J.A.B. Bulao & Associates

CASE 2012-0049: JUDGE ADORACION G. ANGELES VS. HON. MA. MERCEDITAS N. GUTIERREZ, OMBUDSMAN; HON. ORLANDO C. CASIMIRO, OVERALL DEPUTY OMBUDSMAN; HON. SYLVIA A. SEVERO, GRAFT INVESTIGATOR AND PROSECUTION OFFICER I; HON. MARILOU B. ANCHETA-MEJICA, ACTING DIRECTOR, PIAB-D; HON. JOSE T. DE JESUS, JR., ASSISTANT OMBUDSMAN, PAMO; ALL OF THE OMBUDSMAN; AND SSP EMMANUEL Y. VELASCO (G.R. NOS. 189161 & 189173, MARCH 21, 2012, SERENO, J.) SUBJECT/S: POWER OF THE COURT OVER THE OMBUDSMAN’S EXERCISE OF ITS INVESTIGATIVE AND PROSECUTORIAL POWERS  (BRIEF TITLE: JUDGE ANGELES VS. OMBUDSMAN)

=======================

DISPOSITIVE:

WHEREFORE, we DISMISS the Petition for Certiorari filed by Judge Adoracion G. Angeles. We AFFIRM the two Joint Orders of the Ombudsman in Case Nos. OMB-C-C-07-0103-C and OMB-C-A-O7-0117-C dated 21 March 2007 and 30 June 2008, respectively.

SO ORDERED.

=======================

Republic of the Philippines
Supreme Court
Manila

SECOND DIVISION

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

SERENO, J.:

The Case

This is a special civil action for certiorari under Rule 65 of the 1997 Rules of Court. The Court is once again asked to determine whether the Office of the Ombudsman (Ombudsman) committed grave abuse of discretion in the exercise of its discretionary powers to investigate and prosecute criminal complaints.

This Petition dated 01 September 2009 seeks to set aside the Joint Order^[1][1] dated 21 March 2007 of the Ombudsman (the questioned Joint Order) exonerating respondent Senior State Prosecutor Emmanuel Y. Velasco (respondent Velasco or respondent) from the charges filed by petitioner Judge Adoracion G. Angeles (petitioner Judge Angeles or petitioner).

The Facts

The Complaint filed with the Ombudsman

          Petitioner Judge Angeles was, at the time this Petition was filed, the Presiding Judge of Branch 121 of the Caloocan City Regional Trial Court (RTC); while private respondent Velasco was a senior state prosecutor at the Department of Justice (DOJ).

On 20 February 2007, petitioner Judge Angeles filed a criminal Complaint against respondent Velasco with the Ombudsman^[2][2] and sought his indictment before the Sandiganbayan for the following acts allegedly committed in his capacity as a prosecutor:

1.       Giving an unwarranted benefit, advantage or preference to the accused in a criminal case for smuggling by failing to present a material witness;

2.       Engaging in private practice by insisting on the reopening of child abuse cases against petitioner;

3.       Falsifying a public document to make it appear that a clarificatory hearing on the child abuse Complaint was conducted.^[3][3]

Failure to present a material witness

          According to the Complaint, respondent Velasco, who was the trial prosecutor in a criminal case involving the smuggling of jewelry,^[4][4] failed to present a material witness in the aforesaid case.^[5][5] The witness, a gemmologist of the Bureau of Customs, was to testify on the type of  substance making up the pieces of smuggled jewelry.^[6][6]

          According to petitioner, considering the materiality of the gemmologist’s testimony, which respondent must have known of, since he was the handling trial prosecutor of the case, his failure to offer the said testimony in court shows that he tried to suppress the evidence in favor of the accused in the said case. This act was alleged to be in violation of Section 3(e) of the Anti Graft and Corrupt Practices Act,^[7][7] which considers as a corrupt practice the acts of public officers that give unwarranted benefits to any private party through either manifest partiality, evident bad faith, or gross inexcusable negligence in the discharge of their official functions.^[8][8]

The gemmologist, however, was eventually presented as a witness after respondent Velasco had filed a Motion to adduce additional evidence in the said case.^[9][9]

Insistence on the reopening of child abuse cases

The second act complained of refers to respondent Velasco’s filing of two Petitions to reopen the child abuse cases filed against petitioner Judge Angeles. Petitioner was previously charged with inflicting physical and psychological abuse on Maria Mercedes Vistan, her 13-year-old grandniece.^[10][10] Respondent was the one who conducted the preliminary investigation of the Complaint for child abuse and later indicted petitioner for 21 counts thereof.^[11][11] However, the DOJ later on reversed respondent Velasco’s recommendation^[12][12] upon a Petition for Review filed by respondent. Consequently, the Informations, which had been filed in the meantime, were ordered withdrawn by the trial court.^[13][13] Petitioner later filed an administrative Complaint against respondent for gross misconduct, gross ignorance of the law, incompetence, and manifest bad faith arising from the alleged malicious indictment.

According to petitioner, the move of respondent to reopen the child abuse cases was allegedly meant to exact vengeance for petitioner’s filing of the above-mentioned administrative Complaint.^[14][14] Meanwhile, the two Petitions to reopen the child abuse cases, which were filed by respondent in the DOJ and the Office of the President, were denied for having been filed in the wrong venues.

Petitioner alleges in her Complaint that since respondent Velasco was not the trial prosecutor in the said case, his unauthorized act of filing two Petitions to reopen the child abuse cases constituted a violation of Section 7(b)(2) of the Code of Conduct and Ethical Standards for Public Officials and Employees.^[15][15] This code considers as unlawful the acts of public officials and employees engaging in the private practice of their profession, unless authorized by the Constitution or by law.^[16][16] This single act of moving to reopen the child abuse cases was the only instance of private practice imputed to respondent Velasco. No other act constituting private practice was cited by petitioner.

