THIRD DIVISION
|
AIR MATERIEL WING SAVINGS
AND LOAN ASSOCIATION, INC., COL. RICARDO L. NOLASCO, [JR.], PAF (Ret.); COL. THADDEUS P. ESTALILLA, PAF (Ret.); COL. ISMAEL A. ABAD; 2LT. MORADO O. MERCADO, PAF (Ret.);
2LT. CESAR S. TOLEDANES, PAF (Ret.); COL. DOMINGO E. DIMAPILIS JR., PAF; COL.
ANTONIO S. GUMBA, PAF (Ret.); 2LT. RICARDO P. PERIDO; 2LT. CEDRIC V. REYES,
PAF (Ret.); BGEN. RUBEN C. ESTEPA, PAF (Ret.); COL. ANGEL E. TAPAC, PAF (Ret.); and MAJ. ROLANDO S. CACABELOS, PAF
(Ret.), Petitioners, - versus - COL. LUVIN S. MANAY, PNP
(Ret.); COL. ANTONIO
MANTUANO, PAF (Ret.); COL. ANSELMO R. GERONIMO, PAF
(Ret.); MAJ. JOSE A. ELAURZA, PAF (Ret.); LT. JOHNSON NESTOR OCFEMIA, PAF
(Ret.); and HON. JESUS B. MUPAS, PRESIDING JUDGE, Respondents. |
G.R.
No. 175338
Present: YNARES-SANTIAGO, J.,
Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and REYES, JJ. Promulgated: October
9, 2007 |
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DECISION
NACHURA, J.:
Before the
Court is a Petition for Review on Certiorari
of the Decision[1] of
the Court of Appeals (CA), dated
The facts
of the case are as follows:
Petitioner Air Materiel Wing Savings and Loan
Association, Inc. (AMWSLAI) is a corporation duly organized and existing under
and by virtue of the laws of the
Conceding
to the clamor for a new set of Trustees, respondents Col. Luvin S. Manay,
(Ret.); Col. Antonio Mantuano (Ret); 2Lt. Johnson Nestor Ocfemia (Ret.); Maj.
Jose A. Elaurza (Ret.); and Col. Anselmo R. Geronimo (Ret.) and petitioners
Col. Ricardo Nolasco, Jr., Col. Thaddeus Estalilla, and Lt. Morado Mercado,
then members of the Board of Trustees (Board), cut short their terms and
submitted en masse their letters of
resignation dated July 22, 2005, effective at the close of business hours of
September 14, 2005. Three (3) other
members of the Board had earlier resigned from their positions.
On
Pursuant
to Article XIII of AMWSLAI By-Laws, the Board created a Committee on Elections
(AMWSLAI-COMELEC) composed of MGen. Rodolfo
Respondents
and petitioners Col. Nolasco, Jr., Col. Estalilla, Lt. Mercado, Col. Ismael
Abad, BGen. Ruben Estepa, Col. Domingo Dimapilis, Jr., Col. Antonio Gumba, Col.
Angel Tapac, Maj. Rolando Cacabelos, Lt. Cesar Toledanes, Lt. Ricardo Perido,
and Lt. Cedric Reyes, filed their respective Certificates of Candidacy for the October
14 election. Unfortunately, the
AMWSLAI-COMELEC disqualified respondents, declaring them ineligible to run in
the election purportedly for committing acts indicated in the Report of
Examination of the Bangko Sentral ng Pilipinas (BSP).[6] Accordingly, notices of disqualification were
individually sent to them.[7] Consequently, respondents tried to withdraw
their respective resignations on the ground that these were tendered upon an understanding
that there would be a fair and honest election on
Aggrieved,
respondents filed a Petition for Election Protest With Prayer for a Writ of
Preliminary Injunction/Prohibition and/or Temporary Restraining Order[8] on
Also
on even date, respondents filed an Ex-Parte Motion for Immediate/Special Raffle
and/or Cognizance and Issuance of An Ex-Parte Temporary Restraining Order.
