Sawadjaan v CA

516

SUPREME COURT REPORTS ANNOTATED

Sawadjaan vs. Court of Appeals

G. R.No . 1 41 73 5.J une8 ,2 00 5. *

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I NVESTME MENTBANK OFTHEPHI HI LI PPI NES,r e s po nde nt s . Re me di alLaw;Ac t i o ns ;Appe al s ;Theg e ne r alr ul ei st hatt her e me dyt oo bt ai nr e v e r s al ormo modi fic at i on oft hej udgme me nto nt heme me r i t si sappe al . —The gener alr ul ei st hatt he r e me d yt oo bt a i nr e v e r s a lo rmo mo d i fic a t i o no ft hej udg me me nto nt heme me r i t si sa pp e al .Thi si s t r uee v e ni ft hee r r o r ,o ro neo ft hee r r o r s ,a s c r i b edt ot hec o ur tr e n de r i ngt hej udg me me nti s i t sl ac ko fj ur i s di c t i o no v ert hes ubj e c tma mat t e r ,o rt hee xe r c i s eofpo we ri ne x c e s st he r e of ,o r gr a v eabus eo fdi s c r e t i o ni nt hefindi ng soff ac to ro fl a ws e to uti nt hede c i s i o n. Same ;Same ;Same ;I ti ss e t t l e dt hatas pe c i alc i v i lac t i o nf o rc e r t i o r ar iwi l lno tl i easa s ubs t i t ut ef o rt hel o s tr e me dyo fappe al . —Ther e c o r dss ho wt ha tpe t i t i o ne r ’ sc o uns e lr e c e i v e d t he Res ol ut i on oft he CourtofAppeal s denyi ng hi s mot i on f orr ec onsi der at i on on 27 Dec emb mber1999.Thefif t eendayr egl ame ment aryperi odt oappealunderRul e45oft heRul es ofCourtt her ef or el apsedon 11January2000.On23February2000,ov eramo mont haf t er r e c e i p to ft her e s o l ut i o n de ny i ng hi smo t i o nf o rr e c o ns i de r a t i o n,t hepe t i t i o ne rfil e d hi s pe t i t i o nf o rc e r t i o r ar i unde rRul e65.I ti ss e t t l e dt hatas pe c i alc i v i lac t i o nf o rc e r t i o r ar i wi l l no tl i ea sas u bs t i t ut ef o rt hel o s tr e me d yo fa pp e al ,a ndt ho ug ht he r ea r ei ns t a nc e swhe r e t he ext r aor di nary r eme medy of c e r t i o r ar ima yb er e s o r t e dt o de s p i t et he a v ai l a bi l i t yo fa n a ppe a l ,wefindnos p e c i a lr e a s o nsf o rma ma ki ngo uta ne x c e p t i o ni nt hi sc a s e . Co r p o r a t i o nLa w;DeFac t oCo r p o r a t i o n;Byi t sf ai l ur et os ub mi mi ti t sb y l a wso nt i me , t he AI I BPmaybec o ns i de r e dadef ac t oc o r po r at i o nwho s er i ghtt oe x e r c i s ec o r po r at epo we r smay no tb ei nq ui r e di nt oc o l l at e r al l yi n anypr i v at es ui tt owhi c hs u c hc o r po r a t i o nsma ma yb ea par t y . —TheAI I BPwasc r eat edbyRep.Ac tNo.6848.I thasama mai noffic ffic ewher ei tc onduc t s bus i ne s s ,hass har e ho l de r s ,c o r p or a t eo ffi ffic c e r s ,abo ar do fdi r e c t o r s ,as s e t s ,andpe r s o nne l .I t i s ,i nf act ,her er epr es ent ed by t he Offic e oft he Gov er nmentCor por at e Couns el ,“ t he p r i nc i p all a wo ffic ffic eo fg o v e r nme nt o wne d _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ENBANC.

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c o r po r a t i o ns ,o neo fwhi c hi sr e s p onde ntb ank. ”Att hev e r yl e as t ,b yi t sf a i l ur et o ac t o s u bmi ti t sb y l a wso nt i me ,t heAI I BPma ybec o ns i d e r e dadef c o r po r a t i o nwho s er i g ht t oe x e r c i s ec o r p o r at epo we r sma ma yno tb ei nq ui r e di nt oc o l l a t e r a l l yi na nypr i v at es ui tt o whi c hs u c hc o r p o r a t i o n sma ma yb eap ar t y . Sa me me ; Sa me me ; Ac o r po r at i o n whi c h hasf ai l e dt ofil ei t sby l a wswi wi t hi nt hepr e s c r i b e d pe r i o ddo e sno ti ps of ac t ol o s ei t spo we r sass uc h . —A c o r po r a t i o nwhi c hha sf a i l e dt ofil ei t s b y l a wswi wi t hi nt hepr e s c r i b e dp e r i o ddo e sno t i ps of ac t ol o s ei t sp o we r sa ss uc h.TheSEC Rul e so n Sus p e ns i o n/ Re v o c a t i o no ft heCe r t i fic a t eo fRe g i s t r a t i o no fCo r p o r at i o ns ,de t a i l s t hepr o c e d ur e sa ndr e me me d i e st ha tma ma yb ea v a i l e do fb e f o r ean o r d e ro fr e v o c a t i o nc a nb e i s s u e d.The r ei snos ho wi ngt ha ts uc hapr o c e dur eh asb e e ni ni t i a t e di nt hi sc a s e . Admi ni s t r at i v eLaw;Ce r t i o r ar i ;Wo r dsand Phr as e s ;Gr av eAbus eo fDi s c r e t i o n;Gr av e ab us eo fdi s c r e t i o ni mpl i e ss u c hc a pr i c i o usa ndwhi ms i c a le x e r c i s eo fj udg me me n ta se q ui v al e nt t ol ac ko fj ur i s di c t i o n,o r ,i no t he rwo r ds ,whe r et hepo we ri se x e r c i s e di n an ar b i t r a r yo r de s po t i cma ma nne rb yr e a s o no fpa s s i o no rpe r s o nalho s t i l i t y ,and i tmu mus tb es opat e n ta nd

gr o s sast oamo untt oane v as i o no fpo s i t i v edut yo rt oav i r t ualr e f us alt ope r f o r mt hedut y e nj o i ne do rt oac tatal li nc o nt e mpl at i o no fl aw. —Wefind t hatt heCSC andt hec o ur ta quoc ommi t t ed nogra veabuseofdi sc r et i on when t heysus t ai ned Sawadj aan’ sdi smi ss al f r o ms e r v i c e .Gr a v eab us eo fdi s c r e t i o ni mpl i e ss uc hc a pr i c i o usandwhi ms i c a le x e r c i s eo f j udgme ntase qui v al e ntt ol ac ko fj ur i s di c t i o n,o r ,i no t he rwo r ds ,whe r et he po we ri s e x e r c i s e di na na r bi t r a r yo rde s p o t i cma nne rb yr e a s o no fpa s s i o no rpe r s o na lho s t i l i t y ,a nd i tmus tb es opa t e nta ndg r o s sa st oamo untt oane v a s i o no fp o s i t i v edut yo rt oav i r t ua l r e f us a lt ope r f o r mt hed ut ye nj o i ne do rt oa c ta ta l li nc o nt e mp l a t i o no fl a w.Ther e c o r ds s h o wt ha tt her e s p o nd e nt sd i dno neo ft he s e ; t he yac t e di na c c o r d anc ewi t ht hel a w.

