Republic of the PhilippinesSupreme Court

Manila 

FIRST DIVISION  PETRONILO J. BARAYUGA,                         Petitioner,                            -versus-    ADVENTIST UNIVERSITY OF THE PHILIPPINES, THROUGH ITS BOARD OF TRUSTEES, REPRESENTED BY ITS CHAIRMAN, NESTOR D. DAYSON,

               Respondents.

        G.R. No. 168008  

        Present: 

    CORONA, C.J., Chairperson,    LEONARDO-DE CASTRO,    BERSAMIN,    DEL CASTILLO, and    VILLARAMA, JR., JJ.

         Promulgated:         August 17, 2011

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 D E C I S I O N

 

BERSAMIN, J:

 

          The injunctive relief protects only a right in esse. Where the plaintiff does

not demonstrate that he has an existing right to be protected by injunction, his suit

for injunction must be dismissed for lack of a cause of action.

 

The dispute centers on whether the removal of the petitioner as President of

respondent Adventist University of the Philippines (AUP) was valid, and whether

his term in that office was five years, as he insists, or only two years, as AUP

insists.

 

We hereby review the decision promulgated on August 5, 2004,[1] by which

the Court of Appeals (CA) nullified and set aside the writ of preliminary injunction

issued by the Regional Trial Court (RTC), Branch 21, in Imus, Cavite to prevent

AUP from removing the petitioner.

         

Antecedents

 

          AUP, a non-stock and non-profit domestic educational institution

incorporated under Philippine laws on March 3, 1932, was directly under the North

Philippine Union Mission (NPUM) of the Southern Asia Pacific Division of the

Seventh Day Adventists. During the 3rd Quinquennial Session of the General

Conference of Seventh Day Adventists held from November 27, 2000 to December

1, 2000, the NPUM Executive Committee elected the members of the Board of

Trustees of AUP, including the Chairman and the Secretary.  Respondent Nestor

D. Dayson was elected Chairman while the petitioner was chosen Secretary.

 

          On January 23, 2001, almost two months following the conclusion of the

3rd Quinquennial Session, the Board of Trustees appointed the petitioner President

of AUP.[2] During his tenure, or from November 11 to November 13, 2002, a group

from the NPUM conducted an external performance audit. The audit revealed the

petitioner’s autocratic management style, like making major decisions without the

approval or recommendation of the proper committees, including the Finance

Committee; and that he had himself done the canvassing and purchasing of

materials and made withdrawals and reimbursements for expenses without valid

supporting receipts and without the approval of the  Finance Committee. The audit

concluded that he had

 

committed serious violations of fundamental rules and procedure in the

disbursement and use of funds. 

 

The NPUM Executive Committee and the Board of Trustees decided to

immediately request the services of the General Conference Auditing Service

(GCAS) to determine the veracity of the audit findings. Accordingly, GCAS

auditors worked in the campus from December 4 to December 20, 2002 to review

the petitioner’s transactions during the period from April 2002 to October 2002.

On December 20, 2002, CGAS auditors reported the results of their review, and

submitted their observations and recommendations to the Board of Trustees.

 

          Upon receipt of the CGAS report that confirmed the initial findings of the

auditors on January 8, 2003, the NPUM informed the petitioner of the findings and

required him to explain.

 

          On January 15, 2003, Chairman Dayson and the NPUM Treasurer likewise

informed the petitioner inside the NPUM office on the findings of the auditors in

the presence of the AUP Vice-President for Financial Affairs, and reminded him of

the possible consequences should he fail to satisfactorily explain the irregularities

cited in the report.  He replied that he had already prepared his written explanation.

 

The Board of Trustees set a special meeting at 2 p.m. on January 22,

2003.  Being the Secretary, the petitioner himself prepared the agenda and included

an item on his case.  In that meeting, he provided copies of the auditors’ report and

his answers to the members of the Board of Trustees.  After hearing his

explanations and oral answers to the questions raised on issues arising from the

report, the members of the Board of Trustees requested him to leave to allow them

to analyze and evaluate the report and his answers.  Despite a long and careful

deliberation, however, the members of the Board of Trustees decided to adjourn

that night and to set another meeting in the following week considering that the

meeting had not been specifically called for the purpose of deciding his case. The

adjournment would also allow the Board of Trustees more time to ponder on the

commensurate disciplinary measure to be meted on him.

 

          On January 23, 2003, Chairman Dayson notified the petitioner in writing that

the Board of Trustees would hold in abeyance its deliberation on his answer to the

auditors’ report and would meet again at 10:00 a.m. on January 27, 2003.

Chairman Dayson indicated that some sectors in the campus had not been properly

represented in the January 22, 2003 special meeting, and requested the petitioner as

Secretary to ensure that all sectors are duly represented in the next meeting of the

Board of Trustees.[3]

 

          In the January 27, 2003 special meeting, the petitioner sent a letter to the

Board of Trustees. The members, by secret ballot, voted to remove him as

President because of his serious violations of fundamental rules and procedures in

the disbursement and use of funds as revealed by the special audit; to appoint an

interim committee consisting of three members to assume the powers and functions

of the President; and to recommend him to the NPUM for consideration as

Associate Director for Secondary Education.[4]

 

          On January 28, 2003, the petitioner was handed inside the NPUM office a

letter, together with a copy of the minutes of the special meeting held the previous

day. In turn, he handed to Chairman Dayson a letter requesting two weeks within

which to seek a reconsideration, stating that he needed time to obtain supporting

documents because he was then attending to his dying mother.[5] 

 

In the evening of January 28, 2003, the Board of Trustees, most of whose

members had not yet left Cavite, reconvened to consider and decide the petitioner’s

request for reconsideration. During the meeting, he made an emotional appeal to

allow him to continue as President, promising to immediately vacate his office

should he again commit any of the irregularities cited in the auditors’ report. He

added that should the Board of Trustees not favor his appeal, he would settle for a

retirement package for him and his wife and would leave the church. 

 

The Board of Trustees denied the petitioner’s request for reconsideration

because his reasons were not meritorious. Board Member Elizabeth Role served

the notice of the denial on him the next day, but he refused to receive the notice,

simply saying Alam ko na yan.[6]  

 

The petitioner later obtained a copy of the inter-school memorandum dated

January 31, 2003 informing AUP students, staff, and faculty members about his

relief as President and the appointment of an interim committee to assume the

powers and duties of the President.

