G.R. No.

172556 June 9, 2006

TRANS MIDDLE EAST (PHILS.), Petitioner,

vs.
SANDIGANBAYAN (5th Division) PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT (PCGG), The Board of Directors of Equitable PCI Bank, represented by its
Chairman, CORAZON DELA PAZ and SABINO ACUT, JR. (in his capacity as Corporate
Secretary of Equitable PCI Bank), Respondents.

DECISION

TINGA, J.:

The integrity of the judicial system is founded on the soundness and rationality of the judgments
emanating from it. Decisions which are blatantly erroneous or founded on oblique reasoning
inevitably foment doubt within the dispirited public as to the impartiality and judiciousness of the
magistrates concerned. A critical eye must especially be cast on rulings which are not only wrong,
haphazardly grounded and obtusely one-sided, but fortuitously timed to engender the most
advantage to the victor and damage to the loser.

This Petition for Certiorari was filed by petitioner Trans Middle East (Phil.) Equities Inc. (TMEE),
the registered owners of erstwhile sequestered shares in Equitable-PCI Bank (EPCIB) assailing a
Resolution1 promulgated by the Sandiganbayan on 22 May 2006. The Resolution declared that a
Temporary Restraining Order (TRO) initially issued 14 years ago by this Court in cases that were
closed and terminated ten years ago, remained in effect, thus disqualifying TMEE from voting on
its shares. The annual stockholders meeting of EPCIB was scheduled on 23 May 2006, or the day
after the Resolution was promulgated, leaving questions as to the timing of the promulgation. In
any event, the Resolution is rooted in dubious and erroneous legal premises. The writ of certiorari
lies.

A narration of the relevant antecedents ensues.

TMEE is the registered owner of 6,119,067 common shares of stock in the then PCBank, now
Equitable-PCI Bank. On 15 April 1986, these shares were sequestered by the Presidential
Commission on Good Government (PCGG) on the theory that as they actually belong to Benjamin
Romualdez they constitute illegally acquired wealth. Thereafter, a complaint, docketed as Civil
Case No. 0035, was filed against Romualdez by the PCGG before the Sandiganbayan for the
recovery of these shares. Upon motion, TMEE was allowed to intervene by the Sandiganbayan,
and it sought to enjoin the PCGG from voting these shares.

In 1991, the Sandiganbayan, upon motion of TMEE, issued resolutions that enjoined the PCGG
from voting the shares of TMEE and authorized TMEE in exercising its voting rights. These
resolutions were challenged before the Supreme Court, through petitions docketed as G.R. Nos.
105808 and 105809. The Court then issued a TRO enjoining the implementation of the
Sandiganbayan resolutions. Subsequently, G.R. Nos. 105808 and 105809 were consolidated with
several other cases, which were collectively resolved the Court in a 23 January 1995 consolidated
decision entitled Republic v. Sandiganbayan.2 The Court resolved to maintain the TRO it issued
enjoining the implementation of the 1991 orders of the Sandiganbayan, decreeing as follows:

WHEREFORE, judgment is hereby rendered:

xxxx

B. CONFIRMING AND MAINTAINING the temporary restraining orders issued in G.R. Nos.
104883, 105170, 105206, 105808, 105809, 107233, and 107908, which shall continue in force and
effect during the continuation of the proceedings in the corresponding civil actions in the
Sandiganbayan, subject to the latter’s power to modify or terminate the same in the exercise of its
sound discretion in light of such evidence as may subsequently be adduced.3 (Emphasis supplied)

In a subsequent Resolution dated 22 July 1997, concerning pending motions for contempt against
PCI Bank and TMEE, the Court found it necessary to render the following rulings:

WHEREFORE, the Court Resolved:

xxxx

II. To DIRECT the Sandiganbayan, in reiteration of this Court’s prior directives, promptly to
adjudicate after due trial and proper proceedings the ultimate factual issue of whether or not the
movant’s are the legitimate, bona fide owners of the sequestered shares of stock (or the same
constitute ill-gotten wealth which should revert to and be forefeited in favor of the Republic,
represented by the PCGG); and pending such adjudication, resolve, with all deliberate dispatch but
not later than sixty (60) days from notice of this Resolution, the preliminary questions of whether
there is prima facie factual foundation for the sequestration of said stock, and for reasonable
ground for apprehension of dissipation, loss or wastage of assets if the holders of the sequestered
stock are permitted to vote them;

III. To COMMAND TMEE and the PCGG forthwith to formally request the Sandiganbayan to set
Civil Case No. 0035 for hearing so that the issues set out in the immediately preceding paragraph
hereof may be determined with all deliberate dispatch; and

IV. To PROHIBIT from this date and until completion by the Sandiganbayan of its determination
of the preliminary questions set out in paragraph II hereof, the exercise of the right to vote
pertaining to the sequestered PCIB shares of stock in question by either the PCGG or TMEE at
any meeting of the PCIB.4

Meanwhile, in January and February of 1997, TMEE filed two motions before the Sandiganbayan,
both urging the nullification or lifting of the writ of sequestration. It contended that no valid writ
of sequestration was ever issued, the sequestration having been effected through a letter dated 15
April 1986 addressed to EPCIB signed by only one PCGG commissioner, in violation of the
PCGG Rules and Regulations promulgated on 11 April 1986 that required writs of sequestration to
be issued by at least two commissioners. While TMEE argued that it was entitled to the actual
custody and control of the shares, it nonetheless manifested that it was willing to deposit these
shares in escrow to allay any fear of dissipation, loss or wastage of the subject shares, as well as
on all future cash and stock dividends to be declared on the said shares.

In April of 1998, PCGG filed with the Sandiganbayan a Motion for Issuance of Restraining Order,
seeking to enjoin the holding of the EPCIB stockholders meeting on 30 April 1998, on the ground
that since the 1997 Supreme Court Resolution enjoined both the PCGG and TMEE from voting
the sequestered stocks, these shares stood to be diluted considering a proposal in the agenda to
increase the authorized capital stock of EPCIB, among others.

In a Resolution dated 29 April 1998, the Sandiganbayan dismissed these fears of the PCGG as
unfounded. Moreover, in the same Resolution the Sandiganbayan acknowledged that this Court
had granted it the power to modify or terminate this Court’s temporary restraining order in the
exercise of its sound discretion in the light of subsequent evidence. Accordingly, the
Sandiganbayan proceeded to recognize the right of TMEE to vote the shares of stock registered in
its name, and to allow it to vote at the stockholders meeting of 30 April 1998. The Sandiganbayan
justified such recognition based on the following premises: (a) that the PCGG which bore the
burden of proof to show prima facie foundation for the sequestration of TMEE shares had failed to
timely do so; (b) that no damage or dissipation of the sequestered shares would result should
TMEE be allowed to vote them; and (c) that on its face, the writ of sequestration was issued only
by one PCGG Commissioner, in violation of the PCGG’s rules and regulations promulgated on 11
April 1986. Thus, the Sandiganbayan ruled:

UNDER THE PREMISES:

(2) Philippine Commercial and Industrial Bank’s (PCIB) Chairman of the meeting and the
secretary thereof are directed to acknowledge the right of intervenor Trans Middle East (Phil.)
Equities, Inc. (TMEE) to vote the shares of stocks registered in its name and allow it to vote at the
Stockholders’ Meeting scheduled on April 30, 1998 at 9:00 o’clock in the morning or at any other
time to which said stockholders’ meeting may be continued or reset. TMEE shall post a bond of
ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS to answer for any undue damage
that the plaintiff PCGG or the PCIB shall suffer by reason of the sequestered shares of stock
having been voted by and for said intervenor.5

The pending motion for nullification of the writ of sequestration was left unresolved then. On 10
January 2003, the Sandiganbayan issued a Resolution on the motions filed by TMEE in 1997
assailing the sequestration order. The Sandiganbayan granted the motion to nullify the writ of
sequestration of TMEE shares, ruling that the sequestration order null and void as it was issued
only by one PCGG Commissioner. It cited the decision of this Court in Republic v.
Sandiganbayan6 wherein it was ruled that a writ of sequestration signed by only one PCGG
commissioner was an obvious transgression of the PCGG rules.7 At the same time, based on
TMEE’s manifestation that it was willing to deposit the subject shares in escrow to allay any fear
of dissipation, loss or wastage of the subject shares, the Sandiganbayan ordered that the shares be
deposited in escrow with the Land Bank of the Philippines.

