EMERITO M. RAMOS, SR., SUSANA B. RAMOS, JOSEFA RAMOS DE LA RAMA, HORACIO DE LA RAMA, EMERITO B. RAMOS, JR., ANTONIO B. RAMOS, FILOMENA RAMOS LEDESMA, RODOLFO LEDESMA, VICTORIA R…

The propriety of an injunctive relief granted by the Court of
Appeals against the trial court from preventing the sale by the GSIS of the
COMBANK to the First National Bank of Boston (FNBB) and a group of investors is
the issue in the instant Petition.

The petitioners erroneously denominated the instant Petition as
one for certiorari under Rule 45 of the Rules of Court even if no
question of law has been raised^[1]
and the private respondents called the attention of the Court on the matter.^[2]
This error notwithstanding, and in the interest of justice, the Court resolved
to treat the instant Petition as a special civil action for certiorari
under Rule 65 on account of the jurisdictional issues raised herein.^[3]

The pertinent facts of the case are as follows —

On June 15, 1987,
the petitioners filed before the Regional Trial Court in Makati a Complaint for specific
performance, rescission of contract and damages against the private respondents
Government Service Insurance System (GSIS), the Commercial Bank of Manila
(COMBANK) and the Atrium Capital Corporation. 
The case was docketed as Civil Case No. 17027.^[4]

The petitioners prayed, among others, for the issuance of a
restraining order or writ of preliminary injunction enjoining the GSIS and
COMBANK from pushing through with a reported plan to sell COMBANK to the
private respondent FNBB and a group of Filipino investors represented by the
private respondent Edgardo L. Tordesillas.  In support thereof, the petitioners alleged
that the GSIS has no legal right to sell COMBANK inasmuch as both the GSIS and
COMBANK failed to comply with their obligations to the petitioners as embodied
in an Agreement of May 9, 1980 executed by the petitioners and the IUCF
investors group where petitioners sold to the latter 187,649 shares in the
Overseas Bank of Manila under the terms and conditions provided therein.^[5]
In sum, the petitioners maintained that they have considerable proprietary
interest in COMBANK and, accordingly, their consent must be obtained before
COMBANK can be legally sold to interested purchasers.

The case was initially raffled to Branch 133 with Judge
Buenaventura Guerrero presiding therein. 
When Judge Guerrero inhibited himself from further hearing the case, the
suit was raffled anew, this time to Branch 57, the sala
of Judge Francisco X. Velez.  In the meantime,
the petitioners filed an Amended Complaint to implead
the FNBB and private respondent Tordesillas.

The Amended Complaint notwithstanding, the GSIS, the FNBB and the
group of Tordesillas executed a Memorandum of
Agreement for the sale of the bank to FNBB, and the Tordesillas
group on June 22, 1987 for
the price of P510,000,000.00.  The agreement provides, among others, that
the GSIS will be responsible for
any claims which may be brought
by the petitioners against the FNBB and/or Tordesillas
on account of the sale of COMBANK.^[6]

On July 24, 1987,
the trial court issued the restraining order prayed for and set the hearing on
the application for the issuance of a writ of preliminary injunction on August 12, 1987.  On August 31, 1987, and after due hearing,
the trial court issued the writ of preliminary injunction upon a bond in the
amount of Five Million Pesos (P5,000,000.00) filed by the petitioners in favor
of the private respondents.^[7]

On September 7, 1987,
the FNBB and Tordesillas sought a reconsideration of
the action taken by the trial court.  On September 8, 1987, the GSIS and
COMBANK also asked the trial court to reconsider the injunctive relief it
granted.  As of September 20, 1987, the trial court had yet to
resolve the motions for reconsideration filed by the private respondents.

