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G.R. No.

164459
April 24, 2007
LIMITLESS POTENTIALS, INC., Petitioner, vs. HON. COURT OF APPEALS,
CRISOSTOMO YALUNG, and ATTY. ROY MANUEL VILLASOR, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the
1997 Revised Rules of Civil Procedure seeking to annul and set aside: (1)
The Decision,1 dated 16 September 2003, of the Court of Appeals in CAG.R. SP No. 73463 entitled, Limitless Potentials, Inc. vs. Hon. Manuel D.
Victorio, in his capacity as the Presiding Judge of the Regional Trial Court of
Makati City, Branch 141, Crisostomo Yalung, and Atty. Roy Manuel Villasor,
which dismissed herein petitioners Petition for Certiorari under Rule 65 of
the 1997 Revised Rules of Civil Procedure for lack of merit, and (2) The
Resolution,2 dated 8 July 2004, of the appellate court in the same case
which denied petitioners Motion for Reconsideration because the issues
and arguments raised therein had already been passed upon and
judiciously resolved in the Decision dated 16 September 2003.
The controversy of this case stemmed from the following facts:
On 12 October 1995, Digital Networks Communications and Computers,
Inc. (Digital) and herein petitioner Limitless Potentials, Inc. (LPI), a domestic
corporation duly organized and existing under Philippine laws, entered into
a Billboard Advertisement Contract whereby petitioner was to construct
one billboard advertisement for Digitals product for a period of one year,
with an agreed rental of P60,000.00 per month plus Value Added Tax
(VAT). It was agreed, among other things, that Digital will make a threemonth deposit in the following manner, to wit: (a) P60,000.00 plus VAT
upon the signing of the contract, and (b) P120,000.00 plus VAT upon
completion of the billboard. Digital complied with the aforesaid agreement.
The billboard, however, was destroyed by unknown persons. In view
thereof, the contract between Digital and the petitioner was considered
terminated. Digital demanded for the return of their rental deposit for two
months, but the petitioner refused to do so claiming that the loss of the
billboard was due to force majeure and that any cause of action should be
directed against the responsible persons. Thus, on 18 April 1997, Digital
commenced a suit against herein petitioner before the Metropolitan Trial
Court (MeTC) of Makati City, Branch 66, presided over by then Judge Estela
Perlas-Bernabe (Judge Perlas-Bernabe)3 , for the return of Digitals deposit,
which was equivalent to two months rental inclusive of VAT and attorneys
fees. The case was docketed as Civil Case No. 55170.
On 18 June 1997, consistent with its defense against Digitals Complaint,
petitioner filed a ThirdParty Complaint4 against Macgraphics Carranz
International Corporation (Macgraphics) and herein private respondents
Bishop Crisostomo Yalung (Bishop Yalung) and Atty. Roy Manuel Villasor
(Atty. Villasor) alleging that it had entered into a contract of lease with
Roman Catholic Archbishop of Manila (RCAM), as represented by the
private respondents, over a space inside San Carlos Manor Seminary in
Guadalupe Viejo, Makati City, where petitioner erected the subject
billboard. Petitioner further averred that despite its full compliance with
the terms and conditions of the lease contract, herein private respondents,
together with their cohorts, maliciously dismantled and destroyed the
subject billboard and prevented its men from reconstructing it. Thereafter,
petitioner learned that Macgraphics had "cajoled and induced" RCAM,
through the private respondents, to destroy the subject billboard to enable

Macgraphics to erect its own billboard and advertising signs. Thus, by way
of affirmative defenses, petitioner claimed that: (a) the destruction of the
subject billboard was not of its own making and beyond its control, and (b)
Digitals cause of action, if any, should be directed against the private
respondents and Macgraphics. Hence, petitioner prayed that judgment be
rendered in its favor and to hold private respondents liable for the
following: (a) moral damages in the amount of P1,000,000.00; (b)
exemplary, temperate and nominal damages amounting to P300,000.00;
(c) P300,000.00 as attorneys fees; (d) P50,000.00 as litigation expenses;
and (e) costs of suit, allegedly suffered or incurred by it because of the
willful destruction of the billboard by the private respondents.
In response, private respondents filed a Motion to Dismiss the aforesaid
Third-Party Complaint based on the following grounds: (1) litis pendentia;
(2) lack of cause of action; (3) forum shopping; and (4) lack of privity of
contract. The MeTC, in an Order dated 25 August 1997,5 denied the said
Motion to Dismiss. Petitioner filed an Amended Third-Party Complaint.
Again, private respondents filed a Motion to Dismiss Amended Third-Party
Complaint. However, the MeTC also denied the Motion to Dismiss
Amended Third-Party Complaint in an Order dated 10 October 1997.6
On 9 December 1997, private respondents filed a Petition for Certiorari
with Prayer for Preliminary Restraining Order and/or Writ of Preliminary
Injunction before the Regional Trial Court (RTC) of Makati City, assailing the
Orders dated 25 August 1997 and 10 October 1997 of the MeTC of Makati
City denying their Motion to Dismiss Third-Party Complaint and Motion to
Dismiss Amended Third-Party Complaint, respectively, in Civil Case No.
55170.
The RTC issued an Order on 6 February 1998,7 granting private
respondents prayer for a writ of preliminary injunction, conditioned upon
the posting of an injunction bond in the amount of P10,000.00. Thus, the
MeTC was enjoined from hearing the Third-Party Complaint in Civil Case
No. 55170. The pertinent portion of the aforesaid Order reads, as follows:
When the application for temporary restraining order and/or preliminary
injunction was heard this afternoon, [herein petitioner] who did not file
comment on the petition appeared thru counsel Emmanuel Magnaye. It
was brought out to the attention of this Court that respondent judge is
poised on pursuing the hearing of the case before her despite the
pendency of this petition. It appeared that the case was set by respondent
judge for hearing ex-parte for the reception of [herein petitioners]
evidence on 23 February 1998. It also appeared that [herein private
respondents] were declared in default despite the fact that they have filed
their answer and the motion to lift such order of default and for admission
of the answer was denied by respondent judge.

Subsequently, however, the RTC rendered a Decision9 on 28 April 2000,


dismissing the Petition for Certiorari filed by private respondents, the
dispositive portion of which reads:
WHEREFORE, the petition is hereby dismissed for lack of merit. The
preliminary injunction issued by this Court on 6 February 200010 (sic) is
hereby dissolved.
Costs against [herein private respondents].
Disgruntled, private respondents filed an Urgent Motion for
Reconsideration, which was denied by the RTC in its Order dated 26 June
2000.
Petitioner filed its Motion for Judgment Against the Bond, and in
compliance with the directive of the RTC, the petitioner filed a pleading 13
specifying its claims, thus: (a) attorneys fees in the sum of P74, 375.00;
and (b) moral damages for the tarnished good will in the sum of
P1,000,000.00.
The RTC, in its Order dated 3 April 2002,14 denied petitioners Motion for
Judgment Against the Bond declaring that the preliminary injunction was
not wrongfully obtained; therefore, the claim for damages on the bond is
untenable.
Aggrieved, the petitioner moved for the reconsideration of the aforesaid
Order, which was also denied by the RTC in its Order dated 6 August
2002.15
Dissatisfied, the petitioner filed a Petition for Certiorari under Rule 65 of
the Revised Rules of Civil Procedure before the Court of Appeals assailing
the Orders of the RTC dated 3 April 2002 and 6 August 2002 for having
been issued with grave abuse of discretion amounting to lack and/or excess
of jurisdiction.
On 6 November 2002, the Court of Appeals issued a Resolution16 dismissing
the Petition for failure to show proof that a certain Quirino B. Baterna has
been duly authorized by the petitioner to file the Petition for and in its
behalf. Petitioner moved for the reconsideration of the aforesaid
Resolution, which was granted by the appellate court in its Resolution
dated 24 January 200317 thereby reinstating the Petition for Certiorari filed
by the petitioner.
On 16 September 2003, the Court of Appeals rendered a Decision
dismissing the Petition filed by the petitioner for utter lack of merit. The
petitioner filed a Motion for Reconsideration based on the following
grounds:

Upon consideration of the allegations in the petition and the oral


manifestations and admissions of both parties, this Court hereby resolves
to issue the writ of preliminary injunction in order to preserve the status
quo as well as not to render the issue herein raised moot and academic.

