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JM DOMINGUEZ AGRONOMIC COMPANY, INC., HELEN D.
DAGDAGAN, PATRICK PACIS, KENNETH PACIS, and
SHIRLEY DOMINGUEZ, petitioners, vs. CECILIA LICLICAN,
NORMAD.ISIP,andPURITADOMINGUEZ,respondents.
GraveAbuseofDiscretionGraveabuseofdiscretionmayarisewhen
a lower court or tribunal violates or contravenes the Constitution, the law
or existing jurisprudence.We have previously ruled that grave abuse of
discretion may arise when a lower court or tribunal violates or contravenes
the Constitution, the law or existing jurisprudence. By grave abuse of
discretion is meant, such capricious and whimsical exercise of judgment as
isequivalenttolackofjurisdiction.Theabuseofdiscretionmustbegraveas
wherethepowerisexercisedinanarbitraryordespoticmannerbyreasonof
passionorpersonalhostilityandmustbesopatentandgrossastoamountto
an evasion of positive duty or to a virtual refusal to perform the duty
enjoinedbyortoactatallincontemplationoflaw.Thewordcapricious,
usually used in tandem with the term arbitrary, conveys the notion of
willful and unreasoning action. Thus, when seeking the corrective hand of
certiorari, a clear showing of caprice and arbitrariness in the exercise of
discretionisimperative.
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*THIRDDIVISION.
339
VOL.764,JULY29,2015 339
JMDominguezAgronomicCompany,Inc.vs.Liclican
PETITIONforreviewoncertiorariofthedecisionandresolutionof
theCourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
EmilianoL.Gayoforpetitioners.
AeneasEliS.DiazandAlA.Parreoforrespondents.
DionRexA.Africacocounselforrespondents.
VELASCO,JR.,J.:
NatureoftheCase
Petitioners,throughtheinstantPetitionforReviewonCertiorari
underRule45oftheRulesofCourt,seekthereversaloftheCourt
ofAppeals(CA)Decision1datedAugust30,2012
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340
340 SUPREMECOURTREPORTSANNOTATED
JMDominguezAgronomicCompany,Inc.vs.Liclican
and its Resolution2 dated July 15, 2013 in C.A.G.R. S.P. No.
108617.SaidrulingsnullifiedtheOrdersauthorizingtheissuanceof
the assailed warrants of arrest against respondents for allegedly
havingbeenissuedingraveabuseofdiscretion.
TheFacts
During the annual stockholders meeting of petitioner JM
DominguezAgronomicCompany,Inc.(JMD)heldonDecember29,
2007attheBaguioCityCountryClub,theelectionforitsnewsetof
directorswasconducted.Thiseventwaspresidedbythencompany
president, and herein respondent, Cecilia Liclican (Liclican), and
attended by her corespondents Norma Isip (Isip) and Purita
Rodriguez,andbypetitionersHelenDagdagan(Dagdagan),Patrick
Pacis,KennethPacis,andShirleyDominguez(Dominguez)aswell.
Conflict ensued when petitioners Patrick and Kenneth Pacis were
allegedly not allowed to vote on the ground that they are not
registeredstockholdersofJMD.Aspointedout,itwastheirmother
andgrandmother,bothdeceased,whoarethestockholdersinJMD,
and that there is still no settlement of their respective estates to
effectively transfer their shares in the company to Patrick and
KennethPacis.3
Tensions rose and respondents, allegedly, walked out of the
meeting. But since the remaining stockholders with outstanding
sharesconstitutedaquorum,theelectionofofficersstillproceeded,
whichyieldedthefollowingresult:4
Officers:
1.HelenD.DagdaganasPresident
2.PatrickD.PacisasVicePresident
3.KennethD.PacisasSecretary
4.ShirleyC.DominguezasTreasurer
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2Id.,atpp.361362.
3Id.,atp.296.
4Id.,atp.320.
341
VOL.764,JULY29,2015 341
JMDominguezAgronomicCompany,Inc.vs.Liclican
Afterstagingthewalkout,respondents,onevendate,executeda
Board Resolution certifying that in the stockholders meeting, the
followingwereelecteddirectorsandofficersofJMD:5
BoardofDirectors:
1.CeciliaD.LiclicanChairmanandPresidingOfficer
2.NormaD.Isip
3.PuritaC.Dominguez
4.TessieC.Dominguez,and
5.ShirleyC.Dominguez
Officers:
1.CeciliaD.LiclicanasPresidentandPresidingOfficer
2.NormaD.IsipasVicePresident
3.GeraldB.CabreraasCorporateSecretary/Treasurer,and
4.OscarAquinoFinancialConsultantAuditor
Inreactiontotheforegoingdevelopments,petitionersDagdagan,
Patrick and Kenneth Pacis, and Dominguez filed a Complaint
againstrespondentsbeforetheRegionalTrialCourtofBaguioCity
(RTC) for nullification of meetings, election and acts of directors
andofficers,injunctionandotherreliefs,raffledtoBranch59ofthe
court. Docketed as Civil Case No. 6623R, the case, after a failed
mediation,wasreferredforappropriateJudicialDisputeResolution
(JDR) to Branch 7 of the RTC. Meanwhile, petitioner stockholders
immediately took hold of corporate properties, represented
themselvestoJMDstenantsasthetrueandlawfuldirectorsofthe
company,andcollectedanddepositedrentsduethecompanytoits
bankaccount.6
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5Id.,atp.321.
