G.R. No. 83831. January 09, 1992
VICTOR AFRICA, PETITIONER, VS. PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, JOSE LAURETA, MELQUIADES GUTIERREZ, EDUARDO M. VILLANUEVA, EDUARDO DE LOS ANGELES AND ROMAN MABANTA, J…
REGALADO, J.:
Court were consolidated pursuant to our resolution of November 22,
1988[1]
since they involve issues arising from, incidental or related to the
sequestration of Eastern Telecommunications Philippines, Inc. (ETPI) by
the Presidential Commission on Good Government (PCGG) on March 14, 1986
and the consequent filing by the PCGG on July 22, 1987 of an action for
reconveyance, reversion, accounting and restitution of the alleged
ill-gotten ETPI shares and damages, docketed as Civil Case No. 0009 in
the Sandiganbayan.
Shortly after the PCGG sequestered ETPI on March 14, 1986, the
sequestration order was partially lifted in May, 1986 when 40% of the
shares of stock (Class “B”) owned by Cable and Wireless, Ltd. were freed
from the effects of sequestration. The remaining 60% of the shares
(Class “A”), however, remained under sequestration. Thereafter, on July
22, 1987, the PCGG filed with the Sandiganbayan the aforesaid Civil Case
No. 0009.
Subsequently, during the annual stockholders meeting convened on January
29, 1988 pursuant to a PCGG Resolution dated January 28, 1988 which
called for the resumption of the stockholders meeting originally
scheduled on January 4, 1988, Eduardo M. Villanueva, as PCGG nominee,
Roman Mabanta, Jr. and Eduardo de los Angeles as nominees of the foreign
investors, Cable and Wireless Ltd., and Jose L. Africa (who was absent)
were elected as members of the board of directors.
An organizational meeting was later held where Eduardo Villanueva was
elected as president and general manager, while Ramon Desuasido, Almario
Velasco and Ranulfo Payos were elected as acting corporate secretary,
acting treasurer, and acting assistant corporate secretary,
respectively.
The nomination and election of PCGG nominees/designees to the ETPI Board
of Directors, as well as the election of its new officers, triggered a
chain of contentious proceedings before the Sandiganbayan and this Court
between the members of the ETPI Board and its stockholders, on the one
hand, and the PCGG’s nominees/designees elected to the ETPI Board, on
the other hand, in the cases hereinunder discussed.
G.R. No. 83831
Victor Africa, who claims to be an employee of ETPI holding the
positions of vice-president, general counsel (on official leave without
pay), corporate secretary and special assistant to the chairman (and
president), filed directly with this Court on June 30, 1988 a petition
for injunction docketed as G.R. No. 83831, seeking to enjoin the PCGG
and its nominees/designees to the board of directors and the
newly-installed officers of ETPI from implementing their alleged
illegal, invalid and immoral act of ousting him from his offices and
positions at the ETPI pending the determination of whether they have
validly, legally and morally assumed their supposed positions and
offices as “directors” and/or “officers” of ETPI.
He contends that the reasons advanced by the PCGG-sponsored board of
directors for ousting him from his offices (redundancy, need to conserve
company funds and loss of confidence) are flimsy, whimsical and
arbitrary, evidencing not only the PCGG-sponsored board’s discriminatory
and oppressive attitude towards him but, more importantly, it’s clear
intent to harass him into refraining from questioning before several
tribunals all the invalid, illegal and immoral acts of said
PCGG-sponsored board which have caused and are still causing ETPI
damages because they constitute dissipation of assets.
Further claiming that the acts of respondents will work injustice,
unfairness and inequity to him as they will invalidly, illegally and
immorally deprive him of his principal means of livelihood to the
detriment of his spouse and three children, petitioner sought the
issuance of a writ of preliminary injunction or a temporary restraining
order to enjoin the PCGG from ousting him from his positions and offices
effective June 30, 1988.
