MANILA ELECTRIC COMPANY, petitioner, vs. PHILIPPINE CONSUMERS this Court in G.R. No.
this Court in G.R. No. 63018 and on the basis of the Dissenting Opinion of the late Justice
FOUNDATION, INC., EDGARDO S. ISIP, HON. JUDGE MANUEL M.
CALANOG, JR., and HON. JUDGE TIRSO D'C. VELASCO, respondents.
Interest republicae ut sit finis litiumi - it is to the interest of the public that there should be
an end to litigation by the same parties and their privies over a subject fully and fairly
adjudicated. From this overwhelming concern springs the doctrine of res judicata an obvious
rule of reason according stability to judgments.
MERALCO CONTENTION: both holding that Meralco is authorized to retain its savings
realized under P.D. 551. Meralco likewise argues that respondent RTC cannot annul the
Resolution of this Court in G.R. No. 63018 considering that trial courts cannot set aside
decisions of a superior court.
FACTS:
On September 11, 1974, former President Ferdinand E. Marcos, with the objective of enabling
the grantees of electric franchises to reduce their rates "within the reach of consumers",ii
promulgated Presidential Decree No. 551iii providing for the reduction from 5% to 2% of the
franchise tax paid by electric companies
Philippine Consumers Foundation, Inc., (PCFI) filed with the Board of Energy (BOE) a
"Petition for Specific Performance, Damages and Violation of P. D. No. 551"iv against the
Manila Electric Company (Meralco),
PCFI sought for the immediate refund by Meralco to its customers of all the savings it realized
under P.D. No. 551, through the reduction of its franchise tax from 5% to 2%, with interest at
the legal rate; and for the payment of damages and a fine in the amount of P50, 000.00 for
violating P.D. 551
Meralco alleged that it was duly authorized by BOE. Moreover, BoE affirmed that Meralco is
indeed authorized.
It is at once evident from the foregoing controlling facts and
circumstances, particularly the Order of this Board dated March 10, 1980, as
confirmed by the reply-letter dated March 3, 1981, that Meralco has been duly
authorized to retain the savings realized under the provisions of P.D. 551. The
authority granted in the said Order and letter is so clear and unequivocal as to leave
any room for contradictory interpretation. This Board, therefore, holds as untenable
petitioners claim that respondent Meralco was never authorized under the said Order
and letter to hold on to the savings realized under the said decree.
Four years thereafter, PCFI and a certain Edgardo S. Isip, private respondents herein, filed
with respondent Regional Trial Court, Branch 76, Quezon City, a petition for declaratory
relief, docketed as Civil Case No. Q-89-3659.
respondent RTC rendered the assailed Decision declaring null and void the Resolution of
Claudio Teehankee, held that the disputed savings belong to the consumers.
The act therefore of the Minister of Finance was ultra vires, hence, null and
void. Considering that said act became the basis of the Board of Energys decision, it
follows that said decision is likewise null and void and the Supreme Court resolution
affirming said decision is also null and void having proceeded from a void judgment,
hence, cannot be considered as valid judgment that will be a bar to the present
action."
Motion for reconsideration was denied, Hence this petition.
ISSUE:
RESPONDENT JUDGES ERRED IN HOLDING THAT CIVIL CASE NO. 89-3659 IS
NOT BARRED BY PRIOR JUDGMENT.
RULING:
The case can sanctioned under the principle of res judicata.
Res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or
matter settled by judgment.
For a claim of res judicata to prosper, the following requisites must concur: 1) there must
be a final judgment or order; 2) the court rendering it must have jurisdiction over the
subject matter and the parties; 3) it must be a judgment or order on the merits; and 4) there
must be, between the two cases identity of parties, subject matter and causes of action
All the requisites are existent on the case.
.A judgment is on the merits when it determines the rights and liabilities of the parties
based on the disclosed facts, irrespective of formal, technical or dilatory objections.
A lower court cannot reverse or set aside decisions or orders of a superior court, especially
of this Court, for to do so will negate the principle of hierarchy of courts and nullify the
essence of review. A final judgment, albeit erroneous, is binding on the whole world.
