REPUBLIC
TELECOMMUNICATIONS G.R. No. 140338
HOLDINGS, INC., represented
by A2
TELECOMMUNICATIONS INTER-
Present:
NATIONAL
HOLDING CO. PTE.
LTD., and BEAUTY FORTUNE QUISUMBING, J.,
INVESTMENTS,
LTD., HON. Chairperson,
ROSITA
R. GUERRERO, HON. CARPIO,
MANOLITO
S. SOLLER, and HON. CARPIO MORALES,
PAULINO
Q. GALLEGOS in their TINGA, and
capacity
as members of the Securities,
VELASCO, JR., JJ.
Investigation
and Clearing Department
of
the Securities and Exchange
Commission,
Promulgated:
Petitioners,
- versus -
JOSE L. SANTIAGO, MARILYN E.
JAMES B.
LINDENBERG,
QUERUBIN, HYUNG SHIK KIM,
INHO
LEE, PHILIPPINE TELEGRAPH
&
TELEPHONE CORPORATION and
PHILIPPINE
WIRELESS, INC.,
Respondents.
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Tinga, J.:
This
is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, assailing the Decision[1] and
Resolution[2] of
the Court of Appeals in CA-G.R. SP No. 48456. The questioned Decision granted
respondents’ petition for certiorari and nullified the writ of preliminary
injunction and various orders issued by the Securities and Exchange Commission (SEC)
while the Resolution denied petitioners’ motion for reconsideration.
The
instant petition originated from a derivative suit filed by petitioners A2
Telecommunications International Holding Co. Pte. Ltd. (A2 Telecom) and Beauty Fortune Investments Ltd. (hereinafter
referred to as petitioners)[3] with
the Securities Investigation and Clearing Department (SICD) of the SEC.
A2 Telecom owns 20% of the total
stock issued and outstanding of Republic Telecommunications Holdings, Inc.
(hereinafter referred to as RETELCOM), a domestic
corporation formed for the purpose of holding equity in telecommunications
enterprises. Korea Telecoms, a telecommunications corporation organized and
existing under the laws of the
Pursuant
to two joint venture agreements, RETELCOM became the holding company of three
telecommunications companies, namely, Philippine Telegraph & Telephone
Corporation (PT&T), Philippine Wireless, Incorporated (PWI) and Capitol
Wireless, Incorporated.
On
The petition,[4]
filed with the SICD of the SEC and docketed as SEC Case No. 03-98-5926, prayed
for the nullification of three resolutions passed by the RETELCOM Board on
Seven of the nine directors of the
RETELCOM Board, who are herein respondents, ratified the assailed resolutions.
The two dissenting directors are petitioners’ representatives.[6]
In Resolution No. 98-13, the RETELCOM
Board approved the Equipment Supply and Services Agreement (ESA) and the Credit
Facility Agreement (CFA) between PT&T and Qualcomm, Inc. and endorsed the
ESA and CFA to PT&T for the latter’s approval.[7]
In Resolution No. 98-14, the RETELCOM
Board ratified the Guarantee Agreement between RETELCOM, as guarantor, and
Qualcomm, Inc., as lender, to secure PT&T’s
obligations under the CFA. The RETELCOM Board likewise authorized respondent
Jose Luis Santiago to execute and deliver to Qualcomm, Inc. the Guarantee
Agreement.[8]
In Resolution No. 98-15, the RETELCOM
Board approved the Letter-Agreement for the purchase by PWI from Qualcomm, Inc.
of personal communication system equipment and facilities.[9]
Petitioners averred that the RETELCOM
Board belatedly furnished them with copies of the aforementioned agreements.
After perusal of the agreements, petitioners found, so they alleged, grossly
disadvantageous provisions therein. Specifically, the Guarantee Agreement allegedly
contained false representations and warranties exposing RETELCOM and its
stockholders to financial impact. Petitioners purportedly raised said observations
during the
Petitioners sought the issuance of a
writ of preliminary injunction and temporary restraining order (TRO) to enjoin
the RETELCOM Board from executing or implementing the Guarantee Agreement and endorsing
the ESA and CFA to PT&T and the Letter-Agreement to PWI for appropriate action.
After hearing, the SICD issued on
The RETELCOM Board elevated the
matter to the SEC en banc via two separate petitions for certiorari with
a prayer for the issuance of a TRO and a writ of preliminary injunction, which
sought to nullify the three orders of the SICD issued on 9 March 1998, 12 March
1998 and 27 March 1998 and the writ of preliminary injunction dated 30 March
1998. The RETELCOM Board alleged grave and irreparable damage caused to herein
respondents and to the general public by the issuance of the writ of
preliminary injunction.
