Republic of the
Supreme Court
THIRD DIVISION
|
THE INCORPORATORS OF MINDANAO INSTITUTE INC. and THE
BOARD OF TRUSTEES OF MINDANAO INSTITUTE INC., represented by ENGR. VICTORIOSO
D. UDARBE, Petitioners, - versus - THE UNITED
CHURCH OF CHRIST IN THE PHILIPPINES, acting through AGUSAN DISTRICT
CONFERENCE UNITED CHURCH OF CHRIST IN THE PHILIPPINES, represented by REV.
RODOLFO BASLOT, Respondent. |
|
G.R. No. 171765 Present: VELASCO, JR., J., Chairperson, PERALTA, ABAD, PERLAS-BERNABE, JJ. Promulgated: March 21, 2012 |
X
-----------------------------------------------------------------------------------
X
D
E C I S I O N
MENDOZA, J.:
Assailed in this petition for review on certiorari under Rule
45 of the Rules of Court are the September 30, 2005 Decision[1]
and the March 1, 2006 Resolution[2]
of the Court of Appeals (CA), in CA-G.R. SP No. 79156, which dissolved
the Writ of Preliminary Injunction[3]
dated July 9, 2003 issued by the Regional Trial Court of Cabadbaran, Agusan del
Norte, Branch 34 (RTC).
The Factual and Procedural
Antecedents
On April 29, 2003, Gregorio D. Calo, Zoilito L. Cepeda,
Victorioso D. Udarbe, Tita B. Udarbe, Edgar B. Palarca, Louie Libarios, Anna
Mae Pelegrino, Cirilia A. Sanchez, Anita V. Carloto and Eduardo Andit, the incorporators
of Mindanao Institute Inc. (MI Incorporators), represented by Engineer
Victorioso D. Udarbe (Engr. Udarbe),[4]
filed a Petition for Declaratory Relief with Prayer for a Temporary Restraining
Order (TRO) and Preliminary Injunction[5]
against the United Church of Christ in
the Philippines (UCCP), acting through the Agusan District Conference of
the United Church of Christ in the Philippines and represented by Reverend
Rodolfo Baslot (Rev. Baslot), before the RTC, which was docketed as
Special Civil Action Case No. 03-02. The incorporators prayed that Mindanao
Institute, Inc. (MI) be declared the sole owner of the assets and
properties of MI and to prevent the impending takeover by UCCP of MIs
properties. They averred that UCCP was unlawfully claiming ownership of MIs
properties.
On
On
WHEREFORE,
it appearing that petitioners will suffer grave injustice and irreparable
injury, let a temporary restraining order against respondents be issued
restraining respondents, their representatives, attorneys, agents or any other
person acting in their behalf from seizing control and management of the assets
and properties of Mindanao Institute.
IT IS
ORDERED.[10]
Meanwhile, UCCP received copies of MIs Amended Articles of
Incorporation[11] (2003
Amended AOI) which was adopted by the MI Incorporators on May 9, 2003 and
approved by the Securities and Exchange Commission (SEC) on May 26,
2003.
On June 11, 2003, UCCP, represented by Rev. Baslot, and MI,
represented by its President Dr. Edgardo R. Batitang (Dr. Batitang), lodged
a Complaint for Declaration of Nullity of the 2003 Amended Articles of
Incorporation and By-Laws of Mindanao Institute with Prayer for the Issuance of
Temporary Restraining Order and Preliminary Injunction and/or Damages[12]
before the RTC, which was docketed as Civil Case No. 09-2003. UCCP and MI asserted that the Amendment of
MIs Articles of Incorporation effected by signatories in a
reckless and hasty fashion was accomplished without the required majority vote
in clear violation of Section 16[13]
of Corporation Code.[14]
Of the ten (10) signatures appearing in the 2003 Amended AOI constituting
2/3 of the Board of Trustees of MI, five (5) were affixed by mere
representatives who were not duly authorized to vote. Further, UCCP and MI, as
represented by Dr. Batitang, stressed that the procedure in the acceptance of
corporate members as embodied in the Amended By-Laws contains discriminatory
provisions, wherein certain members maybe subjected to confirmation and
acceptance or rejection, but aimed specifically at members to be nominated by
UCCP.