Thus, it is the duty of the lower courts to obey the Decisions of this Court and render
obeisance to its status as the apex of the hierarchy of courts. "A becoming modesty of
inferior courts demands conscious realization of the position that they occupy in the
interrelation and operation of the integrated judicial system of the nation."v "There is only
one Supreme Court from whose decisions all other courts should take their bearings," as
eloquently declared by Justice J. B. L. Reyes.
G.R. No. 180235, January 20, 2016 The RTC then issued its order dismissing the petition.

ALTA VISTA GOLF AND COUNTRY CLUB, Petitioner, v. THE CITY OF CEBU,
HON. MAYOR TOMAS R. OSMEÑA, IN HIS CAPACITY AS MAYOR OF CEBU,
AND TERESITA C. CAMARILLO, IN HER CAPACITY AS THE CITY
TREASURER, Respondents.
FACTS:
Petitioner is a non-stock and non-profit corporation operating a golf course in Cebu City.
On June 21, 1993, the Sangguniang Panlungsod of Cebu City enacted City Tax Ordinance No.
LXIX, otherwise known as the "Revised Omnibus Tax Ordinance of the City of Cebu"
(Revised Omnibus Tax Ordinance).
Section 42 of the said tax ordinance on amusement tax was amended by City Tax Ordinance
Nos. LXXXII4 and LXXXIV5 (which were enacted by the Sangguniang Panlungsod of Cebu
City on December 2, 1996 and April 20, 1998, respectively6) to read as follows:
Section 42. Rate of Tax. - There shall be paid to the Office of the City Treasurer by the
proprietors, lessees or operators of theaters, cinemas, concert halls, circuses and other
similar places of entertainment, an amusement tax at the rate of thirty percent (30%), golf
courses and polo grounds at the rate of twenty percent (20%), of their gross receipts
on entrance, playing green, and/or admission fees
In an Assessment Sheet7 dated August 6, 1998, prepared by Cebu City Assessor Sandra I.
Po, petitioner was originally assessed deficiency business taxes, fees, and other charges
for the year 1998, in the total amount of P3,820,095.68, which included amusement tax
on its golf course amounting to P2,612,961.24 based on gross receipts of
P13,064,806.20.8chanroblesvirtuallawlibrary
Through the succeeding years, respondent Cebu City repeatedly attempted to collect from
petitioner its deficiency business taxes, fees, and charges for 1998, a substantial portion
of which consisted of the amusement tax on the golf course. Petitioner steadfastly refused
to pay the amusement tax arguing that the imposition of said tax by Section 42 of the
Revised Omnibus Tax Ordinance, as amended, was irregular, improper, and illegal.
Petitioner reasoned that under the Local Government Code, amusement tax can only be
imposed on operators of theaters, cinemas, concert halls, or places where one seeks to
entertain himself by seeing or viewing a show or performance
This CLOSURE ORDER precisely satisfies these legal precedents. Hence now, in view
whereof, your business establishment is hereby declared closed in direct contravention of
the above-specified laws and city ordinances. Please cease and desist from further
operating your business immediately upon receipt of this order
ISSUE:
Whether or not the RTC judgment may be directly appealed to the SC via a petition
for review on certiorari
RULING:
The RTC judgment on pure
questions of law may be directly
appealed to this Court via a petition
for review on certiorari.
Even before the RTC, the parties already acknowledged that the case between them involved
only questions of law; hence, they no longer presented evidence and agreed to submit the case
for resolution upon submission of their respective memorandum.
It is incontestable that petitioner may directly appeal to this Court from the judgment of the
RTC on pure questions of law via its Petition for Review on Certiorari. Rule 41, Section 2(c)
of the Rules of Court provides that "[i]n all cases where only questions of law are raised or
involved, the appeal shall be to the Supreme Court by petition for review on certiorari in
accordance with Rule 45." As the Court declared in Bonifacio v. Regional Trial Court of
Makati, Branch 14930:
The established policy of strict observance of the judicial hierarchy of courts, as a rule,
requires that recourse must first be made to the lower-ranked court exercising concurrent
jurisdiction with a higher court. A regard for judicial hierarchy clearly indicates that petitions
for the issuance of extraordinary writs against first level courts should be filed in the RTC and
those against the latter should be filed in the Court of Appeals. The rule is not iron-clad,
however, as it admits of certain exceptions.
