Calleja vs. Panday

A petition for quo warranto alleging usurpation of office in a private corporation is an intra-corporate controversy that must be filed with the RTC designated as Special Commercial Court covering the corporation’s principal office; a regular RTC branch not so designated has no jurisdiction and cannot remand the case to another branch, but must dismiss it.

St. John Hospital, Incorporated is a private corporation with its principal office in Goa, Camarines Sur. The dispute is between petitioners, who are among its incorporators and stockholders, and respondents, who claim to be members of its board of directors and officers. Before R.A. No. 8799, intra-corporate controversies, including quo warranto against persons usurping office in a corporation, fell under the SEC; R.A. No. 8799 transferred that jurisdiction to the courts of general jurisdiction, with the SC designating Special Commercial Courts.

On May 16, 2005, respondents Jose Pierre A. Panday, Augusto R. Panday, and Ma. Thelna P. Mallari filed with the RTC of San Jose, Camarines Sur, Branch 58 a petition for quo warranto with damages and a prayer for mandatory and prohibitory injunction, damages, and issuance of a temporary restraining order against petitioners Ma. Lutgarda P. Calleja, Joaquin M. Calleja, Jr., Jadelson Peter P. Calleja, Ma. Jessica T. Flores, Mercie C. Tipones, and Perfecto Nixon C. Tabora. Respondents alleged that from 1985 up to the filing of the petition, they had been members of the board of directors and officers of St. John Hospital, Incorporated, but sometime in May 2005, petitioners, who are also among the incorporators and stockholders of the corporation, forcibly and with the aid of armed men usurped the powers which supposedly belonged to respondents.

On May 24, 2005, RTC-Br. 58 issued an Order transferring the case to the RTC in Naga City. According to RTC-Br. 58, since the verified petition showed respondents to be residents of Naga City, Section 7, Rule 66 of the 1997 Rules of Civil Procedure required the quo warranto action to be brought in the RTC exercising jurisdiction over the territorial area where the respondents or any of them resides. The Executive Judge of RTC Naga City, however, refused to receive the case folder, stating that improper venue is not a ground for transferring a quo warranto case to another administrative jurisdiction.

RTC-Br. 58 then proceeded to issue and serve summons on petitioners. Petitioner Tabora filed his Answer dated June 8, 2005, raising the affirmative defenses of improper venue, lack of jurisdiction, and wrong remedy of quo warranto. The other petitioners also filed their Answer raising the same affirmative defenses. All the parties were then required to submit their respective memoranda.

On July 13, 2005, RTC-Br. 58 issued the assailed Order. It denied the motion to dismiss, remanded the case to RTC Branch 23, Naga City, which it identified as the special court designated under A.M. No. 00-11-03-SC to try and decide intra-corporate controversies under R.A. No. 8799, cancelled the scheduled July 18, 2005 hearing on the prayer for temporary restraining order and preliminary injunction, and left the issue of whether quo warranto was the proper remedy to the court of competent jurisdiction.

Petitioners did not move for reconsideration of the July 13, 2005 Order and instead elevated the case to the SC via a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure. They also filed an Urgent Motion to Restore Status Quo Ante, alleging that on January 12, 2006, respondent Jose Pierre Panday, with the aid of 14 armed men, assaulted the premises of St. John Hospital in Naga City and took away the daily hospital collections estimated at ₱400,000.00. It is undisputed that the principal office of St. John Hospital, Incorporated is situated at Goa, Camarines Sur.

• Interlocutory Order: Respondents argued that the present petition should be denied due course and dismissed because an appeal under Rule 45 is inappropriate; the Order dated July 13, 2005 is merely an interlocutory order and not a final order as contemplated under Rule 45 of the 1997 Rules of Civil Procedure.
• Wrong Remedy: Respondents argued that a petition for review on certiorari under Rule 45 is the wrong remedy under A.M. No. 04-9-07-SC, which provides that all decisions and final orders in cases falling under the Interim Rules of Corporate Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799 shall be appealable to the CA through a petition for review under Rule 43 of the Rules of Court.
• Delay: Respondents argued that the petition was intended merely to delay the proceedings in the trial court because when the case was transferred to Branch 21 of the RTC, said court granted petitioners’ motion to hold the proceedings in view of the present petition pending before the SC.

