Primary Holding

The injunctive relief protects only a right in esse. Where the plaintiff cannot demonstrate an existing right to be protected by injunction, the suit must be dismissed for lack of cause of action.

Background

The dispute arose when Petronilo Barayuga, President of Adventist University of the Philippines (AUP), was removed from his position on January 27, 2003 following audit findings of financial irregularities and management issues. He filed a suit for injunction and damages, claiming he had a five-year term and was illegally removed. While the Regional Trial Court granted him a preliminary injunction, the Court of Appeals reversed this decision. The case reached the Supreme Court to determine whether he had any legal right to the position that could be protected by an injunctive writ.

Facts

• 1. AUP is a non-stock, non-profit educational institution incorporated under Philippine laws (March 3, 1932)
• 2. During 3rd Quinquennial Session (Nov 27-Dec 1, 2000), NPUM Executive Committee elected Board of Trustees members
• 3. Board appointed Barayuga as President on January 23, 2001
• 4. External performance audit (Nov 11-13, 2002) revealed autocratic management style and irregular financial transactions
• 5. GCAS conducted follow-up audit (Dec 4-20, 2002) confirming initial findings
• 6. Board of Trustees required Barayuga to explain audit findings on January 8, 2003
• 7. Special board meeting held on January 22, 2003 to hear Barayuga's explanations
• 8. Board removed Barayuga as President on January 27, 2003

Arguments of the Petitioners

• 1. Entitled to serve five-year term under Constitution and By-Laws
• 2. Removal lacked valid grounds
• 3. Denied due process rights
• 4. Special board meetings were invalid due to lack of proper notice

Arguments of the Respondents

• 1. Petitioner not an elected trustee or president
• 2. Two-year term applies per AUP By-Laws
• 3. Valid termination for loss of confidence
• 4. Petitioner waived notice objection by participating in meetings

Issues

• 1. Whether CA correctly ruled petitioner had no legal right to position
• 2. Whether removal was valid
• 3. Whether term was five years or two years

Ruling

• 1. Petition denied for lack of merit, primarily because the case had become moot. The injunctive writ had expired upon the end of petitioner's claimed term of office which, even by his own admission through affidavit, had lasted only until December 2005.
• 2. The Board of Trustees validly exercised its authority to remove officers as evidenced by documented violations revealed in two separate audits. The removal was executed through proper board resolution by secret ballot after establishing loss of confidence due to serious violations of fundamental rules.
• 3. The two-year term applies as explicitly stated in AUP's amended By-Laws, supported by Section 108 of Corporation Code which allows articles of incorporation or by-laws to set term limits. Officers, including the President, were to be elected at organizational meetings every two years. The petitioner's "Bluebook" basis for a five-year term was rejected as it was merely an unfilled model form.
• 4. Due process requirements were satisfied as petitioner was informed of audit findings and given opportunity to explain, participated in board meetings to present his defense, and was given chance for reconsideration. His voluntary participation in proceedings without objection constituted waiver of any notice defects.

Doctrines

• 1. A valid writ of preliminary injunction requires the plaintiff to show a present and unmistakable right, demonstrate that the acts complained of violate such right, and establish a special necessity to prevent serious damage.
• 2. In administrative proceedings, due process is satisfied when parties are given fair and reasonable opportunity to explain their side of the controversy, as the essence of due process is the opportunity to be heard.

Precedents Cited

• 1. National Power Corporation v. Court of Appeals [G.R. No. 113103, June 13, 1997] established that judicial admissions do not prevail over documentary proof in determining the facts of a case.
• 2. Ticzon v. Video Post Manila, Inc. [G.R. No. 136342, June 15, 2000] was referenced to establish that the lifetime of a writ of preliminary injunction is co-extensive with the duration of the act sought to be prohibited.

Statutory and Constitutional Provisions

• 1. Corporation Code Section 108 sets forth the requirements for membership and number of trustees in educational corporations, including their terms of office and the classification of board members.
• 2. Corporation Code Section 50 provides the rules governing regular and special meetings of stockholders or members, including provisions for express or implied waiver of meeting notices.
• 3. Rules of Court, Rule 132, Section 20 establishes the requirements for proving and authenticating private documents before they can be received as evidence in judicial proceedings.