Thus, a strict application of the rule is unnecessary when cases brought before the appellate
courts do not involve factual but purely legal questions. (Citations omitted.)

For failure to heed the demand of the City of Treasurer of Cebu City, on January 12, 2006,
petitioner was served with a Closure Order issued by respondent City Mayor Osmena due "A question of law exists when the doubt or controversy concerns the correct application
to operating a business without a business permit, non-payment of deficiencies on of law or jurisprudence to a certain set of facts; or when the issue does not call for an
Business taxes and Amusement Tax. The foregoing developments prompted petitioner to examination of the probative value of the evidence presented, the truth or falsehood of
file with the RTC on January 13, 2006 a Petition for Injunction, Prohibition, Mandamus, facts being admitted[;]" and it may be brought directly before this Court, the undisputed
Declaration of Nullity of Closure Order, Declaration of Nullity of Assessment, and final arbiter of all questions of law.31chanroblesvirtuallawlibrary
Declaration of Nullity of Section 42 of Cebu City Tax Ordinance, with Prayer for
Temporary Restraining Order and Writ of Preliminary Injunction, against respondents.
The availment of administrative remedy entails lesser expenses and provides for a speedier
disposition of controversies. Furthermore, the courts of justice, for reasons of comity and
convenience, will shy away from a dispute until the system of administrative redress has been
completed and complied with, so as to give the administrative agency concerned every
opportunity to correct its error and dispose of the case. However, there are several exceptions
to this rule.
The rule on the exhaustion of administrative remedies is intended to preclude a court from
arrogating unto itself the authority to resolve a controversy, the jurisdiction over which is
initially lodged with an administrative body of special competence. Thus, a case where the
issue raised is a purely legal question, well within the competence; and the jurisdiction of
the court and not the administrative agency, would clearly constitute an exception.
Resolving questions of law, which involve the interpretation and application of laws,
constitutes essentially an exercise of judicial power that is exclusively allocated to the
Supreme Court and such lower courts the Legislature may establish.
In this case, the parties are not disputing any factual matter on which they still need to
present evidence. The sole issue petitioners raised before the RTC in Civil Case No. 25843
was whether Municipal Ordinance No. 98-01 was valid and enforceable despite the absence,
prior to its enactment, of a public hearing held in accordance with Article 276 of the
Implementing Rules and Regulations of the Local Government Code. This is undoubtedly a
pure question of law, within the competence and jurisdiction of the RTC to resolve.
Paragraph 2(a) of Section 5, Article VIII of the Constitution, expressly establishes the
appellate jurisdiction of this Court, and impliedly recognizes the original jurisdiction of lower
courts over cases involving the constitutionality or validity of an
ordinance:ChanRoblesVirtualawlibrary
Section 5. The Supreme Court shall have the following powers:
xxxx
(2) Review, revise, reverse, modify or affirm on appeal or certiorari, as the law or the Rules of
Court may provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or
regulation is in question.
In J.M. Tuason and Co., Inc. v. Court of Appeals, Ynot v. Intermediate Appellate Court, and
Commissioner of Internal Revenue v. Santos, the Court has affirmed the jurisdiction of the
RTC to resolve questions of constitutionality and validity of laws (deemed to include local
ordinances) in the first instance, without deciding questions which pertain to legislative policy.
(Emphases supplied, citations omitted.)
In Cagayan Electric Power and Light Co., Inc. (CEPALCO) v. City of Cagayan De Oro,35
the Court initially conceded that as in Reyes, the failure of taxpayer CEPALCO to appeal
to the Secretary of Justice within the statutory period of 30 days from the effectivity of
the ordinance should have been fatal to its cause. However, the Court purposefully relaxed
the application of the rules in view of the more substantive matters.
Similar to Ongsuco and CEPALCO, the case at bar constitutes an exception to the general
rule. Not only does the instant Petition raise pure questions of law, but it also involves
substantive matters imperative for the Court to resolve.
