88 SUPREME COURT REPORTS ANNOTATED Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. No. L-35990.

June 17, 1981.* ABOITIZ & COMPANY, INC., HONORABLE VICENTE N. CUSI, JR., Judge of the Court of First Instance of Davao, and the PROVINCIAL SHERIFF OF DAVAO DEL SUR, petitioners, vs. COTABATO BUS COMPANY, INC., respondent. Attachment; Insolvency is not a proper ground for issuance of a writ of attachment. Going forthwith to this question of whether insolvency, which petitioners in effect claims to have been proven by the evidence, particularly by companys bank account which has been reduced to nil, may be a ground for the issuance of a writ of attachment, the respondent Court of Appeals correctly took its position in the negative on the strength of the explicit ruling of this Court in Max Chamorro & Co. vs. Philippine Ready Mix Concrete Company, Inc. and Hon. Manuel P. Barcelona. Same; Facts of this case do not warrant issuance of the writ of attachment. It is an undisputed fact that, as averred by petitioner itself, the several buses attached are nearly junks. However, upon permission by the sheriff, five of them were repaired, but they were substituted with five buses which were also in the same condition as the five repaired ones before the repair. This cannot be the removal intended as ground for the issuance of a writ of attachment under Section 1(e), Rule 57, of the Rules of Court. The repair of the five buses was evidently motivated by a desire to serve the interest of the ______________

* SECOND DIVISION. 89

VOL. 105, JUNE 17, 1981 89 Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. riding public, clearly not to defraud its creditors, as there is no showing that they were not put on the run after their repairs, as was the obvious purpose of their substitution to be placed in running condition. Same; Same.Moreover, as the buses were mortgaged to the DPB, their removal or disposal as alleged by petitioner to provide the basis for its prayer for the issuance of a writ of attachment should be very remote, if not nil. If removal of the buses had in fact been committed, which seems to exist only in petitioners apprehensive imagination, the DBP should not have failed to ta ke proper court action, both civil and criminal, which apparently has not been done. Same; Same.The dwindling of respondents bank account despite its daily income of from P10,000.00 to P14,000.00 is easily explained by its having to meet heavy operating expenses, which include salaries and wages of employees and workers. If, indeed the income of the company were sufficiently profitable, it should not allow its buses to fall into disuse by lack of repairs. It should also maintain a good credit standing with its suppliers of equipment and other needs of the company to keep its business a going concern. Petitioner is only one of the suppliers. Same; Same.It is, indeed, extremely hard to remove the buses, machinery and other equipments which respondent company have to own and keep to be able to engage and continue in the operation of its transportation business. The sale or other form of disposition of any of this kind of property is not difficult of detection or discovery, and strangely, petitioner has adduced no proof of any sale or transfer of any of them, which should have been easily obtainable. Aquino, J., separate opinion:

Action; Judges; Judge Cusi was improperly joined as a co-petitioner.In the result. Judge Cusi was improperly joined as a copetitioner. APPEAL by certiorari from the decision of the Court of Appeals. The facts are stated in the opinion of the Court. 90

90 SUPREME COURT REPORTS ANNOTATED Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. DE CASTRO, J.:

The instant petition stemmed from Civil Case No. 7329 of the Court of First Instance of Davao (Branch I) in which a writ of preliminary attachment was issued ex-parte by the Court on the strength of an affidavit of merit attached to the verified complaint filed by petitioner herein, Aboitiz & Co., Inc., on November 2, 1971, as plaintiff in said case, for the collection of money in the sum of P155,739.41, which defendant therein, the respondent in the instant case, Cotabato Bus Co., owed the said petitioner. Respondent company filed in the lower court an Urgent Motion to Dissolve or Quash Writ of Attachment t o which was attached an affidavit executed by its Assistant Manager, Baldovino Lagbao, alleging among other things that the Cotabato Bus Company has not been selling or disposing of its properties, neither does it intend to do so, much less to defraud its creditors; that also the Cotabato Bus Company, Inc. has been acquiring and buying more assets. An opposition and a supplemental opposition were filed to the urgent motion. The lower court denied the motion stating in its Order that the testimony of Bald ovino Lagbao, witness for the defendant, corroborates the facts in the plaintiffs affidavit instead of disproving or showing them to be untrue. A motion for reconsideration was filed by the defendant bus company but the lower court denied it. Hence, the defendant went to the Court of Appeals on a petition for certiorari alleging grave abuse of discretion on the part of herein respondent Judge, Hon. Vicente R. Cusi, Jr. On giving due course to the 91

VOL. 105, JUNE 17, 1981 91 Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. petition, the Court of Appeals issued a restraining order restraining the trial court from enforcing further the writ of attachment and from proceeding with the hearing of Civil Case No. 7329. In its decision promulgated on October 3, 1971, the Court of Appeals declared null and void the order/writ of attachment dated November 3, 1971 and the orders of December 2, 1971, as well as that of December 11, 1971, ordered the release of the attached properties, and made the restraining order originally issued permanent. The present recourse is an appeal by certiorari from the decision of the Court of Appeals reversing the assailed orders of the Court of First Instance of Davao, (Branch I), petitioner assigning against the lower court the following errors: ERROR I

THE COURT OF APPEALS ERRED IN HASTILY AND PERFUNCTORILY RENDERING, ON OCTOBER 3, 1971, A DECISION WITHOUT CONSIDERING MOST OF THE EVIDENCE SUCH THAT 1) EVEN AN IMPORTANT FACT, ESTABLISHED BY DOCUMENTARY EVIDENCE AND NOT DENIED BY RESPONDENT, IS MENTIONED ONLY AS A CLAIM OF PETITIONER COMPANY; 2) THE DECISION CONTAINS NO DISCUSSION AND APPRECIATION OF THE FACTS AS PROVED, ASSEMBLED AND PRESENTED BY PETITIONER COMPANY SHOWINGIN THEIR TOTALITYTHAT RESPONDENT HAS REMOVED, DIVERTED OR DISPOSED OF ITS BANK DEPOSITS, INCOME AND OTHER LIQUID ASSETS WITH INTENT TO DEFRAUD ITS CREDITORS, ESPECIALLY ITS UNSECURED SUPPLIERS; 3) THE DECISION IGNORES THE SIGNIFICANCE OF THE REFUSAL OF RESPONDENT TO PERMIT, UNDER REP. ACT NO. 1405, THE METROPOLITAN BANK & TRUST CO. TO BRING, IN COMPLIANCE WITH A SUBPOENA DUCES TECUM, TO THE TRIAL COURT ALL THE RECORDS OF RESPONDENTS DEPOSITS AND WITHDRAWALS UNDER ITS CURRENT AND SAVINGS ACCOUNTS (NOW NIL) FOR EXAMINATION BY PETITIONER COMPANY FOR THE PUR92

92 SUPREME COURT REPORTS ANNOTATED Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. POSE OF SHOWING DIRECTLY THE REMOVAL, DIVERSION OR DISPOSAL OF RESPONDENTS DEPOSITS AND INCOME WITH INTENT TO DEFRAUD ITS CREDITORS. ERROR II

THE COURT OF APPEALS ERRED IN NOT APPRECIATING THE FACTS THAT RESPONDENTS BANK DEPOSITS ARE NIL AS PROOF WHICHTOGETHER WITH RESPONDENTS ADMISSION OF AN INCOME OF FROM P10,000.00 to P14,000.00 A DAY AND THE EVIDENCE THAT IT CANNOT PRODUCE P634.00 WITHOUT USING A PERSONAL CHECK OF ITS PRESIDENT AND MAJORITY STOCKHOLDER, AND OTHER EVIDENCESHOWS THE REMOVAL OR CHANNELING OF ITS INCOME TO THE LATTER. ERROR III

