G.R. No. L-11357; May 31, 1962
FELIPE B. OLLADA, etc., petitioner-appellant, vs. CENTRAL BANK OF THE PHILIPPINES, respondent-appellee.
FACTS
Felipe B. Ollada, a certified public accountant duly accredited to practice before the Central Bank, challenged a new accreditation requirement imposed by the Bank’s Import-Export Department in December 1955. The requirement compelled CPAs to submit an application form (CB-IED Form No. 5) and an accreditation card (CB-IED Form No. 6) under oath to certify financial statements for clients seeking import dollar allocations, effectively nullifying his prior accreditation. Ollada filed a petition for declaratory relief, arguing the requirement unlawfully invaded the Board of Accountancy’s jurisdiction, exceeded the Central Bank’s powers, and unconstitutionally restrained his profession.
During proceedings, the Central Bank moved to dismiss for lack of cause of action, asserting its authority to issue rules for administering the monetary system. It also manifested willingness to modify the contested forms, specifically deleting a paragraph requiring adherence to the Philippine Institute of Accountants’ rules and amending another to require compliance only with Central Bank regulations consistent with the Board of Accountancy’s rules. The trial court initially denied a preliminary injunction after the Bank submitted modified forms (CB-ID Forms 5 and 6), but later granted it upon Ollada’s claim that Form No. 6 still referenced the Institute’s rules. The Bank further modified Form No. 6, removing the oath and specifying governance by Central Bank rules, leading the court to dissolve the injunction and ultimately dismiss the complaint.
ISSUE
Whether the trial court correctly dismissed the petition for declaratory relief.
RULING
Yes, the Supreme Court affirmed the dismissal. The legal logic centers on the proper use of a declaratory relief action under Rule 66 of the Rules of Court. The Court clarified that an action for declaratory relief is only viable before any breach of a contract, statute, or right has occurred. Its purpose is to secure an authoritative statement of rights or duties before a controversy escalates into a violation, not to remedy an already completed wrong.
In this case, Ollada’s own pleadings established that a breach had already transpired. He explicitly alleged that the Central Bank’s imposition of the new accreditation requirement constituted an “unlawful invasion” of his rights, caused him “serious injury,” and resulted in an “unlawful restraint” on his professional practice. These allegations confirm that an actionable violation had already taken place, granting him a complete cause of action for ordinary remedies like injunction or damages. Consequently, declaratory relief was an improper procedural vehicle. The Court held that where adequate relief is available through other existing forms of action, as it was here, a petition for declaratory relief cannot prosper. The dismissal was without prejudice to Ollada pursuing an appropriate ordinary action.