DEE v.

SEC

FACTS: Naga Telephone Company, Inc. was organized in 1954, the authorized capital was P100,000.00. In 1974 Naga Telephone Co., Inc. (Natelco for
short) decided to increase its authorized capital to P3,000,000.00. As required by the Public Service Act, Natelco filed an application for the approval of
the increased authorized capital with the then Board of Communications under BOC Case No. 74-84. On January 8, 1975, a decision was rendered in
said case, approving the said application subject to certain conditions, among which was:

3. That the issuance of the shares of stocks will be for a period of one year from the date hereof, "after which no further issues will be made without
previous authority from this Board."

Pursuant to the approval given by the then Board of Communications, Natelco filed its Amended Articles of Incorporation with the Securities and
Exchange Commission (SEC for short). When the amended articles were filed with the SEC, the original authorized capital of P100,000.00 was already
paid. Of the increased capital of P2,900,000.00 the subscribers subscribed to P580,000.00 of which P145,000 was fully paid.

On April 12, 1977, Natelco entered into a contract with Communication Services, Inc. (CSI for short) for the "manufacture, supply, delivery and
installation" of telephone equipment. In accordance with this contract, Natelco issued 24,000 shares of common stocks to CSI on the same date as part
of the downpayment. On May 5, 1979, another 12,000 shares of common stocks were issued to CSI. In both instances, no prior authorization from the
Board of Communications, now the National Telecommunications Commission, was secured pursuant to the conditions imposed by the decision in BOC
Case NO. 74-84 aforecite

On May 19, 1979, the stockholders of the Natelco held their annual stockholders' meeting to elect their seven directors to their Board of Directors, for the
year 1979-1980. In this election Pedro Lopez Dee (Dee for short) was unseated as Chairman of the Board and President of the Corporation, but was
elected as one of the directors, together with his wife, Amelia Lopez Dee.

In the election CSI was able to gain control of Natelco when the latter's legal counsel, Atty. Luciano Maggay (Maggay for short) won a seat in the Board
with the help of CSI. In the reorganization Atty. Maggay became president.

The following were elected in the May 19, 1979 election: Atty. Luciano Maggay, Mr. Augusto Federis, Mrs. Nilda Ramos, Ms. Felipa Javalera, Mr.
Justino de Jesus, Sr., Mr. Pedro Lopez Dee and Mrs Amelia C. Lopez Dee. The last three named directors never attended the meetings of the Maggay
Board. The members of the Maggay Board who attended its meetings were Maggay. Federis, Ramos and Javalera. The last two were and are CSI
representatives (Ibid., p. 812).

Petitioner Dee having been unseated in the election, filed a petition in the SEC docketed as SEC Case No. 1748, questioning the validity of the elections
of May 19, 1979 upon the main ground that there was no valid list of stockholders through which the right to vote could be determined. A restraining
order was issued by the SEC placing petitioner and the other officers of the 1978-1979 Natelco Board in hold-over capacity

The SEC restraining order was elevated to the Supreme Court in G.R. No. 50885 where the enforcement of the SEC restraining order was restrained.
Private respondents therefore, replaced the hold-over officers

Subsequently, the Supreme Court dismissed the petition in G.R. No. 50885 upon the ground that the same was premature and the Commission should
be allowed to conduct its hearing on the controversy. The dismissal of the petition resulted in the unseating of the Maggay group from the board of
directors of Natelco in a "hold-over" capacity

In the course of the proceedings in SEC Case No. 1748, respondent hearing officer issued an order on June 23, 1981, declaring: (1) that CSI is a
stockholder of Natelco and, therefore, entitled to vote; (2) that unexplained 16,858 shares of Natelco appear to have been issued in excess to CSI which
should not be allowed to vote; (3) that 82 shareholders with their corresponding number of shares shall be allowed to vote; and (4) consequently,
ordering the holding of special stockholder' meeting to elect the new members of the Board of Directors for Natelco based on the findings made in the
order as to who are entitled to vote

THE SEC EN BANC AFFIRMED THE DECISION OF HEARING OFFICER.

