This case involves a petition for review on certiorari challenging the Court of Appeals' decision which nullified a writ of preliminary injunction issued by the Regional Trial Court. The injunction had prevented the Adventist University of the Philippines (AUP) from removing Petronilo J. Barayuga as its President. Barayuga claimed a five-year term and denial of due process, while AUP asserted a two-year term and valid removal for cause. The Supreme Court denied Barayuga's petition, ruling that the injunctive relief was moot as his alleged term had expired, and that he failed to demonstrate a clear legal right to the office or that he was denied due process.
Primary Holding
An injunctive relief protects only a right in esse; where the plaintiff fails to demonstrate an existing right to be protected by injunction, the suit for injunction must be dismissed for lack of a cause of action. The petitioner's term of office as President of AUP was for two years as per AUP's amended By-Laws, not five years, and by the time of his removal, he was already serving in a hold-over capacity.
Background
The Adventist University of the Philippines (AUP) is a non-stock, non-profit domestic educational institution. Petitioner Petronilo J. Barayuga was appointed President of AUP by its Board of Trustees. Subsequent external and internal audits revealed alleged irregularities in his management style and financial transactions, leading the Board to consider his removal. The core of the dispute revolved around the validity of his removal and the length of his term as President.
History
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Petitioner filed a suit for injunction and damages with a prayer for a Temporary Restraining Order (TRO) in the Regional Trial Court (RTC) of Imus, Cavite, Branch 21, on February 4, 2003.
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RTC issued a status quo order on February 11, 2003.
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RTC issued a TRO on March 21, 2003, enjoining respondents from implementing the resolution removing petitioner as President.
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RTC issued an order on April 25, 2003, granting petitioner's application for a writ of preliminary injunction.
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Respondents filed a petition for certiorari in the Court of Appeals (CA).
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CA issued a TRO on February 24, 2004, enjoining the RTC from proceeding for 60 days.
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CA promulgated its decision on August 5, 2004, nullifying the RTC's writ of preliminary injunction.
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Petitioner appealed to the Supreme Court via petition for review on certiorari.
Facts
- Petronilo J. Barayuga was appointed President of Adventist University of the Philippines (AUP) by its Board of Trustees on January 23, 2001.
- An external performance audit conducted by the North Philippine Union Mission (NPUM) from November 11-13, 2002, revealed Barayuga's alleged autocratic management style and financial irregularities.
- The General Conference Auditing Service (GCAS) conducted a further review from December 4-20, 2002, which confirmed the initial audit findings.
- On January 8, 2003, NPUM informed Barayuga of the GCAS findings and required him to explain.
- The AUP Board of Trustees held a special meeting on January 22, 2003, where Barayuga presented his explanations regarding the audit reports. The Board adjourned to allow more time for deliberation.
- On January 27, 2003, the Board of Trustees, in another special meeting, voted to remove Barayuga as President due to serious violations of fundamental rules and procedures in fund disbursement, appointed an interim committee, and recommended him for an Associate Director position.
- Barayuga requested reconsideration on January 28, 2003, which the Board denied the same evening.
- On February 4, 2003, Barayuga filed a suit for injunction and damages in the RTC, alleging his removal was without valid grounds, violated his five-year term, was done in bad faith, and denied him due process.
- The RTC issued a TRO on March 21, 2003, and subsequently a writ of preliminary injunction on April 25, 2003, preventing AUP from removing Barayuga.
- The Court of Appeals, upon AUP's petition for certiorari, nullified the RTC's writ of preliminary injunction on August 5, 2004, ruling that Barayuga's term was only two years (expiring January 22, 2003), he held no legal right warranting injunction, and was not denied due process.
Arguments of the Petitioners
- The Court of Appeals erred in ruling that certiorari was applicable as the RTC order was supported by substantial evidence and accorded with law and jurisprudence.
- The Court of Appeals incorrectly disregarded the respondent's judicial admission in their answer that petitioner had a five-year term of office.