 

          On February 4, 2003, the petitioner brought his suit for injunction and

damages in the RTC, with prayer for the issuance of a temporary restraining order

(TRO), impleading AUP and its Board of Trustees, represented by Chairman

Dayson, and the interim committee. His complaint alleged that the Board of

Trustees had relieved him as President without valid grounds despite his five-year

term; that the Board of Trustees had thereby acted in bad faith; and that his being

denied ample and reasonable time to present his evidence deprived him of his right

to due process.[7]

 

          The suit being intra-corporate and summary in nature, the application for

TRO was heard by means of affidavits.  In the hearing of February 7, 2003, the

parties agreed not to harass each other. The RTC used the mutual agreement as its

basis to issue a status quo order on February 11, 2003.[8]

 

          In their answer with counterclaim, the respondents denied the allegations of

the petitioner, and averred that he had been validly removed for cause; and that he

had been granted ample opportunity to be heard in his defense.[9]

         

Order of the RTC

 

On March 21, 2003, after summary hearing, the RTC issued the TRO

enjoining the respondents and persons acting for and in their behalf from

implementing the resolution removing him as President issued by the Board of

Trustees during the January 27, 2003 special meeting, and enjoining the interim

committee from performing the functions of President of AUP.  The RTC did not

require a bond.[10]

 

After further hearing, the RTC issued on April 25, 2003 its controversial

order,[11] granting the petitioner’s application for a writ of preliminary injunction. It

thereby resolved three issues, namely: (a) whether the special board meetings were

valid; (b) whether the conflict-of-interest provision in the By-Laws and Working

Policy was violated; and (c) whether the petitioner was denied due process. It

found for the petitioner upon all the issues. On the first issue, it held that there was

neither a written request made by any two  members of the Board of Trustees nor

proper notices sent

 

to the members as required by AUP’s By-Laws, which omissions, being patent

defects, tainted the special board meetings with nullity. Anent the second issue, it

ruled that the purchase of coco lumber from his balae (i.e., mother-in-law of his

son) was not covered by the conflict-of-interest provision, for AUP’s Model

Statement of Acceptance form mentioned only the members of the immediate

family and did not extend to the relationship between him and his balae. On the

third issue, it concluded that he was deprived of due process when the Board of

Trustees refused to grant his motion for reconsideration and his request for

additional time to produce his evidence, and instead immediately implemented its

decision by relieving him from his position without according him the treatment

befitting a university President.

 

 

Proceedings in the CA

 

          With the Interim Rules for Intra-Corporate Controversies prohibiting a

motion for reconsideration, the respondents forthwith filed a petition

for certiorari in the CA,[12] contending that the petitioner’s complaint did not meet

the requirement that an injunctive writ should be anchored on a legal right; and that

he had been merely appointed, not elected, as President for a term of office of only

two years, not five years, based on AUP’s amended By-Laws.

 

          In the meanwhile, on September 17, 2003, the petitioner filed a supplemental

petition in the CA,[13] alleging that after the commencement of his action, he filed in

the RTC an urgent motion for the issuance of a second TRO to enjoin the holding

of an AUP membership meeting and the election of a new Board of Trustees,

capitalizing on the admission in the respondents’ answer that he had been elected

in 2001 to a five-year term of office. He argued that the admission estopped the

respondents from insisting to the contrary.

 

          The respondents filed in the CA a verified urgent motion for a TRO and to

set a hearing on the application for preliminary injunction to enjoin the RTC from

implementing the assailed order granting a writ of preliminary injunction and from

further proceeding in the case. The petitioner opposed the motion for TRO, but did

not object to the scheduling of preliminary injunctive hearings.

 

          On February 24, 2004, the CA issued a TRO to enjoin the RTC from

proceeding for a period of 60 days, and declared that the prayer for injunctive relief

would be resolved along with the merits of the main case.

 

The petitioner sought a clarification of the TRO issued by the CA,

considering that his cause of action in his petitions to cite the respondents in

indirect contempt dated March 5, 2004 and March 16, 2004 filed in the RTC

involved the election of a certain Robin Saban as the new President of AUP in

blatant and malicious violation of the writ of preliminary injunction issued by the

RTC.  In clarifying the TRO, the CA explained that it did not go beyond the reliefs

prayed for in the respondents’ motion for TRO and preliminary injunctive

hearings.

 

On August 5, 2004, the CA rendered its decision nullifying the RTC’s writ

of preliminary injunction. It rejected the petitioner’s argument that Article IV,

Section 3 of AUP’s Constitution and By-Laws and Working Policy of the

Conference provided a five-year term for him, because the provision was

inexistent. It ruled that the petitioner’s term of office had expired on January 22,

2003, or two years from his appointment, based on AUP’s amended By-Laws; that,

consequently, he had been a mere de facto officer appointed by the members of the

Board of Trustees; and that he held no legal right warranting the issuance of the

writ of preliminary injunction.

 

The CA declared that the rule on judicial admissions admitted of exceptions,

as held in National Power Corporation v. Court of Appeals,[14] where the Court held

that admissions were not evidence that prevailed over documentary proof;  that the

petitioner’s being able to answer the results of the special audit point-by-point

belied his allegation of denial of due process; that AUP was the party that stood to

be injured by the issuance of the injunctive writ in the form of a “demoralized

administration, studentry, faculty and staff, sullied reputation, and dishonest

leadership;” and that the assailed RTC order sowed confusion and chaos because

the RTC thereby chose to subordinate the interest of the entire AUP community to

that of the petitioner who had been deemed not to have satisfied the highest ideals

required of his office.           

 

Issues

 

Undeterred, the petitioner has appealed, contending that:

 I.

THE COURT OF APPPEALS HAS DECIDED CONTRARY TO LAW AND JURISPRUDENCE WHEN IT RULED THAT THE EXTRAORDINARY WRIT OF CERTIORARI APPLIED IN THE CASE AT BAR. 

II.THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH THE ESTABLISHED LAW AND JURISPRUDENCE THAT “ADMISSIONS, VERBAL OR WRITTEN, MADE BY A PARTY IN THE COURSE OF THE PROCEEDINGS IN THE SAME CASE, DOES NOT REQUIRE PROOF,” BY REQUIRING PETITIONER BARAYUGA TO PRESENT EVIDENCE THAT HIS TERM AS PRESIDENT OF AUP IS FOR FIVE (5) YEARS.  

III.THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED FACTS WHEN IT RULED THAT PETITIONER BARAYUGA HAS ONLY A TERM OF TWO (2) YEARS INSTEAD OF FIVE (5) YEARS AS CLEARLY ADMITTED BY PRIVATE RESPONDENT AUP IN ITS ANSWER. 

IV.THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND JURISPRUDENCE BY SOLELY RELYING ON THE CASE OF NATIONAL POWER CORPORATION v. COURT OF APPEALS, WHICH INVOLVE FACTS DIFFERENT FROM THE PRESENT CASE. 

V.THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED FACTS WHEN IT UNJUSTIFIABLY ALLOWED THE WAIVER OF NOTICE FOR THE SPECIAL MEETING OF THE BOARD OF TRUSTEES.

 VI.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED FACTS WHEN IT ERRONEOUSLY CONCLUDED THAT PETITIONER BARAYUGA WAS MERELY OCCUPYING THE POSITION OF AUP PRESIDENT IN A HOLD-OVER CAPACITY.

         

 

          The petitioner argues that the assailed RTC order, being supported by

substantial evidence, accorded with law and jurisprudence; that his tenure as

President under the Constitution, By-Laws and the Working Policy of the

Conference was for five years, contrary to the CA’s findings that he held the

position in a hold-over capacity; that instead, the CA should have applied the rule

on judicial admission, because the holding in National Power Corporation v. Court

of Appeals, cited by the CA, did not apply, due to AUP not having presented

competent evidence to prove that he had not been elected by the Board of Trustees

as President of AUP; and that his removal during the special board meeting that

was invalidly held for lack of notice denied him due process.

 

 

 

AUP counters that:

 I

PETITIONER IS NOT AN ELECTED TRUSTEE OF THE AUP BOARD, NOR WAS (HE) ELECTED AS PRESIDENT, AND AS SUCH, HE CAN CLAIM NO RIGHT TO THE AUP PRESIDENCY, BEING TWICE DISQUALIFIED BY LAW, WHICH RENDERS MOOT AND ACAMEDIC ALL OF THE ARGUMENTS IN THIS PETITION.