On July 8, 1988, petitioner informed the Court that while a verbal
agreement to maintain the status quo was reached between petitioner’s
lawyers, Attys. Juan de Ocampo and Antonio Africa, and Messrs. Orlando
Romero and Serafin Rivera of the PCGG, respondent Eduardo M. Villanueva
circulated on July 5, 1988 an inter-office memorandum
easing out
the legitimate members of the board from their rooms in the executive
offices for the benefit of the newly-installed members of the questioned
PCGG board; and that Ildefonso Reynoso, vice-president for
administration, issued a memorandum to the Nival Security and Protective
Agency informing them that they were being relieved of their duty to
provide security services at the 7th Floor of Telecoms Plaza where the
executive offices are located, which services would then be handled by
the FCA Security Agency.[2]
On July 15, 1988, petitioner was allegedly forcibly taken out of his
office on the basis of a PCGG order which petitioner claimed was
addressed not to then PCGG Commissioner Laureta but to three other PCGG
officials, namely, Esteban B. Conejos, Jr., Serafin P. Rivera and
Orlando Z. Romero. As a consequence, petitioner Africa sought to have
then Commissioner Laureta declared in contempt of court for having
committed “improper conduct, tending directly or indirectly, to impede,
obstruct or degrade the administration of justice.”[3]
He likewise sought the issuance of a writ of preliminary mandatory
injunction ordering respondents to open his office and allow him access
to and use of the same.
G.R. Nos. 85597 and 85621
Jose L. Africa, Manuel Nieto and Rafael Valdez, allegedly the registered
stockholders of ETPI, instituted on September 6, 1988 before the
Sandiganbayan Civil Case No. 0048,[4]
a complaint for injunction and damages with prayer for a temporary
restraining order seeking to enjoin Eduardo M. Villanueva from acting as
“Director, President and/or General Manager” of ETPI and from
exercising the powers and functions of said positions, as well as to
stop the PCGG from directly or indirectly interfering with the
management of ETPI. They contend that the assumption of Villanueva to
said positions was effected without due process of law through the PCGG
using and voting the sequestered shares without legal justification.
Eduardo M. Villanueva filed a motion to dismiss/opposition to the
issuance of a restraining order on the grounds of lack of jurisdiction,
because the complaint partakes of the nature of a suit against the State
without its consent; that plaintiffs are not the real parties in
interest in the action, which is actually a quo warranto proceeding;
that the complaint is premature for failure to exhaust administrative
remedies; and that the issues raised have already been passed upon by
the Supreme Court in G.R. No. 82188, a recourse against the Securities
and Exchange Commission (SEC), entitled “PCGG, et al. vs. SEC, et
al.”[5]
The PCGG, on the other hand, opposed the issuance of a writ of
preliminary injunction, contending that the issues raised in Civil Case
No. 0048 have already been passed upon by the Supreme Court in its
aforesaid decision in G.R. No. 82188 promulgated on June 30,
1988.[6]
In the proceedings on September 13, 1988, the PCGG, through Solicitor
Ramolete, moved to defer the hearing until after the motion to dismiss
of Villanueva and the objection raised by PCGG shall have been resolved.
However, the Sandiganbayan resolved to hear the evidence on the
application for preliminary injunction with the understanding that the
incident shall not be resolved earlier than the resolution of the motion
to dismiss and the issue raised by Solicitor Ramolete.[7]
At the scheduled hearing on October 12, 1988, Villanueva objected to
further proceedings without his motion to dismiss being first resolved,
contending that since the action is for injunction and damages, the
reception of evidence on the application for preliminary injunction was
tantamount to a hearing on the merits. In open court, he was overruled
and his motion to have the proceedings suspended pending resolution of
his motion to dismiss was denied.
From the denial of PCGG’s motion to defer hearing and Villanueva’s
motion to suspend proceedings in Civil Case No. 0048, the PCGG filed on
November 12, 1988 a petition for prohibition with prayer for a writ of
preliminary injunction and/or restraining order with this Court,
docketed as G.R. No. 85597, while Villanueva filed on November 16, 1988 a
separate petition for prohibition with preliminary injunction and/or
restraining order docketed as G.R. No. 85621. Both petitions assail the
orders issued by the Sandiganbayan, dated September 13, 1988 and October
12, 1988, as having been issued with grave abuse of discretion
amounting to lack of jurisdiction.
On November 15, 1988, the Court issued a temporary restraining
order[8]
in G.R. No. 85597 directing the Sandiganbayan to cease and desist from
proceeding with its hearing in Civil Case No. 0048 scheduled on
November 18, 1988 at 2:00 P.M. In the resolution of November 22, 1988,
the case was ordered consolidated with the other ETPI cases (G.R. Nos.
83831, 85594 and 85621).
G.R. No. 85594
The same plaintiffs in Civil Case No. 0048, now in their capacity as
erstwhile members of the Board of Directors of ETPI, instituted before
the Sandiganbayan on September 23, 1988 Civil Case No. 0050, another
action for injunction and damages with prayer for a writ of preliminary
injunction and/or temporary restraining order.
