Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83949:58786&catid=1590&Itemid=566
Timestamp: 2019-04-22 08:18:53+00:00

Document:
G.R. No. 174996, December 03, 2014 - BRO. BERNARD OCA, FSC, BRO. DENNIS MAGBANUA, FSC, MRS. CIRILA MOJICA, MRS. JOSEFINA PASCUAL AND ST. FRANCIS SCHOOL OF GENERAL TRIAS, CAVITE, INC., Petitioner, v. LAURITA CUSTODIO, Respondent.
BRO. BERNARD OCA, FSC, BRO. DENNIS MAGBANUA, FSC, MRS. CIRILA MOJICA, MRS. JOSEFINA PASCUAL AND ST. FRANCIS SCHOOL OF GENERAL TRIAS, CAVITE, INC., Petitioner, v. LAURITA CUSTODIO, Respondent.
On July 9, 1973, petitioner St. Francis School of General Trias Cavite, Inc. (School) was organized and established as a non-stock and non-profit educational institution. The organization and establishment of the school was accomplished through the assistance of the La Salle Brothers without any formal agreement with the School. Thus, the incorporators of the School consist of the following persons: private respondent Custodio, petitioner Cirila Mojica (Mojica), petitioner Josefina Pascual (Pascual), Rev. Msgr. Feliz Perez, Bro. Vernon Poore, FSC. The five original incorporators served as the School’s Members and Board of Trustees until the deaths of Bro. Poore and Msgr. Perez.
On September 8, 1988, to formalize the relationship between the De La Salle Greenhills (DLSG) and the School, a Memorandum of Agreement (MOA) was executed. This agreement permitted DLSG to exercise supervisory powers over the School’s academic affairs. Pursuant to the terms of the MOA, DLSG appointed supervisors who sit in the meetings of the Board of Trustees without any voting rights. The first such supervisor was Bro. Victor Franco. Later on, Bro. Franco also became a member of the Board of Trustees and President of the School. Then, on September 8, 1998, petitioner Bro. Bernard Oca joined Bro. Franco as DLSG supervisor. In a while, Bro. Oca also served as a member of the Board of Trustees and President of the School. Bro. Dennis Magbanua also joined Bro. Franco and Bro. Oca as DLSG supervisor and also as a Treasurer of the School.
Petitioners declare that the membership of the DLSG Brothers in the Board of Trustee[s] as its officers was valid since an election was conducted to that effect.
On the other hand, Custodio challenges the validity of the membership of the DLSG Brothers and their purported election as officers of the School. The legality of the membership and election of the DLSG Brothers is the main issue of the case in the lower court.
Custodio alleges that sometime in 1992, Bro. Franco was invited by Mrs. Mojica to act as President of the School. This is because there was only the Tres Marias (referring to the original incorporators, Pascual, Mojica and Custodio) who [were] left to manage the affairs of the school. Bro. Franco accepted the invitation. However, while Bro. Franco acted as President and presided over meetings of the Tres Marias, he never participated in the operation of the School and never exercised voting rights.
Custodio further alleges that on September 8, 1998, during one of the informal meetings held at the School, Bro. Franco unilaterally declared the said meeting as the Board of Trustees’ Meeting and at the same time an Annual Meeting of the Members of the Corporation. During the meeting, Bro. Franco declared that the corporation is composed of the Tres Marias and their husbands, Dr. Castaneda and himself (Bro. Franco) as members. On the other hand, the Board of Trustees was declared to be composed of Bro. Oca, the Tres Marias and himself (Bro. Franco).
According to Custodio, when Bro. Franco eventually left and became inactive in the School, Bro. Oca assumed his position as President and Chairman of the Board of Trustees, without being formally admitted as member of the School and without the benefit of an actual election.
Custodio further states that on December 6, 2000, Bro. Magbanua was introduced to the original incorporators for the first time. Automatically, he was declared as Member of the School and at the same time, Treasurer by Bro. Oca, also without any formal admission into the corporate membership and without the benefit of an actual election.
Custodio alleges that clearly the composition of the membership of the School had no basis there being no formal admission as members nor election as officers.
It appears that the legality of the membership and assumption as officers of the DLSG Brothers was questioned by Custodio following a disagreement regarding a proposed MOA that would replace the existing MOA with the DLSG Brothers and her removal as Curriculum Administrator through the Board of Trustee[s].
Under the proposed MOA, DLSG will supervise and control not only the academic affairs of the School but also the matters of the finance, administration and operations of the latter. Custodio vigorously opposed the proposed MOA. Consequently, unable to convince Custodio and the academic populace to accept the MOA, the DLSG brothers withdrew [their] academic support from the School. A day after the rejection of the proposed MOA, Mojica and Pascual retired as Administrators for Finance and Physical Resource Development (PRD), respectively. However, they maintained their positions as Members and Trustees of the School.