Falsification of Public Document

The alleged falsification of public document arose from the same preliminary investigation conducted by respondent in the child abuse cases mentioned above. According to petitioner Judge Angeles, respondent Velasco made it appear that he had conducted a clarificatory hearing on the Complaint for child abuse on 22 June 1999 as shown in the Minutes^[17][17] of the said hearing.^[18][18] Petitioner alleges that Leonila Vistan, the witness who supposedly attended the hearing, was seriously sick and could not have appeared at the alleged clarificatory hearing.^[19][19] Moreover, respondent had, in fact, resolved the cases two days earlier, on 20 June 1999, as shown by the date on the Resolution indicting petitioner. Thus, the latter alleges, the Minutes of the hearing on 22 June 1999 must have been falsified by respondent by making it appear that Leonila Vistan had participated in an inexistent proceeding. This act is in violation of Article 171 of the Revised Penal Code,^[20][20] which criminalizes it as a falsification of a public document.^[21][21]

The Decision of the Ombudsman

In the questioned Joint Order, the Ombudsman dismissed the charges against respondent Velasco. It found that after evaluation of the facts and evidence presented by complainant, there was no cause to conduct a preliminary investigation or an administrative adjudication with regard to the charges.

On the first charge of suppression of testimonial evidence in connection with the smuggling case, the Ombudsman dismissed the charge on the ground that petitioner had no sufficient personal interest in the subject matter of the grievance.^[22][22] The Ombudsman explained that petitioner was neither one of the parties nor the presiding judge in the said criminal case and, therefore, had no personal interest in it.

Moreover, granting that the personal interest of petitioner was not in issue, respondent Velasco acted based on his discretion as prosecutor and his appreciation of the evidence in the case, and any lapse in his judgment cannot be a source of criminal liability. The Ombudsman said that it had no authority to investigate the prosecutor’s exercise of discretion, unless there is sufficient evidence that the exercise was tainted with malice and bad faith.^[23][23]

The Ombudsman likewise dismissed the second charge of private practice of profession on the ground of failure to exhaust administrative remedies.^[24][24] It pointed out that petitioner should have first elevated her concern to the DOJ, which had primary jurisdiction over respondent’s actions and conduct as public prosecutor.^[25][25]  Moreover, the Ombudsman found that respondent Velasco was not engaged in private practice when he filed the two Petitions for the reopening of the child abuse cases against petitioner, since he was the investigating prosecutor of the said cases.^[26][26]

Finally, on the falsification of a public document, which was also dismissed, the Ombudsman said that the issue should have been raised earlier, when petitioner Judge Angeles filed her Petition for Review of the Resolution of respondent Velasco. Moreover, petitioner should have substantiated the allegation of falsification, because the mere presentation of the alleged falsified document did not in itself establish falsification.   The Ombudsman also ruled that with the belated filing of the charge and the reversal by the DOJ of respondent Velasco’s Resolution indicting petitioner, the materiality of the alleged falsified document is no longer in issue.^[27][27]

Petitioner filed a Motion for Reconsideration^[28][28] of the questioned Joint Order, which was denied by the Ombudsman for lack of merit.^[29][29]

Hence, the present Rule 65 Petition.

Issue

Whether the Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the Complaint against respondent Velasco.

The Court’s Ruling

We dismiss the Petition.

I

Power of the Court over the Ombudsman’s Exercise

of its Investigative and Prosecutorial Powers

As a general rule, the Court does not interfere with the Ombudsman’s exercise of its investigative and prosecutorial powers without good and compelling reasons.  Such reasons are clearly absent in the instant Petition.

At the outset, we emphasize that certiorari is an extraordinary prerogative writ that is never demandable as a matter of right.  Also, it is meant to correct only errors of jurisdiction and not errors of judgment committed in the exercise of the discretion of a tribunal or an officer. This is especially true in the case of the exercise by the Ombudsman of its constitutionally mandated powers. That is why this Court has consistently maintained its well-entrenched policy of non-interference in the Ombudsman’s exercise of its investigatory and prosecutorial powers.^[30][30]

General   Rule   of  Non-Interference

with the Plenary Powers of the Ombudsman

The general rule has always been non-interference by the courts in the exercise by the office of the prosecutor or the Ombudsman of its plenary investigative and prosecutorial powers. In Esquivel v. Ombudsman,^[31][31] we explained thus:

The Ombudsman is empowered to determine whether there exists reasonable ground to believe that a crime has been committed and that the accused is probably guilty thereof and, thereafter, to file the corresponding information with the appropriate courts. Settled is the rule that the Supreme Court will not ordinarily interfere with the Ombudsman’s exercise of his investigatory and prosecutory powers without good and compelling reasons to indicate otherwise. Said exercise of powers is based upon the constitutional mandate and the court will not interfere in its exercise. The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman, but upon practicality as well. Otherwise, innumerable petitions seeking dismissal of investigatory proceedings conducted by the Ombudsman will grievously hamper the functions of the office and the courts, in much the same way that courts will be swamped if they had to review the exercise of discretion on the part of public prosecutors each time they decided to file an information or dismiss a complaint by a private complainant. (Emphasis supplied; citations omitted.)

In Presidential Commission on Good Government v. Desierto,^[32][32] we further clarified the plenary powers of the Ombudsman. We emphasized that if the latter, using professional judgment, finds a case dismissible, the Court shall respect that finding, unless the exercise of such discretionary power was tainted with grave abuse of discretion.

The Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto^[33][33] explained the rationale for the plenary powers of the Ombudsman, which is virtually free from legislative, executive or judicial intervention. Its plenary powers were constitutionally designed to insulate it from outside pressure and improper influence. Accordingly, the Court has consistently respected and recognized, as we do now in this case, the  independence and competence of the Ombudsman, as it acts as “the champion of the people and the preserver of the integrity of public service.”

The Discretionary Nature of 

Preliminary Investigation

The determination by the Ombudsman of probable cause or of whether there exists a reasonable ground to believe that a crime has been committed, and that the accused is probably guilty thereof, is usually done after the conduct of a preliminary investigation. However, a preliminary investigation is by no means mandatory.