On
At the scheduled joint hearing of Special Civil Action Case
No. 03-02 and Civil Case No. 09-2003 to determine the propriety of the issuance
of a writ of preliminary injunction, the Law Office of Bernabe, Doyon, Bringas
and Partners entered its appearance[16]
as collaborating counsel for UCCP. Incidentally, Atty. Roy Doyon (Atty.
Doyon), the son of Executive Judge Orlando F. Doyon (Judge Doyon), was
one of the partners in the said law firm. This prompted Atty. Nelbert T.
Poculan, UCCPs lead counsel, to move for the inhibition of Judge Doyon from
the case. On the other hand, Atty. Rolando F. Carlota, MI Incorporators
counsel, expressed no objection to the continued participation of Judge
Doyon in the proceedings of the case despite the said development.
Subsequently, Judge Doyon proceeded with the joint hearing.
Thereafter, the RTC granted the MI incorporators prayer for preliminary
injunction against UCCP in its Omnibus Order[17]
dated
WHEREFORE,
the prayer for issuance of a Temporary Restraining Order in Civil Case No.
09-2003 is hereby denied with finality.
As
prayed for in Special Civil Case No. 03-02, let a Writ of Preliminary
Injunction be issued, restraining, prohibiting, and enjoining respondents,
UNITED CHURCH OF CHRIST IN THE PHILIPPINES (UCCP) acting thru AGUSAN DISTRICT
CONFERENCE (ADC-UCCP), represented by Rev. Rodolfo Baslot, their agents,
representatives, attorneys, and any other persons acting for and in their
behalf from taking over, seizing control, managing, or administering MINDANAO
INSTITUTE and preventing plaintiffs in discharging their functions and duties
in the management, control and administration of the school, its premises and
assets, upon plaintiffs putting up a bond in the amount of ₱200,000.00
duly approved by the Court, which bond shall be executed in favour of the
defendants to answer for whatever damages they may sustain by reason of or
arising from the issuance of the writ in the event that the Court will finally
rule that the plaintiffs are not entitled thereto.
IT IS
SO ORDERED.
In issuing the preliminary injunction against UCCP, the RTC
explained:
The
prayer for the issuance of a Temporary Restraining Order, hereinafter known as
TRO, in Civil Case No. 09-2003, is anchored on the assumption that the Amended
Articles of Incorporation and Amended By-Laws of Mindanao Institute adopted on
It
should be stressed that the questioned Amended Articles of Incorporation and
By-Laws is duly approved by the Securities and Exchange Commission, hereinafter
referred to as SEC. As such, there being no evidence thus far presented to the
contrary, the presumption is that the official duty of the SEC has been
regularly performed.
Thus,
the actuations of respondents in Civil Case No. 09-2003 based on those
documents are presumptively valid unless declared void by this Court after a
full-blown trial. In other words, plaintiffs at this stage, have not shown the
existence of a clear legal right which has been violated warranting the
issuance of a TRO, because before a TRO or injunction is issued, it is
essential that there must be a right in esse or the existence of a right to be
protected and that the act against which the injunction is issued is a
violation of such right.
On the
other hand, plaintiffs in Special Civil Case No. 03-02 have shown that they
have the legal right in the management and administration of Mindanao Institute
because their actuations are based in an Amended Articles of Incorporation and
By-Laws duly approved by the SEC. The allegation that it was approved by the
SEC in record time cannot be taken as evidence that per se the approval was
against any law, rule or regulation.
It is
precisely for this reason that the Court issued a TRO because from the
amendments, plaintiffs in Special Civil Case No. 03-02 and respondents in Civil
Case No. 09-2003 have clear legal rights over the management and administration
of Mindanao Institute and that the acts of plaintiffs in Civil Case No. 09-2003
and respondents in Special Civil Case No. 03-02 are in violation of those
rights. Pending determination, therefore, of the principal action in Special
Civil Case No. 03-02, the Court is inclined to issue a preliminary injunction
to protect and preserve the rights of plaintiffs.[18]
UCCP moved for a reconsideration but the same was denied by
the RTC in its Resolution[19]
dated
In its Omnibus Order[20]
dated
Disappointed with the unfavorable ruling, UCCP and MI, as
represented by Dr. Batitang, sought relief with the CA via a petition
for certiorari under Rule 65 of the Rules of Court alleging grave abuse of
discretion on the part of the RTC in issuing the assailed order.