THE COURT OF APPEALS ERRED IN NOT APPRECIATING THE RESCUE AND REMOVAL BY RESPONDENT OF FIVE ATTACHED BUSES, DURING THE PENDENCY OF ITS MOTION TO DISSOLVE THE ATTACHMENT IN THE TRIAL COURT, AS A FURTHER ACT OF REMOVAL OF PROPERTIES BY RESPONDENT WITH INTENT TO DEFRAUD PETITIONER COMPANY, FOR WHOSE BENEFIT SAID BUSES HAD BEEN ATTACHED. The questions raised are mainly, if not solely, factual revolving on whether respondent bus company has in fact removed its properties, or is about to do so, in fraud of its creditors. This being so, the findings of the Court of Appeals on said issues of facts are generally considered conclusive and final, and should no longer be disturbed. However, We gave due course to the petition because it raises also a legal question of whether the writ of attachment was properly issued upon a showing that defendant is on the verge of insolvency and may no longer satisfy its just debts without issuing the writ. This may be inferred from the emphasis laid by petitioner on the fact that even for the measly amount of P634.00 payment thereof was made with a personal check of the respondent com93

VOL. 105, JUNE 17, 1981 93

Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. panys president and majority stockholder, and its debts to several creditors, including secured ones like the DBP, have rema ined unpaid, despite its supposed daily income of an average of P12,000.00, as declared by its assistant manager, Baldovino Lagbao.1 Going forthwith to this question of whether insolvency, which petitioners in effect claims to have been proven by the evidence, particularly by companys bank account which has been reduced to nil, may be a ground for the issuance of a writ of attachment, the respondent Court of Appeals correctly took its position in the negative on the strength of the explicit ruling of this Court in Max Chamorro & Co. vs. Philippine Ready Mix Concrete Company, Inc. and Hon. Manuel P. Barcelona.2 Petitioner, however, disclaims any intention of advancing the theory that insolvency is a ground for the issuance of a writ of attachment,3 and insists that its evidence is intended to prove his assertion that respondent company has disposed, or is about to dispose, of its properties, in fraud of its creditors. Aside from the reference petitioner had made to respondent company s nil bank account, as if to show removal of com-panys funds, petitioner also cited the alleged non-payment of its other creditors, including secured creditors like the DBP to which all its buses have been mortgaged, despite its daily income averaging P12,000.00, and the rescue and removal of five attached buses. It is an undisputed fact that, as averred by petitioner itself, the several buses attached are nearly junks. However, upon permission by the sheriff, five of them were repaired, but they were substituted with five buses which were also in the same condition as the five repaired ones before the repair. This cannot be the removal intended as ground for the issuance of a writ of attachment under section 1 (e), Rule 57, of the Rules of Court. The repair of the five buses was evidently motivated by a desire to serve the interest of the riding public, clearly not to _____________

1 p. 24, Appellants Brief. 2 94 Phil. 1005. 3 pages 8-9, Appellants Reply Brief. 94

94 SUPREME COURT REPORTS ANNOTATED Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. defraud its creditors, as there is no showing that they were not put on the run after their repairs, as was the obvious purpose of their substitution to be placed in running condition. Moreover, as the buses were mortgaged to the DBP, their removal or disposal as alleged by petitioner to provide the basis for its prayer for the issuance of a writ of attachment should be very remote, if not nil. If removal of the buses had in fact been committed, which seems to exist only in petitioners apprehensive imagination, the DBP should not have failed to take proper court action, both civil and criminal, which apparently has not been done. The dwindling of respondents bank account despite its daily income of from P10,000.00 to P14,000.00 is easily explained by its having to meet heavy operating expenses, which include salaries and wages of employees and workers. If, indeed the income of the company were sufficiently profitable, it should not allow its buses to fall into disuse by lack of repairs. It should also maintain a good credit standing with its suppliers of equipment and other needs of the company to keep its business a going concern. Petitioner is only one of the suppliers. It is, indeed, extremely hard to remove the buses, machinery and other equipments which respondent company have to own and keep to be able to engage and continue in the operation of its transportation business. The sale or other form of disposition of any of this kind of property is not difficult of detection or discovery, and strangely, petitioner, has adduced no proof of any sale or transfer of any of them, which should have been easily obtainable.

In the main, therefore, We find that the respondent Court of Appeals has not committed any reversible error, much less grave abuse of discretion, except that the restraining order issued by it should not have included restraining the trial court from hearing the case, altogether. Accordingly, the instant petition is hereby denied, but the trial court is hereby ordered to immediately proceed with the hearing of Civil Case No. 7329 and decide it in accordance with the law and the evidence. No special pronouncement as to costs. 95

VOL. 105, JUNE 17, 1981 95 Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. SO ORDERED. Barredo (Chairman), Guerrero*, and Abad Santos, JJ., concur. Aquino, J., in the result. Judge Cusi was improperly joined as a co-petitioner. Concepcion Jr., J., took no part. Petition denied. Notes.Where there are no third parties involved and the non-registration of the notice of levy has not impaired the rights of the judgment debtor, the subsequent registration of the certificate of absolute sale amounted to the filing of notice of levy. (Valenzuela vs. De Aguilar, 8 SCRA 212). The mere garnishment of funds belonging to a party upon order of the court does not have the effect of delivering the money garnished to the sheriff or to the party in whose favor the attachment is issued. (De la Rama vs. Villarosa, 8 SCRA 413). Plaintiffs claim for damages for the discharge of attachment upon giving counter-bond is premature where the case is still pending appeal. (Dizon vs. Valdez, 23 SCRA 200). A writ of garnishment on the salary of a married woman for a judgment debt on which she alone is liable is illegal when it is proved that said salary is not sufficient for her expenses and that of her family. (Avendao vs. Alikpala, 12 SCRA 537). The interest of an heir in the estate of a deceased person may be attached for purposes of execution even if the estate is in the process of settlement before the courts. (Reganon vs. Imperial, 22 SCRA 80). A writ of preliminary attachment is provisional remedy issued upon an order of the court where an action is pending, to ______________

*Justice Guerrero is designated in place of Justice Conception. 96

96 SUPREME COURT REPORTS ANNOTATED Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc. be levied upon the property or properties of the defendant therein, the same to be held thereafter by the sheriff as security for the satisfaction of whatever judgment might be secured by the attaching creditor against the defendant. (Militante vs. Edrosolano, 39 SCRA 473).

The plaintiff who secures a favorable judgment does not need to file a supplemental pleading the finality of the judgment in order to claim payment from the surety on a counter-bond filed by the defendant who failed to satisfy the judgment. (Vanguard Assurance Corporation vs. Court of Appeals, 64 SCRA 148). Under Section 17, an order that the judgment creditor might recover from the surety on the counter bond, it is necessary (1) that execution be first issued against the principal debtor and that; such execution was returned unsatisfied in whole or in part; (2) that the creditor made a demand upon the surety for the satisfaction of the judgment; and (3) that the surety be given notice and a summary hearing in the same action as to his liability for the judgment under his counter bond. (Towers Assurance Corporation vs. Ororawa Supermart, 80 SCRA 262). o0o

97 [Aboitiz & Company, Inc. vs. Cotabato Bus Company, Inc., 105 SCRA 88(1981)] 694

SUPREME COURT REPORTS ANNOTATED Miailhe vs. De Lencquesaing No. L-67715. July 11, 1986.* WILLIAM ALAIN MIAILHE and THE HON. FELIX V. BARBERS, in his capacity as Presiding Judge, RTC of Manila, Branch XXXIII, petitioners-appellants, vs. ELIANE M. DE LENCQUESAING and HERVE DE LENCQUESAING, respondents-appellees. Remedial Law; Special Civil Actions; Attachment; Sec. 1, par. (f), Rule 57 of the Rules of Court, referring to an action against a party who resides out of the Philippines, applies where plaintiffs claim is for liquidated damages, not to unliquidated damages. While it is true that from the aforequoted provision attachment may issue in an action against a party who resides out of the Philippines, irrespective of the nature of the action or suit, and while it is also true that in the case of Cu Unjieng et a l v. Albert, 58 Phil. 495, it was held that each of the six grounds treated ante is independent of the _______________

8 Article 63(2), Revised Penal Code. * SECOND DIVISION. 695

VOL. 142, JULY 11, 1986 695 Miailhe vs. De Lencquesaing others, still it is imperative that the amount sought be liquidated. APPEAL by certiorari to review the decision of the Intermediate Appellate Court.