G.R. No. 79886 November 22, 1989
QUALITRANS LIMOUSINE SERVICE, INC., petitioner,
vs.
ROYAL CLASS LIMOUSINE SERVICE, LAND TRANSPORTATION
COMMISSION, COURT OF APPEALS, respondents.
G.R. No. 79887 November 22, 1989
QUALITRANS LIMOUSINE SERVICE, INC.,
vs.
ROYAL CLASS LIMOUSINE SERVICE, JUDGE PERPETUA COLOMA, and
COURT OF APPEALS, respondents.
FACTS:
On June 22, 1982, the then Board of Transportation, now the Land
Transportation Commission, rendered a Decision granting petitioner a
certificate of public convenience to operate a garage (tourist) air-conditioned
service within the City of Manila and from said place to any point in Luzon, and
vice-versa
On June 25, 1982, said Decision was amended by converting petitioner's
certificate of public convenience for garage service into one for limousine
tourist service for the transportation of all outgoing passengers of the Manila
International Airport
On October 14, 1985, a Deed of Absolute Sale was executed by private
respondent with Transcare, Inc., a duly licensed limousine service operator and
likewise, a holder of a certificate of public convenience By virtue of said sale,
the franchise granted to Transcare, Inc. for the use of 40 units of tourist cars
was sold to private respondent.
On December 27, 1985, upon application filed for the approval of
aforementioned sale, an Order was issued by the Land Transportation
Commission granting a provisional permit in favor of private respondent
within the New Manila International Airport and from said place to any
point in the Island of Luzon accessible to motor vehicle traffic and vice-
versa, involving the right to operate forty (40) units authorized therein.
On June 17, 1986, petitioner filed a motion for reconsideration before the Land
Transportation Commission to correct the route specified in the prefatory
portion of its December 27, 1986
 On September 1, 1986, petitioner filed Civil Case before the
Pasay City Regional Trial Court for damages with prayer for
issuance of a writ of mandatory injunction against private
respondent
RTC dismissed that case on the ground that the court does not have
jurisdiction over the
Further, this Court doesn't have jurisdiction over this case under Sec. 19 BP
Blg. 129.
RTC shall have Exclusive jurisdiction.— SEC. 19, BP Blg. 129.
ISSUE:
WON THE REGIONAL TRIAL COURT HAS JURISDICTION OVER THE CASE
RULING:
NO, RTC does not have jurisdiction.
As to claims that the Land Transportation Commission can not entertain suits for declaratory
relief, there is merit in the ruling under question to the effect that the Commission, under its
enabling law, Executive Order No. 1011, has ample powers to modify certificates of public
convenience, including the grant of latitudinarian franchises in favor of public utilities. We
quote:
... The (Land Transportation) Commission shall have, among others, the
following powers and functions:
(a) Quasi-judicial powers and functions which require
notice and hearing—
xxx xxx xxx
(2) To issue, amend, revise, suspend or cancel
Certificates of Public Convenience or permits
authorizing the operation of public land transportation
services provided by motorized vehicles, and to
prescribe the appropriate terms and conditions
therefor; 6
xxx xxx xxx
Royal Class' application is, quintessentially, a petition for an expanded route, over which the
Board exercises jurisdiction under its charter.
The fact that Qualitrans had, meanwhile, commenced suit in the Regional Trial Court (RTC)
does not oust the Commission of its jurisdiction. The Commission had a primacy of authority
to take cognizance of Royal Class 'inquiry. It is to be noted, indeed, that the very trial court, by
its order of September 8, 1986, 8 denied the issuance of preliminary injunctive relief sought by
Qualitrans, in deference, precisely, to the Board's primal and preferential jurisdiction.
G.R. No. L-59070 March 15, 1982
PHILIPPINE PACIFIC FISHING CO., INC., CHENG YONG, LILIA GAW and CHEN
GUAT, petitioners,
vs.
HON. ARTEMON D. LUNA, Judge of the Court of First Instance of Manila; YOSHIO
YAMAMOTO and MARILYN A. JAVIER, respondent.