On
Herein respondents filed a petition
for review with the Court of Appeals, docketed as CA-G.R. SP No. 48456, to
appeal the
Petitioners filed a petition for
review on certiorari, docketed as G.R. No. 135074, before this Court, assailing
the
On
On
WHEREFORE, finding merit in the petition for review
filed by the petitioners, the same is hereby granted. The questioned orders of
the SEC en banc and the SICD as well as the writ of preliminary injunction are
hereby nullified and set aside. The SICD is hereby directed to proceed with
dispatch in hearing and resolving the merit of the main petition (SEC Case No.
03-98-5926) filed by the A2 group against herein petitioners. (Annex “H,”
petition).
SO ORDERED.[20]
Hence, the instant petition, praying
for the reversal of the Court of Appeals’ Decision based on the following
reasons:
I.
THE COURT OF APPEALS HAS NO JURISDICTION TO ISSUE ANY
DECISION ON THE PETITION FILED WITH IT.
II.
THE COURT OF APPEALS CANNOT OVERRULE A DECISION OF
THIS HONORABLE COURT.
III.
THERE WAS NO LONGER ANY PETITION TO BE DECIDED BY THE
COURT OF APPEALS.
IV.
ASUMING ARGUENDO THAT IT WAS PROPER FOR THE COURT OF
APPEALS TO PROMULGATE THE HEREIN DECISION, SAID DECISION SHOULD BE REVERSED
BECAUSE IT IS CONTRARY TO THE FACTS OF THE CASE, SETTLED LAW AND JURISPRUDENCE.[21]
Before the filing of the instant
petition, petitioners submitted a Manifestation,[22]
stating that Qualcomm, Inc. had backed out of the deal. Petitioners averred
that Ericsson AB had acquired Qualcomm, Inc. and was no longer interested in
pursuing Qualcomm, Inc.’s investment in RETELCOM. The newspaper clipping[23]
annexed in support of the Manifestation reported on the search for a new investor
that would infuse the needed equity in PT&T.
The Court directed the parties to
explain why the petition should not be considered academic by reason of the
supervening event cited in petitioners’ Manifestation.[24]
Respondents assert that the instant
case is not rendered moot and academic, citing other issues that remain to be
litigated, which can be summarized as follows: (1) whether petitioners had the
capacity and authority to file the derivative suit directly or on behalf of
RETELCOM; (2) whether the derivative suit was, in reality, a strike suit; and (3)
whether the assailed Court of Appeals’ Decision overruled this Court’s Resolution
dated 29 January 1999 in G.R. No. 135074.
The first two issues are not being
raised in the instant petition nor were they discussed and resolved in the
assailed Court of Appeals’ Decision. The general rule that an assignment of
error is essential to appellate review and only those assigned will be
considered applies in the absence of exceptional circumstances[25] obtaining
in the instant case. The records reveal that respondents have raised these
issues by way of defense to defeat the derivative suit filed before the SEC. The
Court will not resolve these issues lest it would be preempting the outcome of
the derivative suit still pending before the SEC or the lower court.
The lone issue tackled by the
appellate court was whether the SICD and SEC en banc committed
reversible error in issuing and upholding, respectively, the writ of
preliminary injunction which enjoined the execution of the questioned
agreements between Qualcomm, Inc. and RETELCOM.
The implementation of the agreements
was restrained through the assailed orders of the SICD and the SEC en banc,
which, however, were nullified by the Court of Appeals’ Decision. Thus, petitioners
elevated the matter to this Court praying for the reinstatement of the writ of
preliminary injunction of the SICD and the SEC en banc. However, before
the matter was finally resolved, Qualcomm, Inc. withdrew from the negotiating
table. Its withdrawal had thwarted the execution and enforcement of the
contracts. Thus, the resolution of whether the implementation of said
agreements should be enjoined is no longer necessary.
Indeed, the instant petition, insofar
as it assails the Court of Appeals’ Decision nullifying the orders of the SEC en
banc and the SICD, has been rendered moot and academic. To rule, one way or
the other, on the correctness of the questioned orders of the SEC en banc and
the SICD will be indulging in a theoretical exercise that has no practical
worth in view of the supervening event.
