Pre-trial NOT fatal in intra-corporate election contests

SECOND DIVISION  [ A.M. No. RTJ-18-2533 (Formerly OCA IPI No. 15-4448-RTJ), June 26, 2019 ]  MARISSA LU CHIONG AND CRISTINA LU NG, COMPLAINANTS, VERSUS PRESIDING JUDGE GREGORIO M. VELASQUEZ, REGIONAL TRIAL COURT, BR. 35, CALAMBA CITY, LAGUNA, RESPONDENT.

Complainants Marissa Lu Chiong and Cristina Lu Ng (complainants) filed against respondent Judge Gregorio M. Velasquez (Judge Velasquez), the Presiding Judge of the Regional Trial Court (RTC), Branch 35 of Calamba City, Laguna a Joint-Affidavit Complaint[1] dated August 4, 2015 for Violation of the New Code of Judicial Conduct, Gross Ignorance of the Law and Procedure and Gross Misconduct. The complainants made the following allegations: they are the plaintiffs in the complaints for Nullification of Stockholders' Meeting, Election of the Members lof the Board of Directors, Officers, General Information Sheet and Minutes of Meeting, and Damages with Application for the Issuance of a Temporary Restraining Order (TRO) or Status Quo Ante Order and a Writ of Preliminary Injunction (WPI), both filed with the RTC of Calamba City on March 19, 2014 and docketed as SEC Case No. 99-2014-C[2] and SEC Case No. 100-2014-C[3]; the cases were initially raffled to Judge Maria Florencia B. Formes-Baculo (Judge Formes-Baculo) of the RTC of Calamba City, Branch 34, who heard and granted[4] the complainants' applications for TRO/WPI, but the defendants filed motions for inhibition against Judge Formes-Baculo and urgent motions to dissolve the writs issued; the rnotions for inhibition were granted and the cases were transferred to Judge Velasquez, who conducted a clarificatory hearing[5] and thereafter ordered[6] (1) the parties to file their respective memoranda and (2) the setting of the hearing on July 22, 2015, without prejudice to the court's determination as to whether there should still be a need to conduct a hearing on the memoranda that the parties would file; after the parties filed their memoranda,[7] the complainants were surprised[8] that Judge Velasquez had quickly rendered a Consolidated Decision[9] dated July 13, 2015 dismissing the complaints and upholding the validity of the stockholders' meeting and election held on March 4, 2014; and since Judge Velasquez did not conduct pre-trial prior to issuing the Consolidated Decision upholding the stockholders' meeting and election of board members despite several irregularities, he should be held administratively liable.

At this juncture, it is important to note that the complainants had also appealed the Consolidated Decision with the Court of Appeals (CA) while the instant complaint was pending against Judge Velasquez.

The Office of the Court Administrator (OCA) of the Supreme Court issued a 1st Indorsement[10] dated August 24, 2015 directing Judge Velasquez to file a comment on the complaint. In his Comment[11] dated October 15, 2015, Judge Velasquez classified the cases as involving election contests in two corporations and argued the following points: (1) the filing of the complaint is premature because there is no final declaration that the alleged Consolidated Decision is manifestly erroneous and therefore there is no basis to conclude that he is administratively liable; (2) the promulgation of the Consolidated Decision even without the benefit of pre-trial does not constitute a reversible error because pre-trial is not mandatory under the rules on election contests; and (3) his act of rendering the Consolidated Decision is a judicial act based on his appreciation of the law and the facts of the case and therefore not subject to disciplinary action in the absence of fraud, dishonesty, and/or corruption.

The complainants filed a Manifestation[12] dated September 24, 2015 informing the Court of the CA Decision[13] dated August 28, 2015 where the CA classified the cases as those involving conflicts among stockholders[14] and ruled that pre-trial must be conducted based on the Interim Rules of Procedure for Intra-Corporate Controversies[15] (Interim Rules). According to the CA Decision, because there was no pre-trial, it remained unclear exactly what issues were to be resolved by the trial court. The cases were not ripe for decision and the issuance of the judgment was premature. The complainants were substantially prejudiced and denied of their right to due process of law by the trial court's unmindful failure to calendar the cases for pre-trial. Consequently, the CA granted the complainants' petition for review, set aside the Consolidated Decision in SEC Case Nos. 99-2014-C and 100-2014-C, and remanded the case to the RTC for pre-trial and further proceedings.[16]

On December 5, 2016, the Supreme Court issued a Resolution[17] where the Court resolved to dismiss the complaint against Judge Velasquez for being premature based on the OCA recommendation.[18]

The complainants then filed a Very Respectful Motion for Reconsideration[19] dated April 7, 2017, pointing out that the CA Former Special Third Division had already issued a Resolution[20] denying the defendants' motion for reconsideration. Later on, the complainants manifested[21] that this Court had issued a Resolution[22] in G.R. No. 224809 dated July 10, 2017 affirming the CA's Decision and Resolution to remand the case to the RTC for pre-trial and further proceedings. Because of the said Resolution, the complainants argue that the reasons for prematurity are no longer availing.