BARREDO, J.:
Petition for certiorari and prohibition to annul and set aside as acts in excess of jurisdiction
and or a abuse to discretion the order of respondent judge, which, briefly characterized,
amount to an assumption of jurisdiction by a Court of First Instance and its exercise of the
power to review actuations of the Securities and Exchange Commission. Notably, the
respondents have not filed any answer, required by the Court's resolution of December 16,
1981.
The background facts are simple. As alleged in The petition which be their very nature, and
because they are not denied anyway, respondents having failed to answer. The circumstances
that led to the filing of the instant recourse are:
4.1. The Philippine Pacific Fishing Co., Inc. through its of. officers,
Yoshio Yamamoto anterior Marilyn Javier, private respondents herein,
who are plaintiffs in Civil Case No. 144299, mortgaged to the Philippine
Banking Corporation the fishing vessels, PACIFIC I and PACIFIC II, to
secure payment of a debt. Upon default of the Philippine Pacific Fishing
Co., Inc. to pay its debt, the Philippine Banking Corporation instituted
foreclosure proceedings and filed an action for replevin. To prevent the
foreclosure, Yamamoto and/or Marilyn Javier, acting as officers of the
corporation, made an agreement with Cheng Yong, one of the defendants
in the aforementioned Civil Case. Under the agreement, Cheng Yong paid
the indebtedness of Philippine Pacific Fishing to Philippine Banking
Corporation, and in turn, Yamamoto and/or Javier, as officers of
Philippine Pacific Fishing executed a chattel mortgage of the two vessels
in favor of Cheng Yong.
4.2. Upon failure of Philippine Pacific to pay the debt, Cheng Yong
foreclosed the mortgage. Yamamoto and Javier then went to the Securities
and Exchange Commission and filed a complaint, alleging that the
controversy between Cheng Yong and Philippine Pacific was intra-
corporate. (SEC Case No. 002042). The SEC restrained the foreclosure
proceedings and thereafter, the parties finally agreed to the formation of a
Management Committee, with powers among others, 'to take custody and
possession of all assets, funds, properties and records of the corporation;
and 'to administer, manage and preserve such assets, funds and records.
Exercising said powers the Management Committee ordered Yamamoto
and Javier to deliver to the Committee vessels, PACIFIC I and PACIFIC
II;
V. PERTINENT PROCEEDINGS
5.1. On October 22, 1979 private respondents, through counsel, filed with
the respondent court a complaint for declaration of rescission and
injunction, with ex-parte preliminary injunction docketed as Civil Case
No. 144299, entitled 'Yoshio Yamamoto and Marilyn A. Javier, plaintiffs,
versus, Securities and Exchange Commission, Jose Maria Hilado,
Philippine Pacific Fishing Co., Inc. Cheng Yong, Lilia Gaw and Cheng
Guat; xerox copy of said complaint is hereto attached as Annex 'B',
5.2. In their complaint, private respondents pray that upon filing of the
complaint, a restraining order be issued ex-parte commanding the
defendants to desist from further proceeding in SEC Case No. 2042 and
from enforcing the orders issued by the Securities and Exchange
Commission under date of August 14, 1981, September 29, 1981 and
October 6, 1981; that thereafter, a writ of preliminary injunction be
issued restraining the defendants, particularly the Securities and
Exchange Commission, from enforcing and implementing the orders
complained of and from disturbing or interfering in the exercise by
private respondent Yoshio Yamamoto of his rights to the ownership
and possession of the two fishing vessels, PACIFIC I and PACIFIC II;
5.3. Likewise, private respondents pray that after hearing, private
respondent Yoshio Yamamoto be declared the lawful and absolute owner
of the aforementioned two fishing vessels; that all questioned orders of the
Securities and Exchange Commission be declared null and void and issued
without authority and jurisdiction and/or with grave abuse of discretion
that the defendants, particularly the Securities and Exchange Commission,
desist from questioning the herein private respondent Yoshio Yamamoto's
ownership and right of possession of the aforesaid two vessels and making
permanent such writ of preliminary injunction which it may have issued;
5.4. On the same date, private respondents filed an ex-parte motion for
resolution of the Executive Judge of the Court of First Instance of Manila,
praying that an order be issued directing the Clerk of Court or his
authorized deputy to give due course to the complaint of the herein private
respondents upon payment of the docket fee of P200.00 pursuant to par.