The Resolution decreed:

WHEREFORE, in view of the foregoing:

1) The "URGENT MOTION TO NULLIFY WRIT OF SEQUESTRATION" dated January 28,

1997 filed by movant Trans Middle East (Phils.) Equities, Inc., is hereby GRANTED.
Accordingly, Sequestration Order No. 86-0056 dated April 15, 1986 is hereby declared null and
void for having been issued by one PCGG Commissioner only in direct contravention of Section 3
of the PCGG’s own Rules and Regulations. Conformably, however, with the manifestation of the
movant trans Middle East (Phils.) Equities, Inc. itself, the Court will not order the return of its
shares of stocks sequestered per Sequestration Order No. 86-0056 dated April 15, 1986, but orders
that the same, including the interests earned thereon, to be deposited with the Land Bank of the
Philippines in escrow for the persons, natural or judicial, who shall eventually be adjudged
lawfully entitled thereto.8 (emphasis supplied)

PCGG filed motions for the reconsideration of both the 1998 and 2003 resolutions of the
Sandiganbayan. These motions have not yet been resolved to date. In the meantime, TMEE
alleged that it has voted the subject shares from 1998 up to 2005.9

On 2 May 2006, the PCGG filed a Motion for Execution of this Court’s Decision in G.R. Nos.
105808 and 105809, which was promulgated on 23 January 1995, or more than ten (10) years
earlier. It was argued therein that the 1995 Decision became final and executory by virtue of an
entry of judgment dated 2 April 1996 which was allegedly received by the PCGG only on 2 March
2006.10 The purported receipt then only of the entry of judgment came one (1) day after the
EPCIB’s proxy validation deadline with closure of the Record Book of EPCIB. Desiring to
"exercise its voting rights as upheld by the Supreme Court", the PCGG prayed of the
Sandiganbayan to issue the appropriate order permitting it to vote the sequestered shares or, in the
alternative, to order "re-enforced and/or reissued" the TRO affirmed by the Supreme Court in the
1995 Decision, which enjoined TMEE from voting the sequestered shares.

The Motion for Execution was heard on 5 May 2006, with TMEE making no appearance therein.
The Sandiganbayan ordered TMEE to comment on the said motion within ten (10) days.

Then on May 9, 2006, the PCGG filed an Urgent Ex-Parte Motion to Reinforce/Re-issue TRO,
praying that the Sandiganbayan issue an order re-enforcing and/or re-issuing the TRO issued by
this Court in G.R. Nos. 105808 and 105809 and to execute the TRO under the Decision of the
Supreme Court dated January 13, 1995. The PCGG argued that due to the fact that the
stockholders meeting of EPCIB was scheduled on 23 May 2006, there was an urgent need for the
re-enforcement or reissuance of the TRO affirmed by the Supreme Court in its 1995 Decision. The
PCGG also alleged that they had received reports that "the Romualdezes are bent on disposing of
their shares in EPCIB," and that should they "gain control of the bank of (sic) electing themselves
and/or their dummies/nominees to the helm of the bank, there is a danger that the sequestered
Equitable-PCI Bank shares might dissipate or be disposed of."11

On 22 May 2006, the Sandiganbayan issued the Resolution now assailed before the Court. The
Sandiganbayan acknowledged that the 1998 and 2003 Resolutions it earlier issued had indeed
modified the TRO issued by this Court, and that it had the authority, as granted by the Court, to
modify or terminate such TRO. Nevertheless, the Sandiganbayan ruled that both resolutions had
not yet attained finality since it itself still had to resolve the motions for reconsideration
respectively related thereto filed by the PCGG in 1998 and 2003. The Sandiganbayan opined that
it could not re-issue the TRO since it was this Court which issued the same. Still, the
Sandiganbayan ruled that it could state that the two resolutions modifying this Court’s TRO "have
not attained finality as the motions for reconsiderations thereto have not been resolved by [the
Sandiganbayan]." The dispositive portion of the Resolution read:

WHEREFORE, pertinent to the instant motion, this Court hereby declares that considering that
two resolutions modifying the Supreme Court’s TRO have not attained finality as the motions for
reconsiderations filed thereto have not been resolved by this Court, the TRO, which was issued by
the Supreme Court disqualifying both the PCGG nominees, TMEE, PAH and PAR, from voting
the sequestered shares in the Equitable PCI Bank and Benguet Corporation, respectively is still
existing and in full force and effect.12

On the following day, 23 May 2003, TMEE filed the instant petition with this Court, with a prayer
for the issuance of a Temporary Restraining Order or a Writ of Preliminary Injunction "to preserve
and maintain the status quo wherein TMEE [was] allowed to vote the shares registered in its name
and restraining the respondents from enforcing the [22 May 2003 Sandiganbayan] Resolution
granting the motion to re-enforce/re-issue TRO, until the final resolution" of this Court.

In the absence of an injunctive order restraining the holding of the stockholders’ meeting on 23
May 2006, the meeting was held. Over the objections of TMEE, the election of a new Board of
Directors of EPCIB was held. Since TMEE was not allowed to vote its shares, it was unable to
elect any representative to the Board of Directors despite the fact that it maintained enough shares
to be entitled to at least one board seat. Thus, in its Supplemental Petition attached to a Motion for
Leave of Court to File Supplemental Petition, TMEE prayed for the issuance of a resolution
directing the maintenance of the status quo prior to the disputed election of directors; restraining
the new Board and the officers elected by them from further performing their functions; and
directing the Chairman and Corporate Secretary to recognize and allow the old Board and officers
to serve in a hold-over capacity until further orders from this Court.13

In the course of deliberating the matter of provisional relief sought by TMEE, the self-evident
nature of the correct resolution on the points of law emerged, and a consensus developed within
the Court that the petition be resolved immediately. The challenged Resolution is ostensibly
grounded on an earlier decision of this Court, yet is ultimately oblivious to the full import of that
decision and other juridical precedents as well. The Sandiganbayan in its Resolution likewise sub
silencio contradicts earlier rulings it had previously rendered in connection with the same issues,
yet takes refuge from its inconsistency on its very own inaction on two still pending motions for
reconsideration filed eight and three years ago, respectively.

Considering that all the respondents have duly filed their respective comments, there is no
impediment to the immediate resolution of the case on the merits. We are compelled to act
promptly in light of the highly disturbing circumstances attending this case. This Court cannot
countenance unabashed trifling with the judicial process, turn a blind eye on a patent simulacrum
of judicial adjudication and allow a glaring travesty of justice to go unchecked in time.

The assailed Resolution in this case, promulgated by the Sandiganbayan on 22 May 2006, has
been used to maximum benefit by the respondents, all connected with EPCIB, in an obvious
corporate squabble which saw its apotheosis in the long scheduled annual stockholders meeting on
23 May 2006 wherein TMEE was deprived of its right to vote its shares despite the fact that it
would have been able to elect at least one (1) seat on the Board of Directors. The Court is also
impelled by the recognition that the annulment of the Sandiganbayan resolution would have a
pronounced consequent effect on the financial community, if not the banking public at large.
Hence, the need to resolve this matter promptly.

We now accordingly adjudicate.

The Court first dispenses with procedural issues raised that are ultimately minor. The petition is
denominated as one for certiorari with prayer preliminary injunction and/or temporary restraining
order, under the ambit of Rule 65 of the Rules of Court. Respondent Board of Directors of EPCIB
argue that the failure of TMEE to file a motion for reconsideration with the Sandiganbayan
precluded the immediate resort to the special civil action of certiorari. As a general rule, certiorari
as a special civil action does not lie unless a motion for reconsideration is first filed before the
respondent court. However, this rule does not apply when special circumstances warrant
immediate or more direct action.14 It is well-settled that the availability of appeal does not
foreclose recourse to the extraordinary remedies of certiorari or prohibition where appeal is not
adequate, or equally beneficial,

speedy and sufficient.15 Where the exigencies of the case are such that the ordinary methods of
appeal may not prove adequate—either in point of promptness or completeness, so that a partial if
not a total failure of justice could result—a writ of certiorari may still be issued.16

It cannot evade notice that the assailed Sandiganbayan Resolution was promulgated one (1) day
before the scheduled stockholders meeting of EPCIB. Evidently, TMEE could no longer have
relied on the Sandiganbayan to reverse itself literally overnight, in time for the meeting. The filing
of a motion for reconsideration would not have been an adequate or speedy remedy for TMEE.
Hence, resort to the special civil action of certiorari without filing a motion for reconsideration is
justified under the circumstances.

The more consequential procedural objection lies in the failure of TMEE in its petition to pray for
the annulment of the 22 May 2006 Sandiganbayan Resolution despite the denomination of the
petition as one for certiorari, and the arguments therein that the Sandiganbayan acted with grave
abuse of discretion in rendering the Resolution. On this failure, the respondents in their respective
comments argue that the petition, which was accompanied by a prayer for writ of preliminary
injunction and/or TRO, is effectively an original action for injunction beyond the jurisdiction of
this Court.

TMEE, in its Supplemental Petition filed seven (7) days after the filing of the petition, did
subsequently pray for the nullification of the Sandiganbayan resolution on the ground of grave
abuse of discretion. TMEE deserves some blame for failing to include such prayer in its original
petition, yet given the attendant circumstances, it would be an act of triviality to dismiss the
petition on that ground alone. For one, even assuming that the petition is indeed an original action
for injunction, it was ruled in Del Mar v. Pagcor17 that "this Court has the discretionary power to
take cognizance of the petition at bar if compelling reasons, or the nature and importance of the
issues raised, warrant the immediate exercise of its jurisdiction."18 Indeed, such compelling
reasons, as adverted to before, are present in this case.

