Silen vs. Vera

In quo warranto proceedings instituted to question the legality of the election of corporate directors and officers, a preliminary injunction does not lie to prevent the newly elected officials from discharging their offices and to restore the former directors to their positions, particularly where the former directors' terms have already expired by operation of law; the issuance of such writ constitutes an excess of jurisdiction and abuse of discretion.

• The Zambales Chromite Mining Co., Inc. had by-laws providing that directors shall hold office for one year or until their successors are elected and qualified.
• On March 5, 1936, the respondents (Leon Rosenthal, Frederic H. Stevens, and Gonzalo P. Nava) were elected as directors and officers (president, vice-president, and secretary-treasurer, respectively) for a one-year term.
• In G.R. No. 45473 (promulgated March 13, 1937), this Court declared the March 2, 1936 election of the respondents null and void and ordered a new election; however, the respondents continued to discharge their offices pending finality of the decision and the holding of a new election.
• On March 1, 1937, the one-year term of the respondents expired. A general meeting of stockholders was held, resulting in the election of the petitioners (B. H. Silen, S. J. Wilson, J. George, C. R. Luzuriaga, and Francis Lusk) as directors.
• Upon their election, the petitioners assumed office and elected their respective officers (president, vice-president, treasurer, and secretary), who began performing their functions by issuing checks and transacting business for the corporation.
• The election and assumption of office by the petitioners automatically terminated the term of the respondents by virtue of the by-law provision that directors hold office "for one year or until their successors are elected and qualified," causing the respondents to cease ipso jure.
• On March 4, 1937, the respondents filed a complaint in Civil Case No. 51014 seeking to declare the March 1, 1937 election null and void on the ground that it was not held in accordance with the by-laws, and prayed that they be restored to their offices.
• The Court of First Instance issued a writ of preliminary injunction which suspended the petitioners from their offices and reinstated the respondents, effectively ousting the petitioners and restoring the respondents despite the expiration of the latter's term.

• The Court of First Instance acted without or in excess of jurisdiction in issuing the writ of preliminary injunction in a quo warranto proceeding.
• A preliminary injunction cannot be used to remove corporate officers or restore those whose terms have expired, as this would convert the ancillary remedy into the principal relief, a function not contemplated by law.
• The respondents' term of office expired on March 1, 1937, and they ceased to be directors ipso jure upon the election and qualification of their successors (the petitioners).
• Injunction is not the proper remedy for the removal of an officer of a private corporation or for restoring one wrongfully removed.

• The election of the petitioners on March 1, 1937 was invalid because it was not held in accordance with the by-laws of the corporation.
• The preliminary injunction was necessary to maintain the status quo pending the resolution of the quo warranto proceedings.
• The status quo to be preserved was the administration of the respondents, which had been in place for one year, rather than that of the petitioners who had only been in office for one day.

• Procedural Issues: Whether certiorari is the proper remedy to challenge the issuance of a preliminary injunction by the Court of First Instance.
• Substantive Issues: Whether the Court of First Instance acted in excess of jurisdiction in issuing a preliminary injunction in a quo warranto proceeding for the purpose of suspending newly elected directors and restoring former directors whose terms had already expired.

• Procedural: The Supreme Court granted the petition for certiorari, holding that it is the appropriate remedy when the lower court has acted in excess of jurisdiction and with grave abuse of discretion.
• Substantive: The Court held that the issuance of the preliminary injunction constituted an excess of jurisdiction and abuse of discretion. The election of the petitioners and their assumption of office on March 1, 1937 ended the term of the respondents by operation of the by-law providing that directors serve for one year or until successors are elected and qualified. The respondents therefore ceased ipso jure. The preliminary injunction effectively supplanted the quo warranto proceeding by ousting the petitioners and reinstating the respondents before a final determination on the merits, thereby becoming the principal remedy rather than an ancillary one. Section 162 of the Code of Civil Procedure does not contemplate such use of preliminary injunction, and established jurisprudence holds that injunction is not the proper remedy for removing corporate officers or restoring those removed.

• Term of Office of Directors — Directors elected for a fixed term hold office for that period or until their successors are elected and qualified; the election and qualification of successors automatically terminates the predecessor's term ipso jure by operation of law, without need for further judicial declaration.
• Nature of Preliminary Injunction in Quo Warranto — Preliminary injunction is merely an ancillary remedy in quo warranto proceedings and cannot be used to effectively grant the principal relief sought (the removal of officers and restoration of others) prior to final judgment on the merits.
• Injunction Not Proper Remedy for Corporate Offices — Injunction is not the proper remedy for the removal of an officer of a private corporation, nor for restoring one wrongfully removed.

• "Injunction is not the proper remedy for the removal of an officer of a private corporation, nor for restoring one wrongfully removed."
• "It is clear, therefore, that in the present case the preliminary injunction has supplanted the quo warranto proceeding in which it was issued as an ancillary remedy, thereby becoming a principal remedy, a function thereof not contemplated by Section 162 of the Code of Civil Procedure."
• "This election of the petitioners as directors of the Zambales Chromite Mining Co., Inc., and their assumption of office as such directors ended the term of office of the former directors, the herein respondents, by virtue of the provision of said section I of the by-laws."
• "Therefore the defendants therein, petitioners herein, were practically ousted from their respective offices, and the former directors and officers, the plaintiffs therein and respondents herein, reinstated in the same offices in which they had already ceased ipso jure."

• Chua Ke v. Abeto, 63 Phil. 539 — Cited as controlling precedent for the principle that certiorari lies when a court acts in excess of jurisdiction.
• Castillo v. Bustamante, G.R. No. 44466 and Castillo v. Platon, G.R. No. 45477 — Referenced as the prior decisions wherein this Court declared the respondents' election on March 2, 1936 null and void and ordered a new election.

• Section 208, Code of Civil Procedure — Impliedly authorizes the bringing of an action against corporate directors by means of quo warranto proceedings to determine the legality of their election.
• Section 162, Code of Civil Procedure — Governs preliminary injunctions; cited to emphasize that such remedy cannot be converted into the principal relief sought in the main action.
• Section I, By-laws of Zambales Chromite Mining Co., Inc. — Provides that directors shall hold office for one year or until their successors are elected and qualified; applied to determine that respondents' term ended ipso jure upon petitioners' election and qualification.

• Chief Justice Avanceña — Dissented, arguing that the petition should be denied. He maintained that the issuance of the preliminary injunction was justified to maintain the status quo, which was properly understood as the respondents' administration that had been ongoing for one year, rather than the petitioners' one-day tenure. He further argued that the preliminary injunction was merely provisional and subject to dissolution or confirmation based on the final merits of the quo warranto case, and therefore did not improperly supplant the principal action.