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Palting vs. San Jose Petroleum Inc. [G.R. No.

L-14441, December 17, 1966] permitted to file an opposition to the registration of securities for
sale in the Philippines.
FACTS: W/N the “tie-up” is violative of the Constitution, the Laurel-Langley Agreement, the
 San Jose Petroleum, a corporation from Panama, filed with the Philippine Petroleum Act of 1949, and the Corporation Law – YES
Securities and Exchange Commission a sworn registration statement, for  SJP is not covered by the Parity agreement. It is not owned directly by US
the registration and licensing for sale in the Philippines Voting Trust citizen, but is controlled by a corporation from Panama.
Certificates representing 2,000,000 shares of its capital stock.  They did not provide evidence that majority of its stockholders are US
o It was alleged that the entire proceeds of the sale of said securities citizens.
will be devoted or used exclusively to finance the operations of San
Jose Oil Company, Inc., a domestic mining corporation which has whether or not an American mining corporation may lawfully "be in anywise
14 petroleum exploration concessions covering an area of a little interested in any other corporation (domestic or foreign) organized for the purpose
less than 1,000,000 hectares in different provinces in the of engaging in agriculture or in mining," in the Philippines or whether an American
Philippines. citizen owning stock in more than one corporation organized for the purpose of
 Palting filed an OPPOSITION before SEC on the ground that: engaging in agriculture or in mining, may own more than 15% of the capital stock
a. The tie-up between SJP and SJOC violates the provisions of the then outstanding and entitled to vote, of each of such corporations, in view of the
Constitution, Corporation Law, and the Petroleum Act of 1949. express prohibition contained in Section 13 of the Philippine Corporation Law.
 Art. 13, Sec. 1 of Consti  The petitioner in this case contends that the provisions of the Corporation
b. SJP is not licensed to do business in the Philippines. Law must be applied to American citizens and business enterprise
c. The sale is fraudulent. otherwise entitled to exercise the parity privileges, because both the
 SJP claimed that it was a "business enterprise" enjoying parity rights under Laurel-Langley Agreement (Art. VI, par. 1) and the Petroleum Act of 1948
the Ordinance appended to the Constitution. Such right may be exercised (Art. 31), specifically provide that the enjoyment by them of the same rights
with respect to mineral resources in the Philippines, pursuant to the Laurel- and obligations granted under the provisions of both laws shall be "in the
Langley Agreement (grants US citizens the right to use and exploit natural same manner as to, and under the same conditions imposed upon, citizens
resources in the Philippines), only through the medium of a corporation of the Philippines or corporations or associations owned or controlled by
organized under the laws of the Philippines. citizens of the Philippines."
o Thus, SJP which is allegedly qualified to exercise rights under the
Parity Amendment, had to do so through the medium of a domestic Laurel Langley Agreement
corporation, which is SJOC – They said majority of its stockholders The disposition, exploitation, development and utilization of all agricultural, timber,
are US citizens and mineral lands of the public domain, waters, minerals, coal, petroleum and other
o It refused the contention that the Corporation Law was being mineral oils, all forces and sources of potential energy, and other natural resources
violated, by alleging that Section 13 thereof applies only to foreign of either Party, and the operation of public utilities, shall, if open to any person, be
corporations doing business in the Philippines, and registrant was open to citizens of the other Party and to all forms of business enterprise owned or
not doing business here. controlled, directly or indirectly, by citizens of such other Party in the same manner as
 SEC granted the registration. to and under the same conditions imposed upon citizens or corporations or
associations owned or controlled by citizens of the Party granting the right.
W/N Palting has the personality to file the case as a prospective investor – YES
 The notice and order of SEC was published in 2 newspapers of general The Supreme Court emphasized that the stocks of these corporations are being
circulation in the Philippines, for "any person who is opposed" to the traded in stocks exchanges abroad which renders their foreign ownership subject to
petition for registration and licensing of respondent's securities, to file his change from time to time. This fact renders a practical impossibility to meet the
opposition in 7 days, herein petitioner so filed an opposition. requirements under the parity rights. Hence, the tie up between SJP and SJO is illegal,
 SJP contends that a “prospective investor” is not an “aggrieved party”. SJP not being a domestic corporation or an American business enterprise
o Court ruled that any person (who may not be "aggrieved" or contemplated under the Laurel-Langley Agreement.
"interested" within the legal acceptation of the word) is allowed or