Meanwhile on May 20, 1982 (G.R. No. 63922), petitioner Antonio Villasenor (as plaintiff) filed Civil Case No. 1507 with the Court of First Instance of
Camarines Sur, Naga City, against private respondents and co-petitioners, de Jesus, Tordilla and the Dee's all defendants therein, which was raffled to
Branch I, presided over by Judge Delfin Vir Sunga (Rollo, G.R. No. 63922; pp. 25-30). Villasenor claimed that he was an assignee of an option to
repurchase 36,000 shares of common stocks of Natelco under a Deed of Assignment executed in his favor (Rollo, p. 31). The defendants therein (now
private respondents), principally the Maggay group, allegedly refused to allow the repurchase of said stocks when petitioner Villasenor offered to
defendant CSI the repurchase of said stocks by tendering payment of its price (Rollo, p. 26 and p. 78). The complaint therefore, prayed for the allowance
to repurchase the aforesaid stocks and that the holding of the May 22, 1982 election of directors and officers of Natelco be enjoined (Rollo, pp. 28-29).

A restraining order dated May 21, 1982 was issued by the lower court commanding desistance from the scheduled election until further orders (Rollo, p.
32).

Nevertheless, on May 22, 1982, as scheduled, the controlling majority of the stockholders of the Natelco defied the restraining order, and proceeded with
the elections, under the supervision of the SEC representatives. The group of Manggay won the election again.

Despite service of the order of May 25, 1982, the Lopez Dee group headed by Messrs. Justino De Jesus and Julio Lopez Dee kept insisting no elections
were held and refused to vacate their positions (Rollo, Vol. III, p. 985; p. 11).
On May 28, 1982, the SEC issued another order directing the hold-over directors and officers to turn over their respective posts to the newly elected
directors and officers and directing the Sheriff of Naga City, with the assistance of PC and INP of Naga City, and other law enforcement agencies of the
City or of the Province of Camarines Sur, to enforce the aforesaid order (Rollo, Vol. 11, pp. 577-578).

On June 2, 1982, a charge for contempt was filed by petitioner Villasenor alleging that private respondents have been claiming in press conferences and
over the radio airlanes that they actually held and conducted elections on May 22, 1982 in the City of Naga and that they have a new set of officers, and
that such acts of herein private respondents constitute contempt of court

The RTC found Manggay group guilty of contempt thus a penalty of 6 months imprisonment and a fine of P1000 is ordered by the court.

An appeal before the CA was made by group of Manggay which reversed the decision of contempt order and that there is a valid election ordering the
hold-over officers to vacate the said office.

Hence, these petitions

ISSUE: Whether or not Natelco stockholders have a right of preemption to the 113,800 shares in question

HELD:

While the group of Luciano Maggay was in control of Natelco by virtue of the restraining order issued in G.R. No. 50885, the Maggay Board issued
113,800 shares of stock to CSI Petitioner said that the Maggay Board, in issuing said shares without notifying Natelco stockholders, violated their right of
pre-emption to the unissued shares.

This Court in Benito vs. SEC, et al., has ruled that:

Petitioner bewails the fact that in view of the lack of notice to him of such subsequent issuance, he was not able to exercise his right of pre-emption over
the unissued shares. However, the general rule is that pre-emptive right is recognized only with respect to new issues of shares, and not with respect to
additional issues of originally authorized shares. This is on the theory that when a corporation at its inception offers its first shares, it is presumed to have
offered all of those which it is authorized to issue. An original subscriber is deemed to have taken his shares knowing that they form a definite
proportionate part of the whole number of authorized shares. When the shares left unsubscribed are later re-offered, he cannot therefore (sic) claim a
dilution of interest (Benito vs. SEC, et al., 123 SCRA 722).