The rule is well-settled that for a
court to exercise its power of adjudication, there must be an actual case or
controversy — one which involves a conflict of legal rights, an assertion of
opposite legal claims susceptible of judicial resolution; the case must not be
moot or academic or based on extra-legal or other similar considerations not
cognizable by a court of justice. Where the issue has become moot and academic,
there is no justiciable controversy, and an
adjudication thereon would be of no practical use or value as courts do not sit
to adjudicate mere academic questions to satisfy scholarly interest, however
intellectually challenging.[26]
In the ultimate analysis, petitioners
are seeking the reinstatement of the writ of injunction to prevent the concerned
parties from pushing through with transactions with Qualcomm, Inc. Given that Qualcomm, Inc. is no longer
interested in pursuing the contracts, there is no actual substantial relief to
which petitioners would be entitled and which would be negated by the dismissal
of the petition.[27]
The Court likewise finds it
unnecessary to rule whether the assailed Court of Appeals’ Decision had the
effect of overruling the Court’s Resolution dated
A ruling on the matter practically
partakes of a mere advisory opinion, which falls beyond the realm of judicial
review. The exercise of the power of judicial review is limited to actual cases
and controversies. Courts have no authority to pass upon issues through
advisory opinions or to resolve hypothetical or feigned problems.[28]
While there were occasions[29]
when the Court passed upon issues although supervening events had rendered those
petitions moot and academic, the instant case does not fall under the
exceptional cases. In those cases, the Court was persuaded to resolve moot and
academic issues to formulate guiding and controlling constitutional principles,
precepts, doctrines or rules for future guidance of both bench and bar.
In the case at bar, the resolution of
whether a writ of preliminary injunction may be issued to prevent the
implementation of the assailed contracts calls for an appraisal of factual
considerations which are peculiar only to the transactions and parties involved
in this controversy. Except for the determination of whether petitioners are
entitled to a writ of preliminary injunction which is now moot, the issues
raised in this petition do not call for a clarification of any constitutional
principle or the interpretation of any statutory provision.
Moreover, the resolution of the issue
of whether the assailed Court of Appeals’ Decision overturned the Court’s
Resolution in G.R. No. 135074 would have no operative consequence. The
dispositive portion of the Resolution in G.R No. 135074 set aside the TRO
issued by the Court of Appeals enjoining the SICD and SEC en banc from implementing
the injunction, effectively allowing the SICD and SEC to execute the injunctive
writ. On the other hand, the assailed Decision of the Court of Appeals
nullified the writ of preliminary injunction. Thus, the only consequence of the
determination of the issue would be either upholding the writ of preliminary
injunction in the event of reversal of the assailed Decision or setting the
writ aside if the assailed Decision is affirmed. As pointed above, the Court
would then be indulging in an academic exercise to resolve a question that is
already extinct.
WHEREFORE, the instant petition for
review on certiorari is DENIED for being moot and academic.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate Justice
PRESBITERO J. VELASCO,
JR.
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate
Justice
Chairperson,
Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[1]Penned by Rodrigo V. Cosico, J., and concurred in by Jainal D. Rasul, Chairman, Seventh Division, and Delilah Vidallon Magtolis, JJ.; rollo, pp. 75-142.
[3]Petitioners A2 Telecommunications International Holding Co. Pte. Ltd. and Beauty Fortune Investments Ltd.
incorrectly impleaded as petitioners the members of
the Securities, Investigation and Clearing Department (SICD) of the Securities
and Exchange Commission. The members of the SICD do not have real interest in
the subject matter and do not demand any relief through this petition. They are
not even nominal or pro forma parties, which are required to be on record
by the technical rules of pleadings, because none of the SICD’s
orders are being assailed in this petition.
[25]This Court has allowed the consideration of other grounds not raised or assigned as errors specifically in the following instances: (1) grounds not assigned as errors but affecting jurisdiction over the subject matter; (2) matters not assigned as errors on appeal but are evidently plain or clerical errors within the contemplation of the law; (3) matters not assigned as errors on appeal but consideration of which is necessary in arriving at a just decision and complete resolution of the case or to serve the interest of justice or to avoid dispensing piecemeal justice; (4) matters not specifically assigned as errors on appeal but raised in the trial court and are matters of record having some bearing on the issue submitted which the parties failed to raise or which the lower court ignored; (5) matters not assigned as errors on appeal but closely related to an error assigned; and (6) matters not assigned as errors on appeal but upon which the determination of a question properly assigned is dependent (Hi-Tone Marketing v. Baikal Realty, G.R. No. 149992, August 20, 2004, 437 SCRA 120).