JOHN GOKONGWEI, JR. vs. SECURITIES AND EXCHANGE COMMISSION, ANDRES M. SORIANO, JOSE M.

SORIANO, ENRIQUE ZOBEL, ANTONIO ROXAS, EMETERIO BUNAO, WALTHRODE B. CONDE, MIGUEL ORTIGAS,
ANTONIO PRIETO, SAN MIGUEL CORPORATION, EMIGDIO TANJUATCO, SR., and EDUARDO R. VISAYA

FACTS:
 Petitioner, having discovered that respondent corporation has been investing corporate funds in other
corporations and businesses outside of the primary purpose clause of the corporation, he filed with respondent
Commission, a petition seeking to have private respondents Andres M. Soriano, Jr. and Jose M. Soriano, as well
as the respondent corporation declared guilty of such violation, and ordered to account for such investments and
to answer for damages
 Respondents issued notices of the annual stockholders' meeting, the Agenda thereof, the Re-affirmation of the
authorization to the Board of Directors to invest corporate funds in other companies or businesses for purposes
other than the main purpose for which the Corporation has been organized, and ratification of the investments
made pursuant thereto.
 Petitioner filed with the SEC an urgent motion for the issuance of a writ of preliminary injunction to restrain private
respondents from taking up the Agenda at the annual stockholders' meeting.
 Respondent Commission, however, cancelled the dates of hearing originally scheduled and reset the same to
May 16 and 17, 1977, or after the scheduled annual stockholders' meeting.
 On May 21, 1977, respondent Emigdio G, Tanjuatco, Sr. filed his comment, alleging that the petition has become
moot and academic for the reason, among others that the acts of private respondent sought to be enjoined have
reference to the annual meeting of the stockholder; that in the same meeting, the Agenda was discussed, voted
upon, ratified and confirmed.

ISSUE:
 Whether or not respondent SEC committed grave abuse of discretion in allowing discussion of the Agenda of the
Annual Stockholders' Meeting, and the ratification of the investment in a foreign corporation of the corporate
funds, allegedly in violation of section 17-1/2 of the Corporation Law.

HELD:
 No.
 Section 17-1/2 of the Corporation Law allows a corporation to "invest its funds in any other corporation or
business or for any purpose other than the main purpose for which it was organized" provided that its Board of
Directors has been so authorized by the affirmative vote of stockholders holding shares entitling them to exercise
at least two-thirds of the voting power.
 If the investment is made in pursuance of the corporate purpose, it does not need the approval of the
stockholders. It is only when the purchase of shares is done solely for investment and not to accomplish the
purpose of its incorporation that the vote of approval of the stockholders holding shares entitling them to exercise
at least two-thirds of the voting power is necessary.
 As stated by respondent corporation, the purchase of beer manufacturing facilities by SMC was an investment in
the same business stated as its main purpose in its Articles of Incorporation, which is to manufacture and market
beer.
 Under these circumstances, the ruling in De la Rama v. Manao Sugar Central Co., Inc., supra, appears relevant.
o A private corporation, in order to accomplish is purpose as stated in its articles of incorporation, and
subject to the limitations imposed by the Corporation Law, has the power to acquire, hold, mortgage,
pledge or dispose of shares, bonds, securities, and other evidence of indebtedness of any domestic or
foreign corporation. Such an act, if done in pursuance of the corporate purpose, does not need the
approval of stockholders; but when the purchase of shares of another corporation is done solely for
investment and not to accomplish the purpose of its incorporation, the vote of approval of the
stockholders is necessary.
o A private corporation has the power to invest its corporate funds "in any other corporation or business, or
for any purpose other than the main purpose for which it was organized, provide that 'its board of
directors has been so authorized in a resolution by the affirmative vote of stockholders holding shares in
the corporation entitling them to exercise at least two-thirds of the voting power on such a propose at a
stockholders' meeting called for that purpose,' and provided further, that no agricultural or mining
corporation shall in anywise be interested in any other agricultural or mining corporation. When the
investment is necessary to accomplish its purpose or purposes as stated in its articles of incorporation the
approval of the stockholders is not necessary.
CHEMPHIL EXPORT & IMPORT CORPORATION (CEIC), vs. THE HONORABLE COURT OF APPEALS JAIME Y.
GONZALES, as Assignee of the Bank of the Philippine Islands (BPI), RIZAL COMMERCIAL BANKING
CORPORATION (RCBC), LAND BANK OF THE PHILIPPINES (LBP), PHILIPPINE COMMERCIAL & INTERNATIONAL
BANK (PCIB) and THE PHILIPPINE INVESTMENT SYSTEM ORGANIZATION (PISO)