The facts are stated in the opinion of the Court. PARAS, J.:

This petition is an appeal by certiorari from the Decision of the Intermediate Appellate Court in AC-G.R. SP. No. 01914 which declared null and void, the Order of the Hon. Judge Felix V. Barbers, issued in Civil Case No. 83-16829, dated April 14, 1983, granting petitioners application for the issuance of a writ of preliminary attachment and the Order dated September 13, 1983 denying respondents motion to lift said attachment. The pertinent facts that gave rise to the instant petition are as follows: Petitioner William Alain Miailhe, his sisters Monique Miailhe Sichere, Eliane Miailhe de Lencquesaing and their mother, Madame Victoria D. Miailhe are co-owners of several registered real properties located in Metro Manila. By common consent of the said co-owners, petitioner William Alain has been administering said properties since 1960. As Madame Victoria D. Miailhe, her daughter Monique and son William Alain (herein petitioner) failed to secure an out-of-court partition thereof due to the unwillingness or opposition of respondent Elaine, they filed in the Court of First Instance of Manila (now Regional Trial Court) an action for Partition, which was docketed as Civil Case No. 105774 and assigned to Branch XXX thereof, presided over by Judge Pedro Ramirez. Among the issues presented in the partition case was the matter of petitioners account as administrator of th e properties sought to be partitioned. But while the said administrators account was still being examined, respondent Elaine filed a motion praying that the sum of P203,167.36 which allegedly appeared as a cash balance in her favor as of December 31, 1982, be ordered delivered to her by petitioner William Alain. Against the opposition of petitioner and the other co-owners, Judge 696

696 SUPREME COURT REPORTS ANNOTATED Miailhe vs. De Lencquesaing Pedro Ramirez granted the motion in his Order dated December 19, 1983 which order is now the subject of a certiorari proceeding in the Intermediate Appellate Court under AC-G.R. No. SP-03070. Meanwhile however, and more specifically on February 28, 1983, respondent Elaine filed a criminal complaint for estafa against petitioner William Alain, with the office of the City Fiscal of Manila, alleging in her supporting affidavit that on the face of the very account submitted by him as Administrator, he had misappropriated considerable amounts, which should have been turned over to her as her share in the net rentals of the common properties. Two days after filing the complaint, respondent flew back to Paris, the City of her residence. Likewise, a few days after the filing of the criminal complaint, an extensive news item about it appeared prominently in the Bulletin Today, March 4, 1983 issue, stating substantially that Alain Miailhe, a consul of the Philippines in the Republic of France, had been charged with Estafa of several million pesos by his own sister with the office of the City Fiscal of Manila. On April 12, 1983, petitioner Alain filed a verified complaint against respondent Elaine, for Damages in the amount of P2,000,000.00 and attorneys fees of P250,000.00 allegedly sustained by him by reason of the filing by respondent (then defendant) of a criminal complaint for estafa, solely for the purpose of embarrassing petitioner (then plaintiff) and besmirching his honor and reputation as a private person and as an Honorary Consul of the Republic of the Philippines in the City of Bordeaux, France. Petitioner further charged respondent with having caused the publication in the March 4, 1983 issue of the Bulletin Today, of a libelous news item. In his verified complaint, petitioner prayed for the issuance of a writ of preliminary attachment of the properties of respondent consisting of 1/6 undivided interests in certain real properties in the City of Manila on the ground that respondent-defendant is a non-resident of the Philippines, pursuant to paragraph (f), Section 1, Rule 57, in relation to Section 17, Rule 14 of the Revised Rules of Court. This case for Damages was docketed as Civil Case No. 83697

VOL. 142, JULY 11, 1986 697 Miailhe vs. De Lencquesaing 16829 of the Regional Trial Court of Manila, Branch XXXIII presided over by the Honorable Felix V. Barbers. On April 14, 1983, Judge Barbers granted petitioners application for preliminary attachment upon a bond to be filed by petitioner in the amount of P2,000,000.00. Petitioner filed said bond and upon its approval, the Writ of Preliminary Attachment was issued on April 18, 1983 which was served on the Deputy Clerk of Court of Branch XXX before whom the action for Partition was pending. On May 17, 1983, respondent thru counsel filed a motion to lift or dissolve the writ of attachment on the ground that the complaint did not comply with the provisions of Sec. 3 of Rule 57, Rules of Court and that petitioners claim was for unliqui dated damages. The motion to lift attachment having been denied, respondent filed with the Intermediate Appellate Court a special action for certiorari under AC-G.R SP No. 01914 alleging that Judge Barbers had acted with grave abuse of discretion in the premises. On April 4, 1934, the IAC issued its now assailed Decision declaring null and void the aforesaid Writ of preliminary attachment. Petitioner filed a motion for the reconsideration of the Decision but it was denied hence, this present petition which was given due course in the Resolution of this Court dated February 6, 1985. We find the petition meritless. The most important issue raised by petitioner is whether or not the Intermediate Appellate Court erred in construing Section 1 par. (f) Rule 57 of the Rules of Court to be applicable only in case the claim of the plaintiff is for liquidated damages (and therefore not where he seeks to recover unliquidated damages arising from a crime or tort). In its now assailed decision, the IAC stated We find, therefore, and so hold that respondent court had exceeded its jurisdiction in issuing the writ of attachment on a claim based on an action for damages arising from delict and quasi delict, the amount of which is uncertain and had not been reduced to judgment just because the defendant is not a resident of the Philippines. Because of the uncertainty of the amount of plaintiffs claim it can698

698 SUPREME COURT REPORTS ANNOTATED Miailhe vs. De Lencquesaing not be said that said claim is over and above all legal counterclaims that defendant may have against plaintiff, one of the indispensable requirements for the issuance of a writ of attachment which should be stated in the affidavit of applicant as required in Sec. 3 of Rule 57 or alleged in the verified complaint of plaintiff. The attachment issued in the case was therefore null and void. We agree. Section 1 of Rule 57 of the Rules of Court provides SEC. 1. Grounds upon which attachment may issue.A plaintiff or any proper party may, at the commencement of the action or at any time thereafter, have the property of the adverse party attached as security for the satisfaction of any judgment that may be recovered in the following cases: (a) In an action for the recovery of money or damages on a cause of action arising from contract, express or implied, against a party who is about to depart from the Philippines with intent to defraud his creditors;

(b) In an action for money or property embezzled or fraudulently misapplied or converted to his own use by a public officer, or an officer of a corporation or an attorney, factor, broker, agent, or clerk, in the course of his employment as such, or by any other person in a fiduciary capacity, or for a willful violation of duty; (c) In an action to recover the possession of personal property unjustly detained, when the property, or any part thereof, has been concealed, removed, or disposed of to prevent its being found or taken by the applicant or an officer; (d) In an action against a party who has been guilty of a fraud in contracting the debt or incurring the obligation upon which the action is brought, or in concealing or disposing of the property for the taking, detention or conversion of which the action is brought; (e) In an action against a party who has removed or disposed of his property, or is about to do so, with intent to defraud his creditors; (f)In an action against a party who resides out of the Philippines, or on whom summons may be served by publication. (italics supplied) While it is true that from the aforequoted provision attachment may issue in an action against a party who resides out 699

