G.R. No. 164314 September 26, 2008
SECURITIES AND EXCHANGE COMMISSION, Petitioner vs. PICOP RESOURCES, INC., Respondent.

FACTS

On March 26, 2002, respondent PICOP Resources, Inc. (PICOP) filed with petitioner Securities and Exchange Commission (SEC) an application to amend its Articles of Incorporation to extend its corporate existence for another fifty years. PICOP paid a filing fee of P210.00 based on SEC Memorandum Circular No. 2, Series of 1994. The SEC, however, informed PICOP that the appropriate filing fee was P12 Million, computed as 1/5 of 1% of its authorized capital stock of P6 Billion, based on Republic Act No. 3531 . After exchanges of correspondence and PICOP’s elevation of the matter to the SEC En Banc, the SEC reduced the fee to P6 Million but later reverted to the P12 Million assessment. PICOP paid P11,999,790.00 under protest, in addition to its initial P210.00 payment. PICOP appealed to the Office of the President (OP), arguing that the applicable fee should be P100,000.00 pursuant to SEC Memorandum Circular No. 1, Series of 1986, which prescribes a fee of 1/10 of 1% of the authorized capital stock but not less than P200 nor more than P100,000. The OP ruled in favor of PICOP, ordering the SEC to refund the excess amount. The SEC filed two motions for reconsideration with the OP, the second of which introduced a “newly-found” SEC Circular No. 2, Series of 1990 that allegedly removed the filing fee ceiling. The OP denied the second motion for being a prohibitory pleading. The SEC then filed a motion for extension to file a petition for review with the Court of Appeals, which was denied.

ISSUE

The primary issue is the correct amount of the filing fee for amending PICOP’s Articles of Incorporation to extend its corporate term. A procedural issue is whether the Court of Appeals correctly denied the SEC’s motion for extension to file a petition for review.

RULING

The Supreme Court denied the petition. On the procedural issue, the Court held that the Court of Appeals did not commit grave abuse of discretion in denying the motion for extension. The SEC filed its motion beyond the reglementary period, and no compelling reason justified the extension. On the substantive issue, the Court affirmed the OP’s ruling that the applicable filing fee is P100,000.00 under SEC Memorandum Circular No. 1, Series of 1986. The Court found that the 1986 Circular specifically governs filing fees for amended articles extending corporate term, and this special rule was not validly repealed by the subsequent general provisions of the 1994 or 2001 Circulars. The SEC’s reliance on the 1990 Circular was rejected, as it was not duly filed with the U.P. Law Center as required by the Administrative Code for effectivity, and its belated presentation suggested negligence. The SEC’s assessment based on RA No. 3531 was untenable as the SEC could not identify an “existing law” justifying the 1/5 of 1% rate it sought to impose.