G.R. No. 199028,
November 19, 2014, COSMOS BOTTLING CORPORATION, PETITIONER, VS.
COMMISSION EN BANC OF THE SECURITIES AND EXCHANGE COMMISSION (SEC) AND JUSTINA
F. CALLANGAN, IN HER CAPACITY AS DIRECTOR OF THE CORPORATION FINANCE DEPARTMENT
OF THE SEC, RESPONDENTS.
(THE LAWYER’S POST)
“x x x.
As an administrative
agency with both regulatory and adjudicatory functions,1 the SEC
was given the authority to delegate some of its functions to, inter
alia, its various operating departments, such as the SEC-CFD, the
Enforcement and Investor Protection Department, and the Company Registration
and Monitoring Department, pursuant to Section 4.6 of the SRC, to wit:
SEC. 4. Administrative
Agency.
x x x x
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4.6.
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The Commission
may, for purposes of efficiency, delegate any of its functions to any
department or office of the Commission, an individual Commissioner or
staff member of the Commission except its review or appellate authority and
its power to adopt, alter and supplement any rule or regulation.
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The Commission may
review upon its own initiative or upon the petition of any interested party
any action of any department or office, individual Commissioner, or staff
member or the Commission. (Emphasis and underscoring supplied)
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Naturally, the
aforesaid provision also gives the SEC the power to review the acts performed
by its operating departments in the exercise of the former’s delegated
functions. This power of review is squarely addressed by Section 11-1, Rule XI
of the 2006 SEC Rules of Procedure, which provides that “[a]n appeal to the
Commission En Banc may be taken from a decision, order, or
resolution issued by an Operating Department if there are questions of fact, of
law, or mixed questions of fact and law.”
In this case, the
Court disagrees with the findings of both the SEC En Banc and
the CA that the Revocation Order emanated from the SEC En Banc. Rather,
such Order was merely issued by the SEC-CFD as one of the SEC’s operating
departments, as evidenced by the following: (a) it was printed and issued on
the letterhead of the SEC-CFD, and not the SEC En Banc; (b) it was
docketed as a case under the SEC-CFD as an operating department of the SEC,
since it bore the serial number “SEC-CFD Order No. 027, [s.] 2008;” and (c) it
was signed solely by Director Callangan as director of the SEC-CFD, and not by
the commissioners of the SEC En Banc.
Further, both the
SEC En Banc and the CA erred in holding that the Revocation
Order merely reflected Resolution No. 87, s. 2008, and thus, should already be
considered as the ruling of the SEC En Banc in this case. As
admitted by respondents, the SEC-CFD’s referral of the case to the SEC En
Banc for its consideration in its March 13, 2008 meeting, which
eventually resulted in the issuance of Resolution No. 87, s. 2008, was merely
an internal procedure inherent in the exercise by the SEC of its administrative
and regulatory functions.2Moreover, Cosmos never knew of the existence
of Resolution No. 87, s. 2008, as it was not furnished a copy thereof; nor did
the Revocation Order make any specific reference to the same. Essentially,
Cosmos was only apprised of the existence of Resolution No. 87, s. 2008 when it
was finally cited by the SEC En Banc in its September 10, 2009
Decision.3 Accordingly, when Cosmos received the Revocation Order, it had
every reason to believe that it was issued by the SEC-CFD as an Operating
Department of the SEC, and thus, appealable to the SEC En Banc.
Therefore, the outright dismissal of Cosmos’s appeal by the SEC En Banceffectively
denied it of its right to appeal, as provided for under the SRC and the 2006
SEC Rules of Procedure, and therefore could not be countenanced.
In sum, the
Revocation Order is properly deemed as a decision issued by the SEC-CFD as one
of the Operating Departments of the SEC, and accordingly, may be appealed to
the SEC En Banc, as what Cosmos properly did in this case.
Perforce, the SEC En Banc and the CA erred in deeming Cosmos’s
appeal as a motion for reconsideration and ordering its dismissal on such
ground. In view thereof, the Court deems it prudent to reinstate and remand the
case to the SEC En Banc for its resolution on the merits.
WHEREFORE, the
petition is GRANTED. Accordingly, the Decision dated April 25, 2011 and
the Resolution dated October 17, 2011 of the Court of Appeals in CA-G.R. SP.
No. 110714 are hereby SET ASIDE. The instant case is REMANDED to
the Securities and Exchange Commission En Banc for resolution
of Cosmos Bottling Corporation’s appeal on the merits.
SO ORDERED.
X x x.”
