Manila Electric Company v. The Honorable Sandiganbayan
REITERATIONFacts
The Antecedents: Manila Electric Company (MERALCO) leased spaces in its distribution poles to Sining Makulay, Inc. (SMI) for Community Antenna Television Service (CATV) under a Joint Pole Agreement. MERALCO discovered SMI was also using the poles for computer data channels, which MERALCO considered a violation of the agreement. MERALCO served a notice of termination and demanded removal of SMI's attachments. Procedural History: SMI, which had been placed under sequestration as a company allegedly owned by Roberto Benedicto, filed an "Urgent Motion for Preliminary Injunction" before the Sandiganbayan in Civil Case No. 0034 (Republic of the Philippines vs. Roberto Benedicto, et al.), seeking to enjoin MERALCO from terminating the use of the poles. MERALCO opposed, arguing lack of jurisdiction of the Sandiganbayan over petitioner and the subject matter. The Sandiganbayan ruled in the affirmative, asserting jurisdiction. The Petition: MERALCO filed a petition for certiorari and prohibition with the Supreme Court, assailing the Sandiganbayan's jurisdiction over the petitioner and the subject matter. Subsequently, MERALCO received notice of a resolution granting a "Joint Motion To Approve Compromise Agreement" in Civil Case No. 0034 between the Republic of the Philippines and Roberto S. Benedicto. MERALCO then raised the issue of whether this compromise agreement rendered the instant petition moot and academic.
Issue(s)
Whether the Sandiganbayan acquired jurisdiction over the petitioner (MERALCO) and has jurisdiction over the subject matter of the motion. Whether the compromise agreement in Civil Case No. 0034 rendered the instant petition moot and academic.
Ruling
The petition is DISMISSED for being moot and academic. The questioned resolution dated October 22, 1991 of respondent Sandiganbayan is SET ASIDE for having become functus officio.
Ratio Decidendi
On the issue of Sandiganbayan's jurisdiction over petitioner and the subject matter: The Sandiganbayan correctly assumed jurisdiction because Sining Makulay, Inc. (SMI) was a sequestered corporation. Under Executive Order No. 14, all cases of the Presidential Commission on Good Government (PCGG) concerning ill-gotten wealth and all incidents arising from, incidental to, or related to such cases fall under the exclusive and original jurisdiction of the Sandiganbayan. SMI, being under sequestration, was considered custodia legis, and any action affecting its assets or operations, such as the contractual dispute with MERALCO, was deemed an incident of the main case before the Sandiganbayan. The Court cited PCGG v. Peña and BASECO v. PCGG to support this assertion of jurisdiction over sequestered entities and related incidents. On whether the compromise agreement rendered the petition moot and academic: The Court agreed with MERALCO that the petition had become moot and academic. The compromise agreement between the Republic of the Philippines and Roberto S. Benedicto explicitly lifted the sequestration over SMI, recognizing its private ownership by Benedicto as within his capacity to acquire from his profession and business. Since SMI was no longer under sequestration and was returned to private hands, any dispute arising from the contract between MERALCO and SMI would no longer prejudice the government or the parties in Civil Case No. 0034. The compromise agreement, having the effect of res judicata under Article 2037 of the New Civil Code, superseded the previous situation that justified the Sandiganbayan's exercise of jurisdiction.
Main Doctrine
A case becomes moot and academic when a supervening event, such as the approval of a compromise agreement that lifts the sequestration of a party, renders the resolution of the original issues inconsequential to the parties and the government.