I.

WHEREFORE, the motion for preliminary injunction is granted. Accordingly,


upon the filing by [herein private respondents] of a bond in the amount of
P10,000.00, let a writ of preliminary injunction be issued, enjoining
respondent judge, or her successor, from hearing the [T]hird [P]arty
[C]omplaint against [herein private respondents] in Civil Case No. 55170
until further orders from this Court.8

III.

II.

The dismissal of the petition and dissolution of the injunction


amount to a determination that the injunction was wrongfully
or improvidently obtained.
The petitioner suffered damages by reason of the issuance of
the injunction.
The damages claimed by the petitioner are covered by the
injunction bond.

The Court of Appeals through a Resolution dated 8 July 2004, denied the
petitioners Motion for Reconsideration.
Hence, this Petition.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 1

Petitioner pointed out two basic legal issues wherein the appellate court
committed serious and reversible errors, to wit:
I.
II.

Is malice or bad faith a condition sine qua non for liability to


attach on the injunction bond?
Are attorneys fees, litigation costs, and cost of delay by reason
of the injunction covered by the injunction bond?

Petitioner argues that malice or lack of good faith is not an element of


recovery on the bond. The dissolution of the injunction, even if the
injunction was obtained in good faith, amounts to a determination that the
injunction was wrongfully obtained and a right of action on the injunction
immediately accrues to the defendant. The petitioner maintains that the
attorneys fees, litigation costs, and cost of delay by reason of the
injunction are proper and valid items of damages which can be claimed
against the injunction bond. Hence, having proven through testimonial and
documentary evidence that it suffered damages because of the issuance of
the writ of injunction, and since malice or lack of good faith is not an
element of recovery on the injunction bond, petitioner asserts that it can
properly collect such damages on the said bond.
Private respondent Bishop Yalung on the other hand, prays for the outright
dismissal of the present Petition due to the alleged failure of the petitioner
to comply with the mandatory rule on proper certification on non-forum
shopping under Section 5, Rule 7 of the 1997 Revised Rules of Civil
Procedure. According to him, it is not sufficient for Mr. Baterna to make
the undertaking that "I have not commenced any other action or
proceeding involving the same issue in the Supreme Court, etc." inasmuch
as such undertaking should have been made by the principal party, namely,
the petitioner. He underscores that the verification/disclaimer of forum
shopping executed by Mr. Baterna on behalf of the petitioner is legally
defective for failure to enumerate with particularity the multiple civil and
criminal actions, which were filed by him and the petitioner against the
private respondents.
Private respondent Bishop Yalung also avers that the petitioner is not
entitled to collect damages on the injunction bond filed before the court a
quo. Primarily, as the appellate court mentioned in its Decision, the
preliminary injunction was directed not against the petitioner but against
the MeTC. The petitioner was not restrained from doing any act. What was
restrained was the hearing of the Third-Party Complaint while the Petition
for Certiorari was pending, "in order to preserve the status quo and not to
render the issue therein moot and academic."18 Also, the fact that the
decision is favorable to the party against whom the injunction was issued
does not automatically entitle the latter to recover damages on the bond.
Therefore, the petitioner cannot claim that it suffered damages because of
the issuance of the writ of injunction.
Private respondent Atty. Villasor shares the same argument as that of his
co-respondent Bishop Yalung that it was the MeTC which was enjoined and
not herein petitioner. Private respondent Atty. Villasor further alleged that
in the Special Civil Action for Certiorari, the action is principally against any
tribunal, board, or officer exercising judicial or quasi-judicial functions who
has acted without or in excess of jurisdiction or with grave abuse of
discretion. Thus, private respondents Petition for Certiorari before the RTC
principally pertains to the MeTC and not to herein petitioner. Additionally,
private respondent Atty. Villasor argues that it was petitioner who was
benefited by such writ of preliminary injunction, because the injunction left
Digital unable to prosecute Civil Case No. 55170 against herein petitioner.
Lastly, private respondent Atty. Villasor claims that petitioner did not

oppose their application for a writ of preliminary injunction at the hearing


wherein petitioner was duly represented by counsel.
Simply stated, the threshold issues are:
I.
II.

Can petitioner recover damages from the injunction bond?


Was petitioner able to substantiate the damages?

Quite apart from the above, there appears to be another question


concerning the alleged violation by the petitioner of the mandatory rule on
proper certification on non-forum shopping.
In the case at bar, petitioner repeatedly argues that malice or lack of good
faith is not an element of recovery on the injunction bond. In answering
this issue raised by petitioner, this Court must initially establish the nature
of the preliminary injunction, the purpose of the injunction bond, as well as
the manner of recovering damages on the said bond.
A preliminary injunction is a provisional remedy that a party may resort to
in order to preserve and protect certain rights and interests during the
pendency of an action.19 It is an order granted at any stage of an action,
prior to the judgment or final order, requiring a party, court, agency or
person to perform or to refrain from performing a particular act or acts. A
preliminary injunction, as the term itself suggests, is merely temporary,
subject to the final disposition of the principal action. 20 It is issued to
preserve the status quo ante, which is the last actual, peaceful, and
uncontested status that preceded the actual controversy,21 in order to
protect the rights of the plaintiff during the pendency of the suit.
Otherwise, if no preliminary injunction is issued, the defendant may,
before final judgment, do the act which the plaintiff is seeking the court to
restrain. This will make ineffectual the final judgment that the court may
afterwards render in granting relief to the plaintiff. 22 The status quo should
be existing ante litem motam, or at the time of the filing of the case. For
this reason, a preliminary injunction should not establish new relations
between the parties, but merely maintain or re-establish the pre-existing
relationship between them.23
The purpose of a preliminary injunction is to prevent threatened or
continuous irremediable injury to some of the parties before their claims
can be thoroughly studied and adjudicated. Thus, to be entitled to an
injunctive writ, the petitioner has the burden to establish the following
requisites:
(1)
(2)
(3)

a right in esse or a clear and unmistakable right to be


protected;
a violation of that right;
that there is an urgent and permanent act and urgent necessity
for the writ to prevent serious damage.24

A preliminary injunction or temporary restraining order may be granted


only when, among other things, the applicant, not explicitly exempted, files
with the court, where the action or proceeding is pending, a bond executed
to the party or person enjoined, in an amount to be fixed by the court, to
the effect that the applicant will pay such party or person all damages
which he may sustain by reason of the injunction or temporary restraining
order if the court should finally decide that the applicant was not entitled
thereto. Upon approval of the requisite bond, a writ of preliminary
injunction shall be issued.25 Thus, the posting of a bond is a condition sine
qua non for a writ of preliminary injunction to be issued.