 II

EVEN IF WE FALSELY ASSUME EX GRATIA THAT PETITIONER IS AN ELECTED TRUSTEE AND ELECTED PRESIDENT, THE TWO (2) YEAR TERM PROVIDED IN AUP’S BY-LAWS – REQUIRED BY THE CORPORATION CODE AND APPROVED BY THE SEC – IS WHAT GOVERNS THE INTRA-CORPORATE CONTROVERSY, THE AUP’S ADMISSION IN ITS ANSWER THAT HE HAS A FIVE (5) YEAR TERM BASED ON HIS INVOKED SAMPLE CONSTITUTION, BY-LAWS AND POLICY OF THE SEVENTH DAY ADVENTIST NOTWITHSTANDING. 

IIIPURSUANT TO THE RULES AND SETTLED JURISPRUDENCE, THE ADMISSION IN THE ANSWER IS NOT EVEN PREJUDICIAL AT ALL. 

IVEVEN IF WE FALSELY ASSUME, JUST FOR THE SAKE OF ARGUMENT, THAT THE PETITIONER HAD A FIVE (5) YEAR TERM AS UNIVERSITY PRESIDENT, HE WAS NONETHELESS VALIDLY TERMINATED FOR LOSS OF CONFIDENCE, GIVEN THE NUMEROUS ADMITTED ANOMALIES HE COMMITTED. 

VPETITIONER CANNOT COMPLAIN THAT NOTICES OF THE BOARD MEETING WERE NOT SENT TO ALL “THE TWENTY FIVE (25) TRUSTEES OF THE AUP BOARD”, SINCE: [1] AS THE AUP SECRETARY, IT WAS HE WHO HAD THE DUTY TO SEND THE NOTICES; [2] WORSE, HE ATTENDED AND EXHAUSTIVELY DEFENDED HIS WRITTEN ANSWER IN THE AUP BOARD OF TRUSTEES MEETING, THUS, WAIVING ANY “NOTICE OBJECTION”; [3] WORST OF ALL, HIS AFTERTHOUGHT OBJECTION IS DECEPTIVELY FALSE IN FACT.

 

 

The decisive question is whether the CA correctly ruled that the petitioner

had no legal right to the position of President of AUP that could be protected by

the injunctive writ issued by the RTC.

 

 

Ruling

 We deny the petition for review for lack of merit.

 1.

Petition is already moot

 

The injunctive writ issued by the RTC was meant to protect the petitioner’s

right to stay in office as President. Given that the lifetime of the writ of preliminary

injunction was co-extensive with the duration of the act sought to be prohibited,

[15] this injunctive relief already became moot in the face of the admission by the

petitioner himself, through his affidavit,[16] that his term of office premised on his

alleged five-year tenure as President had lasted only until December 2005. In short,

the injunctive writ granted by the RTC had expired upon the end of the term of

office (as posited by him).

 

The mootness of the petition warranted its denial. When the resolution of the

issue submitted in a case has become moot and academic, and the prayer of the

complaint or petition, even if granted, has become impossible of enforcement – for

there is nothing more to enjoin – the case should be dismissed.[17]  No useful

purpose would then be served by passing on the merits of the petition, because any

ruling could hardly be of any practical or useful purpose in the premises.  It is a

settled rule that a court will not determine a moot question or an abstract

proposition, nor express an opinion in a case in which no practical relief can be

granted.[18]Indeed, moot and academic cases cease to present any justiciable

controversies by virtue of supervening events,[19] and the courts of law will not

determine moot questions,[20] for the courts should not engage in academic

declarations and determine a moot question.[21]

 2.

RTC acted in patently grave abuse of discretionin issuing the TRO and writ of injunction

 

Nonetheless, the aspect of the case concerning the petitioner’s claim for

damages has still to be decided. It is for this reason that we have to resolve whether

or not the petitioner had a right to the TRO and the injunctive writ issued by the

RTC.

 

A valid writ of preliminary injunction rests on the weight of evidence

submitted by the plaintiff establishing: (a) a present and unmistakable right to be

protected; (b) the acts against which the injunction is directed violate such right;

and (c) a special and paramount necessity for the writ to prevent serious damages.

[22] In the absence of a clear legal right, the issuance of the injunctive writ

constitutes grave abuse of discretion[23] and will result to nullification

thereof.  Where the complainant’s right is doubtful or disputed, injunction is not

proper. The possibility of irreparable damage sans proof of an actual existing right

is not a ground for a preliminary injunction.[24]

 

It is clear to us, based on the foregoing principles guiding the issuance of the

TRO and the writ of injunction, that the issuance of the assailed order constituted

patently grave abuse of discretion on the part of the RTC, and that the CA rightly

set aside the order of the RTC.

 

To begin with, the petitioner rested his claim for injunction mainly upon his

representation that he was entitled to serve for five years as President of AUP

under the Constitution, By-Laws and Working Policy of the General Conference of

the Seventh Day Adventists (otherwise called the Bluebook). All that he presented

in that regard, however, were mere photocopies of pages 225-226 of the Bluebook,

which read:

 Article IV-Board of Directors

          Sec. 1. This school operated by the _____________ Union Conference/Mission of Seventh-Day Adventists shall be under the direct control of a board of directors, elected by the constituency in its

quinquennial sessions. The board of directors shall consist of 15 to 21 members, depending on the size of the institution. Ex officio members shall be the union president as chairperson, the head of the school as secretary, the union secretary, the union treasurer, the union director of education, the presidents of the conferences/missions within the union. xxx.          Sec. 2. The term of office of members of the board of directors shall be five years to coincide with the ______________ Union Conference/Mission quinquennial period.                 Sec. 3. The duties of the board of directors shall be to elect quinquenially the president, xxx.

 

Yet, the document had no evidentiary value. It had not been officially

adopted for submission to and approval of the Securities and Exchange

Commission.  It was nothing but an unfilled model form. As such, it was, at best,

only a private document that could not be admitted as evidence in judicial

proceedings until it was first properly authenticated in court.

 

Section 20, Rule 132 of the Rules of Court requires authentication as a

condition for the admissibility of a private document, to wit:

 Section 20. Proof of private document. – Before any private

document offered as authentic is received in evidence, its due execution and authenticity must be proved either:

 (a)   By anyone who saw the document executed or written; or (b)   By evidence of the genuineness of the signature or handwriting

of the maker. 

Any other private document need only be identified as that which it is claimed to be. (21 a)

 

For the RTC to base its issuance of the writ of preliminary injunction on the

mere photocopies of the document, especially that such document was designed to

play a crucial part in the resolution of the decisive issue on the length of the term

of office of the petitioner, was gross error.

 

Secondly, even assuming that the petitioner had properly authenticated the

photocopies of the Bluebook, the provisions contained therein did not vest the right

to an office in him. An unfilled model form creates or establishes no rights in favor

of anyone.

 

Thirdly, the petitioner’s assertion of a five-year duration for his term of

office lacked legal basis.

 

Section 108 of the Corporation Code determines the membership and

number of trustees in an educational corporation, viz:

 Section 108. Board of trustees. – Trustees of educational

institutions organized as educational corporations shall not be less than five (5) nor more than fifteen (15): Provided, however, That the number of trustees shall be in multiples of five (5).