The CA granted the petition in its
WHEREFORE,
above
premises considered, the instant Petition is GRANTED. The writ of preliminary injunction issued
against the United Church of Christ in the Philippines (UCCP) in Special Civil
Case No. 02-03 is hereby DISSOLVED. No pronouncement as to costs.
SO ORDERED.[21]
The CA reasoned, among others, that the petition for certiorari (Civil Case No. 09-2003) having
been jointly filed by UCCP and MI, as represented by Dr. Batitang, was adequate
evidence to support the conclusion that MI did not require any injunctive
relief from UCCP. The CA also stated that in actions for declaratory relief,
the court was only called upon to determine the parties rights and
obligations. Citing Republic v. Court of Appeals,[22] it reasoned out that the RTC could not issue
injunction in an action for declaratory relief in as much as the right of the MI
incorporators had not yet been violated. Moreover, it stated that the
subsequent inhibition of Judge Doyon in the cases was pursuant to the rules on compulsory
disqualification of a judge under Rule 3.12(d) of the Code of Judicial Conduct.[23]
The MI incorporators, represented by Engr. Udarbe, moved for
reconsideration but the motion was denied by the CA in its Resolution dated
Hence, this petition.
THE ISSUES
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS, SPECIAL TWENTY THIRD
DIVISION, IN AN ORIGINAL ACTION FOR CERTIORARI UNDER RULE 65 ERRED IN
CONSIDERING AND RULING ON FACTUAL ISSUES NOT YET HEARD AND TRIED IN THE COURT
OF ORIGIN AND BASED ITS DECISION THEREON.
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS, SPECIAL TWENTY THIRD DIVISION ERRED IN ITS APPLICATION OF RULE 3.12(D) OF THE CODE OF JUDICIAL ETHICS UNDER THE FACTS AND CIRCUMSTANCES SURROUNDING THIS CASE.[24]
In their Memorandum,[25]
the petitioners argue that the CA went beyond the province of a writ of certiorari by resolving factual
questions, which should appropriately be threshed out in the trial. On the
inhibition, they pointed out that it was solely the law partner of Judge
Doyons son, Atty. J. Ma. James L. Bringas (Atty. Bringas), who
personally entered his appearance as collaborating counsel, and not the law firm.
Furthermore, they claim that Atty. Doyon, Judge Doyons son, was neither
present in court on the day Atty. Bringas entered his appearance nor was he
present in any of the previous hearings of the subject cases. Hence, petitioners
claim that Rule 3.12(d) of the Code of Judicial Conduct[26]
is not applicable in this case because Atty. Doyon never represented any party
in any of the subject cases being heard by Judge Doyon.
In its Memorandum,[27]
respondent claims that the petition for review on certiorari filed by the
petitioners was not properly verified as to authorize Engr. Udarbe to file the
same - a fatal procedural infirmity. Further, it points out that petitioners
are raising questions of fact in their petition not cognizable by this Court.
THE COURTS RULING
The petition lacks merit.
The Court is called upon to resolve the issue of whether or
not the CA erred in dissolving the writ of preliminary injunction issued
against UCCP. The writ of preliminary injunction enjoined UCCP from taking
control and management of MI and preventing petitioners from discharging their
functions in its management. Thus, the Court shall confine itself only with the
concerned writ and not the merits of the cases, which are still pending with
the RTC. A preliminary injunction, being a
preservative remedy for the protection of substantive rights or interests, is
not a cause of action in itself but merely a provisional remedy, an adjunct to
a main suit.[28]
A preliminary injunction is defined
under Section 1, Rule 58 of the Rules of Court, as follows:
Section 1. Preliminary injunction defined;
classes. A preliminary injunction is an order granted at any stage of an
action or proceeding prior to the judgment or final order, requiring a party or
a court, agency or a person to refrain from a particular act or acts. x x x
A preliminary injunction is a provisional remedy that a party
may resort to in order to preserve and protect certain rights and interests
during the pendency of an action.[29] The objective of a
writ of preliminary injunction is to preserve the status quo until the
merits of the case can be fully heard. Status quo is the last actual, peaceable and uncontested situation which
precedes a controversy.[30]
Significantly, Section 3, Rule 58 of the Rules of Court, enumerates the grounds for the issuance of a writ of preliminary injunction:
SEC.