• Propriety of Rule 45: Whether a petition for review on certiorari under Rule 45 is the proper remedy to assail an interlocutory order denying a motion to dismiss and remanding the case to another RTC branch.
• Authority to Remand: Whether an RTC branch that has no jurisdiction to try and decide a case has authority to remand the same to another co-equal court in order to cure defects in venue and jurisdiction.
• Applicability of Administrative Circular No. 8-01: Whether Administrative Circular No. 8-01 dated January 23, 2001, which took effect on March 1, 2001, may be applied to the present case filed on May 16, 2005.
• Jurisdiction over Quo Warranto in a Private Corporation: Whether a petition for quo warranto against persons who usurp an office in a private corporation is an intra-corporate controversy that must be filed with the designated Special Commercial Court covering the corporation’s principal office.

• Propriety of Rule 45: No. The July 13, 2005 Order was interlocutory because it did not dispose of the case completely; Rule 45 governs appeals from judgments or final orders. The SC nevertheless treated the petition as a special civil action for certiorari due to the basic jurisdictional issue and the violence between the parties.
• Authority to Remand: No. RTC-Br. 58 had no jurisdiction over the intra-corporate quo warranto case; it could only dismiss the petition, not order its transfer to another branch.
• Applicability of Administrative Circular No. 8-01: No. By the time the petition was filed on May 16, 2005, A.M. No. 03-03-03-SC, effective July 1, 2003, required filing with the Office of the Clerk of Court in the official station of the designated Special Commercial Court; RTC-Br. 58’s reliance on Administrative Circular No. 8-01 was specious.
• Jurisdiction over Quo Warranto in a Private Corporation: Yes. It is an intra-corporate controversy governed by the Interim Rules; under Section 5, venue is the RTC with jurisdiction over the principal office, and for Camarines Sur the designated Special Commercial Court is in Naga City, Branch 23. RTC-Br. 58 in San Jose lacked jurisdiction.

• Propriety of Rule 45: Rule 45 governs appeals from judgments or final orders. The July 13, 2005 Order denied petitioners’ prayer for dismissal and directed transfer to another RTC branch; it did not dispose of the case completely and left something more to be done on the merits, so it was interlocutory. An order denying a motion to dismiss is not appealable and may be reviewed only on appeal from the final judgment; Tolentino vs. Natanauan, quoting Bangko Silangan Development Bank vs. Court of Appeals, so held. Nevertheless, the SC may ignore a technical flaw where there is no plain, speedy, and adequate remedy and to arrest an apparent error, as in Philippine Airlines vs. Spouses Kurangking. Because the basic issue of jurisdiction and the propensity for violence required resolution, the SC treated the Rule 45 petition as a special civil action for certiorari under Rule 65 and resolved the merits.
• Authority to Remand: RTC-Br. 58 was not a designated Special Commercial Court and was never vested with jurisdiction over cases formerly cognizable by the SEC. Having no jurisdiction over the subject matter, it had no authority or power to order the transfer of the case to another RTC branch. The only action it could take was to dismiss the petition for lack of jurisdiction, as held in HLC Construction and Development Corp. vs. Emily Homes Subdivision Homeowners’ Association, so that the issues could be expeditiously heard by the tribunal clothed with jurisdiction. Its July 13, 2005 Order was therefore null and void.
• Applicability of Administrative Circular No. 8-01: RTC-Br. 58 relied on Administrative Circular No. 8-01 to justify the transfer, but that reliance was specious. By the time respondents filed their petition on May 16, 2005, A.M. No. 03-03-03-SC had been effective since July 1, 2003 and expressly required that cases formerly cognizable by the SEC be filed with the Office of the Clerk of Court in the official station of the designated Special Commercial Court. A.M. No. 00-11-03-SC had been in effect for four years and A.M. No. 03-03-03-SC for almost two years; there was no cogent reason for respondents not to know the appropriate court. Filing with RTC San Jose, Camarines Sur was clearly erroneous.
• Jurisdiction over Quo Warranto in a Private Corporation: Allegations that certain persons usurped the offices, powers, and functions of duly elected board members, trustees, and/or officers make out an intra-corporate controversy. Before R.A. No. 8799, Unilongo vs. Court of Appeals held that Rule 66 was limited to quo warranto against public office, public officers who forfeit office, and associations acting as corporations without legal incorporation, while quo warranto against corporations or persons usurping office in a corporation fell under the SEC under P.D. No. 902-A. R.A. No. 8799, Section 5.2 transferred the SEC’s jurisdiction over Section 5, P.D. No. 902-A cases to the courts of general jurisdiction or the appropriate RTC, with the SC authorized to designate branches. Rule 66 still does not apply to quo warranto against persons usurping office in a private corporation because Section 1(a) no longer contains the phrase “or an office in a corporation created by authority of law.” The Interim Rules govern: Section 1(a)(2) covers controversies arising out of intra-corporate relations, and Section 1(a)(3) covers controversies in the election or appointment of directors, trustees, officers, or managers. Section 5 requires the action to be commenced and tried in the RTC with jurisdiction over the principal office. The principal office of St. John Hospital, Incorporated is undisputed to be in Goa, Camarines Sur. Under A.M. No. 00-11-03-SC and A.M. No. 03-03-03-SC, the RTC designated as Special Commercial Court for Camarines Sur is Branch 23, Naga City, and cases must be filed in the Office of the Clerk of Court in the official station of that court. RTC-Br. 58 in San Jose was therefore bereft of jurisdiction.

