A.M. No. RTJ-00-1553 - Caguioa vs. Lavina

Case Summary (A.M. No. RTJ-00-1553)

Factual Background

The complainants acted as partners in the law firm of Sycip Salazar Hernandez and Gatmaitan and served as counsel for Tokyu Construction Co., Ltd. (Tokyu), a Japanese corporation that was the lead member of a consortium under contract with the Philippine Government for the construction of the new NAIA Terminal 2 building. In mid-1994, the Manila International Airport Authority (MIAA) invited prospective contractors to bid for the NAIA terminal project. Four companies—Tokyu, BF Corporation (BF), Oreta & Co. (Oreta), and Mitsubishi Corporation (Mitsubishi)—formed the MTOB Consortium to submit a bid. On May 31, 1995, the consortium members executed a Consortium Agreement that was couched in general terms; specific items of work and pricing allocations among members were not yet agreed pending the outcome of the bid.

After the consortium won the bid and MIAA awarded the contract to the consortium, disputes arose between BF and Tokyu on the allocation of BF’s portions of work and on BF’s fees, including those related to the subcontract portion. Consequently, on January 10, 1997, BF filed a complaint against Tokyu in Civil Case No. 66060, alleging breach of the consortium agreement and praying, in the alternative, for specific performance, rescission and/or damages, and for issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction. In compliance with existing Supreme Court circulars, the Executive Judge of the RTC of Pasig City issued a 72-hour TRO on January 10, 1997, and ordered the immediate raffling of the complaint. The case was raffled on January 13, 1997 to Branch 71 presided by respondent judge.

Respondent judge directed the parties to appear on January 14 and 15, 1997 to determine whether grounds existed to extend the 72-hour TRO to twenty days. On the very day the BF complaint was raffled, Tokyu filed an Urgent Verified Opposition alerting the court to the applicability of PD 1818 and Supreme Court Circular Nos. 13-93 and 68-94, which prohibit courts from issuing injunctions that would delay government infrastructure projects. Despite this warning, respondent judge issued an order on January 21, 1997 extending the TRO for the full period without mentioning PD 1818 and the cited circulars.

Tokyu then sought relief in the Court of Appeals through C.A.-G.R. SP No. 43133, praying for certiorari and prohibition with a very urgent prayer for a writ of preliminary injunction and/or TRO and disqualification. On February 5, 1997, the Court of Appeals issued a TRO enjoining respondent judge from enforcing the January 21, 1997 Order and from proceeding with the hearing of BF’s application for a writ of preliminary injunction pending further orders.

On May 15, 1997, the Court of Appeals rendered a decision in C.A.-G.R. SP No. 43133 allowing respondent judge to proceed with the suspended hearing limited to the issue of whether Tokyu, pending the case resolution, should recognize BF as a partner or member of the consortium and, if affirmative, the amount BF was entitled to receive from payments made by MIAA to the consortium. Tokyu’s motion for reconsideration on June 11, 1997 prayed that respondent judge be prohibited from conducting even the limited hearing. While respondent judge set a June 13, 1997 hearing for the cross-examination of a Japanese national witness, he denied Tokyu’s plea to postpone based on the time needed to prepare the witness’s plane and other arrangements. On June 13, 1997, respondent judge ordered that the witness’s affidavit testimony be stricken off. Respondent denied Tokyu’s reconsideration motion in an order dated June 30, 1997.

On July 18, 1997, while Tokyu was preparing its memorandum due on July 31, 1997, Tokyu received a writ of preliminary prohibitory and mandatory injunction enjoining it from performing and requiring it to perform specified acts related to the project subject matter of Civil Case No. 66060. The record disclosed that Tokyu received, at 4:00 p.m., the writ served on that Friday and, at 4:32 p.m., the judge’s order dated July 8, 1997 granting the application for preliminary prohibition and mandatory injunction. Tokyu lamented that the Friday service and the limited compliance period prevented it from seeking immediate appellate relief during the following weekend.

Tokyu, accordingly, challenged the January 21, 1997 Order, the June 13 and June 30, 1997 Orders, and the July 8 order and the July 18, 1997 writ in a separate special civil action for certiorari with the Court of Appeals, docketed as CA-GR SP No. 44729. In a decision dated October 20, 1997, the Court of Appeals Seventh Division ruled that the orders dated July 8, 1997 and July 18, 1997, both issued in Civil Case No. 66060, were issued with grave abuse of discretion amounting to lack or excess of jurisdiction. The Court of Appeals did not rule conclusively on the June 13 and June 30 orders. The decision in CA-GR SP No. 44729 was later challenged in the Supreme Court through a Petition for Review docketed as G.R. No. 131155, which remained pending at the time the administrative case was resolved. The complainants and respondent judge submitted manifestations on June 13, 2000 and June 7, 2000, respectively, submitting the administrative case for resolution based on the pleadings and records on file.