 The Rules of Procedure of the Office of the Ombudsman (Ombudsman Rules of Procedure),^[34][34] specifically Section 2 of Rule II, states:

Evaluation. — Upon evaluating the complaint, the investigating officer shall recommend whether it may be: a) dismissed outright for want of palpable merit; b) referred to respondent for comment; c) indorsed to the proper government office or agency which has jurisdiction over the case; d) forwarded to the appropriate officer or official for fact-finding investigation; e) referred for administrative adjudication; or f) subjected to a preliminary investigation.

Thus, the Ombudsman need not conduct a preliminary investigation upon receipt of a complaint. Indeed, we have said in Knecht v. Desierto^[35][35] and later in Mamburao, Inc. v. Office of the Ombudsman^[36][36] and Karaan v. Office of the Ombudsman^[37][37] that should investigating officers find a complaint utterly devoid of merit, they may recommend its outright dismissal. Moreover, it is also within their discretion to determine whether or not preliminary investigation should be conducted.

The Court has undoubtedly acknowledged the powers of the Ombudsman to dismiss a complaint outright without a preliminary investigation in The Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto.^[38][38]

We reiterate that the Ombudsman has full discretion to determine whether a criminal case should be filed, including whether a preliminary investigation is warranted.  The Court therefore gives due deference to the Ombudsman’s decision to no longer conduct a preliminary investigation in this case on the criminal charges levelled against respondent Velasco.

II

No Grave Abuse of Discretion in the

Ombudsman’s Evaluation of Evidence

This Court acknowledges exceptional cases calling for a review of the Ombudsman’s action when there is a charge and sufficient proof to show grave abuse of discretion.

Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction; or the exercise of power in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility. The abuse must be in a manner so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.^[39][39]

The determination of grave abuse of discretion as the exception to the general rule of non-interference in the Ombudsman’s exercise of its powers is precisely the province of the extraordinary writ of certiorari. However, we highlight the exceptional nature of that determination.

In this Petition, we do not find any grave abuse of discretion that calls for the Court’s exceptional divergence from the general rule.

Notably, the burden of proof to show grave abuse of discretion is on petitioner, and she has failed to discharge this burden. She  merely states why she does not agree with the findings of the Ombudsman, instead of demonstrating and proving grave abuse of discretion. In her arguments, petitioner would also have us pass upon the factual findings of the Ombudsman. That we cannot do, for this Court is not a trier of facts.

Even if we were to extend liberally the exception to the general rule against the review of the findings of the Ombudsman, an examination of the records would show that no grave abuse of discretion was demonstrated to warrant a reversal of the Joint Order dismissing the Complaint against respondent Velasco.

A. On the first charge of suppression of evidence

On the charge of suppression of evidence arising from the failure of respondent Velasco to present the testimony of a material witness, the Ombudsman found – and  we defer to its findings – that he acted based on his discretion as prosecutor and on his appreciation of the evidence in the case, and any lapse in his judgment cannot be a source of criminal liability. The Ombudsman also found that there was no sufficient evidence that the failure of respondent to present the witness was tainted with malice; or that the failure of respondent to do so gave any private party unwarranted benefit, advantage or preference in the discharge of the former’s official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.

Moreover, in G.R. No. 187596,^[40][40] a case involving the same incidents and parties as the present Petition, this Court affirmed the factual findings of the Court of Appeals (CA). We take judicial notice of the CA’s factual finding that the charge of suppression of evidence by respondent in the smuggling case was dispelled by the Chief State Prosecutor himself in a Certification dated 17 October 2002.^[41][41] The Certification vouching for the integrity and competence of respondent in his handling of the smuggling case states:

This is to certify that I had never called the attention nor even had castigated State Prosecutor EMMANUEL Y. VELASCO with regard to the way he handled the case of People of the Philippines versus Lintag, et al. (Pasay Regional Trial Court, Criminal Case Number 99-0129, for violation of the Tariff and Customs Code of the Philippines) specifically with regard to the aspect of the presentation of one of the prosecution’s witnesses, a gemologist (sic).  In fact, SP Velasco successfully prosecuted said case.^[42][42]

Thus, we find no grave abuse of discretion in the Ombudsman’s dismissal of the first charge.

However, we need to clarify that we cannot subscribe to the other reason for the Ombudsman’s dismissal of the charge pursuant to paragraph 4, Section 20 of the Ombudsman Act. The provision allows the Ombudsman to decide not to conduct the necessary investigation of any administrative act or omission complained of, if it believes that the complainant has no sufficient personal interest in the subject matter of the grievance. It is clear that, in relation to Section 19, Section 20 of the Ombudsman Act applies only to administrative cases. As for Section 19, its subject heading is “Administrative Complaints.” It lists acts or omissions that may be the subject of a complaint on which the Ombudsman shall act. On the other hand, the subject heading of Section 20 is “Exceptions.”  It lists the exceptional situations in which the Ombudsman has the option not to investigate an administrative complaint even when its subject is an act or omission listed in Section 19. That both Sections 19 and 20 of the Ombudsman Act apply only to administrative complaints is made even clearer in the Ombudsman Rules of Procedure.  Their counterpart provisions appear in the Ombudsman Rules of Procedure under Rule III which outlines the procedure for administrative cases.^[43][43]  Clearly, then, paragraph 4, Section 20 of the Ombudsman Act applies only to administrative complaints. It should not have been used by the Ombudsman as a ground to dismiss the first charge, since the Complaint filed by petitioner before the Ombudsman was criminal in nature. The criminal nature of petitioner’s Complaint is clear from its prayer seeking the indictment of respondent before the Ombudsman.^[44][44] This lapse notwithstanding, we do not find any arbitrariness or whim in the manner that the Ombudsman disposed of the charge. If there was any abuse of discretion at all, it was not grave.

