Palting v. San Jose Petroleum, Inc.

FACTS
- This case arose from the opposition filed by Pedro R. Palting, a prospective investor, against the granting of
the registration, and licensing of the sale in the Philippines, of 5 million shares of the capital stock of
Panamanian corporation San Jose Petroleum, Inc.
- San Jose Petroleum filed with the SEC a sworn registration statement for the registration and licensing for sale
in the Philippines Voting Trust Certificates representing 5 million shares of its capital stock at P.70 per share,
with a par value of $.01 per share.
- It was alleged that the entire proceeds of the sale of said securities will be devoted or used exclusively to
finance the operations of San Jose Oil Company, Inc., a domestic mining corporation with 14 petroleum
exploration concessions in the country.
- The SEC issued a notice and order published in 2 newspapers of general circulation in the Philippines, for
any person who is opposed to the petition for registration and licensing of San Jose Petroleums securities, to
file his opposition in 7 days.
- Palting filed his opposition as prospective investor in the shares of San Jose Petroleum assailing 1) the
unconstitutional and unlawful tie-up of San Jose Petroleum and San Jose Oil; 2) the absence of license for San
Jose Petroleum to transact business in the Philippines; 3) the fraud attending the sale of the shares to Philippine
purchasers; and 4) the lack of soundness business principles upon which the enterprise is based.
- The SEC approved the application of San Jose Petroleum for registration and licensing.
- Palting has now filed a petition for review.
ISSUE/S
- Whether or not Pedro R. Palting, as a prospective investor in San Jose Petroleums securities, has
personality to file the petition for review of the order of the Securities and Exchange Commission.
HELD
- Yes. As the Securities Act has been construed by the SEC, any person (who may not be aggrieved or
interested within the legal acceptation of the word) is allowed or permitted to file an opposition to the
registration of securities for sale in the Philippines.
- Thus, Any person who is opposed to this petition must file his written opposition with this Commission
within said period.. partly read the published SEC order referring to the statement of registration filed by San
Jose Petroleum.
- This is in consonance with the generally accepted principle that Blue Sky Laws are enacted to protect investors
and prospective purchasers and to prevent fraud and preclude the sale of securities which are in fact worthless
or worth substantially less than the asking price. Thus, the opposition filed by Palting, giving grounds therefor.
- A hearing was held where Palting was made a party and allowed to actively participate, and under the New
Rules of Court, such party can appeal from a final order, ruling or decision of the SEC.
- The ruling issued by the Utah State Court where the party aggrieved only refers to issuers, dealers and
salesmen securities is not controlling in this jurisdiction.
DOCTRINE
- As the Securities Act has been construed by the SEC, any person (who may not be aggrieved or interested
within the legal acceptation of the word) is allowed or permitted to file an opposition to the registration of
securities for sale in the Philippines.
- This is in consonance with the generally accepted principle that Blue Sky Laws are enacted to protect investors
and prospective purchasers and to prevent fraud and preclude the sale of securities which are in fact worthless
or worth substantially less than the asking price. Thus, the opposition filed by Palting, giving grounds therefor.