On
The
petitioners have fully established to the satisfaction of this Court that if
the holding of the “GENERAL ELECTIONS” of the members of the Board of Trustees
of AMWSLAI, scheduled on
WHEREFORE,
an Executive Temporary Restraining Order is hereby issued for a period of 72
hours from today, restraining the Respondents [petitioners] from holding and/or
conducting the subject election scheduled on
On the same date, Sheriff Virgilio Villar
(sheriff Villar) served copies of the Summons (with copy of Complaint and its
Annexes), Notice of Raffle and the 72-Hour TRO, at the
SHERIFF’S RETURN
This
is to certify that on this date
However, in the afternoon of the same
day, Ms. Liong returned all the pleadings/notices and orders to the Office of
the Clerk of Court of the RTC,
The
following day, the Presiding Judge of Branch 117, RTC,
After the aforesaid hearing, the RTC
issued an Order[13] dated
Meanwhile, the October 14 election
was held as scheduled, where the petitioners were declared winners.[15] They then took their oath on
On
Failing
to obtain a favorable judgment, respondents filed a petition for certiorari before the CA seeking to
nullify the assailed RTC Orders for having been issued with grave abuse of
discretion. They likewise prayed that
the October 14 election be nullified and that respondents be eventually
reinstated to the contested positions in a hold over capacity until a new set
of trustees be validly elected in a new election called for the purpose.[20]
In
a Decision dated
Petitioners’ motion for reconsideration
proved futile. Hence, the present
petition.
Meantime,
on the strength of the CA decision, respondents filed a Motion for
Reinstatement[22] before
the RTC, praying that they be reinstated to their position as members of the
AMWSLAI Board which the RTC granted in an Order[23]
dated
However,
on
The issues for resolution, as set
forth in the Memorandum for the petitioners, are the following:
I.
WHETHER OR NOT PETITIONERS VIOLATED THE
72-HOUR TEMPORARY RESTRAINING ORDER DESPITE THE FACT THAT THE SAID ORDER WAS A
NULLITY, AND THE ISSUANCE THEREOF WAS IMPROPER, ILLEGAL AND INVALID, FOR HAVING
VIOLATED THE INTERIM RULES OF PROCEDURE FOR INTRA-CORPORATE CONTROVERSIES.
II.
WHETHER OR NOT THE RULING OF THE HONORABLE
JUDGE HENRICK F. GINGOYON OF THE
III.
WHETHER OR NOT THE HONORABLE JUDGE GINGOYON
GRAVELY ABUSED HIS DISCRETION WHEN HE DENIED THE RESPONDENTS’ APPLICATION FOR
TEMPORARY RESTRAINING ORDER AND THE MOTION TO RECALL SAID ORDER.
IV.
WHETHER OR NOT THE RESPONDENTS WERE DEPRIVED
OF THEIR RIGHT TO ASSAIL THEIR DISQUALIFICATION TO BE ELECTED AS MEMBERS OF THE
BOARD OF TRUSTEES OF AMWSLAI IN THE OCTOBER 14, 2005 ELECTION AND THE RESULTS
OF THE SAID ELECTION.
V.
WHETHER OR NOT THE RESPONDENTS’ CLAIM THAT
THE ORDER DATED
VI.
WHETHER OR NOT CREDENCE SHOULD BE GIVEN TO
RESPONDENTS’ CLAIM THAT AMWSLAI WILL SUFFER GRAVE AND IRREPARABLE INJURY WHILE
THIS CASE REMAINS UNRESOLVED AND THE
VII.
WHETHER OR NOT THE ALLEGATION OF THE
RESPONDENTS THAT PETITIONER RICARDO NOLASCO, JR., WHO IS ACTING AS CHAIRMAN OF
THE AMWSLAI BOARD, HAS ENGAGED IN IRREGULAR TRANSACTIONS CLEARLY INIMICAL TO
THE INTEREST OF AMWSLAI, IS FALSE, UNFOUNDED AND UNSUBSTANTIATED.[25]
At
the outset, we must emphasize that the TRO issued by this Court on
It
may be noted that the resignations of the previous occupants of the contested
positions were accepted by the Board in its Resolution No. 2005-353[26]
dated
Now,
to the question of the validity of the 72-hour TRO issued by RTC Pasay
Executive Judge Caridad Grecia-Cuerdo.