B. On the second charge of private practice

The Ombudsman found that respondent Velasco was not engaged in private practice when he filed two Petitions for the reopening of the child abuse cases against petitioner on the ground that respondent was acting in his capacity as the investigating prosecutor of the said cases. Again, this Court takes judicial notice of the CA’s finding in G.R. No. 187596, adverted to earlier, that respondent’s isolated act of filing a pleading did not necessarily constitute private practice of law.^[45][45] We have, in fact, said so in Maderada v. Mediodea,^[46][46] citing People v. Villanueva:^[47][47]

Private practice has been defined by this Court as follows:

“Practice is more than an isolated appearance, for it consists in frequent or customary action, a succession of acts of the same kind. In other words, it is frequent habitual exercise. Practice of law to fall within the prohibition of statute [referring to the prohibition for judges and other officials or employees of the superior courts or of the Office of the Solicitor General from engaging in private practice] has been interpreted as customarily or habitually holding one’s self out to the public, as a lawyer and demanding payment for such services.  x x x.”

Clearly, by no stretch of the imagination can the act of respondent Velasco be considered private practice, since he was not customarily or habitually holding himself out to the public as a lawyer and demanding payment for those services. The appellate court also noted that, on the contrary, he filed the motion in good faith and in the honest belief that he was performing his duty as a public servant.^[48][48]

Thus, the Ombudsman did not commit any grave abuse of discretion when it dismissed the second charge against respondent Velasco.

However, we again need to point out that we do not share the Ombudsman’s finding that the charge is dismissible on the ground of failure to exhaust administrative remedies pursuant to paragraph 1, Section 20 of the Ombudsman Act. As already explained earlier, the said provision applies only to administrative cases, while the Complaint before the Ombudsman was not administrative, but criminal, in nature.  Still, we do not find any abuse of discretion when the Ombudsman proffered this ground for dismissing the second charge.

C. On the third charge of falsification of public document

Finally, the Ombudsman correctly found that the charge of falsification had not been substantiated, and that the mere presentation of the alleged manufactured document alone would not in itself establish falsification. To recall, petitioner Angeles claimed that Leonila Vistan could not have appeared before respondent Velasco because she was sick, but offered no supporting evidence. Also, it does not follow that a clarificatory hearing could not have been conducted, just because respondent Velasco had prepared a Resolution on 20 June 1999, two days before that hearing.

Moreover, as found by the CA in G.R. No. 187596 adverted to earlier, a clarificatory hearing was in fact conducted. The appellate court found that the declarations of petitioner could not prevail over the positive assertion of Percival Abril and Jesusa Hernandez, who testified that they had seen Leonila Vistan before Velasco at the clarificatory hearing on 22 June 1999.^[49][49]

However, the Court differs with the Ombudsman on the latter’s pronouncement that the issue of falsification of public document should have been raised by petitioner earlier, when she filed her Petition for Review of the Resolution of respondent Velasco; and that, consequently, the charge of falsification of a public document was no longer in issue because of its belated filing. We draw attention to the fact that the Petition for Review of respondent’s Resolution indicting petitioner Judge Angeles was under an entirely different proceeding. The purpose of the Petition was to reverse the aforesaid Resolution, and not to exact criminal liability on respondent for the crime of falsification of a public document, as in the Complaint before the Ombudsman. Thus, it cannot be said that the issue of falsification of a public document in the criminal Complaint was raised belatedly, because the Complaint was not a continuation of the previous Petition for Review of respondent’s Resolution. The two proceedings were completely independent of each other. This lapse, however, did not constitute grave abuse of discretion.

In sum, this Court finds no compelling reason to depart from its long-standing policy of non-interference in the exercise by the Ombudsman of its investigatory and prosecutorial powers which, as we have emphasized, are plenary.

Although the Court diverges from some of the conclusions reached by the Ombudsman, we find that its dismissal of the charges against respondent Velasco was arrived at after a rational deliberation.  Such deliberation was shown by its reasoned disposition of the case in the exercise of its constitutionally mandated discretionary powers. The Ombudsman did not overstep the boundaries of its plenary powers and acted within the permissible limits. We do not find any arbitrariness or abuse that was so gross and patent in the manner it exercised its discretion as would warrant this Court’s reversal. 

Absent a clear showing of grave abuse of discretion, we uphold the findings of the Ombudsman.

Final Note

Finally, the Court notes with strong disapproval both parties’ resort to abuse of the judicial processes of this Court. This is the third case we know of that the parties have filed against each other, and that has reached the Supreme Court.^[50][50]

This fact is especially regrettable, considering that petitioner as judge and respondent as prosecutor should have been well-cognizant of our clogged court dockets and should have thus exercised more restraint in filing cases against each other. Canon 12 of the Code of Professional Responsibility enjoins a lawyer from filing multiple actions arising from the same cause and from misusing court process.^[51][51] Judging from the number of cases and the vengeful tone of the charges that the parties have hurled against each other in their pleadings, they seem more bent on settling what has become a personal score between them, rather than on achieving the ends of justice.^[52][52]

The parties are warned against trifling with court process. This case shall, hopefully, serve as a reminder of their ethical and professional duties and put an immediate end to their recriminations.

WHEREFORE, we DISMISS the Petition for Certiorari filed by Judge Adoracion G. Angeles. We AFFIRM the two Joint Orders of the Ombudsman in Case Nos. OMB-C-C-07-0103-C and OMB-C-A-O7-0117-C dated 21 March 2007 and 30 June 2008, respectively.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

    ARTURO D. BRION                                   JOSE PORTUGAL PEREZ                    

         Associate Justice                                                   Associate Justice

BIENVENIDO L. REYES

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 Court’s Division.

                                                              ANTONIO T. CARPIO

                                                                    Associate Justice

                                                          Chairperson, Second 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.

RENATO C. CORONA

                                                                            Chief Justice     

CASE 2012-0048: LEONCIA MANUEL & MARINA S. MUDLONG VS. LEONOR SARMIENTO (G.R. NO. 173857, MARCH 21, 2012, PERALTA, J.) SUBJECT/S: FINDINGS OF FACTS OF CA ARE CONCLUSIVE MORE SO IF THEY UPHELD RTC DECISION (BRIEF TITLE: MUDLONG VS. SARMIENTO)

========================

DISPOSITIVE:

WHEREFORE, the petition is DENIED.  The Decision of the Court of Appeals in CA-G.R. CV No. 64449, dated July 14, 2006, is AFFIRMED.