The injunction bond is intended as a security for damages in case it is finally


decided that the injunction ought not to have been granted. Its principal
purpose is to protect the enjoined party against loss or damage by reason
of the injunction,26 and the bond is usually conditioned accordingly.
The damages sustained as a result of a wrongfully obtained injunction may
be recovered upon the injunction bond which is required to be deposited
with court.27 Rule 57, Section 20, of the 1997 Revised Rules of Civil
Procedure, which is similarly applicable to preliminary injunction,28 has
outlined the procedure for the filing of a claim for damages against an
injunction bond. The aforesaid provision of law pertinently provides:
SEC. 20. Claim for damages on account of improper, irregular or excessive
attachment. - An application for damages on account of improper, irregular
or excessive attachment must be filed before the trial or before appeal is
perfected or before the judgment becomes executory, with due notice to
the attaching party and his surety or sureties, setting forth the facts
showing his right to damages and the amount thereof. Such damages may
be awarded only after proper hearing and shall be included in the
judgment on the main case.
If the judgment of the appellate court be favorable to the party against
whom the attachment was issued, he must claim damages sustained during
the pendency of the appeal by filing an application in the appellate court,
with notice to the party in whose favor the attachment was issued or his
surety or sureties, before the judgment of the appellate court becomes
executory. The appellate court may allow the application to be heard and
decided by the trial court.
Nothing herein contained shall prevent the party against whom the
attachment was issued from recovering in the same action the damages
awarded to him from any property of the attaching party not exempt from
execution should the bond or deposit given by the latter be insufficient or
fail to fully satisfy the award.29
Now, it can be clearly gleaned that there is nothing from the aforequoted
provision of law which requires an enjoined party, who suffered damages
by reason of the issuance of a writ of injunction, to prove malice or lack of
good faith in the issuance thereof before he can recover damages against
the injunction bond. This Court was very succinct in the case of Aquino v.
Socorro,30 citing the case of Pacis v. Commission on Elections,31 thus:
Malice or lack of good faith is not an element of recovery on the bond. This
must be so, because to require malice as a prerequisite would make the
filing of a bond a useless formality. The dissolution of the injunction, even if
the injunction was obtained in good faith, amounts to a determination that
the injunction was wrongfully obtained and a right of action on the
injunction bond immediately accrues. Thus, for the purpose of recovery
upon the injunction bond, the dissolution of the injunction because of
petitioners main cause of action provides the actionable wrong for the
purpose of recovery upon the bond.
We, therefore, agree with the petitioner that indeed, malice or lack of good
faith is not a condition sine qua non for liability to attach on the injunction
bond.
With respect to the issue raised by the petitioner regarding the coverage of
the injunction bond, this Court finds it necessary to quote once again the
provision of Section 4(b), Rule 58 of the 1997 Revised Rules of Civil
Procedure, to wit:

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 2

Unless exempted by the court, the applicant files with the court where the
action or proceeding is pending, a bond executed to the party or person
enjoined, in an amount to be fixed by the court, to the effect that the
applicant will pay to such party or person all damages which he may
sustain by reason of the injunction or temporary restraining order if the
court should finally decide that the applicant was not entitled thereto.
Upon approval of the requisite bond, a writ of preliminary injunction shall
be issued.
The aforesaid provision of law clearly provides that the injunction bond is
answerable for all damages. The bond insures with all practicable certainty
that the defendant may sustain no ultimate loss in the event that the
injunction could finally be dissolved.32 Consequently, the bond may
obligate the bondsmen to account to the defendant in the injunction suit
for all damages, or costs and reasonable counsels fees, incurred or
sustained by the latter in case it is determined that the injunction was
wrongfully issued.33 Likewise, the posting of a bond in connection with a
preliminary injunction does not operate to relieve the party obtaining an
injunction from any and all responsibility for damages that the writ may
thereby cause. It merely gives additional protection to the party against
whom the injunction is directed. It gives the latter a right of recourse
against either the applicant or his surety or against both. 34
The contention of the petitioner, thus, is tenable. Attorneys fees, litigation
costs, and costs of delay can be recovered from the injunction bond as long
as it can be shown that said expenses were sustained by the party seeking
recovery by reason of the writ of preliminary injunction, which was later on
determined as not to have been validly issued and that the party who
applied for the said writ was not entitled thereto. The case of Aquino v.
Socorro,35 citing the case of Pacis v. Commission on Elections,36 holds that
the dissolution of the injunction, even if the injunction was obtained in
good faith, amounts to a determination that the injunction was wrongfully
obtained and a right of action on the injunction bond immediately accrues.
It is also erroneous for the appellate court to rule that petitioner is not
entitled to claim damages from the injunction bond simply because the
preliminary injunction was directed against the MeTC and not against the
petitioner. The MeTC does not stand to suffer damages from the injunction
because it has no interest or stake in the Petition pending before it.
Damage or loss is suffered by the party whose right to pursue its case is
suspended or delayed, which in this case, is the petitioner. Upon issuance
of the writ of injunction, it is the petitioner who will stand to suffer
damages for the delay in the principal case because, had it not been for the
injunction, the petitioner would not have incurred additional expenses for
attending the separate hearings on the injunction, and the RTC can already
decide the main case and make a prompt determination of the respective
rights of the parties therein. Hence, even if the preliminary injunction was
directed against the MeTC and not against the petitioner, it is the latter
which has the right to recover from the injunction bond the damages which
it might have suffered by reason of the said injunction.
As to the second main issue in the present case, although we do recognize
that the petitioner had a right to recover damages from the injunction
bond, however, we agree in the findings of the Court of Appeals, which
affirmed the findings of the RTC, that the petitioner did not sustain any
damage by reason of the issuance of the writ of injunction. In the
petitioners Motion for Judgment Against the Bond,37 petitioner stated
therein, thus:

5. There can be no serious debate that the issuance of the Writ of


Preliminary injunction, all at the instance of [herein private respondents],
resulted in actual and pecuniary damages on the part of [herein petitioner]
in the amount more than the value of the bond posted by [private
respondents]. The attorneys fees for expenses in litigation alone expended
by [petitioner] to defend itself in this proceedings, not to mention other
pecuniary damages, amounts to P10,000.00.38
In the case at bar, petitioner is claiming attorneys fees in the sum of
P74,375.00 it allegedly paid to defend itself in the main case for certiorari,
which it would not have spent had the private respondents not filed their
nuisance Petition and secured a writ of preliminary injunction. Likewise, by
reason of the unfounded suit, the good will of the petitioner was brought
to bad light, hence, damaged.39 It is noteworthy to mention that the
undertaking of the injunction bond is that it shall answer for all damages
which the party to be restrained may sustain by reason of the injunction if
the court should finally decide that the plaintiff was not entitled thereto.
Apparently, as the appellate court pointed out in its Decision dated 16
September 2003, the damages being claimed by the petitioner were not by
reason of the injunction but the litigation expenses it incurred in defending
itself in the main case for certiorari, which is definitely not within the
coverage of the injunction bond. Thus, this Court is not convinced that the
attorneys fees in the amount of P74,375.00 as well as the moral damages
for the tarnished good will in the sum of P1,000,000.00 were suffered by
the petitioner because of the issuance of the writ of injunction.
Furthermore, this Court will not delve into the sufficiency of evidence as to
the existence and amount of damages suffered by petitioner for it is
already a question of fact. It is settled that the factual findings of the trial
court, particularly when affirmed by the Court of Appeals, are binding on
the Supreme Court.40 Although this rule is subject to exceptions,41 the
present case does not fall into any of those exceptions which would have
allowed this Court to make its own determination of facts. This Court
upholds the factual findings of both the RTC and the Court of Appeals that
there is insufficient evidence to establish that petitioner actually suffered
damages because of the preliminary injunction issued by the RTC.
Now, on the matter of proper certification on non-forum shopping.
The requirement of a Certification on Non-Forum Shopping is contained in
Rule 7, Section 5, of the 1997 Revised Rules of Civil Procedure, which states
that:
The plaintiff or principal party shall certify under oath in the complaint or
other initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith: (a) that
he has not theretofore commenced any action or filed any claim involving
the same issues in any court, tribunal or quasi-judicial agency and, to the
best of his knowledge, no such other action or claim is pending therein; (b)
if there is such other pending action or claim, a complete statement of the
present status thereof; and (c) if he should thereafter learn that the same
or similar action or claim has been filed or is pending, he shall report that
fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by
mere amendment of the complaint or other initiatory pleading but shall be
cause for the dismissal of the case without prejudice, unless otherwise
provided, upon motion and after hearing. The submission of a false
certification or non-compliance with any of the undertakings therein shall