On September 21, 1987,
the FNBB and Tordesillas
filed a special civil action for certiorari and
prohibition with the Court of Appeals praying, inter alia,
for the issuance of a restraining order enjoining the trial court from
enforcing the writ of preliminary
injunction issued on August 31, 1987.  The case was docketed as CA-G.R. SP-No. 12859 and raffled to the Eleventh Division of the appellate court.^[8]

On September 25, 1987,
the Eleventh Division of the appellate court resolved to hold in abeyance the
consideration of the Petition for certiorari and prohibition pending the
resolution of the motions for reconsideration by the trial court.^[9]

On the same day, September
25, 1987, the GSIS and COMBANK filed a special civil action for certiorari and mandamus with the
Court of Appeals, praying for the same reliefs sought
in the special civil action filed by the FNBB and Tordesillas.  The case was docketed as CA-G.R. SP No. 12903
and raffled to the Seventh Division of the appellate court.^[10]

On September 30, 1987, the Seventh Division of the appellate
court resolved to give due course to the Petition (CA-G.R. SP No. 12903) and to
issue a temporary restraining order enjoining the trial court from enforcing
the writ of preliminary injunction it had issued upon a bond in the amount of
Five Million Pesos (P5,000,000.00) to be filed by the
GSIS and COMBANK in favor of the petitioners.^[11]

In view of the said Resolution of the Seventh Division, the
petitioners filed a Motion seeking the consolidation
of the two cases (CA-G.R. SP Nos. 12859 and 12903) and praying that the
temporary restraining order issued by the Seventh Division be lifted.  The Seventh Division heard oral arguments on
the said Motion.

On October 7, 1987, the Seventh Division resolved to consolidate
the two cases under the Seventh Division in accordance with the internal rules
of the appellate court on such matters and upon observing that both cases raise
almost identical issues.^[12] The Seventh Division also resolved to hold
in abeyance the consideration of the motion to lift the temporary restraining
order it had earlier issued in order not to pre-empt the action of the Eleventh
Division on the matter.^[13]

Meanwhile, in an order dated October 12, 1987, the trial court denied the two motions
seeking a reconsideration of its previous order relating to the writ of preliminary injunction it had issued.^[14]

The petitioners filed an Urgent Manifestation/Motion praying that
the restraining order issued by the Seventh Division be lifted.^[15]
They also asked the appellate court to schedule a hearing on the motion. 
The petitioners likewise accused the herein private respondents
of engaging in forum shopping.^[16]

On November 10, 1987,
the Eleventh Division resolved to deny the
Urgent Manifestation/Motion on the ground that there is no cogent reason for
granting the same.^[17]
The appellate court also instructed the parties to submit their respective
memoranda on the issue of whether or not the restraining order issued by the
Seventh Division should be
converted into a writ of preliminary injunction in lieu of oral argument.^[18]

On December 7, 1987,
the Eleventh Division resolved to
convert the restraining order issued by the Seventh Division into a writ of preliminary injunction.^[19]
The same Division, however, did not pass upon the issue of forum shopping.  The pertinent portions of the said Resolution
are as follows —

“After considering the arguments of the parties contained in
their respective memoranda, and without going into the merits of the petition, this Court holds that
the restraining order should be converted into a (writ of) preliminary injunction. 
In this regard, We are not unmindful of the
fact that the Memorandum of Agreement provides additional protection to private
respondents (herein petitioners), particularly paragraph 10 thereof, which
provides:

‘By closing, the seller shall
further have executed a document holding
ComBank and the Buyers free and harmless from any and
all present or future claims which may be raised by Mr. Emerito M. Ramos, Sr. and/or
such entities owned, managed or controlled by him, whether directly or
indirectly, and agreeing to
fully indemnify ComBank and/or the Buyers for all
actual and other damages which may be suffered therefrom.’

“Indeed, the existing bond and stipulation amply protect the
interests of private respondents (herein petitioners) without unnecessarily
hampering the privatization program of the government.

” . . . The Court’s main concern at this stage of the
proceedings is to determine whether the issuance of a (writ of) preliminary
injunction to enjoin the lower court from enforcing the questioned order and writ, would work injustice to private
respondents (herein petitioners) or render the judgment in the main case
ineffectual.  From what have (sic) been
discussed above, the Court is constrained to rule in the negative.

“IN VIEW OF THE FOREGOING, a writ of preliminary injunction is
hereby ISSUED in the same tenor as the restraining order issued by the Seventh Division and adopted by this
Court.” (Page 54, Rollo.)

