TITLE FACTS ISSUE(S) RULING(S)

Sixto Crisostomo, Felipe Crisostomo, Juanito WON the investments made No. The investments in UDMC of Doctors Yamada and Enatsu do not violate the
CRISOSTOMO Crisostomo et al were the original stockholders of the by Yamada and Enatsu Constitutional prohibition against foreigners practicing a profession in the Philippines (Sec
V. SEC, G.R. United Doctors Medical Center (UDMC), which was constitute illegal practice of 14, Art XII, 1987 Constitution) for they do not practice their profession (medicine) in the
NO organized in 1968 with authorized capital stock of P1 profession by foreigners in Philippines, neither have they applied for a license to do so. They only own shares of stock
89095-89555 million (later increased to P15 million in 1972). They the Philippines in a corporation that operates a hospital. No law limits the sale of hospital shares of stock to
(1989) owned 40% of the outstanding stock while the majority doctors only. The ownership of such shares does not amount to engaging (illegally) in the
belonged to the members of the United Medical Staff practice of medicine, or, nursing. If it were otherwise, the petitioner's stockholding in UDMC
Association (UMSA) would also be illegal.
1. Despite their minority status, the Crisostomo
TOPIC:
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
GER the outstanding shares of UDMC. Both
WORDS/ transactions were authorized by the BOD and
KEYWORD( stockholders of UDMC, and approved by BSP
S): 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