 Unless otherwise provided in the articles of incorporation or the by-

laws, the board of trustees of incorporated schools, colleges, or other institutions of learning shall, as soon as organized, so classify themselves

that the term of office of one-fifth (1/5) of their number shall expire every year. Trustees thereafter elected to fill vacancies, occurring before the expiration of a particular term, shall hold office only for the unexpired period. Trustees elected thereafter to fill vacancies caused by expiration of term shall hold office for five (5) years. A majority of the trustees shall constitute a quorum for the transaction of business. The powers and authority of trustees shall be defined in the by-laws.

 For institutions organized as stock corporations, the number and

term of directors shall be governed by the provisions on stock corporations.

 

The second paragraph of the provision, although setting the term of the

members of the Board of Trustees at five years, contains a proviso expressly

subjecting the duration to what is otherwise provided in the articles of

incorporation or by-laws of the educational corporation. That contrary provision

controls on the term of office.[25]

 

In AUP’s case, its amended By-Laws provided the term of the members of

the Board of Trustees, and the period within which to elect the officers, thusly:

 Article I

 Board of Trustees

 Section 1. At the first meeting of the members of the corporation,

and thereafter every two years, a Board of Trustees shall be elected. It shall be composed of fifteen members in good and regular standing in the Seventh-day Adventist denomination, each of whom shall hold his office for a term of two years, or until his successor has been elected and qualified. If a trustee ceases at any time to be a member in good and

regular standing in the Seventh-day Adventist denomination, he shall thereby cease to be a trustee.

xxxx 

Article IV 

Officers 

Section 1. Election of officers. – At their organization meeting, the members of the Board of Trustees shall elect from among themselves a Chairman, a Vice-Chairman, a President, a Secretary, a Business Manager, and a Treasurer. The same persons may hold and perform the duties of more than one office, provided they are not incompatible with each other.[26]

 

 

 In light of foregoing, the members of the Board of Trustees were to serve a

term of office of only two years; and the officers, who included the President, were

to be elected from among the members of the Board of Trustees during their

organizational meeting, which was held during the election of the Board of

Trustees every two years. Naturally, the officers, including the President, were to

exercise the powers vested by Section 2 of the amended By-Laws for a term of

only two years, not five years.

 

Ineluctably, the petitioner, having assumed as President of AUP on January

23, 2001, could serve for only two years, or until January 22, 2003. By the time of

his removal for cause as President on January 27, 2003, he was already occupying

the office in a hold-over capacity, and could be removed at any time, without

cause, upon the election or appointment of his successor. His insistence on holding

on to the office was untenable, therefore, and with more reason when one considers

that his removal was due to the loss of confidence on the part of the Board of

Trustees.

 4.

Petitioner was not denied due process

 

          The petitioner complains that he was denied due process because he was

deprived of the right to be heard and to seek reconsideration; and that the

proceedings of the Board of Trustees were illegal due to its members not being

properly notified of the meeting.

 

Still, the petitioner fails to convince us.

 

The requirements of due process in an administrative context are satisfied

when the parties are afforded fair and reasonable opportunity to explain their

respective sides of the controversy,[27] for the essence of due process is an

opportunity to be heard.[28] Here, the petitioner was accorded the full opportunity to

be heard, as borne by the fact that he was granted the

opportunity  to  refute  the  adverse findings contained in the GCAS audit report

and that the Board of Trustees first heard his side during the board meetings before

his removal. After having voluntarily offered his refutations in the proceedings

before the Board of Trustees, he should not now be permitted to denounce the

proceedings and to plead the denial of due process after the decision of the Board

of Trustees was adverse to him.

 

Nor can his urging that the proceedings were illegal for lack of prior

notification be plausible in light of the fact that he willingly participated therein

without raising the objection of lack of notification. Thereby, he effectively waived

his right to object to the validity of the proceedings based on lack of due notice.[29]

 5.

Conclusion

 

The removal of the petitioner as President of AUP, being made in

accordance with the AUP Amended By-Laws, was valid. With that, our going into

the other issues becomes unnecessary. We conclude that the order of the RTC

granting his application for the writ of preliminary injunction was tainted with

manifestly grave abuse of discretion; that the CA correctly nullified and set aside

the order; and that his claim for damages, being bereft of factual and legal warrant,

should be dismissed.

 

WHEREFORE, we DENY the petition for review on certiorari for lack of

merit, and hereby DISMISS SEC Case No. 028-03 entitled Dr. Petronilo

Barayuga v. Nelson D. Dayson, et al.

 

 

The petitioner shall pay the cost of suit.

 

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-48754            November 26, 1941

EMILIO V. REYES, protestant-appellant, vs.APOLONIO R. DIAZ, protestee-appellee.

MORAN, J.:

This case is certified to this Court by the Court of Appeals upon the ground that the jurisdiction of the trial court is in issue. The supposed questions of jurisdiction are, first, whether or not there is sufficient to show that the protestant has duly filed his certificate of candidacy, and second, whether the trial court has or has no authority to pass upon the validity of the ballots adjudicated to the protestant which have not been challenged by the protestee in his counter-protest.

Article VIII, section 2, No. 3, of the Constitution confers upon the Supreme Court jurisdiction over "all cases in which the jurisdiction of any trial court is in issue." Section 138, No. 3, of the Revised Administrative Code as amended by Commonwealth Acts Nos. 3 and 259, provides that the Supreme Court shall have appellate jurisdiction over "all cases in which the jurisdiction of any inferior court is in issue." It has been held that the word "jurisdiction" as used in the constitutions and in the statutes "means jurisdiction as to the subject-matter only, unless an exception arises by reason of its employment in a broader sense." (15 C. J. 735;

Johnson vs. Wells, 91 Fed. 1; U. S. vs. Lee, 84 Fed. 626; Vinal vs. Continental Constr., etc. Co., 34 Fed. 228; Starnes vs. Mutual Loan etc., Co., 102 Ga. 597; 29 SE 452.) There is in our Constitution or in the law aforecited nothing which may lend the word "jurisdiction" therein used a broader meaning than jurisdiction over the subject matter. On the contrary, having due regard to the manifest purpose of the law, which is to confine the appellate jurisdiction of this court to cases of vital importance involving questions of fundamental character, such, for instance, as the question of validity of statute, treaty or ordinance, or the legality of any tax, import or assessment which may effect the very existence of the government, or criminal cases wherein life imprisonment or death penalty is imposed, we are of the opinion and so hold, that the issue of jurisdiction which confers appellate powers upon this Court in a given case is not such question as is dependent exclusively upon minor matters of fact or upon a mere construction of the pleadings, but that which has reference to the more important question of jurisdiction of the trial court over the subject-matter as determined by law.

Jurisdiction over the subject-matter is the power to hear and determine cases of the general class to which the proceedings in question belong (C. J. S., p. 36) and is conferred by the sovereign authority which organizes the court and defines its powers (Banco Español Filipino vs. Palanca, 37 Phil. 921; Perkins vs. Dizon, 40 Off. Gaz. No. 7, 3d Sup. p. 216; Ng Si Chok vs. Vera, G.R. No. 45674). The question, therefore, of whether a court has jurisdiction over the subject-matter, calls for interpretation and application of the law of jurisdiction which distributes the judicial power among the different courts in the Philippines, and since the ruling on the matter is of far-reaching consequences, affecting, as it may, the very life and structure of our judicial system, the law has deemed it wise to place the

power and authority to act thereon in the highest court of the land.