The questioned issuance of the 113,800 stocks is not invalid even assuming that it was made without notice to the stockholders as claimed by the
petitioner. The power to issue shares of stocks in a corporation is lodged in the board of directors and no stockholders meeting is required to consider it
because additional issuance of shares of stocks does not need approval of the stockholders. Consequently, no pre-emptive right of Natelco stockholders
was violated by the issuance of the 113,800 shares to CSI.
 BITONG v. CA

Bitong, Alleging before the SEC that she had been the Treasurer and a Member of the Board of Directors of Mr. & Ms. from the time it was
incorporated on 29 October 1976 to 11 April 1989, and was the registered owner of 1,000 shares of stock out of the 4,088 total outstanding shares,
petitioner complained of irregularities committed from 1983 to 1987 by Eugenia D. Apostol, President and Chairperson of the Board of Directors. Petitioner
claimed that except for the sale of the name Philippine Inquirer to Philippine Daily Inquirer (PDI hereafter) all other transactions and agreements entered
into by Mr. & Ms. with PDI were not supported by any bond and/or stockholders resolution. And, upon instructions of Eugenia D. Apostol, Mr. & Ms. made
several cash advances to PDI on various occasions amounting to P3.276 million. On some of these borrowings PDI paid no interest whatsoever. Despite
the fact that the advances made by Mr. & Ms. to PDI were booked as advances to an affiliate, there existed no board or stockholders resolution, contract
nor any other document which could legally authorize the creation of and support to an affiliate.

Petitioner further alleged that respondents Eugenia and Jose Apostol were stockholders, directors and officers in both Mr. & Ms.and PDI. In fact on
2 May 1986 respondents Eugenia D. Apostol, Leticia J. Magsanoc and Adoracion G. Nuyda subscribed to PDI shares of stock at P50,000.00 each or a
total of P150,000.00. The stock subscriptions were paid for by Mr. & Ms. and initially treated as receivables from officers and employees. But, no payments
were ever received from respondents, Magsanoc and Nuyda.

The petition principally sought to (a) enjoin respondents Eugenia D. Apostol and Jose A. Apostol from further acting as president-director and
director, respectively, of Mr. & Ms. and disbursing any money or funds except for the payment of salaries and similar expenses in the ordinary course of
business, and from disposing of their Mr. & Ms. shares; (b) enjoin respondents Apostol spouses, Magsanoc and Nuyda from disposing of the PDI shares
of stock registered in their names; (c) compel respondents Eugenia and Jose Apostol to account for and reconvey all profits and benefits accruing to them
as a result of their improper and fraudulent acts; (d) compel respondents Magsanoc and Nuyda to account for and reconvey to Mr. & Ms. all shares of
stock paid from cash advances from it and all accessions or fruits thereof; (e) hold respondents Eugenia and Jose Apostol liable for damages suffered
by Mr. & Ms. and the other stockholders, including petitioner, by reason of their improper and fraudulent acts; (f) appoint a management committee for Mr.
& Ms. during the pendency of the suit to prevent further dissipation and loss of its assets and funds as well as paralyzation of business operations; and,
(g) direct the management committee for Mr. & Ms. to file the necessary action to enforce its rights against PDI and other third parties.

The original stockholders of Mr. & Ms., i.e., JAKA, Luis Villafuerte, Ramon Siy, the Apostols and Ex Libris continued to be virtually the same up to
1989. Thereafter it was agreed among them that, they being close friends, Mr. & Ms. would be operated as a partnership or a close corporation; respondent
Eugenia D. Apostol would manage the affairs of Mr. & Ms.; and, no shares of stock would be sold to third parties without first offering the shares to the
other stockholders so that transfers would be limited to and only among the original stockholders.

Private respondents also asserted that respondent Eugenia D. Apostol had been informing her business partners of her actions as manager, and
obtaining their advice and consent. Consequently the other stockholders consented, either expressly or impliedly, to her management. They offered no
objections. As a result, the business prospered. Thus, as shown in a statement prepared by the accounting firm Punongbayan and Araullo, there were
increases from 1976 to 1988 in the total assets of Mr. & Ms.

