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Philippine Supreme Court Jurisprudence > Year 2005 > April 2005 Decisions > G.R. No. 146006 - Jose C. Lee, et al. v. Regional Trial Court of Quezon City, Branch 85, et al. :




G.R. No. 146006 - Jose C. Lee, et al. v. Regional Trial Court of Quezon City, Branch 85, et al.

PHILIPPINE SUPREME COURT DECISIONS

THIRD DIVISION

[G.R. NO. 146006. April 22, 2005]

JOSE C. LEE AND ALMA AGGABAO, in their capacities as President and Corporate Secretary, respectively, of Philippine International Life Insurance Company, and FILIPINO LOAN ASSISTANCE GROUP, Petitioners, v. REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 85 presided by JUDGE PEDRO M. AREOLA, BRANCH CLERK OF COURT JANICE Y. ANTERO, DEPUTY SHERIFFS ADENAUER G. RIVERA and PEDRO L. BORJA, all of the Regional Trial Court of Quezon City Branch 85, MA. DIVINA ENDERES claiming to be Special Administratrix, and other persons/public officers acting for and in their behalf, Respondents.

R E S O L U T I O N

CORONA, J.:

For resolution is private respondent Ma. Divina Ortañez-Enderes' omnibus motion to cite petitioners in indirect contempt of Court and for the disbarment and/or imposition of disciplinary sanctions on petitioners' counsel1 for their refusal to comply with the final and executory decision of this Court dated February 23, 2004.

This case began with a petition for letters of administration of the intestate estate of Dr. Juvencio P. Ortañez filed 25 years ago on September 24, 1980. Forming part of the inventory of the estate were 2,029 shares of stock in Philippine International Life Insurance Company (Philinterlife). During the pendency of these proceedings, Juliana, Jose and Rafael (all surnamed Ortañez), the surviving legitimate spouse and legitimate children of the decedent respectively, executed an extrajudicial settlement of the estate, partitioning it (including the Philinterlife shares of stock) among themselves. Thereafter, Juliana and Jose sold the 2,029 shares to the Filipino Loan Assistance Group (FLAG).2

However, private respondent, one of the illegitimate children of the decedent, was in the meantime appointed as special administratrix of the 2,029 Philinterlife shares of stock. When Jose Ortañez filed an omnibus motion seeking the approval of the sale of the shares of stock to FLAG and the release of private respondent as special administratrix, the trial court in its August 11, 1997 order, denied said motion. On August 29, 1997, the intestate court declared the extrajudicial settlement made by Juliana, Jose and Rafael partially void ab initio insofar as the transfer of the Philinterlife shares was concerned. These orders were later upheld by the Court of Appeals (CA) and this Court.

In its order dated July 6, 2000, the intestate court granted the motion for execution filed by private respondent:

WHEREFORE, premises considered, let a writ of execution issue as follows:

1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in the name of the Estate of Dr. Juvencio Ortañez to Filipino Loan Assistance Group (FLAG);

2. Commanding the President and the Corporate Secretary of Philinterlife to reinstate in the stock and transfer book of Philinterlife the 2,029 Philinterlife shares of stock in the name of the Estate of Dr. Juvencio P. Ortañez as the owner thereof without prejudice to other claims for violation of pre-emptive rights pertaining to the said 2,029 Philinterlife shares;

3. Directing the President and the Corporate Secretary of Philinterlife to issue stock certificates of Philinterlife for 2,029 shares in the name of the Estate of Dr. Juvencio P. Ortañez as the owner thereof without prejudice to other claims for violation of pre-emptive rights pertaining to the said 2,029 Philinterlife shares; andcralawlibrary

4. Confirming that only the Special Administratrix, Ma. Divina Ortañez-Enderes, has the power to exercise all the rights appurtenant to the said shares, including the right to vote and to receive dividends;

5. Directing Philinterlife and/or any other person or persons claiming to represent it or otherwise, to acknowledge and allow the said Special Administratrix to exercise all the aforesaid rights on the said shares and to refrain from resorting to any action which may tend (to) directly or indirectly impede, obstruct or bar the free exercise thereof under pain of contempt.

