SC asked to junk Stradcom case for procedural infirmity

Posted at 07/14/11 8:43 AM

MANILA, Philippines - Mainly on the basis of procedural violation, the state, through the Office of the Solicitor General (OSG), has asked the Supreme Court (SC) to junk Stradcom Corporation's plea for issuance of a temporary restraining order (TRO) and/or a writ of preliminary injunction against a trial court ruling last June granting a complaint for interpleader filed by the Land Transportation Office (LTO).

In a 32-page opposition ad cautelam filed Tuesday, respondent Republic of the Philippines asked for the immediate dismissal of a petition filed by Stradcom last July 6 seeking to set aside and annul the order dated June 21, 2011 of Quezon City Regional Trial Court Branch 222 Presiding Judge Edgar Dalmacio Santos who is handling the interpleader case that seeks to determine the rightful officers and representatives of the LTO's information technology (IT) service provider in the wake of an intra-corporate dispute between 2 warring factions.

The state alleged that in filing the instant petition before the high court, Stradcom committed "gross violation of procedural requirements" since it had not filed a motion for reconsideration (MR) of the assailed order with the trial court.

"Petitioner failed to file a motion for reconsideration of the order dated June 21, 2011, which is a plain, speedy and adequate  remedy available in the ordinary course of law, rendering its present recourse legally unavailing," the opposition read.

"A motion for reconsideration of the order of resolution is a condition precedent for the filing of a petition for certiorari challenging the issuance of the same. A petition for certiorari is an extraordinary remedy and should be filed only as a last resort."

The state argued that Stradcom's case does not fall under any of the following recognized exceptions to the filing of a motion for reconsideration: (1)where the order is a patent nullity where the court has no jurisdiction; (2) where the questions raised in the certiorari proceeding have been duly raised and decided by the lower court, or the same as those raised and decided upon by the lower court; (3) where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the government or the petitioner or the subject matter of the action is perishable; (4) where, under the circumstances, a motion for reconsideration would be useless; (5) where petitioner was deprived of due process and there is extreme urgency for relief; and (60 where the issue raised is one purely of law or when public interest is involved.

The state said Stradcom was not excused from filing a motion for reconsideration because the assailed order does not constitute a patent nullity and the trial court has undisputed jurisdiction over the interpleader case.

The state argued that Stradcom's plea for injunctive relief should have been presented before the trial court.

"A mere threat of a possible forced shut down of the LTO IT project does not constitute a compelling reason to dispense with the requirement of a motion for reconsideration," the opposition read.

The state also alleged Stradcom violated the hierarchy of courts when it elevated its plea before the high court when, apart from being a court of last resort, the high tribunal's "original jurisdiction to issue a writ of certiorari is not exclusive as it is shared with the Regional Trial Court and the Court of Appeals."

"Direct resort to this Honorable Court will not be countenanced if adequate remedy can be obtained from the lower courts. For the Honorable Court is a court of last resort and it must remain so if it is to satisfactorily perform the responsibilities vested in it by the Constitution and by immemorial tradition," the opposition read.

Stradcom's move to elevate the intra-corporate dispute case before the high court was assailed also on the basis of the issue being a factual one "best left to the lower courts" since the high tribunal "is not a trier of facts."

"The review of factual matters is not the province of the Supreme Court and is not the proper forum for the ventilation and substantiation of factual issues. It is not the function of this Honorable Court to review, examine, and evaluate or weigh the probative value of the evidence presented."

"By the same token, the prayer for a restraining order will compel this Honorable Court to determine as to which group should be paid the claimed IT fees."

Some P1.3-billion in contractual obligations to the information technology service provider was held in abeyance because of the dispute and ordered deposited with the trial court -- an order Stradcom, through its president Cezar Quiambao, assailed before the high court.

Quiambao's group is at odds with that of Bonifacio Sumbilla's over control and ownership of Stradcom.

In its petition, Stradcom claimed continued withholding of payment would cause the cessation of its operations "to the damage of the general public." To which the state replied by saying: "[T]he chaotic situation painted by petitioner conveniently ignores the fact that there is another faction claiming to be the rightful representative of Stradcom which is allegedly entitled to receive payment in behalf of the corporation. The Republic's act of withholding of payment is not a choice, but a necessity."

"Faced with two conflicting claims, the Republic's most prudent recourse was the filing of an interpleader action to settle the issue," the opposition stated.

The state argued that Stradcom's plea for the high tribunal to direct the LTO to strictly comply with the procedure in the escrow agreement for the daily transfer of fees due Stradcom is not a prayer for issuance of a TRO but that of a mandatory injunction since it requires a positive act from government.

"[T]his Honorable Court cannot give it because it would in effect be a resolution of the factual issue of the control and ownership of Stradcom," the opposition stated.

"It is settled that a court should avoid issuing a writ of preliminary mandatory injunction which would effectively dispose of the main issue without a trial."

On the issue of irreparable injury, the state said the alleged injury Stradcom claims it stands to suffer "can be adequately compensated" and subjected to exact computation, and thus, not irreparable.

The state further stressed that should any stoppage in Stradcom's operations occur, it will not be the fault of the state but "by reason of the refusal of the conflicting claimants to interplead and prove once and for all who between them is the rightful representative of Stradcom."

"The threat of a shutdown is a poorly veiled attempt by petitioner, a private entity, to hold the Republic and the public hostage."

The state said Stradcom's invocation of public interest "is an attempt to mislead" the high court into issuing a TRO when in fact "it desires only to receive payment."