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Securities and Exchange Commission v. Hon. Oscar P. Noel, JR., A.M. No. RTJ-23-028, January 23, 2023

The SEC issued a cease and desist order against Kapa-Community Ministry International for selling securities without proper registration. Kapa filed a case in RTC seeking an injunction against the SEC order. The RTC judge granted a temporary restraining order and preliminary injunction against the SEC order. The SEC filed a complaint against the RTC judge, arguing the judge did not have jurisdiction because the case directly interfered with the SEC's powers. The Office of the Court Administrator found the RTC judge administratively liable for gross ignorance of the law, as RTCs do not have jurisdiction over cases that interfere with SEC powers and orders. On review, the Supreme Court upheld the finding, noting RTCs cannot interfere with or overturn rulings of co-equal

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165 views2 pages

Securities and Exchange Commission v. Hon. Oscar P. Noel, JR., A.M. No. RTJ-23-028, January 23, 2023

The SEC issued a cease and desist order against Kapa-Community Ministry International for selling securities without proper registration. Kapa filed a case in RTC seeking an injunction against the SEC order. The RTC judge granted a temporary restraining order and preliminary injunction against the SEC order. The SEC filed a complaint against the RTC judge, arguing the judge did not have jurisdiction because the case directly interfered with the SEC's powers. The Office of the Court Administrator found the RTC judge administratively liable for gross ignorance of the law, as RTCs do not have jurisdiction over cases that interfere with SEC powers and orders. On review, the Supreme Court upheld the finding, noting RTCs cannot interfere with or overturn rulings of co-equal

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Marlon
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Securities and Exchange Commission v. Hon. Oscar P. Noel, Jr., A.M. No.

RTJ-
23-028, January 23, 2023
FACTS:
On February 14, 2019, the SEC issued a Cease and Desist Order (CDO) against
Kapa-Community Ministry International, Inc. (KAPA) after discovering that the
latter was selling securities in the form of investment contracts, in violation of
Republic Act No. (RA) 8799, otherwise known as "The Securities Regulation
Code" (SRC). KAPA initially filed a motion before the SEC seeking the lifting of
the CDO, but later on, withdrew the same. On March 1, 2019, KAPA filed the
subject case for injunction with application for issuance of a temporary
restraining order (TRO) and/or writ of preliminary injunction (WPI) before the
RTC, essentially claiming that the CDO issued by the SEC violated its right to
religious freedom.
RTC Branch 58 granted KAPA’s prayer for 20-day TRO and writ of preliminary
injunction on the ground that it was unopposed and proceeded to issue the
same on March 19, 2019 also noting that the court has jurisdiction over the
case and not the SEC which was asserted by the SEC.
In light of the foregoing, the SEC filed the instant complaint for, inter alia,
Gross Ignorance of the Law against respondent. Essentially, the SEC
contended that it is a co-equal body of RTCs, and hence, the RTCs cannot
interfere with or overturn its rulings. In this regard, the SEC pointed out
Section 179 of RA 11232, otherwise known as the "Revised Corporation Code of
the Philippines" (RCC), which provides that "[n]o court below the Court of
Appeals shall have jurisdiction to issue a restraining order, preliminary
injunction, or preliminary mandatory injunction in any case, dispute, or
controversy that directly or indirectly interferes with the exercise of the powers,
duties and responsibilities of the Commission that falls exclusively within its
jurisdiction." As such, respondent's acts of issuing a TRO and WPI against the
CDO constitutes Gross Ignorance of the Law.
In a Report dated August 11, 2020, the Office of the Court Administrator (OCA)
recommended, among others, that respondent be found administratively liable
for Gross Ignorance of the Law, and accordingly, be meted with the penalty of
suspension from the service for a period of four months, with a stem warning
that a repetition of the same or similar offense shall be dealt with more severely
by the Court.
ISSUE:
Whether or not respondent erred in taking cognizance of the complaint for lack
of jurisdiction
HELD:
YES.
It is worthy to note that "[a]s courts of general jurisdiction, the RTC ordinarily
exercise exclusive original jurisdiction over civil actions incapable of pecuniary
estimation, such as that of accounting, cancellation of certificates of sale
issued in foreclosure proceedings and injunction. Nevertheless, the scope of
such general jurisdiction cannot be extended over matters falling under the
special jurisdiction of another court or quasi-judicial body." Relatedly, under
prevailing laws, rules, and jurisprudence, it is a basic rule that pursuant to its
exercise of quasi-judicial jurisdiction, i.e., the issuance of CDOs, the SEC
stands as a co-equal body of the RTCs; hence, all orders and issuances issued
by the SEC in the exercise of such jurisdiction may not be interfered with, let
alone overturned, by the RTCs.
The foregoing rule, which stems from "the doctrine of judicial stability or non-
interference in the regular orders or judgments of a co-equal court, is an
elementary principle in the administration of justice: no court can interfere by
injunction with the judgments or orders of another court of concurrent
jurisdiction having the power to grant the relief sought by the injunction. The
rationale for the rule is founded on the concept of jurisdiction: a court that
acquires jurisdiction over the case and renders judgment therein has
jurisdiction over its judgment, to the exclusion of all other coordinate courts,
for its execution and over all its incidents, and to control, in furtherance of
justice, the conduct of ministerial officers acting in connection with this
judgment." Further, "[t]his rule of non-interference applies not only to courts of
law having equal rank but also to quasi-judicial agencies statutorily at oar with
such courts."
Based on the foregoing, respondent should have refrained from acting on the
subject case — as what the Presiding Judge of RTC Branch 58 did. Despite
these, respondent still issued a 20-day TRO, and later on, a WPI in KAPA's
favor and against the CDO issued by the SEC, a co-equal body.

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