In their complaint, plaintiffs questioned the acts and orders of the
PCGG leading to the election of therein defendants Melquiades Gutierrez,
Mark Javier, Ranulfo P. Payos, Jose P. Roxas and Almario Velasco, and
Cable and Wireless representatives Roman Mabanta, Jr. and Eduardo de los
Angeles to the ETPI Board of Directors. Claiming to be the duly elected
members of the ETPI Board of Directors during the January 4, 1988
special stockholders meeting, plaintiffs prayed that defendants be
removed from their ETPI positions, and that an injunction be issued
perpetually restraining the PCGG from electing, designating and
supporting the defendants in their ETPI roles. [9]
The PCGG,[10] and
its nominees/designees to the ETPI Board,[11] Roman Mabanta, Jr. and Eduardo de los
Angeles[12]
separately filed their respective motions to dismiss and opposed the
issuance of a writ of preliminary injunction/restraining order invoking
substantially the same grounds proffered in Civil Case No. 0048, as
follows: (1) the court lacks jurisdiction because plaintiffs may not sue
the State without its consent; (2) the filing of the complaint is
improper because the cause(s) of action alleged and the reliefs sought
therein constitute an action for quo warranto, hence plaintiffs are not
the proper and real parties in interest to oust or unseat defendants;
and (3) the filing of the complaint is barred by lis pendens, as
plaintiffs should have contested PCGG’s acts in Civil Case No. 0009
(Republic vs. Jose L. Africa, et al.). Roman Mabanta, Jr. and Eduardo de
los Angeles further maintained that respondent court has no
jurisdiction over the nature and subject matter of the complaint insofar
as they are concerned, they being Class B Directors; and that the
complaint is barred by the decision of the Supreme Court in G.R. No.
82188.
On October 21, 1988, or while the motions to dismiss remained pending
and prior to the hearing set on November 3, 1988 for the issuance of a
writ of preliminary injunction/temporary restraining order, the Clerk of
Court of the Sandiganbayan issued, upon request of the counsel for Jose
L. Africa, et al. dated October 18, 1988, a subpoena duces tecum and ad
testificandum ordering the PCGG or its representatives to appear and
testify before the Sandiganbayan during the hearing on November 3, 1988
at 2:00 P.M. and to produce the stock and transfer book and all stubs of
the outstanding stock certificates of ETPI.
Three days thereafter, or on October 24, 1988, another subpoena duces
tecum was issued upon an amended request for subpoena by the same
counsel, ordering Assistant Solicitor General Ramon Desuasido or his
representative to appear before the Sandiganbayan at the 2:00 P.M.
hearing on November 3, 1988 and to produce the “minutes of all meetings
of the Board of Directors and Stockholders of ETPI held from January 29,
1988 to date.”
The PCGG and its nominee/designee, Ramon Desuasido, moved to quash both
subpoenae, but the motion was denied by the Sandiganbayan in an
order[13] dated
November 3, 1988. The hearing was reset to November 15, 1988 at 2:00
o’clock in the afternoon.
On November 15, 1988, an urgent petition for certiorari, docketed as
G.R. No. 85594, was filed by the PCGG and its nominees/designees before
this Court, assailing as having been issued with grave abuse of
discretion the incidental orders dated October 24, 1988 and November 3,
1988 on the principal contention that the Sandiganbayan has no
jurisdiction over the main action for damages since Civil Case No. 0050
is in truth a suit against the State without its consent. The PCGG also
prayed for the issuance of a temporary restraining order to enjoin the
respondents from enforcing and/or executing the subpoenae dated October
21, 1988 and October 24, 1988. On the same date, or on November 15,
1988, the Court issued a temporary restraining order.[14]
The Sandiganbayan, in the meantime, proceeded with the main case and,
thereafter, on December 13, 1988 promulgated a resolution[15] denying the motions
to dismiss separately filed by the PCGG and the individual defendants.
On February 23, 1989, the Sandiganbayan denied the motion for
reconsideration filed by the representatives of Cable and Wireless,
Ltd.[16]
The PCGG and its nominees opted not to file a motion for
reconsideration apparently in the belief that the same would be merely
repetitive, if not futile.
From the denial of the motion to dismiss, the PCGG and its
nominees/designees filed on March 27, 1989 an Urgent Supplemental
Petition in G.R. No. 85594[17]
assailing the denial by the Sandiganbayan of their motions to dismiss
on the grounds that the core subject matter and issue are res judicata
by virtue of the decision in G.R. No. 82188; that the respondent court
lacks jurisdiction over the case; that private respondents have no legal
capacity to sue and institute a separate action; and that they are not
the real parties in interest.
