G.R. No. 207246 , November 22, 2016
JOSE M. ROY III, Petitioner, vs. CHAIRPERSON TERESITA HERBOSA, THE SECURITIES AND EXCHANGE COMMISSION, AND PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Respondents.

FACTS

Petitioner Jose M. Roy III challenged the validity of Securities and Exchange Commission (SEC) Memorandum Circular No. 8, series of 2013, which prescribed the guidelines for compliance with the constitutional foreign ownership limit. The Circular required compliance with the 60% Filipino ownership requirement only for each class of shares with voting rights. Petitioners-in-intervention, including Wilson Gamboa Jr., argued this was insufficient, contending the requirement must apply to all classes of shares in corporations engaged in nationalized activities, irrespective of voting rights, as mandated by the Court’s ruling in Gamboa v. Teves.
The core dispute centered on the proper interpretation of the term “capital” in the Constitution and the scope of the SEC’s implementing rules. The majority of the Court upheld the validity of Memorandum Circular No. 8, prompting this dissenting opinion.

ISSUE

Did the SEC commit grave abuse of discretion in issuing Memorandum Circular No. 8 by limiting the application of the constitutional foreign ownership requirement only to shares with voting rights, thereby allegedly violating the ruling in Gamboa v. Teves?

RULING

Justice Leonen, in his dissenting opinion, argued that the SEC gravely abused its discretion. The legal logic is anchored on a holistic interpretation of the Gamboa rulings. While the 2011 Gamboa Decision’s dispositive portion defined “capital” as shares entitled to vote, the 2012 Gamboa Resolution provided crucial clarification. An extended resolution was promulgated to fine-tune and illuminate the concept, explicitly stating that the ownership requirement must apply to each class of shares, regardless of differences in voting rights. The dissent emphasizes that a judgment must be read in its entirety to harmonize all its parts.
The brevity of the 2012 Resolution’s dispositive portion—merely denying the motions for reconsideration—did not negate the substantive clarifications within its text. The act of issuing an extended resolution itself indicated the Court’s intent to expound on matters needing greater illumination. Therefore, Memorandum Circular No. 8, by failing to encompass every class of shares, deviated from this clarified standard and violated the constitutional mandate. This position does not violate the immutability of judgments but affirms Gamboa by applying its integrated rationale to a new, justiciable controversy triggered by an allegedly defective administrative issuance.