1. Yasay vs Recto

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    SYNOPSIS

    The SEC issued a temporary restraining order (TRO

    njoining the Interport Resources Corporation fro

    olding its annual stockholders meeting. The stockholder

    owever, proceeded with the meeting causing the SEC eclare it null and void and directed respondents to appe

    efore the SEC to show cause why no disciplinary actio

    ould be taken against them or why they should not b

    ted in contempt. After the hearing, the SEC issued a

    der declaring the respondents guilty of contempt. In dume, respondents appealed from the aforesaid order to th

    ourt of Appeals. The Court of Appeals reversed and side the SEC ruling. Hence, this appeal.

    The Supreme Court agreed with the respondent th

    e charge of contempt in this case partook the nature ofiminal offense. The exoneration of the contemner froe charge amounts to an acquittal from which an appe

    ill not lie. Contrary to the view of petitioners, the effect

    e TRO of the Court of Appeals directing the SEC to desi

    om enforcing its own TRO was to allow such meeting toceed as scheduled. More, the Court of Appeals in its fin

    ecision nullified the SECs order. Hence, there was nillful disobedience to a lawful order of the SE

    espondents were not guilty of contempt. The Cou

    enied the petition for review on certiorari and affirm

    e decision of the Court of Appeals.

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    SYLLABUS

    REMEDIAL LAW; SPECIAL CIVIL ACTION

    CONTEMPT; CRIMINAL CONTEMP

    DISTINGUISHED FROM CIVIL CONTEMPT. -

    distinction is made between a civil and crimincontempt. Civil contempt is the failure to d

    something ordered by a court to be done for th

    benefit of a party. A criminal contempt is any condudirected against the authority or dignity of the cou

    Civil contempt proceedings are generally held to b

    remedial and civil in their nature; that is, they aproceedings for the enforcement of some duty, an

    essentially a remedy for coercing a person to do th

    thing required. In general, civil contempt proceedinshould be instituted by an aggrieved party, or h

    successor, or someone who has a pecuniary interein the right to be protected. If the contempt

    initiated by the court or tribunal exercising the pow

    to punish a given contempt, it is criminal in natur

    and the proceedings are to be conducted

    accordance with the principles and rules applicable criminal cases. The State is the real prosecuto

    [People vs. Godoy. 243 SCRA 64, 79 (1995)]. The re

    character of the proceedings in contempt cases is t

    be determined by the relief sought or by the domina

    purpose. The proceedings are to be regarded a

    criminal when the purpose is primarily punishmenand civil when the purpose is primarily compensato

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    or remedial. [Remman Enterprises, Inc. vs. Court

     Appeals, 268 SCRA 688, 697 (1997)]; [People v

    Godoy, supra.]

    ID.; ID.; ID.; NATURE AND FUNCTION. - While the SE

    is vested with the power to punish for contempt, thsalutary rule is that the power to punish for contem

    must be exercised on the preservative, not vindictiv

    principle, and on the corrective and not retaliatoidea of punishment. The courts and other tribuna

    vested with the power of contempt must exercise th

    power to punish for contempt for purposes that aimpersonal, because that power is intended as

    safeguard not for the judges as persons but for th

    functions that they exercise.

     APPEARANCES OF COUNSELThe Solicitor General for petitioners.Siguion Reyna Montecillo & Ongsiako for respondents.

    FIRST DIVISION

    [G.R. No. 129521. September 7, 1999]

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    ECURITIES AND EXCHANGE COMMISSION CHAIRMA

    PERFECTO R. YASAY, JR., ASSOCIAT

    COMMISSIONERS FE ELOISA C. GLORIA, EDIJE

    MARTINEZ and ROSALINDA CASIGURAN, petitioners, vs. MANUEL D. RECT

    PELAGIO T. RICALDE and CESAR MANALAYSAY, respondents. 

    D E C I S I O N

    ARDO, J .:

    The case before the Court is an appeal from a decisiothe Court of Appeals[1] setting aside the order of th

    curities and Exchange Commission (SEC)[2] declarin

    spondents guilty of contempt for disobeying a temporar

    straining order issued to respondents to desist fro

    olding a stockholders meeting of the Interport Resourc

    orporation.

    The facts are as follows:

    On June 28, 1996, SEC Chairman Yasay upon requecertain stockholders of Interport Resources Corporatio

    rected respondent Ricalde to submit to the SEC a list

    ockholders and to set a definite time and place for th

    lidation of proxies and nominations for directors of th

    m.

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    On the same date, June 28, 1996, the SEC issued

    mporary restraining order (TRO) enjoining the Interpo

    esources Corporation from holding the July 9, 199

    heduled annual meeting of the stockholders.

    Notwithstanding the SEC's TRO, the stockholdeoceeded with the meeting on July 9, 1996, presided ov

    y respondent Manalaysay.

    On July 10, 1996, the SEC declared the stockholde

    eeting of Interport Resources Corporation held on July

    996, null and void and directed respondents to appeefore the SEC on July 15, 1996, at 3:00 p.m., to show cau

    hy no disciplinary action should be taken against them ohy they should not be cited in contempt.