Recapping, therefore, from the foregoing narration it appears that the
injunction suits filed and docketed as Civil Cases Nos. 0048 and 0050 in
the Sandiganbayan and the petition for injunction filed directly with
this Court as G.R. No. 83831 are substantially identical in the reliefs
sought therein, that is, to nullify the acts and orders of the PCGG
which led to the nomination and election of the new members of the board
of directors and officers of the ETPI and to enjoin said directors and
officers from exercising the powers and functions of said positions.
Civil Cases Nos. 0048 and 0050 were elevated to this Court on some
incidental matters relating to the propriety of hearing the cases on the
merits without the motions to dismiss filed therein having been first
resolved; and in Civil Case No. 0050, on the additional issue of the
legality of the subpoena duces tecum and ad
testificandum issued
by the Sandiganbayan ordering the PCGG or its representatives to testify
and produce the stock and transfer book, all stubs of the outstanding
stock certificates of ETPI and the minutes of all meetings of the board
of directors and stockholders held from January 29, 1988.
The issue in Civil Case No. 0050 as to the propriety of hearing the main
action for injunction before resolving the motions to dismiss has been
mooted when the Sandiganbayan denied said motions to dismiss on December
13, 1988. We are, however, constrained to go deeper into the issue
since the denial of said motions was the subject matter of a
supplemental petition in G.R. No. 85594.
With respect to G.R. Nos. 85597 and 85621, we find that the deferment of
the resolution of the motions to dismiss Civil Case No. 0048 was
tainted with grave abuse of discretion. It is well-settled that while
the court has the discretion to defer the hearing and determination of a
motion to dismiss if the ground therefor is not indubitable,[18]
such deferment is in excess of jurisdiction if the ground for the
motion to dismiss is lack of jurisdiction or lack of cause of action,
since the allegations of the complaint are deemed admitted and the
motion to dismiss can be resolved without waiting for trial on the
merits.[19]
Clearly, on the
face of the complaint, the issue of lack of jurisdiction invoked in the
motion to dismiss can be resolved without waiting for trial on the
merits as will be shown hereunder. Thus, petitioner Villanueva is
correct in his assertion that his motion to dismiss must first be
resolved before trial on the merits may be had.
Be that as it may, this finding merely constitutes a technical victory
for said petitioner as it will be rendered moot and academic by the
following ruling on the merits of the grounds raised in his motion to
dismiss.
In G.R. No. 85621, petitioner Villanueva imputes grave abuse of
discretion to the Sandiganbayan in proceeding with the hearing of Civil
Case No. 0048. To his mind, the injunction suit filed by Africa, Nieto
and Valdez is in effect a suit against the State and, since there is no
waiver of immunity by the State, respondent court cannot acquire
jurisdiction over the same.
Along the same vein, the PCGG elevated to this Court in G.R. No. 85594
the denial of its motion to dismiss Civil Case No. 0050 contending that
the Sandiganbayan has no jurisdiction to entertain an independent suit
against the Republic of the Philippines (PCGG) not only because it is
only the Republic, without consenting to be sued or countersued, that is
allowed to file civil or criminal cases with said court pursuant to
Executive Order No. 14, but also because the cause of action, if any, or
the subject matter or nature of the complaint for injunction are not
within the limited or special jurisdiction of the Sandiganbayan as
defined by Section 4, Presidential Decree No. 1606, as amended by
Presidential Decree No. 1891, even as such jurisdiction has been
enlarged by Executive Order No. 14.
The law and jurisprudence on the jurisdiction of the Sandiganbayan over
cases for the recovery of “ill-gotten wealth” are now settled. In PCGG
vs. Hon. Emmanuel G. Peña, etc., et al., [20] this Court held:
“x x x Under Section 2 of the President’s Executive Order No. 14 issued
on May 7, 1986, all cases of the Commission regarding the Funds, Moneys,
Assets, and Properties Illegally Acquired or Misappropriated by Former
President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos, their Close
Relatives, Subordinates, Business Associates, Dummies, Agents, or
Nominees’ whether civil or criminal, are lodged within the ‘exclusive
and original jurisdiction of the Sandiganbayan’ and all incidents
arising from, incidental to, or related to, such cases necessarily fall
likewise under the Sandiganbayan’s exclusive and original jurisdiction,
subject to review on certiorari exclusively by the Supreme Court.”