More fundamentally, it is evident from the allegations in the petition, replete with imputations of
grave abuse of discretion on the part of the Sandiganbayan when it promulgated its resolution, that
the nature of the petition is one for certiorari, with injunction sought only as an ancillary relief.
The nature of an action, as well as which court or body has jurisdiction over it, is determined
based on the material allegations contained in the petition.19 Any doubts as to whether TMEE
seeks the annulment of the Sandiganbayan resolution are cleared by the Supplemental Petition,
which expressly seeks such relief.

The Court is also inclined to view this defect with liberality, considering that TMEE had only one
(1) calendar day to prepare the petition, which sought to vindicate the exercise of its voting rights
in the EPCIB stockholders meeting, which was enjoined by the Sandiganbayan resolution
promulgated just the day before such election. The forced haste under which the petition was
prepared cannot be attributed to the fault of TMEE, and any resulting errors in the petition that are
of the non-fatal variety can be overlooked.

Respondents, particularly the EPCIB Board of Directors, ascribe a few other procedural errors on
the part of the petitioner, but these are so minor that they do not merit the attention of the Court.
Suffice it to say, they do not adduce a compulsory rule that would mandate the dismissal of the
petition contrary to the discretion of the Court to do otherwise.

We now turn to the merits of the case.

The assailed Sandiganbayan resolution was occasioned by an "Urgent Ex-Parte Motion to

Reinforce/Re-issue TRO" filed by the PCGG, which prayed for the issuance of an order re-
enforcing and/or re-issuing the TRO issued by this Court in G.R. Nos. 105808 and 105809. The
sort of relief sought is unconventional to say the least. No such remedy is provided for under the
rules of procedure, although it is not expressly barred. The uniqueness of the relief sought should
nonetheless be cause for skepticism on the part of the court hearing the claim. Procedural rules
exist to provide a methodical system that would facilitate the judicious disposition of cases. A
recourse that finds no authorization or support under the rules could in fact be aimed to subvert
orderly procedure, an end that runs contrary to the interest of justice.

The judicial duty, when confronted with such a pleading as the "motion for the
reinforcement/reissuance" of the PCGG, is to look beyond the verbiage and ascertain the real
nature of the action on which the prayer is founded. In this case, it is ineluctable that what the
PCGG sought through its motion was injunctive relief that would refrain TMEE from exercising
its voting rights in the 2004 EPCIB stockholders’ meeting, or other meetings for that matter. While
the legal basis for such prayer is suggested on the continued recognition of a provisional remedy
granted a long time ago, the ultimate goal of the motion is to secure injunctive relief. As such, the
rules on injunction must apply.

The relevant antecedent facts actually point to three successive recourses to injunctive relief which
were availed of in this case. The first was the 1986 order of sequestration, sequestration being in
itself a form of a provisional remedy, an extraordinary measure intended to prevent the
destruction, concealment or dissipation of sequestered properties and, thereby, to conserve and
preserve them, pending the judicial determination in the appropriate proceeding of whether the
property was in truth ill-gotten.20

The second injunctive relief involved in this case came in the form of the TRO issued by this
Court in 1992 in G.R. Nos. 105808 and 105809, restraining the implementation of the 1992
Sandiganbayan order allowing TMEE to vote its shares. The right to the TRO is grounded on the
subsistence of the sequestration order.

The same TRO issued in G.R. Nos. 105808 and 105809 was reaffirmed in the 1995 Supreme
Court Decision in Republic v. Sandiganbayan, an unusual step in itself considering that normally,
a provisional injunctive order survives only as long as the case wherein it was issued. But since
the said TRO related to pending incidents in Civil Case No. 0035 before the Sandiganbayan, the
Court ceded control over the TRO to the anti-graft court, with a specific grant of authority on the
latter to "to modify or terminate the same in the exercise of its sound discretion in light of such
evidence as may subsequently be adduced". The Sandiganbayan did just that through its 1998 and
2003 Resolutions which respectively recognized TMEE’s rights to vote the shares and nullified the
writ of sequestration.

The third mode of injunctive relief involved herein was the PCGG’s motion for the "re-
enforcement or reissuance" of the earlier Supreme Court TRO. Palpably, this motion prayed for
the reaffirmation of the TRO granted by the Supreme Court in G.R. Nos. 105808 & 105809, cases
which were closed and terminated nearly 10 years ago; but at the same time effectively sought to
enjoin the 1998 and 2003 Sandiganbayan Resolutions, praying as the PCGG did that TMEE be
denied the right to vote its shares notwithstanding the two Sandiganbayan resolutions.

For injunctive relief to avail to the PCGG, it must be able to demonstrate the existence of a clear
legal right to be entitled to such relief.21 In the absence of a clear legal right, the issuance of the
injunctive relief constitutes grave abuse of discretion.22 There could only be two putative sources
of such legal right of the PCGG — the 1986 sequestration order and the 1995 Decision of this
Court which affirmed the 1992 TRO issued by the Supreme Court. Yet closer scrutiny of either
reveals no foundational recognition of a clear legal right of the PCGG.

It is settled that as a general rule, the registered owner of the shares of a corporation, even if they
are sequestered by the government through the PCGG, exercises the right and the privilege of
voting on them.23 The PCGG as a mere conservator cannot, as a rule, exercise acts of dominion
by voting these shares.24 The registered owner of sequestered shares may only be deprived of
these voting rights, and the PCGG authorized to exercise the same, only if it is able to establish
that (1) there is prima facie evidence showing that the said shares are ill-gotten and thus belong to
the State; and (2) there is an imminent danger of dissipation, thus necessitating the continued
sequestration of the shares and authority to vote thereupon by the PCGG while the main issue is
pending before the Sandiganbayan.25

Clearly, the existence of the writ of sequestration alone would not legally justify barring TMEE
from voting its shares. Such preclusion may only occur if there is prima facie evidence showing
that the said shares are ill-gotten and there is an imminent danger of dissipation. The
Sandiganbayan or any other court has yet to pronounce any findings to those effects. In fact, the
Sandiganbayan, in its 1998 Resolution, instead declared that TMEE possessed "a prima facie
right" as owner of the registered owner of the sequestered shares, and that there appeared to be "no
strong grounds for apprehension of dissipation or loss of assets of TMEE."26 Concerns over
dissipation have likewise been assuaged that the shares have been deposited in escrow with the
Land Bank of the Philippines on the initiative of TMEE itself. In any event, the nullification in
2003 of the very writ of sequestration by the Sandiganbayan further militates against any
recognition that the sequestration order established a clear legal right that entitled the PCGG to
injunctive relief.

We now examine whether the legal consequences of the 1995 Decision of the Court provide a
clear legal right to injunctive relief to the PCGG.

An examination of the dispositive portion of the 1995 Decision insofar as it pertains to TMEE puts
in doubt whether its "execution" should have resulted in barring TMEE from voting its shares in
the 2006 stockholders meeting. While the 1995 Decision maintained the earlier TRO barring
TMEE from voting its shares, it also authorized the Sandiganbayan "to modify or terminate the
same in the exercise of its sound discretion in light of such evidence as may subsequently be
adduced."

In that sense, the 1995 Decision consisted of two (2) phases. The first phase consists of the
affirmation of the TRO, a stance that subsisted as a matter of default. The second phase, however,
consists of either the modification or termination of the TRO by the Sandiganbayan in light of the
evidence subsequently adduced. Should the condition set in the second phase – modification or
termination by the Sandiganbayan – then the first phase is ended, and the affirmation of the TRO
can no longer be acknowledged as the default action.

There is no question that the Sandiganbayan did modify the TRO by virtue of its 1998 and 2003
Resolutions. The 1998 Resolution "acknowledge[d] the right of intervenor Trans Middle East
(Phil.) Equities, Inc. (TMEE) to vote the shares of stocks registered in its name." The 2003
Resolution went even further in declaring null and void the 1986 sequestration order. Both
resolutions thoroughly explained the reasons for granting favorable reliefs to TMEE.27 The 1998
Resolution even specifically invoked the 1995 Decision of this Court that categorically declared
that the Sandiganbayan had the power to modify or terminate the restraining order in the exercise
of its sound discretion in the light of such evidence as may be subsequently adduced.28

Respondent Board of Directors contest the argument that the 1998 Resolution either lifted or
terminated the 1992 TRO, alleging that the dispositive portion therein29 merely allowed TMEE to
votes it shares for the stockholders meeting on 30 April 1998, and not at other stockholders’
meetings held in previous years. This claim is belied by a close look at the dispositive portion of
the 1998 Resolution, which directed the then PCI Bank to "xxx acknowledge the right of [TMEE]
to vote the shares of stocks registered in its name and allow it to vote at the Stockholders’ Meeting
scheduled on April 30, 1998".30

As evidenced by the use of the conjunctive "and", there were two directives contained in that
order, namely: that the right of TMEE to vote the shares of stocks registered in its name; and to
allow TMEE to vote at the 1998 stockholders’ meeting. The first directive, mandating the
recognition of TMEE’s right to vote its shares, is not subjected to any limitation as to time or
particular circumstance. Neither did the Sandiganbayan’s discussion in the body of the 1998
Resolution support the view that the right of TMEE to vote the shares was limited to the 1998
stockholders meeting.