Private respondents further contended that petitioner, being merely a holder-in-trust of JAKA shares, only represented and continued to
represent JAKA in the board. In the beginning, petitioner cooperated with and assisted the management until mid-1986 when relations between her and
her principals on one hand, and respondent Eugenia D. Apostol on the other, became strained due to political differences. Hence from mid-1986 to mid-
1988 petitioner refused to speak with respondent Eugenia D. Apostol, and in 1988 the former became openly critical of the management of the
latter. Nevertheless, respondent Eugenia D. Apostol always made available to petitioner and her representatives all the books of the corporation.

Private respondents averred that all the PDI shares owned by respondents Eugenia and Jose Apostol were acquired through their own private funds
and that the loan of P750,000.00 by PDI from Mr. & Ms.had been fully paid with 20% interest per annum. And, it was PDI, not Mr. & Ms., which loaned off
P250,000.00 each to respondents Magsanoc and Nuyda. Private respondents further argued that petitioner was not the true party to this case, the real
party being JAKA which continued to be the true stockholder of Mr. & Ms.; hence, petitioner did not have the personality to initiate and prosecute the
derivative suit which, consequently, must be dismissed.

On 6 December 1990, the SEC Hearing Panel[3] issued a writ of preliminary injunction enjoining private respondents from disbursing any money
except for the payment of salaries and other similar expenses in the regular course of business. The Hearing Panel also enjoined respondent Apostol
spouses, Nuyda and Magsanoc from disposing of their PDI shares, and further ruled -

x x x respondents contention that petitioner is not entitled to the provisional reliefs prayed for because she is not the real party in interest x x x x is bereft
of any merit. No less than respondents Amended Answer, specifically paragraph V, No. 8 on Affirmative Allegations/Defenses states that `The petitioner
being herself a minor stockholder and holder-in-trust of JAKA shares represented and continues to represent JAKA in the Board. This statement refers
to petitioner sitting in the board of directors of Mr. & Ms. in two capacities, one as a minor stockholder and the other as the holder in trust of the shares
of JAKA in Mr. & Ms. Such reference alluded to by the respondents indicates an admission on respondents part of the petitioners legal personality to file
a derivative suit for the benefit of the respondent Mr. & Ms. Publishing Co., Inc.

The Hearing Panel however denied petitioners prayer for the constitution of a management committee.

Petitioner testified at the trial that she became the registered and beneficial owner of 997 shares of stock of Mr. & Ms. out of the 4,088 total
outstanding shares after she acquired them from JAKA through a deed of sale executed on 25 July 1983 and recorded in the Stock and Transfer Book
of Mr. & Ms. under Certificate of Shares of Stock No. 008. She pointed out that Senator Enrile decided that JAKA should completely divest itself of its
holdings in Mr. & Ms. and this resulted in the sale to her of JAKAs interest and holdings in that publishing firm.

Private respondents refuted the statement of petitioner that she was a stockholder of Mr. & Ms. since 25 July 1983 as respondent Eugenia D. Apostol
signed Certificate of Stock No. 008 only on 17 March 1989, and not on 25 July 1983. Respondent Eugenia D. Apostol explained that she stopped using
her long signature (Eugenia D. Apostol) in 1987 and changed it to E.D. Apostol, the signature which appeared on the face of Certificate of Stock No. 008
bearing the date 25 July 1983. And, since the Stock and Transfer Book which petitioner presented in evidence was not registered with the SEC, the entries
therein includingCertificate of Stock No. 008 were fraudulent. Respondent Eugenia D. Apostol claimed that she had not seen the Stock and Transfer Book
at any time until 21 March 1989 when it was delivered by petitioner herself to the office of Mr. & Ms., and that petitioner repeatedly referred to Senator
Enrile as "my principal" during the Mr. & Ms. board meeting of 22 September 1988, seven (7) times no less.