Petitioners
assail the validity of this 72-hour TRO on the following grounds: that its
issuance contravenes the Interim Rules of Procedure Governing Intra-Corporate
Controversies which requires a hearing; that there was no justifiable reason for
its issuance this not being an exceptional case; and that the respondents
failed to post a bond. Petitioners
further insist that the TRO had no force and effect because there was no valid
service of summons in accordance with the Rules of Court. They also contend
that, even assuming that the 72-hour TRO is valid, the conduct of the election in
defiance of the TRO only gave rise to the right to hold the AMWSLAI-COMELEC in
contempt, but not to nullify the election.
We
are not persuaded.
The
Executive Judge of the RTC of Pasay is not precluded by the Interim Rules from
issuing the 72-hour TRO. Section 1, Rule
10 thereof explicitly allows a party to apply for any available provisional
remedy provided in the Rules of Court.
And Section 5, Rule 58 of the Rules of Court grants the Executive Judge
(of a multiple-sala court) the authority to issue ex parte a TRO effective for only 72-hours. The proscription on the issuance of a TRO
without a hearing was never intended to bar the court absolutely from
exercising its power to issue the same when the court deems it imperative. In any event, the requirement for the conduct
of a hearing was satisfied when a summary hearing was immediately scheduled and
held at the Pasay RTC, Branch 117 to which the case was raffled.
The other issues raised, i.e.,
whether or not the case was exceptional and whether or not the respondents
posted a bond, are factual in nature.
Suffice it to state that an inquiry into these issues necessitates a
review of factual and evidentiary matters which is proscribed in a petition for
review on certiorari under Rule 45 of
the Rules.[28] Indubitably,
this Court has stressed that the grant or denial of a writ
of preliminary injunction (or restraining order) rests in the sound discretion
of the court since the assessment and evaluation of evidence towards that end
involve findings of facts left to the said court for its conclusive
determination. Hence, the exercise of judicial discretion by a court in
injunctive matters must not be interfered with.[29]
Next,
we confront the issue of the validity of the service of summonses --- and of
the TRO --- on the members of the AMWSLAI-COMELEC.
Petitioners
assert that the service of the summonses and the TRO on Ms. Liong was
defective, because Ms. Liong was not duly authorized to receive them on behalf
of the COMELEC members.
The
contention lacks merit.
The rules on valid service of summons
are laid down in Sections 6 and 7, Rule 14 of the Rules of Court. The aforesaid provisions read:
Sec. 6. Service
in person on defendant. – Whenever practicable, the summons shall be served
by handing a copy thereof to the defendant in person, or, if he refuses to
receive and sign for it, by tendering it to him.
Sec. 7. Substituted
service. – If, for justifiable causes, the defendant cannot be served
within a reasonable time as provided in the preceding section, service may be
effected (a) by leaving copies of the summons at the defendant’s residence with
some person of suitable age and discretion then residing therein, or (b) by
leaving the copies at defendant’s office or regular place of business with some
competent person in charge thereof.
Personal service of summons is preferred over
substituted service. Only if the former cannot be made promptly may
the process server resort to the latter.
