. Therefore, the assignee, APT, possessed the rights of a shareholder with respect to the assigned shares. On the jurisdiction of the Sandiganbayan: The dispute between APT and respondent Olivares concerning the election of corporate officers and the validity of stockholders' meetings was fundamentally an intra-corporate dispute. Such disputes are within the exclusive jurisdiction of the Securities and Exchange Commission (now Regional Trial Courts under RA 8799). The fact that some of the shares involved were sequestered did not automatically vest jurisdiction in the Sandiganbayan, especially since the power of APT to vote the shares emanated from a contractual relationship (the deed of assignment) predating the sequestration. The Court emphasized that the dispute was of no concern to the Sandiganbayan, having no relevance to the ownership of sequestered stock, citing San Miguel Corporation vs. Kahn. The Sandiganbayan's resolution of February 3, 1992, clearly outlined the conditions under which Olivares could preside, and these conditions were not met when APT representatives appeared and were willing to vote. The Sandiganbayan's subsequent resolution of February 1, 1993, which upheld Olivares's actions and declared the APT-led meeting void, constituted grave abuse of discretion as it encroached upon the jurisdiction of the SEC.
Main Doctrine
An intra-corporate dispute concerning the election of corporate officers and the validity of stockholders' meetings, even if involving sequestered shares, falls within the jurisdiction of the Securities and Exchange Commission (now Regional Trial Courts), not the Sandiganbayan, unless the dispute is intrinsically linked to the ownership or disposition of sequestered assets.