SPECI ALCI VI LACTI ON i nt heSupr emeCour t .Cer t i or ar i . Thef ac t sa r es t at e di nt heo pi ni o no ft heCo ur t . Samue lS.Samue l a f o rpe t i t i o ne r . Pang al ang anandPi ne da c o uns e lf o rr e s p o nde nt . 518

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CHI CONAZARI O J ,. : Thi si sape t i t i o nf o rc e r t i o r ar i unde rRul e6 5o ft heRul e so fCo ur to ft heDe c i s i o no f 1

t heCourtofAppeal so f30Mar c h1999affir mi ngRes ol ut i onsNo.944483andNo. 9 5 2 7 54o ft heCi v i lSe r v i c eCo mmi s s i o n( CSC)d at e d11Aug us t1 9 94a nd1 1Ap r i l 1 9 95 ,r e s p e c t i v e l y ,whi c hi nt ur na ffir me d Re s o l ut i o n No .2 3 09 o ft he Bo a r do f Di r e c t o r so ft heAl Ama na hI s l a mi cI n v e s t me n tBa nk o ft hePhi l i p pi ne s( AI I BP) da t e d1 3De c e mb e r1 99 3,findi ngpe t i t i o ne rg ui l t yo fDi s h o ne s t yi nt hePe r f o r ma nc e o fOffic i a lDut i e sa nd/ o rCo nduc tPr e j udi c i alt ot heBe s tI nt e r e s to ft heSe r v i c ea nd d i s mi s s i ng hi m f r o m t he s e r v i c e ,a nd i t s Re s o l ut i o no f 15 De c e mbe r 19 99 2

di s mi s s i ngpe t i t i o ne r ’ sMo t i o nf o rRe c o ns i de r a t i o n. There c or dsshow t hatpe t i t i onerSappar iK.Sawadj aan wasamong t hefir s t e mp l o y e e so ft hePhi l i p pi neAma na hBa nk( PAB)whe ni twa sc r e a t e db yv i r t ueo f Pr e s i d e nt i a lDe c r e eNo .2 64o n0 2Aug us t1 97 3.Her o s et hr o ug ht her a nks , wo r ki ng hi swa yupf r o m hi si ni t i a lde s i g nat i o na ss e c ur i t yg ua r d,t os e t t l i ngc l e r k,b oo k ke e pe r ,c r e di ti nv e s t i g at o r ,pr o j e c t anal y s t ,a ppr a i s e r / i ns pe c t o r ,a nd e v ent ual l y , l o ansanal y s t . 3

I n Fe b r ua r y1 988 ,whi l es t i l lde s i g na t e dasa ppr a i s e r / i nv e s t i g at o r ,Sa wadj a an wa sa s s i g ne dt oi ns p e c tt hep r o p e r t i e so ffe r e da sc o l l a t e r a l sb y Co mp r e s s e d Ai r Ma c h i ne r i e sa ndEq ui p me ntCo r p o r a t i o n( CAMEC)f o rac r e d i tl i neo fFi v eMi l l i o n Pe s o s( P5 , 0 00 , 0 00 . 0 0) .Thepr o p e r t i e sc o n s i s t e do ft wopa r c e l so fl and c o v e r e db y Tr a ns f e rCe r t i fic a t e so fTi t l e( TCTs )No .N1 30 67 1a ndNo .C5 25 76 .Ont heb as i so f hi sI ns p e c t i o na ndAp pr a i s a lRe p o r t , t hePAB g r a nt e dt hel o a na pp l i c a t i o n .Whe n 4

t hel o a nma t ur e do n _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Do c k e t e dasCAG. R.SPNo .3 7 89 1 ;Pe n ne db yAs s o c i a t eJ us t i c eRo me oA.Br a wne r ,wi t hAs s o c i a t e

1

J us t i c e sAng e l i naSa ndo v a l Gut i e r r e za ndMa r t i nS.Vi l l a r a ma ,J r . ,c o n c ur r i ng . Ro l l o ,p.37 .

2

Pe t i t i o ne r ’ sSe r vi c eRe c o r d,Ro l l o ,p.61 .

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Ro l l o ,p.64.

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17May1989,CAMECr eques t edane xt ensi onof180days ,butwasgr ant edonl y120 da y st or e p a yt hel o a n. 5

I nt heme a nt i me , Sa wa dj a a nwa sp r o mo t e dt oLo a nsAna l y s tIo n0 1J ul y1 9 8 9. 6

I n January1990,Congre s spas s edRepubl i cAc t6848c r eat i ngt heAI I BP and r e p eal i ngP. D.No .264( whi c hc r e at e dt hePAB) .Al las s e t s ,l i abi l i t i e sandc a pi t al a c c o u nt so ft hePAB we r et r a ns f e r r e dt ot heAI I BP , a ndt hee x i s t i ngp e r s o nne lo f 7

t hePAB we r et oc o nt i nuet od i s c ha r g et he i rf unc t i o nsunl e s sd i s c ha r g e d . I nt he 8

e ns u i ngr e o r g a ni z a t i o n,Sa wa dj a anwa sa mo ngt hep e r s o nne lr e t a i ne db yt heAI I BP . Whe nCAMEC f a i l e dt opa yde s p i t et heg i v e ne x t e n s i o n ,t heb ank,no wr e f e r r e d t oa st heAI I BP ,d i s c o v e r e dt ha tTCT No .N1 3 06 7 1 wa ss p ur i o u s ,t hep r o p e r t y de s c r i b e dt he r e i nno ne x i s t e nt ,a ndt ha tt hepr o p e r t yc o v e r e db yTCT No .C5 25 76 ha dapr i o re x i s t i ngmo r t g ag ei nf a v o ro fo neDi v i naPa bl i c o . On0 8J une19 9 3,t heBo a r do fDi r e c t o r so ft heAI I BP c r e a t e da nI n v e s t i g a t i ng Commi t t eet ol oo ki nt ot he CAMEC t r ansac t i on,whi c h had c os tt he bank Si x Mi l l i o n Pe s o s( P6 , 0 00 , 0 00 . 00 )i nl o s s e s .The s ubse quent e ve nt s ,as f ound and 9

d e c i d e dup o nb yt heCo ur to fAp pe a l s , ar easf o l l o ws : 10

On18June1993,pet i t i onerr ec ei ve damemor andum f r om I s l ami cBank[ AI I BP]Chai r man Rober t oF.DeOc ampoc hargi nghi m wi t hDi s honest yi nt hePer f or manc eofOffic i alDut i es a nd/ o rCo nduc tPr e j udi c i a lt ot heBe s tI nt e r e s to ft heSe r v i c ea ndpr e v e nt i v e l ys us p e ndi ng hi m. I n hi smemor andum dat ed 8 Sept ember1993,pet i t i oneri nf or med t heI nves t i gat i ng Co mmi t t e et ha th ec o ul dno ts u bmi thi ms e l ft ot hej ur i s _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ De c i s i o no ft heAI I BPI n v e s t i g a t i ngCo mmi t t e ed a t e d3De c e mb e r1 9 93 ,CARo l l o , p .6 8.

5

Pe t i t i o ne r ’ sSe r vi c eRe c o r d,Ro l l o ,p.61 .

6

Se c .4 8,Re p ub l i cAc tNo . 6 84 8.

7

Se c .4 9,Re p ub l i cAc tNo . 6 84 8.

8

De c i s i o no ft heAI I BPI n v e s t i g a t i ngCo mmi t t e ed a t e d3De c e mb e r1 9 93 ,CARo l l o , p .4 8.

9

Ro l l o ,pp.3 036.

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di c t i o no ft heCo mmi t t e ebe c a us eo fi t sal l e g edpar t i al i t y .Fo rhi sf ai l ur et oappe arbe f o r e t he hear i ng s e ton 17 Sept ember1993,af t ert he hear i ng of13 Sept ember1993 was p o s t po ne d due t ot he Ma ni f e s t a t i o no fe v e n da t e fil e db y pe t i t i o ne r ,t he I nv e s t i g a t i ng Co mmi t t e ede c l a r e dpe t i t i o ne ri nd e f a ul ta nd t hepr o s e c ut i o n wa sa l l o we dt opr e s e n ti t s e v i d e n c e e xpar t e . On0 8De c e mb e r1 9 93 ,t heI n v e s t i g a t i ngCo mmi t t e er e nd e r e dad e c i s i o n,t hepe r t i ne nt po r t i o nso fwhi c hr e adsa sf o l l o ws : “ I nv i e wo fr e s p o nd e ntS AWADJ AAN’ sa b j e c tf a i l ur et ope r f o r m hi sd ut i e sa nda s s i g ne dt a s k sas a ppr a i s e r / i ns p e c t o r ,whi c hr e s ul t e dt ot hepr e j ud i c ea nds u bs t a nt i a ld ama get ot heBa nk,r e s p o nd e nt s h o ul db ehe l dl i a bl et he r e f o r e .Att hi sj unc t ur e ,ho we v e r ,t heI n v e s t i g at i ngCo mmi t t e ei so ft he c o n s i d e r e do p i ni o nt ha thec o u l d no tb ehe l dl i a bl ef o rt hea dmi ni s t r a t i v eo ffe ns eo fd i s h o ne s t y

c o ns i d e r i ngt hef a c tt ha tn oe v i d e nc ewa sa dd uc e dt os h o wt ha th epr o fit e do rb e n e fit e df r o mb e i ng r e mi s si nt hepe r f o r ma nc eo fhi sd ut i e s .Ther e c o r di sb e r e f to fa nye v i d e nc ewhi c hwo ul ds h o wt ha t her e c e i v e da nya mo unti nc o n s i d e r a t i o nf o rhi sno np e r f o r ma nc eo fhi so ffic i a ld ut i e s . Thi sno t wi t hs t a ndi ng ,r e s p onde ntc a nno te s c a pel i a bi l i t y .Asadv e r t e dt oe ar l i e r ,hi sf a i l ur et o p e r f o r m hi so ffic i a ld ut i e sr e s u l t e dt ot hepr e j ud i c ea nds u bs t a nt i a ld ama get ot heI s l a mi cBa nkf o r whi c hhes houl dbehel dl i abl ef ort headmi ni s t r at i veoffens eo fCONDUCTPREJUDI CI ALTO THE BESTI NTERESTOFTHESERVI CE. Pr emi s es c ons i der ed,t he I nve s t i gat i ng Commi t t ee r ec ommends t hat r es pondent SAPPARI SAWADJ AAN beme t e dt hepe nal t yo fSI X( 6)MONTHSandONE( 1)DAY SUSPENSI ON f r o mo ffic e i na c c o r d anc ewi t ht heCi v i lSe r v i c eCo mmi s s i o n ’ sMe mo r a nd um Ci r c u l a rNo .3 0 ,Se r i e so f1 98 9 . ”