Respondents are generally silent as to the effect of the 2003 Resolution nullifying the writ of
sequestration. Yet the import of that ruling is equally important to this case.

The 2003 Resolution nullifying the sequestration order over TMEE’s shares was based on the fact,
of which there appears to be no serious contest, that the said order, dated 15 April 1986, was
signed by only one PCGG commissioner in violation of the PCGG Rules and Regulations
promulgated on 11 April 1986.31 The 2003 Resolution particularly cited the Court’s 1998
Decision in Republic v.

Sandiganbayan,32 penned by Chief Justice Panganiban, which categorically ruled that "the writ
[of sequestration] must bear the signatures of two commissioners, because their signatures are the
best evidence of their approval thereof."33 The Court also noted that the PCGG Rules took effect
on 11 April 1986, and that "the signing of sequestration orders by two commissioners had already
been encouraged after April 11, 1986."34

The binding effect of the same provision of the PCGG Rules on the PCGG after 11 April 1986 was
also affirmed in the 1996 ruling in Republic v. Sandiganbayan,35 also penned by Chief Justice
Panganiban. Quoting the same provision requiring that the writ of sequestration may be issued
upon the authority of at least two commissioners, the Court said that the provision was "couched
in clear and simple language [and] leaves no room for interpretation".

The finding of the Sandiganbayan that the writ of sequestration was null and void was material to
the determination whether the PCGG had the right to the injunctive relief it sought. This point is
especially relevant, since if the sequestration order against TMEE is declared null and void, the
earlier TRO will become functus officio. The TRO cannot continue to exist if the sequestration
order is null and void from the beginning. Based on the 2003 Sandiganbayan Resolution, the
sequestration order against TMEE is deemed void as of 15 April 1986, or more than 20 years ago.
Not only the clarity, but the very existence of the legal right on which the PCGG grounds its right
to relief became controverted as a result of the 2003 Resolution.

These twin resolutions of the Sandiganbayan pose a critical impediment to a determination that the
PCGG had a clear legal right to protect that would justify injunctive relief in its favor. At the very
least, these resolutions, issued within the bounds of authority granted by this Court to the
Sandiganbayan, becloud the continued efficacy to this day of the 1992 TRO; at most, they confirm
that the 1992 TRO no longer subsists. The Court is inclined towards the latter view. Clearly, it
would be proper to assert that the 1998 and 2003 Resolutions of the Sandiganbayan were issued
not only in compliance with but in execution and implementation of the 1995 Decision of the
Court. Considering that the Sandiganbayan had already modified or terminated the restraining
order, pursuant to the authority granted it by this Court, it may be very well be that there is nothing
left in the 1995 Decision to execute. At bare minimum, considering the accomplished modification
and virtual termination of the restraining order as of 2003, execution of the 1995 Decision in 2006
cannot possibly contemplate the revival of the TRO.

Obviously, the Sandiganbayan failed to consider these points when it rendered the assailed
Resolution. It does not even appear that the Sandiganbayan evaluated the PCGG’s motion within
the frame of mind that a clear legal right must exist to entitle the PCGG’s prayer. Instead, it
engaged in a mechanical application of technicalities in a manner that failed to consider the more
crucial issues at hand.

There is an admitted convenience in simply pronouncing, as the Sandiganbayan did, that since the
motions for reconsideration to the 1998 and 2003 Resolutions had not been resolved, the efficacy
of those resolutions cannot yet be recognized. It cannot be denied though that the two resolutions
are properly characterized as interlocutory orders, as they do not finally dispose of Civil Case No.
0035. In Valarao v. Pascual,36 the Court contended with the question of whether respondents
therein were bound to respect the authority of a special administrator on the ground that the
interlocutory order appointing such administrator was not yet final and executory because of a
pending motion for reconsideration. The Court held:

[R]espondents cannot disobey the reasonable exercise of the authority of a special administrator
on the dubious ground that the order appointing petitioner Valarao as special administratrix had
not in the meantime become final and executory because of a pending motion for reconsideration
filed by them. The fallacy of this reasoning is apparent, for an interlocutory order is not instantly
appealable and therefore there is no period nor action to suspend or interrupt by a motion for
reconsideration; it is even well settled that a special civil action for certiorari does not suspend the
immediate enforceability of an interlocutory order absent a temporary restraining order or an
injunction. In the same manner, the appointment of a special administrator being an interlocutory
order is not interrupted by a motion for reconsideration and thus must be obeyed as the
proceedings in the probate court progress.37

The same characteristics of the interlocutory order in Valarao apply in this case. Since the orders
recognizing TMEE to vote its shares and nullifying the writ of sequestration are both
unappealable, they can only be assailed through a special civil action for certiorari, the filing of
which however does not ipso facto inhibit the effectivity of the assailed order unless specifically
enjoined. For this reason, it cannot be said that the 1998 and 2003 Resolutions, interlocutory as
they are in character, are not yet susceptible to enforcement during the motions for reconsideration
therefor.

It also bears notice that from the time the 1998 Resolution recognized the right of TMEE to vote
its shares until eight (8) years later, no serious challenges were posed against the right of TMEE to
vote those shares by reason of the pending motion for reconsideration. There is some dispute as to
whether during the last eight years of EPCIB stockholder meetings, TMEE was actually able to
formally vote its shares38 or merely consented to a common slate of nominees previously agreed
upon to negate the need to conduct an actual meeting.39 Yet whatever the fact may be, these
stockholders meetings and election of the Board of Directors were conducted to the satisfaction of
TMEE, which was able to successfully elect at least one nominee to the Board. Those
circumstances do not bear the mark of TMEE being deprived of the right to vote its shares in the
stockholders meetings from 1998 to 2005, when the contrary should have resulted if the position
of the respondents were to be believed.

For all intents and purposes, the 1998 and 2003 Resolutions had been respected prior to the
current year by the Sandiganbayan and the parties. Given the pending motions for reconsideration,
theoretically it is still within the power of the Sandiganbayan to reverse or modify the 1998 and
2003 resolutions. Yet if the Sandiganbayan were so minded to modify or reverse the two earlier
resolutions, it should do so directly and explicitly, not only tangentially or by implication as it
actually did, and at that based on premises which contradict the predicates on which its 1998 and
2003 Resolutions are anchored. In other words, it may reverse its earlier rulings only on the
evidentiary foundations prescribed by this Court in its 1995 Decision which have to pertain to the
existence of a valid basis for sequestration or the danger of dissipation of the sequestered shares.

Until and unless it reconsiders the 1998 and 2003 Resolutions in that fashion and on that basis, the
Sandiganbayan is bound to respect them, moreso because they are its own rulings. It is thus
precluded from performing any act or promulgate any issuance inconsistent with the letter, tenor
and disposition of those previous rulings which remain extant. It cannot re-enforce the TRO
against TMEE or recognizing the continued legal effects of the nullified sequestration order, as it
did through the challenged resolutions. It can only do so by reconsidering the 1998 and 2003
resolutions.

Thus, it can be appreciated why the Sandiganbayan in the challenged Resolution merely opted to
declare the TRO confirmed in this Court’s 1995 Decision is "is still existing and in full force and
effect," desisting as it did from ordering the execution of the 1995 Decision. Such declaration,
however, is not wholly correct as it is incomplete. It did not include the fact that the TRO had
already been modified by the 1998 and 2003 Resolutions of the Sandiganbayan. Moreover, it
failed to consider the well-established doctrine that the registered owner of sequestered shares is
generally entitled to vote the shares.40

The Court thus rules, with considerable ease, that the 22 May 2006 Resolution of the
Sandiganbayan was issued with grave abuse of discretion, and must be annulled.

The Court finds the actions of the PCGG in this case distressing. Its actions and resort to
unconventional modes of relief towards the end of depriving TMEE the right to vote its shares,
notwithstanding two Sandiganbayan rulings recognizing such right are tantamount to abuse of the
judicial process.

For one, concerning the Motion for Execution of Judgment it had filed on 2 May 2006, it appears
highly suspect that the PCGG would await more than ten years before it would move to execute or
enforce the 1995 Decision of the Supreme Court. Entry of Judgment on that Decision was dated 2
April 1996. Under Article 1144 of the Civil Code, an action based upon a judgment must be
brought within ten years from the time the right of action accrues, or within ten years counted
from the time the judgment became final.41 Under Section 2, Rule 37, the date of finality of the
judgment or final order shall be deemed to be the date of its entry.

Notably, nothing in the rules of procedure provides that the entry of judgment be served on the
parties, or reckons the date of finality of the judgment from the moment the entry of judgment is
received by the parties. Hence, the fact that PCGG allegedly was served the Entry of Judgment
only on 2 March 2006 does not detract from the fact that any action to execute or enforce the 1995
Decision of the Supreme Court was barred by prescription after 2 April 2006. The filing of the two
motions by the PCGG before the Sandiganbayan was made only in May of 2006.