Costs against petitioners.

SO ORDERED.

========================

SUBJECT/DOCTRINE/DIGEST:

COURT OF APPEALS AFFIRMED THE DECISION OF RTC THAT RESPONDENT IS ENTITLED TO BROKER’S COMMISSION. CAN SC REVERSE THE CA DECISION?

NO. FINDINGS OF CA ARE CONCLUSIVE ON THE PARTIES AND EVEN SO IF THE CA AFFIRMS THE FACTUAL FINDINGS OF THE RTC.

Factual findings of the Court of Appeals are conclusive on the parties and carry even more weight when the said court affirms the factual findings of the trial court.^[1][27]  The Court has carefully reviewed the records of this case and finds no cogent reason to overturn the finding of the Court of Appeals.

========================

Republic of thePhilippines

Supreme Court

Manila

THIRD DIVISION

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – -x

D E C I S I O N

PERALTA, J.:

This is a petition for review on certiorari^[2][1] of the Decision^[3][2] of the Court of Appeals in CA-G.R. CV No. 64449 promulgated on July 14, 2006, which affirmed with modification the Decision of the Regional Trial Court of Malolos, Bulacan, Branch 81 (trial court) finding petitioners Leoncia Manuel and Marina Mudlong liable to pay respondent Leonor Sarmiento her broker’s commission as well as moral and exemplary damages.

The facts, as culled from the decision of the Court of Appeals and the records, are as follows:

Petitioner Leoncia Manuel appointed her granddaughter, petitioner Marina Mudlong, as her attorney-in-fact,^[4][3] granting her the authority to sell a parcel of land containing an area of 23,959 square meters located in Tigbe (Diliman), Norzagaray, Bulacan,  registered in her (Leoncia Manuel) name. In turn, Marina Mudlong informed several real estate brokers that the said property was for sale, including respondent Leonor Sarmiento.

In anticipation of the sale of the property and her eventual reimbursement, respondent voluntarily undertook the reconstitution of the title over the subject property, its survey, as well as the payment of real estate taxes and tax clearances thereon.

In March 1997, Chiao Liong Tan, a businessman, was looking for a property to purchase in Norzagaray, Bulacan.  Chiao Liong Tan’s secretary, Antonia de Leon, told Josie Buluran, a broker, about it.  Josie Buluran and other brokers, namely, Ernesto Sanchez and Lucy Eustaquio, started looking for a property for Chiao Liong Tan.  Josie Buluran asked Rodolfo Santos, a former barangay captain of Partida, Norzagaray, if he knew of any property that might be for sale in the area.  Rodolfo Santos told Josie Buluran that the property of Leoncia Manuel, which was adjacent to his land, was for sale, and that she should get in touch with respondent, because the title and other documents of the property were in her possession. He referred Josie Buluran to his wife, Teodora “Doray”Santos, to facilitate her introduction to respondent.  Thus, Josie Buluran went to Doray Santos, who told respondent about Chiao Liong Tan’s interest in the property of Leoncia Manuel.

OnMay 7, 1997, Chiao Liong Tan, Antonia de Leon, Josie Buluran and Lucy Eustaquio went to the property of petitioner Leoncia Manuel.  Thereafter, they went to the house of the spouses Rodolfo and Doray Santos to meet respondent.  Chiao Liong Tan asked respondent if she could give him the complete documents of Leoncia Manuel’s property.  Respondent showed Chiao Liong Tan the photocopy of the title of the said property and the old tax receipts.  Chiao Liong Tan told respondent that he needed the new plan and new tax receipts plus the tax clearance.  He asked respondent if she could provide the said documents by2:00 p.m.of that day.

Hence, at 2:00 p.m.of March 7, 1997, respondent and Josie Buluran went to Chiao Liong Tan’s office in Binondo to present the documents he requested.  At the end of their meeting, Chiao Liong Tan agreed to buy the property of Leoncia Manuel at P100.00 per square meter, and asked respondent to produce her authority to sell.

OnMarch 8, 1997, respondent, the spouses Rodolfo and Doray Santos, and Lucy Eustaquio went to petitioner Marina Mudlong’s house to ask her to execute an exclusive authority to sell in respondent’s favor.  It appears that respondent brought two blank authority to sell forms, which petitioner Marina Mudlong both signed.

Respondent filled in the first form to reflect her real agreement with petitioner Marina Mudlong: (1) the asking price for the property was P65.00 per square meter; (2) respondent’s commission would be the difference between Marina Mudlong’s asking price and the price agreed upon by the buyer; (3) the term of respondent’s exclusive authority to sell was for one month, which was reckoned from the date the said document was notarized on March 8, 1997.^[5][4]

On the other hand, the second form reflected the asking price as P120.00 per square meter, and respondent’s commission was 5% of the agreed price.  This was the unnotarized authority to sell that respondent submitted to Chiao Liong Tan as part of her selling strategy.^[6][5]

Although respondent submitted all the documents required by Chiao Liong Tan, he did not get in touch with her again.  On March 25, 1997, Chiao Liong Tan bought the property directly from petitioner Marina Mudlong at the price of P90.00 per square meter, or for the total price of P2,156,310.00.^[7][6]

On April 7, 1997, after respondent learned that she had been excluded from the sale, she sent two demand letters^[8][7] to petitioner Marina Mudlong,  asking to be reimbursed the amount of P35,000.00 for the expenses she incurred in reconstituting the title over the subject property, having it surveyed, and in paying the real estate taxes and tax clearances thereon.  In addition, respondent asked for 10% of the selling price obtained from Chiao Liong Tan as her commission, since the sale was consummated during the one-month validity of her exclusive authority to sell.

Marina Mudlong ignored respondent’s demand. Thus, on June 5, 1997, respondent filed a Complaint^[9][8] for collection of sum of money with damages against Marina Mudlong and her grandmother, Leoncia Manuel.