In effect, the writ of preliminary injunction issued by the
Eleventh Division set aside the writ of preliminary injunction issued by the
trial court.  Therefore, there was no
more judicial obstacle to the sale of COMBANK. 
On December 11, 1987,
the GSIS and the FNBB and the group of Filipino investors represented by Tordesillas executed the Purchase and Sale Agreement of the
COMBANK pursuant to the Memorandum Agreement of June 22, 1987.^[20]

On December 15, 1987,
the instant Petition was filed with this Court.  The petition raised the following issues:

“I

WHILE THE TWO PETITIONS WHICH PRIVATE
RESPONDENTS FILED WITH RESPONDENT COURT CLEARLY CONSTITUTE ‘FORUM SHOPPING’ AND
HENCE, SHOULD HAVE BEEN DISMISSED OUTRIGHT, RESPONDENT COURT COMMITTED GRAVE
ABUSE OF DISCRETION IN GIVING DUE COURSE TO THE TWO PETITIONS AND GRANTING THE
ANCILLARY RELIEFS THEREIN SOUGHT.

II

IN ISSUING THE RESOLUTION DATED DECEMBER 7, 1987 CONVERTING THE
RESTRAINING ORDER OF SEPTEMBER 30,
1987 INTO AN INJUNCTION, RESPONDENT COURT
OVERSTEPPED ITS JURISDICTIONAL BOUNDS OR COMMITTED GRAVE ABUSE OF DISCRETION BY
MAKING FINDINGS AND CONCLUSIONS WITHOUT FACTUAL OR LEGAL BASIS BUT BASED MERELY
ON SPECULATIONS AND CONJECTURES.

III

RESPONDENT COURT COMMITTED GRAVE ABUSE OF
DISCRETION IN REFUSING TO TAKE COGNIZANCE OF THE FACT THAT FNBB WAS FOUND
GUILTY OF VIOLATING U.S. FEDERAL BANKING LAWS AND IN CONSIDERING PRESS REPORTS
ON THIS MATTER AS ‘HEARSAY’ WHEN FNBB ITSELF HAS ADMITTED SUCH FACT IN ITS OWN
PLEADINGS.” (Pages 15, 18 and 29, Rollo.)

As instructed by the Court, the private respondents filed their
respective Comments on the Petition.^[21]
Private respondent Tordesillas filed a Manifestation
and Motion on January 20, 1988 informing the Court that he ceased to have any
real interest in the subject matter of this case, and that there is no possible
act of his which can be properly
enjoined by the Court.^[22] This Court granted the prayer that he be
excused from filing a Comment on the Petition.^[23]

 For their part, the other
private respondents maintain that the Petition should be dismissed on the
ground that, among others, the act sought to be enjoined, i.e.,
the sale of COMBANK to the FNBB and the group of Filipino investors, is already
a consummated act.  In addition thereto,
the private respondents contend that the instant Petition is insufficient in
form and substance.

In the course of the proceedings, the parties submitted other
pleadings in support of their arguments. 
Thereafter, the case was considered submitted
for decision.^[24]

After a careful examination of the entire record of the case, the
Court finds the instant petition to be devoid of merit.  There is no cogent reason to hold that the
Eleventh Division of the Court of Appeals committed a grave abuse of discretion
amounting to lack of jurisdiction as alleged
by the petitioners.

I.

The Court is not persuaded that the private respondents were
engaged in forum shopping in the Court of Appeals.

It should be noted
that this controversy involves three groups of litigants — the petitioners as
the first group, the GSIS and COMBANK as the second group, and the FNBB and the
group of Filipino investors composing the third group.  When the GSIS and COMBANK felt aggrieved by
the action taken by the trial court, they had the prerogative to question the
same by way of a separate special civil action filed with Court of
Appeals.  By the same token, the FNBB and
the group of Filipino investors can avail of the same remedy.  Since they were not satisfied with the action
taken by the trial court, they had the option to challenge the same through a
separate special civil action filed with the appellate court.  The two groups of private respondents are
different litigants with different interests. 
One group need not get the consent of the other before seeking relief in
the appellate court through a special civil action.  Each group was represented by its own
lawyers.  The two groups filed separate
pleadings.