On 13 Dec ember1993,t he Boar d ofDi r ec t or soft he I s l ami cBank [ AI I BP]adopt ed Re s o l ut i o nNo .2 30 9find i ngp e t i t i o ne rg ui l t yo fDi s h o ne s t yi nt hePe r f o r ma nc eo fOffic i a l Dut i e sand / o rCo nd uc tPr e j ud i c i a lt ot heBe s tI nt e r e s to ft heSe r v i c ea nd i mp o s i ngt he pe na l t yo fDi s mi s s a lf r o mt heSe r v i c e . On r e c o ns i d e r a t i o n,t heBo a r do fDi r e c t o r so ft heI s l a mi cBa nk [ AI I BP]a do p t e dt he Re s o l ut i o nNo .2 33 2o n2 0Fe b r u ar y1 99 4r e d uc i ngt hepe na l t yi mp o s e do np e t i t i o ne rf r o m di s mi s s a lt os us p e ns i o nf o rape r i o do fs i x( 6 )mo nt hsa ndo ne( 1 )da y . 521

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On2 9Ma r c h1 99 4,pe t i t i o ne rfi l e dano t i c eo fa ppe a lt ot heMe r i tSy s t e m Pr o t e c t i o nBo a r d ( MSPB) . On11Augus t1994,t heCSC adopt edRes ol ut i onNo.944483di smi ss i ngt heappealf or l ac kofmer i tandaffir mi ngRes ol ut i onNo.2309dat ed13Dec ember1993oft heBoar dof Di r e c t o r so fI s l a mi cBa nk. On1 1Ap r i l1 99 5,t heCSC a do p t e dRe s o l ut i o nNo .9 52 57 4d e ny i ngp e t i t i o ne r ’ sMo t i o n f o rRe c o ns i de r a t i o n. On16June1995,t hei ns t antpet i t i onwasfil edwi t ht heHonor abl eSupre meCourton t hef o l l o wi nga s s i g nme nto fe r r o r s : I .Pub l i cr e s p o nd e ntAl Ama na hI s l a mi cI n v e s t me ntBa nko ft hePhi l i p pi ne sh a sc o mmi t t e dag r a v e a bus eo fd i s c r e t i o na mo unt i ng t oe x c e s so rl a c ko fj ur i s d i c t i o n whe ni ti ni t i a t e da nd c o n duc t e d a dmi ni s t r a t i v ei nv e s t i g at i o nwi t ho utav al i dl ypr o mul g at e dr ul e so fpr o c e dur ei nt headj udi c a t i o no f a dmi ni s t r a t i v ec a s e sa tt heI s l a mi cBa nk. I I .Pub l i cr e s p o nd e ntCi v i lSe r v i c e Co mmi s s i o n ha sc o mmi t t e dag r a v ea b us eo fd i s c r e t i o n a mo unt i ngt ol a c ko fj ur i s d i c t i o nwhe ni tp r e ma t u r e l ya ndf a l s e l ya s s ume dj ur i s d i c t i o no ft hec a s e no ta pp e al e dt oi t ,b utt ot heMe r i tSy s t e m Pr o t e c t i o nBo a r d . I I I .Bot ht he I s l ami c Bank and t he Ci vi lSer vi c e Commi s s i on er r ed i n findi ng pet i t i oner Sa wa dj a ano fha v i ngde l i b er a t e l yr e po r t i ngf a l s ei nf o r ma t i o na ndt he r e f o r eg ui l t yo fDi s ho ne s t yand Co nduc tPr e j udi c i a lt ot heBe s tI nt e r e s to ft heSe r v i c ea ndpe na l i z e dwi t hdi s mi s s a lf r o mt hes e r v i c e .

On 04Jul y1995,t heHonor abl eSupr emeCour E t n Banc r e f e r r e dt hi spe t i t i o nt ot hi s Ho n o r a b l eCo ur tp ur s u antt oRe v i s e dAd mi ni s t r a t i v eCi r c ul a rNo .1 9 5,whi c ht o o ke ffe c t on01June1995. “ Wedono tfindme r i t[ i n]t hepe t i t i o n. Ane ntt hefir s tas s i gnme nto fe r r o r ,ar e adi ngo ft her e c o r dswo ul dr e v e alt hatpe t i t i o ne r r a i s e sf o rt hefir s tt i met heal l e g e df a i l ur eo ft heI s l a mi cBa nk[ AI I BP]t opr o mul g at er ul e s o fpr o c e d ur eg o ve r ni ngt headj udi c a t i o nanddi s po s i t i o no fadmi ni s t r a t i v ec as e si nv o l v i ngi t s p e r s o n ne l .I ti sar u l et h ati s s ue sno tpr o pe r l yb r o ug hta ndv e nt i l a t e db e l o w ma yno tb e r a i s e df o rt hefir s tt i meo na ppe a l ,s a v ei ne x c e p t i o na lc i r c ums t anc e s( Cas o l i t a,Sr .v .Co ur t of Appe al s ,27 5 SCRA 25 7) no ne o f whi c h, ho we v e r , o bt ai n i n t hi s c as e . Gr ant i ngarguendo t ha tt hei s s uei so fs u c he x c e p t i o na lc ha r a c t e rt ha tt heCo ur tma yt a ke

c o g ni z a nc eo ft he s a me ,s t i l l ,i tmus tf a i l .Se c t i o n2 6o fRe p ub l i cAc tNo .6 84 8( 1 99 0) p r o v i d e s : 522

522


Sawadjaan vs. Court of Appeals P we r so ft heBo ar d. r o a de s tp o we r st oma na g e Se c t i o n2 6 .o —TheBo a r do fDi r e c t o r ss ha l lha v et heb t heI s l a mi cBa nk,xxxTheBo ar ds ha l la do p tp ol i c yg ui de l i ne sne c e s s a r yt oc a r r yo ute ffe c t i v e l yt h e pr o v i s i o nso ft hi sChar t e raswe l lasi nt e r nalr ul e sa ndr e g ul at i o ns ne c e s s a r yf o rt h ec o nduc to fi t s I s l a mi cba nki ng b us i ne s sa nd a l lma t t e r sr e l a t e d p t oe r s o nne lo r g ani z at i o n,o ffic ef unc t i o nsand s al ar yadmi ni s t r at i o n.( I t a l i c sour s )