In the instant, case, there is no such question of jurisdiction as above described. Both parties agree that if the due filing of the protestant's certificate of candidacy is proven, the trial court has no jurisdiction except to dismiss the case. There is, therefore, no question between the parties as to what the jurisdiction of the trial court is according to law in either case. The real question between them is one of fact — whether or not the protestant's certificate of candidacy has been duly filed. And not the until this fact is proved can the question of jurisdiction be determined.

Neither is the second question one of jurisdiction within the purview of the legal provisions above quoted. Whether certain ballots are or are not pertinent to the issue raised in the pleadings, is merely a question of relevancy of evidence. It may be true that the court by an erroneous ruling on such question my encroach upon issues completely foreign to those defined in the pleadings, but in such case the question of jurisdiction that may arise would not be one of jurisdiction over the subject-matter but of jurisdiction over the issue. In order that a court may validly try and decide a case, it must have jurisdiction over the persons of the parties. (Banco Español Filipino vs.Palanca, 37 Phil. 921; Perkins vs. Dizon, 40 Off. Gaz. No. 7, 3d Sup. p. 216.) But in some instances it is said that the court should also have jurisdiction over the issue (15 C. J. 734; Hutts vs. Martin, 134 Ind. 587, 33 N. E. 676), meaning thereby that the issue being tried and decided by the court be within the issues raised in the pleadings. But this kind of jurisdiction should be distinguished from jurisdiction over the subject-matter the latter being conferred by law and the former by the pleadings. Jurisdiction over the issue, unlike jurisdiction over the subject-

matter, may be conferred by consent either express or implied of the parties. (Rule 17, sec. 4, Rules of Court.) Although an issue is not duly pleaded it may validly be tried and decided if no timely objection is made thereto by the parties. This cannot be done when jurisdiction over the subject-matter is involved. In truth, jurisdiction over the issue is an expression of a principle that is involved in jurisdiction over the persons of the parties. Where, for instance, an issue is not duly pleaded in the complaint, the defendant cannot be said to have been served with process as to that issue. (Cf. Atkins etc. Co. vs. Domingo, 44 Phil. 680). At any rate, whether or not the court has jurisdiction over a specific issue is a question that requires nothing except an examination of the pleadings, and this function is without such importance as call for the intervention of this Court.

Furthermore, this question of jurisdiction is unsubstantial. It is well-settled rule that the institution of suffrage is of public, not private, interest, and the court may examine all the ballots after the ballot boxes are opened in order to determine which are legal and which are illegal, even though neither of the parties raised any question as to their illegality. (Yalung vs. Atienza, 52 Phil. 781; Cecilio vs. Tomacruz, 62 Phil. 689; Cosculluela vs. Gaston, 63 Phil. 41).

Wherefore, this case is hereby remanded to the Court of Appeals for further proceedings.

SECOND DIVISION                                                                  MA. TERESA CHAVES BIACO,                       G.R. No. 161417                     Petitioner,                                                                                                                   Present:                                                                              QUISUMBING, J.,

                                                Chairperson,             -  versus  -                                                CARPIO,                                                                             CARPIO MORALES,

                    TINGA, and          VELASCO, JR.,  JJ.

PHILIPPINE COUNTRYSIDE RURAL                 BANK,                              Respondent.                                 Promulgated:                                                                                   February 8, 2007 x----------------------------------------------------------------------------x  

D E C I S I O N 

TINGA, J.:                                                                

          Petitioner, Ma. Teresa Chaves Biaco, seeks a review of the Decision [1] of the

Court of Appeals in CA-G.R. No. 67489 dated August 27, 2003, which denied her

petition for annulment of judgment, and the Resolution[2] dated December 15,

2003 which denied her motion for reconsideration.

 

The facts as succinctly stated by the Court of Appeals are as follows:

 Ernesto Biaco is the husband of petitioner Ma. Teresa Chaves

Biaco. While employed in the Philippine Countryside Rural Bank (PCRB) as branch manager, Ernesto obtained several loans from the respondent bank as evidenced by the following promissory notes:

 Feb. 17, 1998                                  P  65,000.00Mar. 18, 1998                                      30,000.00May 6, 1998                                        60,000.00May 20, 1998                                    350,000.00July 30, 1998                                     155,000.00Sept. 8, 1998                                       40,000.00Sept. 8, 1998                                     120,000.00 As security for the payment of the said loans, Ernesto executed a

real estate mortgage in favor of the bank covering the parcel of land described in Original Certificate of Title (OCT) No. P-14423. The real estate mortgages bore the signatures of the spouses Biaco.

 When Ernesto failed to settle the above-mentioned loans on its

due date, respondent bank through counsel sent him a written demand on September 28, 1999. The amount due as ofSeptember 30, 1999 had already reached ONE MILLION EIGHTY THOUSAND SIX HUNDRED SEVENTY SIX AND FIFTY CENTAVOS (P1,080,676.50).

 The written demand, however, proved futile. On February 22, 2000, respondent bank filed a complaint for

foreclosure of mortgage against the spouses Ernesto and Teresa Biaco before the RTC of Misamis Oriental. Summons was served to the spouses Biaco through Ernesto at his office (Export and Industry Bank) located at Jofelmor Bldg., Mortola Street, Cagayan de Oro City.

 Ernesto received the summons but for unknown reasons, he failed

to file an answer. Hence, the spouses Biaco were declared in default upon motion of the respondent bank. The respondent bank was allowed to present its evidence ex parte before the Branch Clerk of Court who was then appointed by the court as Commissioner.

 

    Arturo Toring, the branch manager of the respondent bank,

testified that the spouses Biaco had been obtaining loans from the bank since 1996 to 1998.  The loans for the years 1996-1997 had already been paid by the spouses Biaco, leaving behind a balance of P1,260,304.33 representing the 1998 loans. The amount being claimed is inclusive of interests, penalties and service charges as agreed upon by the parties. The appraisal value of the land subject of the mortgage is only P150,000.00 as reported by the Assessor’s Office.

 Based on the report of the Commissioner, the respondent judge

ordered as follows: 

WHEREFORE, judgment is hereby rendered ordering defendants spouses ERNESTO R. BIACO and MA. THERESA [CHAVES] BIACO to pay plaintiff bank within a period of not less than ninety (90) days nor more than one hundred (100) days from receipt of this decision the loan of ONE MILLION TWO HUNDRED SIXTY THOUSAND THREE HUNDRED FOUR PESOS and THIRTY THREE CENTAVOS (P1,260,304.33) plus litigation expenses in the amount of SEVEN THOUSAND SIX HUNDRED FORTY PESOS (P7,640.00) and attorney’s fees in the amount of TWO HUNDRED FIFTY TWO THOUSAND THIRTY PESOS and FORTY THREE CENTAVOS (P252,030.43) and cost of this suit.

       In case of non-payment within the period, the Sheriff of

this Court is ordered to sell at public auction the mortgaged Lot, a parcel of registered land (Lot 35802, Cad. 237 {Lot No. 12388-B, Csd-10-002342-D}), located at Gasi, Laguindingan, Misamis Oriental and covered by TCT No. P-14423 to satisfy the mortgage debt, and the surplus if there be any should be delivered to the defendants spouses ERNESTO and MA. THERESA [CHAVES] BIACO. In the event however[,] that the proceeds of the auction sale of the mortgage[d] property is not enough to pay the outstanding obligation, the defendants are ordered to pay any deficiency of the judgment as their personal liability.

