G.R. No. 78017, June 8, 1990
BANK OF AMERICA NT & SA, petitioner, vs. COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION, POTENCIANO ILUSORIO, ET AL., and ANDREW GOTIANUN, respondents.

FACTS

The Insular Bank of Asia and America (IBAA) was established pursuant to a 1974 Memorandum of Agreement involving Bank of America (BA), among others. The agreement included a right of first refusal provision among the original parties. In 1978, a class suit was filed before the Securities and Exchange Commission (SEC) by the “Asia Group,” representing themselves and other IBAA stockholders. The complaint alleged that BA violated the agreement by selling its IBAA shares to Andrew Gotianun and his group, who knowingly induced the sale. The suit sought damages and was docketed as SEC Case No. 1613.
During the SEC proceedings, the Asia Group filed a “Motion to Drop Defendant” seeking to dismiss BA from the case, arguing BA was no longer a stockholder and its continued inclusion was a procedural ploy to delay the suit against Gotianun. The SEC granted the motion. BA opposed, contending it was an indispensable party. BA’s motion for reconsideration was denied. BA then filed a petition for certiorari with the Court of Appeals, which dismissed the petition. The CA ruled that the SEC order was interlocutory and not appealable, and that certiorari was improper as BA failed to show any grave abuse of discretion. BA elevated the case to the Supreme Court via petition for review.

ISSUE

Whether the Court of Appeals erred in dismissing BA’s petition for certiorari, which challenged the SEC’s order dropping BA as a defendant in the class suit.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The SEC order dropping BA as a party defendant was an interlocutory order, not a final judgment. It did not dispose of the case on the merits but merely determined a procedural matter during the pendency of the suit. As such, it was not appealable. The remedy of certiorari under Rule 65 was available only if the SEC acted without or in excess of jurisdiction or with grave abuse of discretion. The Court found no such abuse. The SEC has broad discretion in procedural matters, including the dropping of a party, to ensure the speedy administration of justice. The plaintiff, as the master of the complaint, generally has the prerogative to choose against whom to pursue the action.
The Court further held that BA was not an indispensable party. An indispensable party is one without whom no final determination of the case can be had. The cause of action for damages against Gotianun, based on his alleged inducement of a breach, could proceed independently of BA’s continued presence as a defendant. BA’s remedy, if it believed the action could not proceed without it, was to move for the dismissal of the entire case, not to insist on remaining as a defendant against the plaintiff’s will. The SEC’s order was a valid exercise of procedural discretion to prevent delay and streamline the proceedings.