June 2011 - Philippine Supreme Court Resolutions
Philippine Supreme Court Resolutions
[G.R. No. 191238 : June 08, 2011]
ADERITO Z. YUJUICO, BONIFACIO C. SUMBILLA, AND DOLNEY S. SUMBILLA V. CEZAR T. QUIAMBAO
G.R. No. 191238 (Aderito Z. Yujuico, Bonifacio C. Sumbilla, and Dolney S. Sumbilla v. Cezar T. Quiambao). - Before this Court is a Petition[1] for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, assailing the Decision[2] dated August 25, 2009 and Resolution[3] dated February 10, 2010 of the Court of Appeals (CA) in CA-G.R. No. 106676.
This is not the first time that the parties herein came before this Court. In fact, we rendered our decision in Yujuico v. Quiambao.[4] For purposes of clarity, however, we find it necessary to state the facts before and after we rendered our decision in Yujuico.
Strategic Alliance Development Corporation (STRADEC) is a domestic corporation engaged in the business of providing financial and investment advisory services and investing in projects through consortium or joint venture information. From its inception, STRADEC's principal place of business was located at the 24th Floor, One Magnificent. Mile-Citra Building, San Miguel Avenue, Ortigas Center, Pasig City. On July 27, 1998, the Securities and Exchange Commission (SEC) approved the amendments of STRADEC's Articles of Incorporation, authorizing the change of its principal office from Pasig City to Bayambang, Pangasinan.
On March 1, 2004, STRADEC held its annual stockholders' meeting in its Pasig City office. At the said meeting, the following were elected members of the Board of Directors: Petitioners Aderito Z. Yujuico (Yujuico), Bonifacio C. Sumbilla (Bonifacio), Dolney S. Sumbilla (Dolney), and respondent Cezar T. Quiambao (Quiambao), together with Jose M. Magno III (Magno) and Ma. Christina Ferreros (Ferreros). Aderito Yujuico was elected Treasurer.
On August 16, 2004, Quiambao, Magno, and Ferreros filed before the Regional Trial Court (RTC), Branch 56, San Carlos City, Pangasinan, a Complaint against STRADEC, represented by Yujuico, Bonifacio, and Dolney, as members of its Board of Directors. The complaint prayed that: (1) the March 1, 2004 election be nullified on the ground of improper venue, pursuant to Section 51 of the Corporation Code; (2) all ensuing transactions conducted by the elected directors be likewise nullified; and (3) a special stockholders' meeting be held anew.
Subsequently, Quiambao, et al., filed an Amended Complaint further praying for the issuance of a temporary restraining order (TRO) and/of writ of preliminary injunction to enjoin Yujuico, et al. from discharging their functions as directors and officers of STRADEC.
On September 22, 2004, Quiambao, et al. further filed a Supplemental Complaint praying that the court (I) direct Export Industry Bank and Bonifacio to surrender to them the original and reconstituted Stock and Transfer Book and other corporate documents of STRADEC; and (2) nullify the reconstituted Stock and Transfer Book and all transactions of the corporation.
As the controversy involved an intra-corporate dispute, the trial court, on October 4, 2004, issued an Order, transferring the case to RTC, Branch 48, Urdaneta City, being a designated Special Commercial Court. The case was then re-docketed as Civil (SEC) No. U-14.
Since Branch 48 of RTC, Urdaneta City, had no presiding judge at that time, Judge Meliton G. Emuslan (Judge Emuslan) acted as pairing judge to take cognizance of the case therein until the appointment and assumption of a regular judge.
On November 2, 2004, Yujuico, et al. filed their Answer with Counterclaim, praying for the dismissal of the complaint on the following grounds, among others: (a) the complaint does not state a cause of action; (b) the action is barred by prescription for it was filed beyond the 15-day prescriptive period provided by Section 2, Rule 6 of the Interim Rules and Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799; (c) Quiambao, et al.'s prayer that a special stockholders' meeting be held in Bayambang, Pangasinan, is premature pending the establishment of a principal office of STRADEC in said municipality; and (d) Quiambao, et al. waived their right to object to the venue when they attended and participated in the said March 1, 2004 meeting and election without any protest. Yujuico, et al. likewise opposed the application for a writ of preliminary injunction as Quiambao, et al. allegedly had no right that was violated and entitled to be protected by law.
Meanwhile, Judge Aurelio R. Ralar, Jr. (Judge Ralar) was appointed as presiding judge of RTC, Branch 48, Urdaneta City. Significantly, on November 9, 2004, he took his oath of office, and on November 12, 2004, he assumed his duties, Subsequently, on November 25, 2004, pairing Judge Emuslan still issued an Order granting Quiambao, et al.'s application for preliminary injunction ordering: (1) the holding of a special stockholders' meeting of STRADEC on December 10, 2004 in the principal office of the corporation in Bayambang, Pangasinan; and (2) the turnover by Bonifacio to the court of the duplicate key of the safety deposit box in Export Industry Bank, Shaw Boulevard, Pasig City, where the original Stock and Transfer Book of STRAJDEC was deposited.
