G.R. No. 139371 - Indiana Aerospace University vs. Commission on Higher Education

In October 1996, Dr. Reynaldo B. Vera, Chairman of the Technical Panel for Engineering, Architecture, and Maritime Education (TPRAM) of CHED, received an inquiry letter dated October 18, 1998, from Douglas R. Macias concerning whether the petitioner, Indiana Aerospace University, had acquired “university status” in light of its advertisement in the Manila Bulletin.
On October 24, 1996, Dr. Vera formally referred the inquiry to Chairman Alcala of CHED, requesting that the Regional Office investigate the alleged misrepresentation by the petitioner.
The investigation was conducted by CHED’s Regional Director in Cebu City, with a report submitted in January 1997. The report noted that in May 1996, the Regional Director, Ma. Lilia Gaduyon, had advised the school’s president not to use “University” in its corporate name, as such usage required compliance with CHED Memorandum Order No. 48, s. 1996.

Based on the investigation, on February 3, 1997, CHED directed the petitioner to desist from using the term “University” in its corporate name, including its branches.
It was verified through the Securities and Exchange Commission (SEC) that the petitioner had filed a proposal to amend its corporate name (from Indiana School of Aeronautics to Indiana Aerospace University). However, a correspondence from SEC Chairman Perfecto R. Yasay, Jr. clarified that no amended articles of incorporation had been filed incorporating the term “University.”
On February 24, 1997, Jovenal Toring, petitioner’s chairman and founder, submitted an appeal for reconsideration of CHED’s order, promising adherence to provisions of CHED Memorandum Order No. 48, s. 1996.

On April 2, 1998, the petitioner filed a Complaint for Damages against CHED with a prayer for a writ of preliminary injunction and a temporary restraining order, docketing the case as Civil Case No. 98-811.
CHED responded by filing a Special Appearance with a Motion to Dismiss on April 7, 1998, arguing improper venue, lack of authority on the part of the petitioner, and lack of a valid cause of action.
The petitioner opposed the motion on April 17, 1998; subsequent pleadings and formal offers of evidence took place from July through October 1998.

The RTC, in an Order dated August 14, 1998, denied CHED’s Motion to Dismiss and issued a writ of preliminary injunction in favor of the petitioner. The order also directed CHED to file its answer within 15 days from receipt (which was August 15, 1998).
CHED, however, filed a Motion for Extension of Time on September 22, 1998 (with an extension until November 18, 1998), and eventually, its Answer was filed on November 17, 1998.
Despite the answer’s filing, the petitioner moved on November 11, 1998, to expunge CHED’s answer while demanding a hearing on the matter. The RTC later declared CHED in default in an Order dated December 9, 1998, following the procedural irregularities in filing opposition to the motion to expunge.

On February 23, 1999, CHED filed a Petition for Certiorari with the Court of Appeals, challenging the RTC’s decision declaring it in default and several related orders.
CHED averred that its failure to timely file an answer was due to excusable negligence and emphasized that the rule on default should be invoked only if prejudice to the opposing party is evident.
CHED’s petition further contested the issuance of the writ of preliminary injunction and the dismissal of its complaint, arguing that these measures were based on erroneous factual and legal interpretations concerning its authority and the petitioner’s rights.

Whether CHED’s Petition for Certiorari was filed within the prescribed 60-day reglementary period under Section 4, Rule 65 of the Rules of Court.
Whether the reliance on the receipt of the December 9, 1998, default Order, rather than the August 14, 1998 Order, was appropriate for computing the reglementary period.

Whether the declaration of CHED in default was proper given that its Answer had been filed before the effectuation of the default Order.
Whether CHED’s delay was due to excusable negligence, and if the petitioner sustained any prejudice from such delay.
Whether the appropriate remedial measure should have been a motion to set aside the default rather than the issuance of the default Order.

Whether the writ of preliminary injunction, which enjoined CHED from acting upon its order, was justified.
Whether petitioner’s right to continue using “university” in its corporate name was clearly established, and if the injunction respected the balance between proprietary rights and public interest.

Whether the dismissal of the petitioner’s Complaint for Damages due to lack of merit and valid cause of action was proper.
Whether the assessment of the petitioner’s claim to university status, based on its unauthorized corporate name and alleged misrepresentation, was within the court’s jurisdiction in a certiorari proceeding.