Megan - Sugar - Corp. - v. - RTC of Iloilo Branch 68 - GR No. 170352
Megan - Sugar - Corp. - v. - RTC of Iloilo Branch 68 - GR No. 170352
DECISION
PERALTA, J : p
SO ORDERED. 15 DSTCIa
SO ORDERED. 21
In denying MEGAN's petition, the CA ruled that since Atty. Sabig had
actively participated before the RTC, MEGAN was already estopped from
assailing the RTC's jurisdiction.
Aggrieved, MEGAN then filed a Motion for Reconsideration, 22 which
was, however, denied by the CA in Resolution dated October 12, 2005.
Hence, herein petition, with MEGAN raising the following issues for this
Court's consideration, to wit:
I.
II.
Both EPCIB and NFSC, however, claim that MEGAN is already estopped
from assailing the authority of Atty. Sabig. They contend that Atty. Sabig had
actively participated in the proceedings before the RTC and had even filed a
number of motions asking for affirmative relief. They also point out that Jose
Concha (Concha), who was a member of the Board of Directors of MEGAN,
accompanied Atty. Sabig during the hearing. Lastly, EPCIB and NFSC
contend that all the motions, pleadings and court orders were sent to the
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office of MEGAN; yet, despite the same, MEGAN never repudiated the
authority of Atty. Sabig.
After a judicial examination of the records pertinent to the case at bar,
this Court agrees with the finding of the CA that MEGAN is already estopped
from assailing the jurisdiction of the RTC.
Relevant to the discussion herein is the transcript surrounding the
events of the November 29, 2002 hearing of Passi Sugar's motion for
intervention, to wit:
ATTY. ARNOLD LEBRILLA:
Appearing as counsel for defendant PCI Equitable Bank, your
Honor.
ATTY. CORNELIO PANES:
Your Honor, the counsel for the plaintiff CIMICO has not yet
arrived.
ATTY. SABIG:
Your Honor, we have been furnished of a copy of the motion. I've
talked to Atty. [Leonardo] Jiz and he informed me that he cannot
attend this hearing because we are in the process of taking over
this case. However, the Passisugar had intervened and we have
to appear because we have been copy furnished of the motion,
and also, your Honor, since the motion will directly affect Megan
and we are appearing in this hearing despite the fact that we had
not officially received the copy of the motion. Anyway, your
Honor, since we are in the process of taking over this case, Atty.
Jiz told me that he cannot appear today. cIEHAC
COURT:
COURT:
Just a moment, Atty. Panes. Shall we allow Atty. Sabig to finish
first?
ATTY. SABIG:
This motion directly affects us and that's why we're voluntarily
appearing, just for this hearing on the motion and not for the
case itself, specifically for the hearing [on] this motion. That's our
appearance for today because we have been served and we have
to protect our interest. We are not saying that we are taking over
the case but there is a hearing for the motion in intervention and
we have been served a copy, that's why we appear voluntarily.
EDHCSI
ATTY. LEBRILLA:
Your Honor, please, for the defendant, we do not object to the
appearance of the counsel for Megan provided that the counsel
could assure us that whatever he says [all through] in this
proceeding will [bind] his client, your Honor, as he is duly
authorized by the corporation, under oath, your Honor, that
whatever he says here is binding upon the corporation.
COURT:
Why will you not implead them because they are now in
possession of the mill?
ATTY. SINGSON:
That's why we want to be clarified. In what capacity is Megan
entering into the picture? That's the point now that we would like
to ask them. So, whatever statement you'll be making here will
bind Megan?
ATTY. SABIG:
ATTY. SABIG:
Yes, your Honor.
COURT:
And whatever statement you made here will bind Megan?
ATTY. SABIG:
ATTY. SINGSON:
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You are in possession of the mill. [On] what authority are
you in possession, this Megan group?
ATTY. SABIG:
The doctrine of estoppel is based upon the grounds of public policy, fair
dealing, good faith and justice, and its purpose is to forbid one to speak
against his own act, representations, or commitments to the injury of one to
whom they were directed and who reasonably relied thereon. The doctrine of
estoppel springs from equitable principles and the equities in the case. It is
designed to aid the law in the administration of justice where without its aid
injustice might result. It has been applied by this Court wherever and
whenever special circumstances of a case so demand. 25
Based on the events and circumstances surrounding the issuance of
the assailed orders, this Court rules that MEGAN is estopped from assailing
both the authority of Atty. Sabig and the jurisdiction of the RTC. While it is
true, as claimed by MEGAN, that Atty. Sabig said in court that he was only
appearing for the hearing of Passi Sugar's motion for intervention and not for
the case itself, his subsequent acts, coupled with MEGAN's inaction and
negligence to repudiate his authority, effectively bars MEGAN from assailing
the validity of the RTC proceedings under the principle of estoppel.
In the first place, Atty. Sabig is not a complete stranger to MEGAN. As a
matter of fact, as manifested by EPCIB, Atty. Sabig and his law firm SABIG
SABIG & VINGCO Law Office has represented MEGAN in other cases 26 where
the opposing parties involved were also CIMICO and EPCIB. As such, contrary
to MEGAN's claim, such manifestation is neither immaterial nor irrelevant, 27
because at the very least, such fact shows that MEGAN knew Atty. Sabig.