3. Grounds for issuance of preliminary injunction. A preliminary
injunction may be granted when it is established:
(a)
That the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act or
acts complained of, or in requiring the performance of an act or acts, either
for a limited period or perpetually;
(b)
That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the
applicant; or
(c)
That a party, court, agency or a person is doing, threatening, or is attempting
to do, or is procuring or suffering to be done, some act or acts probably in
violation of the rights of the applicant respecting the subject of the action
or proceeding, and tending to render the judgment ineffectual.
Based on the foregoing provision, the Court in St. James
College of Paraaque v. Equitable PCI Bank[31]
ruled that the following requisites must be proved before a writ of preliminary
injunction will issue:
(1) The applicant must have a clear and
unmistakable right to be protected, that is, a right in esse;
(2) There is a material and substantial
invasion of such right;
(3) There is an urgent need for the writ to
prevent irreparable injury to the applicant; and
(4) No other ordinary, speedy, and adequate
remedy exists to prevent the infliction of irreparable injury.[32]
[Underscoring supplied]
It bears stressing that to be entitled to an injunctive writ,
the right to be protected and the violation against that right must be
shown. A writ of preliminary injunction may be issued only upon clear
showing of an actual existing right to be protected during the pendency of the
principal action.[33]
When the complainants right or title is doubtful or disputed, he does not have
a clear legal right and, therefore, the issuance of injunctive relief is not proper.[34]
In the present case, the records fail to reveal any clear and
unmistakable right on the part of petitioners. They posit that they are suing in
behalf of MIs interests by preventing UCCP from unlawfully
wresting control of MIs properties. Their claimed derivative interest, however,
has been disputed by UCCP in both its Answer with Counterclaim in Special Civil
Action Case No. 03-02 and its Complaint in Civil Case No. 09-2003, wherein MI itself,
represented by Dr. Batitang himself, is its co-petitioner. Evidently, the
conflicting claims of the parties regarding the issue of ownership over MIs
property create the impression that the petitioners derivative right, used as
basis for the issuance of the preliminary injunction, is far from clear. Petitioners
claimed right is still indefinite, at least until it is properly threshed out
in a trial, negating the presence of a right in esse that
requires the protection of an injunctive writ. Verily, petitioners cannot lay
claim to a clear and positive right based on the 2003
Amended AOI, the provisions of which are strongly disputed and alleged
to be invalidly obtained.
As regards the issue of Judge Doyons
disqualification to sit as judge in the subject cases, the Court agrees with
the CA. The pertinent rule on the mandatory disqualification of judicial officers
is laid down in Rule 137 of the Rules of Court. Section 1 thereof provides:
SECTION
1. Disqualification of judges. No judge or judicial officer
shall sit in any case in which he, or his wife or child, is pecuniary
interested as heir, legatee, creditor or otherwise, or in which he is related
to either party within the sixth degree of consanguinity or affinity, or to
counsel within the fourth degree, computed according to the rules of the
civil law, or in which he has been executor, administrator, guardian, trustee
or counsel, or which he has presided in any inferior court when his ruling or
decision is the subject of review, without the written consent of all parties
in interest, signed by them and entered upon the record. [Underscoring
supplied]
x x x.
Moreover, Rule 3.12 of Canon 3 of the Code of Judicial
Conduct, which took effect from
A judge should
take no part in a proceeding where the judges impartiality might reasonably be
questioned. These cases include, among others, proceedings where:
x x x
(d) the
judge is related by consanguinity or affinity to a party litigant within
the sixth degree or to counsel within the fourth degree. [Underscoring
supplied]
The prohibitions under the afore-quoted provisions of the
Rules are clear. The disqualification is mandatory and gives the judicial
officer concerned no discretion but to inhibit himself from trying or sitting
in a case. The rationale, therefore, is to preserve the people's faith and
confidence in the judiciary's fairness and objectivity.[35]
While the Court finds it ludicrous
that it was the counsel of UCCP, Atty. Poculan, who sought the inhibition of Judge
Doyon, considering that the law firm of the latters son is his collaborating
counsel, still the mandatory prohibition applies. Judge Doyon should have immediately
inhibited himself from the case upon learning of the entry of appearance of his
sons law firm. Where the disqualifying fact is indubitable and the parties to
the case make no waiver of such disqualification, as in the case at bench,
Section 1, Rule 137 of the Rules of Court forthwith completely strips the judge
of authority to proceed.[36]
WHEREFORE, the petition is DENIED. The assailed
SO ORDERED.
