G.R. No. L-34344 February 29, 1988
RICARDO AGUIRRE, FELIXBERTO VALDEZ, ESTEBAN RIVERA and ZAMBALES COLLEGES, INC., petitioners, vs. JOSE DUMLAO, and COURT OF APPEALS, respondents.

FACTS

The case originated from the removal of private respondent Jose Dumlao as a member of the Board of Trustees of Zambales Colleges, Inc. Dumlao was elected for a one-year term in July 1950. In October 1950, the stockholders held a special meeting where they reduced the board from seven to five members, removed all incumbent trustees, and elected a new board, excluding Dumlao. Dumlao and others filed a quo warranto proceeding (Civil Case No. 1374) challenging the legality of the meeting and the election. The Court of First Instance dismissed the case, but on appeal, the Court of Appeals, in a 1954 decision, declared the removal illegal, stating a trustee could only be ousted for misfeasance and not through a special election. However, it dismissed the quo warranto petition as moot because Dumlao’s one-year term had already expired by the time of the decision.
Subsequently, in 1955, Dumlao filed a separate damage suit (Civil Case No. 1714) against the petitioners, seeking compensation for his unlawful ouster and related prosecution for estafa. The trial court awarded Dumlao actual, moral, and nominal damages. The petitioners appealed to the Court of Appeals, which affirmed the trial court’s decision. The petitioners then elevated the case to the Supreme Court.

ISSUE

Whether the petitioners are liable for damages to Dumlao for his illegal removal as a member of the Board of Trustees.

RULING

The Supreme Court dismissed the petition and affirmed the award of damages. The Court held that the sole issue was the liability for damages arising from an act already adjudged as illegal. The 1954 Court of Appeals decision in the quo warranto case had attained finality and constituted the “law of the case” between the parties. That decision explicitly declared Dumlao’s removal illegal, even though it dismissed the petition on the ground of mootness due to the expiration of his term. This final adjudication of illegality provided a proper basis for a subsequent damage suit.
The Court rejected the petitioners’ attempt to re-litigate the legality of the removal, emphasizing that this question was already settled and could not be resurrected. Under Section 15, Rule 66 of the Rules of Court, a person adjudged entitled to an office in a quo warranto proceeding may also bring an action to recover damages sustained due to the usurpation. The mootness of the quo warranto petition concerning reinstatement did not bar a claim for damages resulting from the unlawful act itself. Therefore, the petitioners were liable for the damages awarded as a consequence of their illegal removal of Dumlao from his corporate office.