• Intra-corporate controversy — A quo warranto petition alleging usurpation of the offices, powers, and functions of duly elected board members, trustees, and/or officers of a private corporation is an intra-corporate controversy. It is governed by the Interim Rules, not Rule 66. Applied: respondents’ petition against petitioners over St. John Hospital, Incorporated was intra-corporate.
• Jurisdiction over SEC cases after R.A. No. 8799 — Section 5.2 of R.A. No. 8799 transferred the SEC’s jurisdiction over cases enumerated in Section 5 of P.D. No. 902-A to the courts of general jurisdiction or the appropriate RTC, with the SC designating Special Commercial Courts. Applied: the quo warranto case fell under the designated Special Commercial Court, not a regular RTC branch.
• Venue of intra-corporate cases — Under Section 5 of the Interim Rules, actions covered by the Rules are commenced and tried in the RTC with jurisdiction over the principal office of the corporation. Under A.M. No. 03-03-03-SC, filing is with the Office of the Clerk of Court in the official station of the designated Special Commercial Court. Applied: principal office in Goa, Camarines Sur; designated court in Naga City, Branch 23; RTC-Br. 58 in San Jose lacked jurisdiction.
• No power to remand without jurisdiction — A court without jurisdiction over the subject matter cannot order the transfer of a case to another co-equal court; it must dismiss the case. Applied: RTC-Br. 58 should have dismissed the quo warranto petition instead of remanding it.
• Interlocutory order not appealable under Rule 45 — An order denying a motion to dismiss is interlocutory and not appealable; the remedy is to answer, go to trial, and appeal from the final judgment. Applied: the July 13, 2005 Order was interlocutory. Exception: the SC may treat a wrong petition as a special civil action for certiorari where no plain, speedy, adequate remedy exists and to arrest an apparent error. Applied: the SC resolved the merits due to the basic jurisdictional issue and violence.
• Rule 66 limited to public office — Rule 66 quo warranto applies to usurpation of public office, position, or franchise, public officers who forfeit office, and associations acting as corporations without legal incorporation; it does not apply to persons usurping office in a private corporation. Applied: respondents’ quo warranto against petitioners over a private corporation was not governed by Rule 66.