6Id.,atpp.34.
342
342 SUPREMECOURTREPORTSANNOTATED
JMDominguezAgronomicCompany,Inc.vs.Liclican
Whenfiled,theinformationswereeventuallyraffledtoBranch7
oftheRTC,thesamecourtoverseeingtheJDR,13
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7Id.,atpp.247253.
8Id.,atp.252.
9Id.,atpp.247248.
10Id.,atpp.254259.
11Id.,atp.257.
12Id.,atp.260.
13Id.,atp.300.
343
VOL.764,JULY29,2015 343
JMDominguezAgronomicCompany,Inc.vs.Liclican
WHEREFORE,theInformationfiledhereinisherebygivenduecourse.
Let the corresponding warrant of arrest be issued against the accused. As
recommended,thebailisherebyfixedasPhp80,000.00.
SOORDERED.
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14Id.,atp.271.
15Id.,atp.269.
16Id.,atpp.270,272.
344
344 SUPREMECOURTREPORTSANNOTATED
JMDominguezAgronomicCompany,Inc.vs.Liclican
andsetasidethetwo(2)March10,2009OrdersbytheRTCBranch
7,anchored,amongothers,ontheallegedexistenceofaprejudicial
question. According to respondents, petitioner stockholders, by
filingthecomplaintaffidavit,arealreadyassumingthattheyarethe
legitimate directors of JMD, which is the very issue in the intra
corporatedisputependingintheRTC,Branch59.
RulingoftheCourtofAppeals
In its assailed Decision, the CA granted the petition for
certiorari,disposingasfollows:
WHEREFORE, the challenged Orders both dated March 10, 2009 are
herebyANNULLED and SET ASIDE for having been issued with grave
abuseofdiscretionamountingtolackorexcessofjurisdiction.
SOORDERED.
TheappellatecourtheldthatJudgeTiongsonTaborashouldhave
refrainedfromdeterminingprobablecausesincesheiswellawareof
thependencyoftheissueonthevalidityofJMDselectionsinCivil
CaseNo.6623R.AsthejudgeoverseeingtheJDRofthesaidintra
corporatedispute,sheknewthattherewasstilldoubtastowhothe
rightfully elected directors of JMD are and, corollarily, who would
have the authority to initiate the criminal proceedings for qualified
theft.17
The CA further noted that even as corporate officers, as they
claimtobe,petitioners Dagdagan and Patrick Pacis cannot file the
ComplaintAffidavit in the exercise of corporate powers without
authorityfromtheboardofdirectorsunderSec.23,18inrelationto
Sec.2519oftheCorporation
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17Id.,atp.307.
18Section23.Theboardofdirectorsortrustees.Unless otherwise provided
inthisCode,thecorporatepowersofallcorpora
345
VOL.764,JULY29,2015 345
JMDominguezAgronomicCompany,Inc.vs.Liclican
xxxSincethereisdoubtintheinstantcaseastothesufficiencyofthe
authority of a corporate officer, Judge TiongsonTabora should have
exercisedprudencebyholdingthecriminalcasesinabeyancependingreso
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tions formed under this Code shall be exercised, all business conducted and all
propertyofsuchcorporationscontrolledandheldbytheboardofdirectorsortrustees
tobeelectedfromamongtheholdersofstocks,orwherethereisnostock,fromamong
the members of the corporation, who shall hold office for one (1) year until their
successorsareelectedandqualified.xxx
19Section25.Corporateofficers,quorum.Immediately after their election,
thedirectorsofacorporationmustformallyorganizebytheelectionofapresident,
whoshallbeadirector,atreasurerwhomayormaynotbeadirector,asecretarywho
shallbearesidentandcitizenofthePhilippines,andsuchotherofficersasmaybe
providedforinthebylaws.Anytwo(2)ormorepositionsmaybeheldconcurrentlyby
thesameperson,exceptthatnooneshallactaspresidentandsecretaryoraspresident
andtreasureratthesametime.
The directors or trustees and officers to be elected shall perform the duties
enjoined on them by law and the bylaws of the corporation. Unless the articles of
incorporationorthebylawsprovideforagreatermajority,amajorityofthenumberof
directorsortrusteesasfixedinthearticlesofincorporationshallconstituteaquorum
forthetransactionofcorporatebusiness,andeverydecisionofatleastamajorityof
thedirectorsortrusteespresentatameetingatwhichthereisaquorumshallbevalid
asacorporateact,exceptfortheelectionofofficerswhichshallrequirethevoteofa
majorityofallthemembersoftheboard.
Directorsortrusteescannotattendorvotebyproxyatboardmeetings.
20Rollo,p.309.
