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INDIANA AEROSPACE UNIVERSITY v. COMMISSION ON HIGHER EDUCATION

FACTS:

The "Indiana Aerospace University" filed a complaint for damages against the Commission on Higher Education (CHED), claiming that CHED's cease and desist order prevented them from using the word "University" in their name. The trial court denied CHED's motion to dismiss and granted the petitioner's motion for a writ of preliminary injunction. The trial court also declared CHED in default for failing to file an answer and ordered the petitioner to present its evidence ex-parte. CHED filed a petition for certiorari with the Court of Appeals, arguing that the trial court committed grave abuse of discretion. The Court of Appeals ruled in favor of CHED, stating that the petitioner failed to show evidence that it had been granted university status. The Securities and Exchange Commission and the Department of Education, Culture and Sports both denied endorsing the petitioner's use of the word "university."

The petitioner claimed that the Department of Education, Culture and Sports (DECS) had issued a Certification endorsing the change of their corporate name. However, the DECS denied issuing such certification. The appellate court ruled that the writ of preliminary injunction had been erroneously issued and that the petitioner's claim was subordinate to the public interest in protecting students and parents. The trial court had declared the respondent in default, but the appellate court reasoned that the respondent's failure to file an answer in a timely manner was due to excusable negligence and did not warrant being declared in default.

ISSUES:

  1. Whether the Petition for Certiorari by respondent CHED was filed within the prescribed period prescribed by law.

  2. Whether the RTC's declaration of respondent CHED in default was proper.

  3. Whether the RTC's issuance of the Writ of Preliminary Injunction was valid.

  4. Whether the Court of Appeals erred in ordering the dismissal of Civil Case No. 98-811.

RULING:

  1. Timeliness of Certiorari

    The Supreme Court ruled that the Petition for Certiorari was timely filed. The proper date to compute the reglementary period was the date the respondent received the December 9, 1998 Order declaring it in default, which was on January 13, 1999. Since the Petition for Certiorari was filed on February 23, 1999, it complied with the sixty-day period prescribed by Section 4, Rule 65 of the 1997 Rules of Court.

  2. Validity of the Default Order

    The Supreme Court found that the RTC gravely abused its discretion in declaring the respondent in default despite the latter having filed an Answer before the default order was issued. As default judgments are generally disfavored, the Court emphasized that the filing of the Answer should be admitted, especially since no prejudice was caused to the petitioner.

  3. Preliminary Injunction

    The Supreme Court concurred with the CA that the RTC improperly issued the Writ of Preliminary Injunction against the respondent. The petitioner had no clear legal right to continue representing itself as a "university," as it did not meet the qualifications set forth by the CHED and other statutes. Therefore, the Writ of Preliminary Injunction was unjustified.

  4. Dismissal of Civil Case No. 98-811

    The Supreme Court found that the CA erred in dismissing Civil Case No. 98-811 on grounds of lack of cause of action. The RTC should have based its decision solely on the facts alleged in the complaint, assuming them to be true, rather than considering external evidence.

PRINCIPLES:

  • Timeliness of filing Petitions for Certiorari Computation of the reglementary period hinges on the receipt of the order in question.

  • Grounds for Certiorari Exceptions to the prerequisite of filing a motion for reconsideration include issues of public interest, urgency, or purely legal nature.

  • Default Judgments Default judgments are disfavored and should only be issued in cases of obstinate refusal or inordinate neglect to comply with court orders. Lack of prejudice and the presence of meritorious defenses allow for default orders to be set aside.

  • Preliminary Injunctions These are only warranted when there is a demonstrable right in esse. The issuance of an injunction to preserve false representations goes against equity.

  • Motion to Dismiss for Lack of Cause of Action Such motions should be decided strictly on the allegations of the complaint itself, assuming them to be true at face value, to avoid procedural errors and denial of due process.

WHEREFORE , the Petition is hereby GRANTED IN PART , and the assailed Decision MODIFIED . The trial court is DIRECTED to SET ASIDE the Order of default of December 9, 1998; to ADMIT the Answer dated November 5, 1998; to LIFT the preliminary injunction; and to CONTINUE , with all deliberate speed, the proceedings in Civil Case No. 98-811.