In its motion to reinforce/reissue TRO before the Sandiganbayan, the PCGG adverted to reports
that the sequestered shares were in danger of dissipation and diminution as the Romualdezes
"were bent on disposing their shares in Equitable-PCI Bank."42 The shares of EPCIB, including
the interests earned thereon, are deposited in escrow with the Land Bank of the Philippines, on
order of the Sandiganbayan in its 2003 Resolution, at the instance of no less than TMEE. Unless
otherwise ordered by the Sandiganbayan, these shares would remain in escrow until Civil Case
No. 0035 is finally resolved by the Sandiganbayan. As such, these shares have been apparently
insulated from dissipation and diminution. They cannot be simply be disposed of, conveyed or
encumbered by TMEE, even if the sequestration order were voided or the TRO lifted.

This being the situation, the only way by which these shares under escrow may be diminished or
dissipated would be through radical corporate changes within EPCIB, such as through the increase
of capital stock, or even through the dissolution or merger of the bank itself. However, it remains
highly dubious that TMEE could, by exercising its right to vote the shares, effect such changes
that would diminish or dissipate those stocks that it could not dispose of. The shares of TMEE
comprise only 7.13% of the outstanding capital stock of EPCIB,43 and would entitle TMEE to
only one (1) seat in the 15-person Board of Directors.44 TMEE is very much a minority
stockholder in Equitable-PCI Bank, and on its own, incapable of imposing its will on the bank.

It is not beyond the realm of possibility that these shares of TMEE in EPCIB, minimal as they
may be, could somehow accord TMEE a significant degree of influence in the policies and
decisions of the bank. At the same time, considering the limited number of shares TMEE holds,
this prospect should be considered, on its face, highly unlikely. Yet the PCGG staked its motion
before the Sandiganbayan on the claim that the allowance of TMEE to vote its shares could
somehow diminish or dissipate those shares deposited in escrow, a highly facile claim considering
the circumstances. Still, the Sandiganbayan refused to subject such claim to any scrutiny at all,
and worse, granted the relief sought on the dubious premises.

Our attention is also called to the letter dated 22 May 2006, written by PCGG Commissioner
William Dichoso, and addressed to the Board of Directors of EPCIB.45 The letter, captioned
"TRO Issued by the Sandiganbayan in Civil Case No. 0035 (Republic of the Philippines v.
Benjamin Romualdez)", bluntly states that the Sandiganbayan "has issued a Temporary
Restraining Order restraining xxx [TMEE] from voting in the stockholders meeting of [EPCIB],"
and advises that "Copy of the Temporary Restraining Order will follow."46

No such temporary restraining order was issued by the Sandiganbayan. Certainly, the challenged
Resolution does not contain any directive for the issuance of a separate temporary restraining
order. All the challenged Resolution affirms is the supposed continuing force of the TRO as
affirmed by 1995 Decision of the Court. But as earlier discussed, while the 1995 Decision
affirmed the earlier TRO issued by the Court, it also affirmed the right of the Sandiganbayan to
modify or terminate such TRO if the evidence so warranted. The Sandiganbayan has exercised
such right and has chosen not to disavow such exercise. Neither has the modification or
termination of the TRO been reversed or set aside by a higher court.

The impression left by the PCGG letter to EPCIB was that the bank had no choice outside of
violating a judicial order but to disallow TMEE from voting its shares. Yet even with the assailed
Resolution of the Sandiganbayan, such a conclusion is not so evident. At the very least, the PCGG
letter conveyed the message that the Sandiganbayan had enjoined the voting of TMEE shares in
the 23 May 2006 stockholders meeting when in fact the anti-graft court did not provide for an
injunctive relief in such manner.

Still, ultimate blame must be foisted on the Sandiganbayan. Wittingly or unwittingly, it became
complicit in the denial of justice to TMEE when it issued the assailed Resolution, despite the lack
of ample basis to support it. Had it ruled judiciously on the motion, the resultant farce would not
have been staged. More to the point, had it resolved the pending motions for reconsideration in a
timely manner, this entire controversy could have been avoided.

Finally, we consider the consequences of the annulment of the assailed Resolution on the
subsequently held stockholders’ meeting and election of the Board of Directors of EPCIB. It
appears that there is no serious dispute that TMEE would have been entitled to one seat on the
Board had it been able to vote its shares. TMEE asserts that it has 51,827,640 EPCIB shares,47
equivalent to 7.13% of the outstanding capital stock of the bank. Respondent Board of Directors
admits that the shares of TMEE constitute 7.13% of the outstanding capital stock of the bank.48
Since Section 24 of the Corporation Code allows a stockholder such as TMEE to cumulate all of
his shares in the voting for directors, a 7.13 % stock interest in the outstanding capital stock is
sufficient to elect one seat in the 15-seat EPCIB Board of Directors.49 However, relying on the
null and void Resolution of the Sandiganbayan, respondents Board of Directors and Corporate
Secretary prevented TMEE from voting its shares and electing its nominee or representative to the
Board of Directors.

Clearly, TMEE is entitled to one seat on the Board of Directors of EPCIB. There is the option of
annulling the entire election, but such step would be too drastic in light of the fact that only one of
the 15 seats should be necessarily affected upon the seating of TMEE’s nominee to the Board of
Directors. The more prudent step on the part of the Court is to declare that one nominee or
representative of TMEE is entitled to be seated immediately on the Board of Directors, and to
direct the respondents EPCIB Board and Board Corporate Secretary to admit and recognize said
nominee or representative of TMEE to the Board of Directors in place of the person who was
elected to the Board at the 23 May 2006 annual stockholders’ meeting had TMEE not been
disallowed to vote its shares.

The Court, as far back as 1998, already admonished the PCGG and the Sandiganbayan to speedily
proceed with the hearings and resolutions of the main cases for recovery and reconveyance of
alleged ill-gotten wealth.50 In ordinary times, what the Court should be resolving right now in the
exercise of judicial review should be the final decisions of the Sandiganbayan on the recovery of
sequestered assets, and not preliminary matters like those now before us. It is this unconscionable
delay that has precisely allowed this unwanted circus to march into this Court. The protracted
delay serves no end except to foster mockery of the judicial system.

WHEREFORE, the PETITION is GRANTED. The Resolution of the Sandiganbayan dated 22

May 2006 is declared NULL and VOID.

The election at the 23 May 2006 annual stockholders’ meeting of the person to the seat in the
Equitable-PCI Bank Board of Directors to which petitioner Trans Middle East (Phils.), Inc. is
entitled is likewise declared NULL and VOID.

PENDING FINALITY OF THIS DECISION AND IMMEDIATELY UPON RECEIPT HEREOF,

respondents Board of Directors of Equitable-PCI Bank and Corporate Secretary Sabino E. Acut,
Jr. are DIRECTED NOT TO RECOGNIZE said person whose election to the Board of Directors is
set aside and nullified herein and TO RECOGNIZE the nominee or representative of TMEE as a
duly elected member of the Board of Directors, with all the rights and privileges appertaining to
the position.

SO ORDERED.

EN BANC

ROBERTO M. VILLANUEVA, G.R. No. 167726

Petitioner,
Present:
PANGANIBAN, C.J.,
PUNO,
- versus - QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
COURT OF APPEALS and CARPIO-MORALES,
HOUSE OF REPRESENTATIVES, CALLEJO, SR.,
Represented by ROBERTO P. AZCUNA,
NAZARENO, in his capacity TINGA,
as Secretary General, CHICO-NAZARIO,
Respondents. GARCIA, and
VELASCO, JR., JJ.

Promulgated:

July 20, 2006

x-------------------------------------------------------------------------- x

DECISION

TINGA, J.:

Assailed in this Rule 45 Petition for Review[1] is the Decision[2] dated 27 August 2003 of the
Court of Appeals in C.A.-G.R. SP No. 75002, and its Resolution[3] dated 29 March 2005 denying
herein petitioner Roberto M. Villanuevas (Villanueva) Motion for Reconsideration.[4] The
dispositive portion of the challenged Decision reads as follows:

WHEREFORE, the writ of certiorari is GRANTED. The questioned resolutions of the Civil
Service Commission is (sic) hereby REVERSED and SET ASIDE, and the said respondent
ORDERED to CEASE AND DESIST from implementing the same. The Decision of the House of
Representatives Disciplinary Board dated 07 June 2000 is hereby REINSTATED, and respondent
Villanueva is ORDERED DISMISSED from the service with forfeiture of all benefits.

No Costs.