The aforequoted ruling was reiterated in PCGG vs. Hon. Aquino, Jr.,
etc., et al. and Marcelo Fiberglass Corporation vs. PCGG,[21] which were jointly
decided by the Court on June 30, 1988.
In six (6) subsequent cases[22] likewise jointly decided on August 10, 1988,
the Court pointed out that:
“x x x (the) exclusive jurisdiction conferred on the
Sandiganbayan
would evidently extend not only to the principal causes of action,
i.e., the recovery of alleged ill-gotten wealth, but also to ‘all
incidents arising from, incidental to, or related to, such cases,’ such
as the dispute over the sale of shares, the propriety of the issuance of
ancillary writs or provisional remedies relative thereto, the
sequestration thereof, which may not be made the subject of separate
actions or proceedings in another forum.”
A careful examination of the records of these cases reveals that the
complaints instituted by Jose L. Africa, et al. in Civil Cases Nos. 0048
and 0050 before the Sandiganbayan are in the nature of special and
original civil actions for injunction[23]
directed against the defendants therein and specially seeking to
restrain them from representing and acting as officers and members of
the Board of Directors of ETPI and to prevent the PCGG from exercising
acts of ownership and/or management over ETPI.
Moreover, in claiming as illegal the acts or orders of the PCGG issued
in pursuance of the exercise of its powers and functions under Executive
Orders Nos. 1, 2 and 14, which resulted in the installation of
defendants to the Board of Directors of ETPI and to their corporate
offices, plaintiffs Jose L. Africa, et al. merely sought to preserve the
status quo, that is, the last actual, peaceable, uncontested status
which preceded the pending controversy. The status quo to the plaintiffs
was the fact of their election to the Board of Directors of ETPI during
the special stockholders meeting on January 4, 1988 allegedly pursuant
to a valid call, notice and assembly in accordance with law.
The issue of jurisdiction of the Sandiganbayan over original special
civil actions involving the powers and functions of the PCGG has been
raised in and resolved by this Court. In the consolidated cases of PCGG
vs. Hon. Aquino, Jr., etc., et al. and Marcelo Fiberglass Corporation
vs. PCGG, supra, therein private respondent Marcelo Fiberglass
Corporation contested the jurisdiction of the Sandiganbayan over special
civil actions claiming that Section 2 of Executive Order No. 14 vested
the Sandiganbayan with jurisdiction over civil and criminal cases filed
by the PCGG but not over special civil actions filed by private parties;
that Section 2 did not limit the filing of special civil actions by
private persons exclusively with the Sandiganbayan; and that
Presidential Decree No. 1606 which created the Sandiganbayan did not
vest such court with jurisdiction over special civil actions such as
those involved therein and as enumerated in Section 4 of Presidential
Decree No. 1606.
The Court rejected such contention, declaring that the attempt to remove
special civil actions from the Sandiganbayan’s exclusive jurisdiction
is of no avail if they similarly involve the powers and functions of the
PCGG. The Court reiterated the pronouncement in PCGG vs. Pena, etc., et
al., supra, that the Sandiganbayan has exclusive and original
jurisdiction in civil or criminal cases involving ill-gotten wealth
under Executive Order No. 14, as well as incidents arising from,
incidental or related to such cases, subject to review on certiorari
exclusively by the Supreme Court.
Since the injunctive suits filed by Jose L. Africa, et al. before the
Sandiganbayan stemmed from incidents arising from, incidental and
related to the partial sequestration of ETPI, the directive enunciated
in the Peña case that “those who wish to question or challenge the
Commission’s acts or orders in such cases must seek recourse in the same
court, the Sandiganbayan, which is vested with exclusive and original
jurisdiction,” applies to the instant case.
Neither would the principle of immunity of the State from suit invoked
by the PCGG divest the Sandiganbayan of its jurisdiction over the
complaints for injunction in both Civil Cases Nos. 0048 and 0050. While
there were claims for damages alleged in the complaints in both cases,
the same are, however, directed against the individual defendants in
their personal capacities for having allegedly acted without legal
authority and in a manner adverse to the interests of ETPI.[24]
Incorporating a monetary claim in the complaint will not convert the
special civil action for injunction into a mere claim for damages which
would otherwise call for the application of the rule on non-suability of
the State.[25]
The
complaints for injunction do not seek money judgments from nor do they
demand any affirmative performance by the State in its political
capacity which would call for immunity from suit. The doctrine of state
immunity from suit applies only in actions resulting in adverse
consequences on the public treasury, whether in the disbursement of
funds or loss of property.[26]
Plaintiffs in both cases sought the intervention of the Sandiganbayan to
obtain redress for what they perceived to be an arbitrary and illegal
deprivation of their proprietary rights in the ETPI by the individual
defendants resulting from the latter being installed as directors or
officers of ETPI by virtue of the questioned acts or orders of the PCGG.
