G.R. No. 215280 - Eizmendi Jr. vs. Ferdez

The case involves a petition for review on certiorari under Rule 45 of the Rules of Court filed by Teodorico P. Fernandez against several individual petitioners who purportedly constituted themselves as new members of the Board of Directors (BOD) of Valle Verde Country Club, Inc. (VVCCI).
The petition seeks to nullify and set aside the Court of Appeals (CA) Decision dated June 30, 2014, and to reinstate the earlier order issued by Branch 158 of the Regional Trial Court (RTC) on January 28, 2014, in Commercial Case No. 13-202, which disallowed the presentation of evidence relating to the February 23, 2013 elections.

On November 28, 2013, Fernandez filed a Complaint for Invalidation of Corporate Acts and Resolutions and an Application for Writ of Preliminary Injunction against the individual petitioners.
Fernandez alleged that the petitioners, having constituted themselves as the new BOD during an annual meeting held on February 23, 2013, did so despite the absence of a requisite quorum.
He claimed that his suspension as a member of VVCCI was illegal since he did not receive due process – including not being notified about the suspension despite being a proprietary member in good standing.

Make the injunction permanent;
Invalidate the petitioners’ claim to the office of director of VVCCI;
Nullify the February 23, 2013 annual members’ meeting and other board meetings where resolutions regarding his suspension were approved; and
Recover attorney’s fees along with exemplary and moral damages.

Additionally, he filed an Urgent Motion for Production/Copying of Documents to obtain various corporate records, including the Stock and Transfer Book, membership certificates, Articles of Incorporation, and By-Laws, among others.

On January 14, 2014, during the hearing of the writ of preliminary injunction before Judge San Pedro, the issue was narrowed: the court expressly stated that it would only consider Fernandez’s suspension and not the election contest aspects of his complaint.
Fernandez attempted to introduce evidence that indirectly questioned the validity of the election of the petitioners as BOD members; however, the RTC limited the proceedings solely to determining whether due process was observed in his suspension.
On January 20, 2014, petitioners filed their Answer with Counterclaim and moved for dismissal on grounds including:

Lack of cause of action against individual petitioners since the BOD acts collegially;
The allegation constituting an election contest filed beyond the mandated 15-day period;
Failure to exhaust intra-corporate remedies and comply with VVCCI’s by-laws; and
Violation of rules on notarial practice.

On January 28, 2014, the RTC issued an Order noting that the writ of preliminary injunction became moot after the parties agreed to reinstate Fernandez, while expressly refusing to entertain issues regarding the February 23, 2013 elections.
The RTC’s subsequent Resolution dated February 3, 2014, denied the Urgent Motion for Production/Copying of Documents, reaffirming that the case was not an election contest because such issues were barred by the 15-day filing period.

Fernandez challenged the RTC Order and Resolution by filing a petition for certiorari before the CA, arguing:

The RTC gravely abused its discretion by treating the case as strictly a suspension issue without allowing evidence pertaining to the disputed election; and
The RTC’s reliance on res judicata and similar doctrines was misplaced.

Reversed the RTC’s limitation and allowed the presentation of evidence regarding the election of the BOD, contending that such evidence was necessary to determine the legality of Fernandez’s suspension; and
Noted that Fernandez’s complaint contained elements of an election contest—even though his main contention was his wrongful suspension.

Petitioners later argued that Fernandez was indirectly challenging the validity of their election beyond the allowable 15-day period under the Interim Rules and sought to invoke precedents (including Valle Verde Country Club, Inc. v. Eizmendi, Jr.) to bar such contestations.
In their petition for review on certiorari, Fernandez later contended that even if the complaint partly raised an election contest issue, his primary cause of action was the lack of due process in his suspension, and he was not seeking to unseat the petitioners from their posts.

The higher court, in reviewing the matter, granted the petition for review on certiorari.
It reversed and set aside the CA Decision and Resolution that allowed the election contest evidence, reinstating the RTC Order that barred such evidence based on:

The contention that the election contest was filed beyond the mandatory 15-day reglementary period under the Interim Rules; and
The necessity of preventing indirect circumvention of procedural rules designed to ensure stable and efficient corporate governance.

Whether Fernandez’s complaint, which also challenges the validity of the election of the individual petitioners as members of the BOD of VVCCI, constitutes an election contest subject to the 15-day reglementary period under the Interim Rules.
Whether the RTC abused its discretion by limiting the issue to due process in his suspension and excluding evidence related to the February 23, 2013 election.
Whether the doctrines of res judicata, law of the case, or stare decisis preclude Fernandez from raising his claims against the petitioners.
Whether allowing evidence on the validity of the election, indirectly included in the suspension issue, would effectively circumvent the procedural limitations imposed by the Interim Rules.