10, Section 5 Rule 141 of the Rules of Court. Xerox copy of the motion is
hereto attached as Annex 'C'. Acting upon said motion, the aforementioned
Executive Judge granted the same and ordered the Clerk of Court to accept
the filing of private respondents' complaint upon payment of docket fee in
the sum of P200.00. Xerox copy of the order is hereto attached as Annex
'D';
5.5. On October 26, 1981, the respondent judge issued the order
complained of, copy of which is hereto attached as Annex 'A' restraining
the Securities and Exchange Commission, and Jose Maria Hilado, and the
petitioners from further proceeding with SEC Case No. 2042 and from
enforcing the aforesaid orders until further orders from the Court;
5.6. On November 10, 1981 petitioners Cheng Yong, Lilia Gaw and
Cheng Guat, who are some of the defendants named in the aforestated
Civil Case No. 144299, Court of First Instance of Manila, filed, through
counsel, a motion to dismiss the complaint, xerox copy of which is hereto
attached as Annex 'E' and an opposition to the issuance of a writ of
preliminary injunction, xerox copy of which is hereto attached as Annex
'F'
5.7. In his meantime the hearing of the application for issuance of a writ of
preliminary injunction which was originally set on November 6, 1981 was,
upon motion of private respondents' counsel, postponed and reset to
November 18, 1981, during which The parties were given a period of
fifteen (15) days within which to simultaneously submit their respective
memorandum:
5.8. On November 19, 1981, as aforesaid, the fourth floor of the City Hall
of Manila housing several salas of the Court of first Instance of Manila,
among which is the sala of Branch XXXII was burned and as
consequence, the judicial records including those of the aforementioned
case was burned, hence, The proceedings in said case is ordered suspended
pending the reconstitution of the judicial records. thereafter however
counsel for defendant Cheng Yong, Lilia Gaw and Cheng Guat in the
aforementioned Civil case No. L-44299 in the court below filed, through
counsel, their memorandum, xerox copy of which is hereto attached as
Annex 'G' (Pp. 7-12, Record)
The order of herein respondent Judge being questioned reads thus:
This is a complaint for declaration of rescission and injunction, with
prayer for issuance of a writ of preliminary injunction to restrain the
Securities and Exchange Commission from further proceeding with SEC
Case No. 2042, entitled, 'YOSHIO YAMAMOTO and MARILYN A.
JAVIER vs. PHILIPPINE PACIFIC FISHING CO., INC., CHENG
YONG, LILIA GAW, CHENG GUAT and the SHERIFF OF MANILA'
as well as from enforcing its Orders of August 14, September 29, and
October 6, 1981. Finding the complaint sufficient in form and substance,
defendants are required to show cause on November 6, 1981 at 8:30
o'clock a.m. why the writ of preliminary injunction should not be issued.
Let copies of this Order together with copies of the complaint be served
upon the defendants at the expense of plaintiffs. Defendants are required
to answer the petition within ten (10) days from receipt of this Order.
Meanwhile, the defendants are hereby restrained from further proceeding
with SEC. No. 2042 and from enforcing the aforesaid Orders until further
orders from this Court.
 Plaintiffs are hereby ordered to immediately file a bond of P20,000 to
answer for any damages which respondents may sustain by reason of the
issuance of this Order, if the Court should finally decide that they are not
entitled thereto.
SO ORDERED.
Manila, Philippines, October 26, 1981. (Page 22, Record)
The orders of the Securities and Exchange Commission referred to in the above order are as
follows:
ORDER
After a careful study and review of the allegations of the separate motions filed by the
respondents, both seeking to reconsider the Order of this Commission dated June 17, 1981
denying the motion to dismiss and the opposition of petitioners thereto, this Hearing Officer
finds no compelling reason for disturbing the findings made in the Order sought to be
reconsidered, and thereto, said motions are hereby DENIED.