In compliance with the November 25, 2004 Order, the court sheriff caused the opening of the safety deposit box of STRADEC in Export Industry Bank, and Quiambao, et al. took custody of its contents.
On December 10, 2004, Yujuico, et al. filed before the CA a Petition jar Certiorari with Prayer for the Issuance of TRO and/or Preliminary Injunction, assailing Judge Emuslan's November 25: 2004 Order.
Meanwhile, on the same day (December 10, 2004), as directed in the November 25, 2004 Order of Judge Emuslan, a special stockholders' meeting of STRADEC was held in Bayambang, Pangasinan, wherein a new set of directors was elected for the term 2004-2005, namely: Cezar Quiambao, Anthony K. Quiambao as Corporate Treasurer; and Albert M. Rasalan as Assistant Corporate Secretary.
On March 31, 2005, the CA dismissed Yujuico, et al.'s Petition for Certiorari; upheld the jurisdiction of the RTC over the controversy; and sustained the validity of Judge Emuslan's Order of November 25, 2004.
Upon denial of their motion for reconsideration, Yujuico, et al. filed a Petition for Review on Certiorari before this Court, docketed as G.R. No. 168639.
On January 29, 2007, this Court in Yujuico reversed the CA, and held that Judge Emuslan's authority, to issue the November 25, 2004 Order ceased when Judge Ralar was appointed as the regular presiding judge of RTC, Branch 48, Urdaneta City, on November 12, 2004.
Even assuming that Judge Emuslan had authority to issue the November 25, 2004 Order granting the writ of preliminary injunction, this Court found that he issued the same with grave abuse of discretion because he did not make a specific and substantial narration of the evidence that established the applicants' clear and unmistakable right to be protected, nor the serious damage or irreparable loss that they would suffer if the writ was not granted.
The Court, moreover, found that in ordering a new corporate election to be held on December 10, 2004, Judge Emuslan impliedly invalidated the March 1, 2004 stockholders' meeting and the ensuing election of the directors and officers of STRADEC. Thus, instead of preserving the status quo, Judge Emuslan's injunctive order prematurely resolved the principal action without a full-blown trial on the merits.
Accordingly, we set aside the November 25, 2004 Order of the RTC and ordered the restoration of "the last actual peaceable uncontested status of the parties (prior] to filing by respondents herein of Civil (SEC) Case No. U-14."
Thus, we disposed in Yujuico:
WHEREFORE, we GRANT the instant petition and REVERSE the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 87785.
The Order dated November 25, 2004 of Judge Meliton O. Emuslan, RTC, Branch 48, Urdaneta City, in Civil (SEC) No. U-14 and the special stockholders" meeting and election held on December 10, 2004 in Bayambang are SET ASIDE.
The last actual peaceable uncontested status of the parties prior to the filing by respondents herein of Civil (SEC) Case No. U-14 is RESTORED.
This case is REMANDED to the RTC, Branch 48, Urdaneta City, for further proceedings with dispatch.
SO ORDERED.[5]
Upon finality of our decision in Yujuico, Yujuico, et al. filed a Motion before the RTC, Brand) 48, Urdaneta City, to implement the restoration of the "last actual peaceable uncontested status" of the parties ordered by this Court. Yujuico, et al. prayed that Quiambao, et al. be directed to (1) desist from holding themselves out as the duly elected directors and/or officers of STRADEC; and (2) turn over all transactions undertaken by Quiambao, et al., which tend to violate or circumvent this Court's decision in Yujuico.[6]
On October 7, 2008, the RTC issued a resolution,[7] holding that the restoration of status quo ante necessarily requires the return of corporate powers and recognition of the directors and officers of STRADEC duly elected prior to the filing of this case. Accordingly, the court a quo directed Quiambao, et al. to (I) turn over to Yujuico, et al. all the corporate records of STRADEC necessary for the conduct of the day to day activities of the company, such as the Stock and Transfer Book, stock certificate book, minute file, corporate seal, accounting records, ledgers, journals, bank passbook, and checks; and (2) refrain from representing themselves as the duly elected directors and officers of STRADEC.
On certiorari, the CA reversed the said RTC resolution, providing as follows:
WHEREFORE, the petition for certiorari is GRANTED. The assailed Resolution, dated 7 October 2008, of the Regional Trial Court, Branch 48, Urdaneta City, Pangasinan, in Civil (SRC) Case No. U-14, is ANNULLED and SET ASIDE.
The composition of the Board of Directors and Officers of Strategic Alliance Development Corporation prior to the 1 March 2004 elections, or that obtaining during the 2003-2004 elections, is RESTORED and ordered to be MAINTAINED during the pendency of the main case.