constitute indirect contempt of court without prejudice to the


corresponding administrative and criminal actions. If the acts of the party
or his counsel clearly constitute willful and deliberate forum shopping, the
same shall be ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for administrative sanctions.
Private respondent Bishop Yalung might have overlooked the Secretarys
Certificate42 attached to the petitioners Petition for Review, which
authorized Mr. Baterna, President of herein petitioner LPI, to represent the
latter in this case. According to the Secretarys Certificate, the Board of
Directors of petitioner LPI, at a special meeting held on 12 August 2004 at
its office at No. 812 J.P. Rizal St., Makati City, during which there was a
quorum, the following resolutions were approved, to wit:
RESOLVED, AS IT IS HEREBY RESOLVED, that the corporation reiterates the
authority of its President, Mr. Quirino B. Baterna, to represent the
corporation in all cases by and/or against the corporation vis--vis the
Roman Catholic Archbishop of Manila/Crisostomo Yalung, Roy
Villasor/Digital Netwrok (sic) Communications and Computers, Inc., and/or
MacGraphics Carranz International Corporation, to file a Petition for
Review on Certiorari with the Supreme Court docketed as G.R. No. 164459
to assert/protect LPIs rights and interests in connection with C.A.-G.R. No.
73463, entitled "Limitless Potentials, Inc., vs. Hon. Manuel Victorio, et al.,"
Honorable Court of Appeals, Manila.
RESOLVED FURTHERMORE, that any and all acts of our President,
concerning the above-referenced subject matter are hereby affirmed,
confirmed and ratified by the corporation for all legal intents and
purposes.43
Private respondent Bishop Yalung further argued that Mr. Baterna failed to
enumerate in the Certification against Forum Shopping the multiple cases
filed by him and the petitioner against private respondents. This is also
erroneous.
Forum shopping consists of filing multiple suits involving the same parties
for the same cause of action, either simultaneously or successively, for the
purpose of obtaining a favorable judgment.44 It exists where the elements
of litis pendentia45 are present or where a final judgment in one case will
amount to res judicata in another.46 It may be resorted to by a party
against whom an adverse judgment or order has been issued in one forum,
in an attempt to seek a favorable opinion in another, other than by an
appeal or a special civil action for certiorari.47
As the RTC correctly found, there was no violation of the rule against forum
shopping. The cause of action in petitioners case for consignation and
damages docketed as Civil Case No. 95-1559,48 is different from the cause
of action in its Third-Party Complaint in Civil Case No. 55170. The damages
sought in the first case were those suffered by petitioner by reason of the
alleged breach of the contract of lease by the RCAM; whereas the damages
sought in the Third-Party Complaint were those allegedly suffered by
petitioner owing to the destruction of its billboard by the private
respondents, thereby terminating the Billboard Advertisement Contract
between petitioner and Digital. Digital also sued petitioner for recovery of
the rental deposits it had already paid under the same contract.
Consequently, petitioner had to engage the services of counsel and
incurred litigation expenses in order to defend itself in the case filed
against it by Digital. Thus, the two actions are completely different and
distinct from each other so much so that a decision in either case could not

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 3

be pleaded as res judicata in the other. Hence, there is no forum shopping


that would necessitate the outright dismissal of this case.

Grazing Reports from 1985 to 1999 or pay the corresponding penalty for
non-submission thereof.7

WHEREFORE, premises considered, the instant Petition is hereby DENIED.


The Decision and Resolution of the Court of Appeals dated 16 September
2003 and 8 July 2004, respectively, affirming the Decision of the RTC dated
28 April 2000, denying herein petitioners motion to recover damages
against the injunction bond, are hereby AFFIRMED. Costs against
petitioner. SO ORDERED.

HGL contested the findings and filed a letter of reconsideration on January


12, 2001, which was denied by DENR Secretary Heherson Alvarez in a
letter-order dated December 9, 2002. The DENR stated that it had
coordinated with the DOE, which had jurisdiction over coal or coal deposits
and coal-bearing lands, and was informed that coal deposits were very
likely to exist in Sitios Bobog and Pontod. Hence, unless it could be proved
that coal deposits were not present, HGL's request had to be denied.8

G.R. No. 166854


December 6, 2006
SEMIRARA
COAL
CORPORATION
(now
SEMIRARA
MINING
CORPORATION), petitioner, vs. HGL DEVELOPMENT CORPORATION and
HON. ANTONIO BANTOLO, Presiding Judge, Branch 13, Regional Trial
Court, 6th Judicial Region, Culasi, Antique, respondents.
DECISION
QUISUMBING, J.:
Before us is a petition for review on certiorari assailing the Decision 1 dated
January 31, 2005, of the Court of Appeals in CA G.R. CEB SP No. 00035
which affirmed the Resolution2 dated September 16, 2004 of the Regional
Trial Court of Culasi, Antique, Branch 13.
The facts are as follows:
Petitioner Semirara Mining Corporation is a grantee by the Department of
Energy (DOE) of a Coal Operating Contract under Presidential Decree No.
9723 over the entire Island of Semirara, Antique, which contains an area of
5,500 hectares more or less. 4
Private respondent HGL Development Corporation is a grantee of Forest
Land Grazing Lease Agreement (FLGLA) No. 184 by the then Ministry of
Environment and Natural Resources,5 over 367 hectares of land located at
the barrios of Bobog and Pontod, Semirara, Caluya, Antique. The FLGLA No.
184 was issued on September 28, 19846 for a term of 25 years, to end on
December 31, 2009. Since its grant, HGL has been grazing cattle on the
subject property.
Sometime in 1999, petitioner's representatives approached HGL and
requested for permission to allow petitioner's trucks and other equipment
to pass through the property covered by the FLGLA. HGL granted the
request on condition that petitioner's use would not violate the FLGLA in
any way. Subsequently, however, petitioner erected several buildings for
petitioner's administrative offices and employees' residences without
HGL's permission. Petitioner also conducted blasting and excavation;
constructed an access road to petitioner's minesite in the Panaan Coal
Reserve, Semirara; and maintained a stockyard for the coal it extracted
from its mines. Thus, the land which had been used for cattle grazing was
greatly damaged, causing the decimation of HGL's cattle.
On September 22, 1999, HGL wrote petitioner demanding full disclosure of
petitioner's activities on the subject land as well as prohibiting petitioner
from constructing any improvements without HGL's permission. Petitioner
ignored the demand and continued with its activities.
On December 6, 2000, the Department of Environment and Natural
Resources (DENR) unilaterally cancelled FLGLA No. 184 and ordered HGL to
vacate the premises. The DENR found that HGL failed to pay the annual
rental and surcharges from 1986 to 1999 and to submit the required

HGL sent a letter dated March 6, 2003 to DENR Secretary Alvarez seeking
reconsideration. The DENR did not act on the letter and HGL later
withdrew this second letter of reconsideration in its letter of August 4,
2003.
On November 17, 2003, HGL filed a complaint against the DENR for specific
performance and damages with prayer for a temporary restraining order
and/or writ of preliminary injunction, docketed as Civil Case No. 20675
(2003) with the Regional Trial Court of Caloocan City. A writ of preliminary
injunction was issued by the Caloocan City RTC on December 22, 2003,
enjoining the DENR from enforcing its December 6, 2000 Order of
Cancellation.
Meanwhile, HGL had also filed on November 17, 2003, a complaint against
petitioner for Recovery of Possession and Damages with Prayer for TRO
and/or Writ of Preliminary Mandatory Injunction, docketed as Civil Case
No. C-146 with the Regional Trial Court of Culasi, Antique, Branch 13. 9
On December 1, 2003, the Antique trial court heard the application for Writ
of Preliminary Mandatory Injunction in Civil Case No. C-146. Only HGL
presented its evidence. Reception for petitioner's evidence was set to
March 23-24, 2004. Petitioner was notified. But, on March 19, 2004,
petitioner's President wrote the court asking for postponement since its
counsel had suddenly resigned. The trial court refused to take cognizance
of the letter and treated it as a mere scrap of paper since it failed to
comply with the requisites for the filing of motions and since it was not
shown that petitioner's President was authorized to represent petitioner.
Because of petitioner's failure to attend the two scheduled hearings, the
trial court, in an Order dated March 24, 2004, deemed the application for
issuance of a Writ of Preliminary Mandatory Injunction submitted for
decision. Meanwhile, petitioner had filed its Answer dated February 26,
2004, raising among others the affirmative defense that HGL no longer had
any right to possess the subject property since its FLGLA has already been
cancelled and said cancellation had already become final.
On April 14, 2004, petitioner filed a verified Omnibus Motion praying that
the trial court reconsider its Order of March 24, 2004, since petitioner's
failure to attend the hearing was due to an accident. Petitioner also prayed
that the trial court admit as part of petitioner's evidence in opposition to
the application for injunction, certified copies of the DENR Order of
Cancellation dated December 6, 2000; HGL's letter of reconsideration
dated January 12, 2001; letter of DENR Secretary Alvarez dated December
9, 2002 denying reconsideration of the order; and registry return receipt
showing HGL's receipt of the denial of reconsideration. In the alternative,
petitioner prayed that the case be set for preliminary hearing on its
affirmative defense of lack of cause of action and forum-shopping.10 Public
respondent denied the Omnibus Motion in a Resolution dated June 21,
2004.