- The Court of Appeals erred in ruling that petitioner's term was only two years, contrary to the respondent's admission and the provisions of the Constitution, By-Laws, and Working Policy of the Conference which allegedly provided for a five-year term.
- The Court of Appeals improperly relied on National Power Corporation v. Court of Appeals as its facts were different.
- The Court of Appeals unjustifiably allowed the waiver of notice for the special board meeting where he was removed.
- The Court of Appeals erroneously concluded that petitioner was merely occupying the AUP presidency in a hold-over capacity.
- Petitioner was denied due process because he was not given ample and reasonable time to present his evidence, and the special board meeting leading to his removal was invalidly held for lack of notice.
Arguments of the Respondents
- Petitioner was not an elected trustee of the AUP Board nor elected as President, thus having no claim to the AUP presidency and being twice disqualified by law.
- Even if petitioner were an elected trustee and president, the two-year term provided in AUP's By-Laws, as required by the Corporation Code, governs the intra-corporate controversy, not an alleged five-year term based on an invoked sample constitution.
- The admission in the answer regarding a five-year term was not prejudicial.
- Even assuming a five-year term, petitioner was validly terminated for loss of confidence due to numerous committed anomalies.
- Petitioner cannot complain about lack of notice for the board meeting because as AUP Secretary, it was his duty to send notices, he attended and defended himself, thereby waiving any objection, and his afterthought objection was false.
- Petitioner had no legal right to the position of President of AUP that could be protected by an injunctive writ.
Issues
Issues
- Whether the petition for review has become moot and academic.
- Whether the Regional Trial Court acted with patently grave abuse of discretion in issuing the Temporary Restraining Order and writ of preliminary injunction.
- Whether the petitioner had a clear legal right to the office of President of AUP for a term of five years.
- Whether the petitioner was denied due process in his removal as President of AUP.
Ruling
- The petition for review was denied for lack of merit, and the underlying SEC Case was dismissed.
- The injunctive writ issued by the RTC became moot because the petitioner's own alleged five-year term would have expired in December 2005, rendering the injunction without purpose.
- The RTC acted with patently grave abuse of discretion in issuing the TRO and writ of injunction because the petitioner failed to establish a clear and unmistakable right to be protected. His claim of a five-year term based on photocopies of an unauthenticated and unfilled model form (Bluebook) lacked evidentiary value and legal basis.
- AUP's amended By-Laws, consistent with Section 108 of the Corporation Code, provided for a two-year term for members of the Board of Trustees and, consequently, for officers like the President elected from among them. Petitioner's term, having begun on January 23, 2001, expired on January 22, 2003. At the time of his removal on January 27, 2003, he was occupying the office in a hold-over capacity and could be removed at any time upon the election or appointment of a successor, or for cause.
- Petitioner was not denied due process as he was given the opportunity to refute the audit findings and present his side before the Board of Trustees. His participation in the board meetings without raising objections to lack of notice constituted a waiver of such objection.
Doctrines
- Right in esse for Injunctive Relief — An injunctive relief protects only a right that is actually existing and demonstrable. The Court held that petitioner failed to demonstrate such an existing right to the presidency of AUP, particularly for a five-year term, thus his suit for injunction was correctly dismissed.
- Moot and Academic Principle — A case becomes moot and academic when a resolution of the issue submitted has become impossible of enforcement or when no useful purpose would be served by passing on its merits. The Court applied this by noting that the petitioner's claimed five-year term (even if accepted for argument's sake) had already expired, rendering the injunction moot.
- Grave Abuse of Discretion in Issuing Injunction — In the absence of a clear legal right, the issuance of an injunctive writ constitutes grave abuse of discretion. The RTC's reliance on unauthenticated documents to establish petitioner's right to office was deemed a grave abuse of discretion.
- Authentication of Private Documents (Rule 132, Section 20, Rules of Court) — Before a private document is received as authentic evidence, its due execution and authenticity must be proved. The Court found that the photocopies of the Bluebook presented by the petitioner were not properly authenticated and thus had no evidentiary value to support his claim of a five-year term.