 

SO ORDERED. 

On July 12, 2000, the sheriff personally served the above-mentioned judgment to Ernesto Biaco at his office at Export and Industry Bank. The spouses Biaco did not appeal from the adverse decision of the trial court. On October 13, 2000, the respondent bank filed an ex parte motion for execution to direct the sheriff to sell the mortgaged lot at public auction. The respondent bank alleged that the order of the court requiring the spouses Biaco to pay within a period of 90 days had passed, thus making it necessary to sell the mortgaged lot at public auction, as previously mentioned in the order of the court. The motion for execution was granted by the trial court per Order dated October 20, 2000.

 On October 31, 2000, the sheriff served a copy of the writ of

execution to the spouses Biaco at their residence in #92 9th Street, Nazareth, Cagayan de Oro City. The writ of execution was personally received by Ernesto. By virtue of the writ of execution issued by the trial court, the mortgaged property was sold at public auction in favor of the respondent bank in the amount of ONE HUNDRED FIFTY THOUSAND PESOS (P150,000.00).

 The amount of the property sold at public auction being

insufficient to cover the full amount of the obligation, the respondent bank filed an “ex parte motion for judgment” praying for the issuance of a writ of execution against the other properties of the spouses Biaco for the full settlement of the remaining obligation. Granting the motion, the court ordered that a writ of execution be issued against the spouses Biaco to enforce and satisfy the judgment of the court for the balance of ONE MILLION THREE HUNDRED SIXTY NINE THOUSAND NINE HUNDRED SEVENTY FOUR PESOS AND SEVENTY CENTAVOS (P1,369,974.70).

 The sheriff executed two (2) notices of levy against properties

registered under the name of petitioner Ma. Teresa Chaves Biaco. However, the notices of levy were denied registration because Ma. Teresa had already sold the two (2) properties to her daughters on April 11, 2001.[3]

  

Petitioner sought the annulment of the Regional Trial Court decision

contending that extrinsic fraud prevented her from participating in the judicial

foreclosure proceedings.  According to her, she came to know about the judgment

in the case only after the lapse of more than six (6) months after its finality.  She

claimed that extrinsic fraud was perpetrated against her because the bank failed to

verify the authenticity of her signature on the real estate mortgage and did not

inquire into the reason for the absence of her signature on the promissory

notes.  She moreover asserted that the trial court failed to acquire jurisdiction

because summons were served on her through her husband without any

explanation as to why personal service could not be made.

 

The Court of Appeals considered the two circumstances that kept petitioner

in the dark about the judicial foreclosure proceedings: (1) the failure of the sheriff

to personally serve summons on petitioner; and (2) petitioner’s husband’s

concealment of his knowledge of the foreclosure proceedings.  On the validity of

the service of summons, the appellate court ruled that judicial foreclosure

proceedings are actions quasi in rem. As such, jurisdiction over the person of the

defendant is not essential as long as the court acquires jurisdiction over

the res.  Noting that the spouses Biaco were not opposing parties in the case, the

Court of Appeals further ruled that the fraud committed by one against the other

cannot be considered extrinsic fraud.

 

Her motion for reconsideration having been denied, petitioner filed the

instant Petition for Review,[4] asserting that even if the action is quasi in

rem, personal service of summons is essential in order to afford her due

process.  The substituted service made by the sheriff at her husband’s office cannot

be deemed proper service absent any explanation that efforts had been made to

personally serve summons upon her but that such efforts failed.  Petitioner

contends that extrinsic fraud was perpetrated not so much by her husband, who did

not inform her of the judicial foreclosure proceedings, but by the sheriff who

allegedly connived with her husband to just leave a copy of the summons intended

for her at the latter’s office.

 

Petitioner further argues that the deficiency judgment is a personal judgment

which should be deemed void for lack of jurisdiction over her person.

 

 Respondent PCRB filed its Comment,[5] essentially reiterating the appellate

court’s ruling.  Respondent avers that service of summons upon the defendant is

not necessary in actions quasi in rem it being sufficient that the court acquire

jurisdiction over the res.  As regards the alleged conspiracy between petitioner’s

husband and the sheriff, respondent counters that this is a new argument which

cannot be raised for the first time in the instant petition.

 

We required the parties to file their respective memoranda in the

Resolution[6] dated August 18, 2004.  Accordingly, petitioner filed her

Memorandum[7] datedOctober 10, 2004, while respondent filed its Memorandum

for Respondent[8] dated September 9, 2004.

 

Annulment of judgment is a recourse equitable in character, allowed only in

exceptional cases as where there is no available or other adequate

remedy. Jurisprudence and Sec. 2, Rule 47 of the 1997 Rules of Civil Procedure

(Rules of Court) provide that judgments may be annulled only on grounds of

extrinsic fraud and lack of jurisdiction or denial of due process.[9] 

 

Petitioner asserts that extrinsic fraud consisted in her husband’s concealment

of the loans which he obtained from respondent PCRB; the filing of the complaint

for judicial foreclosure of mortgage; service of summons; rendition of judgment by

default; and all other proceedings which took place until the writ of garnishment

was served.[10] 

 

Extrinsic fraud exists when there is a fraudulent act committed by

the prevailing party outside of the trial of the case, whereby the defeated party was

prevented from presenting fully his side of the case by fraud or deception practiced

on him by the prevailing party.[11] Extrinsic fraud is present where the unsuccessful

partyhad been prevented from exhibiting fully his case, by fraud or deception

practiced on him by his opponent, as by keeping him away from court, a false

promise of a compromise; or where the defendant never had knowledge of the suit,

being kept in ignorance by the acts of the plaintiff; or where an attorney

fraudulently or without authority assumes to represent a party and connives at his

defeat; or where the attorney regularly employed corruptly sells out his client’s

interest to the other side.  The overriding consideration is that the fraudulent

scheme of the prevailing litigant prevented a party from having his day in court.[12]

 

 With these considerations, the appellate court acted well in ruling that there

was no fraud perpetrated by respondent bank upon petitioner, noting that the

spouses Biaco were co-defendants in the case and shared the same

interest.  Whatever fact or circumstance concealed by the husband from the wife

cannot be attributed to respondent bank. 

 

Moreover, petitioner’s allegation that her signature on the promissory notes

was forged does not evince extrinsic fraud.  It is well-settled that the use of forged

instruments during trial is not extrinsic fraud because such evidence does not

preclude the participation of any party in the proceedings.[13]

 

The question of whether the trial court has jurisdiction depends on the nature

of the action, i.e., whether the action is in personam, in rem, or quasi in rem.   The

rules on service of summons under Rule 14 of the Rules of Court likewise apply

according to the nature of the action. 