The private respondents can be considered to have engaged in
forum shopping if all of them, acting as one group, filed identical special
civil actions in the Court of Appeals and in this Court.  There must be identity of parties or
interests represented, rights asserted and relief sought in different
tribunals.^[25] In
the case at bar, the two groups of private respondents appear to have acted
independently of each other when they sought relief from the appellate
court.  Both groups sought relief from
the same tribunal.

It would not matter even if there are several divisions in the
Court of Appeals and that both suits could be assigned to different
divisions.  The adverse party can always
ask for the consolidation of the two cases. 
In fact, the petitioners sought
the consolidation of both CA.–G.R.
SP Nos. 12859 and 12903.

The petitioners must have been aware that the two groups of
private respondents are different entities. 
When the petitioners filed their
Complaint with the trial court, the GSIS and COMBANK were the original
defendants therein.  The petitioners
later amended their Complaint by including the FNBB and the Tordesillas investors group as
defendants.

The Court, therefore, holds that the Court of Appeals did not
commit a grave abuse of
discretion amounting to lack of
jurisdiction when it refused to order the dismissal of CA-G.R. SP Nos. 12859
and 12903 on the ground of forum shopping.

II.

This Court finds that the Eleventh Division of the Court of
Appeals did not commit a grave abuse of discretion amounting to lack of
jurisdiction when it issued the questioned writ of preliminary injunction.  The court reproduces with approval the disquisition of the respondent court in
its resolution of December 7, 1987 —

“The principal
relief sought by private respondents as
plaintiffs in the court below is one for specific performance.  Rescission is invoked merely as an
alternative remedy should specific performance be impossible of
compliance.  This is as it should be
because ‘the action for rescission is
subsidiary; it cannot be
instituted except when the party suffering damages has no other legal means to
obtain reparation for the same.’ (Art. 1383, Civil Code; Vinco v. Fuentebella, 12 C.A. Rep. 645; Guash v. Espirity, 11 Phil. 184; Goquiolay, et al. v. Sycip, et
al., 108 Phil. 947).

What are those matters which private respondents seek to be
performed by petitioners, particularly
petitioners GSIS and COMBANK?

They are:

(1)  To release their titles
within 90 days from the opening of the COMBANK on January 8, 1981;

(2)  To grant them a loan of
P20,000,000.00;

(3)  To restructure their
loan of P45 million on the books of OBM (now COMBANK) over a period of eight
years with a 3-year grace period on principal and interest;

(4)  To implement the
non-accrual of interest on the aforesaid P45 million loan during the closure of
OBM (now COMBANK);

(5)  To grant them the option
to purchase 10% of the COMBANK shares within three (3) years from the
re-opening of ComBank on January 9, 1981 and pending
the exercise of said option, to assign
voting rights equivalent to 10% of COMBANK’s equity.

Private respondents contend that the foregoing conditions have not
been complied with, and that therefore, the earlier sales of Overseas Bank (now
COMBANK), organized and founded by the
Ramos family, to the IUCP/Herdis group, and by the
latter to the GSIS should be rescinded. 
In the meanwhile, they contend that the proposed sale by GSIS to FNBB/ Tordesillas group should be enjoined as it has been
enjoined by respondent court.

The foregoing, in their bare essence, are the issues to be
resolved.

Private respondents do not deny the existence of the Memorandum of
Agreement in connection with the sale of COMBANK, which includes a provision that GSIS would assume the latter’s
obligation.  Nor is the solvency of
GSIS denied, as it could not be
denied, by them.  Hence, insofar as the
principal relief of
specific Performance of the conditions heretofore mentioned are concerned, private respondents are
duly protected and assured that the same will be complied with by GSIS itself provided that private
respondents themselves comply with their end of the agreement.  This is in keeping with the policy of the State ‘to promote privatization
through an orderly, coordinated and efficient program for the prompt
disposition of the large number of
non-performing assets of the government financial institutions, and certain
government owned or controlled corporations which have been found unnecessary
or inappropriate for the government sector to maintain.’ (Sec. 1, Proclamation No. 50 of December 8, 1986).  In fine, private respondents have failed to
show indubitably that Specific Performance of the conditions earlier
mentioned is impossible of compliance considering the guarantee of GSIS.

