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8/15/2019 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.