SO ORDERED.[5]

The antecedents are as follows:

On 24 November 1997, Villanueva, married man and the Legislative Assistant II of the Cashiering
and Administrative Records Division of the House of Representatives (the House), was charged
with Grave Misconduct, Disgraceful and Immoral Conduct Prejudicial to the Best Interest of the
Service before the House Disciplinary Board. The charges were based on an entry in the Official
Log Book as well as a Spot Inspection Report accomplished, respectively, by Frederick Maramba
(Maramba) and Orencio Castillo (Castillo), both security officers of the House who were on
regular roving patrol duty on the night of 16 October 1997. Their routine inspection tour included
Room 305, Northwing Building, Office of Representative Constantino H. Navarro, Jr., of the First
District of Surigao Del Norte.[6]

Maramba and Castillo narrated that when they came upon said office at around 9:30 of that night,
they saw Villanueva, a married man[7] and a female asleep on the couch, both naked, with the
womans arm resting on Villanuevas body. The female was later identified as Elizabeth Navarro-
Arguelles (Navarro-Arguelles), Representative Navarros daughter and confidential assistant,
herself a married woman.[8]

Villanuevas immediate supervisor, Jose Ma. Antonio B. Tuano, Chief of the Cashiering and
Administrative Records Division, lodged the complaint against the former.[9] Incidentally, no
charges were filed against Navarro-Arguelles as the House Disciplinary Board has no jurisdiction
over confidential assistants of Representatives.[10]

The House Disciplinary Board, after hearing, found Villanueva guilty as charged and suspended
him for one (1) year without pay with a stern warning that any infraction in the future will be dealt
with more severely.[11] However, acting on Villanuevas motion for reconsideration, the House
Disciplinary Board increased the penalty to dismissal with forfeiture of all benefits.[12]

Speaker Manuel B. Villar, Jr. affirmed the latter Decision of the House Disciplinary Board in a
Resolution[13] dated 5 October 2000. Villanueva moved for a reconsideration of the Decision but
this was denied by Speaker Feliciano Belmonte, Jr., in a Resolution[14] dated 28 May 2001.[15]
Villanueva then interposed an appeal before the Civil Service Commission (the Commission)
which, on 12 April 2002, modified the penalty to suspension. The dispositive portion of the
Commissions Resolution No. 020536[16] reads as follows:
WHEREFORE, the appeal of Robert[o] M. Villanueva is hereby partly GRANTED. The
Commission holds that Villanueva is guilty of Disgraceful and Immoral Conduct for which he is
meted the penalty of one (1) year suspension. In all other respects, the decisions appealed from are
affirmed.

Considering that Villanueva has been out of the service for more than the imposed suspension, he
should now be reinstated to his former position. It is understood that this reinstatement shall not
carry with it the payment of back salaries and other entitlements, for he is not totally exonerated.
[17]

In its motion for reconsideration, the House prayed for the re-imposition of the penalty of
dismissal on Villanueva. For his part, Villanueva moved for partial reconsideration, seeking that he
be awarded his benefits for the period of January 1999 to February 2001. The Commission denied
both motions in Resolution No. 021492[18] dated 18 November 2002, a copy of which the House
received on 21 November 2002.[19]
In a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure filed on 20 January
2003 before the Court of Appeals, the House ascribed grave abuse of discretion to the Commission
for reducing the penalty to a mere suspension.

In its challenged Decision, the Court of Appeals granted the petition for certiorari and sustained
the Decision of the House Disciplinary Board dismissing Villanueva. In arriving at this
conclusion, the Court of Appeals emphasized the similarity of the factual circumstances of the
case at bar with Dicdican v. Fernan, Jr.,[20] wherein the Court dismissed the court personnel
found guilty of disgraceful and immoral conduct.[21] The appellate court stated that adherence to
case law dictates the imposition of a similar penalty for the similar offense in the case at bar.
Otherwise, the Court would be imposing on judicial employees more stringent standards than
employees of the Legislature or the Executive.[22]

The appellate court likewise pointed out that the Commission gravely erred in failing to recognize
the gravity of Villanuevas misconduct, stressing that Villanueva not only disregarded his marriage
vows but also exhibited total disrespect of the marital status of Elizabeth Navarro-Arguelles.[23]

Moreover, the Court of Appeals held that Villanuevas offense relates to his official functions as it
was made possible precisely by his official functions. By virtue of his position, Villanueva had
free rein inside the building even after office hours. Clearly, therefore, Villanueva used his office
to commit the misconduct for which he was charged,[24] it concluded.

Finally, the appellate court disclosed its desire to improve the public regard of the government
sector by safeguarding morality in the ranks.[25]

The Court of Appeals likewise denied Villanuevas Motion for Reconsideration.[26] Thus,
Villanueva filed the instant petition.
In the instant petition, Villanueva insists that the appellate court did not have jurisdiction over the
Houses petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure as it was a
substitute for lost appeal.[27] Villanueva also maintains that the Commission acted well within the
confines of its jurisdiction when it imposed the penalty prescribed by law for disgraceful and
immoral conduct.[28] Villanueva likewise contends that the Dicdican adjudication finds no
application in the instant case as it was arrived at in the Courts exercise of its administrative
jurisdiction over its personnel.[29] Further, Villanueva points out that his misconduct is in no way
connected with his official functions and it cannot thus be equated with grave misconduct as
defined by law.[30]

In its Comment,[31] the House contends that an appeal from the decision of the Commission
would not constitute a speedy and adequate remedy thus necessitating the resort to the remedy of
certiorari under Rule 65. The House reasons that the decision of the Commission was immediately
executory and its execution would not have been stayed by an ordinary appeal.[32] The House
also maintains that the ruling of the appellate court is in accordance with law and jurisprudence,
particularly the Dicdican case. The House argues that employees of the legislature, just like
employees of the judiciary, should be subject to the same exacting standards of morality and
decency in their professional and private conduct.[33]

Lastly, the House posits that since Villanueva was found guilty of Grave Misconduct, Disgraceful
and Immoral Conduct and Conduct Prejudicial to the Best Interest of the Service, dismissal indeed
is the appropriate penalty.[34]

In his Reply,[35] Villanueva maintains, among other things, that even if an appeal before the Court
of Appeals does not stop the execution of the Commissions Decision the House could have
applied for a restraining order or injunction to stay it,[36] noting that Section 82, Rule VI of the
Uniform Rules on Administrative Cases in the Civil Service[37] provides, thus:

Section 82. Effect of Pendency of Petition for Review/Certiorari with the Court.The filing and
pendency of a petition for review with the Court of Appeals or certiorari with the Supreme Court
shall not stop the execution of the final decision of the Commission unless the Court issues a
restraining order or an injunction.
Moreover, Villanueva points out that the House could have easily availed of the remedy of appeal
under Rule 43 of the 1997 Rules of Civil Procedure. The House received a copy of the assailed

resolution of the Commission on 21 November 2002. According to the Rules, the House had
fifteen (15) days, or until 6 December 2002, to perfect an appeal which apparently, it did not do.
Instead, it filed a petition for certiorari under Rule 65 to make up for the lost remedy of appeal.
[38]

The Court finds merit in the petition.

At the outset, we find that the Court of Appeals erred in giving due course to the Houses petition
for certiorari as it was filed in lieu of an appeal which is the prescribed remedy. Section 5, Rule 43
of the 1997 Rules of Civil Procedure states that final orders or resolutions of the Commission are
appealable to the Court of Appeals through a petition for review. However, instead of availing of
the remedy of appeal, the House resorted to the wrong remedy of certiorari.

Notably, the House received the assailed resolution of the Commission on 21 November 2002, and
thus it had until 6 December 2002 or fifteen (15) days after, to file an appeal. Despite the sufficient
time, the House allowed the period to elapse and instead filed a petition for certiorari under Rule
65 on 20 January 2003, close to two (2) months after its receipt of the resolution. Failing to
undertake an appeal, the House interposed a special civil action of certiorari. Evidently, the House
intended to make up for the lost remedy of appeal and substituted it with a petition for certiorari
under Rule 65.

Settled is the rule that a special civil action of certiorari is not a substitute for a lost or lapsed
remedy of appeal.[39] As the Court aptly held in David v. Cordova,[40] to wit:

x x x x Where appeal is available to the aggrieved party, the action for certiorari will not be
entertained. The remedies of appeal (including petitions for review) and certiorari are mutually
exclusive, not alternative or successive. Hence, certiorari is not and cannot be a substitute for an
appeal, especially if ones own negligence or error in ones choice of remedy occasioned such loss
or lapse. One of the requisites of certiorari is that there be no available appeal or any plain, speedy
and adequate remedy. Where an appeal is available, certiorari will not prosper, even if the ground
therefor[e] is grave abuse of discretion.[41]

That appeals to the Court of Appeals do not stop the execution of decisions of the Commission is
not sufficient justification for resorting to the remedy of certiorari. As correctly pointed out by
Villanueva, the execution of the decision of the Commission may be stayed if the House applies
for and the appellate court so issues a restraining order or an injunction.[42] This thus enunciates
the reality that, under the circumstances, an appeal from the decision of the Commission was an
adequate and speedy remedy foreclosing the need for a Rule 65 petition for certiorari.

