G.R. No. 150335 & 152687; March 1, 2007
ERNESTO V. YU and MANUEL C. YUHICO, Petitioners, vs. THE ORCHARD GOLF & COUNTRY CLUB, INC., et al., Respondents.

FACTS

Petitioners, members of The Orchard Golf & Country Club, were suspended by the club’s board of directors for violating club rules by playing as a twosome on a weekend without permission and using offensive language towards staff. They filed petitions for injunction with the Securities and Exchange Commission (SEC) to challenge the suspension. The SEC-SICD issued a 20-day Temporary Restraining Order (TRO) on July 14, 2000, and later a writ of preliminary injunction on August 7, 2000. However, on August 1, 2000, the SEC en banc issued guidelines stating that TROs or injunctions in intra-corporate cases filed before August 8, 2000, would only be effective up to August 8, 2000, due to the impending transfer of jurisdiction to regular courts under the new Securities Regulation Code. Relying on this, the board implemented the suspension after August 8. Petitioners then filed a petition for indirect contempt in the Regional Trial Court (RTC), which issued an order effectively restoring the injunction. The Court of Appeals reversed the RTC, leading petitioners to elevate the case to the Supreme Court.

ISSUE

The primary issue is whether the writ of preliminary injunction issued by the SEC-SICD on August 7, 2000, lapsed on August 8, 2000, pursuant to the SEC en banc guidelines, thereby allowing the respondent board to implement the suspension.

RULING

The Supreme Court ruled that the writ of preliminary injunction did not lapse on August 8, 2000, and the board’s implementation of the suspension was improper. The legal logic is anchored on the nature and effectivity of injunctive writs. A writ of preliminary injunction, once issued, remains effective until it is dissolved by the court that issued it or is otherwise terminated by a final judgment on the merits. The SEC en banc guidelines of August 1, 2000, which purported to limit the effectivity of such writs to August 8, 2000, constituted an invalid amendment of the Rules of Court. The SEC, in issuing the guidelines, exercised quasi-judicial power. However, procedural rules concerning court processes, including the duration and effectivity of injunctions, are within the sole rule-making power of the Supreme Court. The SEC guidelines could not supersede or modify the established rules that a preliminary injunction persists until revoked. Therefore, the writ issued on August 7 remained in full force beyond August 8. The board’s act of enforcing the suspension based on the perceived lapse was a violation of a valid court order. The Court of Appeals decision was reversed, and the RTC order maintaining the injunction was upheld.