6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or any other person or persons claiming to represent it or otherwise, are hereby directed to comply with this Order within three (3) days from receipt hereof under pain of contempt.

7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to implement the writ of execution with dispatch to forestall any/or further damage to the Estate.

SO ORDERED.3

Unfortunately, however, the writ of execution was not enforced due to the resistance of herein petitioners. To block the execution, petitioners filed before the CA a petition for certiorari , docketed as CA G.R. SP No. 59736, questioning the order of execution, among others. The petition was dismissed outright on July 26, 2000. Petitioners then elevated the case to us. On February 23, 2004, a decision was promulgated by the Third Division of this Court:4

WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals in CA-G.R. S.P. No. 59736 dated July 26, 2000, dismissing petitioners' petition for certiorari and affirming the July 6, 2000 order of the trial court which ordered the execution of its (trial court's) August 11 and 29, 1997 orders, is hereby AFFIRMED.

SO ORDERED.5

On April 27, 2004, petitioners filed an omnibus motion for reconsideration and referral of this case to the en banc allegedly in view of the conflicting rulings of two divisions of the Court. In a resolution dated May 26, 2004, the Court denied the motion for lack of merit:

The Court deliberated on the petitioners' omnibus motion for reconsideration of the decision of February 23, 2004 which denied the Petition for Review on Certiorari . It appears to the Court that the motion merely reiterates the same arguments earlier raised and does not present any substantial reason not previously invoked nor any matter not already considered and passed upon by the Court.

ACCORDINGLY, the Court Resolved to DENY the motion for reconsideration for lack of merit. This denial is FINAL.6

Thus on July 9, 2004, the February 23, 2004 decision became final and executory, and was recorded in the book of entries of judgments. On October 1, 2004, an alias writ of execution was issued by the intestate court (the court of origin). In said writ, the deputy sheriffs were ordered to enforce the August 11 and 29, 1997 and July 6, 2000 orders of the intestate court.

Instead of complying with the writ, petitioners filed on October 15, 2004, a motion to suspend execution/period of compliance by reason of supervening events, raising the following arguments: (1) the intestate court had already revoked the appointment of private respondent as special administratrix; (2) there was a need to lay down the legal procedure in the implementation of the writ and (3) there must be a declaration that the price per share of the 2,029 shares was only P1,000 which was its book value at the time the shares were sold in 1989 and 1991.7

Private respondent went back to this Court and filed this omnibus motion asserting that petitioners "made a travesty of the final and executory decisions of the Lower Courts and this Honorable Court - when they refused to comply with the Alias Writ of Execution issued by the Lower Court."8

Before we discuss the substance of private respondent's motion, we note that attached to it were mere photocopies of the supporting documents and not "certified true copies of documents or papers involved therein" as required by the Rules of Court.9 However, given that the motion was verified and petitioners, who were given a chance to oppose or comment on it, made no objection thereto, we brush aside the defect in form and proceed to discuss the merits of the motion.

Furthermore, as held in Remman Enterprises, Inc. v. CA,10 Section 3, Rule 71 of the Rules of Court outlines the procedural requisites before the accused may be punished for indirect contempt: (1) the filing of a written charge and (2) an opportunity to be heard by himself or counsel. All that the law requires is that there is a charge in writing duly filed in court and an opportunity given to the person charged to be heard by himself or counsel. What is important is that the alleged contemner be granted an opportunity to meet the charges against him and to be heard in his defense.11 Petitioners were given this opportunity; they in fact filed their Opposition.12

Petitioners assert that private respondent engaged in forum-shopping because the latter had previously filed a similar motion in the intestate court. The argument has no merit. The charge for indirect contempt must be filed before the court against which the indirect contempt was committed. Section 4, Rule 71 states:

SEC. 5. Where charge to be filed. 'Where the charge for indirect contempt has been committed against a Regional Trial Court or a court of equivalent or higher rank, or against an officer appointed by it, the charge may be filed with such court. xxx

Hence, the charge for indirect contempt for disobedience to our February 23, 2004 decision was correctly brought to us. As we explained in the case of Igot v. Court of Appeals:

In whatever context it may arise, contempt of court involves the doing of an act, or the failure to do an act, in such a manner as to create an affront to the court and the sovereign dignity with which it is clothed. As a matter of practical judicial administration, jurisdiction has been felt to properly rest in only one tribunal at a time with respect to a given controversy. Only the court which rendered the order commanding the doing of a certain act is vested with the right to determine whether or not the order has been complied with, or whether a sufficient reason has been given for noncompliance, and, therefore, whether a contempt has been committed. It is a well-established rule that the power to determine the existence of contempt of court rests exclusively with the court contemned. No court is authorized to punish a contempt against another.

The rationale that is usually advanced for the general rule ... is that, contempt proceedings are sui generis and are triable only by the court against whose authority the contempts are charged; the power to punish for contempt exists for the purpose of enabling a court to compel due decorum and respect in its presence and due obedience to its judgments, orders and processes and in order that a court may compel obedience to its orders, it must have the right to inquire whether there has been any disobedience thereof, for to submit the question of disobedience to another tribunal would operate to deprive the proceeding of half its efficiency.13

We now proceed to the merits of the motion to cite for indirect contempt and for imposition of disciplinary sanctions.

The private respondent alleges that the following acts of the petitioners constituted indirect contempt under Section 3, Rule 71 of the Rules of Court: (1) petitioners' failure to comply with the alias writ of execution served upon them on October 12, 2004 and (2) their act of filing a patently baseless motion (to suspend execution/period of compliance by reason of supervening events) which was obviously intended to defeat the implementation of the final and executory decision of this Court.

On the other hand, petitioners allege that the immediate execution of the subject decision would be inequitable and should be suspended pending an order of clarification of certain matters. According to them, the certificates of the shares of stock were turned over to the intestate court and not to private respondent because her appointment as special administratrix had already been revoked by the court.

Petitioners' obstinate refusal to abide by this Court's February 23, 2004 decision demonstrates a contumacious attitude which this Court cannot countenance. This contumacy becomes all the more glaring because of the strongly worded admonition in our decision that "(p)etitioners and all parties claiming rights under them are hereby warned not to further delay the execution of the Orders of the intestate court dated August 11 and August 29, 1997."14 The previously quoted July 6, 2000 order of the intestate court, which was affirmed by this Court, also contained the following directives:

x x x

5. Directing Philinterlife and/or any other person or persons claiming to represent it or otherwise, to acknowledge and allow the said Special Administratrix to exercise all the aforesaid rights on the said shares and to refrain from resorting to any action which may tend (to) directly or indirectly impede, obstruct or bar the free exercise thereof under pain of contempt.

6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or any other person or persons claiming to represent it or otherwise, are hereby directed to comply with this Order within three (3) days from receipt hereof under pain of contempt.

7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to implement the writ of execution with dispatch to forestall any/or further damage to the Estate.

SO ORDERED.15 (Emphasis supplied)ςrαlαωlιbrαrÿ

Clearly, petitioners' defiant non-compliance with these directives, as proved by the sheriff's report dated October 13, 2004, constituted indirect contempt. The pertinent portion of this report stated:

That on October 12, 2004, when Sheriff Borja went to the Philenterlife (sic) Office to check whether there was already compliance with the Alias Writ of Execution, one of their staff told Sheriff Borja that Mr. Jose Lee wanted to talk with Sheriff Borja over the Telephone. In their telephone conversation, Mr. Jose Lee told Sheriff Borja that he had already consulted his lawyer regarding the matter.