 

An action in personam is an action against a person on the basis of his

personal liability. An action in rem is an action against the thing itself instead of

against the person. An action quasi in rem is one wherein an individual is named as

defendant and the purpose of the proceeding is to subject his interest therein to the

obligation or lien burdening the property.[14]

 

In an action in personam, jurisdiction over the person of the defendant is

necessary for the court to validly try and decide the case. In a proceeding in

rem orquasi in rem, jurisdiction over the person of the defendant is not a

prerequisite to confer jurisdiction on the court provided that the court acquires

jurisdiction over theres. Jurisdiction over the res is acquired either (1) by the

seizure of the property under legal process, whereby it is brought into actual

custody of the law; or (2) as a result of the institution of legal proceedings, in

which the power of the court is recognized and made effective.[15] 

 

Nonetheless, summons must be served upon the defendant not for the

purpose of vesting the court with jurisdiction but merely for satisfying the due

process requirements.[16] 

 

A resident defendant who does not voluntarily appear in court, such as

petitioner in this case, must be personally served with summons as provided under

Sec. 6, Rule 14 of the Rules of Court.  If she cannot be personally served with

summons within a reasonable time, substituted service may be effected (1) by

leaving copies of the summons at the defendant’s residence with some person of

suitable age and discretion then residing therein, or (2) by leaving the copies at

defendant’s office or regular place of business with some competent person in

charge thereof in accordance with Sec. 7, Rule 14 of the Rules of Court.  

 

In this case, the judicial foreclosure proceeding instituted by respondent

PCRB undoubtedly vested the trial court with jurisdiction over the res.  A judicial

foreclosure proceeding is an action quasi in rem.  As such, jurisdiction over the

person of petitioner is not required, it being sufficient that the trial court is vested

with jurisdiction over the subject matter.

 

There is a dimension to this case though that needs to be delved

into.  Petitioner avers that she was not personally served summons.  Instead,

summons was served to her through her husband at his office without any

explanation as to why the particular surrogate service was resorted to.  The

Sheriff’s Return of Service dated March 21, 2000 states:                        x x x x 

That on March 16, 2000, the undersigned served the copies of Summons, complaint and its annexes to the defendants Sps. Ernesto R. & Ma. Teresa Ch. Biaco thru Ernesto R.Biaco[,] defendant of the

above-entitled case at his office EXPORT & INDUSTRY BANK, Jofelmore Bldg.[,] Mortola St., Cagayan de Oro City and he acknowledged receipt thereof as evidenced with his signature appearing on the original copy of the Summons.[17] [Emphasis supplied]

 

Without ruling on petitioner’s allegation that her husband and the sheriff

connived to prevent summons from being served upon her personally, we can see

that petitioner was denied due process and was not able to participate in the

judicial foreclosure proceedings as a consequence.  The violation of petitioner’s

constitutional right to due process arising from want of valid service of summons

on her warrants the annulment of the judgment of the trial court.

 

There is more, the trial court granted respondent PCRB’s ex-parte motion

for deficiency judgment and ordered the issuance of a writ of execution against the

spouses Biaco to satisfy the remaining balance of the award.  In short, the trial

court went beyond its jurisdiction over the res and rendered a personal judgment

against the spouses Biaco.  This cannot be countenanced.

 

In Sahagun v. Court of Appeals,[18]  suit was brought against a non-resident

defendant, Abelardo Sahagun, and a writ of attachment was issued and

subsequently levied on a house and lot registered in his name.  Claiming ownership

of the house, his wife, Carmelita Sahagun, filed a motion to intervene.  For failure

of plaintiff to serve summons extraterritorially upon Abelardo, the complaint was

dismissed without prejudice. 

 

Subsequently, plaintiff filed a motion for leave to serve summons by

publication upon Abelardo.  The trial court granted the motion.  Plaintiff later filed

an amended complaint against Abelardo, this time impleading Carmelita

and Rallye as additional defendants.  Summons was served on Abelardo through

publication in theManila Evening Post.  Abelardo failed to file an answer and was

declared in default.  Carmelita went on certiorari to the Court of Appeals assailing

as grave abuse of discretion the declaration of default of Abelardo.  The Court of

Appeals dismissed the petition and denied reconsideration.

 

In her petition with this Court, Carmelita raised the issue of whether the trial

court acquired jurisdiction over her husband, a non-resident defendant, by the

publication of summons in a newspaper of general circulation in

the Philippines.  The Court sustained the correctness of extrajudicial service of

summons by publication in such newspaper. 

 

The Court explained, citing El Banco Español-Filipino v. Palanca,[19] that

foreclosure and attachment proceedings are both actions quasi in rem.  As such,

jurisdiction over the person of the (non-resident) defendant is not

essential.  Service of summons on a non-resident defendant who is not found in the

country is required, not for purposes of physically acquiring jurisdiction over his

person but simply in pursuance of the requirements of fair play, so that he may be

informed of the pendency of the action against him and the possibility that property

belonging to him or in which he has an interest may be subjected to a judgment in

favor of a resident, and that he may thereby be accorded an opportunity to defend

in the action, should he be so minded. 

 

Significantly, the Court went on to rule, citing De Midgely v. Ferandos, et.

al.[20] and Perkins v. Dizon, et al.[21]  that in a proceeding in rem or quasi in rem,the

only relief that may be granted by the court against a defendant over whose person

it has not acquired jurisdiction either by valid service of summons or by voluntary

submission to its jurisdiction, is limited to the res.

 

Similarly, in this case, while the trial court acquired jurisdiction over the res,

its jurisdiction is limited to a rendition of judgment on the res.  It cannot extend its

jurisdiction beyond the res and issue a judgment enforcing petitioner’s personal

liability.  In doing so without first having acquired jurisdiction over the person of

petitioner, as it did, the trial court violated her constitutional right to due process,

warranting the annulment of the judgment rendered in the case. 

 

WHEREFORE, the instant petition is GRANTED. The Decision

dated August 27, 2003 and the Resolution dated December 15, 2003 of the Court

of Appeals in CA-G.R. SP No. 67489 are SET ASIDE.  The Judgment dated July

11, 2000 and Order dated February 9, 2001 of the Regional Trial Court of Cagayan

de Oro City, Branch 20, are likewise SET ASIDE.  

 

SO ORDERED.

CHESTER DE JOYA,                               G.R. No. 162416                             Petitioner,                                                                   Present:                                                                                               PUNO, J., Chairperson,

- versus -                                                    SANDOVAL-GUTIERREZ,                                                                             CORONA,                                                                             AZCUNA, and                                                                             GARCIA, JJ.JUDGE PLACIDO C. MARQUEZ,                  in his capacity as Presiding Judge of     Branch 40, Manila-RTC, PEOPLE           Promulgated:OF THE PHILIPPINES and THESECRETARY OF THE DEPARTMENT           January 31, 2006OF JUSTICE,                             Respondents.     x-----------------------------------------------------------------------------------------x

 DECISION

 AZCUNA, J.:  

          This is a petition for certiorari and prohibition that seeks the

Court to nullify and set aside the warrant of arrest issued by

respondent judge against petitioner in Criminal Case No. 03-

219952 for violation of Article 315, par. 2(a) of the Revised Penal

Code in relation to Presidential Decree (P.D.) No. 1689.  Petitioner

asserts that respondent judge erred in finding the existence of

probable cause that justifies the issuance of a warrant of arrest

against him and his co-accused.