Custodio contends that while Pascual and Mojica remained to be Members and Trustees of the School, upon retirement, they stopped reporting for work. Mr. Al Mojica, son of Mrs. Mojica, who was then the school cashier, also stopped reporting for work. Thus, Custodio avers that being the only remaining Administrator, she served as the Over-all Director of the School. Being the Over-all Director, Custodio made appointments to fill in the vacuum created by the sudden retirement of Pascual and Mojica. Hence, she appointed Mr. Joseph Custodio as OIC both for Finance and PRD and [Ms. Herminia] Reynante as Cashier.
Upon the appointment of Joseph Custodio and Reynante, a special meeting was called by Bro. Oca in which the petitioners alleged that the prior organizational structure was restored, and the retirement of Pascual and Mojica disapproved by proper corporate action. It was agreed to in the meeting that the school was going to revert to the three-man co-equal structure with Pascual as PRD head, Mojica as Finance head and Custodio as Curriculum Administrator.
In the same meeting, petitioners alleged that Custodio admitted to having opened an account with the Luzon Development Bank in her own name for the alleged purpose of depositing funds for and in behalf of the School. Petitioners alleged that a directive was issued for the immediate closing of this account. Still, Custodio refused to close such account.
Subsequently, on January 31, 2002, Mojica and Pascual formally resigned from their administrative posts. As such as a replacement, Atty. Eleuterio A. Pascual and Mr. Florante N. Mojica[,] Jr. were appointed by the Board of Trustees as PRD Administrator and Finance Administrator respectively.
According to petitioners, due to the repeated refusal of Custodio to close the account she opened in her own name with the Luzon Development Bank, the Board of Trustees, in a meeting held on March 7, 2002, approved a resolution to file a case against the latter. Consequently, the Board of Trustees also approved resolutions to the effect that Custodio, Mr. Joseph Custodio and Reynante be stopped from performing their functions in the School.
This treats of the defendant’s explanation, manifestation and plaintiff’s comment thereto.
A perusal of the allegations of the defendants’ pleadings shows that they merely turned-over a manager’s check in the amount of P397,127.64 representing money collected from the students from October 2002 to December 2002. The Order of October 21, 2002 directed plaintiff and defendants, as well as Mr. Al Mojica to turn over to Ms. Herminia Reynante all money previously collected and to submit a report on what have been collected, how much, from whom and the dates collected.
In the first questioned Order20 dated August 5, 2003, the lower court denied the Manifestation and Motion of petitioners and reiterated its order for petitioners to turn over the items enumerated in its March 24, 2003 Order.
WHEREFORE, in view of the foregoing, the defendants are hereby ordered to comply with the mandate contained in the order[s] dated March 24 and August 5, 2003.
Dissatisfied with the rulings made by the trial court, petitioners filed with the Court of Appeals a petition for certiorari under Rule 65 with application for the issuance of a temporary restraining order and/or writ of preliminary injunction to nullify, for having been issued with grave abuse of discretion amounting to lack or in excess of jurisdiction, the Orders dated August 5, 2003, August 21, 2003 and October 8, 2003 that were issued by the trial court.
However, the Court of Appeals frustrated petitioners’ move through the issuance of the assailed September 16, 2005 Decision which dismissed outright petitioners’ special civil action for certiorari. Petitioners moved for reconsideration but this was also thwarted by the Court of Appeals in the assailed October 9, 2006 Resolution.
WHETHER OR NOT THE COURT OF APPEALS, CONTRARY TO LAW AND JURISPRUDENCE, COMMITTED REVERSIBLE ERROR IN RULING THAT THE TRIAL COURT HAD NOT DEPRIVED PETITIONERS OF DUE PROCESS IN ISSUING ITS ORDERS OF 5 AUGUST 2003, 21 AUGUST 2003 AND 8 OCTOBER 2003.
THE HONORABLE COURT OF APPEALS WAS CORRECT WHEN IT RULED THAT THE TRIAL COURT (RTC Br. 21) HAD NOT DEPRIVED PETITIONERS OF DUE PROCESS IN ISSUING ITS ORDERS OF 5 AUGUST 2003, 21 AUGUST 2003 AND 8 OCTOBER 2003.
In fine, the sole issue in this case is whether or not the trial court committed grave abuse of discretion in issuing the assailed Orders dated August 5, 2003, August 21, 2003 and October 8, 2003.
Petitioners argue that the Court of Appeals, in its assailed September 16, 2005 Decision, failed to consider that no adequate proceedings had been accorded to the petitioners by the trial court for the exercise of its right to be heard on the matters subject of the questioned Orders. Furthermore, petitioners point out that the Court of Appeals erroneously gave its imprimatur to the trial court’s issuance of the assailed Status Quo Order dated August 21, 2003 without first requiring and accepting from respondent the requisite bond that is required under the Interim Rules of Procedure for Intra-Corporate Controversies.