As the House failed to file a timely appeal, the Court of Appeals should have denied outright its
petition for certiorari. Moreover, even if such petition was not procedurally flawed, still and all, it
was bereft of merit and the appellate court erred in granting it.

First, the appellate court erred when it concurred with the Houses contention that Villanuevas
offense should be classified as grave misconduct.

Following a string of precedents, Amosco v. Magro[43] defines misconduct in this wise:

Misconduct in office has a definite and well understood legal meaning. By uniform legal
definition, it is a misconduct such as affects his performance of his duties as an officer and not
such only as affects his character as a private individual. It is settled that misconduct, misfeasance,
or malfeasance warranting removal from office of an officer, must have direct relation to and be
connected with the performance of official duties amounting either to maladministration or willful,
intentional neglect and failure to discharge the duties of the office.[44]
Misconduct means intentional wrongdoing or deliberate violation of a rule of law or standard of
behavior, especially by a government official. To constitute an administrative offense, misconduct
should relate to or be connected with the performance of the official functions and duties of a
public officer. In grave misconduct as distinguished from simple misconduct, the elements of
corruption, clear intent to violate the law or flagrant disregard of established rule, must be
manifest. Corruption as an element of grave misconduct consists in the act of an official or
fiduciary person who unlawfully and wrongfully uses his station or character to procure some
benefit for himself or for another person, contrary to duty and the rights of others. [45]
In the present case, Villanuevas offense was in no way connected with the performance of his
functions and duties as a public officer. Sure, his office was used as a venue for the commission of
the offense and definitely, his offense speaks despicably of his character as a man but it in no way
evinced any failure on his part to discharge his duties as a public officer. Yes, Villanuevas offense
is gravely immoral and reprehensible but it falls short of grave misconduct as defined by law.

To determine whether a public officer committed misconduct, it is necessary to separate the

character of the man from the character of the officer.[46] Here, Villanuevas transgression laid
bare the values of his inner being but did not expose any of his shortcoming as a public officer.
Who Villanueva is and what he believes in are inconsequential in concluding whether his
misdemeanor amounts to misconduct. Rather, what is material is whether Villanueva properly
discharged his public functions which we believe in no way was compromised or affected by the
commission of his offense.

However, as correctly found by the Commission, we believe that Villanueva is guilty of

Disgraceful and Immoral Conduct for having engaged in an illicit affair. In a catena of cases, the
Court has ruled that government employees engaged in illicit relations are guilty of disgraceful
and immoral conduct for which he/she may be held administratively liable.[47]

According to Section 22 (o), Rule XVI of the Omnibus Rules Implementing Book V of the
Administrative Code of 1987 and Section 52 A (15) of the Uniform Rules on Administrative Cases
in the Civil Service,[48] the first offense of Disgraceful and Immoral Conduct is punishable by
suspension of six (6) months and one (1) day to one (1) year. A second offense is punishable by
dismissal.

As Villanueva is a first-time offender, the proper penalty is suspension. The Commission therefore
correctly meted out said penalty. It clearly acted in accordance with law and no grave abuse of
discretion can be ascribed to it contrary to the appellate courts finding.

Moreover, we do not agree with the appellate courts ruling that Dicdican should be the controlling
precedent such that the penalty of dismissal should be imposed in the instant case.
As correctly pointed out by Villanueva, when the Supreme Court acts on complaints against
judges or any of the personnel under its supervision and control, it acts as personnel administrator
imposing discipline and not as a court judging justiciable controversies.[49]

In Dicdican, the Court sanctioned its errant personnel according to what it believed to be the
commensurate punishment. We deemed it wise to impose more stringent standards primarily to
show that we are serious in policing our ranks. We imposed punishment in Dicdican as we deemed
it proper, according to our own policies, but not without the guidance of the rules in the civil
service. In this case, however, we are not acting as a personnel administrator but rather as the
adjudicative appellate tribunal of last resort reviewing the decisions of lower courts. It is our
responsibility to confirm whether the lower courts upheld the law. The law in this case clearly
states that the proper penalty is suspension and not dismissal as held by the appellate court, hence,
suspension it must be.

WHEREFORE, the petition is GRANTED. The Decision dated 27 August 2003 of the Court of
Appeals in C.A.- G.R. SP No. 75002 and its Resolution dated 29 March 2005 denying petitioners
motion for reconsideration are REVERSED and SET ASIDE. Resolution No.

020536 dated 12 April 2002 and Resolution No. 021492 dated 18 November 2002 of the Civil
Service Commission are AFFIRMED and REINSTATED.

SO ORDERED.

THIRD DIVISION

RAMCAR, INCORPORATED, G.R. No. 157075

Petitioner,
Present:

QUISUMBING, J.,
- versus - Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
HI-POWER MARKETING, VELASCO, JR., JJ.
LEONIDAS D. BOHOL, and
RHODORA A. BOHOL, Promulgated:
Respondents.
July 17, 2006
x------------------------------------------------------------------------------x
DECISION

TINGA, J.:

Before the Court is a Petition for Certiorari filed by Ramcar, Incorporated (Ramcar), raising the
same questions of fact passed upon by both the lower court[1] and the Court of Appeals.

The antecedents are as follows:

Respondent Leonidas Bohol (Bohol) is a distributor of Ramcar products in Quezon City and San
Pablo City using the business name Hi-Power Marketing.

On 4 March 1982, Ramcar and Bohol entered into a loan agreement whereby Ramcar allotted
P300,000.00 as a trade credit line for the batteries to be distributed by Bohol, and released another
P300,000.00 as a straight loan to the latter.[2] To secure the payment of the loan, Bohol executed a
Real Estate Mortgage[3] over a parcel of land and its improvements covered by Transfer
Certificate of Title (TCT) No. 285976.[4] Bohol also signed an undated promissory note[5]
stipulating the schedule of payments and the breakdown of the principal amount and the interest to
be paid.

Subsequently, on the premise that Bohol had defaulted on his loan, Ramcar petitioned the sheriff
of Quezon City to foreclose the mortgage to satisfy an indebtedness of P370,429.42 plus interest.
The auction sale was set on 6 July 1984.[6]

On 3 July 1984, Bohol and his wife (spouses Bohol) filed a Petition for Prohibition with
Preliminary Injunction before the Regional Trial Court (RTC) of Quezon City, Branch 101,
docketed as Special Civil Action No. Q-42032, to prevent the sheriff from conducting the auction
sale. The RTC issued a status quo order on 4 July 1984, thereby temporarily averting the
scheduled sale.[7]

After trial, finding that Bohol had defaulted in the performance of his obligation, the RTC
rendered its decision dismissing the petition for prohibition. The spouses Bohol filed a Motion for
Reconsideration and For New Trial[8] which was denied by the RTC on 4 November 1985.[9]
They then appealed to the Court of Appeals (CA), with the appeal docketed as CA-G.R. CV No.
11496.

While the case was pending before the CA, Ramcar requested the Office of the Sheriff of Quezon
City to proceed with the implementation of the extrajudicial foreclosure in view of the dismissal
of the petition for prohibition of the spouses Bohol. A notice of sheriffs sale was issued and
published for three consecutive weeks in a newspaper of general circulation.

On 28 November 1985, or the day before the scheduled auction sale, the spouses Bohol and Hi-
Power Marketing filed a case against Ramcar before the RTC, docketed as Civil Case No. Q-
46683, praying that their obligation be declared extinguished and their property released from the
mortgage on the ground that they have already overpaid their account.[10]

Nonetheless, the auction sale pushed through on 29 November 1985, with Ramcar emerging as the
highest bidder.[11] After the period to redeem the property had expired, Ramcar caused the
transfer of the certificate of title to its name. Thus, on 11 February 1987, TCT No. 354635 was
issued in favor of Ramcar in place of the old certificate of title in the name of Bohol.[12] On 4
May 1987, Ramcar filed a Petition for a Writ of Possession with the RTC of Quezon City,
docketed as LRC Case No. Q-3696.[13]

Almost one year later, the decision on the appeal by the spouses Bohol in CA-G.R. CV No. 11496
was promulgated on 8 March 1988. The CA declared that the main issue to be threshed out was
whether there was indeed default in payment on the part of the spouses Bohol.[14] This issue was
not thoroughly passed upon by the trial court. Thus, the CA found the need to remand the case for
further hearing on the question of default. It held:

Since default was the principal ground relied upon for the foreclosure of mortgage, RAMCAR
was called upon to prove it and it was absolutely necessary to make a finding that there was in fact
a default. While the parties opted to submit the case upon position papers, the latter unfortunately
did not provide any clarification. On the contrary, the parties presented positions seriously at odds
with each other, and the issue remained as murky as it was before the submission of the papers.
RAMCARs brief is not of any assistance either; it merely reiterates the amount stated in its
application for foreclosure and contains no explanation of the issues.

