G.R. No. 190112 - Co Sr. vs. The Philippine Canine Club, Inc.

Case Summary (G.R. No. 190112)

Key Dates and Procedural Posture

Formation of AKCUPI: 2008.
PCCI Amended By-laws adopted: May 17, 2008; SEC certification issued August 22, 2008.
Petition for annulment of the Amended By-laws, injunction and damages (with TRO/preliminary injunction application) filed: January 7, 2008 (docketed Civil Case No. Q-09-207).
RTC issued TRO and later a Writ of Preliminary Injunction (orders referenced in the record).
Court of Appeals (CA) reversed the RTC and denied relief; CA decision and resolution were challenged by petition for certiorari to the Supreme Court.
Applicable constitution for analysis: 1987 Philippine Constitution (decision date post-1990).

Applicable Law and Authorities Relied Upon

Corporation Code provisions cited in the pleadings (including Section 6 on voting rights and Section 48 regarding SEC approval of by-laws).
Rule 58, Section 1, Revised Rules of Court (definition and nature of preliminary injunction).
Precedents and principles cited by the courts: Bustamante v. Court of Appeals; Dayrit v. Delos Santos; Philippine National Bank v. Court of Appeals; Go v. Looyuko; and other authorities on the nature and limits of injunctive relief.

Factual Background

PCCI amended its By-laws on May 17, 2008 to add and revise provisions governing suspension, expulsion, termination and reinstatement of membership, including a provision (Article VI, Section 6.2(d)) making membership in, or participation with, organizations deemed by PCCI’s Board of Directors to be “prejudicial to the best interest of PCCI” a ground for sanction. Some petitioners registered their dogs with the newly formed AKCUPI. PCCI’s Board thereafter suspended several petitioners (Co, Cruz, Alegado, Jester), stripped a champion title, barred Cruz from judging, and communicated expulsions or threatened expulsions to the petitioners. The petitioners challenged the Amended By-laws and the sanctions, alleging that non-voting members were denied participation in the by-law amendments in violation of Section 6 of the Corporation Code and that the Amended By-laws were thus null and void.

RTC Proceedings and Ruling

The petitioners sought annulment of the Amended By-laws and a prohibitory writ. After summary hearing the Regional Trial Court granted the petitioners’ application: it issued a Temporary Restraining Order and, subsequently, a Writ of Preliminary Injunction restraining PCCI from implementing provisions of the May 17, 2008 Amended By-laws and from enforcing the suspension and expulsion of the petitioners. The RTC’s rationale included the proposition that non-voting members were nevertheless entitled to vote on by-law amendments under Section 6 of the Corporation Code and that the May 17, 2008 amendments were questionable for lack of participation by non-voting members.

CA Ruling and Grounds for Reversal

The Court of Appeals reversed the RTC, holding that the issuance of the preliminary injunction was tainted with grave abuse of discretion. The CA reasoned that by the time the writ of preliminary injunction was issued, the Amended By-laws had been approved and were in full force and effect and the punitive actions (suspension/expulsion) against the affected petitioners had already been implemented. Relying on precedent that the primary purpose of injunctive relief is to preserve the status quo and not to undo consummated acts (Bustamante v. Court of Appeals), the CA concluded that the acts sought to be enjoined had been consummated and could no longer be restrained by a preliminary injunction. The petitioners’ motion for reconsideration was denied, prompting the petition for certiorari to the Supreme Court.

Issues Presented to the Supreme Court

Whether a court may issue a preliminary injunction enjoining enforcement of PCCI’s Amended By-laws and the penalty of expulsion where those by-laws had been adopted, approved by the SEC, and enforcement had already been implemented against certain petitioners.
Whether the principle in Dayrit v. Delos Santos (that not only commission but continuation of certain acts may be enjoined) applies to the present circumstances.

Supreme Court’s Threshold Observations

The Court emphasized that it could not determine the substantive validity of the Amended By-laws at the preliminary-injunction stage without prejudging the merits of the main action pending in the RTC. The limited question before the Court was the propriety of issuing a preliminary injunction to restrain implementation of the Amended By-laws given that SEC approval had been obtained and sanctions had already been executed against some petitioners.

Legal Principles on Preliminary Injunction Applied

A preliminary injunction is a preservative, provisional remedy intended to preserve the status quo pendente lite; it is not meant to correct or redress wholly consummated wrongs or punish past acts.
The status quo is the last actual, peaceable, uncontested condition preceding the controversy.
When the acts sought to be enjoined have already been performed or completed prior to the filing of the injunction suit, injunctive relief is generally inappropriate because the primary objective of preserving the status quo cannot be achieved. Precedents were cited to this effect (e.g., Philippine National Bank v. Court of Appeals; Go v. Looyuko).

Court’s Analysis on the Facts

The Supreme Court reviewed the record and agreed that not all petitioners were in the same factual situation at the time the RTC issued the preliminary injunction: Joseph Ongchuan and Lucianne Cham had only been threatened wit

Case Syllabus (G.R. No. 190112)

Citation and Case Identification

Reported at 759 Phil. 134; 111 OG No. 52, 7715 (December 28, 2015).
G.R. No. 190112, decided April 22, 2015, SECOND DIVISION.
Decision penned by Justice Brion.
Petition for review on certiorari under Rule 45 of the Rules of Court (rollo, pp. 7-40).
Case below: Court of Appeals in CA-G.R. SP No. 107516; CA Decision dated June 15, 2009 and CA Resolution dated October 29, 2009 (CA rollo, pp. 78-83; rollo, pp. 43-54; rollo, pp. 55-59).