WHEREFORE, we respectfully submit this report to the Honorable Court with the information that up to this writing, Philenterlife (sic) has not submitted their compliance to the Sheriff or to the Court.16

Petitioners' act of filing their motion to suspend execution/period of compliance by reason of supervening events also showed their continuing, stubborn resistance to this Court's judgment. Indeed, one of the exceptions to the principle of immutability of final judgments is the existence of supervening events. Supervening events refer to facts which transpire after judgment has become final and executory or to new circumstances which develop after the judgment has acquired finality.17

The private respondent alleges that the revocation of her appointment as special administratrix was made by the intestate court in its May 12, 2003 and September 4, 2003 orders.18 This is not disputed by the petitioners. In short, this fact already existed before the decision of this Court was promulgated on February 23, 2004 and before it became final and executory on July 9, 2004. Therefore, the revocation of the appointment of private respondent as special administratrix was evidently not a supervening event.

Furthermore, this issue had already been raised in petitioners' motion for reconsideration19 of this Court's February 23, 2004 decision and passed upon by the Court in its resolution dated May 26, 2004 denying the motion for lack of merit. Likewise, the increase in the value of the shares from P1,000 to P4,000 was also raised in the same motion for reconsideration.20 The Court stated that "the motion merely reiterate(d) the same arguments earlier raised and (did) not present any substantial reason not previously invoked nor any matter not already considered and passed upon by the Court."21

Petitioners insist that there must be an order laying down the legal procedure for the implementation of the writ, which implementation did not include taking over the management of Philinterlife and obtaining possession of office premises. We disagree. The execution should not be suspended for that reason.

Our February 23, 2004 ruling categorically stated that the estate of Dr. Juvencio P. Ortañez was the lawful owner of 2,029 Philinterlife shares. As lawful owner of the Philinterlife shares, the estate can exercise all the rights of ownership, including the right to vote the shares. If, by voting the shares, the estate is able to elect its own representatives who succeed in attaining management control of Philinterlife, then let it be as such would be a legitimate consequence of our February 23, 2004 decision.

We call particular attention to the fact that in our February 23, 2004 decision, we noted that petitioners, with the rest of the FLAG-controlled directors and stockholders, increased the authorized capital stock of Philinterlife, diluting in the process the 2,029 shares of the estate22 representing 50.725% of Philinterlife. We observed that this was obviously calculated to make it difficult for the estate to reassume its controlling interest in Philinterlife. Thus, we ruled that, considering the nullity of the sale of the 2,029 shares to FLAG, the increase in Philinterlife's authorized capital stock was void ab initio.23 Consequently, any approval by the Securities and Exchange Commission of this increase would likewise be void ab initio.

Moreover, the directives to petitioners Jose C. Lee and Alma Aggabao, as president and corporate secretary, respectively, of Philinterlife, were sufficiently clear and needed absolutely no clarification in order to exact their compliance thereto. Since the nullity of the sale of the 2,029 Philinterlife shares to FLAG had been confirmed, they were ordered to:

(1) reinstate the shares in the name of the estate in the stock and transfer book;

(2) issue stock certificates in the name of the estate;

(3) acknowledge and allow the special administratrix to exercise all the rights appurtenant to the shares;

(4) refrain from resorting to any action which may tend to directly or indirectly impede, obstruct or bar the free exercise of these rights and

(5) comply with the order within three days from receipt.

The first two directives were undoubtedly covered by the duties and functions of the corporate secretary and president of a corporation. The next two ordered them not to resist the writ and the last directive provided a period for their compliance. Given the foregoing, there was never any need to clarify the procedure for the implementation of the writ.

Pertinent portions of Section 3, Rule 71 of the Rules of Court read:

Sec. 3. Indirect contempt to be punished after charge and hearing. 'After a charge in writing has been filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt:

x x x

(b) Disobedience of or resistance to a lawful writ, process, order or judgment of a court xxx

(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct contempt xxx

(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice;

x x x

In the recent case of Heirs of Trinidad de Leon vda. de Roxas v. Court of Appeals, we explained the concept of contempt of court:

Contempt of court is a defiance of the authority, justice or dignity of the court; such conduct as tends to bring the authority and administration of the law into disrespect or to interfere with or prejudice parties litigant or their witnesses during litigation (12 Am. Jur. 389, cited in 14 SCRA 813).