346
346 SUPREMECOURTREPORTSANNOTATED
JMDominguezAgronomicCompany,Inc.vs.Liclican
Aggrieved, individual petitioners moved for reconsideration, on
the main contention that their election as officers and directors of
JMDhasalreadybeensustainedbythetrialcourtviaitsJudgmentin
Civil Case No. 6623R dated May 6, 2011. They likewise claimed
thattheissueonwhetherornottheRTC,Branch7committedgrave
abuse of discretion is already rendered moot and academic by the
judgesinhibitioninCriminalCaseNos.29175Rand29176R,and
the termination of the JDR proceedings in Civil Case No. 6623R.
Petitioners motion, however, proved futile as the appellate court
deniedthesameinitsJanuary13,2013Resolution.22
Hence,theinstantrecourse.
TheIssues
Plainly,theresolution of the extant case depends on whether or
notthereexistsaprejudicialquestionthatcouldaffectthecriminal
proceedingsforqualifiedtheftagainstrespondents.Intheconcrete,
theissuesare(i)whetherornotCivilCaseNo.6623Rconstituteda
prejudicialquestionwarrantingthesuspensionoftheproceedingsin
CriminalCaseNos. 29175R and 29176R and (ii) whether or not
grave abuse of discretion attended the issuance of the two assailed
March10,2009OrdersinCriminalCaseNos.29175Rand29176
R.
TheCourtsRuling
Thepetitionlacksmerit.
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21Id.,atpp.314315.
22Id.,atp.361.
347
VOL.764,JULY29,2015 347
JMDominguezAgronomicCompany,Inc.vs.Liclican
ThechallengedOrdersofthetrial
courtwereissuedingraveabuseof
discretion
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23Perezv.CourtofAppeals,G.R.No.162580,January27,2006,480SCRA411,
416.
24Yapv.Cabales,G.R.No.159186,June5,2009,588SCRA426.
348
348 SUPREMECOURTREPORTSANNOTATED
JMDominguezAgronomicCompany,Inc.vs.Liclican
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25Id.
26RulesofCourt,Rule111,Sec.7.
349
VOL.764,JULY29,2015 349
JMDominguezAgronomicCompany,Inc.vs.Liclican
Verily,theRTCoughttohavesuspendedtheproceedings,instead
ofissuingthechallengedOrdersissuedbytheRTC.
Thesubsequentresolutionofthe
prejudicialquestiondidnotcure
thedefect
It may be, as the petitioners pointed out in their motion for
reconsiderationfiledbeforetheCA,thatCivilCaseNo.6623Rwas
eventuallyresolvedintheirfavorthroughaJudgment27datedMay
6,2011renderedbytheRTC,Branch59,thedispositiveportionof
whichreads:
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27Rollo,pp.353355.PennedbyJudgeIluminadaP.Cabato.
350
350 SUPREMECOURTREPORTSANNOTATED
JMDominguezAgronomicCompany,Inc.vs.Liclican
ThisJudgmenthas,onJune6,2011,becomefinalandexecutory,
as per the Notice of Entry of Judgment issued by the same trial
court.28Evidently,whatevercloudofdoubtloomedoverpetitioners
actuationshasalreadybeendispelled.Petitionersthenpostulatethat
thequestiononwhetherornotthechallengedOrderswereissuedin
grave abuse of discretion has already been rendered moot and
academic by the June 6, 2011 ruling and by Judge Tiongson
Taboras subsequent inhibition in the criminal proceedings.
Consequently, they argue that their motion for reconsideration
shouldhavebeengrantedbytheappellatecourt.
Wearenotconvinced.
Theresolutionoftheprejudicialquestiondidnot,incontext,cure
the grave abuse of discretion already committed. The fact remains
thatwhentheRTC,Branch7issueditschallengedOrdersonMarch
10,2009,theJudgmentinfavorofpetitionerswasnotyetrendered.
Consequently,therewasstill,atthattime,arealdisputeastowho
the rightful set of officers were. Plainly, Judge TiongsonTabora
should not have issued the challenged Orders and should have,
instead,suspendedtheproceedingsuntilCivilCaseNo.6623Rwas
resolvedwithfinality.
Togranttheinstantpetitionandrulethattheproceduralinfirmity
has subsequently been cured either by the Judgment or by Judge
TiongsonTaboras inhibition would mean condoning the
continuation of the criminal proceedings despite, at that time, the
existenceofaprejudicialquestion.Suchcondonationwouldcreatea
precedent that renders inutile the doctrine on prejudicial question,
such that the court trying the criminal case will be permitted to
proceedwiththetrialintheaberrantassumptionthattheresolution
of the prior instituted civil case would benefit the private
complainantinthecriminalproceedings.Toreiterate,therewasno
certaintyyetonhowtheRTC,Branch59wouldrulethus,no
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28Id.,atp.356.
351
VOL.764,JULY29,2015 351
JMDominguezAgronomicCompany,Inc.vs.Liclican
Peralta,Villarama,Jr.,Perez**andJardeleza,JJ.,concur.
Petitiondenied,judgmentandresolutionaffirmed.
352
352 SUPREMECOURTREPORTSANNOTATED
JMDominguezAgronomicCompany,Inc.vs.Liclican
**DesignatedactingmemberperSpecialOrderNo.2084datedJune29,2015.
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