Securities and Exchange Commission v. Picop Resources, Inc.
REITERATIONFacts
The Antecedents: Respondent PICOP Resources, Inc. (PICOP) sought to amend its Articles of Incorporation to extend its corporate existence by fifty years. PICOP initially paid a filing fee of P210.00, based on SEC Memorandum Circular No. 2, Series of 1994. However, the Securities and Exchange Commission (SEC) assessed a significantly higher fee of P12 Million, asserting it was based on Republic Act No. 3531, which mandates that fees for extending corporate existence should be the same as those for original articles of incorporation. Procedural History: PICOP contested the P12 Million assessment, arguing that subsequent SEC circulars did not provide for such a fee and that the 1994 Circular only required a P200.00 fee for amended articles. The SEC En Banc initially reduced the fee to P6 Million but later reverted to the P12 Million assessment, asserting that the 1994 Circular removed fee ceilings. PICOP paid the assessed amount under protest and appealed to the Office of the President (OP). The OP ruled in favor of PICOP, setting the filing fee at P100,000.00 based on SEC Memorandum Circular No. 1, Series of 1986, and ordered a refund. The SEC's subsequent motions for reconsideration before the OP were denied, the second being deemed a prohibited pleading. The SEC then appealed to the Court of Appeals (CA). The Petition: The SEC filed a motion for extension to file a petition for review with the CA under Rule 43. The CA denied this motion, finding it was filed beyond the reglementary period because the SEC had erroneously reckoned the appeal period from the denial of its second, prohibited motion for reconsideration before the OP, instead of from the denial of its first and only permissible motion for reconsideration. The CA subsequently denied the SEC's motion for reconsideration. The SEC then filed the present petition for review on certiorari with the Supreme Court, arguing that the CA erred in denying its motion for extension and its subsequent motion for reconsideration, and in finding no prima facie error in the OP's decision regarding the applicable filing fee.
Issue(s)
Whether the Court of Appeals erred in denying the SEC's motion for extension to file a petition for review, considering the SEC's filing of a prohibited pleading. Whether the Court of Appeals erred in denying the SEC's motion for reconsideration. Whether the Court of Appeals erred in finding no prima facie error committed by the Office of the President in setting aside the SEC's order assessing P12,000,000.00 as filing fee, and whether the applicable filing fee should be P100,000.00.
Ruling
The petition is DENIED for lack of merit. The Court of Appeals committed no reversible error. The Supreme Court affirmed the ruling of the Court of Appeals and the Office of the President.
Ratio Decidendi
On the denial of the motion for extension and dismissal of the petition by the Court of Appeals: The Supreme Court affirmed the CA's ruling that the SEC's appeal was filed out of time. The reglementary period to appeal to the CA is fifteen (15) days from the denial of the first and only motion for reconsideration allowed by the rules. The SEC filed a second motion for reconsideration before the Office of the President, which is a prohibited pleading. Such a prohibited pleading does not toll the running of the period to appeal. The SEC erroneously reckoned the appeal period from the denial of its second motion for reconsideration, when it should have been reckoned from the denial of its first motion for reconsideration. Therefore, the SEC's motion for extension to file its petition for review was indeed filed beyond the reglementary period. On the denial of the motion for reconsideration by the Court of Appeals: (This issue is addressed within the discussion of the first issue, as the denial of the motion for reconsideration is integral to the determination of whether the appeal was filed on time. The Supreme Court's affirmation of the CA's ruling implicitly addresses this issue.) On the finding of no prima facie error by the Court of Appeals regarding the Office of the President's ruling: The Supreme Court agreed with the OP and CA that the applicable filing fee should be P100,000.00. The 1986 Circular specifically addressed the matter of filing fees for the extension of corporate term and provided a clear computation. The SEC's reliance on RA 3531 was found to be without basis for the P12 Million assessment, as the SEC failed to point to an existing law justifying that rate. The OP correctly applied the principle that a special rule (1986 Circular) cannot be repealed by a subsequent general rule (1994 and 2001 Circulars) unless expressly stated. Furthermore, the SEC's attempt to introduce the 1990 Circular, which would have removed the fee ceiling, was rejected because it was not properly published and therefore not effective at the time PICOP filed its application. The late discovery of the 1990 Circular and its submission only on the day of the second motion for reconsideration demonstrated a violation of due process, as the public was not properly apprised of the regulation.
Main Doctrine
A second motion for reconsideration is a prohibited pleading and does not toll the reglementary period for appeal. The filing fee for the extension of corporate term is governed by the specific circular addressing that matter, and subsequent general circulars do not repeal it unless expressly stated. A regulation must be published to be effective and bind the public.