• “It is hornbook principle that Rule 45 of the 1997 Rules of Civil Procedure governs appeals from judgments or final orders.” — The SC used this to hold that the July 13, 2005 Order, being interlocutory, could not ordinarily be assailed under Rule 45.
• “The only action that RTC-Br. 58 could take on the matter was to dismiss the petition for lack of jurisdiction.” — The SC held that a court without jurisdiction cannot remand the case to another branch.
• “It should be noted that allegations in a complaint for quo warranto that certain persons usurped the offices, powers and functions of duly elected members of the board, trustees and/or officers make out a case for an intra-corporate controversy.” — The SC characterized respondents’ petition as an intra-corporate controversy, which determined the governing procedure and court.

• Tolentino vs. Natanauan, G.R. No. 135441, November 20, 2003, 416 SCRA 273 — Relied on for the rule that an order denying a motion to dismiss is interlocutory and not appealable, nor subject of a petition for review on certiorari.
• Philippine Airlines vs. Spouses Kurangking, 438 Phil. 375 (2002) — Relied on to justify giving due course despite the wrong remedy, treating the petition as a special civil action for certiorari in the interest of arresting an apparent error and where there is no plain, speedy, and adequate remedy.
• Unilongo vs. Court of Appeals, 365 Phil. 105 (1999) — Relied on for the rule that Rule 66 is limited to public office and that quo warranto against corporations or persons usurping office in a corporation fell under the SEC under P.D. No. 902-A.
• HLC Construction and Development Corp. vs. Emily Homes Subdivision Homeowners’ Association, G.R. No. 139360, September 23, 2003, 411 SCRA 504 — Relied on for the rule that a court without jurisdiction over the subject matter should dismiss the case so the issues may be resolved by the tribunal clothed with jurisdiction.

• Rule 45, 1997 Rules of Civil Procedure — Governs appeals from judgments or final orders; the July 13, 2005 Order was interlocutory, so Rule 45 was not the proper remedy.
• Rule 65, 1997 Rules of Civil Procedure — The SC treated the Rule 45 petition as a special civil action for certiorari because of the basic jurisdictional issue and the violence between the parties.
• Rule 66, Section 1(a), 1997 Rules of Civil Procedure — Covers quo warranto against persons who usurp, intrude into, or unlawfully hold or exercise a public office, position, or franchise; it does not cover persons who usurp an office in a private corporation.
• Section 7, Rule 66, 1997 Rules of Civil Procedure — Invoked by RTC-Br. 58 for transferring the case to Naga City based on respondents’ residence; the SC held Rule 66 did not apply because the case was an intra-corporate controversy.
• Section 5.2, Republic Act No. 8799 — Transferred the SEC’s jurisdiction over all cases enumerated under Section 5 of P.D. No. 902-A to the courts of general jurisdiction or the appropriate RTC, with the SC authorized to designate RTC branches.
• Section 5, Presidential Decree No. 902-A — Formerly vested the SEC with original and exclusive jurisdiction over intra-corporate controversies; its cases were transferred by R.A. No. 8799.
• Sections 1(a)(2) and 1(a)(3), Interim Rules of Procedure Governing Intra-Corporate Controversies Under R.A. No. 8799 (A.M. No. 01-2-04-SC) — Cover controversies arising out of intra-corporate relations and controversies in the election or appointment of directors, trustees, officers, or managers; these governed respondents’ quo warranto petition.
• Section 5, Interim Rules — Requires all actions covered by the Rules to be commenced and tried in the RTC with jurisdiction over the principal office of the corporation; applied to St. John Hospital, Incorporated’s principal office in Goa, Camarines Sur.
• A.M. No. 00-11-03-SC (effective December 15, 2000) — Designated RTC Branch 23, Naga City as the special court for Camarines Sur to try and decide cases formerly cognizable by the SEC.
• A.M. No. 03-03-03-SC (effective July 1, 2003) — Designated the SEC courts as Special Commercial Courts and required cases to be filed in the Office of the Clerk of Court in the official station of the designated Special Commercial Court; applied to the 2005 filing.
• Administrative Circular No. 8-01 (effective March 1, 2001) — Cited by RTC-Br. 58 as basis for transferring SEC cases; the SC rejected its reliance because A.M. No. 03-03-03-SC already governed by the time respondents filed their petition.