organized and incorporated the ISLAMIC DIRECTORATE OF THE

Islamic Directorate of the PHILIPPINES (IDP).

Philippines v. CA, Iglesia ni 2. The Libyan government donated money to the IDP to purchase
Kristo land at Culiat, Tandang Sora, Quezon City, to be used as a Center for
the Islamic populace.
14 May 1997
Hermosisima Jr., J. 3. In 1971, the Board of Trustees of the IDP was composed of the
Manzano following per Article 6 of its Articles of Incorporation:
SUMMARY: IDP-Carpizo, without having been authorized as the duly
constituted members of IDP’s Board of Trustees, executed a deed of
Senator Mamintal Tamano
sale of 2 parcels of land in favor of Iglesia ni Kristo. The sale was
Congressman Ali Dimaporo
opposed by IDP-Tamano averring that Carpizo group was not the
Congressman Salipada Pendatun
legitimate BOT. Civil case for specific performance was filed by INC
Dean Cesar Adib Majul
against IDP-Carpizo. Meanwhile, SEC case was filed by IDP-Tamano to
Sultan Harun Al-Rashid Lucman
resolve authority of IDP-Carpizo. During the Pendency of SEC case, TC
Delegate Ahmad Alonto
ruled in favor of INC. SEC case was later decided declaring null and
Commissioner Datu Mama Sinsuat
void transactions entered by IDP-Carpizo. INC appealed the SEC case
Mayor Aminkadra Abubakar
to CA which ruled in its favor. IDP-Tamano appealed CA decision to SC
which upheld SEC decision.
4. In 1972, after the purchase of the land by the Libyan government in
DOCTRINE: The Tandang Sora property constitutes the only property the name of IDP, Martial Law was declared. Most of the members of
of the IDP. Hence, its sale to a third-party is a sale or disposition of all the 1971 Board of Trustees like Senators Mamintal Tamano,
the corporate property and assets of IDP. For the sale to be valid, the Salipada Pendatun, Ahmad Alonto, and Congressman Al-Rashid
majority vote of the legitimate Board of Trustees, concurred in by the Lucman flew to the Middle East to escape political persecution.
vote of at least 2/3 of the bona fide members of the corporation
should have been obtained. These twin requirements were not met as 5. Thereafter, two Muslim groups sprung, the Carpizo Group and the
the Carpizo Group which voted to sell the Tandang Sora property was Abbas Group. Both groups claimed to be the legitimate IDP. On
a fake Board of Trustees, and those whose names and signatures were October 3, 1986, the SEC, in a suit between these two contending
affixed by the Carpizo Group together with the sham Board groups, came out with a Decision declaring the election of both the
Resolution authorizing the negotiation for the sale were, from all Carpizo Group and the Abbas Group as IDP board members to be
indications, not bona fide members of the IDP as they were made to null and void. Since the election of both petitioners and
appear to be. respondents has been declared null and void, the members of the
petitioning corporation are hereby authorized to prepare and
FACTS: adopt their by-laws for submission to the Commission. Once
approved, an election of the members of the Board of Trustees shall
1. Islamic Directorate of the Philippines (IDP)-Tamano Group alleges immediately be called pursuant to the approved by-laws.
that sometime in 1971, Islamic leaders of all Muslim major tribal
groups in the Philippines headed by Dean Cesar Adib Majul
6. Neither group took the necessary steps prescribed by the SEC, thus, Iglesia ni Kristo and the Islamic Directorate of the Philippines,
no valid election of the members of the Board of Trustees of IDP Inc.  null and void;
was ever called. 3. Declaring the election of the Board of Directors of the
corporation from 1986 to 1991 as null and void;
7. Without having been properly elected as new members of the 4. Declaring the acceptance of the respondents, except Farouk
Board of Trustee of IDP, the Carpizo Group caused to be signed an Carpizo and Musnib Buat, as members of the IDP null and void.
alleged Board Resolution of the IDP, authorizing the sale of the 15. INC elevated SEC Case to by way of a special civil action for
subject two parcels of land to INC for P22,343,400. certiorari. CA granted INC’s petition. Thus, the IDP-Tamano Group
brought the instant petition for review
8. Petitioner 1971 IDP Board of Trustees headed by former Senator
Mamintal Tamano, or the Tamano Group, filed a petition before the ISSUE: Did CA err in setting aside that portion of the SEC's Decision
SEC seeking to declare null and void the Deed of Absolute Sale which declared the sale of 2 parcels of land in Quezon City
signed by the Carpizo Group and INC since the group of Engineer between the IDP-Carpizo Group and INC null and void? Yes!
Carpizo was not the legitimate Board of Trustees of the IDP.
1. There can be no question as to the authority of the SEC to pass
9. INC, pursuant to the Deed of Absolute Sale executed in its favor, upon the issue as to who among the different contending groups is