MEGAN can no longer deny the authority of Atty. Sabig as they have
already clothed him with apparent authority to act in their behalf. It must be
remembered that when Atty. Sabig entered his appearance, he was
accompanied by Concha, MEGAN's director and general manager. Concha
himself attended several court hearings, and on December 17, 2002, even
sent a letter 28 to the RTC asking for the status of the case. A corporation
may be held in estoppel from denying as against innocent third persons the
authority of its officers or agents who have been clothed by it with ostensible
or apparent authority. 29 Atty. Sabig may not have been armed with a board
resolution, but the appearance of Concha made the parties assume that
MEGAN had knowledge of Atty. Sabig's actions and, thus, clothed Atty. Sabig
with apparent authority such that the parties were made to believe that the
proper person and entity to address was Atty. Sabig. Apparent authority, or
what is sometimes referred to as the "holding out" theory, or doctrine of
ostensible agency, imposes liability, not as the result of the reality of a
contractual relationship, but rather because of the actions of a principal or
an employer in somehow misleading the public into believing that the
relationship or the authority exists. 30 ISDHcT
One of the instances of estoppel is when the principal has clothed the
agent with indicia of authority as to lead a reasonably prudent person to
believe that the agent actually has such authority. 32 With the case of
MEGAN, it had all the opportunity to repudiate the authority of Atty. Sabig
since all motions, pleadings and court orders were sent to MEGAN's office.
However, MEGAN never questioned the acts of Atty. Sabig and even took
time and effort to forward all the court documents to him.
To this Court's mind, MEGAN cannot feign knowledge of the acts of
Atty. Sabig, as MEGAN was aware from the very beginning that CIMICO was
involved in an on-going litigation. Such fact is clearly spelled out in MEGAN's
MOA with CIMICO, to wit:
WHEREAS, CIMICO had filed a 2nd Amended Complaint for Sum
of Money, Breach of Contract and Damages with Preliminary Injunction
with a Prayer for a Writ of Temporary Restraining Order against the
NEW FRONTIER SUGAR CORPORATION, pending before Branch 68 of
the Regional Trial Court, based in Dumangas, Iloilo, Philippines, entitled
CENTRAL ILOILO MILLING CORPORATION (CIMICO) versus NEW
FRONTIER SUGAR CORPORATION (NFSC), EQUITABLE PCI BANK and
PHILIPPINE INDUSTRIAL SECURITY AGENCY docketed as CIVIL CASE NO.
02-243; 33
MEGAN had all the opportunity to assail the jurisdiction of the RTC and
yet far from doing so, it even complied with the RTC Order. With the amount
of money involved, it is beyond belief for MEGAN to claim that it had no
knowledge of the events that transpired. Moreover, it bears to stress that
Atty. Sabig even filed subsequent motions asking for affirmative relief, more
important of which is his March 27, 2003 Urgent Ex-Parte Motion 37 asking
the RTC to direct the Sugar Regulatory Administration (SRA) to release
certain quedans in favor of MEGAN on the premise that the same were not
covered by the RTC Orders. Atty. Sabig manifested that 30% of the value of
the quedans will be deposited in court as payment for accrued rentals.
Noteworthy is the fact that Atty. Sabig's motion was favorably acted upon by
the RTC. Like the CA, this Court finds that estoppel has already set in. It is
not right for a party who has affirmed and invoked the jurisdiction of a court
in a particular matter to secure an affirmative relief to afterwards deny that
same jurisdiction to escape a penalty. 38 The party is barred from such
conduct not because the judgment or order of the court is valid but because
such a practice cannot be tolerated for reasons of public policy. 39
Lastly, this Court also notes that on April 2, 2003, Atty. Sabig again
filed an Urgent Ex-Parte Motion 40 asking the RTC to direct the SRA to
release certain quedans not covered by the RTC Orders. The same was
granted by the RTC in an Order 41 dated April 2, 2003. Curiously, however,
Rene Imperial, the Plant Manager of MEGAN, also signed the April 2, 2003
RTC Order and agreed to the terms embodied therein. If Atty. Sabig was not
authorized to act in behalf of MEGAN, then why would MEGAN's plant
manager sign an official document assuring the RTC that he would deliver
30% of the value of the quedans earlier released to MEGAN pursuant to the
March 27, 2003 Order?
The rule is that the active participation of the party against whom the
action was brought, coupled with his failure to object to the jurisdiction of
the court or administrative body where the action is pending, is tantamount
to an invocation of that jurisdiction and a willingness to abide by the
resolution of the case and will bar said party from later on impugning the
court or body's jurisdiction. 42 Based on the preceding discussion, this Court
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holds that MEGAN's challenge to Atty. Sabig's authority and the RTC's
jurisdiction was a mere afterthought after having received an unfavorable
decision from the RTC. Certainly, it would be unjust and inequitable to the
other parties if this Court were to grant such a belated jurisdictional
challenge.
WHEREFORE, premises considered, the petition is DENIED. The
August 23, 2004 Decision and October 12, 2005 Resolution of the Court of
Appeals, in CA-G.R. SP No. 75789, are AFFIRMED.
SO ORDERED.
Carpio, Nachura, Abad and Mendoza, JJ., concur.
Footnotes
1.Rollo , pp. 10-46.
3.Id. at 55-57.
4.Records, Vol. 1, pp. 19-21.
5.Docketed as Civil Case No. 02-240.
6.Records, Vol. 1, pp. 9-17.
7.Id. at 98-113.
12.Id. at 705-707.
13.Id. at 745-752.
14.Rollo , pp. 139-150.
15.Id. at 149-150.
16.Records, Vol. 2, pp. 799-804.
17.Id. at 909-911.
18.Id. at 893-895.
19.Records, Vol. 3, pp. 1069-1070.
20.Rollo , pp. 159-190.
21.Id. at 52.
32.Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc. , 479
Phil. 896, 914 (2004).
37.Id. at 156-158.
38.Tijam v. Sibonghanoy, No. L-21450, April 15, 1968, 23 SCRA 29, 36.
39.La Campana Food Products, Inc. v. Court of Appeals , G.R. No. 88246, June 4,
1993, 223 SCRA 151, 157.