FACTS:
 Antonio M. Garcia filed a complaint for declaratory relief and/or injunction against the PISO, BPI, LBP, PCIB and
RCBC (the consortium), seeking judicial declaration of the validity of the surety agreement entered into and to
perpetually enjoin the latter from claiming any purported obligations in said agreement.
 Seven months later, Antonio Garcia filed a complaint for declaratory relief and/or injunction against the Security
Bank & Trust Co(SBTC).
 The RTC (consortium case) denied the application of Garcia for preliminary injunction and instead granted the
consortium's prayer for a writ of preliminary attachment. Hence, various real and personal properties of Garcia
were garnished, including the disputed shares. This garnishment, however, was not annotated in Chemphil's
stock and transfer book.
 The Trial court also granted SBTC's prayer for the issuance of a writ of preliminary attachment, a notice of
garnishment covering Garcia's shares in CIP/Chemphil (including the disputed shares) was served on Chemphil
through its then President.

 Antonio Garcia then transferred to Ferro Chemicals, Inc. (FCI) the disputed shares and other properties for
P79,207,331.28. It was agreed upon that part of the purchase price shall be paid by FCI directly to SBTC for
whatever judgment credits that may be adjudged in the latter's favor in the aforementioned SBTC case.
 FCI issued a Check in favor of SBTC in the amount of P35,462,869.62. SBTC refused to accept the check
claiming that the amount was not sufficient to discharge the debt. The check was thus consigned by Antonio
Garcia and Dynetics with the RTC as payment of their judgment debt in the SBTC case.
 FCI assigned its 4,119,614 shares in Chemphil, which included the disputed shares, to petitioner CEIC. The
shares were registered and recorded in the corporate books of Chemphil in CEIC's name and the corresponding
stock certificates were issued to it.

 Meanwhile, the consortium filed a motion for execution. Among Garcia's properties that were levied upon were his
1,717,678 shares in Chemphil (the disputed shares).
 The consortium acquired the disputed shares of stock at the public auction sale conducted by the sheriff for
P85,000,000.00. On same day, a Certificate of Sale was issued to it
 CEIC filed a motion to intervene in the consortium case on grounds that it is the rightful owner of the disputed
shares. It further alleged that the disputed shares were previously owned by Antonio M. Garcia but subsequently
sold by him to Ferro Chemicals, Inc. (FCI) which in turn assigned the same to CEIC.
 The consortium filed their opposition alleging that their attachment lien over the disputed shares of stocks must
prevail over the private sale in favor of the CEIC considering that said shares of stock were garnished in the
consortium's favor.

ISSUE:
 Whether or not the consortium's attachment lien over the disputed Chemphil shares is null and void and not
binding on third parties due to the latter's failure to register said lien in the stock and transfer books of Chemphil

HELD:
 No.
 The attachment lien acquired by the consortium is valid and effective. Both the Revised Rules of Court and the
Corporation Code do not require annotation in the corporation's stock and transfer books for the attachment of
shares of stock to be valid and binding on the corporation and third party.
 Section 63 of the same Code states:
o Sec. 63. Certificate of stock and transfer of shares. — The capital stock of stock corporations shall be
divided into shares for which certificates signed by the president or vice-president, countersigned by the
secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance
with the by-laws. Shares of stock so issued are personal property and may be transferred by delivery of
the certificate or certificates indorsed by the owner or his attorney-in-fact or other person legally
authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until
the transfer is recorded in the books of the corporation so as to show the names of the parties to the
transaction, the date of the transfer, the number of the certificate or certificates and the number of shares
transferred.
 o No shares of stock against which the corporation holds any unpaid claim shall be transferable in the
books of the corporation.
 Are attachments of shares of stock included in the term "transfer" as provided in Sec. 63 of the Corporation
Code?
o We rule in the negative. As succinctly declared in the case of Monserrat v. Ceron, "chattel mortgage over
shares of stock need not be registered in the corporation's stock and transfer book inasmuch as chattel
mortgage over shares of stock does not involve a "transfer of shares," and that only absolute transfers of
shares of stock are required to be recorded in the corporation's stock and transfer book in order to have
"force and effect as against third persons.”
 Although the Monserrat case refers to a chattel mortgage over shares of stock, the same may be applied to the
attachment of the disputed shares of stock in the present controversy since an attachment does not constitute an
absolute conveyance of property but is primarily used as a means "to seize the debtor's property in order to
secure the debt or claim of the creditor in the event that a judgment is rendered."