Petitioner filed a motion for reconsideration of the said resolution. Upon


HGL's opposition, the motion was declared submitted for resolution in
accordance with the trial court's Order of August 5, 2004. 11
On September 16, 2004, the trial court granted the prayer for issuance of a
Writ of Preliminary Mandatory Injunction.12 Petitioner did not move for
reconsideration of the order. The Writ of Preliminary Mandatory Injunction
was accordingly issued by the trial court on October 6, 2004. 13 The writ
restrained petitioner or its agents from encroaching on the subject land or
conducting any activities in it, and commanded petitioner to restore
possession of the subject land to HGL or its agents.
Petitioner questioned the Resolution dated September 16, 2004, and the
Writ of Preliminary Mandatory Injunction dated October 6, 2004 before the
Court of Appeals in a petition for certiorari, raising eight issues. On January
31, 2005, however, the appellate court dismissed the petition. The Court of
Appeals in its decision by Justice Magpale ruled on the issues posed before
the appellate court:
1.

2.
3.

4.

5.

6.

7.

8.

PRIVATE RESPONDENT HAS NO LEGAL RIGHT OR CAUSE OF


ACTION UNDER THE PRINCIPAL ACTION OR COMPLAINT, MUCH
LESS, TO THE ANCILLARY REMEDY OF INJUNCTION;
PRIVATE RESPONDENT DID NOT COME TO COURT WITH
"CLEAN HANDS";
RESPONDENT JUDGE UNJUSTIFIABLY AND ARBITRARILY
DEPRIVED PETITIONER OF ITS FUNDAMENTAL RIGHT TO DUE
PROCESS BY NOT GIVING IT AN OPPORTUNITY TO PRESENT
EVIDENCE IN OPPOSITION TO THE MANDATORY INJUNCTION;
RESPONDENT
JUDGE
IMMEDIATELY
GRANTED
THE
APPLICATION FOR THE ISSUANCE OF A WRIT OF MANDATORY
INJUNCTION WITHOUT FIRST RESOLVING THE PENDING
MOTION FOR RECONSIDERATION DATED JULY 12, 2004 OF
PETITIONER;
RESPONDENT JUDGE DID NOT CONSIDER OR ADMIT THE
CERTIFIED TRUE COPIES OF THE OFFICIAL RECORDS OF THE
DENR CANCELLING PRIVATE RESPONDENT'S FLGLA AS
EVIDENCE AGAINST THE MANDATORY INJUNCTION PRAYED
FOR;
RESPONDENT JUDGE SHOULD HAVE GRANTED PETITIONER'S
MOTION FOR PRELIMINARY HEARING ON ITS AFFIRMATIVE
DEFENSE THAT PRIVATE RESPONDENT UNDER ITS COMPLAINT
HAS NO CAUSE OF ACTION AGAINST PETITIONER;
RESPONDENT JUDGE SHOULD HAVE DISMISSED THE
COMPLAINT OUTRIGHT FOR VIOLATION OF THE RULES ON
FORUM SHOPPING BY PRIVATE RESPONDENT;
THE MANDATORY INJUNCTION ISSUED IN THE INSTANT CASE IS
VIOLATIVE OF THE PROVISIONS OF PRESIDENTIAL DECREE
605.14

The Court of Appeals in the assailed Decision dated January 31, 2005,
opined and ruled as follows (which we quote verbatim):
Anent the first issue, WE rule against the petitioner.
Perusal of the allegations in the Complaint filed by the private
respondent with the court a quo show that its cause of action is
mainly anchored on the Forest Land Grazing Lease Agreement
("FLGLA") executed by and between said private respondent and the
Department of Environment and Natural Resources (DENR) which

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 4

became effective on August 28, 1984 and to expire on December 31,


2009.
Under the said lease agreement, the private respondent was granted
permission to use and possess the subject land comprising of 367hectares located at the barrios of Bobog and Pontod, Semirara Island,
Antique for cattle-grazing purposes.
However, petitioner avers that the "FLGLA" on which private
respondent's cause of action is based was already cancelled by the
DENR by virtue of its Orders dated December 6, 2000 and December
9, 2002.
While it is true that the DENR issued the said Orders cancelling the
"FLGLA", the same is not yet FINAL since it is presently the subject of
Civil Case No. 20675 pending in the Regional Trial Court (RTC) of
Caloocan City. Thus, for all intents and purposes, the "FLGLA" is still
subsisting.
The construction of numerous buildings and the blasting activities
thereon by the petitioner undertaken without the consent of the
private respondent blatantly violates the rights of the latter because
it reduced the area being used for cattle-grazing pursuant to the
"FLGLA".
From the foregoing it is clear that the three (3) indispensable
requisites of a cause of action, to wit: (a) the right in favor of the
plaintiff by whatever means and under whatever law it arises or is
created; (b) an obligation on the part of the named defendant to
respect or not to violate such right; (c) an act or omission on the part
of such defendant is violative of the right of plaintiff or constituting a
breach of the obligation of defendant to the plaintiff for which the
latter may maintain an action for recovery of damages, are PRESENT.
Hence, having established that private respondent herein has a cause
of action under the principal action in Civil Case No. C-146,
necessarily it also has a cause of action under the ancillary remedy of
injunction.

Makati City, by signing on and in behalf of the said law office. This
Court takes judicial notice of the fact that law offices employ more
than one (1) associate attorney aside from the name partners. As
such, it can easily assign the instant case to its other lawyers who are
more than capable to prepare the necessary "motion for
postponement" or personally appear to the court a quo to explain
the situation.
Even assuming arguendo that Atty. Hilario is the only one who is
knowledgeable of the facts of the case, still, petitioners cannot claim
that there was violation of due process because the "ESSENCE of due
process is reasonable opportunity to be heard x x x. What the law
proscribed is lack of opportunity to be heard." In the case at bar,
petitioner was given two (2) settings to present its evidence but it
opted not to.
Lastly, a prayer for the issuance of a writ of preliminary mandatory
injunction demands urgent attention from the court and as such,
delay/s is/are frowned upon due to the irreparable damage/s that
can be sustained by the movant.

The case filed with the court a quo is principally based on the alleged
encroachment by the petitioner of the subject land over which
private respondent claims it has authority to occupy or possess until
December 31, 2009 pursuant to FLGLA No. 184.

Petitioner claims that the court a quo gravely erred when it issued
the writ of preliminary injunction without first resolving its Motion
for Reconsideration dated July 12, 2004.

WHEREFORE, the instant petition for certiorari is DENIED and


consequently, the assailed Resolution is hereby AFFIRMED.

WE rule that the public respondent cannot be faulted for not


resolving the Motion for Reconsideration dated July 12, 2004
because the same partakes of the nature of a second motion for
reconsideration of the Order dated March 24, 2004.
Records readily disclose that a prior motion for reconsideration was
filed by the petitioner herein assailing the Order dated March 24,
2004. Although captioned as "Omnibus Motion" the same was really
a motion for reconsideration. Said "Omnibus Motion" was resolved
by the court a quo in its Order dated June 21, 2004.

