Facts:

In the case of Air Materiel Wing Savings and Loan Association, Inc. et al. vs. Col. Luvin S. Manay et al., petitioners include Air Materiel Wing Savings and Loan Association, Inc. (AMWSLAI) and various retired members of the Philippine Air Force, including Col. Ricardo L. Nolasco, Jr., Col. Thaddeus P. Estalilla, Lt. Morado O. Mercado, among others. Respondents are Col. Luvin S. Manay and other retired members of the Philippine National Police and the Air Force. The incident stems from a series of events leading up to an election of the Board of Trustees on October 14, 2005.

The AMWSLAI is organized under Philippine laws and its By-Laws dictate that members of its Board serve a three-year term. Respondents resigned en masse on July 22, 2005, effective September 14, 2005, due to demands for new trustees. As such, the existing Board accepted these resignations and declared all seats vacant in Board Resolution No. 2005-353, which scheduled a general election for October 14, 2005. A

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Facts:

Background of the Corporation and its Governance

• AMWSLAI is a corporation duly organized and existing under Philippine law.
• Its By-Laws provide that the Board of Trustees, composed of 11 members, shall serve for a term of three years.

Mass Resignation and Board Resolution

• Respondents, along with some petitioners, submitted their letters of resignation on July 22, 2005, to take effect at the close of business on September 14, 2005.
• Three other board members had resigned earlier.
• On September 7, 2005, the Board accepted the mass resignation via Board Resolution No. 2005-353 and declared all 11 seats vacant, specifying that the resignations were to become effective only upon the election and proclamation of new winners.
• A general election was scheduled for October 14, 2005.

Formation and Actions of the AMWSLAI-COMELEC

• Pursuant to Article XIII of the By-Laws, the Board formed the Committee on Elections (AMWSLAI-COMELEC) with a Chairman and two members to supervise the upcoming election.
• Both petitioners and respondents, who were members of the Board, filed Certificates of Candidacy for the October 14 election.
• The AMWSLAI-COMELEC disqualified respondents based on allegations of having committed acts detailed in a BSP examination report, and individual notices of disqualification were sent.

Attempts to Withdraw Resignations and Initial Legal Actions

• Respondents sought to withdraw their resignations on the ground that such submissions were made under the expectation of a fair and honest election.
• Their requests to revoke their resignations were not acted upon by the Board.
• In response, respondents filed a Petition for Election Protest with a prayer for a writ of preliminary injunction/prohibition and/or a temporary restraining order (TRO) before the RTC of Pasay City on October 12, 2005.

Issuance of the 72-Hour TRO and Service of Process

• On October 13, 2005, Executive Judge Caridad H. Grecia-Cuerdo of the RTC granted a 72-hour TRO to enjoin the conduct of the October 14 election, emphasizing the urgency and potential for irreparable injury.
• The TRO was served to AMWSLAI-COMELEC through Sheriff Virgilio Villar at the AMWSLAI Building via Ms. Kathy Liong, an authorized receiving personnel.
• Later that day, Ms. Liong returned the documents to the Clerk of Court, stating she was not authorized to accept them on behalf of the COMELEC members, leading to questions on the validity of service.

Subsequent Developments at the RTC

• A hearing was conducted on the application for an extended TRO (20-day) on October 14, 2005, with appearances by counsels for both respondents and AMWSLAI, as well as an intervenor candidate.
• The RTC denied the application for a TRO based on a finding that the summons were not properly served on the members of the AMWSLAI-COMELEC, due mainly to the service being effected on Ms. Liong under questionable authority.
• As a result, no effective summons, petition, or restraining order was deemed served on the COMELEC members at that time.

The Election, Its Aftermath, and Appeals

• The October 14, 2005 election proceeded as scheduled despite the TRO, and petitioners were declared the winners.
• The newly elected board members took their oath on October 17, 2005, assuming office thereafter.
• Respondents filed a motion to recall the order declaring non-service of the TRO; however, it was denied by the RTC on October 28, 2005.
• Unsuccessful at the RTC level, respondents pursued a petition for certiorari before the Court of Appeals (CA) seeking nullification of the RTC orders, annulment of the election, and reinstatement of respondents pending a new election.
• On August 15, 2006, the CA annulled the contested RTC orders and invalidated the October 14 election, holding that substituted service was sufficient under the circumstances.

Reinstatement Order and Subsequent Supreme Court Intervention

• On November 22, 2006, following the CA decision, respondents filed a Motion for Reinstatement and were reinstated as members of the AMWSLAI Board by the RTC.
• However, on November 28, 2006, and as amended on December 4, 2006, the Supreme Court issued a TRO enjoining the implementation of the CA decision and the reinstatement order, holding that the respondents could only continue in a temporary capacity until a new, valid election was held.

Core Elements Summarized

• The central issues include the validity of the 72-hour TRO, the sufficiency of the service of summons, the alleged improper conduct of the petitioners in defying the TRO, and the legality of the election results obtained in defiance of that order.
• The evolving judicial proceedings at the RTC, CA, and ultimately the Supreme Court illustrate the complexities inherent in intra-corporate governance disputes and the execution of provisional remedies.

Issue:

• Whether petitioners violated the 72-hour TRO despite claims that the TRO was a nullity and was issued improperly, illegally, and invalidly for failing to comply with the Interim Rules for Intra-Corporate Controversies.

• Whether the service of summons and the TRO on the members of the AMWSLAI-COMELEC, effected through Ms. Liong, was valid, given the question of her authority to receive such documents on behalf of the COMELEC members.

• Whether the Honorable Judge Gingoyon of RTC Pasay abused his discretion in denying the respondents’ application for a temporary restraining order and the motion to recall the earlier TRO.

• Whether respondents were deprived of their right to contest their disqualification as candidates in the October 14, 2005 election, thereby impacting their eligibility for Board membership.

• Whether credence should be given to the RTC’s order dated November 22, 2006, which ordered the reinstatement of respondents as members of the Board.

• Whether the claim that AMWSLAI would suffer grave and irreparable injury during the pendency of the case—justifying the imposition of the TRO—should be sustained despite arguments that lifting the TRO might be premature.

• Whether the allegations that petitioner Ricardo Nolasco, Jr., acting as Chairman of the Board, engaged in irregular transactions detrimental to the interests of AMWSLAI are unfounded and lacking in substantiation.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)