Of course, private respondents may be right in claiming that the
privatization policy of the government will not be violated if they succeed in
re-acquiring OBM, now COMBANK.  After
all, the Ramos group are also Filipino private enterprises who were the founders of OBM and should,
as a rule, be entitled to priority, instead of a foreign group whose reputation
is allegedly tainted or questionable. 
But that is not the point here. 
In asking for rescission, private respondents as plaintiffs failed to allege in their complaint their ability
and willingness to restore or return
what they have received from the IUCP-Herdis group
under the Basic Agreement of May 9, 1980. 
Instead, they confirm their inability or unwillingness to restore what
they had received by saying that ‘no offer of restoration is necessary where it
would be in vain and useless as where it is patent that a tender, if made,
would be rejected,’ (Langdon v. Loup Rive Public Power District, 139, Neb. 296,
297 NW 557 as cited in 17 Am. Jur. 2nd
997; Schlake v. McConnel,
83 Cal. App. 725; Esau v. Briggs, 89 Cal. App. 2d 427; Simmons v. Briggs, 69
Cal. App. 447 cited on p. 40 of Answer to Petition).  Aside from the foregoing, private respondents
do not deny having sold their own remaining shares in COMBANK to petitioner
GSIS, thereby placing in serious doubt whether they could still question the sale of the bank by IUCP-Herdis group to GSIS.

In view of the foregoing circumstances, the proposed sale or
negotiation and eventual consummation of said sale to the prospective buyer (FNBB/Tordesillas) would be unduly hampered, if the order and
writ of preliminary injunction issued by the respondent court would be allowed to remain in force in
contravention of the state policy to effect ‘prompt disposition of x x x government owned
controlled corporation.’“ (Pages 51-53, Rollo.)

Respondent GSIS denies non-compliance
with any of its commitment under the agreement of May 9, 1980 or that if any had not been complied with it
was because of the default of petitioners.  Nevertheless, as above discussed the Memorandum of Agreement regarding the sale of
COMBANK executed by the GSIS on one hand and the FNBB and the group of Filipino investors on the other provides sufficient protection to the
petitioners in the event that their claim against the GSIS and COMBANK is
substantiated before the trial court. 
The Memorandum of Agreement clearly provides that the GSIS will be responsible for any claims which
may be brought by the petitioners against the FNBB and/or Tordesillas
on account of the sale of COMBANK.  The
same provision can be found in the Purchase and Sale Agreement covering
COMBANK.^[26]
In a Deed of Assignment executed also on December 11, 1987, COMBANK assigned to GSIS “all
outstanding and existing loans, accrued interest and other receivables” of
petitioners.^[27]
On the same date too, a separate Indemnity Agreement was executed by GSIS in
favor of FNBB holding the latter “free and harmless from any and all present or future claims which may
be raised” by petitioners.^[28]
Moreover, as correctly pointed out by the Court of Appeals, the bond in the
amount of Five Million Pesos filed by the GSIS and COMBANK with the Court of
Appeals provides additional protection to the petitioners.

As to the alleged repeated violation of Federal Banking laws by
FNBB, it must be assumed that when the GSIS sold the COMBANK to the FNBB with the
approval of the President of the Philippines,
the credit standing and reputation of FNBB had been taken into
consideration.  There is a presumption of regularity in the performance of
official duties.^[29]

III.

The instant Petition should also be dismissed on another
ground.  The act sought to be enjoined in
this case, i. e., the sale of COMBANK
to the FNBB and the group of
Filipino investors, is already a consummated act.  The established principle is that when the
events sought to be prevented by injunction or prohibition
have already happened, nothing more could be enjoined or prohibited.^[30]
Thus, the instant Petition is moot and academic.