JOSE
CATRAL
Associate Justice
WE CONCUR:
PRESBITERO
J. VELASCO, JR.
Associate Justice
Chairperson
DIOSDADO
M. PERALTA ROBERTO A.
ABAD
Associate Justice Associate Justice
ESTELA
M. PERLAS-BERNABE
Associate Justice
A T T E S T A T I O N
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 Courts Division.
PRESBITERO J. VELASCO, JR.
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 Chairpersons
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 Courts Division.
RENATO
C. CORONA
Chief Justice
[1] Rollo, pp. 24-34. Penned by Associate Justice Normandie B. Pizarro and concurred in by Associate Justice Edgardo A. Camello and Associate Justice Rodrigo F. Lim, Jr.
[2]
[3]
[4]
[5]
[6]
[7]
[8] Answer, Par. 5, id. at 57.
[9] Rollo, pp. 61a-62.
[10]
[11] Id. at 63-69.
[12] Id. at 70-87.
[13] Sec. 16. Amendment of Articles of Incorporation. Unless otherwise prescribed by this Code or by special law, and for legitimate purposes, any provision or matter stated in the articles of incorporation may be amended by a majority vote of the board of directors or trustees and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock, without prejudice to the appraisal right of dissenting stockholders in accordance with the provisions of this Code, or the vote or written assent of at least two-thirds (2/3) of the members if it be a non-stock corporation.
x x x
[14] Batas Pamabansa Blg. 68.
[15] Rollo, pp. 88-90.
[16]
[17] CA rollo, pp. 36-38.
[18]
[19]
[20]
[21] Rollo, p. 33.
[22] 383 Phil. 398 (2000).
[23] A judge should
take no part in a proceeding where the judges impartiality might reasonably be
questioned. These cases include, among others, proceedings where:
(d) the judge is related by consanguinity or affinity to a party litigant within the sixth degree or to counsel within the fourth degree.
[24] Rollo, p. 10.
[25]
[26] Supra note 23.
[27] Rollo, pp. 170-188.
[28] Pahila-Garrido v. Tortogo, G.R. 156358,
[29] Limitless Potentials, Inc. v. Court of Appeals, G.R. No. 164459, April 24, 2007, 522 SCRA 70, 82.
[30] Preysler, Jr. v. Court of Appeals, 527 Phil. 129,136 (2006), citing Cortez-Estrada v. Heirs of Domingo Samut/Antonia Samut, 491 Phil. 458, 472 (2005); Los Baos Rural Bank, Inc. v. Africa, 433 Phil. 930, 945 (2002).
[31] G.R. No. 179441, August 9, 2010, 627 SCRA 328, 344, citing Bian Steel Corporation v. Court of Appeals, 439 Phil. 688, 703-704 (2002); Hutchison Ports Philippines Ltd. v. Subic Bay Metropolitan Authority, 393 Phil. 843, 859 (2000).
[32]
[33] Equitable PCI Bank, Inc. v. OJ-Mark Trading, Inc., G.R. No. 165950, August 11, 2010, 628 SCRA 79, 88, citing Borromeo v. Court of Appeals, G.R. No. 169846, March 28, 2008, 550 SCRA 269, 280; Lim v. Court of Appeals, 517 Phil. 522, 527 (2006).
[34] Barayuga v.
[35] Busilac Builders, Inc. v. Judge Charles A. Aguilar, A.M. No.
RTJ-03-1809, October 17, 2006, 504 SCRA 585, 598, citing Ortiz v. Jaculbe,
Jr., 500 Phil. 142, 147 (2005); Pimentel v. Salanga, 128 Phil. 176,
183 (1967); Hacienda Benito, Inc. v. Court of Appeals, 237 Phil. 46, 63
(1987).
[36] Geotina v. Gonzales, 148-B Phil. 556, 568-569 (1971).