Andrew Neil R.

Ninobla

Stock and Transfer

Provident International Resources v. Venus GRN 167041 17 June 2008

Facts:
The subject of this case is the two (2) stock and transfer books of Provident
International Resources Corp. (PIRC) that were registered by two contending group of
shareholders. PIRC was organized on 1979 by the Marcelo Group. However, the Asistio
Group claimed that the Marcelo Group acquired shares in PIRC as mere trustees for
them. On 2002, the SEC Company Registration and Monitoring Department (SEC-
CRMD) called the attention of PIRC for its failure to register its stock and transfer book
(STB). The Asistio Group acting on the request of SEC, registered PIRCs STB on the
same year. However, PIRCs corporate secretary upon learning the 2002 Asistio
Groups registration questioned the same by presenting the 1979 PIRCs STB with SEC
stamp and signature of the OIC of book registration department. This prompted the
Asistio Group to file a case before the RTC to enjoin the PIRCs Marcelo Group from
holding office and taking custody of the corporate books. Meanwhile, the SEC ruled in
favor of the Marcelo Group and cancelled the 2002 PIRCs STB. The Asistio Group
appealed to the SEC Board of Commissioners which sustained the SEC-CRMDs
decision. Aggrieved, the Asistio group elevated their plea to the CA, which ruled that
the issue of two (2) STBs is covered by intra-corporate and not subject to the
jurisdiction of the SEC but with the RTC.

Issue:
Is the issue of two (2) STBs covered by intra-corporate and not subject to the
jurisdiction of the SEC?

Held:

No. The issue of two (2) STBs is not covered by intra-corporate and subject to the
jurisdiction of SEC. Under the law, SEC has the regulatory power to revoke the
corporate franchise, from which a corporation owes its legal existence, and likewise
have the lesser power of merely recalling and canceling a STB that was erroneously
registered. As the administrative agency responsible for the registration and
monitoring of STBs, it is the body cognizant of the STB registration procedures,
and in possession of the pertinent files, records and specimen signatures of
authorized officers relating to the registration of STBs. The evaluation of whether
a STB was authorized by the SEC primarily requires an examination of the STB itself
and the SEC files. This function necessarily belongs to the SEC as part of its
regulatory jurisdiction. Contrary to the allegations of the Asistio Group, the issues
involved in this case can be resolved without going into the intra-corporate
controversies brought up by respondents.
As the regulatory body, it is the SECs duty to ensure that there is only one set of
STB for each corporation. The determination of whether or not the 1979-registered
STB is valid and of whether to cancel and revoke the August 6, 2002 certification and
the registration of the 2002 STB on the ground that there already is an existing STB is
impliedly and necessarily within the regulatory jurisdiction of the SEC.