At the hearing on July 27, 1981, the motion of counsel for the respondent corporation
requiring the petitioners who are in possession of the fishing vessels F/B Pacific I and II, to
deliver said fishing vessels to the corporation was likewise considered. After considering the
manifestation and arguments of both parties and upon suggestion of this Hearing Officer, the
parties agreed that in lieu of the appointment of a receiver as prayed for by the petitioners in
their motion of this Hearing Officer, the parties agreed that in lieu of the appointment of a
receiver as prayed for by the petitioners in their motion to that effect and the delivery of the
fishing vessels to the corporation as requested by counsel for the respondent corporation, a
Management Committee be instead created. The petitioners and the respondents immediately
nominated their representatives as members and the Chairman to be designated by the
Commission.
As agreed upon by the parties, assisted by their respective counsels, a Management Committee
is hereby created and constituted to be composed of Mrs. Marilyn Javier and Mr. Melecio
Hernandez as members with Atty. Felipe S. Tongco of this Commission as Chairman. The said
Committee, which shall at all times be under the control and supervision of this Commission
shall have the following powers, functions and duties, to wit:
1. to take custody and possession of all assets, funds, properties and
records of the corporation and to prepare an inventory thereof;
2. to administer, manage and preserve such assets, funds and records;
3. to receive any and all amounts, sums or money due and owing to the
company and to deposit such amounts received in an appropriate bank for
and in the account of the corporation;
4. to make such payments and disbursements in the ordinary course of
business;
5. to keep and maintain proper accounting records of each and every
transaction of the company, particularly receipts and disbursements of
funds;
6. to submit to this Commission a detailed report on all receipts and
disbursement of funds and such other reports as this Commission may
require and
7. to acquire, lease, sell mortgage or otherwise encumber such assets with
the prior approval of this Commission.
The parties, petitioners as well as defendants shall turn over to the
Commission all the assets, funds, properties and records of the corporation
in their possession including the vessels F/B Pacific I and II within five (5)
days and to submit to the Commission within ten (10) days a complete
inventory of all the assets, funds, properties and records of the corporation
which are in their possession, in the presence of the Chairman and the
members of the above committee
Until further orders from this Commission, said Committee created
pursuant to this Order shall have all the foregoing authorities and must
discharge all the functions pertaining thereto as well as to perform such
other duties as may be necessary in order to protect the interest of the
corporation.
The application of the petitioners for the provisional remedy of
receivership is also hereby considered withdrawn.
SO ORDERED.
Mandaluyong, Metro Manila, August 14, 1981.
xxx xxx xxx
ORDER
Submitted for resolution is the manifestation and motion filed by the
respondents to cite petitioners in contempt of this Commission and the
opposition thereto filed by petitioners.
In a manifestation and motion filed before this Commission on September
1, 1981, respondents alleged that in an order dated August 14, 1981,
issued by the Commission, the parties, petitioners and respondents, were
directed to turn over to the Management Committee formed thereat, all the
assets, funds, properties and records of the corporation which are in their
possession, including the vessels F/B Pacific I and Pacific II within five
(5) days and to submit to the Commission within ten (10) days, a complete
inventory of said assets, funds, properties and records of the corporation in
the presence of the Chairman and members of the Management
Committee; that more than five (5) days have elapsed since the receipt of
the order of August 14, 1981 by the petitioners without the latter having
complied with the directive to deliver the aforesaid vessels to the
Commission; that each day of delay in the delivery of the possession of the
aforestated vessel and. in the operation thereof by the Management
Committee, deprived the corporation of sizeable earnings out of said
vessels and that this failure of petitioners to comply with the Order, being
willful and deliberate, constitute contumacious acts punishable under the
New Rules of Procedure in the Securities and Exchange Commission.