    At the hearing on July 15, 1996, responde

    analaysay questioned the validity of the TRO as well e contempt proceedings in light of the TRO issued by th

    ourt of Appeals restraining the SEC from enforcing i

    RO.[3] 

    After the hearing, on July 15, 1996, the SEC issued a

    der stating:

    x x

    EWED in this light Atty. Cesar Manalaysay, Manuel D.ecto and Atty. Pelagio T. Ricalde are hereby DECLARED

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    UILTY OF CONTEMPT and are correspondingly ORDERE

    pay a fine of TEN THOUSAND (P10,000.00) Pesos each

    pon finality of this Order for willfully disobeying and

    sregarding the July 8, 1996 Order of this Commission.ty. Cesar Manalaysay is likewise BARRED from practicin

    s law profession before this commission for a period ofxty (60) days from date hereof and Mr. Recto and Atty.

    calde are, by this ORDER, prohibited and barred from

    ting as President/Chairman and Secretary respectively

    terport Resources, Inc. within the same period. This

    rder shall be immediately executory unless otherwisestrained by a court of competent jurisdiction.

    O ORDERED.

    DSA, Greenhills, Mandaluyong City.

    /t) PERFECTO R. YASAY, JR.

    hairman

    /t) FE ELOISA C. GLORIA

    ssociate Commissioner

    /t) EDIJER A. MARTINEZ

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    ssociate Commissioner[4] 

    In due time, respondents appealed from the aforesader to the Court of Appeals.

    After due proceedings, on April 14, 1997, the Court ppeals promulgated its decision reversing and settin

    ide the SEC order declaring respondents guilty ntempt. The dispositive portion reads:

    HEREFORE, premises considered, respondents Orderated July 15, 1996, is hereby REVERSED and SET ASIDE.

    he cash bond of P50,000.00 may be withdrawn by

    etitioners.

    O ORDERED.

    /t) ARTEMIO G. TUQUERO

    ssociate Justice

    /t) ARTEMON D. LUNA

    ssociate Justice

    /t) HECTOR L. HOFILEA

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    ssociate Justice[5] 

    On May 2, 1997, petitioners filed a motion fconsideration of the decision. However, on June 11, 199

    e Court of Appeals denied the motion.

    Hence, this appeal.

    On September 10, 1997, the Court require

    spondents to comment on the petition within ten (10

    ays from notice.[6] On October 7, 1997, respondents file

    eir comment.[7] In the main, respondents submit thntempt is criminal in character and their exoneratio

    om a charge of contempt amounts to an acquittal fro

    hich an appeal would not lie.[8] 

    At issue in this petition is whether or not the Court o

    ppeals erred, as a matter of law, in setting aside the ordethe SEC finding respondents guilty of contempt f

    sobeying its temporary restraining order to desist fro

    olding the annual stockholders meeting of the Interpo

    esources Corporation scheduled on July 9, 1996.

    We agree with respondents that the charge

    ntempt partakes of the nature of a crimin

    fense.[9] The exoneration of the contemner from th

    arge amounts to an acquittal from which an appe

    ould not lie.

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    A distinction is made between a civil and crimin

    ntempt. Civil contempt is the failure to do somethin

    dered by a court to be done for the benefit of a party.

    iminal contempt is any conduct directed against thuthority or dignity of the court .[10] 

    Petitioners argue that the contempt committed b

    spondents was civil in nature, as the tempora

    straining order the SEC issued was for the benefit ofarty to a case. The contention is untenable.

    Civil contempt proceedings are generally held to bmedial and civil in their nature; that is, they a

    oceedings for the enforcement of some duty, ansentially a remedy for coercing a person to do the thin

    quired.[11] In general, civil contempt proceedings shou

    e instituted by an aggrieved party, or his successor, meone who has a pecuniary interest in the right to b

    otected.[12] If the contempt is initiated by the court

    bunal exercising the power to punish a given contempis criminal in nature, and the proceedings are to b

    nducted in accordance with the principles and rul

    pplicable to criminal cases. The State is the reosecutor.[13] 

    The real character of the proceedings in contem

    ses is to be determined by the relief sought or by th

    ominant purpose. The proceedings are to be regarded a

    iminal when the purpose is primarily punishment, an

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    vil when the purpose is primarily compensatory

    medial.[14] 

    But whether the first or the second, contempt is still

    iminal proceeding in which acquittal, for instance, is

    ar to a second prosecution. The distinction is for thurpose only of determining the character of punishme

    be administered.[15] 

    In this case, the contempt is not civil in nature, b

    iminal, imposed to vindicate the the dignity and power

    e Commission; hence, as in criminal proceedings, appeal would not lie from the order of dismissal of, or a

    oneration from, a charge of contempt.[16] 

    At any rate, the SEC order directing respondents

    ow cause why they should not be cited in contempt w

    ghly improper. The Court of Appeals issued on July 996, a temporary restraining order against the order e SEC of June 28, 1996 directing the Interport Resourc

    orporation to desist from holding the stockholde

    eeting on July 9, 1996. Contrary to the view

    etitioners, the effect of the temporary restraining order oe Court of Appeals directing the SEC to desist fro

    nforcing its own TRO was to allow such meeting oceed as scheduled. More, the Court of Appeals in its fin

    ecision nullified the SEC's order.[17]Hence, there was n

    illful disobedience to a lawful order of th

    EC. Respondents were not guilty of contempt.