The petitioners, however, may still pursue their claim against
the GSIS in the trial court pursuant to the provisions of the Memorandum of Agreement and the Purchase and Sale
Agreement and the accompanying documents aforestated.

WHEREFORE, the instant Petition is hereby DISMISSED for
lack of merit without pronouncement as to costs.

SO ORDERED.

Fernan, C.J., Narvasa,
Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Sarmiento, Cortes, Medialdea, and Regalado, JJ., concur.

Melencio-Herrera and Griño-Aquino, JJ., no part.

^[1]
Only questions of law may be raised in a petition for review on certiorari under
Rule 45.

^[2]
Pages 10 to 12, Comment filed by private
respondent Government Service Insurance System; pages 324 to 326, Rollo.  Also,
pages 18 to 20, Comment filed by private respondent First National Bank Boston,
pages 359
to 361, Rollo.

^[3] Resolution dated December 17, 1987; page 304, Rollo.   A special civil action for certiorari lies against the Court
of Appeals pursuant to the provisions of Rule 65 in relation to Section 5,
Article VIII of the 1987 Constitution.

^[4]
Paragraphs 1 and 2, Petition; pages 7-9, Rollo.  Manifestation filed by the petitioners; pages
309 and 310, Rollo; See also questioned order
of the RTC of Makati of August 26, 1987, Annex H to
petition, pages 90-93, Rollo.

^[5]
Annex F to petition; pages 56-75, Rollo.

^[6] Pages 76 to 86, Rollo.

^[7] Pages 90 to 96, Rollo.

^[8]
At that time, the Eleventh division of the Court of Appeals was composed of
Justices Lorna S. L. De La Fuente, Ricardo J. Francisco and Alfredo L. Benipayo.

^[9] Page 151, Rollo.

^[10] The
Seventh Division of the Court of Appeals was then composed of Justices Vicente
V. Mendoza, Manuel C. Herrera and Jorge S. Imperial.

^[11] Pages 37 and 38, Rollo.

^[12] Pages 190 to 193, Rollo.

^[13] Ibid.

^[14] Pages 194 to 195, Rollo.  An examination of the Order of the trial court shows that although the trial court was aware of the
temporary restraining order issued by the Seventh Division of the appellate
court, it went on to resolve the Motions for Reconsideration in compliance with the Resolution of the Eleventh Division which in effect
authorized such action.

^[15] Pages 201 to 204, Rollo.

^[16] Ibid.

^[17] Page 43, Rollo.

^[18] Ibid.

^[19] Pages 48 to 55, Rollo.

^[20] Pages 373 to 391, Rollo.

^[21] Pages 315 to 341 and pages
342 to 364, Rollo.  The
GSIS and the FNBB filed separate Comments.

^[22] Pages 366 and 367, Rollo.

^[23] Resolution dated January 28, 1988; page 419, Rollo.

^[24]
On January 20, 1989,
petitioners submitted their Manifestation with a copy of the Rejoinder filed in
the lower court.

^[25] Palm Avenue Realty Development Corp. vs.
PCGG, G.R. No. 76296, August 31, 1987; E. Razon, Inc.
vs. Phil. Ports Authority, G.R. No. 75197, June 22, 1987; and Buan vs. Lopez, Sr., 145 SCRA 34, 38, 39 (1987).

^[26] Sec. 6.1 The parties
shall indemnify and hold the BANK and each other free and harmless at all times,
from and against and in respect of any damage, loss, cost, expense, liability
and/or counsel’s fees, resulting from any misrepresentation or breach of
representation or warranty.

Sec. 6.2 The BUYERS are granted the power
to collect damages which are the natural and probable consequences of any
misrepresentation or breach of representation
or warranty and those which may
be reasonably attributed to non-compliance due to the SELLER’s
misrepresentation, breach and/or
failure or refusal to comply with any of its obligations.

^[27] Pages 386-388, Rollo.

^[28] Pages 389-391, Rollo.

^[29] Section 5(m), Rule 131, Rules of Court.

^[30] Aragones vs. Subido, 25 SCRA 95 (1968); and Ramonte
vs. Bonto, 16 SCRA 257, 263 (1966).