This Court finds that the petitioner was not deprived of due process.

Anent the fifth issue, WE rule against the petitioner.

It appears from the records of the instant case that the petitioner
was given two (2) settings for the reception of its evidence in support
of its opposition to the prayer of herein private respondent for the
issuance of a writ of preliminary mandatory injunction.
Unfortunately, on both occasions, petitioner did not present its
evidence.

The court a quo was correct in disregarding the documentary


evidence submitted by the petitioner in support of its opposition to
the prayer for the issuance of a writ of preliminary mandatory
injunction.

Scrutiny of the pleadings submitted by both parties shows that


petitioner's lawyer, Atty. Mary Catherine P. Hilario, affiliates herself
with the law firm of BERNAS SAN JUAN & ASSOCIATE LAW OFFICES
with address at 2nd Floor, DMCI Plaza 2281 Pasong Tamo Extension,

The instant case is not within the purview of the above-cited law
because the issue/s raised herein does not involve or arise out of
petitioner's coal operation contract.

As such, the preliminary mandatory injunction issued by the court a


quo did not in any way affect the efficacy of the petitioner's coal
concession or license.

Hence, the public respondent is no longer duty bound to resolve the


subsequent, reiterative and second motion for reconsideration.

WE are not persuaded.

Section 1 thereof provides that "No court of the Philippines shall


have jurisdiction to issue any restraining order, preliminary injunction
or preliminary mandatory injunction in any case involving or growing
out of the issuance, suspension, revocation, approval or disapproval
of any concession, license, permit, patent or public grant of any kind
for the disposition, exploitation, utilization, exploration and
development of the natural resources of the country."

Anent the fourth issue, WE rule against the petitioner.

Anent the third issue, WE rule against the petitioner.

Petitioner claims that its failure to attend the hearings for the
reception of its evidence was excusable due to the sudden
resignation of its lawyer and as such, nobody can attend the hearings
of the case.

Licenses, and Other Permits Issued by Public Administrative Officials


or Bodies for the Exploitation of Natural Resources."

SO ORDERED.15
Hence, this instant petition. On February 23, 2005, this Court issued a TRO
enjoining the implementation and enforcement of the Court of Appeals
Decision dated January 31, 2005.16
Petitioner submits in the petition now the following grounds:
I.

II.

The documentary evidence submitted by the petitioner herein with


the court a quo were merely attached to an "Omnibus Motion" and
was not properly identified, marked and formally offered as evidence
which is a blatant disregard and violation of the Rules on Evidence.
Considering the above discussions, this Court finds that the public
respondent did not abuse his discretion in issuing the assailed
resolution.
Anent the eighth issue, WE likewise rule against the petitioner.
Presidential Decree (PD) 605 is the law "Banning the Issuance by
Courts of Preliminary Injunctions in Cases Involving Concessions,

III.

IV.

V.

THE RESOLUTION DATED 16 SEPTEMBER 2004 AND THE WRIT


OF PRELIMINARY MANDATORY INJUNCTION DATED 6 OCTOBER
2004 ISSUED BY PUBLIC RESPONDENT ARE A PATENT NULLITY
AS PRIVATE RESPONDENT CLEARLY HAS NO LEGAL RIGHT OR
CAUSE OF ACTION UNDER ITS PRINCIPAL ACTION OR
COMPLAINT, MUCH LESS, TO THE ANCILLARY REMEDY OF
PRELIMINARY MANDATORY INJUNCTION;
A WRIT OF PRELIMINARY MANDATORY INJUNCTION CANNOT
BE USED TO TAKE PROPERTY OUT OF THE POSSESSION OF ONE
PARTY AND PLACE IT INTO THAT OF ANOTHER WHO HAS NO
CLEAR LEGAL RIGHT THERETO;
PRIVATE RESPONDENT'S COMPLAINT IN CIVIL CASE NO. C-146
IS IN THE NATURE OF AN ACCION PUBLICIANA, NOT FORCIBLE
ENTRY; HENCE, A WRIT OF PRELIMINARY MANDATORY
INJUNCTION IS NOT A PROPER REMEDY;
PETITIONER WAS UNJUSTIFIABLY AND ARBITRARILY DEPRIVED
OF ITS FUNDAMENTAL RIGHT TO DUE PROCESS WHEN IT WAS
DENIED THE RIGHT TO PRESENT EVIDENCE IN OPPOSITION TO
THE
APPLICATION
FOR
PRELIMINARY
MANDATORY
INJUNCTION;
THE PUBLIC RESPONDENT DELIBERATELY WITHHELD THE
RESOLUTION
OF
PETITIONER'S
MOTION
FOR
RECONSIDERATION DATED 12 JULY 2004 AND PROCEEDED TO
PREMATURELY ISSUE THE PRELIMINARY MANDATORY

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 5

VI.

INJUNCTION IN VIOLATION OF PETITIONER'S RIGHT TO FAIR


PLAY AND JUSTICE;
VI PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF
DISCRETION WHEN:
1)
HE REFUSED OR FAILED TO ADMIT AND/OR CONSIDER
THE CERTIFIED DENR RECORDS OF THE DENR ORDER
CANCELLING PRIVATE RESPONDENT'S FLGLA;
2)
HE REFUSED OR FAILED TO CONDUCT A HEARING ON
THESE CERTIFIED PUBLIC DOCUMENTS WHICH
CONCLUSIVELY PROVE PRIVATE RESPONDENT'S LACK OF
CAUSE OF ACTION UNDER THE PRINCIPAL ACTION; AND
3)
HE REFUSED OR FAILED TO DISMISS THE COMPLAINT
OUTRIGHT FOR VIOLATING THE RULES ON FORUM
SHOPPING BY PRIVATE RESPONDENT.17

Before this Court decides the substantive issues raised herein, certain
procedural issues that were raised by the parties must first be addressed.
Petitioner contends that it was improper for the Regional Trial Court of
Antique to issue the writ of preliminary mandatory injunction (and for the
Court of Appeals to affirm the same) without giving it an opportunity to
present evidence and without first resolving the Motion for
Reconsideration dated July 12, 2004. But as borne by the records of the
case, it is evident that petitioner had the opportunity to present evidence
in its favor during the hearing for the application of the writ of preliminary
mandatory injunction before the lower court. However, petitioner's failure
to present its evidence was brought by its own failure to appear on the
hearing dates scheduled by the trial court. Thus, petitioner cannot
complain of denial of due process when it was its own doing that
prevented it from presenting its evidence in opposition to the application
for a writ of preliminary mandatory injunction. It must be pointed out that
the trial court correctly refused to take cognizance of the letter of
petitioner's President which prayed for the postponement of the scheduled
hearings. Said letter was not a proper motion that must be filed before the
lower court for the stated purpose by its counsel of record. Moreover,
there was absolutely no proof given that the sender of the letter was the
duly authorized representative of petitioner.
Second, the filing of the motion for reconsideration dated July 12, 2004,
which essentially reproduced the arguments contained in the previously
filed and denied Omnibus Motion dated April 14, 2004, renders the said
motion for reconsideration dated July 12, 2004, a mere pro forma motion.
Moreover, the motion for reconsideration dated June 12, 2004, being a
second motion for reconsideration, the trial court correctly denied it for
being a prohibited motion.18
Third, it must be stated that the petition for certiorari before the Court of
Appeals should not have prospered because petitioner failed to file a
motion for reconsideration from the assailed resolution of the Regional
Trial Court of Antique, granting the writ of preliminary mandatory
injunction. Well settled is the rule that before a party may resort to the
extraordinary writ of certiorari, it must be shown that there is no other
plain, speedy and adequate remedy in the ordinary course of law. Thus, it
has been held by this Court that a motion for reconsideration is a condition
sine qua non for the grant of the extraordinary writ of certiorari.19 Here, a
motion for reconsideration was an available plain, speedy and adequate
remedy in the ordinary course of law, designed to give the trial court the
opportunity to correct itself.
Now on the merits of the instant petition.