In a Memorandum[23] dated January 3, 2018, the OCA opined that the Court may already determine the administrative culpability of Judge Velasquez and essentially made the following findings: (1) the allegation of gross misconduct is devoid of merit; and (2) while Judge Velasquez was not motivated by bad faith, fraud, corruption, or dishonesty in issuing the Consolidated Decision, Judge Velasquez still failed to comply with the Interim Rules which requires pre-trial to be conducted. The OCA emphasized that the blatant disregard of clear and unmistakable provisions of Supreme Court circulars enjoining strict compliance subjects the magistrate to corresponding administrative sanctions. Since this Court already issued a ruling in G.R. No. 224809 affirming the need to conduct a pre-trial in SEC Case Nos. 99-2014-C and 100-2014-C, Judge Velasquez should be held guilty of Gross Ignorance of the Law and is also therefore guilty of violating the New Code of Judicial Conduct. Hence, the OCA recommended that Judge Velasquez be found guilty of gross ignorance of the law and fined in the amount of P21,000.00.[24]

The OCA's finding that there is no gross misconduct is well-taken. In the case at bar, the allegation of gross misconduct against Judge Velasquez is devoid of merit because the complainants failed to establish Judge Velasquez's bad faith, malice, or ill will. Complainants merely pointed to circumstances based on mere conjectures and suppositions of bias and partiality, but these are not sufficient to prove gross misconduct.[25]

However, the Court disagrees with the OCA's findings that Judge Velasquez should be liable for gross ignorance of the law and violation of the New Code of Judicial Conduct. It is important to note that these findings of the OCA hinged on Judge Velasquez's failure to conduct a pre-trial despite being required under the Interim Rules.

Gross ignorance of the law is discussed in the case of Department of Justice v. Mislang[26] as follows:
Gross ignorance of the law is the disregard of basic rules and settled jurisprudence. A judge may also be administratively liable if shown to have been motivated by bad faith, fraud, dishonesty or corruption in ignoring, contradicting or failing to apply settled law and jurisprudence, x xx

For liability to attach for ignorance of the law, the assailed order, decision or actuation of the judge in the performance of official duties must not only be found erroneous but, most importantly, it must also be established that he was moved by bad faith, dishonesty, hatred, or some other like motive. Judges are expected to exhibit more than just cursory acquaintance with statutes and procedural laws. They must know the laws and apply them properly in all good faith, x x x[27] (Emphasis supplied)
In the case at bar, there is no showing that Judge Velasquez's act of issuing the Consolidated Decision was attended with bad faith, dishonesty, hatred, or some other like motive. In fact, Judge Velasquez explained his reason for not conducting pre-trial in the two cases as follows:
There is no dispute that the two (2) cases wherein the challenged Consolidated Decision was rendered involved election contests in private corporations. The herein complainants themselves admitted in their complaint that the said cases are election contests. Election contests in a private corporation is admittedly a specific kind of intra-corporate controversy and therefore, the applicability of the Interim Rules of Procedure for Intra-Corporate Controversies x x x is likewise undisputed. It has to be noted, however, that there are several kinds of intra-corporate controversies and while there are rules for intra-corporate controversies in general x x x said [Interim Rules] also provide rules for specific kinds of intra-corporate controversies. And precisely, election contest, as^a specific kind of intra-corporate controversy, is among those which the Interim Rules of Procedure for Intra-Corporate Controversies singled-out and for which specific rules have been provided. Thus, Rule 6 of the said Interim Rules of Procedure for Intra-Corporate Controversies is specifically applicable to "Election Contests". And in the case of PHILCOMSAT Holdings Corporation vs. Philippine Communications Satellite Corporation (PHILCOMSAT), the Supreme Court ruled that the said Rule 6 of the Interim Rules of Procedure for Intra-Corporate Controversies nowhere required that the Regional Trial Court, acting as a special commercial court, should first conduct a pre-trial before it could render its judgment in a corporate election contest. In other words, in election contests, as [a] specific type of intra-corporate dispute, pre-trial is not mandatory.[28] (Emphasis supplied and citation; omitted)
Indeed, in the cited PHILCOMSAT[29] case, it was ruled that lack of pre-trial was not fatal in intra-corporate election contests:
Lack of pre-trial was not fatal
in intra-corporate election contests 
Under Section 4 of Rule 6 (Election Contests) of the Interim Rules of Procedure for Intra-Corporate Controversies x x x the trial court within two days from the filing of the complaint, may outrightly dismiss the complaint upon a consideration of the allegations thereof if the complaint is not sufficient in form and substance, or, if the complaint is sufficient, may order the issuance of summons which shall be served together with a copy of the complaint, on the defendant within two days from its issuance. Should it find the need to hold a hearing to clarify specific factual matters, the trial court shall set the case for hearing, and the hearing shall be completed not later than 15 days from the date of the first hearing. The trial court is mandated to render a decision within If days from receipt of the last pleading, or from the date of the last hearing as the case may be.The CA correctly pointed out that Rule 6 nowhere required thai: the RTC acting as a special commercial court should first conduct a pre-trial conference before it could render its judgment in a corporate election contest. Hence, the RTC (Branch 138) in Makati properly heard the case of annulment of the election with dispatch in accordance with the guidelines set in the resolution in A.M. No. 01-2-04-SC. With the requirements of due process having been served, no defect informed the RTC's ruling to set aside the election, and to oust those illegally elected.[30] (Emphasis supplied)
Judge Velasquez therefore had legal basis to conclude that pre-trial was not required in the two cases involving intra-corporate controversies considering that he characterized both of these cases as involving election contests and that there is no showing that the ruling in the PHILCOMSAT case had been overturned. Indeed, a judge cannot be civilly, criminally, or administratively liable for his official acts, no matter how erroneous, provided he acts in good faith.[31] Consequently, there is also no basis to hold Judge Velasquez liable for violating the New Code of Judicial Conduct.