VOL. 142, JULY 11, 1986 699 Guzman vs. National University of the Philippines, irrespective of the nature of the action or suit, and while it is also true that in the case of Cu Un jieng et al v. Albert, 58 Phil. 495, it was held that each of the six grounds treated ante is independent of the others, still it is imper ative that the amount sought be liquidated. In view of the foregoing, the Decision appealed from is hereby AFFIRMED. SO ORDERED. Feria (Chairman), Fernan, Alampay and Gutierrez, Jr., JJ., concur. Decision affirmed. Notes.A special civil action of certiorari and prohibition which may be filed within a reasonable period, no time frame for its filing having been fixed by Rule 65, Rules of Court. (Cubar vs. Mendoza, 120 SCRA 768). Certiorari is proper where trial court already issued a writ of execution of questioned judgment. Issuance of writ of execution is a question of law. (Vda. de Sayman vs. Court of Appeals, 121 SCRA 650). The writ of certiorari may not be availed of to make up for the loss, through omission or oversight, of the right to appeal. (Lobete vs. Sundiam, 123 SCRA 185). o0o [Miailhe vs. De Lencquesaing, 142 SCRA 694(1986)] 110 SUPREME COURT REPORTS ANNOTATED Mabayo Farms, Inc. vs. Court of Appeals G.R. No. 140058. August 1, 2002.* MABAYO FARMS, INC., herein represented by its President MRS. RORAIMA SILVA, petitioner, vs. HON. COURT OF APPEALS and ANTONIO SANTOS, respondents.

Remedial Law; Injunction; As an ancillary or preventive remedy, a writ of preliminary injunction may therefore be resorted to by a party to protect or preserve his rights and for no other purpose during the pendency of the principal action; It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit; A person who is not a party in the main suit, cannot be bound by an ancillary writ.A preliminary injunction is an order granted at any stage of an action prior to final judgment, requiring a person to refrain from a particular act. As an ancillary or preventive remedy, a writ of preliminary injunction may therefore be resorted to by a party to protect or preserve his rights and for no other purpose during the pendency of the principal action. Its object is to preserve the status quo until the merits of the case can be heard. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. Thus, a person who is not a party in the main suit, like private respondent in the instant case, cannot be bound by an ancillary writ, such as the writ of preliminary injunction issued against the defendants in Civil Case No. 6695. He cannot be affected by any proceeding to which he is a stranger. Same; Actions; Intervention; Intervention in an action is neither compulsory nor mandatory but only optional and permissive; Requisites to warrant intervention.First, Private respondent had no duty to intervene in the proceedings in Civil Case No. 6695. Intervention in an action is neither compulsory nor mandatory but only optional and permissive. Second, to warrant intervention, two requisites must concur: (a) the movant has a legal interest in the matter in litigation, and (b) intervention must not unduly delay or prejudice the adjudication of the rights of the parties nor should the claim of the intervenor be capable of being properly decided in a separate proceeding. The interest, which entitles a person to intervene in a suit, must involve the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment. ______________

* SECOND DIVISION. 111

VOL. 386, AUGUST 1, 2002 111 Mabayo Farms, Inc. vs. Court of Appeals PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the resolution of the Court. Don P. Porciuncula for petitioner. Oscar L. Karaan for private respondent. RESOLUTION QUISUMBING, J.:

This petition for review seeks to reverse the decision1 promulgated on August 27, 1999, of the Court of Appeals in CA-G.R. SP No. 51375. The appellate court enjoined the enforcement of the writ of preliminary injunction dated April 14, 1998, issued by the Regional Trial Court of Balanga, Bataan, Branch 1, in Civil Case No. 6695 against private respondent, Antonio Santos. The factual antecedents of this case are as follows: On August 22, 1969, the Bureau of Lands declared Francisco Domingo, Reynaldo Florida, Cornelio Pilipino and Severino Vistan, lawful possessors of Lot 1379 of the Morong, Bataan Cadastre. Lot 1379 consists of 144 hectares. Domingo, Florida, Pilipino and Vistan through their forebears and by themselves had been in open, notorious, and exclusive possession of portions of Lot 1379

since 1933 in the concept of owners. The Bureau then directed them to confirm their titles over the property by filing the appropriate applications for the portions of the property respectively occupied by them. In October 1970, petitioner bought the respective portions of Domingo, Florida, Pilipino and Vistan, totaling 69,932 square meters and entered into a compromise settlement with six other persons occupying the property, whose applications had been rejected by the Bureau. Petitioner then filed an application for land registration docketed as LRC Cad. Rec. No. N-209 with the then Court of First Instance of Bataan, Branch 1. The application was con______________

1 Rollo, pp. 92-97. 112

112 SUPREME COURT REPORTS ANNOTATED Mabayo Farms, Inc. vs. Court of Appeals tested by several oppositors, among them the heirs of one Toribio Alejandro. On December 20, 1991, the trial court decided the land registration case in petitioners favor. The losing parties appealed t o the Court of Appeals, where the case was docketed as CA-G.R. CV No. 40452. On March 14, 2000, the appellate court affirmed the lower courts decision.2 In June 1997, a group of occupants entered the land, destroyed the fences and drove away livestock owned by petitioner. On October 9, 1997, petitioner filed a complaint for injunction with damages, with a prayer for a temporary restraining order, docketed as Civil Case No. 6695, with the RTC of Balanga, Bataan. Named as defendants were Juanito Infante, Domingo Infante, Lito Mangalidan, Jaime Aquino, John Doe, Peter Doe, and Richard Doe. The trial court issued the temporary restraining order (TRO) and on January 16, 1998, the sheriff served copies on the defendants. The sheriff accompanied petitioners president to the property where they found five (5) persons cultivating the land. The latter refused to give their names or receive copies of the TRO. They claimed that they were only farm workers of a certain Antonio Santos who allegedly owned the land.3 On April 14, 1998, the trial court issued a writ of preliminary injunction restraining the defendants or persons acting on their behalf from entering and cultivating the disputed property. The aforementioned writ was also served upon respondent who was occupying a portion of Lot No. 1379.4 On February 24, 1999, private respondent filed a special civil action for certiorari docketed as CA-G.R. SP No. 51375 with the Court of Appeals. Private respondent averred that he only learned about the writ of preliminary injunction on February 16, 1999, when he secured a copy of the order. He claimed that he was an innocent purchaser for value of the property from Francisco, Armando, and Conchita, all surnamed Alejandro and the injunc______________

2 Id., at pp. 113-125. 3 CA Rollo, p. 73. 4 Supra, note 1 at 75. 113

VOL. 386, AUGUST 1, 2002 113 Mabayo Farms, Inc. vs. Court of Appeals tion prevented him from using his property. He alleged that he was not a party to Civil Case No. 6695 and that it was grave abuse of discretion for the trial court to enforce the injunctive writ against him since it did not have jurisdiction over him. On August 27, 1999, the appellate court decided CA-G.R. SP No. 51375 in private respondents favor, thus: WHEREFORE, premises considered the instant Petition is hereby GRANTED. Public respondent is enjoined from imposing the questioned writ of preliminary injunction dated April 14, 199[8] against petitioner [Santos]. SO ORDERED.5 Hence, the instant petition, submitting the following issues for our consideration: A. WHETHER [PRIVATE] RESPONDENT WAS DEPRIVED OF HIS CONSTITUTIONAL RIGHT TO BE HEARD. B. WHETHER RULE 3, SEC. 11 OF THE 1997 RULES OF CIVIL PROCEDURE6 IS APPLICABLE IN THE ABOVE-ENTITLED CASE. We find the lone issue to be: Is private respondent bound by the writ of preliminary injunction issued by the trial court? First, petitioner contends that the injunctive writ of April 14, 1998 was issued not only against all named defendants in Civil Case No. 6695, but also against three unnamed Does. It now argues that the Does in the complaint are all those who violated its rights, including private respondent. Petitioner asks us to note that the writ of injunction was served not only against the defendants in Civil Case No. 6695, but also against other persons who were seen entering and cultivating petitioners property, including ______________

