A.M. No. RTJ-23-029 (Formerly OCA IPI No. 19-4955-RTJ). January 23, 2023.
Securities and Exchange Commission, represented by Commissioner Emilio B. Aquino, Complainant, vs. Hon. Oscar P. Noel, Jr., Presiding Judge, Branch 35, Regional Trial Court, General Santos City, South Cotabato, Respondent.

FACTS

The Securities and Exchange Commission (SEC) issued a Cease and Desist Order (CDO) against Kapa-Community Ministry International, Inc. (KAPA) for violating the Securities Regulation Code. KAPA filed a case for injunction with an application for a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction (WPI) before the Regional Trial Court (RTC), claiming the CDO violated its right to religious freedom. The case was raffled to Branch 35 presided by respondent Judge Oscar P. Noel, Jr. The SEC filed a manifestation contending the RTC had no jurisdiction, but respondent expunged it for violating the Efficient Use of Paper Rule. Respondent granted KAPA’s prayer for a 20-day TRO and later issued a WPI, reasoning the courts had jurisdiction over constitutional issues like religious freedom, the SEC’s power was limited to securities, and the prayers were unopposed. The SEC filed an administrative complaint for Gross Ignorance of the Law, citing Section 179 of the Revised Corporation Code, which prohibits courts below the Court of Appeals from issuing injunctive relief that interferes with the SEC’s exclusive jurisdiction. Respondent defended his actions, stating the SEC failed to attend hearings and that KAPA raised a constitutional issue.

ISSUE

Whether or not respondent should be held administratively liable for Gross Ignorance of the Law for issuing a TRO and WPI against an SEC Cease and Desist Order.

RULING

Yes, respondent is administratively liable for Gross Ignorance of the Law. The Court found that respondent blatantly disregarded Section 179 of the Revised Corporation Code, a clear and straightforward legal provision that expressly strips RTCs of jurisdiction to issue any restraining order or injunction that interferes with the SEC’s exclusive powers. His defense that the case involved religious freedom was untenable, as the circumstances indicated KAPA was circumventing the proper procedure. The prior denial of a TRO by another RTC branch on jurisdictional grounds should have alerted him. His failure to recognize this basic jurisdictional limitation constituted gross ignorance. The Court resolved the case under the further amended Rule 140 of the Rules of Court. Considering this was respondent’s third infraction for the same offense, having been previously admonished and reprimanded, the Court modified the OCA’s recommended penalty and imposed a fine of P40,000.00.