Palting vs. San Jose Petroleum Inc.

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G.R. No. L-14441 December 17, 1!!
FACTS: In 1"!, San Jose Petroleum, Inc. #SJP$, a mining cor%oration organi&e' un'er t(e
la)s o* Panama, )as allo)e' b+ t(e Securities an' ,-c(ange .ommission #S,.$ to sell its
s(ares o* stoc/s in t(e P(ili%%ines. 0%%arentl+, t(e %rocee's o* suc( sale s(all be investe' in
San Jose 1il .om%an+, Inc. #SJ1$, a 'omestic mining cor%oration. Pe'ro Palting o%%ose' t(e
aut(ori&ation grante' to SJP because sai' tie u% bet)een SJP an' SJ1 is violative o* t(e
constitution2 t(at SJ1 is 34 o)ne' b+ SJP2 t(at t(e ot(er 134 is o)ne' b+ anot(er *oreign
cor%oration2 t(at a mining cor%oration cannot be intereste' in anot(er mining cor%oration.
SJP on t(e ot(er (an' invo/e' t(at un'er t(e %arit+ rig(ts agreement #Laurel-Langle+
0greement$, SJP, a *oreign cor%oration, is allo)e' to invest in a 'omestic cor%oration.
ISSUE: 5(et(er or not SJP is correct.
HELD: No. 6(e %arit+ rig(ts agreement is not a%%licable to SJP. 6(e %arit+ rig(ts are onl+
grante' to 0merican business enter%rises or enter%rises 'irectl+ or in'irectl+ controlle' b+
7S citi&ens. SJP is a Panamanian cor%orate citi&en. 6(e ot(er o)ners o* SJ1 are 8ene&uelan
cor%orations, not 0mericans. SJP )as not able to s(o) contrar+ evi'ence. 9urt(er, t(e
Su%reme .ourt em%(asi&e' t(at t(e stoc/s o* t(ese cor%orations are being tra'e' in stoc/s
e-c(anges abroa' )(ic( ren'ers t(eir *oreign o)ners(i% sub:ect to c(ange *rom time to
time. 6(is *act ren'ers a %ractical im%ossibilit+ to meet t(e re;uirements un'er t(e %arit+
rig(ts. <ence, t(e tie u% bet)een SJP an' SJ1 is illegal, SJP not being a 'omestic cor%oration
or an 0merican business enter%rise contem%late' un'er t(e Laurel-Langle+ 0greement.