G.R. No. L-65800 - Vda. De Tupas vs. Branch XLII, Regional Trial Court of Negros Occidental

The institution at issue, St. Francis School of General Trias, Cavite, Inc., was organized and established on July 9, 1973, as a non-stock and non-profit educational institution.
Its original incorporators included private respondent Laurita Custodio, petitioners Cirila Mojica and Josefina Pascual, as well as Rev. Msgr. Feliz Perez and Bro. Vernon Poore, who, together, formed the initial Board of Trustees.
The La Salle Brothers, though instrumental in the school’s establishment, did not have a formal agreement regarding their involvement.

On September 8, 1988, a Memorandum of Agreement (MOA) was executed between De La Salle Greenhills (DLSG) and the School, which provided DLSG with supervisory powers over the school’s academic affairs.
Under the MOA, DLSG appointed supervisors who participated in Board meetings without voting rights.
Bro. Victor Franco was initially appointed and later became both a member of the Board and the President of the School.
On September 8, 1998, Bro. Bernard Oca joined as a DLSG supervisor and later assumed the role of Board member and President.
Bro. Dennis Magbanua joined subsequently as a supervisor and Treasurer, with petitioners asserting that these appointments were validated by a purported election, while respondent Custodio contested the validity of such membership and election.

Custodio argued that the inclusion of the DLSG brothers as members and officers of the Board was invalid as they were not formally admitted nor elected.
It was contended that an informal declaration by Bro. Franco, during a meeting in 1992 and later in 1998, unilaterally altered the composition of the membership and the Board of Trustees without following proper corporate and electoral procedures.
The subsequent organizational changes, including the appointment of new administrators (e.g., replacing Cirila Mojica and Josefina Pascual) and the restructuring of the school’s leadership, intensified the dispute as Custodio opposed the proposed MOA that would further extend DLSG’s control over both academic and administrative affairs.

A controversy ensued when Custodio challenged the legality of the Board’s composition and the process leading to the DLSG brothers’ appointments.
The dispute led to a series of administrative actions:

On June 7, 2002, Custodio filed a complaint questioning the legality of the Board's actions and the school’s internal processes.
On July 8, 2002, the Board of Trustees resolved to remove Custodio from her positions as a trustee and as Curriculum Administrator.
Custodio’s subsequent petitions, including a request for the issuance of a temporary restraining order and/or writ of preliminary injunction, were directed against these internal orders.

The trial court in Branch 21 of the Regional Trial Court of Imus, Cavite, issued several orders:

Orders dated August 5, 2003, August 21, 2003, and October 8, 2003 addressed the controversy, including mandating the turnover of funds and delineating the powers of the school officers.
The August 21, 2003 order, in particular, issued a status quo order, directing the reinstatement of Custodio in her former positions.

Disagreements over these orders led petitioners to file a petition for certiorari before the Court of Appeals, which dismissed the petition regarding the temporary restraining order and related relief, before the issue was elevated to the Supreme Court on review under Rule 45.

In the Court of Appeals proceedings, petitioners challenged the issuance of the RTC orders on grounds of due process and grave abuse of discretion.
Core issues raised included the alleged lack of proper proceedings before the issuance of the status quo order (August 21, 2003) and the failure to require respondent to post the requisite bond under the Interim Rules of Procedure for Intra-Corporate Controversies.
The Supreme Court’s review focused on whether the trial court’s actions—particularly the issuance of the August 21, 2003 status quo order—constituted grave abuse of discretion by failing to comply with procedural requirements, despite no denial of due process in other orders.

Whether the trial court, in issuing its orders dated August 5, 2003, August 21, 2003, and October 8, 2003, violated the petitioners’ right to due process by not affording them a full and adequate opportunity to be heard.
Whether the trial court committed grave abuse of discretion in the issuance of the August 21, 2003 status quo order by:

Directing the reinstatement of Custodio to her former positions, an act that effectively undid decisions previously made by the Board of Trustees.
Failing to require the posting of a bond as mandated by Section 1, Rule 10 of the Interim Rules of Procedure for Intra-Corporate Controversies.
Bypassing the procedural requirements for applications for injunctive relief under Section 4, Rule 58 of the Rules of Court.

Whether the issuance of the amendments in subsequent orders (notably, the October 8, 2003 order) adequately remedied the procedural defects inherent in the August 21, 2003 status quo order.