Section 6, Rule 112 of the Revised Rules of Criminal

Procedure provides:

 Sec. 6.  When warrant of arrest may issue. – (a) By

the Regional Trial Court. – Within ten (10) days from the filing of the complaint or information, the judge shall personally evaluate the resolution of the prosecutor and its supporting evidence.  He may immediately dismiss the case if the evidence on record clearly fails to establish probable cause.  If he finds probable cause, he shall issue a warrant of arrest, or a commitment order if the accused has already been arrested pursuant to a warrant issued by the judge who conducted the preliminary investigation or when the complaint or information was filed pursuant to section 7 of this Rule.  In case of doubt on the existence of probable cause, the judge may order the prosecutor to present additional evidence within five (5) days from notice and the issuance must be resolved by the court within thirty (30) days from the filing of the complaint or information.

 x x x[1]

  

 

          This Court finds from the records of Criminal Case No. 03-

219952 the following documents to support the motion of the

prosecution for the issuance of a warrant of arrest:

 1.                  The report of the National Bureau of Investigation to Chief

State Prosecutor Jovencito R. Zuño as regards their investigation on the complaint filed by private complainant Manuel Dy Awiten against Mina Tan Hao @

Ma. Gracia Tan Hao and Victor Ngo y Tan for syndicated estafa.  The report shows thatHao induced Dy to invest more than a hundred million pesos in State Resources Development Management Corporation, but when the latter’s investments fell due, the checks issued by Hao in favor of Dy as payment for his investments were dishonored for being drawn against insufficient funds or that the account was closed.[2]

 2.                  Affidavit-Complaint of private complainant

Manuel Dy Awiten.[3]

 3.                  Copies of the checks issued by private complainant in

favor of State Resources Corporation.[4]

 4.                  Copies of the checks issued to private complainant

representing the supposed return of his investments in State Resources.[5]

 5.                  Demand letter sent by private complainant to

Ma. Gracia Tan Hao.[6]

 6.                  Supplemental Affidavit of private complainant to include

the incorporators and members of the board of directors of State Resources Development Management Corporation as participants in the conspiracy to commit the crime of syndicated estafa.  Among those included was petitioner Chester DeJoya.[7]

 7.                  Counter-Affidavits of Chester De Joya and the other

accused, Ma. Gracia Hao and Danny S. Hao.  

Also included in the records are the resolution issued by

State Prosecutor Benny Nicdao finding probable cause to indict

petitioner and his other co-accused for syndicated estafa,[8] and a

copy of the Articles of Incorporation of State Resources

Development Management Corporation naming petitioner as

incorporator and director of said corporation.

 

This Court finds that these documents sufficiently establish

the existence of probable cause as required under Section 6, Rule

112 of the Revised Rules of Criminal Procedure.  Probable cause

to issue a warrant of arrest pertains to facts and circumstances

which would lead a reasonably discreet and prudent person to

believe that an offense has been committed by the person sought

to be arrested.  It bears remembering that “in determining

probable cause, the average man weighs facts and circumstances

without resorting to the calibrations of our technical rules of

evidence of which his knowledge is nil.  Rather, he relies on the

calculus of common sense of which all reasonable men have an

abundance.”[9] Thus, the standard used for the issuance of a

warrant of arrest is less stringent than that used for establishing

the guilt of the accused.  As long as the evidence presented

shows a prima facie case against the accused, the trial court

judge has sufficient ground to issue a warrant of arrest against

him.

 

The foregoing documents found in the records and examined

by respondent judge tend to show that therein private

complainant was enticed to invest a large sum of money in State

Resources Development Management Corporation; that he issued

several checks amounting toP114,286,086.14 in favor of the

corporation; that the corporation, in turn, issued several checks to

private complainant, purportedly representing the return of his

investments; that said checks were later dishonored for

insufficient funds and closed account; that petitioner and his co-

accused, being incorporators and directors of the corporation, had

knowledge of its activities and transactions.  These are all that

need to be shown to establish probable cause for the purpose of

issuing a warrant of arrest.  It need not be shown that the

accused are indeed guilty of the crime charged.  That matter

should be left to the trial.  It should be emphasized that before

issuing warrants of arrest, judges merely determine personally

the probability, not the certainty, of guilt of an accused.  Hence,

judges do not conduct a de novo hearing to determine the

existence of probable cause.  They just personally review the

initial determination of the prosecutor finding a probable cause to

see if it is supported by substantial evidence.[10]  In case of doubt

on the existence of probable cause, the Rules allow the judge to

order the prosecutor to present additional evidence.  In the

present case, it is notable that the resolution issued by State

Prosecutor Benny Nicdao thoroughly explains the bases for his

findings that there is probable cause to charge all the accused

with violation of Article 315, par. 2(a) of the Revised Penal Code in

relation to P.D. No. 1689.

 

The general rule is that this Court does not review the

factual findings of the trial court, which include the determination

of probable cause for the issuance of warrant of arrest.  It is only

in exceptional cases where this Court sets aside the conclusions

of the prosecutor and the trial judge on the existence of probable

cause, that is, when it is necessary to prevent the misuse of the

strong arm of the law or to protect the orderly administration of

justice.  The facts obtaining in this case do not warrant the

application of the exception.

 

In addition, it may not be amiss to note that petitioner is not

entitled to seek relief from this Court nor from the trial court as he

continuously refuses to surrender and submit to the court’s

jurisdiction.  Justice Florenz D. Regalado explains the requisites

for the exercise of jurisdiction and how the court acquires such

jurisdiction, thus:

 x x x  Requisites for the exercise of jurisdiction and how

the court acquires such jurisdiction: a.                  Jurisdiction over the plaintiff or petitioner:  This is

acquired by the filing of the complaint, petition or initiatory pleading before the court by the plaintiff or petitioner.

 b.                 Jurisdiction over the defendant or

respondent:  This is acquired by the voluntary appearance or submission by the defendant or respondent to the court or by coercive process issued by the court to him, generally by the service of summons.

 c.                   Jurisdiction over the subject matter:  This is

conferred by law and, unlike jurisdiction over the parties, cannot be conferred on the court by the voluntary act or agreement of the parties.

 d.                 Jurisdiction over the issues of the case:  This is

determined and conferred by the pleadings filed in the case by the parties, or by their agreement in a pre-trial order or stipulation, or, at times by their implied consent as by the failure of a party to object to evidence on an issue not covered by the pleadings, as provided in Sec. 5, Rule 10.

 e.                  Jurisdiction over the res (or the property or thing

which is the subject of the litigation).  This is acquired by the actual or constructive seizure by the court of the thing in question, thus placing it in custodia legis, as in attachment or garnishment; or by provision of law which recognizes in the court the power to deal with the property or subject matter within its territorial jurisdiction, as in land registration proceedings or suits involving civil status or real property in the Philippines of a non-resident defendant.

          

Justice Regalado continues to explain:            

            In two cases, the court acquires jurisdiction to try the case, even if it has not acquired jurisdiction over the person of a nonresident defendant, as long as it has jurisdiction over the res, as when the action involves the personal status of the plaintiff or property in the Philippines in which the defendant claims an interest.  In such cases, the service of summons by publication and notice to the defendant is merely to comply with due process requirements.  Under Sec. 133 of the Corporation Code, while a foreign corporation doing business in the Philippines without a license cannot sue or intervene in any action here, it may be sued or proceeded against before our courts or administrative tribunals.[11]

  

Again, there is no exceptional reason in this case to allow

petitioner to obtain relief from the courts without submitting to its

jurisdiction.  On the contrary, his continued refusal to submit to

the court’s jurisdiction should give this Court more reason to

uphold the action of the respondent judge.  The purpose of a

warrant of arrest is to place the accused under the custody of the

law to hold him for trial of the charges against him.  His evasive

stance shows an intent to circumvent and frustrate the object of

this legal process.  It should be remembered that he who invokes

the court’s jurisdiction must first submit to its jurisdiction.

 

WHEREFORE, the petition is DISMISSED.

 

No costs.

 

SO ORDERED.