Moreover, the proof of service of summons must (a) indicate the
impossibility of service of summons within a reasonable time; (b) specify the efforts exerted to locate the
defendant; and (c) state that the summons was served upon a person of
sufficient age and discretion who is residing in the address, or who is in charge
of the office or regular place of business, of the defendant. It is likewise required that the pertinent
facts proving these circumstances be stated in the proof of service or in the
officer’s return. The failure to comply
faithfully, strictly and fully with all the foregoing requirements of
substituted service renders the service of
summons ineffective. [30] These requirements are necessary because
substituted service is in derogation of the usual method of service. It is a method extraordinary in character and
may be used only as prescribed and in the circumstances authorized by statute.[31]
Cognizant of the foregoing standard,
we find it necessary to recall the facts surrounding the service of summons on
the petitioners. Sheriff Villar served
copies of the Summons (with copy of the Complaint and its Annexes), Notice of
Raffle and the 72-Hour TRO, on October 13, 2005 at the AMWSLAI Building, through Ms. Liong, an authorized receiving
personnel, who personally received copies of said court processes on behalf of
all the petitioners; the same was then reflected in the Sheriff’s Report quoted
earlier. However, Ms. Liong returned all
the pleadings/notices and orders in the afternoon of the same day at the Office
of the Clerk of Court of the RTC,
The authority of Ms. Liong to receive
the documents on behalf of the officers of AMWSLAI is undisputed. There is no gainsaying that she is the person
in charge of the AMWSLAI office. The
only questions left for us to answer are whether or not sheriff Villar exerted
enough effort to effect personal service, and whether or not Ms. Liong was
authorized to receive the documents for the COMELEC members.
We answer both questions in the
affirmative. The supplemental report
clearly established the impossibility of personal service within a reasonable
time. Service was made on October 13 and
the election sought to be enjoined would take place the following day. The Sheriff, in serving the Court’s processes,
is not expected to wait for the arrival of all the officers of AMWSLAI and the
members of the COMELEC at the
Still, in order to buttress their
claim that no valid substituted service of summons was effected, petitioners insist
that the members of the COMELEC were not holding office at the
We do not agree.
MGen. Estrellado, Col. Paduganan and
Lt. Col. Jungco were impleaded not in their individual capacities but in their
official roles as members of the AMWSLAI-COMELEC. The AMWSLAI-COMELEC was created only to
oversee the election of the members of the AMWSLAI Board, with no personality
of its own. We can, therefore, conclude
that its members maintain their office in the same building. Moreover, as correctly found by the CA, the
letter used by Ms. Liong bears the AMWSLAI letterhead with address at
Clearly then, if the Court puts the stamp
of validity on the substituted service made on the AMWSLAI officers, the same seal
of legitimacy should be accorded to the substituted service made on the COMELEC
members. Logic then dictates that the
service of the 72-hour TRO was also valid and binding on all the parties. Perforce, at the time the election was
conducted on October 14, 2005, there was a valid TRO and thus, the election was
held in violation thereof.
An injunction
or restraining order must be obeyed while it remains in full force and effect until
the injunction or restraining order has been set aside, vacated, or modified by
the court which granted it, or until the order or decree awarding it has been
reversed on appeal. The injunction must
be obeyed irrespective of the ultimate validity of the order, and no matter how
unreasonable and unjust the injunction may be in its terms.[34]
Petitioners contend that violation of
a TRO opens the parties to liability for contempt of court but does not give
the court the authority to nullify the act done in defiance thereof. To bolster
their claim, they cite the case of Velasco
v. Court of Appeals,[35]
where the Court pronounced that any violation of the injunction or temporary
restraining order which is in full force and effect constitutes contempt of
court and is punishable as such, and the remedy of the aggrieved party is to
institute contempt proceedings where the court in appropriate cases may punish
the violator for the purpose of preserving and enforcing the rights of the
persons for whose protection the injunction or restraining order was granted.[36] There is no doubt that a person guilty of
defying a court process may be held liable for contempt of court. But contempt of court is not the solitary
consequence of disobedience to a court order.
The Court cannot be restricted to this singular response to an insolent
challenge to its dignity and authority.
The Court is not precluded from declaring as invalid the act committed
in violation of its lawful order.
As correctly claimed by the
petitioners, we declared in the early case of Auyong Hian v. Court of Tax Appeals[37]
that a restraining order, like an injunction, operates upon a person. It is granted in the exercise of equity
jurisdiction and has no in rem effect
to invalidate an act done in contempt of an order of the court except where by
statutory authorization, the decree is so framed as to act in rem on property.[38] However, in the same case, we also held that
the act is ordinarily valid and legally effective, except as to the person who obtained the injunction and those claiming
under him, and as to them, the act is valid unless and until they attack it in
a proper manner.[39] Stated in another way, transfers and
contracts, or agreements in violation of injunction are invalid as to the complainant
or those claiming under him and may be set aside except as against innocent
third persons or when it appears on final hearing that there was no ground for
granting injunction.[40] Clearly, there is no proscription to invalidating
the act, but only with respect to the parties.