Panel and Concurrence

Decision of this Court authored by BRION, J.
Concurrence by Carpio (Chairperson), Peralta, Mendoza, and Leonen, JJ.
Note: Justice Mendoza designated as additional member in lieu of Associate Justice Mariano C. Del Castillo per raffle dated April 13, 2015.

Parties

Petitioners: Primo Co, Sr.; Edgardo Cruz; Fe Lanny L. Alegado; Jester B. Ongchuan; Joseph Ongchuan; Lucianne Cham (members of PCCI).
Respondent: The Philippine Canine Club, Inc. (PCCI), a non-stock, non-profit organization established in 1963 to promote breeding of purebred dogs.
Mentioned third party organization: Asian Kennel Club Union of the Philippines, Inc. (AKCUPI), established sometime in 2008.

Factual Background — General

PCCI’s principal purpose: promoting breeding of purebred dogs; organized as non-stock, non-profit since 1963.
AKCUPI was established as a corporate entity in 2008 and intended to hold/sponsor dog shows and events similar to those of other kennel clubs, including PCCI.
Petitioners believed no conflict between PCCI and AKCUPI goals, and that no express or implied prohibition barred PCCI members from joining or affiliating with other kennel clubs; accordingly, petitioners registered their dogs with AKCUPI.

Amended By-laws — Adoption and SEC Certification

On May 17, 2008, PCCI amended its By-laws; petitioners allege the amendments were adopted "without the participation of its non-voting members, including the petitioners."
PCCI submitted the Amended By-laws to the Securities and Exchange Commission (SEC) for approval.
On August 22, 2008, the SEC issued a Certification approving PCCI’s Amended By-laws pursuant to Section 48 of the Corporation Code of the Philippines.

Amended By-laws — Provisions Challenged (Article VI)

Petitioners assail amendments they deem onerous, particularly provisions in:
- ARTICLE VI SUSPENSION, EXPULSION, TERMINATION AND REINSTATEMENT OF MEMBERSHIP
- SECTION 6.1 SUSPENSION AND EXPULSION FOR CAUSE
  - 6.1.1 Any member shall be suspended or removed from the roll of membership in the manner provided in these By-Laws and for causes and conduct prejudicial to the best interest and welfare of the corporation, its members and/or the purebred dog sport in the Philippines, including but not limited to, a violation of existing laws, of the Articles of Incorporation and the By-Laws of PCCI and of the rules and regulations, policies and procedures promulgated by the Board of Directors not otherwise contrary to law or to these By-Laws.
- SECTION 6.2 PREJUDICIAL CONDUCT
  - (d) Membership in or direct or indirect participation in the formation, organization, operation and activities of an incorporated or unincorporated organization whose purposes and activities have been determined by the Board of Directors to be prejudicial to the best interest of PCCI, its members and the purebred dog sport. [Emphasis supplied in source.]

PCCI’s Actions Against Petitioners

PCCI’s Board of Directors ordered immediate suspension of petitioners Primo Co, Sr., Edgardo Cruz, Fe Lanny L. Alegado, and Jester B. Ongchuan due to their registration of dogs with AKCUPI.
PCCI stripped Primo Co, Sr.’s champion dog (Phil Hof Palawan Stalwart Ethan) of its title.
PCCI prevented Edgardo Cruz from acting as a judge in dog shows which he regularly performed in the past.
On December 15, 2008, PCCI sent identical letters to Primo Co, Sr., Edgardo Cruz, and Jester Ongchuan informing them of their expulsion from the organization for alleged "conduct prejudicial to the best interest" of PCCI.
Petitioners Fe Lanny L. Alegado was personally advised of her expulsion by PCCI’s General Manager, though she never actually received formal communication of expulsion.
Joseph Ongchuan and Lucianne Cham were allegedly threatened with similar sanctions.

Petitioners’ Case, Claims, and Prayer

On January 7, 2008, petitioners filed a case for Annulment of the Amended By-laws, Injunction and Damages with an application for a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction before the Regional Trial Court (RTC), Quezon City; docketed as Civil Case No. Q-09-207 (rollo, pp. 60-79).
Petitioners’ central claims:
- The Amended By-laws (especially Article VI) entirely revised and modified the article on suspension and expulsion of members.
- Adoption of the May 17, 2008 Amended By-laws without participation of non-voting members (including petitioners) constituted a violation of Section 6 of the Corporation Code and rendered the amendments null and void.
- Since the suspension/expulsion and threatened sanctions were based on this provision, petitioners sought a TRO and, thereafter, a Writ of Preliminary Injunction enjoining PCCI from implementing the Amended By-laws.

RTC Proceedings and Orders

After summary hearing, RTC issued an Order dated January 14, 2009 granting petitioners’ prayer for issuance of a TRO.
Thereafter, on February 4, 2008, the RTC issued a Writ of Preliminary Injunction (order text appears in source).
RTC’s findings and reasoning:
- Although petitioners were non-voting members of PCCI, they were entitled to vote on amendments of the by-laws under Section 6 of the Corporation Code.
- The May 17, 2008 Amended By-laws was voted upon only by voting members and without participation of non-voting members, including petitioners, rendering the Amended By-laws questionable.
- As a result, petitioners were entitled to the injunctive relief prayed for.
RTC’s February 4, 2008 Order (pertinent portion quoted in source):
- "ACCORDINGLY, the plaintiffs' prayer for the issuance of a writ of preliminary injunction is hereby GRANTED. Let such writ issue forthwith restraining and/or prohibiting defendant PCCI from implementing any or all provisions of the 17 May 2008 Amended By-Laws of PCCI and from enforcing and/or implementing the suspe