5 Id., at p. 97. 6 SEC. 11. Misjoinder and non-joinder of parties.Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined party may be severed and proceeded with separately. 114

114 SUPREME COURT REPORTS ANNOTATED Mabayo Farms, Inc. vs. Court of Appeals private respondent. Since the latter personally received the injunctive order on June 5, 1998, he was already forewarned to intervene in Civil Case No. 6695 if he had any right or interest to protect in the disputed property. This he failed to do. Since private respondent did not then take the opportunity to present his side, he cannot now claim that he was denied due process when the writ was enforced against him. In his comment, private respondent counters that he was not legally bound nor required by law to file his pleadings in Civil Case No. 6695 as he was not a party in said case. Likewise, he was not required to act on or protest the injunctive writ in the aforementioned civil case. Private respondent avers that what petitioner wants is to have a continuing writ in its favor, to include not only the defendants in Civil Case No. 6695 but also all those who may subsequently intrude into the land dispute.

Private respondent submits that the court a quo committed no error in describing petitioners posture as a v iolation of the fundamental rights to notice and hearing. We have minutely scrutinized the order granting the writ of preliminary injunction and are unable to say that the writ applied to private respondent. The order merely stated [L]et a writ of preliminary injunction be issued enjoining and restraining the defendants or any person or persons acting in their place or stead from further entering and cultivating the said land of the plaintiff subject matter of this case until further order from the Court. 7 The persons specifically enjoined in the order were the defendants in Civil Case No. 6695 or persons acting in their stead. Petitioner itself admitted that private respondent was not a defendant in Civil Case No. 6695 since at the institution of the case in 1997, he (private respondent) did not have a right over any portion of petitioners lot.8 Neither was he a trespasser then.9 Also, nothing in the records indicate that private resp ondent was acting on behalf of any of the defendants. Taking all these into consideration, we ______________

7 CA Rollo, p. 20. 8 Rollo, p. 21. 9 Ibid. 115

VOL. 386, AUGUST 1, 2002 115 Mabayo Farms, Inc. vs. Court of Appeals must hold that the writ of preliminary injunction thus cannot be made to apply to private respondent. A preliminary injunction is an order granted at any stage of an action prior to final judgment, requiring a person to refrain from a particular act.10 As an ancillary or preventive remedy, a writ of preliminary injunction may therefore be resorted to by a party to protect or preserve his rights and for no other purpose during the pendency of the principal action.11 Its object is to preserve the status quo until the merits of the case can be heard.12 It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit.13 Thus, a person who is not a party in the main suit, like private respondent in the instant case, cannot be bound by an ancillary writ, such as the writ of preliminary injunction issued against the defendants in Civil Case No. 6695. He cannot be affected by any proceeding to which he is a stranger.14 Second, petitioner contends that the Court of Appeals erred when it observed that petitioner should have impleaded private respondent as defendant in Civil Case No. 6695 pursuant to Section 11, Rule 3 of the 1997 Rules of Civil Procedure.15 Instead, private respondent should have intervened in Civil Case No. 6695 to protect his rights. Petitioner avers that at the time the injunctive writ was issued, it had already rested its case and to require it to amend its complaint to include private respondent was too late. Private respondent counters that there was no reason why Section 11, Rule 3 of the 1997 Rules of Civil Procedure should not be ______________

10 1997 RULES OF CIVIL PROCEDURE, Rule 58, Sec. 1. 11 China Banking Corporation v. Court of Appeals, G.R. No. 121158, 333 Phil. 158, 173; 265 SCRA 327 (1996), citing Bengzon v. Court of Appeals, No. L-82568, 161 SCRA 745, 749 (1988) and Calo & San Jose v. Roldan, No. L-252, 76 Phil. 445, 451-452 (1946). 12 Rava Development Corporation v. Court of Appeals, G.R. No. 96825, 211 SCRA 144, 154 (1992), citing Avila v. Tapucar, G.R. No. 45947, 201 SCRA 148 (1991).

13 Lopez v. Court of Appeals, G.R. No. 110929, 322 SCRA 686, 691 (2000). 14 Matuguina Integrated Wood Products, Inc. v. Court of Appeals, G.R. No. 98310, 263 SCRA 490, 505-506 (1996). 15 Supra, note 6. 116

116 SUPREME COURT REPORTS ANNOTATED Mabayo Farms, Inc. vs. Court of Appeals made to apply to Civil Case No. 6695. He argues that contrary to petitioners posture, his inclusion as a defendant in Civil Case No. 6695 is procedurally correct since no final judgment had yet been rendered in said case. Moreover, he avers that petitioner cannot insist that private respondent be vigilant in protecting his rights by intervening in Civil Case No. 6695. We agree with private respondent. First, private respondent had no duty to intervene in the proceedings in Civil Case No. 6695. Intervention in an action is neither compulsory nor mandatory but only optional and permissive.16 Second, to warrant intervention, two requisites must concur: (a) the movant has a legal interest in the matter in litigation,17 and (b) intervention must not unduly delay or prejudice the adjudication of the rights of the parties18 nor should the claim of the intervenor be capable of being properly decided in a separate proceeding.19 The interest, which entitles a person to intervene in a suit, must involve the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment.20 Civil Case No. 6695 was an action for permanent injunction and damages. As a stranger to the case, private respondent had neither legal interest in a permanent injunction nor an interest on the damages to be imposed, if any, in Civil Case No. 6695. To allow him to intervene would have unnecessarily complicated and prolonged the case. We agree with the Court of Appeals that to make the injunctive writ applicable against private respondent, petitioner should have impleaded the latter as an additional defendant in Civil Case No. 6695. Petitioners insistence that it had rested its c ase and hence was too late to include defendant finds no support in Section 11. ______________

16 Cruzcosa, et al. v. Hon. H. Concepcion, et al., No. L-11146, 101 Phil. 146, 150 (1957). 17 Batama Farmers Cooperative Marketing Association, Inc., et al. v. Hon. Rosal, et al., G.R. No . L-30526, 149 Phil. 514, 518 (1971). 18 Balane v. De Guzman, No. L-21281, 20 SCRA 177, 179 (1967). 19 Pfleider v. Cordova de Britanico, et al., No. L-19077, 120 Phil. 1008, 1010, 12 SCRA 222 (1964). 20 Garcia v. David, No. 45454, 67 Phil. 279, 284 (1939). 117