In their Answer,^[10][9] petitioners denied having given respondent an exclusive authority to sell.  They stated that the authority to sell form presented by respondent was blank, or without detail when petitioner Marina Mudlong signed it, and that they never intended respondent’s authority to be exclusive for one month fromMarch 8, 1997.

Further, petitioners explained that respondent’s negotiation with the buyer bogged down, because the buyer lost trust and confidence in her for her misrepresentation and she ceased to be a party to the negotiations.

Petitioners alleged that the only brokers who are entitled to a commission from the sale are the spouses Rodolfo and Doray Santos, Josie Buluran, Antonia de Leon, and Lucy Eustaquio, as they were the ones who found the buyer, and pursued the sale to its conclusion.

During the trial, respondent presented some receipts for the expenses that she incurred in getting the documents for the property of petitioner Manuel, which receipts totalled P669.78.  She admitted that she lost the receipts of her other expenses.

On the other hand, to show that respondent’s authority to sell was not exclusive, petitioner Marina Mudlong presented two copies of authority to sell, both dated March 11, 1997, that she had granted to Antonia de Leon and Rodolfo Santos^[11][10] as well as to Josie Buluran and Lucy Eustaquio.^[12][11]

The main issue before the trial court was whether the plaintiff, herein respondent, being an exclusive agent, was entitled to her commission for the sale of the property of defendants, petitioners herein.

On June 4, 1999, the trial court rendered a Decision^[13][12] in favor of respondent.  The trial court held that the authority to sell clearly provides that the authority given by petitioner Marina Mudlong to respondent was exclusive in nature, which meant that the public would have to negotiate only with respondent for the sale of the property of Leoncia Manuel.  The dispositive portion of the Decision reads:

WHEREFORE, judgment is hereby rendered —

1. ordering the defendants to, jointly and severally, pay the plaintiff the amount of P323,815.00 as actual and compensatory damages;

2. ordering the defendants to, jointly and severally, pay the plaintiff the amount of P10,000.00 as attorney’s fees and P1,000.00 per appearance in court;

3. ordering the defendants to, jointly and severally, pay the plaintiff the amount of P50,000.00 as moral damages and another P50,000.00 as exemplary damages; and

4. pay the costs of the suit.^[14][13]

Petitioners appealed the trial court’s decision to the Court of Appeals, alleging that the trial court erred  in finding that there was due execution of the authority to sell; in considering respondent as one of the agents entitled to a commission; in not finding that there were other agents in the transaction; in giving credence to the sole and uncorroborated testimony of respondent; and that the trial court erred in appreciating the facts of the case.

The Court of Appeals affirmed the decision of the trial court with modification.  The dispositive portion of the Decision reads:

WHEREFORE, the decision appealed from is AFFIRMED with MODIFICATION, in that the amount of actual and compensatory damages awarded to Leonor Sarmiento is INCREASED to P599,644.78, while the award of attorney’s fees is DELETED.^[15][14]

The Court of Appeals held that the trial court correctly found that the notarized authority to sell executed by petitioner Marina Mudlong, in favor of respondent, was validly executed; hence, its terms must be given effect. Since the sale to the buyer was consummated within the period of respondent’s exclusive authority to sell, respondent was entitled to a commission of P25.00 per square meter, or a total of P598,975.00. The appellate court found that respondent worked on the sale of the property, and provided the buyer with the documents that facilitated the sale of the property.  It held that the presence of the other agents, namely, Rodolfo Santos, Josie Buluran, Antonia de Leon, and Lucy Eustaquio, did not detract from the exclusive nature of the authority to sell that petitioner Marina Mudlong had granted to respondent. It stated that the fact that Marina Mudlong granted the other brokers an authority to sell on March 11, 1997, after she had already constituted respondent as her exclusive agent on  March 8, 1997, and during the validity of respondent’s exclusive authority to sell, underscores Marina Mudlong’s bad faith and intentional breach of her contract with respondent.

The Court of Appeals upheld the award of P50,000.00 as moral damages to respondent, as it found that the breach of contract by petitioner Marina Mudlong was attended by bad faith, citing Article 2220 of the Civil Code. The appellate court stated that it was apparent that respondent suffered from wounded feelings, because despite all the work that she had put into the sale of the subject property, petitioner Mudlong excluded respondent from the sale, granted authorities to sell to the other brokers during the effectivity of respondent’s exclusive authority to sell, and withheld respondent’s rightful commission from her.

The appellate court also upheld the award of exemplary damages in the amount of P50,000.00 to set an example for the public good.^[16][15]  It ruled that the exclusive authority to sell granted by petitioner Marina Mudlong to respondent is a valid contract that has the effect of law between the parties, and Mudlong’s wanton breach thereof should not be countenanced lest it set a bad precedent in the community.

However, the appellate court deleted the grant of attorney’s fees by the trial court, as the reasons or grounds therefor were not stated in the body of the decision.^[17][16]

Thereafter, petitioners filed this petition before this Court, raising the following issues:

I

[THE] COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS DISCRETION IN FINDING RESPONDENT AS EXCLUSIVE AGENT/BROKER OF THE PETITIONERS NOTWITHSTANDING EVIDENCE TO THE CONTRARY.

II

[THE] COURT OF APPEALS SERIOUSLY ERRED IN HOLDING EXCLUSIVE APPOINTMENT OF RESPONDENT IN THE AUTHORITY GRANTED, SHALL EXCLUDE OTHER AGENTS OR CO-AGENTS TO A FEE OR COMMISSION, GRANTING ARGUENDO, THAT SAID AUTHORITY REMAINS VALID AND EFFECTIVE AS AGAINST THE PETITIONERS.^[18][17]

Petitioners contend that the Court of Appeals erred in finding respondent as exclusive agent of petitioners despite evidence to the contrary, that is, there were two sets of authority to sell, one notarized, while the other was unnotarized; the unnotarized authority to sell was presented to the buyer, while the notarized authority to sell was presented to the court as the basis for respondent’s action.  According to petitioners, the only authority to sell that should be recognized is the unnotarized authority to sell presented to the buyer, as the said authority played a vital and determining role, without which there could be no meeting of the minds between the buyer and the seller with respect to the sale of the property.