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    While the SEC is vested with the power to punish f

    ntempt ,[18] the salutary rule is that the power to punis

    r contempt must be exercised on the preservative, n

    ndictive principle,[19] and on the corrective and ntaliatory idea of punishment .[20] The courts and oth

    bunals vested with the power of contempt must exercise power to punish for contempt for purposes that ar

    mpersonal, because that power is intended as a safeguar

    ot for the judges as persons but for the functions that the

    ercise.[21] 

    In this case, the SEC issued the citation fntempt sua sponte. There was no charge filed by a priva

    arty aggrieved by the acts of respondents. Strict

    eaking, there was no disobedience to the SECmporary restraining order. The Court of Appea

    njoined that order. Consequently, respondents' act oceeding with the scheduled stockholders' meeting w

    ot contumacious as there was no willful disobedience

    n order of the SEC.[22] The disobedience which the la

    unishes as constructive contempt implies willfulness. Fo

    bottom, contempt is a willful disregard osobedience.[23] 

    The SEC was rather hasty in asserting its power

    unish for contempt. The chairman and commissioners

    e SEC must exercise the power of contempt judicious

    nd sparingly with utmost self- restraint.[24]

     

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    Finally, the penalty imposed exceeded tho

    uthorized in the powers of the SEC [25] in relation to th

    964 Revised Rules of Court as amended.[26] If th

    ntempt was committed against a superior court or judge accused may be fined not exceeding thirty thousan

    esos (P30,000.00) or imprisoned not more than six (6onths, or both. The SEC suspended responde

    analaysay from the practice of law in the SEC, a pow

    sted exclusively in the Supreme Court.[27] 

    WHEREFORE, the Court hereby DENIES the petitio

    r review on certiorari and AFFIRMS the decision of thourt of Appeals in CA-G. R. SP No. 41400, promulgated o

    pril 14, 1997.

    No costs.

    SO ORDERED.

    Puno, Kapunan, and Ynares-Santiago, JJ., concur.

    Davide, Jr., C.J., (Chairman), on official leave. 

    Rollo, CA Decision, pp. 31-39, Justice Artemio G. Tuquero, ponente, and Justitemon D.Luna and Hector L. Hofilea, concurring.

    Annex C, Petition, Rollo, pp. 42-45.

    n CA-G. R. SP No. 41157, entitled Interport Resources, Inc.vs. SEC.

    Annex C, supra., at pp. 44-45.

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    A Decision, supra., at p. 39.

    Rollo, p. 55.

    Rollo, pp. 59-80.

    omment, Rollo, at pp. 61- 62.

    Adorio vs. Bersamin, 273 SCRA 217 [1997].

    Moran, Comments on the Rules of Court, Vol. 3, 1997 ed. p. 445; Santiagounciacion, Jr., 184 SCRA 118 [1990]; Converse Rubber Corp. vs. Jacinto Rubber astic Co., Inc., 97 SCRA 158, 182-183 [1980].

    People vs. Godoy, 243 SCRA 64, 79 [1995].

    People vs. Godoy, supra, at p. 80.

    People vs. Godoy, supra.

    Remman Enterprises, Inc. vs. Court of Appeals, 268 SCRA 688, 697 [199ople vs. Godoy, supra.

    Santiago vs. Anunciacion, Jr., 184 SCRA 118, 121 [1990].

    Insurance Commissioner vs. Globe Assurance Co., Inc., 111 SCRA 202, 204 [1982].

    CA-G. R. SP No. 41157, Decision, promulgated on September 16, 1996.

    P. D. 902-A, Sec. 6 [e].

    Commissioner of Immigration vs. Cloribel, 127 Phil. 716 [1967].

    Nazareno vs. Barnes, 136 SCRA 57, 73 [1985]; Pacuribot vs. Lim, Jr., 275 SCRA 597].

    Austria vs. Masaquiel, 20 SCRA 1247, 1260 [1967]; Nazareno vs. Barnes, supgeles vs. Gernale, Jr., 274 SCRA 10 [1997]).

    Dee vs. Securities and Exchange Commission, 199 SCRA 238 [1991].

    Commissioner of Immigration vs. Cloribel, supra.

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    De Guia vs. Guerrero, 234 SCRA 625, 630 [1994]; Fontelera vs. Amores, 70 SCRA [1976]; Pacuribot vs. Lim, Jr., supra.

    P. D. 902-A, Section 6 [e].

    Rule 71, Section 6, 1964 Revised Rules of Court, as amended (See Administratcular No. 22-95, dated October 11, 1995; In re: Ventura O. Ducat, 269 SCRA 697])

    Article VIII, Section 5 [5], Constitution.