VOL. 386, AUGUST 1, 2002 117 Dayrit vs. Philippine Bank of Communications The rule categorically provides that Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action (stress supplied) and on such terms as are just.21 We find it inexplicable why petitioner

pointedly resisted the advice of the appellate court to implead private respondent as an additional defendant in Civil Case No. 6695. WHEREFORE, the instant petition is DENIED and the assailed decision of the Court of Appeals in CA-G.R. SP No. 51375 AFFIRMED. No pronouncement as to costs. SO ORDERED. Bellosillo (Chairman), Mendoza and Corona, JJ., concur. Petition denied, judgment affirmed. Note.Injunction whether preliminary or final is not designed to protect contingent or future rights. (Ortaez-Enderes vs. Court of Appeals, 321 SCRA 178 [1999]) o0o [Mabayo Farms, Inc. vs. Court of Appeals, 386 SCRA 110(2002)] 356 SUPREME COURT REPORTS ANNOTATED The Senate Blue Ribbon Committee vs. Majaducon G.R. No. 136760. July 29, 2003.* THE SENATE BLUE RIBBON COMMITTEE, represented by its Chairman, SENATOR AQUILINO Q. PIMENTEL, JR., petitioner, vs. HON. JOSE S. MAJADUCON, Presiding Judge of Branch 23, Regional Trial Court of General Santos City, and ATTY. NILO J. FLAVIANO, respondents. G.R. No. 138378. July 29, 2003.* AQUILINO Q. PIMENTEL, JR., petitioner, vs. THE HONORABLE JOSE S. MAJADUCON, in his capacity as Presiding Judge of Branch 23, Regional Trial Court, General Santos City, respondent. Remedial Law; Certiorari; There is grave abuse of discretion when the respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment as when the assailed order is bereft of any factual and legal justification.There is grave abuse of discretion when the respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment, as when the assailed order is bereft of any factual and legal justification. In this case, the assailed resolution of respondent Judge Majaducon was issued without legal basis. Same; Same; The Regional Trial Court of General Santos City or any court for that matter had no authority to prohibit the Committee from requiring respondent to appear and testify before it.The principle of separation of powers essentially means that legislation belongs to Congress, execution to the Executive, and settlement of legal controversies to the Judiciary. Each is prevented from invading the domain of the others. When the Senate Blue Ribbon Committee served subpoena on respondent Flaviano to appear and testify before it in connection with its investigation of the alleged misuse and mismanagement of the AFP-RSBS funds, it did so pursuant to its authority to conduct inquiries in aid of legislation. This is clearly provided in Article VI, Section 21 of the Constitution, thus: The Senate or the House of Representatives or any of its respective committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of persons appearing in or affected by such inquiries shall be respected. Hence, the Regional Trial Court of General Santos City, or any court for that matter, had no authority to prohibit the Committee from requiring respondent to appear and testify before it. _______________

* EN BANC. 357

VOL. 407, JULY 29, 2003

357 The Senate Blue Ribbon Committee vs. Majaducon Same; Same; No basis for the respondent Judge to apply the ruling in Bengzon. In the instant case, the complaint against respondent Flaviano regarding the anomaly in the sale of Lot X, MR-1160 was still pending before the Office of the Ombudsman when the Committee served subpoena on him. In other words, no court had acquired jurisdiction over the matter. Thus, there was as yet no encroachment by the legislature into the exclusive jurisdiction of another branch of the government. Clearly, there was no basis for the respondent Judge to apply the ruling in Bengzon. Hence, the denial of petitioners moti on to dismiss the petition for prohibition amounted to grave abuse of discretion. Same; Same; Statement that respondent Judge was grossly ignorant of the rules of law and procedures does not constitute improper conduct that tends to impede, obstruct or degrade the administration of justice.Finally, the statement that respondent Judge was grossly ignorant of the rules of law and procedure does not constitute improper conduct that tends to impede, obstruct or degrade the administration of justice. As correctly argued by petitioner, the phrase gross ignorance of the rules of law and procedure is ordinarily found in administrative complaints and is a necessary description to support a peti tion which seeks the annulment of an order of a judge wherein basic legal principles are disregarded. PETITIONS for review of the resolutions of the Regional Trial Court of Gen. Santos City, Br. 23.

The facts are stated in the opinion of the Court. Eddie U. Tamondong, Jose S. Songco, Abelardo de Jesus and Felipe R. Fragante for petitioner. Flaviano, Canja, Oclarit & Associates for private respondent Atty. N. J. Flaviano. YNARES-SANTIAGO, J.:

For resolution are two consolidated petitions: (a) G.R. No. 136760, for certiorari, prohibition, mandamus and preliminary injunction, assailing the resolution dated November 11, 1998 of Judge Jose S. Majaducon of the Regional Trial Court of General Santos City, Branch 23, which denied the Senate Blue Ribbon Committees motion to dismiss the petition for prohibition, injunction with writ of preliminary injunction filed by private respondent Atty. Nilo J. Flaviano; and (b) G.R. No. 138378, for review of the resolution dated April 15, 1999 of respondent Judge Majaducon declaring petitioner Senator Aquilino Q. Pimentel, Jr. guilty of indirect contempt of court. 358

358 SUPREME COURT REPORTS ANNOTATED The Senate Blue Ribbon Committee vs. Majaducon The antecedent facts are as follows: G.R. No. 136760: On August 28, 1998, Senator Blas F. Ople filed Senate Resolution No. 157 directing the Committee on National Defense and Security to conduct an inquiry, in aid of legislation, into the charges of then Defense Secretary Orlando Mercado that a group of active and retired military officers were organizing a coup detat to prevent the administ ration of then President Joseph Estrada from probing alleged fund irregularities in the Armed Forces of the Philippines.1 On the same date, Senator Vicente C. Sotto III also filed Resolution No. 160, directing the appropriate senate committee to conduct an inquiry, in aid of legislation, into the alleged mismanagement of the funds and investment portfolio of the Armed Forces Retirement and Separation Benefits System (AFP-RSBS) x x x.2

The Senate President referred the two resolutions to the Committee on Accountability of Public Officers and Investigations (Blue Ribbon Committee) and the Committee on National Defense and Security. During the public hearings conducted by the Senate Blue Ribbon Committee (hereafter called the Committee), it appeared that the AFP-RSBS purchased a lot in General Santos City, designated as Lot X, MR-1160, for P10,500.00 per square meter from private respondent Atty. Nilo J. Flaviano. However, the deed of sale filed with the Register of Deeds indicated that the purchase price of the lot was only P3,000.00 per square meter. The Committee thereafter caused the service of a subpoena to respondent Atty. Flaviano, directing him to appear and testify before it. Respondent refused to appear at the hearing. Instead, he filed a petition for prohibition and preliminary injunction with prayer for temporary restraining order with the Regional Trial Court of General Santos City, Branch 23, which was docketed as SP Civil Case No. 496. On October 21, 1998, the trial court issued a Temporary Restraining Order directing the Committee to CEASE and DESIST _______________

1 Rollo for G.R. No. 136760, p. 51. 2 Id., at p. 54. 359

VOL. 407, JULY 29, 2003 359 The Senate Blue Ribbon Committee vs. Majaducon from proceeding with the inquiry in P.S. 160 particularly in General Santos City and/or anywhere in Region XI or Manila on matters affecting the patenting/titling and sale of Lot X, MR-1160-D to AFP-RSBS, and from issuing subpoenas to witnesses from Region XI, particularly from General Santos City, pending the hearing of the petition for prohibition and injunction.3 On November 5, 1998, the Committee filed a motion to dismiss the petition on the grounds of (a) lack of jurisdiction, and (b) failure to state a valid cause of action. It further argued that the issuance of the Temporary Restraining Order was invalid for violating the rule against ex-parte issuance thereof; and that the same was not enforceable beyond the territorial jurisdiction of the trial court. On November 11, 1998, the trial court denied petitioners motion to dismiss and granted the writ of preliminary injunction, thus: WHEREFORE, PREMISES CONSIDERED, the motion to dismiss is DENIED, and the WRIT OF PRELIMINARY INJUNCTION is hereby issued against respondent. It is enjoined from enforcing its subpoenas to petitioner in Region XI to appear and testify before it in any of its inquiry or investigation anywhere in the Philippines regarding the acquisition by the AFP-RSBS of Lot X, MR-1160-D, located in General Santos City. The bond of petitioner filed on October 21, 1998, for P500,000.00 for the TRO also serves as his bond in this injunction. SO ORDERED.4 Hence, the instant petition for certiorari which was docketed as G.R. No. 136760, alleging that respondent Judge Majaducon committed grave abuse of discretion and/or acted without or in excess of jurisdiction when he: I. DENIED PETITIONERS MOTION TO DISMISS THE PETITION FOR PROHIBITION AND PRELIMINARY INJUNCTION FILED BY PRIVATE RESPONDENT, ATTY. NILO J. FLAVIANO, AGAINST THE PETITIONER IN SP. CIVIL CASE NO. 496. II. ISSUED (1) A TEMPORARY RESTRAINING ORDER EXPARTE FOR A PERIOD OF TWENTY (20) DAYS AGAINST THE PETITIONER ON OCTOBER 21, 1998, AND (2) A WRIT OF PRELIMINARY INJUNCTION ON NOVEMBER 11, 1998 ENJOINING THE PETI _______________

