Title
Pheschem Industrial Corp. vs. Surigao
Case
A.C. No. 8269
Decision Date
Dec 11, 2013
Pheschem Industrial Corporation faced obstruction from local officials, including Atty. Surigao, over quarry operations, leading to legal disputes and a disbarment complaint dismissed by the Supreme Court due to lack of malice.
disbarment complaint
lawyers
municipal officials

Case Summary (A.C. No. 8269)

Factual Background

Pheschem is a domestic corporation engaged in producing hydrated lime and had operated a limestone quarry in Palompon, Leyte under a 25-year mining permit since 1985. Toward the end of that permit, Pheschem encountered opposition from local officials and barangay residents when it sought to renew or operate new quarry sites. Pheschem traced the hostility in part to its refusal to permit logging trucks associated with Barangay Liberty Chairman Eddie Longcanaya to pass through its quarry, which allegedly led the chairman to impose an informal P100.00 fee per dump truck and to mobilize a barricade blocking quarry access on May 12, 2008.

Respondents' Alleged Participation and Local Resolutions

Pheschem sought assistance from Atty. Lloyd P. Surigao, then Vice-Mayor of Palompon, but alleged that he joined the barangay blockade and presided over a dialogue that disregarded DENR certifications favorable to Pheschem. The Sangguniang Bayan of Palompon passed Municipal Resolution No. 068-020608 on June 2, 2008, expressing omnibus opposition to any re-application by Pheschem for mining permits, ECC, business permit, or mayor’s permit. Pheschem also alleged that Atty. Surigao later appeared as collaborating counsel for a dismissed Pheschem employee in a labor case and that Sangguniang Bayan member Atty. Jesus A. Villardo III joined municipal actions adverse to the company.

New Quarries, Cease-and-Desist Order, and Truck Seizures

After being prevented from hauling limestone from its original site, Pheschem opened a new quarry in Barangay Cantandoy and then in Barangay San Miguel. Mayor Eulogio S. Tupa issued a Cease and Desist Order dated July 14, 2008 directed to Engr. Timoteo Andales, Pheschem’s operations manager, which described alleged violations of ECC conditions and of environmental and mining laws and ordered cessation of hauling to Pheschem’s plant. Thereafter municipal officers and police seized Pheschem dump trucks on several occasions, including a seizure on January 6, 2009 when Atty. Surigao, Pajaron of MENRO, and policemen entered Pheschem’s quarry site.

Judicial Relief and RTC Orders

Pheschem filed SCA Case No. 0045-PN for injunction, prohibition, and mandamus with damages on December 5, 2008, naming the municipal officials including Atty. Surigao and Atty. Villardo as respondents. The RTC issued a 72-hour temporary restraining order on December 8, 2008 and, after hearing, granted a writ of preliminary injunction on December 22, 2008 enjoining the town officials and others from interfering with Pheschem’s quarry operations and ordering release of impounded trucks. The municipal defendants filed motions for reconsideration and further proceedings; the RTC denied motions to dissolve the preliminary injunction in July 2009 and later granted enforcement of its orders on January 15, 2010.

Administrative and Provincial Determinations

While municipal actions sought to cancel Pheschem’s provincial quarry permit, the Office of the Provincial Governor of Leyte dismissed a joint complaint filed by Mayor Tupa and municipal officers in a March 20, 2009 Resolution. The DENR-EMB issued an ECC to Engr. Andales for a land development (leveling) project on July 4, 2008, and advised the municipal officials that an ECC does not exempt the proponent from securing other clearances from concerned agencies or local government units. Quarry permits were later issued by the Governor of Leyte to Engr. Andales and to Pheschem for specified periods, though municipal certifications indicated that the site was not a quarry area and that San Miguel lay within the Palompon Forest Reserve declared under Presidential Proclamation No. 212.

IBP Investigation, Report and Initial Disposition

This Court referred Pheschem’s disbarment complaint to the IBP. On January 5, 2011, IBP Investigating Commissioner Rebecca Villanueva-Maala recommended dismissal of the disciplinary complaint for lack of merit, finding that the respondents merely performed their duties as public officials and that misconduct in the discharge of official duties is disciplinable only when it affects a lawyer’s qualifications or shows moral delinquency; she found no evidence of malice, ill intent, or bad faith. The IBP Board of Governors adopted and approved that recommendation on July 21, 2012 in Resolution No. XX-2012-308.

IBP Reconsideration and Suspension

Pheschem moved for reconsideration of the IBP dismissal, contending that respondents acted in excess of authority, attacked a valid ECC without merit, insisted on local permits which the municipality itself denied, defied RTC injunctive writs, and that Atty. Surigao used office to influence Sanggunian action. On March 21, 2013, IBP Governor Leonor L. Gerona-Romeo issued a one-page resolution reversing the Board’s earlier adoption and finding that the respondents’ actions, though apparently in performance of duties, constituted arbitrary acts beyond the scope of discretionary authority that bordered on harassment and were unethical per professional standards; she ordered suspension of each respondent from the practice of law for one month. The IBP Board of Governors adopted that reversal in Resolution No. XX-2013-327.

Court of Appeals Proceedings and CA Ruling

While the IBP processes were ongoing, the municipal defendants filed three certiorari petitions in the Court of Appeals seeking to lift the RTC writ of preliminary injunction, to dismiss the SCA for lack of cause of action, and to set aside various RTC orders. The Court of Appeals, in a consolidated decision, found that the RTC orders constituted manifestly grave abuse of discretion and lifted the writ of preliminary injunction in SCA Case No. 0045-PN, concluding that Pheschem had no existing vested right to continue operating its quarries.

Parties’ Contentions on Review to the Supreme Court

Pheschem insisted before the IBP and in its motions that the respondents’ acts were not regular official acts, that the DENR and other competent agencies found no violations by Pheschem, that respondents defied injunctive writs, and that municipal insistence on local permits was pretextual. The respondents maintained that their actions responded to complaints by barangay residents regarding alleged dynamite blasting and quarrying; that municipal regulation under R.A. No. 7160 empowered local governments to exercise police power and to regulate use of property for public welfare and environmental protection; that Pheschem’s operations lacked necessary local permits and that the ECC issued to Engr. Andales was for leveling and not for quarrying; and that seizures were effected by municipal officers deputized by the provincial government.

The Supreme Court’s Ruling

The Court resolved to dismiss the disbarment complaint against Attys. Lloyd P. Surigao and Jesus A. Villardo III. The Court endorsed the IBP Investigating Commissioner’s factual findings that the respondents acted in the performance of their official duties and that there was no showing that their acts demonstrated moral delinquency or were motivated by malice, ill intent, or bad faith. The Court noted that IBP Governor Gerona-Romeo reversed

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