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JM DOMINGUEZ AGRONOMIC COMPANY v. CECILIA LICLICAN

FACTS:

During the annual stockholders meeting of JM Dominguez Agronomic Company, Inc. (JMD), tensions arose when petitioners Patrick and Kenneth Pacis were allegedly not allowed to vote on the ground that they are not registered stockholders of JMD. Respondents walked out of the meeting and the remaining stockholders conducted the election of new directors and officers. In response, petitioners filed a complaint before the Regional Trial Court (RTC) seeking the nullification of the meetings, election, and acts of directors and officers. JMD, represented by petitioners, filed a criminal complaint against respondents for qualified theft for allegedly withdrawing money from the corporation's bank account without authority. The Office of the City Prosecutor recommended the filing of informations, and the RTC issued orders finding probable cause and authorizing the issuance of warrants of arrest against respondents. Respondents then filed a petition for certiorari with the Court of Appeals (CA) to annul the RTC orders. They argued that there is a prejudicial question since the validity of JMD's elections is still pending in the RTC. The CA granted the petition and annulled the RTC orders, stating that the judge should have refrained from determining probable cause due to the intra-corporate dispute and the doubt on the authority of the officers.

ISSUES:

  1. Whether or not Civil Case No. 6623-R constituted a prejudicial question warranting the suspension of the proceedings in Criminal Case Nos. 29175-R and 29176-R.

  2. Whether or not grave abuse of discretion attended the issuance of the two assailed March 10, 2009 Orders in Criminal Case Nos. 29175-R and 29176-R.

  3. Whether or not the questioned Orders were issued in grave abuse of discretion.

  4. Whether or not the motion for reconsideration of the petitioners should have been granted by the appellate court.

RULING:

  1. The petition lacks merit. The challenged Orders of the trial court were issued in grave abuse of discretion. The Court held that Judge Tiongson-Tabora acted with grave abuse of discretion when she ordered the arrests of respondents Isip and Liclican despite the existence of a prejudicial question. The CA correctly ruled that Civil Case No. 6623-R, the intra-corporate dispute, posed a prejudicial question to Criminal Case Nos. 29175-R and 29176-R. The resolution of Civil Case No. 6623-R, which involved the issue of who should rightfully be seated at the company's helm, determined the authority of petitioners to prosecute the criminal cases for qualified theft. Judge Tiongson-Tabora should have suspended the criminal proceedings instead of issuing the challenged Orders. The subsequent resolution of the prejudicial question did not cure the defect.

  2. The Supreme Court held that the challenged Orders were indeed issued in grave abuse of discretion. The fact that the Judgment in favor of the petitioners was not yet rendered at the time the Orders were issued means that there was still a real dispute as to who the rightful set of officers were. The trial court should have suspended the proceedings until the civil case was resolved with finality.

  3. The motion for reconsideration of the petitioners should not have been granted by the appellate court. The resolution of the prejudicial question did not cure the grave abuse of discretion already committed. The nullification of the challenged Orders does not entail the dismissal of the criminal cases but only the suspension of the proceedings. However, given the resolution of the prejudicial question and the inhibition of the judge, the criminal cases may proceed and should be re-raffled to re-determine the existence of probable cause.

PRINCIPLES:

  • Grave abuse of discretion may arise when a lower court or tribunal violates or contravenes the Constitution, the law, or existing jurisprudence.

  • The existence of a prejudicial question generally arises when a civil action and a criminal action are both pending, and there exists in the former an issue that must be pre-emptively resolved before the latter may proceed. The resolution of the issue in the civil action is determinative of the guilt or innocence of the accused in the criminal case.

  • The court has the discretion to suspend criminal proceedings when there is a prejudicial question that needs to be resolved in a civil action.

  • The existence of a prejudicial question requires the suspension of the criminal proceedings until the civil case is resolved with finality.

  • The resolution of a prejudicial question does not necessarily cure the grave abuse of discretion already committed by the trial court.

  • Nullification of the challenged orders does not result in the dismissal of the criminal cases but only in the suspension of the proceedings.