The SEC Hearing Panel dismissed the derivative suit filed by petitioner and dissolved the writ of preliminary injunction barring private respondents
from disposing of their PDI shares and any of Mr. & Ms. assets. The Hearing Panel ruled that there was no serious mismanagement of Mr. & Ms. which
would warrant drastic corrective measures. It gave credence to the assertion of respondent Eugenia D. Apostol that Mr. & Ms. was operated like a close
corporation where important matters were discussed and approved through informal consultations at breakfast conferences. The Hearing Panel also
concluded that while the evidence presented tended to show that the real party-in-interest indeed was JAKA and/or Senator Enrile, it viewed the real issue
to be the alleged mismanagement, fraud and conflict of interest on the part of respondent Eugenia D. Apostol, and allowed petitioner to prosecute the
derivative suit if only to resolve the real issues. Hence, for this purpose, the Hearing Panel considered petitioner to be the real party-in-interest.

On 19 August 1993 respondent Apostol spouses sold the PDI shares registered in the name of their holding company, JAED Management
Corporation, to Edgardo B. Espiritu. On 25 August 1993 petitioner Bitong appealed to the SEC En Banc.

On 24 January 1994 the SEC En Banc[4] reversed the decision of the Hearing Panel and, among others, ordered private respondents to account for,
return and deliver to Mr. & Ms. any and all funds and assets that they disbursed from the coffers of the corporation including shares of stock, profits,
dividends and/or fruits that they might have received as a result of their investment in PDI, including those arising from the P150,000.00 advanced to
respondents Eugenia D. Apostol, Leticia J. Magsanoc and Adoracion G. Nuyda; account for and return any profits and fruits of all amounts irregularly or
unlawfully advanced to PDI and other third persons; and, cease and desist from managing the affairs of Mr. & Ms. for reasons of fraud, mismanagement,
disloyalty and conflict of interest.

The SEC En Banc also declared the 19 August 1993 sale of the PDI shares of JAED Management Corporation to Edgardo B. Espiritu to be tainted
with fraud, hence, null and void, and considered Mr. & Ms. as the true and lawful owner of all the PDI shares acquired by respondents Eugenia D. Apostol,
Magsanoc and Nuyda. It also declared all subsequent transferees of such shares as trustees for the benefit of Mr. & Ms. and ordered them to forthwith
deliver said shares to Mr. & Ms.

Consequently, respondent Apostol spouses, Magsanoc, Nuyda, and Mr. & Ms. filed a petition for review before respondent Court of Appeals,
docketed as CA-GR No. SP 33291, while respondent Edgardo B. Espiritu filed a petition for certiorari and prohibition also before respondent Court of
Appeals, docketed as CA-GR No. SP 33873. On 8 December 1994 the two (2) petitions were consolidated.

On 31 August 1995 respondent appellate court rendered a decision reversing the SEC En Banc and held that from the evidence on record petitioner
was not the owner of any share of stock in Mr. & Ms. and therefore not the real party-in-interest to prosecute the complaint she had instituted against
private respondents. Accordingly, petitioner alone and by herself as an agent could not file a derivative suit in behalf of her principal. For not being the real
party-in-interest, petitioners complaint did not state a cause of action, a defense which was never waived; hence, her petition should have been
dismissed. Respondent appellate court ruled that the assailed orders of the SEC were issued in excess of jurisdiction, or want of it, and thus were null and
void.[5] On 18 January 1996, petitioner's motion for reconsideration was denied for lack of merit.

Before this Court, petitioner submits that in paragraph 1 under the caption "I. The Parties" of her Amended Petition before the SEC, she stated that
she was a stockholder and director of Mr. & Ms. In par. 1 under the caption "II. The Facts" she declared that she "is the registered owner of 1,000 shares
of stock of Mr. & Ms. out of the latters 4,088 total outstanding shares" and that she was a member of the Board of Directors of Mr. & Ms. and treasurer
from its inception until 11 April 1989. Petitioner contends that private respondents did not deny the above allegations in their answer and therefore they
are conclusively bound by this judicial admission. Consequently, private respondents admission that petitioner has 1,000 shares of stock registered in her
name in the books of Mr. & Ms. forecloses any question on her status and right to bring a derivative suit on behalf of Mr. & Ms.