 Petitioners also contend that the Court of Appeals erred in upholding the finding of the trial court that respondent was entitled to the payment of commission by reason of the exclusive nature of the notarized authority to sell granted to respondent, even if respondent was not able to close the sale of the property between petitioners and the buyer.  They argue that the Court of Appeals erred in holding that the presence of the other agents did not detract from the exclusive nature of the authority to sell granted to respondent.      

The main issues raised are: (1) whether or not the notarized exclusive authority to sell granted to respondent is valid; and (2) whether or not respondent is entitled to her broker’s commission.

Under Section 1, Rule 45 of the Rules of Court, providing for appeals by certiorari before the Supreme Court, it is clearly enunciated that only questions of law may be set forth.^[19][18]  The Court may resolve questions of fact only in exceptional cases^[20][19] as follows:

 (1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition, as well as in the petitioner’s main and reply briefs, are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.^[21][20]

Petitioners contend that (1) the Court of Appeals committed errors in its findings of facts as the appellate court delved on speculations; (2) the inferences it made are mistaken or absurd; (3) there was misapprehension of facts; and (4) the facts are conflicting, contrary to the admission of respondent, and contradicted by the evidence on record.

 However, a careful review by this Court of the records of this case would show that the appellate court did not err in its factual findings.  The appellate court correctly stated that respondent was able to prove her case against petitioners by a preponderance of evidence.  It found respondent’s testimony to be credible, positive and supported by documentary evidence.

The validity of the notarized authority to sell which granted respondent exclusive authority to sell the property of Leoncia Manuel for one month, which was reckoned from the date of notarization of the document onMarch 8, 1997, is a factual issue, which had been determined by the trial court and the Court of Appeals with the same finding.  This Court also reviewed the subject authority to sell, and agrees that the Court of Appeals correctly held, thus:

The trial court correctly found that the authority to sell executed by Marinain favor of Leonor was validly executed. First, Leonor’s authority to sell was notarized. Thus, there is a presumption that it had been validly executed. A notarized document has in its favor the presumption of regularity, and can be contradicted only by clear and convincing evidence. Second, while insisting that the authority to sell form had been blank when she signed it, Marina does not deny the genuineness of her signature thereon. Third, the authority to sell presented by Leonor toMarina was a pre-printed form, with the title “Authority to Sell” clearly spelled out on top of the document.  Even if it were true that the details of the form were not yet inserted therein whenMarina signed it, she knew, or should have known, from its title, that she had signed an authority to sell in favor of Leonor. Thus, her having signed it in blank was an implied authorization for Leonor to fill it up according to their agreement. In the absence of clear and convincing evidence thatMarina and Leonor had an agreement different from that appearing in the signed authority to sell, it is presumed that the signed contract embodies their complete and true agreement. The presumption of regularity, the evidentiary weight conferred upon public documents with respect to its execution, as well as the statements and the authenticity of the signatures thereon, therefore, stand.

Since the authority to sell is valid and binding, its terms must be given effect. Under the authority to sell, Marinainstituted Leonor, for 1 month from 8 March 1997, to be the exclusive selling agent of the subject property, with the right to earn a commission equivalent to the difference between Marina’s asking price of P65.00 per square meter and the actual selling price. Since the sale to Chiao Liong Tan was consummated at P90.00 per square meter, and executed on 25 March 1997, within the period of Leonor’s exclusive authority to sell, it follows that she is entitled to a commission of P25.00 per square meter, or a total of P598,975.00.

Moreover, it is beyond cavil that Leonor had worked on the sale of the subject property, as shown by her efforts to have its title reconstituted, to have it surveyed, to pay its real estate taxes, and to secure a tax clearance thereon.Marinacannot deny that Leonor had talked to Chiao Liong Tan and produced the documents that enabled the sale to push through. Without those documents, Chiao Liong Tan would not have purchased the property.

Unfortunately, Leonor was not able to produce all the receipts pertaining to the expenses that she had incurred in relation to the documentation of the subject property. All the same, she is entitled to be reimbursed for those expenses that she was able to prove, in the amount of P669.78.

The presence of the other agents, namely, Rodolfo, Josie, Antonia de Leon, and Lucy Eustaquio does not detract from the exclusive nature of the authority to sell that Marinahad granted to Leonor. As Leonor explained, these other brokers were merely her informants. In fact, from the record, it would appear that these other brokers were not even necessary to the sale, as Chiao Liong Tan had already made up his mind to purchase the property even without their help. As Chiao Liong Tan told Leonor, he only needed to see the documents of the subject property and he was all set to buy it. The fact that Marina also granted the other brokers an authority to sell on 11 March 1997, after she had already constituted Leonor as her exclusive agent on 8 March 1997, and during the validity of Leonor’s exclusive authority to sell, underscores Marina’s bad faith and intentional breach of her contract with Leonor.^[22][21]

The notarized exclusive authority to sell entitles respondent to the amount of commission stated therein, which is the difference between petitioner Marina Mudlong’s asking price of P65.00 per square meter and the actual selling price of P90.00 per square meter. Thus, the difference of P25.00 per square meters multiplied by the land area of 23,959 square meters amounts to the commission of P598,975.00, which amount the Court of Appeals awarded to respondent. The sale of the property was consummated on March 25, 1997 as evidenced by the Deed of Absolute Sale,^[23][22] which date is within the period of respondent’s exclusive authority to sell.  Moreover, the Court of Appeals found that respondent worked on the sale of the property, as she had the title of the property reconstituted, had the property surveyed, paid the real estate taxes, and secured a tax clearance thereon. Further, respondent talked to the buyer, provided the documents he requested, and they even agreed on the selling price of P100.00 per square meter.  However, the buyer later went directly to the owner of the property, and the selling price was lowered to P90.00 per square meter. These circumstances show that the Court of Appeals did not err in affirming the trial court’s decision that respondent was entitled to the payment of her commission for the sale of the subject property within the period of respondent’s exclusive authority to sell.