There was therefore urgent need to receive evidence, from the Bohols, that they might prove their
claim of overpayment, from RAMCAR, that it might establish not only the fact of default but also
the particular loan availment it sought to satisfy with the aborted foreclosure. The decision was
clearly premature.[15]

As both Civil Case No. Q-46683 (verified complaint for the extinguishment of Bohols obligation)
and LRC Case No. Q-3697 (for ex-parte issuance of a writ of possession in favor of Ramcar) were
pending at the time Special Civil Action No. Q-42032 was ordered remanded to the trial court, and
there being interrelated issues, the three cases were consolidated before RTC Branch 101, Quezon
City.[16]
After trial and reception of the parties respective evidence, the RTC in a Decision[17] dated 19
January 1999 ruled in favor of Ramcar, finding that Bohol had an outstanding unpaid obligation in
the amount of P370,959.62. It also declared the extrajudicial foreclosure valid and

consequently affirmed the validity of the transfer of Bohols property to Ramcar.[18]

Bohol went up to the CA with the appeal docketed as CA-G.R. SP No. 52593. The CA reversed
the RTC decision, declared the obligation of the spouses Bohol to Ramcar extinguished by
payment, and the extrajudicial foreclosure of the real estate mortgage null and void. The appellate
court also set aside the writ of possession issued in favor of Ramcar, cancelled the latters TCT No.
354635, and reinstated Bohols TCT No. 285976. The CA ruled:

The pivotal question in these cases is whether the Bohols were in default in the payment of their
loan obligation to Ramcar at the time Ramcar foreclosed the mortgage on the Bohol[s] property. x
xx

xxxx

From comparison of the two sets of computations, it appears the Bohols had paid to Ramcar more
than the amount that Ramcar is seeking to collect from them. The reason for this is that the Bohols
had shown payments and deliveries that were not taken into consideration by Ramcar when it
computed the account of the Bohols. Ramcar failed to prove that the amounts paid by the Bohols,
as reflected by the Exhibits C to G, were already credited to them in the statement of account
Exhibit 18, which in turn was the basis for the extrajudicial foreclosure. Resultantly, the Bohols
had overpaid the mortgaged obligation and may not, therefore, be considered in default. The
extrajudicial foreclosure proceedings instituted against them lacks legal basis and its consequences
must be rectified accordingly in the interest of justice.[19]

Ramcar filed a Motion for Reconsideration which was denied by the CA in its Resolution dated 22
November 2002.[20]

On 21 February 2003, Ramcar filed this Petition for Certiorari against the spouses Bohol and Hi-
Power Marketing alleging that the CA committed grave abuse of discretion: (1) in refusing to
consider the evidence of Ramcar showing that Bohol still has an outstanding balance on his loan;
and (2) in reversing the final order of the RTC granting the writ of possession in favor of Ramcar.

Ramcar contends that Bohol, by means of double crediting and wrong posting, made it appear that
he has already fully paid the obligation. Ramcar also questions the nullification of the extrajudicial
sale, contending that the legal requirements were observed by the sheriff in proceeding with the
sale.

The spouses Bohol, in their Comment,[21] assert that the instant petition is not the proper remedy
as the CA did not commit grave abuse of discretion in rendering the assailed Decision. They also
refute the allegation of Ramcar that they have not fully paid the loaned amount. After a lengthy
discussion of the facts of the case and the computations made by the CA, they posit that the
documents on record clearly show that they have already fulfilled their obligation to Ramcar.
Further, they submit that the documents which Ramcar attached to its petition have not been
presented before the RTC, are utterly self-serving, and should not be accorded any probative
value.

Ultimately, the issue to be decided in this case is whether Bohol has already satisfied his
obligation to Ramcar in full.

The present petition must be dismissed for failure of Ramcar to prove that the CA committed
grave abuse of discretion. A writ of certiorari may be issued only for the correction of errors of
jurisdiction or grave abuse of discretion amounting to lack or excess of jurisdiction. The writ
cannot be used for any other purpose as its function is limited to keeping the inferior courts within
the bounds of its jurisdiction.[22]

In this case, although Ramcar alleged in its Petition that the CA committed grave abuse of
discretion, it did not in any manner show how the appellate court committed such abuse. It is an
empty allegation bereft of any substantiation.

The original action for certiorari may be directed against an interlocutory order of the court prior
to appeal from the judgment or where there is no appeal or any other plain, speedy or adequate
remedy.[23] There was a plain, speedy or adequate remedy available to Ramcar. It could and
should have filed an appeal assailing the Decision of the CA.

It is worth mentioning that Ramcar received the Resolution of the CA denying its Motion for
Reconsideration on 23 December 2002.[24] Ramcar filed its Petition for Certiorari on 21 February
2003 or sixty (60) days after receipt of the Resolution. Since Ramcar failed to appeal within
fifteen (15) days from its receipt of the Resolution, the decision of the CA had become final and
executory. It is well-settled that the filing of the petition for certiorari cannot serve as a substitute
for the lost remedy of appeal.[25] Where the issue or question involves or affects the wisdom or
legal soundness of the decisionnot the jurisdiction of the court to render said decisionthe same is
beyond the province of a petition for certiorari.[26]

The fact that this Petition for Certiorari raises questions of fact further militates against it. In Day
v. RTC of Zamboanga City, Br. XIII,[27] the Court held that in an original action for certiorari,
questions of fact cannot be raised much less passed upon by the respondent court. Only
established or admitted facts can be considered.[28]
In any case, even if we dispense with the technicalities and reevaluate the questions of fact raised
by Ramcar as an exception[29] to the general rule that such questions cannot be reviewed by this
Court, the petition should still be dismissed.

The CA, in ruling for the spouses Bohol, held that:

The Bohols on the other hand, sought to establish overpayment with figures contained in: (1) their
summaries, Exhibit C, D, E of deliveries of wooden crates to Ramcar with supporting delivery
receipts, (2) list of credit memos, Exhibit F, issued by Ramcar to Bohol showing discounts and
price adjustments given to the Bohols, with supporting credit memos; and (3) cash payments,
Exhibit G., with official receipts showing remittances to Ramcar. In the hearing on August 11,
1995, as appearing on page 17 of the transcript, the trial court directed the petitioners to underline
the entries in their records of payments and deliveries which were not credited to them by Ramcar.
In compliance, they made undelinings in Exhibit C, D, E, F and G. They also presented two more
statements, Exhibit H and I, which were supposed to reflect additional credit memos and payments
to Ramcar, but because these were not supported by evidence, unlike the previous statements, we
chose to ignore them. x x x x[30]

It is significant to note that the CA closely analyzed and discussed the merits of the case, taking
into consideration the alleged double crediting and wrong posting of Bohol. It concluded, after
weighing the respective evidence adduced by the parties, that Bohol has fully satisfied his
obligation to Ramcar. In fact, according to the CA, Bohol even made excess payments to Ramcar.
The CA extensively computed the statements of account and the receipts presented and found that
Bohol should prevail in the present dispute.

In contrast, the trial courts decision is bereft of any meaningful evaluation of the evidence
choosing instead merely to replicate the allegations of the various parties particularly the
calculations offered by Ramcar.

It should also be stressed that in the instant petition, Ramcar neither denied the veracity of the
receipts and credit memos Bohol presented to the lower court nor effectively repudiated these
documents. Ramcar merely claims wrong posting on the part of Bohol in arriving at a conclusion
of overpayment. While Ramcar questions the CAs finding of overpayment by Bohol, it did not
focus its petition on this issue but gave a protracted and irrelevant discussion regarding the
redemption of a mortgaged property.
Ramcar also presented to this Court annexes F, G and H showing the breakdown of purchases
Bohol had made from January 1982 to August 1983, the alleged payments made by Bohol from
February 1982 to October 1983, and the credit memos issued by Ramcar thru offsetting from
February 1982 to February 1984, respectively. These documents tend to prove that Bohol still has
an outstanding balance. However, as correctly pointed out by Bohol, the annexes were not
presented before the RTC in Ramcars Formal Offer of Evidence[31]

and the person who prepared the documents did not authenticate the documents in court. The
Court cannot even determine the identity of the person who prepared the documents as only the
signature was affixed to the lower right hand corner of each page of the documents.

Our rule on evidence provides the procedure on how to present documentary evidence before the
court, as follows: firstly, the documents should be authenticated and proved in the manner
provided in the rules of court; secondly, the documents should be identified and marked; and
thirdly, it should be formally offered to the court and shown to the opposing party so that the latter
may have the opportunity to object thereto.[32]

We have carefully examined the documentary evidence presented by the parties in the RTC and
the CA and found that the documents now being presented by Ramcar, i.e. the purchases of Hi-
Power Marketing, payments of battery account, and credit memos issued by Ramcar applied to Hi-
Power Market thru offsetting were not part of the records in the lower court or the appellate court.
They were submitted for the first time to this Court. This being the case, we shall not take them
into account.

In view of the foregoing, we find that the Court of Appeals committed neither grave abuse of
discretion nor any error in judgment in rendering the assailed Decision.

WHEREFORE, the instant petition is hereby DISMISSED. The Decision of the Court of Appeals
dated 28 June 2002 is hereby AFFIRMED. Costs against petitioner.

SO ORDERED.