Not necessarily. A party whose pleading is admitted as an admission against interest is entitled to overcome by evidence the apparent inconsistency,
and it is competent for the party against whom the pleading is offered to show that the statements were inadvertently made or were made under a mistake
of fact. In addition, a party against whom a single clause or paragraph of a pleading is offered may have the right to introduce other paragraphs which tend
to destroy the admission in the paragraph offered by the adversary.[6]

ISSUE: WHETHER PETITIONER IS THE REAL PARTY IN INTEREST?

HELD: NO. The answer of private respondents shows that there was no judicial admission that petitioner was a stockholder of Mr. & Ms. to entitle
her to file a derivative suit on behalf of the corporation. Where the statements of the private respondents were qualified with phrases such as, "insofar as
they are limited, qualified and/or expanded by," "the truth being as stated in the Affirmative Allegations/Defenses of this Answer" they cannot be considered
definite and certain enough, cannot be construed as judicial admissions.[7]

More so, the affirmative defenses of private respondents directly refute the representation of petitioner that she is a true and genuine stockholder of
Mr. & Ms. by stating unequivocally that petitioner is not the true party to the case but JAKA which continues to be the true stockholder of Mr. & Ms. In fact,
one of the reliefs which private respondents prayed for was the dismissal of the petition on the ground that petitioner did not have the legal interest to
initiate and prosecute the same.

When taken in its totality, the Amended Answer to the Amended Petition, or even the Answer to the Amended Petition alone, clearly raises an issue
as to the legal personality of petitioner to file the complaint.Every alleged admission is taken as an entirety of the fact which makes for the one side with
the qualifications which limit, modify or destroy its effect on the other side. The reason for this is, where part of a statement of a party is used against him
as an admission, the court should weigh any other portion connected with the statement, which tends to neutralize or explain the portion which is against
interest.

In other words, while the admission is admissible in evidence, its probative value is to be determined from the whole statement and others intimately
related or connected therewith as an integrated unit.Although acts or facts admitted do not require proof and cannot be contradicted, however, evidence
aliunde can be presented to show that the admission was made through palpable mistake.[8] The rule is always in favor of liberality in construction of
pleadings so that the real matter in dispute may be submitted to the judgment of the court.[9]
 Consuelo Metal Corporation v. Planters Development Bank

On 1 April 1996, CMC filed before the SEC a petition to be declared in a state of suspension of payment, for rehabilitation, and for the appointment of a

rehabilitation receiver or management committee under Section 5(d) of Presidential Decree No. 902-A.[5] On 2 April 1996, the SEC, finding the petition

sufficient in form and substance, declared that all actions for claims against CMC pending before any court, tribunal, office, board, body and/or commission

are deemed suspended immediately until further order from the SEC. [6]

In an Order dated 13 September 1999, the SEC directed the creation of a management committee to undertake CMCs rehabilitation and reiterated the

suspension of all actions for claims against CMC

Thereafter, respondent Planters Development Bank (Planters Bank), one of CMCs creditors, commenced the extra-judicial foreclosure of CMCs real estate

mortgage. Public auctions were scheduled on 30 January 2001 and 6 February 2001.

CMC filed a motion for the issuance of a temporary restraining order and a writ of preliminary injunction with the SEC to enjoin the foreclosure of the real

estate mortgage. On 29 January 2001, the SEC issued a temporary restraining order to maintain the status quo and ordered the immediate transfer of the

case records to the trial court.[11]

The case was then transferred to the trial court. In its 25 April 2001 Order, the trial court denied CMCs motion for issuance of a temporary restraining

order. The trial court ruled that since the SEC had already terminated and decided on the merits CMCs petition for suspension of payment, the trial court

no longer had legal basis to act on CMCs motion.

On 28 May 2001, the trial court denied CMCs motion for reconsideration. [12] The trial court ruled that CMCs petition for suspension of payment could not

be converted into a petition for dissolution and liquidation because they covered different subject matters and were governed by different rules. The trial

court stated that CMCs remedy was to file a new petition for dissolution and liquidation either with the SEC or the trial court.