Petitioners, in opposing the motion for contempt, averred that they are not
in possession of assets, funds, properties and records of the corporation
which to the best of their knowledge are in the possession of respondent
Cheng, that the fishing vessels F/B Pacific I and II are not assets of
respondent corporation, petitioner Yamamoto having rescinded the sale in
the exercise of his lien as an unpaid seller of the vessels and that petitioner
Yamamoto is willing to consider arrangement whereby the vessels would
be operated under the supervision of the Management Committee for the
benefit of all the parties concerned, the rescission the sale of the vessels
notwithstanding. "Considering that one of the issues involved in this case
is the ownership of the two (2) vessels, we consider it quite impractical for
the petitioners to capitalize on this issue to justify their inability to comply
with the Order of this Commission dated August 14, 1981.
Unless, therefore, prevented by any supervening events, petitioners are
duty bound to abide by the directive of this Commission for the delivery of
the two (2) fishing boats to the Management Committee. Viewed from this
perspective, we find petitioners' non-compliance with the Order of this
Commission dated August 14, 1981 directing delivery of fishing boats P/B
Pacific I and II, which are admittedly in their (petitioners) possession, to
the Management Committee to be without any justifiable reason.
WHEREFORE, petitioners are hereby found guilty of indirect contempt
and fine of P1,000 plus an additional fine of P200 for every day of delay
in the delivery of said vessels or non-compliance with the order is hereby
imposed upon them without prejudice to imprisonment in case petitioners
still fail to deliver the two (2) fishing boats within five (5) days from
receipt of the Order.
SO ORDERED.
Mandaluyong, Metro Manila, September 29, 1981. (Pp. 57-59, Record)
ORDER
Acting upon the urgent ex-parte motion of defendant corporation dated
October 6, 1981, and finding the same to be meritorious, said urgent ex-
parte motion is hereby GRANTED.
WHEREFORE, the Chairman of the Management Committee or his duly
authorized representative is hereby directed to take possession of the
fishing vessel, the PACIFIC II, wherever it may be found in Philippine
waters and for the purpose, is hereby authorized 'to enlist the aid and
support of any and all enforcement agencies of the government, civil or
military'. pursuant to Sec. 3 of Presidential Decree No. 902-A.
SO ORDERED.
Mandaluyong, Metro Manila, Philippines.
October 6, 1981. (Page 60, Record)
We are aware of the fact that up to the present respondent judge has not gone beyond issuing
the above restraining order, notably requiring the filing of a bond. What has happened with the
motion for a writ of preliminary injunction is not in the record. But assuming respondents
should claim that the herein petition is premature considering there is no showing that
respondent judge has not been asked to reconsider his impugned order and the incident on
the preliminary injunction has not been resolved. Our ready answer is that We have opted
to act now, for the simple reason that the invalidity of the challenged order is so manifest and
patent, in fact and in law, that it would be a waste of time and actually an injustice to
petitioners, if We delayed further disposition of the issues raised by them. We cannot imagine
any different end result that subsequent actions of the parties or respondent judge could
possibly affect Our conclusion regarding the utter lack of jurisdiction of respondent judge in
the premises.
As already portrayed above, the parties came within the jurisdiction of the Securities and
Exchange Commission on the basis of the complaint of herein petitioners. They claimed their
controversy with private respondents involved intra-corporate matters within the exclusive
jurisdiction of that body. The Commission took cognizance thereof, the parties discussed their
respective positions before it, and on the issues joined by them, the Commission issued the
orders above-quoted.
If any or all of said orders are erroneous, the organic act creating the Commission, Presidential
Decree 902-A, provides the appropriate remedy, first within the Commission itself, and
ultimately in this Court. Nowhere does the law empower Court of First Instance to interfere
with the orders of the Commission. Not even on grounds of due process or jurisdiction. The
Commission is, conceding arguendo a possible claim of respondents, at the very least. a co-
equal body with the Courts of First Instance. Even as such co-equal, one would have no power
to control the other. But the truth of the matter is that only the Supreme Court can enjoy and
correct any actuation of the Commission. (Pineda vs. Lantin, 6 SCRA 757)
Moreover, it is obvious that since the Commission has its offices outside of Manila, under
settled jurisprudence, a Manila court's writ of preliminary injunction. much less a restraining
order, can have no binding effect outside the Manila area.
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered setting aside the
impugned order of herein respondent judge and making the restraining order heretofore issued
by Us permanent. with costs against respondents.