GOVERNMENT SERVICE, INSURANCE SYSTEM, vs. THE HON. COURT OF APPEALS, (8TH DIVISION), ANTHONY
V. ROSETE, MANUEL M. LOPEZ, FELIPE B. ALFONSO, JESUS F. FRANCISCO, CHRISTIAN S. MONSOD, ELPIDIO
L. IBAÑEZ, and FRANCIS GILES PUNO

FACTS:
 The annual stockholders’ meeting of the Manila Electric Company was scheduled on 27 May 2008. In connection
with the annual meeting, proxies were required to be submitted and the proxy validation was slated for five days
later.
 In view of the resignation of Camilo Quiason, the position of corporate secretary of Meralco became vacant. The
board of directors of Meralco designated Jose Vitug to act as corporate secretary for the annual meeting.
However, when the proxy validation began, the proceedings were presided over by respondent Anthony Rosete
(Rosete), assistant corporate secretary and in-house chief legal counsel of Meralco. Private respondents
nonetheless argue that Rosete was the acting corporate secretary of Meralco.
 GSIS, a major shareholder in Meralco, was distressed over the proxy validation proceedings, and the resulting
certification of proxies in favor of the Meralco. GSIS filed an Urgent Petition with the SEC seeking to restrain
Rosete from "recognizing, counting and tabulating, directly or indirectly, notionally or actually or in whatever way,
form, manner or means, or otherwise honoring the shares covered by" the proxies in favor of respondents or any
officer representing MERALCO Management," and to annul and declare invalid said proxies GSIS also prayed for
the issuance of a Cease and Desist Order (CDO) to restrain the use of said proxies during the annual meeting.
 A CDO to that effect was issued.
 Respondents filed a petition for certiorari with prohibition with the Court of Appeals, praying that the CDO and the
Show Cause Order (SCO) be annulled.
 Court of Appeals Eighth Division promulgated a decision in the case whereby the complaint filed by GSIS in the
SEC is DISMISSED due to SEC’s lack of jurisdiction, due to forum shopping by respondent GSIS, and due to
splitting of causes of action by respondent GSIS.
 Commissioner Martinez in his capacity as OIC of the SEC, and Hubert Guevarra in his capacity as Director of the
Compliance and Enforcement Department of the SEC filed a petition for certiorari under Rule 65, seeking the
"reversal" of the assailed decision of the Court of Appeals, the recognition of the jurisdiction of the SEC over the
petition of GSIS, and the affirmation of the CDO and SCO.
 Private respondents seek the expunction of the petition filed by the SEC

ISSUE:
 Whether or not Commissioner Marquez and Guevarra, are real parties-in-interest.

HELD:
 Under Section 1 of Rule 45, which governs appeals by certiorari, the right to file the appeal is restricted to "a
party," meaning that only the real parties-in-interest who litigated the petition for certiorari before the Court of
Appeals are entitled to appeal the same under Rule 45.
 The SEC and its two officers may have been designated as respondents in the petition for certiorari filed with the
Court of Appeals, but under Section 5 of Rule 65 they are not entitled to be classified as real parties-in-interest.
 Under the provision, the judge, court, quasi-judicial agency, tribunal, corporation, board, officer or person to whom
grave abuse of discretion is imputed (the SEC and its two officers in this case) are denominated only as public
respondents. The provision further states that "public respondents shall not appear in or file an answer or
comment to the petition or any pleading therein."
 [R]ule 65 involves an original special civil action specifically directed against the person, court, agency or party a
quo which had committed not only a mistake of judgment but an error of jurisdiction, hence should be made public
respondents in that action brought to nullify their invalid acts.
 It shall, however be the duty of the party litigant, whether in an appeal under Rule 45 or in a special civil action in
Rule 65, to defend in his behalf and the party whose adjudication is assailed, as he is the one interested in
sustaining the correctness of the disposition or the validity of the proceedings.
 The party interested in sustaining the proceedings in the lower court must be joined as a co-respondent and he
has the duty to defend in his own behalf and in behalf of the court which rendered the questioned order.
 While there is nothing in the Rules that prohibit the presiding judge of the court involved from filing his own
answer and defending his questioned order, the Supreme Court has reminded judges of the lower courts to
refrain from doing so unless ordered by the Supreme Court.
 The judicial norm or mode of conduct to be observed in trial and appellate courts is now prescribed in the second
paragraph of this section.
o A person not a party to the proceedings in the trial court or in the Court of Appeals cannot maintain an
action for certiorari in the Supreme Court to have the judgment reviewed.
 Justice Isagani Cruz added, in a Concurring Opinion in Santiago: "The judge is not an active combatant in such
proceeding and must leave it to the parties themselves to argue their respective positions and for the appellate
court to rule on the matter without his participation."
 The SEC could have similarly felt in good faith that the assailed Court of Appeals decision had unduly impaired its
prerogatives or caused some degree of hurt to it. Yet assuming that there are rights or prerogatives peculiar to the
SEC itself that the appellate court had countermanded, these can be vindicated in the petition for certiorari filed by
GSIS, whose legal capacity to challenge the Court of Appeals decision is without question. There simply is no
plausible reason for this Court to deviate from a time-honored rule that preserves the purity of our judicial and
quasi-judicial offices to accommodate the SEC’s distrust and resentment of the appellate court’s decision.