Administrative Law Case Digests

OLAGUER vs REGIONAL TRIAL COURT

FACTS: The parameters of the jurisdiction of the ordinary courts in relation to the Securities and Exchange
Commission (SEC) and the Sandiganbayan are put into issue in this petition.

private respondents are the only stockholders ith the right to vote of the !hilippine "ournalists# $nc. (!"$)
!ublisher of several daily periodicals such as %anila "ournal# !eople&s "ournal# etc. Sometime in '# !"$
obtained from the *evelopment +ank of the !hilippines (*+!) certain ,nancing accommodations and as
security thereof executed a ,rst mortgage in favor of *+! on its acts enumerated in a list attached to the
mortgage. The !"$ stockholders assigned to *+! the voting rights over - of the total subscribed and
outstanding voting shares of stock of the company held by them. The *+! appointed said !"$ stockholders
as proxies to exercise its right to vote. *ue to some ,nancial di/culty on its part# !"$ re0uested for a
restructuring of its loan obligation ith certain conditions. The re0uest as granted by the *+! in a letter
dated 1ugust 2# '3-. *ue to the default on the part of the !"$ the *+! cancelled the proxies in favor of the
assigning stockholders on September 45# '3- and designated as its proxies petitioner Eduardo 6laguer#
 "ose %ari 7ele8 and %anuel de 9eon.

!etitioner 6laguer asked private respondent :osario %. +arreto 6livares to assign 0ualifying shares not
only to the three proxies of *+! but also to to others to be chosen by him so as to enable the ,ve of them
to sit in the !"$ board of directors# and that# accordingly# they may be able to coordinate more e;ectively
ith *+! as regards the early evaluation and approval of the re0uest for another restructuring of the !"$
loan.

1lthough 6laguer as elected chairman of the board and chief executive o/cer of !"$ he failed to comply
ith his commitment and that this gave private respondents a reason to cancel the assignment. 6laguer
also committed certain illegal acts hich gave rise to the ,ling of several complaints against him.
<oever# before these cases could be resolved# 6laguer&s appointment as member of the board of 
directors of *+! as terminated by !resident Cora8on C. 10uino e;ective September # '3.

$t is likeise alleged that# the termination notithstanding# 6laguer continued to exercise and retain full
management and control of !"$. The *+! chief legal counsel rote to petitioner :eyes informing him of 
6laguer&s removal from o/ce and enjoining him from implementing or complying ith any instructions
from 6laguer and from disposing of the properties of !"$ and disbursing any funds ithout prior approval of 
the board of directors of !"$ hich ill soon be elected# except such amounts needed in the ordinary course
of business. 1ccordingly# the *+!# acting through its Chairman# "esus Estanislao and its *irector=in=Charge#
 "ose %ari 7ele8# entered into an $nterim 1greement ith private respondents. The said agreement called
for a special stockholders meeting for the purpose of electing a ne board of directors hich shall hold
o/ce until the next regular stockholders meeting to be held on >ebruary ?# '33.

$n a letter dated *ecember '2# '3# the *+! chief legal counsel informed the private respondents that
the said $nterim 1greement cannot be implemented because 6laguer claims that he has just been
designated the ,scal and team leader of the !residential Commission on @ood @overnment (!C@@)
assigned to the !"$ and that all his actions are sanctioned and reported to !C@@ Chairman :amon 1. *ia8#
and that it is the !C@@ hich exercises the voting rights of all !"$ common stocks se0uestered since '3-#
including those assigned to *+! and that the !"$ 0ualifying share no held by !"$ *irectors came from
shares se0uestered by the !C@@.

6n "anuary 2# '33# a motion to dismiss as ,led by the petitioners on the ground that the court has no
 jurisdiction over the persons of petitionersA that they ere not served summons and that the subject
matter of the action involves controversies arising out of intra=corporate relations beteen and among
stockholders hich are covered by the provisions of Section B of !residential *ecree o. 5?=1 so that the
matter is ithin the original and exclusive jurisdiction of the Securities and Exchange Commission (SEC)A
that the venue for a petition seeking injunctive relief should be the Sandiganbayan.

6n "anuary '2# '33# an order as issued by the trial court denying the motion to dismiss. <ence# the
herein petition for certiorari and prohibition ith a prayer for the issuance of a temporary restraining order
andD or a rit of preliminary injunction.

$SSEF Ghether or not the trial court has jurisdiction over the subject matter of the action

:9$@F o. The petition is impressed ith merit. There is no dispute that the !"$ is no under
se0uestration by the !C@@ and that Civil Case o. 554B as ,led in the Sandiganbayan herein the !"$ is
listed as among the corporations involved in the unexplained ealth case against former !resident %arcos#
 

:omualde8 and many others. The records likeise sho that petitioner 6laguer# among others# is a ,scal
agent of the !C@@ and that as Chairman of the +oard of *irectors of the !"$ he as acting for and in behalf 
of the !C@@. nder Section ? of Executive 6rder o. '2# the Sandiganbayan has exclusive and original
 jurisdiction over all cases regarding Hthe funds# moneys# assets and properties illegally ac0uired by >ormer
!resident >erdinand E. %arcos# %rs. $melda :omualde8 %arcos# their close relatives# subordinates# business
associates# dummies# agents# or nominees#H civil or criminal# including incidents arising from such cases.
 The *ecision of the Sandiganbayan is subject to revie on certiorari exclusively by the Supreme Court.

$n the exercise of its functions# the !C@@ is a co=e0ual body ith the regional trial courts and co=e0ual
bodies have no poer to control the other. The regional trial courts and the Court of 1ppeals have no
 jurisdiction over the !C@@ in the exercise of its poers under the applicable Executive 6rders and Section
?-# 1rticle I7$$$ of the '3 Constitution and# therefore# may not interfere ith and restrain or set aside the
orders and actions of the !C@@. +y the same token# the regional trial courts have no jurisdiction over the
acts of ,scal agents of the !C@@ acting for and in behalf of said commission.

 The Commission should not be embroiled in and samped by legal suits before inferior courts all over the
land. 6therise# the Commission ill be forced to spend valuable time defending all its actuations in such
courts. This ill defeat the very purpose behind the creation of the Commission. 1ccordingly# Section 2(a)
of Executive 6rder o. ' expressly accorded the Commission and its members immunity from suit for
damages in thatF Ho civil action shall lie against the Commission or any member thereof for anything
done or omitted in the discharge of the task contemplated by this order.H

!etitioners 6laguer and :eyes appear to be ,scal agents of the !C@@. There can be no doubt# therefore#
that the subject matter of the action (the !"$ its properties and assets) falls ithin the exclusive jurisdiction
of the Sandiganbayan. !etitioners# as ,scal agents of the !C@@# cannot be sued in such capacity before
the ordinary courts. The tribunal for such purpose is the Sandiganbayan.

$t necessarily follos that the issues raised by the private respondents before the respondent judge to the
e;ect that petitioners are usurpers and have no right to sit in the board of directors or act as corporate
o/cers of the !"$ are issues hich should be addressed to the Sandiganbayan.

RATIO: Some administrative agencies are bodies corporate with legal capacity to sie and be sued in the
courts. The PCGG is a co-equal body with the regional trial courts and co-equal bodies have no power to
control the other.

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