- Term of Office for Trustees and Officers of Educational Corporations (Section 108, Corporation Code) — This section provides that trustees of educational corporations shall hold office for five years, unless otherwise provided in the articles of incorporation or by-laws. The Court emphasized that AUP's amended By-Laws, which provided for a two-year term for trustees and officers elected from them, controlled.
- Due Process in Administrative Proceedings — The essence of due process in administrative proceedings is the opportunity to be heard, or a fair and reasonable opportunity to explain one's side. The Court found that petitioner was afforded this opportunity when he presented his explanations to the Board of Trustees regarding the audit reports.
- Waiver of Notice for Corporate Meetings (Section 50, Corporation Code) — Notice of any meeting may be waived, expressly or impliedly, by any stockholder or member. The Court ruled that petitioner's active participation in the board meetings where his removal was discussed, without raising any objection regarding lack of notice, constituted an implied waiver.
Key Excerpts
- "The injunctive relief protects only a right in esse. Where the plaintiff does not demonstrate that he has an existing right to be protected by injunction, his suit for injunction must be dismissed for lack of a cause of action."
- "In the absence of a clear legal right, the issuance of the injunctive writ constitutes grave abuse of discretion and will result to nullification thereof. Where the complainant's right is doubtful or disputed, injunction is not proper."
- "The requirements of due process in an administrative context are satisfied when the parties are afforded fair and reasonable opportunity to explain their respective sides of the controversy, for the essence of due process is an opportunity to be heard."
Precedents Cited
- National Power Corporation v. Court of Appeals — Referenced by the CA regarding exceptions to the rule on judicial admissions, holding that admissions were not evidence that prevailed over documentary proof. The Supreme Court did not extensively discuss this but focused on the petitioner's failure to prove his term.
- Ticzon v. Video Post Manila, Inc. — Cited for the principle that the lifetime of a writ of preliminary injunction is co-extensive with the duration of the act sought to be prohibited. This supported the finding that the injunction became moot.
- Lomo v. Mabelin; Bongat v. Bureau of Labor Relations — Cited for the general rule that when the resolution of an issue becomes moot and academic, the case should be dismissed.
- Nisce v. Equitable PCI-Bank, Inc. — Cited for the requisites of a valid writ of preliminary injunction (present and unmistakable right, violation of such right, paramount necessity) and that the possibility of irreparable damage sans proof of an actual existing right is not a ground for preliminary injunction.
- Tayag v. Lacson — Cited for the principle that in the absence of a clear legal right, the issuance of an injunctive writ constitutes grave abuse of discretion.
- Samalio v. Court of Appeals — Cited for the definition of due process in an administrative context as a fair and reasonable opportunity to explain one's side.
- Association of International Shipping Lines, Inc. v. Philippine Ports Authority — Cited for the principle that the essence of due process is an opportunity to be heard.
Provisions
- Rule 132, Section 20, Rules of Court (Proof of private document) — Applied to determine that the petitioner's photocopied Bluebook pages lacked evidentiary value as they were not properly authenticated.
- Section 108, Corporation Code (Board of trustees of educational institutions) — Interpreted to mean that while the default term for trustees is five years, this can be otherwise provided in the articles of incorporation or by-laws. AUP's By-Laws providing a two-year term were held to be controlling.
- AUP's Amended By-Laws, Article I, Section 1 (Board of Trustees) — Cited to establish that the Board of Trustees shall be elected every two years for a term of two years.
- AUP's Amended By-Laws, Article IV, Section 1 (Election of officers) — Cited to show that officers, including the President, are elected by the Board of Trustees from among themselves, implying their term aligns with the trustees' two-year term.
- Section 50, Corporation Code (Regular and special meetings of stockholders or members) — Specifically, the third paragraph regarding waiver of notice was applied to conclude that petitioner waived any objection to lack of notice by participating in the board meetings.