On t he ot herhand,I t em No.2 ofExec ut i veOr derNo.26 ( 1992)ent i t l ed “ Pr es c r i bi ng Pr o c e d ur ea ndSa nc t i o nst oEns u r eSp e e dyDi s p o s i t i o no fAd mi ni s t r a t i v eCa s e s ”d i r e c t s , “ a l la dmi ni s t r a t i v ea ge nc i e s ”t o“ a do pta ndi nc l udei nt he i rr e s p e c t i v eRul e so fPr o c e dur e ” pr o v i s i o nsde s i g ne dt oa bb r e v i a t eadmi ni s t r a t i v epr o c e e di ng s . Theabo v et wo( 2 )pr o v i s i o nsr e l i e dupo nb ype t i t i o ne rd o e sno tr e q ui r et heI s l a mi cBa nk [ AI I BP]t op r o mul g at er ul e so fpr o c e d ur eb e f o r eadmi ni s t r a t i v edi s c i p l i nema yb ei mp o s e d upo ni t se mp l o y e e s .Thei nt e r n alr u l e so fp r o c e dur e so r da i ne dt obea do p t e db yt heBo a r d r e f e r st ot ha tne c e s s a r yf o rt hec o nd uc to fi t sI s l a mi cba nki ngb us i ne s sa nd a l lma t t e r s r e l a t e dt o“ pe r s o n ne lo r g a ni z a t i o n,o ffic ef unc t i o nsa nd s a l a r ya dmi ni s t r a t i o n. ”On t he c ont r ary ,Sec t i on 26 ofRA 6848 gi vest heBoar d ofDi r ec t or soft heI s l ami cBank t he “ b r o a d e s tp o we r st oma na g et heI s l a mi cBa nk. ”Thi sg r a nto fb r o a dpo we r swo ul db eani d l e c e r e mo nyi fi two ul dbepo we r l e s st odi s c i pl i nei t se mpl o y e e s . The s e c o nd a s s i g nme nto fe r r o rmus tl i k e wi s ef a i l .The i s s ue i sr a i s e df o rt he fir s t t i mev i at hi spe t i t i o nf o rc e r t i o r ar i .Pe t i t i o ne rs ubmi t t e dhi ms e l ft ot hej ur i s di c t i o no ft he CSC.Al t ho u gh he c o ul d ha v er a i s e dt he a l l e g e dl a c ko fj ur i s d i c t i o ni n hi sMo t i o nf o r Re c o ns i de r a t i o no fRe s o l ut i o nNo .9 44 48 3o ft heCSC,hedi dno td os o . Byfil i ngt heMo t i o n f o rRe c o ns i de r a t i o n,hei se s t o ppe df r o m de ny i ngt heCSC’ sj ur i s d i c t i o no v e rhi m,a si ti s s et t l edr ul et hata par t ywhoasksf oran affirmat i ver el i efc annotl at eron i mpugn t he a c t i o no ft het r i b una la swi t ho utj ur i s d i c t i o na f t e ran a dv e r s er e s ul twa sme t e dt ohi m. Al t ho ughj ur i s di c t i o no v e rt hes ubj e c tmat t e ro fac as ema ybeo bj e c t e dt oatanys t ageo ft he pr o c e e di ng se ve no nappe al ,t hi spar t i c ul arr ul e ,ho we v e r ,me anst hatj ur i s di c t i o nali s s ue s i nac a s ec a nb er a i s e do nl yd ur i ngt hepr o c e e d i ng si ns a i dc a s eandd ur i ngt heap pe a lo f s a i dc a s e A (r ago nv .Co ur to fAppe al s ,2 70SCRA 6 03 ) .Thec a s eatb a ri sape t i t i o n[ f o r ] c e r t i o r a r ia ndno ta na ppe al . Butev enont hemer i t st heargumentmus tf al t er .I t em No.1ofCSC Res ol ut i onNo.932 38 7da t e d2 9J une1 9 93 ,p r o v i d e s : De c i s i o nsi na dmi ni s t r a t i v ec a s e si nv o l v i ngo ffic i a l sande mpl o y e e so ft hec i v i ls e r v i c eappe al a bl et o t heCommi s s i onpur s uantt o 523

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Sawadjaan vs. Court of Appeals i . e . , Se c t i o n4 7o fBo o kV o ft heCo d e( Ad mi ni s t r a t i v eCo d eo f1 98 7)i nc l ud i ngp e r s o n ne la c t i o nss uc h a sc o nt e s t e da pp o i nt me nt ss h al lno wb ea pp e al e dd i r e c t l yt ot heCo mmi s s i o nandno tt ot heMSPB.

I R n ube ne c i av .Ci v i lSe r v i c eCo mmi s s i o n,2 44SCRA6 40 ,6 51 ,i twa sc a t e g o r i c a l l yhe l d: ...Thef unc t i o nso ft heMSPB r e l a t i ngt ot hed e t e r mi na t i o no fa dmi ni s t r a t i v ed i s c i p l i na r yc a s e s we r e , i no t he rwo r d s ,r e a l l o c a t e dt ot h eCo mmi s s i o ni t s e l f .

Bet hatasi tma y ,“ ( i ) ti sho r nbo o kdo c t r i net h ati no r d er‘ ( t ) oas c e r t ai nwhe t he rac o ur t ( i nt hi sc a s e ,admi ni s t r a t i v eag enc y )hasj ur i s di c t i o no rno t ,t hepr o v i s i o nso ft hel a ws ho ul d b ei nq ui r e di nt o . ’Fur t he r mo r e ,‘ t hej ur i s d i c t i o no ft hec o ur tmus ta ppe a rc l e a r l yf r o mt he s t at ut el a wo ri twi l lno tb ehe l dt oe xi s t . ’ A ”(z ar c o nv .Sandi g anbay an,268SCRA747 ,757)

Fr o mt hepr o v i s i o no fl a wa bo v e c i t e d,t heCi v i lSe r v i c eCo mmi s s i o nc l e ar l yha sj ur i s d i c t i o n o v e rt heAdmi ni s t r a t i v eCa s ea ga i ns tpe t i t i o ne r . Ane ntt he t hi r d as s i gnme nto fe r r o r ,we l i ke wi s e do no tfind me r i ti n pe t i t i o ne r ’ s pr o po s i t i o nt hathes ho ul dno tbel i abl e ,asi nt hefir s tpl ac e ,hewasno tq ual i fie dt ope r f o r m t he f unc t i o ns o fa pp r a i s e r / i n ve s t i g at o rb e c a us e he l a c k e dt he ne c e s s a r yt r a i ni ng a nd e x pe r t i s e ,a ndt he r e f o r e ,s ho ul dno tha v ebe e nf o unddi s ho ne s tb yt heBo a r do fDi r e c t o r so f I s l ami c Bank [ AI I BP]and t he CSC.Pet i t i oner hi ms el fadmi t st hat t he pos i t i on of a pp r a i s e r / i ns p e c t o ri s“ o ne o ft he mo s ts e r i o us [ a nd ]s e ns i t i v ej o bi nt he b anki ng o p e r a t i o ns . ”Hes ho ul dha v eb e e na wa r et ha ta c c e p t i ngs u c had e s i g na t i o n,hei so b l i g e dt o per f or m t he t as k at hand by t he e xe r c i s eo f mo r et han or di nar y pr udenc e . As a ppr a i s e r / i nv e s t i g a t o r ,he i se x p e c t e d,a mo ng o t he r s ,t oc he c kt he a ut he nt i c i t yo ft he d o c u me nt sp r e s e nt e db yt heb o r r o we rb yc o mp ar i ngt he m wi t ht heo r i g i na l so nfil ewi t ht he p r o p e rg o v e r n me nto ffic e .Hes h o ul dha v ema dei ts u r et ha tt het e c hni c a ld e s c r i p t i o nsi nt he l o c a t i o np l a no nfil ewi t ht heBur e a uo fLa nd so fMa r i ki na ,j i b ewi t ht ha ti ndi c a t e di nt he TCTo ft hec o l l a t e r a lo ffe r e db yCAMEC,a ndt ha tt hemo r t g a g ei nf a v o ro ft heI s l a mi cBa nk wasdul yannot at edatt hebac koft heco pyoft heTCT keptbyt heRegi s t erofDeedsof Ma r i ki na .Thi s ,p e t i t i o ne rf a i l e dt od o ,f o rwhi c hhemus tb ehe l dl i a bl e .Tha thed i dno t pr o fitf r o m hi sf a l s er e p o r ti so fnomo me nt .Ne i t he rt hef a c tt ha ti twa sno tde l i b er a t eo r wi l l f ul ,de t r a c t sf r o mt hena t u r eo ft hea c ta sd i s h o ne s t .Wha ti sap pa r e nti shes t a t e d s o me t hi ngt ob eaf a c t ,whe nher e a l l ywa sno ts u r et ha ti twa ss o . 524

524



WHEREFORE,abo vepr emi s esc ons i der ed,t he i ns t antPe t i t i on i sDI SMI SSED,and t he a s s a i l e dRe s o l ut i o nso ft heCi v i lSe r v i c eCo mmi s s i o na r eh e r e b yAFFI RMED. ”

On 24Mar c h 1999,Sawadj aan’ sc ouns elno t i fiedt hec ourta q uoo fhi sc ha ng eo f a d d r e s s , buta ppar e nt l yne g l e c t e dt ono t i f yhi sc l i e nto ft hi sf ac t .Thus ,o n23Jul y 11