WHEREFORE, the administrative complaint for Gross Misconduct, Gross Ignorance of the Law and Procedure, and Violation of the New Code of Judicial Conduct against Presiding Judge Gregorio M. Velasquez, Regional Trial Court, Branch 35, Calamba City, Laguna is DISMISSED for lack of merit.

SO ORDERED.

[1] Rollo (Vol. I), pp. 2-28.

[2] Entitled "Marissa Lu Chiong and Cristina Lu Ng vs. Emmanuel M. Lu, Rommel M. Lu, Carmela M. Lu, Karen Grace P. Lu, James Michael M. Lu and REMCOR Industrial and Manufacturing Corporation'" id. at 46-66.

[3] Entitled "Marissa Lu Chiong and Cristina Lu Ng vs. Emmanuel M. Lu, Rommel M. Lu, Carmela M. Lu, Karen Grace P. Lu, James Michael M. Lu and SOUTECH Development Corporation," id. at 145-224.

[4] Orders dated January 5, 2015 in SEC Case No. 99-2014-C and SEC Case No. 100-2014-C, both penned by Presiding Judge Maria Florencia B. Formes-Baculo; rollo (Vol. II), pp. 879-924.

[5] See Order dated May 27, 2015; id. at 949.

[6] See Order dated June 4, 2015; id. at 950-951.

[7] Complainants' Memorandum for SEC Case No. 99-2014-C dated June 8, 2015, id. at 952-960; Complainants' Memorandum for SEC Case No. 100-2014-C dated June 8, 2015, id. at 961-969; Defendants' Memorandum (for the Motion to Dissolve Writ of Preliminary Injunction) foil SEC Case No. 99-2014-C dated June 9, 2015, id. at 970-992; Defendants' Memorandum (for the Motion to Dissolve Writ of Preliminary Injunction) dated June 9, 2015, id. at 1067-1P89; Complainants' Memorandum for SEC Case No. 99-2014-C dated June 16, 2015, id. at 1163-1167; Complainants' Memorandum for SEC Case No. 100-2014-C dated June 16, 2015, id. at 1168-1172; Defendants' Memorandum for SEC Case No. 99-2014-C dated June 18, 2015, id. at 1173-1187. A copy of the defendants' memorandum for SEC Case No. 100-2014-C was not included in the Rollo. According to complainants, it is the same memorandum as the one filed in 99-2014-C, see rollo (Vol. I), p. 8.

[8] Rollo (Vol. I), p. 9.

[9] Id. at 29-45. Penned by Judge Gregorio M. Velasquez.

[10] Rollo (Vol. II), p. 1200.

[11] Id. at 1201-1206.

[12] Id. at 1189-1191.

[13] Id. at 1193-1199. Penned by Associate Justice Mario V. Lopez and concurred in by Associate Justices Rosmari D. Carandang (now a Member of this Court) and Carmelita Salandanan Manahan of the Special Third Division of the CA.

[14] Id. at 1195.

[15] PROPOSED INTERIM RULES OF PROCEDURE GOVERNING INTRA-CORPORATE CONTROVERSIES UNDER R.A. No. 8799, A.M. No. 01-2-04-SC, March 13, 2001.

[16] Rollo (Vol. II), pp. 1197-1198.

[17] Id. at 1230-1231.

[18] See Report dated September 14, 2016; id. at 1226-1229.

[19] Rollo (Vol. II), pp. 1232-1246, including its Annex.

[20] Resolution dated May 23, 2016; id. at 1241-1243.

[21] Manifestation with Motion for Resolution dated September 22, 2017; id. at 1248-1251.

[22] Rollo (Vol. II), pp. 1252-1253.

[23] Id. at 1257-1269.

[24] See id. at 1261-1269.

[25] Id. at 1261-1262.

[26] 791 Phil. 219 (2016).

[27] Id. at 227-228.

[28] Rollo (Vol. II), pp. 1204-1205.

[29] Philippine Overseas Telecommunications Corp. v. Africa, 713 Phil. 265 (2013).

[30] Id. at 331.

[31] Tamondong v. Pasal, A.M. No. RTJ-16-2467 (formerly OCA I.P.I. No. 14-4308-RTJ), October 18, 2017, 842 SCRA 561, 571.

Popular Posts