The pivotal issue confronting this Court is whether the Court of Appeals
seriously erred or committed grave abuse of discretion in affirming the
September 16, 2004 Resolution of the Regional Trial Court of Antique
granting the writ of preliminary mandatory injunction.
Under Article 539 of the New Civil Code, a lawful possessor is entitled to be
respected in his possession and any disturbance of possession is a ground
for the issuance of a writ of preliminary mandatory injunction to restore
the possession.20 Thus, petitioner's claim that the issuance of a writ of
preliminary mandatory injunction is improper because the instant case is
allegedly one for accion publiciana deserves no consideration. This Court
has already ruled in Torre, et al. v. Hon. J. Querubin, et al.21 that prior to the
promulgation of the New Civil Code, it was deemed improper to issue a
writ of preliminary injunction where the party to be enjoined had already
taken complete material possession of the property involved. However,
with the enactment of Article 539, the plaintiff is now allowed to avail of a
writ of preliminary mandatory injunction to restore him in his possession
during the pendency of his action to recover possession.22
It is likewise established that a writ of mandatory injunction is granted
upon a showing that (a) the invasion of the right is material and
substantial; (b) the right of complainant is clear and unmistakable; and (c)
there is an urgent and permanent necessity for the writ to prevent serious
damage.23
In the instant case, it is clear that as holder of a pasture lease agreement
under FLGLA No. 184, HGL has a clear and unmistakable right to the
possession of the subject property. Recall that under the FLGLA, HGL has
the right to the lawful possession of the subject property for a period of 25
years or until 2009. As lawful possessor, HGL is therefore entitled to
protection of its possession of the subject property and any disturbance of
its possession is a valid ground for the issuance of a writ of preliminary
mandatory injunction in its favor. The right of HGL to the possession of the
property is confirmed by petitioner itself when it sought permission from
HGL to use the subject property in 1999. In contrast to HGL's clear legal
right to use and possess the subject property, petitioner's possession was
merely by tolerance of HGL and only because HGL permitted petitioner to
use a portion of the subject property so that the latter could gain easier
access to its mining area in the Panaan Coal Reserve.
The urgency and necessity for the issuance of a writ of mandatory
injunction also cannot be denied, considering that HGL stands to suffer
material and substantial injury as a result of petitioner's continuous
intrusion into the subject property. Petitioner's continued occupation of
the property not only results in the deprivation of HGL of the use and
possession of the subject property but likewise affects HGL's business
operations. It must be noted that petitioner occupied the property and
prevented HGL from conducting its business way back in 1999 when HGL
still had the right to the use and possession of the property for another 10
years or until 2009. At the very least, the failure of HGL to operate its
cattle-grazing business is perceived as an inability by HGL to comply with
the demands of its customers and sows doubts in HGL's capacity to
continue doing business. This damage to HGL's business standing is
irreparable injury because no fair and reasonable redress can be had by
HGL insofar as the damage to its goodwill and business reputation is
concerned.
Petitioner posits that FLGLA No. 184 had already been cancelled by the
DENR in its order dated December 6, 2000. But as rightly held by the Court
of Appeals, the alleged cancellation of FLGLA No. 184 through a unilateral

act of the DENR does not automatically render the FLGLA invalid since the
unilateral cancellation is subject of a separate case which is still pending
before the Regional Trial Court of Caloocan City. Notably, said court has
issued a writ of preliminary injunction enjoining the DENR from enforcing
its order of cancellation of FLGLA No. 184.
The Court of Appeals found that the construction of numerous buildings
and blasting activities by petitioner were done without the consent of HGL,
but in blatant violation of its rights as the lessee of the subject property. It
was likewise found that these unauthorized activities effectively deprived
HGL of its right to use the subject property for cattle-grazing pursuant to
the FLGLA. It cannot be denied that the continuance of petitioner's
possession during the pendency of the case for recovery of possession will
not only be unfair but will undeniably work injustice to HGL. It would also
cause continuing damage and material injury to HGL. Thus, the Court of
Appeals correctly upheld the issuance of the writ of preliminary mandatory
injunction in favor of HGL.
WHEREFORE, the instant petition is DENIED. The Decision dated January
31, 2005, of the Court of Appeals in CA G.R. CEB SP No. 00035, which
affirmed the Resolution dated September 16, 2004 of the Regional Trial
Court of Culasi, Antique, Branch 13, as well as the Writ of Preliminary
Mandatory Injunction dated October 6, 2004 issued pursuant to said
Resolution, is AFFIRMED. The temporary restraining order issued by this
Court is hereby lifted. No pronouncement as to costs. SO ORDERED.

CHINA BANKING CORPORATION,


SPOUSES JOEY & MARY JEANNIE
CASTRO and SPOUSES RICHARD &
EDITHA NOGOY,
Petitioners,
- versus BENJAMIN CO, ENGR. DALE OLEA
and THREE KINGS CONSTRUCTION
& REALTY CORPORATION,
Respondents.

G.R. No. 174569


Present:
QUISUMBING, J.,
Chairperson,
CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.
Promulgated:
September 17, 2008

x--------------------------------------------------x
DECISION
CARPIO MORALES, J.:
Petitioner China Banking Corporation sold a lot located at St. Benedict
Subdivision, Sindalan, San Fernando, Pampanga, which was covered by
Transfer Certificate of Title (TCT) No. 450216-R to petitioner-spouses Joey
and Mary Jeannie Castro (the Castro spouses). It sold two other lots also
located in the same place covered by TCT Nos. 450212-R and 450213-R to
petitioner-spouses Richard and Editha Nogoy (the Nogoy spouses).
The lots of the Castro spouses and the Nogoy spouses are commonly
bound on their southeastern side by Lot No. 3783-E, which is covered by
TCT No. 269758-R in the name of respondent Benjamin Co (Co) and his
siblings.
Co and his siblings entered into a joint venture with respondent Three
Kings Construction and Realty Corporation for the development of the
Northwoods Estates, a subdivision project covering Lot No. 3783-E and

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 6

adjacent lots. For this purpose, they contracted the services of respondent,
Engineer Dale Olea.
In 2003, respondents started constructing a perimeter wall on Lot No.
3783-E.
On November 28, 2003, petitioners, through counsel, wrote respondents
asking them to stop constructing the wall, and remove all installed
construction materials and restore the former condition of Lot No. [3]783-E
which they (petitioners) claimed to be a road lot. 1 They also claimed that
the construction obstructed and closed the only means of ingress and
egress of the Nogoy spouses and their family, and at the same time, caved
in and impeded the ventilation and clearance due the Castro spouses
residential house.2
Petitioners demand remained unheeded, prompting them to file before
the Regional Trial Court (RTC) of San Fernando, Pampanga a complaint,3
docketed as Civil Case No. 12834, for injunction, restoration of road
lot/right of way and damages with prayer for temporary restraining order
and/or writ of preliminary injunction.
Before respondents filed their Answer,4 petitioners filed an Amended
Complaint,5 alleging that the construction of the perimeter wall was almost
finished and thus modifying their prayer for a writ of preliminary injunction
to a writ of preliminary mandatory injunction, viz:
WHEREFORE, it is respectfully prayed of this Honorable Court that:
A. Before trial on the merits, a temporary restraining order be issued
immediately restraining the defendants from doing further construction of
the perimeter wall on the premises, and thereafter, a writ of preliminary
mandatory injunction be issued enjoining the defendants from
perpetrating and continuing with the said act and directing them jointly
and severally, to restore the road lot, Lot 3783-E to its previous condition.
x x x x 6 (Underscoring in the original; emphasis supplied)
After hearing petitioners application for a writ of preliminary mandatory
injunction, Branch 44 of the San Fernando, Pampanga RTC denied the
same, without prejudice to its resolution after the trial of the case on the
merits, in light of the following considerations:
After a judicious evaluation of the evidence, the Commissioners Report on
the Conduct of the Ocular Inspection held on February 14, 2004, as well as
the pleadings, the Court is of the opinion and so holds that a writ of
preliminary injunction should not be issued at this time. Plaintiffs have not
clearly shown that their rights have been violated and that they are
entitled to the relief prayed for and that irreparable damage would be
suffered by them if an injunction is not issued. Whether lot 3783-E is a road
lot or not is a factual issue which should be resolved after the presentation
of evidence. This Court is not inclined to rely only on the subdivision plans
presented by plaintiffs since, as correctly argued by defendants, the
subdivision plans do not refer to lot 3783-E hence are not conclusive as to
the status or classification of lot 3783-E. This court notes further that
Subdivision Plan Psd-03-000577 of Lot 3783 from which the other
subdivision plans originates [sic] does not indicate lot 3783-E as a road lot.
Even the physical evidence reveals that lot 3783-E is not a road lot. The
Court noticed during the ocular inspection on February 14, 2004, that there
is a PLDT box almost in front of lot 3783-E. There is no visible pathway
either in the form of a beaten path or paved path on lot 3783-E. Visible to