filed an action for Specific Performance with Damages against the the legitimate Board of Trustees of the IDP since this is a matter
vendor, Carpizo Group. properly falling within the original and exclusive jurisdiction of the
SEC by virtue of Sections 3 and 5(c) of Presidential Decree No. 902-
10. IDP-Tamano Group sought to intervene in the civil case for specific A:
performance.
Sec. 3. The Commission shall have absolute jurisdiction, supervision and control
over all corporations, partnership or associations, who are the grantees of
11. INC opposed the motion arguing that the issue sought to be primary franchises and/or a license or permit issued by the government to
litigated by way of intervention is an intra-corporate dispute which operate in the Philippines . . . .
xxx xxx xxx
falls under the jurisdiction of the SEC. 
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities
and Exchange Commission over corporations, partnerships and other forms of
12. Judge Reyes denied IDP-Tamano’s motion to intervene.  associations registered with it as expressly granted under existing laws and
decrees, it shall have original and exclusive jurisdiction to hear and decide cases
involving:
13. Apprised of the pendency of the SEC Case involving the xxx xxx xxx
controverted status of the IDP-Carpizo Group but without waiting c) Controversies in the selection or appointment of directors, trustees, officers, or
for the outcome of said case, Judge Reyes rendered Partial managers of such corporations, partnerships or associations. . . . .
Judgment ordering the IDP-Carpizo Group to comply with its
obligation under the Deed of Sale. If the SEC can declare who is the legitimate IDP Board, then it can
14. In the meantime, SEC came out with a Decision: also declare who is not the legitimate IDP Board. This is precisely
1. Declaring the by-laws submitted by the respondents null and what the SEC did when it adjudged the election of the Carpizo
void. Group to the IDP Board of Trustees to be null and void.  SEC in
2. Declaring the sale of the two (2) parcels of land in Quezon effect made the unequivocal finding that the IDP-Carpizo Group is a
City covered by the Deed of Absolute Sale entered into by bogus Board of Trustees. Carpizo Group is bereft of any authority
 to bind IDP in any kind of transaction including the sale or xxx xxx xxx
disposition of IDP property. The Tandang Sora property constitutes the only property of the
IDP. Hence, its sale to a third-party is a sale or disposition of all the
All acts carried out by the Carpizo Board, particularly the sale of the corporate property and assets of IDP. For the sale to be valid, the
Tandang Sora property, allegedly in the name of the IDP, have to be majority vote of the legitimate Board of Trustees, concurred in by
struck down for having been done without the consent of the IDP the vote of at least 2/3 of the bona fide members of the
thru a legitimate Board of Trustees. corporation should have been obtained. These twin requirements
were not met as the Carpizo Group which voted to sell the
2. [RELEVANT]The Carpizo Group-INC sale is further deemed null Tandang Sora property was a fake Board of Trustees, and those
and void ab initio because of the Carpizo Group's failure to comply whose names and signatures were affixed by the Carpizo Group
with Section 40 of the Corporation Code pertaining to the together with the sham Board Resolution authorizing the
disposition of all or substantially all assets of the corporation: negotiation for the sale were, from all indications, not bona
Sec. 40. Sale or other disposition of assets. — Subject to the fide members of the IDP as they were made to appear to be.
provisions of existing laws on illegal combinations and
monopolies, a corporation may, by a majority vote of its board DISPOSITIVE: Petition GRANTED. RULED IN FAVOR OF IDP-TAMANO
of directors or trustees, sell, lease, exchange, mortgage, GROUP.
pledge or otherwise dispose of all or substantially all of its
property and assets, including its goodwill, upon terms and
conditions and for such consideration, which may be money,
stocks, bonds or other instruments for the payment of money
or other property or consideration, as its board of directors or
trustees may deem expedient, when authorized by the vote of
the stockholders representing at least two-thirds (2/3) of the
outstanding capital stock; or in case of non-stock corporation,
by the vote of at least two-thirds (2/3) of the members, in a
stockholders' or members' meeting duly called for the purpose.
Written notice of the proposed action and of the time and place
of the meeting shall be addressed to each stockholder or
member at his place of residence as shown on the books of the
corporation and deposited to the addressee in the post office
with postage prepaid, or served personally: Provided, That any
dissenting stockholder may exercise his appraisal right under
the conditions provided in this Code.

A sale or other disposition shall be deemed to cover