1 99 9,Sa wa dj a an,b yhi ms e l f ,fil e daMo t i o nf o rNe w Tr i a l i nt heCo ur to fAp pe a l s 12

b as e do nt hef o l l o wi ngg r o unds :f r a ud,a c c i de nt ,mi s t a keo re x c us a bl ene g l i g e nc e a ndne wl ydi s c o v e r e de v i de nc e .Hec l a i me dt ha theha dr e c e nt l yd i s c o v e r e dt ha ta t t he t i me hi s empl o ymentwas t er mi nat ed,t he AI I BP had notye tadopt ed i t s c o r po r a t eb y l a ws .He a t t a c he d a Ce r t i fic a t i o n by t he Sec ur i t i esand Exc hange 13

Commi s s i on( SEC)t hati twasonl yon27May1992t hatt heAI I BP s ubmi t t edi t s d r a f tb y l a wst ot heSEC,a nd t ha ti t sr e g i s t r a t i o n wa sb e i ng he l di na be y a nc e p e nd i ngc e r t a i nc o r r e c t i o n sb e i ngma det he r e o n .Sa wa dj a ana r g u e dt ha ts i nc et he AI I BPf ai l e dt ofil ei t sb y l a wswi t hi n60da y sf r o mt hepas s ag eo fRe p.Ac tNo .6848, a sr e q ui r e db ySe c .5 1o ft hes a i dl a w,t heb anka ndi t ss t o c kho l de r sha d“ a l r e a dy f o r f e i t e di t sf r a nc hi s eo rc har t e r ,i nc l udi ng i t sl i c e ns et oe x i s tand o pe r a t ea sa c o r po r at i o n, ”andt husnol o ng e rha v e“ t hel e g als t andi ngandpe r s o nal i t yt oi ni t i at e 14

ana dmi ni s t r a t i v ec as e . ” Sa wa dj a an’ sc o u ns e ls u bs e q ue nt l ya do p t e dhi smo t i o n,b utr e q ue s t e dt ha ti tb e t r e a t e da sa mo t i o nf o rr e c o ns i de r a t i o n. Thi smo t i on wasdeni ed byt hec ourta 15

q uo i ni t sRe s o l ut i o no f1 5De c e mb e r1 9 99 . 16

St i l ldi s he ar t e ne d,Sa wadj aanfil e dt hepr e s e ntpe t i t i o nf o rc e r t i o r ar i underRul e 6 5o ft heRul e so fCo ur tc ha l l e ng i ngt heab o v eDe c i s i o na ndRe s o l ut i o no ft heCo ur t o fAp pe a l so nt heg r o u ndt ha tt hec o u r taquoe r r e d :i )i ni g no r i ngt hef ac t sand e v i de nc e st ha t

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ CARo l l o ,p .1 71 .

1 1

CARo l l o ,p p.1 75 1 93 .

1 2

Da t e d19Oc t o b e r1 9 9 3,CARo l l o ,p p.1 9 6.

1 3

CARo l l o ,p .1 94 .

1 4

CARo l l o ,p .2 00 .

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CARo l l o ,p .2 05 .

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t heal l e g edI s l ami cBankhasnov al i db y l a ws ;i i )i ni g no r i ngt hef ac t sande v i de nc e s t hatt heI s l ami cBa nk l o s ti t sj ur i di c a lpe r s o na l i t ya sa c o r po r a t i o no n1 6 Apr i l 1 99 0;i i i )i ni g no r i ngt hef a c t sande v i de nc e st hatt hea l l e g e dI s l a mi cBanka ndi t s a l l e g e dBo ar do fDi r e c t o r sh av enoj ur i s d i c t i o nt oac ti nt hema nne rt he ydi di nt he a bs e n c eo fa v a l i db y l a ws ;i v )i n no tc o r r e c t i ng t he a c t so ft he Ci v i lSe r v i c e Co mmi s s i o n whoe r r o n e o us l yr e n de r e dt hea s s a i l e dRe s o l ut i o n sNo .9 4 4 4 83a nd No .9 52 75 4a sar e s ul to ff r aud,f a l s i fic a t i o na nd/ o rmi s r e pr e s e nt a t i o nsc o mmi t t e d b yFa r o u kA.Ca r p i z oa ndhi sg r o up ,i nc l ud i ngRo b e r t oF .d eOc a mp o ;v )i na ffir mi ng a n unc o n s c i o na bl y har s ha nd/ o re x c e s s i v epe na l t y ;a nd v i )i nf a i l i ng t oc o n s i de r ne wl ydi s c o v e r e de v i de nc eandr e v e r s ei t sde c i s i o nac c o r d i ng l y . par t e Subs equent l y , pet i t i oner Sawadj aan fil ed an E “x Ur ge nt Mo t i o n f o r Addi t i o nalEx t e ns i o no fTi met oFi l eaRe pl y( t ot heCo mme nt so fRe s po nde ntAl AmanahI nv e s t me ntBanko ft hePhi l i ppi ne s ) , Re pl y( t oRe s p o nde nt ’ sCo ns o l i da t e d 17

Co mme nt , )andRepl y( t ot heAl l eg edComment so fRes pondentAl AmanahI s l ami c 18

Banko ft hePhi l i ppi ne s ) . ”On1 3Oc t o b e r2 0 00 ,hei nf o r me dt hi sCo u r tt ha theha d 19

t e r mi na t e dhi sl a wy e r ’ ss e r v i c e s ,a nd,b yhi ms e l f ,pr e p ar e da ndfil e dt hef o l l o wi ng : 1 )Mo t i o nf o rNe wTr i a l ;2 )Mo t i o nt oDe c l a r eRe s p o nde nt si nDe f a ul ta nd / o rHa v i ng 20

Wa i v e dt he i r Ri g ht st oI nt e r p o s e Ob j e c t i o nt o Pe t i t i o n e r ’ s Mo t i o nf o r Ne w Tr i al ;3 E )x Par t e Ur g e n tMo t i o n st oPuni s hAt t o r ne y sAma doD.Va l d e z ,El p i d i oJ . 21

Ve g a,Al daG.Re y e s ,Do mi nado rR.I s i do r o ,Jr . ,andOdi l o n A.Di azf o rBe i ngi n Co n t e mp to fCo u r t& t oI nhi b i tt he mf r o m Ap pe a r i ngi nt hi sCa s eUnt i lt he yCa n Pr e s e ntVa l i d Ev i d e nc eo fLe g a lAut ho r i t y ;4 )Op po s i t i o n/Re p l y( t oRe s p o nd e nt 22

AI I BP’ sAl l e g e dCo mme nt ) ;5 E )x Par t e 23

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Da t e d1 5J une2 00 0,Ro l l o ,p p.1 40 1 43 .

1 7

Da t e d1June2 00 0,Ro l l o ,p p.1 4 41 6 6.

1 8

Da t e d1J ul y20 00 ,Ro l l o ,p p.1 68 1 97 .

1 9

Ro l l o ,pp.2 03 2 38 .

2 0

Da t e d9Ma r c h2 0 01 ,Ro l l o ,p p.2 6 02 62 .

2 1

Da t e d2 1Oc t o b e r2 0 0 1,Ro l l op p.2 87 2 93 .

2 2

Da t e d2 7Oc t o b e r2 00 1,Ro l l o ,p p.2 94 3 13 .

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Ur g e n tMo t i o nt oPuni s hAt t y .Re y n a l d oA.Pi ne d af o rCo n t e mp to fCo u r ta ndt he I s s u a nc eo faCo mmi t me n tOr d e r / Wa r r a ntf o rHi sAr r e s t ; 6 )Re pl y / Oppo s i t i o n( To 24

t heFo r ma lNo t i c eo fWi t hd r a wa lo fUnd e r s i g ne dCo uns e la sLe g a lCo uns e lf o rt he Res pondent I s l ami c Bank wi t h Oppos i t i on t o Pe t i t i oner ’ s Mo t i on t o Puni s h Under s i gned Couns elf orCont emptofCour tf ort he I s s uanc e ofa Warr antof Ar r e s t ) ;7) Memor andum f or Pe t i t i oner ;8 ) Op po s i t i o nt o So l Ge n ’ s Mo t i o nf o r 25

26

Cl a r i fic a t i o n wi t h Mo t i o nf o rDe f a ul ta nd/ o rWa i v e ro fRe s p o nd e nt st oFi l et he i r Me mo r andum;9 )Mo t i o nf o rCo nt e mp to fCo ur tand I nhi b i t i o n/ Di s q u al i fic a t i o n 27

wi t hOppos i t i ont oOGCC’ sMo t i onf orExt ensi onofTi met oFi l eMemor andum;10) 28