The records of the case are REMANDED to the Regional Trial Court, Branch 48, Urdaneta City, Pangasinan for further proceedings and reception of evidence.
The Regional Trial Court, Branch 48, Urdaneta City, Pangasinan is DIRECTED to decide the case WITH DISPATCH, in accordance with the mandate of the Supreme Court in Yujuico vs. Ouiambao.
SO ORDERED.[8]
Hence this Petition.
Petitioners submit that the CA committed serious errors of low in granting respondent's petition for certiorari that:
I. THE APPELLATE COURT SERIOUSLY ERRED IN HOLDING THAT THE LAST ACTUAL PEACEABLE UNCONTESTED STATUS OE THE PARTIES PRIOR TO THE FILING BY PETITIONER OF CIVIL (SEC) CASE NO. U-14 WAS THE SITUATION THAT OBTAINED PRIOR TO THE 1 MARCH 2004 STOCKHOLDERS' MEETING;
II. THE TURNOVER OF ALL CORPORATE RECORDS OF STRADEC TO MR. YUJUICO IS IN KEEPING WITH THE SUPREME COURT'S FINAL JUDGEMENT IN G.R. NO. 168639.[9]
The resolution of the present petition hinges on whether or not the RTC was correct in issuing the resolution dated October 7, 2008 supposedly in consonance with our ruling in Yujuico, restoring the status quo.
The petition is bereft of merit.
Status quo is defined as the last actual, peaceful, and uncontested status that precedes the actual controversy, that which is existing at the time of the filing of the case.[10]
In annulling the assailed RTC resolution, the CA. correctly opined, citing Mayor Garcia v. Hon. Mojica,[11] that the last actual peaceable uncontested status of the parties prior to the filing of Civil (SEC) Case No. U-14 would not refer to the result of the election of officers held on March 1, 2004 since that election did not precede the present controversy; it is, in fact, the real controversy. The last actual peaceable uncontested status of the parties prior to the filing of this case would be the composition of STRADEC's directors and officers prior to the March 1, 2004 elections, or that obtaining during the 2003-2004 elections.[12]
Jurisprudence has defined grave abuse of discretion to mean the capricious or whimsical exercise of judgment that is so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.[13] Clearly, the RTC in this case, as found by the CA, gravely abused its discretion when it issued the assailed resolution dated October 7, 2008 supposedly in consonance with the status quo order of this Court in Yujuico. In issuing the October 7, 2008 resolution, the RTC prejudged Civil (SBC) Case No. U-14, without a full-blown trial.
Moreover, it is worth mentioning that in G.R. No. 188864, entitled "Aderito Z. Yujuico v. CITRA Metro Manila Tollways Corporation, Strategic Alliance Development Corporation and Cezar T. Quiambao,� this Court affirmed the decision dated February 2, 2009 of RTC Pasig City, Branch 155, in SCA No. 3034, entitled "CITRA Metro Manila Tollways Corporation v. Strategic Alliance Development Corporation, et al." We denied the petition in G.R. No. 188864 for petitioner's availment of a wrong mode of appeal. In any event, we found therein no reversible error in the assailed decision of the RTC, Pasig City, Branch 155,[14] which stated that: "After a careful evaluation of the arguments raised by the contending parties in support of their respective positions, the Court rules in favor of Cezar T. Quiambao, finding the latter and his group as the lawful and valid representative of STRADEC in all its dealings with plaintiff CMMTC."
In sum, we find no reversible error as to warrant the modification, much less the reversal, of the assailed CA Decision and Resolution.
WHEREFORE, the instant Petition is DENIED and the Court of Appeals Decision dated August 25, 2009 and Resolution dated February 10, 2010 are hereby AFFIRMED. No costs.
SO ORDERED.
Very truly yours,
MA. LUISA L. LAUREA
Clerk of Court
By:
(Sgd.) TERESITA AQUINO TUAZON
Asst. Clerk of Court
Endnotes:
[1] Rollo, pp. 11-35.[2] Penned by Associate Justice Ricardo R. Rosario, with Associate Justices Martin S. Villarama, Jr. (now a member of this Court) and Magdangal M. de Leon, concurring; id. at 38-55.
[3] Id. at 57-58.
[4] G.R. No. 168639, January 29, 2007, 513 SCRA 243.
[5] Id. at 266. (Emphasis supplied.)
[6] Rollo, pp. 279-283.
[7] Id. at 285-286.
[8] Supra note 2, at 54.
[9] Supra note 1, at 23.
[10] Cortez- Estrada v. Heirs of Domingo Samut, 491 Phil. 458, 472 (2005).
[11] 372 Phil. 892 (1999).
[12] Supra note 2, at 51-52.
[13] Land Bank of the Philippines v. Court of Appeals, G.R. No. 129368, August 25, 2003, 409 SCRA 455,481.
[14] Rollo, p. 430.