On the other hand, respondent maintains that the manner of the issuance of the assailed Orders of the trial court did not violate the due process rights of petitioners. Respondent also claims that a valid ground for the issuance of the assailed Status Quo Order dated August 21, 2003 did exist and that the alleged failure of the trial court to require the posting of a bond prior to the issuance of a status quo order was mooted by the assailed Order dated October 8, 2003 which required respondent and Reynante to file a bond in the amount of P300,000.00 each.
We find the petition to be partly meritorious.
Grave abuse of discretion means such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion, as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.
In the case at bar, we find that petitioners were not denied due process by the trial court when it issued the assailed Orders dated August 5, 2003, August 21, 2003 and October 8, 2003. The records would show that petitioners were given the opportunity to ventilate their arguments through pleadings and that the same pleadings were acknowledged in the text of the questioned rulings. Thus, petitioners cannot claim grave abuse of discretion on the part of the trial court on the basis of denial of due process.
However, with respect to the assailed Status Quo Order dated August 21, 2003, we find that the trial court has failed to comply with the pertinent procedural rules regarding the issuance of a status quo order.
SECTION 1. Provisional remedies. - A party may apply for any of the provisional remedies provided in the Rules of Court as may be available for the purposes. However, no temporary restraining order or status quo order shall be issued save in exceptional cases and only after hearing the parties and the posting of a bond.
First, the directive to reinstate respondent to her former position as school director and curriculum administrator is a command directing the undoing of an act already consummated which is the exclusive province of prohibitory or mandatory injunctive relief and not of a status quo order which is limited only to maintaining the last, actual, peaceable and uncontested state of things which immediately preceded the controversy. It must be remembered that respondent was already removed as trustee, member of the corporation and curriculum administrator by the Board of Trustees of St. Francis School of General Trias, Cavite, Inc. months prior to her filing of the present case in the trial court.
Third, it is settled in jurisprudence that an application for a status quo order which in fact seeks injunctive relief must comply with Section 4, Rule 58 of the Rules of Court: i.e., the application must be verified aside from the posting of the requisite bond.34 In the present case, the Manifestation and Motion, through which respondent applied for injunctive relief or in the alternative a status quo order, was merely signed by her counsel and was unverified.
In conclusion, we rule that no grave abuse of discretion was present in the issuance of the assailed August 5, 2003 and October 8, 2003 Orders of the trial court. However, we find that the issuance of the assailed August 21, 2003 Status Quo Order was unwarranted for non-compliance with the rules. Therefore, the said status quo order must be set aside.
At this point, the Court finds it apropos to note that the Status Quo Order on its face states that the same is effective until the application for the issuance of a temporary restraining order is resolved. However, respondent’s prayer for a temporary restraining order or a writ of preliminary injunction in her Complaint still appears to be pending before the trial court. For this reason, the Court deems it necessary to direct the trial court to resolve the same at the soonest possible time.
WHEREFORE, premises considered, the petition is PARTLY GRANTED. The assailed Decision dated September 16, 2005 and the Resolution dated October 9, 2006 of the Court of Appeals in CA-G.R. SP No. 79791 are hereby AFFIRMED in part insofar as they upheld the assailed August 5, 2003 and October 8, 2003 Orders of the trial court. They are REVERSED with respect to the assailed August 21, 2003 Status Quo Order which is hereby SET ASIDE for having been issued with grave abuse of discretion. The trial court is further DIRECTED to resolve respondent’s application for injunctive relief with dispatch.
Sereno, C.J., (Chairperson), Bersamin, Perez, and Perlas-Bernabe, JJ., concur.
1Rollo, pp. 9-27; penned by Presiding Justice Romeo A. Brawner with Associate Justices Edgardo P. Cruz and Jose C. Mendoza (now Supreme Court Associate Justice), concurring.
2 Id. at 29-30; penned by Associate Justice Jose C. Mendoza (now a member of this Court) with Associate Justices Edgardo P. Cruz and Lucenito N. Tagle, concurring.
13 TSN, June 17, 2003, pp. 10-21.
19 Records, Vol. I, pp. 325-337.
30 G.R. No. 198554, July 30, 2012, 677 SCRA 750, 782-783.
31Magtibay v. Indar, A.M. No. RTJ-11-2271, September 24, 2012, 681 SCRA 510, 517.
32Mayor Garcia v. Hon. Mojica, 372 Phil. 892, 900 (1999).
34Prado v. Veridiano II, G.R. No. 98118, December 6, 1991, 204 SCRA 654, 669-670. Although this case was decided under the old rules, the present rules under the 1997 Rules of Civil Procedure still require a verified application and a bond for the issuance of a writ of preliminary injunction or a temporary restraining order.

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