Mo t i o nf o rEnf o r c e me nt( I nDe f e ns eo ft heRul eo fLa w) ;1 1)Mo t i o na ndOp po s i t i o n 29

( Mo t i ont oPuni s hOGCC’ sAt t or ne ysAmadoD.Val dez ,Ef r enB.Gonzal es ,Al daG. Re y e s ,Od i l o nA.Di a zandDo mi na do rR.I s i do r o ,J r . ,f o rCo nt e mp to fCo ur ta ndt he I s s uance of a War r ant f or t hei r Ar r es t ; and Opposi t i on t ot hei r Al l eg ed “ Mani f e s t at i o n and Mo t i o n” Dat e d Febr uar y 5, 2002 ) ;12) Mo t i o n f o r 30

Re c o ns i d e r a t i o no fI t e m( a )o fRe s o l ut i o nda t e d5Fe b r ua r y2 00 2wi t hSup pl e me nt a l Mo t i o nf or Co nt e mpt o fCo urt ;1 3 ) Mo t i o nf o r Re c o n s i d e r a t i o no fPo r t i o no f 31

Re s o l ut i on Dat e d 12 Mar c h 2002; 14 E )x Par t eUr gentMo t i on f orExt ensi on of 32

Ti met oFi l eRe pl yMe mo r andum ( To :CSC andAI I BP’ sMe mo r andum) ;1 5)Re p l y 33

Me mo r andum ( To: CSC’ sMe mo r andum)Wi t h Ex Par t e Ur g e ntMo t i o nf o rAd di t i o na l Ex t e ns i o no ft i met oFi l e _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Da t e d1 8Oc t o b e r2 00 1,Ro l l o ,p p.3 14 3 18 .

2 4

Da t e d4De c e mb e r2 0 0 1,Ro l l o ,p p.3 25 3 39 .

2 5

Da t e d7Ja nua r y2 00 2,Ro l l o ,p p.3 49 3 81 .

2 6

Da t e d2 0J anua r y2 00 2,Ro l l o ,p p.3 8 23 8 8.

2 7


2 8

Da t e d0 5Fe b r ua r y20 02 , .Ro l l o ,pp .4 05 4 11 .

2 9


3 0

Da t e d08Ap r i l2 00 2,Ro l l o ,pp .4 19 4 29 .

3 1

Da t e d12Ma y2 0 02 ,Ro l l o ,p p.4 3 04 3 4.

3 2

Da t e d0 8No v e mb e r2 0 0 2 ,Ro l l o ,p p.4 8 6 4 8 9.

3 3

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Re pl yMe mo r andum ( To :AI I BP’ sMe mo r andum) ; and16)Re pl yMe mo r andum ( To : 34

OGCC’ sMe mo r andum f o rRe s po ndentAI I BP) . 35

Pe t i t i o ne r ’ se ffo r t sar euna vai l i ng ,andwede nyhi spe t i t i o nf o ri t spr o c e dur a land s u bs t a nt i v efla ws . Theg e ne r a lr ul ei st ha tt her e me d yt oo b t a i nr e v e r s a lo rmo d i fic a t i o no ft he j udg me nto nt heme r i t si sappe al .Thi si st r uee v e ni ft hee r r o r ,o ro neo ft hee r r o r s , a s c r i be dt ot hec o ur tr e nde r i ng t hej udg me nti si t sl a c ko fj ur i s d i c t i o no v e rt h e s u b j e c tma t t e r ,o rt he e x e r c i s eo fp o we ri ne x c e s st he r e o f ,o rg r a v ea b us eo f di s c r e t i o ni nt hefindi ng soff ac to ro fl a ws e to uti nt hede c i s i o n. 36

Ther e c o r d ss ho wt hatpe t i t i o ne r ’ sc o uns e lr e c e i v e dt heRe s o l ut i o no ft heCo ur to f Appe al sde ny i nghi smo t i o nf o rr e c o ns i de r at i o no n27De c e mbe r1999.Thefif t e e n d a yr e g l e me nt a r yp e r i o dt oa pp e a lund e rRul e45o ft heRul e so fCo ur tt he r e f o r e l a ps e do n1 1J anua r y2 00 0.On2 3Fe b r u ar y20 00 ,o v e ramo nt ha f t e rr e c e i p to ft he

r e s o l ut i o nde ny i nghi smo t i o nf o rr e c o ns i de r at i o n,t hepe t i t i o ne rfil e dhi spe t i t i o nf o r c e r t i o r a r iunde rRul e65 . I ti ss et t l e dt hatas pe c i alc i v i lac t i o nf o rc e r t i o r ar iwi l lno tl i easas ubs t i t ut ef o r t hel o s tr e me dyo fa ppe a l , a ndt ho ug ht he r ea r ei ns t a nc e s whe r et hee x t r a o r d i na r y 37

38

r e me d yo fc e r t i o r a r ima ybe _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Da t e d08De c e mb e r2 0 0 2,Ro l l o ,p p.4 90 A4 90 A6 .

3 4


3 5

He i r so fLo ur de sPo t e nc i anoPadi l l av .Co ur to fAppe al s,G. R.No.147205,10Mar c h2004,425SCRA 3 6

236,c i t i n MMD g Av .JANCOM Env i r o nme nt alCo r p. ,G. R.No. 147465,30Januar y2002,375SCRA320. 3 7 P aav .Co ur to fAppe al s,G. pi nav. R.No .1 2 65 6 0,4De c e mb e r1 9 9 7 ,2 8 2SCRA 4 4 8 ,c i t i ngVda.deEs

Abay a,G. R.No.45142,26 Apr i l1991, 196 SCRA 312,Sy v .Ro me r o,G. R.No.83580,23 Sept ember 1992, 214SCRA 187 Hi , po l i t ov .Co ur to fAppe al s,G. R.Nos .10847879,21 February1994,230 SCRA 1 91 F ,a j ar dov .Baut i s t a,G. R.Nos .10219397,10May1994,232SCRA 291 D , el aPazv .Pani s,G. R.No . 57023,22June1995, 245SCRA242. Whe np ub l i cwe l f a r ea ndt hea dv a nc e me nto fpub l i cp o l i c yd i c t a t e s ,o rwhe nt heb r o a de ri nt e r e s t so f

3 8

j us t i c es or e qui r e ,o rwhe nt he wr i t si s s ue d ar e nul l ,o rwhe nt he que s t i o ne do r de ramo untt o an o ppr e s s i v eex er c i s eo fj udi c i alaut ho r i t y . 528

528



r e s o r t e dt ode s pi t et hea v ai l abi l i t yo fa n appe al , wefind nos p e c i a lr e a s o n sf o r 39

ma ki ngo uta ne x c e p t i o ni nt hi sc a s e . Ev e ni fwewe r et oo ve r l o o kt hi sf ac ti nt hebr o a de ri nt e r e s t so fj us t i c eandt r e a t t hi sa sas p e c i a lc i v i lac t i o nf o rc e r t i o r ar iunder Rul e 65,t he pe t i t i o n wo ul d 40

ne v e r t he l e s sbe d i s mi s s e df o rf a i l ur eo ft he pe t i t i o ne rt os h o w g r a v ea bus eo f di s c r e t i o n.Pe t i t i o ne r ’ sr e c ur r e ntar g ume nt ,t e nuo usa ti t sv e r ybe s t ,i spr e mi s e do n t hef ac tt hats i nc er e s po nde ntAI I BPf ai l e dt ofil ei t sb y l a wswi t hi nt hede s i g nat e d 6 0da y sf r o mt hee ffe c t i v i t yo fRe p.Ac tNo .68 48,a l lpr o c e e di ng si ni t i a t e db yAI I BP andal lac t i o nsr e s u l t i ngt he r e f r o m ar eapat e ntnul l i t y .Or ,i nhi swo r d s ,t heAI I BP a ndi t so ffic e r sa ndBo a r do fDi r e c t o r s , ...[ H] a v enol e g ala ut ho r i t yno rj ur i s d i c t i o nt oma na gemuc hl e s so p e r a t et heI s l a mi c Ba nk,fil ea dmi ni s t r a t i v ec ha r g e sa ndi n v e s t i g a t ep e t i t i o n e ri nt hema nne rt he yd i da nd a l l e g e d l ypa s s e dBo a r dRe s o l ut i o nNo .2 30 9o nDe c e mb e r1 3 ,1 99 3whi c hi s nul landv o i df o r l a c ko fa n( s i c )aut ho r i z e d and v a l i db y l a ws .TheCI VI L SERVI CE COMMI SSI ON was t he r e f o r eaffir mi ng ,e r r o ne o u s l y ,anul la ndv o i d“ Re s o l ut i o nNo .2 30 9d at e dDe c e mb e r1 3, 1 99 3o ft heBo a r do fDi r e c t o r so fAl Ama na hI s l a mi cI nv e s t me ntBa nko ft hePhi l i pp i ne s ”i n CSC Re s o l ut i o nNo .9 44 48 3d at e dAug us t1 1 ,1 99 4.A mo t i o nf o rr e c o ns i d e r a t i o nt he r e o f was deni ed by t he CSC i ni t s Res ol ut i on No.952754 dat ed Apr i l 11,1995. Bo t h a c t s / r e s o l ut i o ns o ft he CSC a r ee r r o ne o u s ,r e s ul t i ng f r o m f r a ud ,f a l s i fic a t i o ns a nd mi s r epr es ent at i onsoft he al l eg ed Chai r man and CEO Robe r t o F.de Oc ampo and t he a l l e g e dDi r e c t o rFa r o ukA.Ca r p i z oa ndhi sg r o u pa tt hea l l e g e dI s l a mi cBa nk. 4 1

