Case Digest (G.R. No. 157671)
Case Digest (G.R. No. 157671)
Facts:
Danilo G. Punongbayan v. Perfecto G. Punongbayan, Jr., Marilou P. Visitacion, and Sotero A. Punongbayan, G.R. No. 157671, June 20, 2006, Supreme Court Second Division, Sandoval‑Gutierrez, J., writing for the Court.St. Peter’s College is a non‑stock, non‑profit educational corporation in Iligan City administered by a five‑member Board of Trustees. By 1995 two trustees (Leonila and Leonora) had died, leaving three surviving trustees: Danilo (petitioner), Perfecto, Jr. (respondent), and Sotero (respondent‑intervenor). Danilo served as President; Perfecto, Jr. as Treasurer; Marilou Visitacion (respondent) as Corporate Secretary. No Board meetings had been convened.
In 1998 Sotero filed with the Securities and Exchange Commission (SEC) a petition (SEC Case No. 10‑96‑5471) seeking, among other relief, the creation of a management committee (ManCom) due to lack of quorum and an impending halt to school operations. The SEC, by Order dated November 10, 1998, created a ManCom, and on February 24, 1999 appointed five members; one appointee later inhibited herself, producing a deadlock among the remaining members.
By operation of Republic Act No. 8799 (the Securities Regulation Code), jurisdiction over intra‑corporate controversies was transferred from the SEC to the Regional Trial Courts (RTC). The SEC case thus became Corporation Case No. 006 in RTC, Branch 5, Iligan City. Sotero moved in the RTC to abolish the SEC‑created ManCom and to require the original Board to reconvene. The RTC denied the motion on June 5, 2001, ordered revamping of the ManCom to three members, and on June 20, 2001 appointed Luis Lacar, Adelfa Silor, and Rico Quilab as the new ManCom members.
Perfecto, Jr. and Visitacion filed a petition for certiorari in the Court of Appeals (CA), alleging grave abuse of discretion by the RTC judge; the CA initially dismissed the petition for forum‑shopping but later admitted an amended petition and an intervention by Sotero. The CA enjoined implementation of the RTC orders (March 13, 2002 resolution) and, in a Decision dated March 17, 2003, set aside the RTC orders, reasoning that the SEC orders creating ManCom 1 had become final and executory and could not be altered by the RTC, and that the RTC therefore acted with grave abuse of discretion in abolishing ManCom 1 and appointing ManCom 2. The CA also found that, with a later‑convened Board and SEC‑approved by‑laws, the necessity for a ManCom had become moot.
Petitioner Danilo filed this petition for review on certiorari under Rule 45, challenging the CA Decision and principally contending the RTC merely reorganized, not abolished, the SEC‑created ManCom. Respondents argued the RTC had no authority to replace the SEC‑appointed members and should have ordered the surviving trustees to reconvene.
Issues:
- Did the Court of Appeals err as a matter of law in setting aside the RTC orders that reorganized the SEC‑created management committee on the ground of grave abuse of discretion?
- Whether the reorganization ordered by the RTC amounted to a revocation or alteration of a final and executory SEC order creating the management committee?
- Whether, in the circumstances (deadlock paralyzing operations), the RTC should have directed the Board of Trustees to reconvene instead of appointing replacements to the management committee?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)