Contempt of court is defined as a disobedience to the Court by acting in opposition to its authority, justice and dignity. It signifies not only a willful disregard or disobedience of the court's orders, but such conduct as tends to bring the authority of the court and the administration of law into disrepute or in some manner to impede the due administration of justice (17 C.J.S. 4).

This Court has thus repeatedly declared that the power to punish for contempt is inherent in all courts and is essential to the preservation of order in judicial proceedings and to the enforcement of judgments, orders and mandates of the court, and consequently, to the due administration of justice (Slade Perkins v. Director of Prisons, 58 Phil. 271; In re Kelly, 35 Phil. 944; Commissioner of Immigration v. Cloribel, 20 SCRA 1241; Montalban v. Canonoy, 38 SCRA 1).24

Petitioners' disobedience to this Court's judgment is an affront to the Court and the dignity with which it is clothed. Their attempt to raise issues already laid to rest by a final and executory judgment of no less than the highest tribunal of the land constitutes a disrespectful and insolent defiance of the authority of this Court and impedes the speedy administration of justice.25 As mentioned in the beginning of this Resolution, this controversy has been pending for 25 long years already. Apparently, petitioners want to prolong it to eternity.

In Sacdalan v. Court of Appeals, we said:

Well-settled is the principle that a decision that has acquired finality becomes immutable and unalterable and may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact or law and whether it will be made by the court that rendered it or by the highest court of the land.

The reason for this is that litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be not deprived of the fruits of the verdict. Courts must guard against any scheme calculated to bring about that result and must frown upon any attempt to prolong the controversies.

The only exceptions to the general rule are the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party, void judgments, and whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable.26

This case does not fall under any of the recognized exceptions. Moreover, the immutability of the February 23, 2004 decision is all the more emphasized in this case since it is this Court, the highest Court of the land and final arbiter of all legal controversies, that promulgated it. Thus, petitioners are bound by the finality of our decision and cannot, under the guise of a phony motion to suspend execution/period of compliance by reason of supervening events, reopen a case already decided with finality. Nor should they be permitted to litigate anew questions or issues already laid to rest.

The fact is that virtually the same issues have been elevated to this Court no less than three times: in G.R. NOS. 128525, 135177 and 146006. Private respondent obtained a writ of execution in 2000 but her attempt to enforce the writ was unsuccessful. After our February 23, 2004 decision became final and executory, she obtained an alias writ of execution on October 1, 2004 but the petitioners again managed to frustrate her efforts to execute the decision and torpedo its enforcement.

As we ruled in Beautifont, Inc. v. Court of Appeals:

'Considerable time has already elapsed and, to serve the ends of justice, it is time that [the] controversy is finally laid to rest. "Sound practice seeks to accommodate the theory which avoids waste of time, effort and expense, both to the parties and the government, not to speak of delay in the disposal of the case. A marked characteristic of our judicial set-up is that where the dictates of justice so demand ... the Supreme Court should act, and act with finality." In this case, the dictates of justice do demand that this Court act, and act with finality.27

This Court is becoming impatient with the devious tricks and maneuvers of petitioners.

Section 7, Rule 71 of the Rules of Court penalizes indirect contempt as follows:

Sec. 7. Punishment for indirect contempt. 'If the respondent is adjudged guilty of indirect contempt committed against a Regional Trial Court or a court of equivalent or higher rank, he may be punished by a fine not exceeding thirty thousand pesos or imprisonment not exceeding six (6) months or both. xxx

Petitioners Jose C. Lee and Alma Aggabao, for their defiance and resistance to the October 1, 2004 alias writ of execution enforcing this Court's February 23, 2004 decision ― resulting in the frustration of its execution ― are hereby adjudged guilty of indirect contempt.