No whe r ei npe t i t i o ne r ’ sv o l umi no uspl e a di ng si st he r eas h o wi ngt ha tt hec o ur ta q uo c o mmi t t e dgr a v eabus eo fdi s c r e t i o na mo unt i ngt ol ac ko re x c e s so fj ur i s d i c t i o n r e v e r s i bl eb y a pe t i t i o nf o rc e r t i o r ar i .Pe t i t i o ne ra l r e a dy r a i s e dt he q ue s t i o no f AI I BP’ sc o r po r at ee x i s t e nc eandl ac ko fj ur i s di c t i o ni nhi sMo t i o nf o rNe w Tr i al / _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

3 9

Supra,No t eNo .3 6,c i t i n R g ui z ,Jr .v .Co ur to fAppe al s,G. R.No.101566,26Marc h1993,220SCRA

490. 4 0 L i g o nv .Co ur to fAppe al s,G. R.No. 127683,7Augus t1998,294SCRA73.

Pe t i t i o nf o rCe r t i o r ar i ,Ro l l o ,pp.2223.

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Mo t i o nf o rRe c o ns i d e r a t i o no f2 7Ma y1 99 7a ndwa sd e ni e db yt heCo ur to fAp pe a l s . De s p i t et hev o l umeo fp l e a d i ng sheha ss u bmi t t e dt husf a r ,heha sad de dno t hi ng s ub s t ant i a lt ohi sa r g ume nt s . The AI I BP wasc r e at e d byRe p.Ac tNo .6848.I thasa mai n offic ewher ei t c o nduc t sbus i ne s s ,ha ss har e ho l de r s ,c o r po r a t eoffic e r s ,ab oar do fdi r e c t o r s ,as s e t s , a nd p e r s o n ne l .I ti s ,i nf a c t ,he r er e p r e s e n t e db yt heOffic eo ft he Go v e r nme n t Co r po r a t eCo uns e l ,“ t hepr i nc i p all a wo ffic eo fg o v e r n me nt o wne dc o r po r a t i o ns ,o ne o fwhi c hi sr e s p o nd e ntb ank. ” Att heve r yl e as t ,b yi t sf ai l ur et os ubmi ti t sby l a ws 42

o nt i me ,t heAI I BPma ybec o ns i de r e dadef a c t oc o r p o r a t i o n who s er i g htt oe x e r c i s e 43

c o r po r a t epo we r sma yno tb ei nq ui r e di nt oc o l l a t e r a l l yi na nypr i v at es ui tt owhi c h s u c hc o r po r a t i o nsma ybeapa r t y . 44

Mo r e o v e r ,ac o r p o r at i o nwhi c hhasf ai l e dt ofil ei t sb y l a wswi t hi nt hepr e s c r i be d per i od doe s noti ps o f ac t ol o s e i t s po we r s as s uc h. The SEC Rul e s o n Sus pe ns i o n/ Re v o c a t i o no ft heCe r t i fic a t eo fRe gi s t r a t i o no fCo r po r a t i o ns , de t a i l st he 45

pr o c e d ur e sa ndr e me d i e st ha tma ybea v ai l e do fb e f o r eano r de ro fr e v o c a t i o nc a nb e i s s ue d.The r ei snos ho wi ngt h ats uc hapr o c e dur eha sbe e ni ni t i a t e di nt hi sc a s e . I na ny c a s e ,pe t i t i o ne r ’ sa r g ume nti si r r e l e v a ntbe c a us et hi sc a s ei s no ta c o r po r a t ec o n t r o v e r s y ,b utal a bo rdi s p ut e ;and i ti san e mpl o y e r ’ sb as i cr i g htt o f r e e l ys e l e c to rdi s c har g ei t se mpl o y e e s ,i fo nl y asa me as ur eo fs e l f pr o t e c t i o n ag ai ns ta c t si ni mi c alt oi t si nt e r e s t .Re g ar dl e s so fwhe t he rAI I BPi sac o r po r a t i o n,a 46

par t ne r s hi p,as o l epr o pr i e t o r s hi p,o ra s ar i s ar i s t o r e ,i ti sanundi s put e df ac tt hat AI I BP i st hepe t i t i o ne r ’ se mpl o y e r .AI I BP c ho s et or e t ai n hi ss e r vi c e sdur i ngi t s r e o r g ani z a t i o n,c o n t r o l l e dt heme a nsand _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Re s o l ut i o nda t e d6Aug us t2 00 2,Ro l l o ,p p.4 35 4 36 .

4 2

4 3 Ha l lv .Pi c c i o,No .L2 5 98 ,2 9J une1 9 50 ,8 6Phi l6 03 .

Se c .20 B , at asPambans aBl g.6 8,o t he r wi s ek no wna st he“ Co r p o r a t i o nCo d eo ft hePhi l i p pi ne s . ”

4 4

XXVI I ISECQua r t e r l yBul l e t i n9 0( No .3 ,J une1 9 94 ) .

4 5

4 6 F i l i pr o ,I nc o r po r at e dv .Nat i o nalLabo rRe l at i o nsCo mmi s s i o n,G. R.No .7 0 54 6,1 6Oc t o b e r1 9 86 ,1 45

SCRA123. 530

530



me t ho d sb ywhi c hhi swo r kwa st ob ep e r f o r me d ,p ai dhi swa g e s ,a nd ,e v e nt ua l l y , t e r mi nat e dhi ss e r v i c e s . 47

Andt ho ughhehashadampl eo ppo r t uni t yt odos o ,t hepe t i t i o ne rhasno tal l e g e d t ha th ei sa ny t hi ngo t he rt ha na ne mp l o y e eo fAI I BP .Heha sne i t he rc l a i me d ,no r s h o wn,t ha thei sas t o c k ho l de ro ra no ffic e ro ft hec o r po r a t i o n.Ha v i nga c c e p t e d e mp l o y me ntf r o m AI I BP ,a ndr e nd e r e dhi ss e r v i c e st ot hes a i db ank,r e c e i v e dhi s

s a l a r y ,a nd a c c e p t e dt hep r o mo t i o ng i v e n hi m,i ti sno wt o ol a t ei nt hed a yf o r pe t i t i o ne rt oque s t i o ni t se x i s t e nc ea ndi t spo we rt ot e r mi nat ehi ss e r v i c e s . Onewho a s s ume sa n o b l i g a t i o n t oa n o s t e n s i b l ec o r p o r a t i o n a ss u c h, c a nno tr e s i s t pe r f o r ma nc et he r e o fo nt heg r o undt h att he r ewa si nf a c tnoc o r p o r a t i o n.