3 Rollo for G.R. No. 136760, p. 37. 4 Id.,at pp. 35-36. 360

360 SUPREME COURT REPORTS ANNOTATED The Senate Blue Ribbon Committee vs. Majaducon TIONER FROM ENFORCING ITS SUBPOENAS TO PRIVATE RESPONENT IN REGION XI. III. APPLIED THE RULING OF BENGZON VS. SENATE BLUE RIBBON IN GRANTING INJUNCTIVE RELIEF TO PRIVATE RESPONDENT.5 G.R. No. 138378:

On January 13, 1999, the newspaper, The Philippine Star published a news report on the filing by the Committee with this Court of the petition for certiorari which was docketed as G.R. No. 136760. The news report quoted portions of the petition filed by the Committee, alleging that Regional Trial Court Judge Majaducon was guilty of gross ignorance of the rules and procedures when he issued the temporary restraining order and the writ of preliminary injunction because, under the principle of separation of powers, courts cannot interfere with the exercise by the legislature of its authority to conduct investigations in aid of legislation.6 Reacting to the aforesaid news report, respondent Judge Majaducon motu proprio initiated a charge for indirect contempt of court against Senator Aquilino Q. Pimentel, Jr., news reporter Perseus Echeminada, Philippine Star publisher Maximo Soliven, editor-in-chief Ramon J. Farolan, and executive editor Bobby G. dela Cruz, which was docketed as Special Civil Case No. 496. Judge Majaducon averred that the news report created in the minds of the reader the impression that he violated the separation of powers clause of the Constitution and that he was guilty of gross ignorance of the rules and procedures. After the respondents submitted their respective answers, a decision was rendered on April 15, 1999 finding petitioner Pimentel guilty of indirect contempt. Hence, the instant petition based on the following grounds: I. THE EXPRESSION GROSS IGNORANCE OF THE RULES OF PROCEDURE OR GROSS IGNORANCE OF THE LAW IN REFERENCE TO THE RESPONDENTS EX-PARTE ISSUANCE OF INJUNCTIVE RELIEF IS NOT PEJORATIVE AS TO CONSTITUTE A GROUND FOR INDIRECT CONTEMPT. _______________

5 Id.,at pp. 11-12. 6 J. Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary, p. 603 (1996 edition). 361

VOL. 407, JULY 29, 2003 361

The Senate Blue Ribbon Committee vs. Majaducon II. THIS HONORABLE COURT ITSELF USES GROSS IGNORANCE OF THE LAW AND OTHER EXPRESSIONS OF SIMILAR FORCEFUL IMPORT IN DESCRIBING GROSS AND PALPABLE ERRORS OF JUDGES. III. BY UPHOLDING HIS CONTEMPT CHARGE AGAINST THE PETITIONER, THE RESPONDENT JUDGE HAS, IN EFFECT, PREEMPTED THIS HONORABLE COURT IN RESOLVING THE ISSUES RAISED AGAINST HIM IN G.R. NO. 136760. IV. THE PUBLICATION BY PHILIPPINE STAR OF THE BLUE RIBBON PETITION IN G.R. NO. 136760, OR EXCERPTS THEREOF WAS A LEGITIMATE EXERCISE OF FREEDOM OF EXPRESSION AND OF THE PRESS. The two petitions, namely G.R. No. 136760 and G.R. No. 138378, were ordered consolidated on December 11, 2000. The issues for resolution in these joint petitions are: (a) whether or not respondent Judge Jose Majaducon committed grave abuse of discretion when he dismissed petitioners motion to dismiss the petition for prohibition and issued the writ of preliminary injunction; and (b) whether or not respondent Judge erred in convicting petitioner Pimentel of indirect contempt of court. On the first issue, petitioner Committee contends that courts have no jurisdiction to restrain Congress from performing its constitutionally vested function to conduct investigations in aid of legislation, following the principle of separation of powers. Moreover, the petition filed by respondent Flaviano before the trial court failed to state a cause of action considering that the legislative inquiry did not deal with the issuance of the patent and title to Lot X, MR-1160-D in the name of AFP-RSBS, which is well within the courts jurisdiction, but with the anomaly in the purchase thereof, which falls squarely within the ambit of Senate Resolutions Nos. 1577 and 160.8 On the other hand, respondent Flaviano contends that the trial court may properly intervene into investigations by Congress pursuant to the power of judicial review vested in it by the Constitution. He avers that he has a valid cause of action to file the petition for prohibition considering that the Committees investigation will _______________

7 Supra,note 1. 8 Supra,note 2. 362

362 SUPREME COURT REPORTS ANNOTATED The Senate Blue Ribbon Committee vs. Majaducon delve into the validity of the patenting and titling of Lot X, MR-1160-D which, as admitted by petitioner, falls within the competence of judicial courts. In fact, the validity of the purchase by AFP-RSBS of the subject lot is already the subject of a pending action before the Regional Trial Court of General Santos City and the Ombudsman of Mindanao. Finally, he cites the case of Bengzon v. Senate Blue Ribbon Committee,9 and argues that preliminary injunction may issue in cases pending before administrative bodies such as the Ombudsman or the Office of the Prosecutor as long as the right to self-incrimination guaranteed by the Bill of Rights is in danger. Furthermore, an information against him has been filed with the Sandiganbayan. We find for petitioner. There is grave abuse of discretion when the respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment, as when the assailed order is bereft of any factual and legal justification.10 In this case, the assailed resolution of respondent Judge Majaducon was issued without legal basis. The principle of separation of powers essentially means that legislation belongs to Congress, execution to the Executive, and settlement of legal controversies to the Judiciary. Each is prevented from invading the domain of the others.11 When the Senate Blue Ribbon Committee served subpoena on respondent Flaviano to appear and testify before it in connection with its

investigation of the alleged misuse and mismanagement of the AFP-RSBS funds, it did so pursuant to its authority to conduct inquiries in aid of legislation. This is clearly provided in Article VI, Section 21 of the Constitution, thus: The Senate or the House of Representatives or any of its respective committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of persons appearing in or affected by such inquiries shall be respected. _______________

9 G.R. No. 89914, 20 November 1991, 203 SCRA 767. 10 Ban Hua Flores v. Office of the Ombudsman and Atty. Enrique L. Flores, Jr., G.R. No. 136769, 17 September 2002, 389 SCRA 127. 11 Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary, p. 603 (1996 ed.). 363