Administrative Complaint and Recommendation of the Court Administrator

The Court Administrator, after relating the procedural and factual antecedents, recommended administrative sanction for respondent judge based on the January 21, 1997 Order. The Court Administrator reasoned that respondent judge had ignored the prohibition in PD 1818 and Supreme Court Circular Nos. 13-93 and 68-94 by extending the initial 72-hour TRO for twenty days despite Tokyu’s verified opposition. Accordingly, the Court Administrator recommended a fine of P5,000. As to the other orders questioned in the complaint, the Court Administrator recommended deferral until the pending appeal in G.R. No. 131155 would have been resolved with finality.

The Parties’ Contentions and the Court’s Approach

Respondent judge, in his comment, maintained that he acted in good faith and acted in accordance with procedural rules. He further argued that PD 1818 was not violated because his January 21, 1997 Order allegedly did not prohibit any person or entity from proceeding with or continuing the government project’s execution or implementation.

The Court, however, adopted a bifurcated approach. It ruled that the validity and propriety of the June 13, June 30, and July 8, 1997 Orders and the writ dated July 18, 1997 should be threshed out first in G.R. No. 131155. It held that ruling on those matters in the administrative case would be premature because disciplinary proceedings against judges do not complement or substitute for judicial remedies, whether ordinary or extraordinary. The Court emphasized that a litigant abuses court processes by resorting prematurely to administrative discipline or criminal prosecution before the correctness of the judge’s orders has been finally resolved, particularly when such correctness remains pending appellate review. The Court thus dismissed the complaint with respect to respondent judge’s other questioned orders for prematurity.

At the same time, the Court deemed it appropriate to resolve respondent judge’s administrative liability as to the January 21, 1997 Order. It observed that, although the Court of Appeals May 15, 1997 decision allowed respondent judge to continue the injunction proceedings, the appellate court did not make any conclusive ruling on the legality of the January 21, 1997 Order vis-à-vis PD 1818. The Court of Appeals had confined its discussion to the effects of the statute as regards MIAA, and it did not address a possible violation concerning Tokyu and the broader reach of the statutory prohibition. The administrative issue, the Court reasoned, remained viable despite the mootness of the twenty-day TRO by the time of the Court of Appeals’ May 15 decision, because the expiration of the TRO did not equate to an administrative absolution of respondent judge’s earlier disregard of PD 1818.

Legal Basis and Reasoning on the January 21, 1997 Order

The Court anchored respondent judge’s liability on his failure to observe the explicit and unequivocal mandate of PD 1818, reinforced by Supreme Court Circular Nos. 13-93 and 68-94. Section 1 of PD 1818 provides that no court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy involving an infrastructure project or a natural resource development project of the government, or any public utility operated by the government. The statute further bars such writs to prevent any person, entity, or government official from proceeding with, continuing, or pursuing lawful activity necessary for the execution or implementation of such projects or the operation of such utilities.

The Court recalled that in Garcia v. Burgos, it had reiterated the prohibitory character of PD 1818 and stressed that the provision expressly deprives courts of jurisdiction to issue injunctive writs that stop the implementation or execution of an infrastructure project. It also noted that Administrative Circular No. 07-99 dated June 25, 1999 was later issued by the Chief Justice to remind all judges of lower courts to exercise utmost caution in issuing TROs and writs of preliminary injunction, demonstrating the strict and mandatory nature of Section 1 of PD 1818.

Respondent judge’s good faith defense was rejected in light of the content and effect of the order and the earlier TRO. The Court held that respondent judge’s position that PD 1818 was inapplicable because his order did not directly prohibit any person from proceeding or continuing the project could not stand against the governing text and the TRO directives. The Court quoted the r

Case Syllabus (A.M. No. RTJ-00-1553)

Parties and Procedural Posture

Attys. Alfredo Benjamin S. Caguioa and Ricardo Ma. P.G. Ongkiko filed a sworn letter-complaint against Judge Celso D. Lavina of the Regional Trial Court of Pasig City, Branch 71.
The complaint accused the respondent judge of grave misconduct for maliciously issuing several void orders in connection with Civil Case No. 66060.
The case reached the Court on administrative proceedings, with the parties submitting the matter for resolution on the basis of the pleadings and records already filed, as reflected in their respective Manifestations.
The Court treated the validity and propriety of certain orders as pending judicial issues in an earlier appellate proceeding, but resolved administrative liability as to one specific order.
The complaint was ultimately partially dismissed and the respondent judge was fined for one act.