Finally, with regard to the administrative charge against petitioners' counsel, Atty. Teodorico Fernandez, pursuant to paragraph 2, Section 1, Rule 139-B of the Rules of Court, this Court resolves to refer it to the Commission on Bar Discipline of the Integrated Bar of the Philippines for investigation, report and recommendation.

WHEREFORE, petitioners Jose C. Lee and Alma Aggabao, president and corporate secretary, respectively, of petitioner Philippine International Life Insurance Company, are hereby found GUILTY of INDIRECT CONTEMPT for which the maximum FINE of P30,000 is hereby imposed on each of them, payable in full within five days from receipt of this resolution. They are furthermore given a final non-extendible period of five days from receipt of this resolution within which to comply within our decision and orders as aforementioned. Petitioners are hereby warned not to file any more pleadings in connection herewith. Failure to comply with our decision, orders and P30,000 fine within the five-day period will subject them to imprisonment till full compliance.

In view hereof, petitioners' counsel, Atty. Teodorico Fernandez, is likewise strongly warned to refrain from any further attempts to make a mockery of our judicial processes.

SO ORDERED.

Panganiban, (Chairman), Carpio-Morales and Garcia, JJ., concur.

Sandoval-Gutierrez, J., no part.

Endnotes:


1 Rollo, p. 830.

2 FLAG, together with Jose C. Lee and Alma Aggabao, its president and corporate secretary respectively, are the petitioners herein.

3 Rollo, pp. 47-48.

4 Penned by Associate Justice Renato C. Corona and concurred in by Associate Justices Jose C. Vitug (retired) and Conchita Carpio Morales. Justice Angelina Sandoval-Gutierrez took no part.

5 Rollo, pp. 777-778.

6 Id., p. 816.

7 Id., pp. 855-856.

8 Id., p. 836.

9 Rule 71, Sec. 4.

10 335 Phil. 1150 (1997).

11 Id., p. 1159, citing Castaños v. Judge Escaño, Jr., 321 Phil. 527, 553-554 (1995); Gavieres v. Falcis, G.R. No. 62380, 7 February 1991, 193 SCRA 649,, in turn citing People v. Venturanza, et al., 98 Phil. 211 (1956); Santos v. Court of First Instance of Cebu, Branch VI, G.R. NOS. 57190-91, 18 May 1990, 185 SCRA 472,.

12 Rollo, pp. 919-928.

13 G.R. No. 150794, 17 August 2004, citing San Luis v. CA, et al., 417 Phil. 599 (2001).

14 Rollo, p. 777.

15 Supra at note 3.

16 Rollo, p. 853.

17 Natalia Realty, Inc. v. Court of Appeals, G.R. No. 126462, 12 November 2002, 391 SCRA 370, 387, citing Clavano v. Housing and Land Use Regulatory Board, G.R. No. 143781, 27 February 2002, 378 SCRA 172.

18 Rollo, p. 836.

19 Id., p. 810.

20 Id. p. 811-812. Specifically, petitioners alleged that in 1980, the fair market value of each share of stock was only P1,791.91. In 2003, this increased to P3,914.21; Rollo, p. 811.

21 Supra at note 6.

22 Rollo, p. 753.

23 Id., p. 771.

24 G.R. No. 138660, 5 February 2004, 422 SCRA 101, 114-115, citing Halili, et al. v. CIR, et al., 220 Phil. 507 (1985).

25 Id., citing People v. Godoy, 312 Phil. 977 (1995) and Pacquing v. Court of Appeals, 200 Phil. 516 (1982).

26 G.R. No. 128967, 20 May 2004, 428 SCRA 586, 599, citing Philippine Veterans Bank v. Estrella, G.R. No. 138993, 27 June 2003, 405 SCRA 168 and Salva v. Court of Appeals, 364 Phil. 284 (1999).

27 G.R. No. 50141, 29 January 1988, 157 SCRA 481, 494, citations omitted.




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