CMC filed a petition for certiorari with the Court of Appeals. CMC alleged that the trial court acted with grave abuse of discretion amounting to lack of

jurisdiction when it required CMC to file a new petition for dissolution and liquidation with either the SEC or the trial court when the SEC clearly retained

jurisdiction over the case.

On 13 June 2001, Planters Bank extra-judicially foreclosed the real estate mortgage

The Court of Appeals held that the trial court correctly denied CMCs motion for the issuance of a temporary restraining order because it was only an

ancillary remedy to the petition for suspension of payment which was already terminated. The Court of Appeals added that, under Section 121 of the

Corporation Code,[14] the SEC has jurisdiction to hear CMCs petition for dissolution and liquidation.

CMC filed a motion for reconsideration. CMC argued that it does not have to file a new petition for dissolution and liquidation with the SEC but that the

case should just be remanded to the SEC as a continuation of its jurisdiction over the petition for suspension of payment. CMC also asked that Planters

Banks foreclosure of the real estate mortgage be declared void.

In its 6 March 2002 Resolution, the Court of Appeals partially granted CMCs motion for reconsideration and ordered that the case be remanded to the

SEC under Section 121 of the Corporation Code.The Court of Appeals also ruled that since the SEC already ordered CMCs dissolution and liquidation,

Planters Banks foreclosure of the real estate mortgage was in order.

ISSUE:
1. Whether the present case falls under Section 121 of the Corporation Code, which refers to the SECs jurisdiction over CMCs dissolution and
liquidation, or is only a continuation of the SECs jurisdiction over CMCs petition for suspension of payment;

HELD:
The SEC has jurisdiction to order CMCs dissolution

but the trial court has jurisdiction over CMCs liquidation.

While CMC agrees with the ruling of the Court of Appeals that the SEC has jurisdiction over CMCs dissolution and liquidation, CMC argues that the Court

of Appeals remanded the case to the SEC on the wrong premise that the applicable law is Section 121 of the Corporation Code. CMC maintains that the

SEC retained jurisdiction over its dissolution and liquidation because it is only a continuation of the SECs jurisdiction over CMCs original petition for

suspension of payment which had not been finally disposed of as of 30 June 2000.

On the other hand, Planters Bank insists that the trial court has jurisdiction over CMCs dissolution and liquidation. Planters Bank argues that dissolution

and liquidation are entirely new proceedings for the termination of the existence of the corporation which are incompatible with a petition for suspension

of payment which seeks to preserve corporate existence.

Republic Act No. 8799 (RA 8799)[15] transferred to the appropriate regional trial courts the SECs jurisdiction defined under Section 5(d) of Presidential

Decree No. 902-A. Section 5.2 of RA 8799 provides:

The Commissions jurisdiction over all cases enumerated under Sec. 5 of Presidential Decree No. 902-A is hereby transferred to the
Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority
may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain
jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one
(1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed. (Emphasis supplied)

The SEC assumed jurisdiction over CMCs petition for suspension of payment and issued a suspension order on 2 April 1996 after it found CMCs petition

to be sufficient in form and substance. While CMCs petition was still pending with the SEC as of 30 June 2000, it was finally disposed of on 29 November

2000 when the SEC issued its Omnibus Order directing the dissolution of CMC and the transfer of the liquidation proceedings before the appropriate trial

court. The SEC finally disposed of CMCs petition for suspension of payment when it determined that CMC could no longer be successfully rehabilitated.

However, the SECs jurisdiction does not extend to the liquidation of a corporation. While the SEC has jurisdiction to order the dissolution of a

corporation,[16] jurisdiction over the liquidation of the corporation now pertains to the appropriate regional trial courts. This is the reason why the SEC, in

its 29 November 2000 Omnibus Order, directed that the proceedings on and implementation of the order of liquidation be commenced at the Regional

Trial Court to which this case shall be transferred. This is the correct procedure because the liquidation of a corporation requires the settlement of claims

for and against the corporation, which clearly falls under the jurisdiction of the regular courts. The trial court is in the best position to convene all the

creditors of the corporation, ascertain their claims, and determine their preferences.