Plaintiffs do not seek to impose pecuniary liabilities against the PCGG
as a government entity. Verily, the PCGG cannot hide behind the
aforestated doctrine of immunity of the State from suit to bar
plaintiffs from going to the courts to seek affirmative reliefs in these
actions.
Seeking further to divest the Sandiganbayan of its jurisdiction over the
actions for injunction in Civil Cases Nos. 0048 and 0050, the PCGG
argues that the said actions are barred by res judicata because of the
prior judgment in PCGG, et al. vs. SEC, et al. and its companion case,
PCGG vs. Sandiganbayan, et al., supra. It is the contention of the PCGG
that the subject matter and issues in both Civil Cases Nos. 0048 and
0050 are the very same subject matter and issues raised by Africa, et
al. in SEC Case No. 3297 and in their motion for injunction in Civil
Case No. 0009, both of which were elevated by the PCGG to this Court in
G.R. No. 82188.
The doctrine of res judicata or bar by prior judgment does not apply in
the instant cases. The two issues raised in G.R. No. 82188 related
principally to the issue of jurisdiction, namely: (1) whether or not the
Securities and Exchange Commission gravely abused its discretion and
acted in excess of jurisdiction in SEC Case No. 3297 when it restrained
the PCGG from holding the special stockholders meeting of the ETPI on
March 4, 1988; and (2) whether or not the Sandiganbayan gravely abused
its discretion and acted in excess of jurisdiction when it restrained
the PCGG, its nominated directors and/or corporate officers, employees,
nominees, agents and/or representatives at ETPI from calling and/or
holding a stockholders meeting and voting the sequestered shares thereat
for the purpose of amending the articles of incorporation or by-laws of
ETPI, or otherwise effecting substantial changes in policy, programs or
practices of said corporation.
In brief, what was obviously raised and resolved by the Court was the
scope and extent of the authority of the Sandiganbayan to issue
injunctive writs on matters involving the exercise and performance of
the powers and functions of the PCGG as conservator in accordance with
the ruling in BASECO vs. PCGG, et al.[27] to prevent the disposal and dissipation of the
assets of sequestered companies or businesses.
Although the challenge against the temporary restraining order issued by
the Securities and Exchange Commission in SEC Case No. 3297 became moot
and academic by virtue of the expiration of its 20-day effectivity
period, the Court nevertheless ruled that the issuance of the same was
tainted with grave abuse of discretion considering that the SEC Hearing
Panel should have then realized that there existed an element in the
case which effectively removed it from the jurisdiction of the SEC, to
wit, the presence of the PCGG which, as another quasi-judicial body, is a
co-equal entity over whose actions the SEC has no power of control.
The Court, on the other hand, upheld the temporary restraining order
issued by the Sandiganbayan insofar as it restrained the stockholders
meeting specifically called for the purpose of ratifying the proposed
amendment to delete from ETPI’s articles of incorporation and by-laws
the “right of first refusal” clause. Recognizing that the exercise of
the “right of first refusal” is an act of strict ownership, the Court
ruled that while there may be instances when only through an act of
strict ownership can the PCGG be able to prevent the dissipation of
assets of a sequestered corporation or business, the situation then
presented was nevertheless not one of such instances.
Significantly, however, the Court found the general injunction imposed
by the Sandiganbayan on the PCGG to desist and refrain from calling a
stockholders meeting for the purpose of electing a new board of
directors or effecting substantial changes in the policy, program or
practice of the corporation to be too broad as to thereby taint said
order with grave abuse of discretion.
On PCGG’s insistence on the rule of bar by prior judgment, it is readily
apparent that one fundamental requisite for the application of that
doctrine of res judicata is absent in the instant case, that is, the
prior judgment or order must be a judgment on the merits of the case.
For a prior judgment to constitute a bar to a subsequent case, (1) it
must be a final judgment or order, (2) the court rendering the same must
have jurisdiction over the subject matter and over the parties, (3) it
must be a judgment for order on the merits, and (4) there must be
between the two cases identity of parties, subject matter, and causes of
action.[28]
There is no dispute that, substantially, the acts or orders of the PCGG
which led to the election of the members of the board of directors and
officers of ETPI, as well as all acts done thereafter by the said board,
are the incidents which gave rise to the causes of action involved in
the injunction suit in SEC Case No. 3297 and the motion for injunction
in Civil Case No. 0009, both of which gave rise to G.R. No. 82188.