Key Factual Allegations

The complainants were partners in the law firm of Sycip Salazar Hernandez and Gatmaitan and served as counsel for Tokyu Construction Co., Ltd. (Tokyu), the lead member of a consortium contracted with the Philippine Government to construct the new NAIA Terminal 2 building.
The consortium comprised Tokyu, BF Corporation (BF), Oreta & Co. (Oreta), and Mitsubishi Corporation (Mitsubishi), under a Consortium Agreement executed on May 31, 1995 that was couched in general terms pending further agreement on specific work allocations and pricing.
After the consortium won the bid and the contract was awarded, disputes arose between BF and Tokyu on the specific portions of work for BF and on BF’s fees, including subcontract portions.
On January 10, 1997, BF filed Civil Case No. 66060 against Tokyu for alleged breach of the consortium agreement, and sought specific performance, rescission and/or damages, and issuance of a TRO and/or writ of preliminary injunction.
The Executive Judge issued a 72-hour TRO on January 10, 1997 and directed immediate raffling of the complaint to the respondent judge’s branch.
Upon raffling to Branch 71, the respondent judge set dates to determine whether the TRO should be extended to twenty days.
On the same day the complaint was raffled to the respondent judge, Tokyu filed an Urgent Verified Opposition pointing out the operation of PD 1818 and Supreme Court Circular Nos. 13-93 and 68-94 prohibiting injunctions that would delay government infrastructure projects.
Despite Tokyu’s opposition, on January 21, 1997 the respondent judge issued an order extending the TRO to the full twenty-day period without mentioning PD 1818 or the cited circulars.
Tokyu then pursued appellate relief: on January 24, 1997, it filed with the Court of Appeals a Petition for Certiorari and Prohibition with a very urgent prayer, docketed as CA-G.R. SP No. 43133, seeking to restrain further action on the January 21, 1997 order.
The Court of Appeals initially issued a TRO on February 5, 1997 enjoining enforcement of the January 21, 1997 order and suspending the hearing of the application for a writ of preliminary injunction until further orders from the appellate court.
The Court of Appeals later allowed continuation of the injunction proceedings on May 15, 1997, limiting the matter to whether, pendente lite, Tokyu should recognize BF as a partner or member and the corresponding share out of payments made by MIAA.
Tokyu sought reconsideration of the May 15, 1997 decision and protested subsequent trial court actions, including orders dated June 13, 1997 and June 30, 1997 that affected a Japanese witness and the proceedings.
On July 18, 1997, Tokyu received a Writ of Preliminary Prohibitory and Mandatory Injunction dated earlier by the respondent judge on July 8, 1997, with Tokyu alleging that the timing of service (a Friday with a short compliance period) was intended to prevent immediate appellate recourse.
Tokyu’s additional challenge resulted in CA-G.R. SP No. 44729, which involved review of multiple orders including those dated June 13, June 30, and July 8, 1997, and the injunctive writ dated July 18, 1997.

Prior Appellate Proceedings

The Court of Appeals decision dated October 20, 1997 in CA-G.R. SP No. 43133 ruled that the July 8, 1997 order granting the writ of preliminary prohibitory mandatory injunction and the consequential July 18, 1997 writ were issued with grave abuse of discretion amounting to lack or excess of jurisdiction.
The Court of Appeals did not make a conclusive finding regarding the June 13, 1997 and June 30, 1997 orders in that particular decision.
Complainants and respondent judge later challenged or relied on the appellate rulings, and the record reflected a pending Petition for Review docketed as G.R. No. 131155, which remained unresolved at the time of administrative resolution.
The Court treated the pending review of the other orders as an indication that those matters should not be determined administratively before judicial remedies were exhausted.

Statutory Framework and Circulars

PD 1818 contains an express prohibition that deprives courts of jurisdiction to issue restraining orders, preliminary injunctions, or preliminary mandatory injunctions in cases involving government infrastructure projects and specified natural resource and public utility development controversies.
Section 1 of PD 1818 bars any court from issuing an injunctive writ “to prohibit any person or persons, entity or government official” from proceeding with or continuing execution, implementation, operation, or lawful activity necessary for such execution or operation.
Supreme Court Circular Nos. 13-93 and 68-94 reminded judges to comply strictly with the mandates of PD 1818.
Garcia v. Burgos was cited for the reiteration that PD 1818 expressly deprives courts of jurisdiction to issue injunctive writs against the implementation or execution of infrastructure projects.
Administrative Circular No. 07-99 dated June 25, 1999 was issued by the Chief Justice to reiterate earlier circulars and remind judges to exercise