VOL. 407, JULY 29, 2003 363 The Senate Blue Ribbon Committee vs. Majaducon Hence, the Regional Trial Court of General Santos City, or any court for that matter, had no authority to prohibit the Committee from requiring respondent to appear and testify before it. The ruling in Bengzon, cited by respondent, does not apply in this case. We agree with petitioner Committee that the factual circumstances therein are different from those in the case at bar. InBengzon, no intended legislation was involved and the subject matter of the inquiry was more within the province of the courts rather than of the legislature. More specifically, the investigation in the said case was an offshoot of the privilege speech of then Senator Enrile, who urged the Senate to look into a possible violation of the Anti-Graft and Corrupt Practices Act by the relatives of then President Corazon Aquino, particularly Mr. Ricardo Lopa, in connection with the alleged sale of 36 to 39 corporations belonging to Benjamin Romualdez. On the other hand, there was in this case a clear legislative purpose, as stated in Senate Resolution No. 160, and the appropriate Senate Committee was directed to look into the reported misuse and mismanagement of the AFP-RSBS funds, with the intention of enacting appropriate legislation to protect the rights and interests of the officers and members of the Armed Forces of the Philippines. Further, in Bengzon, the validity of the sale of Romualdezs corporations was pending with the Sandiganbayan when the Senate Blue Ribbon Committee decided to conduct its investigation. In short, the issue had already been pre-empted by the court. In the instant case, the complaint against respondent Flaviano regarding the anomaly in the sale of Lot X, MR-1160 was still pending before the Office of the Ombudsman when the Committee served subpoena on him. In other words, no court had acquired jurisdiction over the matter. Thus, there was as yet no encroachment by the legislature into the exclusive jurisdiction of another branch of the government. Clearly, there was no basis for the respondent Judge to apply the ruling in Bengzon. Hence, the denial of petitioners motion to dismiss the petition for prohibition amounted to grave abuse of discretion. In G.R. No. 138378, petitioner, Senator Aquilino Pimentel, Jr., contends that respondent judge erred in finding him, as representative of the Committee, guilty of indirect contempt of court under Rule 71, Section 3(d) of the 1997 Rules of Civil Procedure. According to Pimentel, the phrase gross ignorance of the rules of law and 364

364 SUPREME COURT REPORTS ANNOTATED The Senate Blue Ribbon Committee vs. Majaducon

procedure, which the Committee used in the petition, is not depreciatory, but merely a description of normal usage in petitions where the acts of lower courts are challenged before higher judicial bodies. In fact, this Court often uses the phrase in its decisions to describe judges who commit gross and palpable mistakes in their interpretation and application of the law. Petitioner further maintains that when the Committee used the phrase, it did so without malice. Rather, it was only to stress the unfamiliarity of or disregard by the respondent Judge of a basic rule of procedure, and to buttress its arguments in support of its petition for certiorari. Petitioner Pimentel also contends that he had no participation in the publication in the Philippine Star of excerpts from the Committees petition for certiorari. Even assuming arguendo that it was within his control, he pointed out that he could not have prevented the editors and writers of the newspaper from publishing the same, lest he violate their constitutional right of free expression. Indeed, the report by the Philippine Star of the filing of the petition and the reproduction of its contents was a legitimate exercise of press freedom. Respondent Judge counters that Pimentel was guilty of indirect contempt of court, first,for causing the publication of the Committees petition in the Philippine Star notwithstanding that the same was subjudice; second, for making derogatory remarks in the petition itself which affected the honor and integrity of the respondent judge and degraded the administration of justice; and third, for making it appear that an administrative complaint was filed against respondent Judge for gross ignorance of the law. These, he said, constituted malicious and false report which obstructed the administration of justice. Rule 71, Section 3(d) of the 1997 Rules of Civil Procedure provides: Section 3. Indirect contempt to be punished after charge and hearing. After a charge in writing has been filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt: xxx xxx xxx

d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice; x x x. 365

VOL. 407, JULY 29, 2003 365 The Senate Blue Ribbon Committee vs. Majaducon After deliberating on the parties arguments, we find that petitioner Pimentel is not guilty of improper conduct which obstru cts or degrades the administration of justice. Verily, it does not appear that Pimentel caused the publication in the Philippine Star of the fact of filing of the petition for certiorari by the Committee and the reproduction of excerpts thereof. He had no right to choose which news articles will see print in the newspaper. Rather, it is the publisher thereof which decides which news events will be reported in the broadsheet. In doing so, it is allowed the widest latitude of choice as to what items should see the light of day so long a s they are relevant to a matter of public interest, pursuant to its right of press freedom.12 Respondent Judges allegation that petitioner made it appear that an administrative complaint was filed against him is withou t basis. From a careful perusal of the records, it appears that while the Committee prayed for the imposition of administrative sanctions against respondent Judge Majaducon for gross ignorance of the law, no formal administrative complaint was instituted separately from the petition for certiorari. Finally, the statement that respondent Judge was grossly ignorant of the rules of law and procedure does not constitute improper conduct that tends to impede, obstruct or degrade the administration of justice. As correctly argued by petitioner, the phrase gross ignorance of the rules of law and procedure is ordinarily found in administrative complaints and is a necessary description to support a petition which seeks the annulment of an order of a judge wherein basic legal principles are disregarded. In Spouses Bacar v. Judge De Guzman, Jr.,13 it was held that when the law is so elementary, not to know it or to act as if a judge does not know it, constitutes gross ignorance of the law. In this case, there was no showing that petitioner Pimentel, as

representative of the Committee, used the phrase to malign the trial court. Rather, it was used to express what he believed as a violation of the basic principle of separation of powers. In this connection, it bears stressing that the power to declare a person in contempt of court must be exercised on the preservative, not vindictive principle, and on the corrective and not retaliatory _______________

12 Lopez v. Court of Appeals, 145 Phil. 219; 34 SCRA 116 (1970). 13 338 Phil. 41; 271 SCRA 328 (1997). 366

366 SUPREME COURT REPORTS ANNOTATED The Senate Blue Ribbon Committee vs. Majaducon idea of punishment.14 This was aptly expressed in the case of Nazareno v. Barnes:15 A judge, as a public servant, should not be so thin-skinned or sensitive as to feel hurt or offended if a citizen expresses an honest opinion about him which may not altogether be flattering to him. After all, what matters is that a judge performs his duties in accordance with the dictates of his conscience and the light that God has given him. A judge should never allow himself to be moved by pride, prejudice, passion, or pettiness in the performance of his duties. He should always bear in mind that the power of the court to punish for contempt should be exercised for purposes that are impersonal, because that power is intended as a safeguard not for the judges as persons but for the functions that they exercise. WHEREFORE, in view of the foregoing, the petitions docketed as G.R. Nos. 136760 and 138378 are GRANTED. The resolution of the Regional Trial Court of General Santos City, Branch 23, in Special Civil Case No. 496 dated November 11, 1998, which denied the Senate Blue Ribbon Committees motion to dismiss, is REVERSED and SET ASIDE. The Writ of Pre liminary Injunction issued by the trial court on November 11, 1998 is DISSOLVED. The resolution dated April 15, 1999, which declared Senator Aquilino Q. Pimentel, Jr. guilty of indirect contempt of court, is REVERSED and SET ASIDE. The petition for indirect contempt is ordered DISMISSED. SO ORDERED. Davide, Jr. (C.J.), Bellosillo, Puno, Vitug, Panganiban, Quisumbing, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna and Tinga, JJ., concur. Sandoval-Gutierrez, J., On Official Leave. Petitions granted, resolution dated November 11, 1998 reversed and set aside, writ of preliminary injunction dissolved. Resolution dated April 15, 1999 reversed and set aside, petition for indirect contempt dismissed. _______________

14 Oclarit v. Paderanga, G.R. No. 139519, 24 January 2001, 350 SCRA 260, 264-265. 15 220 Phil. 452; 136 SCRA 57 (1985). 367

VOL. 407, JULY 29, 2003 367 People vs. Soriano Note.Certiorari lies where a court has acted without or in excess of jurisdiction or with grave abuse of discretion. (Miranda vs. Abaya, 311 SCRA 617 [1999]) o0o [The Senate Blue Ribbon Committee vs. Majaducon, 407 SCRA 356(2003)]