There is, accordingly, identity of the incidents upon which the causes
of action in Civil Cases Nos. 0048 and 0050 are based and those of the
two cases which gave rise to G.R. No. 82188.
However, there is nothing, in the pronouncements of the Court in G.R.
No. 82188 which finally resolved the merits of the factual issues raised
therein by the opposing parties which included, among others, the
alleged illegal manner by which the meeting to elect the new board of
directors was called and held on January 29, 1988; the qualification,
experience and probity of those elected to the board contrary to the
caveat in BASECO vs. PCGG, et al., supra, on the substitution of
directors of the board of sequestered corporations; and the alleged
mismanagement of the operations of ETPI by those elected to the board
and the corporate offices by the PCGG.
A cursory reading of the decision would show that the Court merely ruled
on the parameters of the jurisdiction of the Sandiganbayan to issue
injunctive writs in cases involving the PCGG and PCGG-related matters.
In fact, the Court stressed in G.R. No. 82188 that “the various motions
filed by private respondents in this case involving matters which would
require us to look into the facts of the case are better ventilated
before the Sandiganbayan.” Nothing final or definite was laid down by
this Court in that case with respect to the legality or illegality of
the questioned acts or orders of the PCGG leading to the election of its
nominees/designees to the ETPI board of directors and corporate
offices.
The denial, therefore, of the motion to dismiss in Civil Case No. 0050
was not sullied by grave abuse of discretion. With this pronouncement,
the denial of the motion to dismiss Civil Case No. 0048 would likewise
be proper and necessarily called for.
The issue raised in the original petition in G.R. No. 85594 relating to
the validity of the issuance by the Sandiganbayan of the subpoena duces
tecum and ad testificandum ordering the PCGG or its representative to
testify and produce the stock and transfer book, all stubs of the
outstanding stock certificates of ETPI and the minutes of all meetings
of the board of directors and stockholders of ETPI held from January 29,
1988 to date was laid to rest by our joint resolution in two cases,
both entitled Republic vs. Sandiganbayan and Eduardo Cojuangco
Jr.,[29] which
applies squarely in the instant petitions.
In upholding therein the right of a stockholder of a sequestered company
to inspect and/or examine the records of a corporation pursuant to
Section 74 of the Corporation Code, the Court found nothing in Executive
Orders Nos. 1, 2 and 14, as well as in BASECO, to indicate an implied
amendment of the Corporation Code, much less an implied modification of a
stockholder’s right of inspection as guaranteed by Section 74 thereof.
The only express limitation on the right of inspection, according to the
Court, is that (1) the right of inspection should be exercised at
reasonable hours on business days; (2) the person demanding the right to
examine and copy excerpts from the corporate records and minutes has
not improperly used any information secured through any previous
examination of the records of such corporation, and (3) the demand is
made in good faith or for a legitimate purpose.
The issues raised in G.R. No. 83831, an original petition filed by
Victor Africa with this Court, including the motion for contempt filed
by Eduardo M. Villanueva against Jose L. Africa, Manuel Nieto and Victor
Africa for having made unwarranted comments to the news media on
matters involved in the pending petitions, are factual in nature and are
best ventilated before the Sandiganbayan — the proper forum where both
parties can substantiate their respective claims. This Court is not a
trier of facts.
Considering that Civil Cases Nos. 0048 and 0050 arose from the partial
sequestration of ETPI and the incidents raised before this Court in G.R.
Nos. 85594, 85597 and 85621 are related to said partial sequestration
of ETPI, all the factual matters alleged in these cases are best
threshed out in the main case, Civil Case No. 0009, as incidents
therein, to save time and efforts in the presentation of evidence and in
order to avoid multiplicity of suits.
IN VIEW OF THE FOREGOING, the petitions in
G.R. Nos.
85594, 85597 and 85621 are hereby DISMISSED for lack of merit, and G.R.
No. 83831 is REFERRED to the Sandiganbayan for appropriate proceedings.
The Sandiganbayan is hereby ordered to consolidate G.R. No. 83831 and
Civil Cases Nos. 0048 and 0050 with Civil Case No. 0009. The temporary
restraining orders separately issued in G.R. No. 85594 and G.R. No.
85597 on November 15, 1988 are hereby LIFTED and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Melencio-Hererra, Gutierrez, Jr., Cruz, Paras,
Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea and
Davide, Jr., JJ., concur.