The effect of invalidity shall in no way apply to persons who do not
have notice of the existence and enforcement of the injunction/restraining
order.
In
the present case, the TRO was obtained by the respondents to restrain the
conduct of the October 14 election. The
election which was held nonetheless, despite the TRO, is, therefore, invalid as
to the respondents and thus may be set aside.
The respondents attacked the validity of the election in their petition
for certiorari before the CA and they
specifically prayed for its annulment.
The Court is, thus, empowered to annul the election and the consequent
assumption of office by the newly elected trustees. Contrary however to the conclusion of the CA
as embodied in the dispositive portion of the assailed decision, the election,
along with the results thereof, is not null and void.[41] Rather, the same is, as it is hereby annulled.
In
light of AMWSLAI Board Resolution No. 2005-353 accepting the resignation of the
incumbent trustees effective only upon the election and proclamation of the
winners, these former trustees --- the respondents herein, together with
petitioners Nolasco, Jr., Estalilla and Mercado --- are entitled to occupy the
contested positions and remain as trustees of AMWSLAI. It is understood, however, that they shall
occupy the same only until the election and proclamation of winners in a valid,
lawful and orderly election.
WHEREFORE, the petition is hereby DENIED.
The Decision of the Court of Appeals, dated
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson
|
MA. ALICIA
AUSTRIA-MARTINEZ Associate Justice |
MINITA V. CHICO-NAZARIO Associate Justice |
RUBEN T. REYES
Associate
Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate
Justice
Chairperson,
Third Division
C E R T I F I C A T I O
N
Pursuant to Section 13, Article
VIII of the Constitution and the Division Chairperson's Attestation, I certify
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 Associate Justice Japar B. Dimaampao, with Associate Justices Rodrigo V. Cosico and Edgardo F. Sundiam, concurring; rollo, pp. 62-76.
[2]
[3] Penned by Judge Henrick F. Gingoyon; id. at 127-130 and 143-146.
[4] CA
rollo, pp. 64-71.
[5] Rollo, pp. 263-264.
[6] Said acts were later the subject of a formal charge against the respondents for violation of BSP Circular No. 396, Series of 2003 (Breach of Trust) and Section 56 of Republic Act (R.A.) 8791 (conducting business in an unsafe or unsound manner) in relation to Section 37 of R.A. No. 7653; id. at 350-354.
[7] Rollo, pp. 104-109.
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21] The dispositive portion of the CA decision reads:
UPON THE
PREMISES, the assailed Orders dated
SO ORDERED. (
[22] Rollo,
pp. 361-374.
[23]
[24]
[25]
[26]
[27] Flexo
Manufacturing Corporation v.
[28] Pascual
v. People, G.R. No. 160540,
[29] Philippine National Bank v. RJ Ventures Realty and Development Corporation, G.R. No. 164548, September 26, 2006, 503 SCRA 639, 660.
[30] Spouses
Jose v. Spouses Boyon, 460 Phil. 354, 363 (2003).
[31] Guiguinto Credit Cooperative, Inc. (GUCCI) v. Torres, G.R. No. 170926, September 15, 2006, 502 SCRA 182, 195; Manotoc v. Court of Appeals, G.R. No. 130974, August 16, 2006, 499 SCRA 21, 33; Ang Ping v. Court of Appeals, 369 Phil 607, 614 (1999).
[32] Rollo, pp. 211-212.
[33]
[34] Lee
v. Court of Appeals, G.R. No. 147191, July 27, 2006, 496 SCRA 668, 687; 43A
C.J.S. Injunctions §286.
[35] 385 Phil. 1038 (2000).
[36]
[37] G.R. No. L-28782,
[38]
[39]
[40] Candler
v. Wallace Candler, Inc., 365
[41] Pursuant to the pronouncement of the
Court in Auyong Hian v. Court of Tax
Appeals that an act done in violation of injunction is not a nullity.