The unnotarized authority to sell presented to the buyer with a higher asking price of P120.00 was, as the Court of Appeals stated, a selling strategy^[24][23] that already included the commission that respondent would gain from the sale.  Respondent testified that the buyer agreed to the price of P100.00 per square meter.^[25][24]  However, the buyer no longer contacted her and went straight to the seller, and the final selling price agreed upon was P90.00 per square meter.  Hence, contrary to the contention of petitioners, the variation in the unnotarized authority to sell cannot affect the validity of the notarized authority to sell, which is the basis of respondent’s commission.  The alleged revocation of the authority to sell of respondent was not raised in the lower court; hence, it could not be raised for the first time on appeal.^[26][25]     

As regards the informants of respondent, namely, Josie Buluran, the spouses Rodolfo and Doray Santos, and Lucy Eustaquio, respondent testified that they will get their commission from her.^[27][26]    

Factual findings of the Court of Appeals are conclusive on the parties and carry even more weight when the said court affirms the factual findings of the trial court.^[28][27]  The Court has carefully reviewed the records of this case and finds no cogent reason to overturn the finding of the Court of Appeals.

WHEREFORE, the petition is DENIED.  The Decision of the Court of Appeals in CA-G.R. CV No. 64449, dated July 14, 2006, is AFFIRMED.

Costs against petitioners.

SO ORDERED.

DIOSDADO M. PERALTA

                                      Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson

        ROBERTO A. ABAD                      JOSE CATRAL MENDOZA

            Associate Justice                                         Associate Justice

      ESTELA M. PERLAS-BERNABE

                                                  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.

                                                PRESBITERO J. VELASCO, JR.

             Associate Justice

            Third Division, Chairperson

CERTIFICATION

          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.

                                                                   RENATO C. CORONA

                                                                             Chief Justice

CASE 2012-0046: THE INCORPORATORS OF MINDANAO INSTITUTE INC. AND THE BOARD OF TRUSTEES OF MINDANAO INSTITUTE INC., REPRESENTED BY ENGR. VICTORIOSO D. UDARBE VS. 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 (G.R. NO.  171765, MARCH 21, 2012, MENDOZA, J.) SUBJECT/S: WRIT OF PRELINARY INJUNCTION; INHIBITION OF JUDGE (BRIEF TITLE: INCORPORATORS OF MII VS. AGUSAN DISTRICT)

=====================

DISPOSITIVE:

WHEREFORE, the petition is DENIED. The assailed September 30, 2005 Decision and March 1, 2006 Resolution of the Court of Appeals, in CA-G.R. SP No. 79156, are hereby AFFIRMED.

=====================

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

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][1] and the March 1, 2006 Resolution^[2][2] of the Court of Appeals (CA), in CA-G.R. SP No. 79156, which dissolved the Writ of Preliminary Injunction^[3][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][4] filed a Petition for Declaratory Relief with Prayer for a Temporary Restraining Order (TRO) and Preliminary Injunction^[5][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 MI’s properties. They averred that UCCP was unlawfully claiming ownership of MI’s properties.

On June 5, 2003, UCCP filed its Answer with Counterclaim,^[6][6] asserting its ownership of MI’s properties based on certain documents.^[7][7] It claimed that the question of ownership in this case was a settled issue and required no further discourse because “they constitute a majority of the Board of Trustees and, therefore, in complete control thereof x x x.”^[8][8]

On June 10, 2003, the RTC issued a TRO^[9][9] against UCCP reasoning out that MI would suffer grave and irreparable damages if the ownership and possession of its assets and properties would be transferred to UCCP.  The RTC disposed:

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][10]

Meanwhile, UCCP received copies of MI’s Amended Articles of Incorporation^[11][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][12] before the RTC, which was docketed as Civil Case No. 09-2003.  UCCP and MI asserted that the Amendment of MI’s 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][13] of Corporation Code.^[14][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 June 17, 2003, the signatories moved to dismiss^[15][15] the complaint for declaration of nullity of the 2003 Amended AOI. They contended that the SEC, in approving the amendments to the Articles of Incorporation and By-Laws, was exercising its quasi-judicial function and, therefore, a co-equal body of the RTC. Thus, the RTC could not grant any of the reliefs prayed for by UCCP.

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][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, UCCP’s 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][17] dated July 4, 2003, the decretal portion of which states:

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 May 26, 2003, is null and void for being ultra vires. However, at this stage of the proceedings where the action of the Court is generally based on initial and incomplete evidence, the Court cannot just precipitately rule that the amendments were ultra vires acts of the respondents.

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][18]

UCCP moved for a reconsideration but the same was denied by the RTC in its Resolution^[19][19] dated August 15, 2003.

In its Omnibus Order^[20][20] dated August 20, 2003, Judge Doyon inhibited himself from the cases citing the fact that his son’s law firm entered its appearance as collaborating counsel for UCCP.

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 September 30, 2005 Decision, the fallo of which reads:

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][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][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][23]

The MI incorporators, represented by Engr. Udarbe, moved for reconsideration but the motion was denied by the CA in its Resolution dated March 1, 2006.

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][24]

In their Memorandum,^[25][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 Doyon’s 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 Doyon’s 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][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][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 COURT’S 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][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][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][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 Parañaque v. Equitable PCI Bank^[31][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][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][33] When the complainant’s 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][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 MI’s interests by preventing UCCP from unlawfully wresting control of MI’s 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 MI’s 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 Doyon’s 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 October 20 1989 until May 31, 2004, the applicable rule then, reads as follows:

A judge should take no part in a proceeding where the judge’s 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][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 latter’s 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 son’s 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][36]

WHEREFORE, the petition is DENIED. The assailed September 30, 2005 Decision and March 1, 2006 Resolution of the Court of Appeals, in CA-G.R. SP No. 79156, are hereby AFFIRMED.

SO ORDERED. 

                                               JOSE CATRAL MENDOZA

                                                         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 Court’s 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 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.

                                                           RENATO C. CORONA

                                                                   Chief Justice