Romero and Nocon, JJ., no
part.
[*]PCGG was
impleaded as a respondent by reason of its being an unwilling
co-petitioner.
[1] Rollo, G.R.
No. 85597, 98.
[2] See Second Ex
Parte Very Urgent Motion for Immediate Issuance of a Temporary
Restraining Order, Rollo, G.R. No. 83831, 31.
[3] Rollo, G.R.
No. 83831, 61-69.
[4] Civil Case
No. 0048 is
actually a revival of Civil Case No. 0045 filed by Jose L. Africa,
Manuel Nieto and Rafael Valdez sometime in August, 1988 but later
withdrawn on September 5, 1988.
[5] Annexes “C”
and “C-1”, Petition, G.R. No. 85621; Rollo, 32-47.
[6] Annex “C”,
Petition, G.R. No. 85597; Rollo, 72-91.
[7] Annex “D”,
id.; ibid., 93-94.
[8] Rollo, G.R.
No. 85597, 95-96.
[9] Annex “A”,
Petition, G.R. No. 85594; Rollo, 26-39.
[10] Annex “B-1”,
Urgent Supplemental Petition, G.R. No. 85594; Rollo, 275-281.
[11] Annex “B”,
id.; ibid., 268-274.
[12] Annex “B-2”,
id.; ibid., 281-288.
[13] Annex “F-1”,
Urgent Supplemental Petition, G.R. No. 85594; Rollo, 67-68.
[14] Rollo, G.R.
No. 85594, 70-71.
[15] Annex “G-1”,
Urgent Supplemental Petition, G.R. No. 85594; Rollo, 312-334.
[16] Annex “G-2”,
id.; ibid., 335-340.
[17] Rollo, G.R.
No. 85594, 217-252.
[18] Section 3,
Rule 16, Rules of Court.
[19] Foster
Parents Plan
International/Bicol, et al. vs. Hon. Demetriou, et al., 142 SCRA 505
(1986); Edward J. Nell Co. vs. Cubacub, et al., 14 SCRA 419 (1965); Abo
vs. Philame (KG) Employees, et, al., 13 SCRA 120 (1965); Campos Rueda
Corporation vs. Hon. Bautista, et al., 6 SCRA 240 (1962).
[20] 159 SCRA 556
(1986).
[21] G.R. Nos.
77916 and 78753, 163 SCRA 363 (1988).
[22] Soriano III,
et al. vs.
Hon. Yuzon, et al., G. R. No. 74910; Cojuangco, Jr., et al. vs. SEC, et
al., G.R. No. 75075; Ganay vs. PCGG, G.R. No. 75094; Board of Directors
of San Miguel Corporation, et al. vs. SEC, et al., G.R. No. 76397;
Cojuangco, Jr., et al. vs. Hon. Laggui, etc., et al., G.R. No. 79459;
Neptunia Corporation, Ltd., et al. vs. PCGG, et al., G.R. No. 79520,
164 SCRA 226 (1988).
[23] See, for
instance, Sec.
4, Rule 39, Rules of Court and Art. 26, Civil Code which contemplate and
authorize original actions for injunction brought specifically to
restrain or command the performance of an act.
[24] Pars. 11 to
19,
Complaint in Civil Case No. 0048, Rollo, G.R. No. 85597, 49-55; Pars. 14
to 20, Complaint in Civil Case No. 0050, Rollo, G.R. No. 85594, 31-36.
[25] Republic vs.
Sandiganbayan, et al., 184 SCRA 382 (1990); Moreno, et al. vs. Hon.
Macadaeg, et al., 7 SCRA 700 (1963); Ruiz, et al. vs. Cabahug, 102 Phil.
110 (1957).
[26] Begosa vs.
Chairman,
Philippine Veterans Administration, et al., 32 SCRA 466 (1970); Johnson
vs. Turner, 94 Phil. 807 (1954); Marvel Building Corporation vs.
Philippine War Damage Commission, 85 Phil. 27 (1949).
[27] 150 SCRA 181
(1987).
[28] Pacific
Banking Corp.
vs. Mendoza, et al., 168 SCRA 709 (1988); Republic vs. Hon. Sebastian,
etc., et al. 166 SCRA 140 (1988); Eternal Gardens Memorial Parks
Corporation vs. Intermediate Appellate Court, et al., 165 SCRA 439
(1988).
[29] G.R. Nos.
88809 and 88858, July 10, 1991.