48

Ev e ni fwewe r et oc o ns i de rt hef a c t sbe hi ndpe t i t i o ne rSa wa dj a an’ sdi s mi s s a l f r o ms e r v i c e ,wewo ul db eha r dpr e s s e dt ofinde r r o ri nt hede c i s i o no ft heAI I BP . As appr ai s e r / i nv e s t i g at o r ,t he pe t i t i o ne r was e x pe c t e dt oc o nduc tan o c ul ar i ns p e c t i o no ft hepr o p e r t i e so ffe r e db yCAMECa sc o l l a t e r a l sa ndc he c kt hec o p i e so f t hec e r t i fic a t e so ft i t l eag ai ns tt ho s eo nfil ewi t ht heRe g i s t r yo fDe e ds .No to nl ydi d hef ai lt oc o nduc tt he s er o ut i nec he c ks ,butheal s ode l i be r a t e l ymi s r e pr e s e nt e di n hi sa ppr a i s a lr e p o r tt ha taf t e rr e v i e wi ng t he d o c u me nt sa nd c o nduc t i ng a s i t e i ns p e c t i o n,hef o undt heCAMECl o a na pp l i c a t i o nt ob ei no r de r .De s p i t et henumb e r o fpl e adi ng sheha sfil e d,heha sf a i l e dt oo ffe ran a l t e r nat i v ee x pl a na t i o nf o rhi s ac t i o ns . When hewasi nf or medoft hec har ge sagai nsthi m anddi r ec t edt oappearand pr es ent hi ss i de on t he mat t er ,t he pet i t i oner s ent i nst ead a memor andum q ue s t i o ni ng t he f a i r n e s sa nd i mp ar t i a l i t yo ft he me mb e r so ft he i n v e s t i g at i ng c o mmi t t e ea ndr e f us i ngt or e c o g ni z et he i rj ur i s d i c t i o no v e rhi m.Ne v e r t he l e s s ,t he i nv e s t i g a t i ng c o mmi t t e er e s c he dul e dt he he a r i ng t og i v et he p e t i t i o ne ra no t he r c hanc e ,buthes t i l lr e f us e dt oappe arbe f o r ei t . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 4 7 B r o t he r ho o d Labo rUni t yMo v e me nto ft hePhi l i ppi ne sv .Zamo r a, G. R.No.L48645,07Januar y

1987 ,147SCRA49. Par .2,Se c .21 B , at asPambans aBl g . 6 8,TheCo r p o r a t i o nCo d eo ft hePhi l i p pi ne s .

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The r e a f t e r ,wi t ne s s e swe r ep r e s e nt e d ,a nd a d e c i s i o n wa sr e nd e r e d find i ng hi m g ui l t yo fdi s ho ne s t yanddi s mi s s i nghi mf r o ms e r v i c e . Hes o ug htar e c o ns i de r a t i o no f t hi sde c i s i o na nd t hes a mec o mmi t t e ewho s ei mp ar t i a l i t yheq ue s t i o ne dr e d uc e d t he i rr e c o mme nd e dp e na l t yt os us p e ns i o nf o rs i xmo nt hsa ndo ned a y .Theb o a r do f di r e c t o r s , ho we v e r ,o pt e dt odi s mi s shi mf r o ms e r v i c e . Ona ppe a lt ot heCSC,t heCo mmi s s i o nf o undt ha tSa wa dj a an’ sf a i l ur et op e r f o r m hi so ffic i a ld ut i e sg r e a t l yp r e j ud i c e dt he AI I BP ,f o r whi c h he s ho u l db e he l d ac c o unt abl e .I the l dt hat : ...( I ) ti sc r ys t alc l eart hatre s pondentSAPPARISAWADJAAN was r emi s si nt he p e r f o r ma nc eo fhi sdut i e sa sa ppr a i s e r / i ns p e c t o r .Ha dr e s p o nde ntp e r f o r me dhi sdut i e sa s a ppr a i s e r / i ns p e c t o r ,hec o ul dha v ee a s i l yno t i c e dt ha tt hepr o p e r t yl o c a t e da tBa l i nt a wak, Cal ooc an Ci t yco ver edbyTCT No.C52576andwhi c hi soneoft hepr oper t i eso ffer edas c o l l a t e r a lb yCAMEC i se n c u mb e r e dt oDi v i naPa bl i c o .Ha dr e s p o nd e ntr e fl e c t e ds uc hf a c t i n hi sapprai sal / i nspec t i on r epor to n sai d pro pert yt heI SLAMI C BANK woul d nothave appro ve d CAMEC’ sl oanofP500, 000. 00i n 1987 and CAMEC’ sP5Mi l l i on l oani n 1988, r e s p o nde ntkno wi ngf ul l ywe l lt heBa nk’ spo l i c yo fno ta c c e p t i nge nc u mb e r e dpr o pe r t i e sa s c o l l a t e r a l . Res pondentSAWADJAAN’ sr epr ehensi bl eacti sf ur t heraggr avat edwhen hef ai l edt o c he c ka ndv e r i f yf r o mt heRe g i s t r yo fDe e d so fMa r i ki nat heaut he nt i c i t yo ft hepr o p e r t y

l oc at edatMayamot ,Ant i pol o,Ri zalc ov er edbyTCTNo.N130671andwhi c hi soneoft he pr o p e r t i e so ffe r e da sc o l l a t e r a lb yCAMEC f o ri t sP5Mi l l i o nl o a ni n1 98 8.I fheo nl yv i s i t e d a ndv e r i fie dwi t ht heRe g i s t e ro fDe e d so fMa r i ki nat hea ut he nt i c i t yo fTCTNo .N1 30 67 1 hec o u l dha v ee as i l yd i s c o v e r e dt ha tTCTNo .N1 30 67 1i sf a keandt hepr o p e r t yd e s c r i b e d t he r e i nno ne x i s t e nt . ... Thi sno t wi t hs t a ndi ng ,r e s p onde ntc a nno te s c a pel i a bi l i t y .Asa dv e r t e dt oe ar l i e r ,hi s f a i l ur et ope r f o r m hi so ffic i a ldut i e sr e s ul t e dt ot hepr e j udi c ea nds ub s t a nt i a lda ma get ot he I SLAMI C BANK f orwhi c h he s houl d be hel dl i abl ef ort he admi ni s t r at i ve offens e of CONDUCTPREJUDI CI ALTO THEBESTI NTERESTOFTHESERVI CE. 4 9

Fr om t hef or ego i ng,wefindt hatt heCSC andt hec ourtaquoc ommi t t ednogr ave a bus eo fdi s c r e t i o nwhe nt he ys us t a i ne dSa _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ CARo l l o ,p p.5 96 0.

4 9

532

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wadj aan’ sdi s mi s s a lf r o ms e r v i c e .Gr a v eabus eo fdi s c r e t i o ni mpl i e ss uc hc a pr i c i o us andwhi ms i c a le x e r c i s eofj udg me nta seq ui v al e ntt ol ac ko fj ur i s di c t i o n,o r ,i no t he r wo r ds ,whe r et hepo we ri se x e r c i s e di na na r b i t r a r yo rde s p o t i cma nne rb yr e a s o no f pa s s i o no rp e r s o na lho s t i l i t y ,a ndi tmus tbes op at e nta ndgr o s sa st oamo untt oan e v as i o no fpo s i t i v edut yo rt oav i r t ualr e f us a lt ope r f o r mt hedut ye nj o i ne do rt oac t ata l li nc o nt e mpl at i o no fl a w. Ther e c o r d ss ho wt ha tt her e s p o nd e nt sd i dno n eo f 50

t he s e ; t he yac t e di na c c o r da nc ewi t ht hel a w. WHEREFORE,t hepe t i t i oni sDI SMI SSED.TheDec i s i onoft heCour tofAppeal s of30Mar c h1999affir mi ngRes ol ut i onsNo.944483andNo.952754oft heCi vi l Se r vi c e Co mmi s s i on, and i t s Re s o l ut i o n of 15 De c e mbe r 1999 ar e her e by AFFI RMED.Co s t sag ai ns tt hepe t i t i o ne r . SOORDERED. Dav i de ,

Jr .( C. J. ) ,Pang ani ban,Qui s umbi ng , Ynar e s Sant i ag o ,Sando v al -

Gut i e r r e z , Car p i o ,Aus t r i aMar t i ne z ,Co r o na,Car p i o Mo r a l e s ,Cal l e j o , Sr . ,Az c una, Ti ng a andGa r c i a ,JJ. ,c o nc ur . Puno ,J. ,OnOffic i alLea ve . Pe t i t i o ndi s mi s s e d,j udg me ntaffir me d. No t e . —Gr aveabus e ofdi s c r e t i on may ar i s e when a l o werc our tort r i bunal

v i o l at e so rc o nt r a v e ne st heCo ns t i t ut i o n,t hel a wo re xi s t i ngj ur i s pr ude nc e . B ( o t o na v s .Co ur to fAppe a l s,398SCRA52[ 2003] ) ——o 0o —— _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 5 0 B e r nal de zv .Fr anc i a,G. R.No.143929,28Febr uar y2003,398SCRA 489 P ; e o pl ev .Ebi as ,G. R.No .

12713 0,12Oc t ob er2000 ,342SCRA 67 E 5; s gue r r av .Co ur to fAppe al s,G. R.No .1 1 93 1 0 ,0 3Fe b r u a r y 1997,267SCRA380,399400. 533

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