G.R. No. 122787 February 9, 1999.
JUAN CALMA, EDMUNDO MAGLANGUE, SERGIO CAYANAN and SILVESTRE LIWANAG, petitioners, vs. COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION, LUIS M. TARUC and NICODEMUS G. NASAL, respondents.

FACTS

On April 30, 1990, private respondents Luis M. Taruc and Nicodemo G. Nasal, Chairman and Secretary of HUKBALAHAP Veterans Association Inc. (HUKVETS), filed a letter-complaint with the Securities and Exchange Commission (SEC). They alleged that in 1987, petitioners Juan Calma, Edmundo Maglangue, Sergio Cayanan, and Silvestre Liwanag surreptitiously arrogated unto themselves the powers of trustees and officers of HUKVETS. Taruc further alleged that on May 15, 1988, the Calma group held a convention without proper notice and without a quorum, during which nine purportedly elected trustees ousted Taruc as Chairman. Taruc also claimed the March 12, 1989 convention, where Calma group members were elected to the Board, was invalid. Petitioner Liwanag denied these allegations, insisting the 1988 convention was valid and duly notified.
When mediation failed, the SEC, through its Prosecution and Enforcement Department (PED), issued a Resolution on May 21, 1992, directing Taruc to call a general membership meeting within thirty days to elect seven new board members. Petitioner Liwanag objected to this resolution on June 16, 1992, and filed a Supplemental Petition/Motion on July 22, 1992. While this petition was pending, the May 21, 1992 Resolution was implemented with the election of a new Board of Directors. The SEC denied the Supplemental Petition/Motion on July 11, 1994, and a Motion for Reconsideration was denied on March 3, 1995.
Petitioners went to the Court of Appeals seeking to annul the PED’s May 21, 1992 Resolution, arguing the PED lacked jurisdiction to adjudicate corporate election contests. The appellate court ruled against them on September 26, 1995, and denied their motion for reconsideration on November 13, 1995.

ISSUE

Whether the Prosecution and Enforcement Department (PED) of the Securities and Exchange Commission has jurisdiction to investigate the April 30, 1990 letter-complaint of private respondents concerning intra-corporate disputes within HUKVETS.

RULING

The Supreme Court ruled that the PED acted within its jurisdiction. The SEC has both regulatory and adjudicative functions. Under its adjudicative authority, it has original and exclusive jurisdiction over controversies involving intra-corporate relations, including those between corporate officers and stockholders. The PED, as an adjudicative arm of the SEC, is vested under Section 6 of P.D. No. 1758 with the exclusive authority to investigate, on complaint or motu proprio, any act or omission of corporate boards, officers, or stockholders involving violations of laws enforced by the SEC.
The instant controversy, concerning the intra-corporate relations and alleged illegal acts of officers within HUKVETS, falls squarely within this adjudicative power. Furthermore, by actively participating in the proceedings before the PED—filing an answer and engaging in exchanges—petitioners voluntarily submitted to its jurisdiction and are now estopped from questioning it. The Court also found that the PED’s May 21, 1992 Resolution was cleared and adopted by the SEC en banc, thereby vesting it with authority.
The Court further held that petitioners were not denied due process, as administrative due process only requires notice and an opportunity to be heard, which they were given through mediation and active participation in the proceedings.
The petition was DENIED. The Decision of the Court of Appeals sustaining the PED Resolution and the subsequent SEC Orders was AFFIRMED.