CRISOSTOMO V. SEC, G.R. NO 89095-89555 (1989) FACTS: Sixto Crisostomo, Felipe Crisostomo, Juanito Crisostomo et al were the original stockholders of the United Doctors Medical Center (UDMC), which was organized in 1968 with authorized capital stock of P1 million (later increased to P15 million in 1972). They owned 40% of the outstanding stock while the majority belonged to the members of the United Medical Staff Association (UMSA) 1. Despite their minority status, the Crisostomo group has managed UDMC from its inception with Juanito Crisostomo as president and petitioner Sixto Crisostomo as director and legal counsel 2. In 1988, UDMC defaulted in its obligation to pay P55 million to DBP. In the last quarter of 1987, UDMC’s assets and those of the Crisostomos which had been given to DBP as collateral, faced foreclosure by the Asset Privatization Trust (APT), which had taken over UDMC’s loan. 3. As such, UDMC, through Ricardo Alfonso and Juanito Crisostomo, persuaded the Yamadas and Enatsu (Shoji Yamada and Tomatada Enatsu are Japanese doctors) to invest fresh capital in UDMC. The wife of Enatsu is a Filipina. They invested P57 million in UDMC 4. The investment was effected by means of a stock purchase agreement and an amended memorandum of agreement whereby the private respondents subscribed to 82.09% of the outstanding shares of UDMC. Both transactions were authorized by the BOD and stockholders of UDMC, and approved by BSP and SEC 5. The said capital not only saved the assets of UDMC from foreclosure but also freed the Crisostomos group their individual and solidary liabilities as sureties for the DBP loan 6. However, petitioner Sixto Crisostomo filed an SEC case against Juanito Crisostomo, Yamada and Enatsu to stop the holding of the stockholder’s and BOD meeting and to disqualify the Japanese investors from holding a controlling interest in UDMC 7. Subsequently, petitioner filed a case with RTC Makati seeking a preliminary injunction and identical reliefs prayed for by him in the SEC case. 8. Petitioner alleged that Yamada and Enatsu violated the Constitutional prohibition against foreigners practicing a profession in the Philippines (Sec 14, Art XII 1987 Constitution ISSUE: WON ISSUE: WON the investments made by Yamada and Enatsu constitute illegal practice of profession by foreigners in the Philippines
HELD: No. The investments in UDMC of Doctors Yamada and Enatsu do not violate the Constitutional prohibition against foreigners practicing a profession in the Philippines (Sec 14, Art XII, 1987 Constitution) for they do not practice their profession (medicine) in the Philippines, neither have they applied for a license to do so. They only own shares of stock in a corporation that operates a hospital. No law limits the sale of hospital shares of stock to doctors only. The ownership of such shares does not amount to engaging (illegally) in the practice of medicine, or, nursing. If it were otherwise, the petitioner's stockholding in UDMC would also be illegal.