everyone including this court are wild plants, grasses, and bushes of
various kinds. Lot 3783-E could not have been a road lot because Sps.
Nogoy, one of the plaintiffs, even built a structure on lot 3783-E which they
used as a coffin factory.
Plaintiffs failed to prove that they will be prejudiced by the construction of
the wall. The ocular inspection showed that they will not lose access to
their residences. As a matter of fact, lot 3783-E is not being used as an
access road to their residences and there is an existing secondary road
within St. Benedict Subdivision that serves as the main access road to the
highway. With respect to the blocking of ventilation and light of the
residence of the Sps. Castro, suffice it to state that they are not deprived of
light and ventilation. The perimeter wall of the defendants is situated on
the left side of the garage and its front entrance is still open and freely
accessible.
This is indeed an issue of fact which should be ventilated in a full blown
trial, determinable through further presentation of evidence by the parties.
xxx
xxxx
WHEREFORE, premises considered, plaintiffs application for the issuance
of a writ of preliminary mandatory injunction is denied without prejudice
to its resolution after the trial of the case on the merits.7 (Underscoring
supplied)
Their Motion for Reconsideration8 having been denied, petitioners filed a
petition for certiorari9 before the Court of Appeals which dismissed the
same10 and denied their subsequent Motion for Reconsideration.11
Hence, the petitioners filed the present petition,12 faulting the Court of
Appeals in
I.

II.

III.

. . . DECID[ING] AND RESOLV[ING] A QUESTION OF SUBSTANCE


NOT IN ACCORD WITH THE BASIC GOVERNING LAW
(PRESIDENTIAL DECREE NO. 1529) AND APPLICABLE DECISIONS
OF THIS HONORABLE COURT.
. . . PROMOTING THE LOWER COURTS RATIOCINATION THAT
PETITIONERS ARE SEEKING THE ESTABLISHMENT OF AN
EASEMENT OF RIGHT OF WAY, WHEN THEY ARE CLAIMING THE
ENFORCEMENT OF THE STATUTORY PROHIBITION AGAINST
CLOSURE OR DISPOSITION OF AN ESTABLISHED ROAD LOT.
. . . SANCTION[ING] THE LOWER COURTS PATENT GRAVE
ABUSE OF DISCRETION IN PERFUNCTORILY DENYING
PETITIONERS APPLICATION FOR WRIT OF PRELIMINARY
INJUNCTION.

It is settled that the grant of a preliminary mandatory injunction rests on


the sound discretion of the court, and the exercise of sound judicial
discretion by the lower court should not be interfered with except in cases
of manifest abuse.14
It is likewise settled that a court should avoid issuing a writ of preliminary
mandatory injunction which would effectively dispose of the main case
without trial.15
In the case at bar, petitioners base their prayer for preliminary mandatory
injunction on Section 44 of Act No. 496 (as amended by Republic Act No.
440), Section 50 of Presidential Decree 1529, and their claim that Lot No.
3783-E is a road lot.

To be entitled to a writ of preliminary injunction, however, the petitioners


must establish the following requisites: (a) the invasion of the right sought
to be protected is material and substantial; (b) the right of the complainant
is clear and unmistakable; and (c) there is an urgent and permanent
necessity for the writ to prevent serious damage.16
Since a preliminary mandatory injunction commands the performance of
an act, it does not preserve the status quo and is thus more cautiously
regarded than a mere prohibitive injunction.17 Accordingly, the issuance of
a writ of preliminary mandatory injunction is justified only in a clear case,
free from doubt or dispute.18 When the complainants right is thus doubtful
or disputed, he does not have a clear legal right and, therefore, the
issuance of injunctive relief is improper.
Section 44 of Act 496,19 which petitioners invoke, provides:
xxxx
Any owner subdividing a tract of registered land into lots shall file with the
Chief of the General Land Registration Office a subdivision plan of such
land on which all boundaries, streets and passageways, if any, shall be
distinctly and accurately delineated. If no streets or passageways are
indicated or no alteration of the perimeter of the land is made, and it
appears that the land as subdivided does not need of them and that the
plan has been approved by the Chief of the General Land Registration
Office, or by the Director of Lands as provided in section fifty-eight of this
Act, the Register of Deeds may issue new certificates of title for any lot in
accordance with said subdivision plan. If there are streets and/or
passageways, no new certificates shall be issued until said plan has been
approved by the Court of First Instance of the province or city in which the
land is situated. A petition for that purpose shall be filed by the registered
owner, and the court after notice and hearing, and after considering the
report of the Chief of the General Land Registration Office, may grant the
petition, subject to the condition, which shall be noted on the proper
certificate, that no portion of any street or passageway so delineated on
the plan shall be closed or otherwise disposed of by the registered owner
without approval of the court first had, or may render such judgment as
justice and equity may require.20 (Underscoring supplied by the petitioners)
Section 50 of Presidential Decree No. 1529,21 which petitioners likewise
invoke, provides:
SECTION 50. Subdivision and consolidation plans. Any owner subdividing
a tract of registered land into lots which do not constitute a subdivision
project as defined and provided for under P.D. No. 957, shall file with the
Commissioner of Land Registration or with the Bureau of Lands a
subdivision plan of such land on which all boundaries, streets, passageways
and waterways, if any, shall be distinctly and accurately delineated.
If a subdivision plan, be it simple or complex, duly approved by the
Commissioner of Land Registration or the Bureau of Lands together with
the approved technical descriptions and the corresponding owner's
duplicate certificate of title is presented for registration, the Register of
Deeds shall, without requiring further court approval of said plan, register
the same in accordance with the provisions of the Land Registration Act, as
amended: Provided, however, that the Register of Deeds shall annotate on
the new certificate of title covering the street, passageway or open space,
a memorandum to the effect that except by way of donation in favor of the
national government, province, city or municipality, no portion of any
street, passageway, waterway or open space so delineated on the plan

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 7

shall be closed or otherwise disposed of by the registered owner without


the approval of the Court of First Instance of the province or city in which
the land is situated. x x x22 (Underscoring supplied by petitioner)
The best evidence thus that Lot No. 3783-E is a road lot would be a
memorandum to that effect annotated on the certificate of title covering it.
Petitioners presented TCT No. 185702-R covering Lot No. 3783-E in the
name of Sunny Acres Realty Management Corporation which states that
the registration is subject to "the restrictions imposed by Section 44 of Act
496, as amended by Rep. Act No. 440."23 The annotation does not explicitly
state, however, that Lot No. 3783-E is a road lot.1awphi1.net
In any event, TCT No. 185702-R had been cancelled and in its stead was
issued TCT No. 247778-R24 which, in turn, was cancelled by TCT No.
269758-R25 in the name of respondent Co and his siblings.
TCT No. 247778-R and respondent Cos TCT No. 269758-R do not now
contain the aforementioned memorandum annotated on TCT No. 185702R re the registration being "subject to restrictions imposed by Section 44 of
Act 496, as amended by Republic Act No. 440." Given the immediately
foregoing circumstances, there is doubt on whether Lot No. 3783-E is
covered by a road lot.
While petitioners correctly argue that certain requirements must be
observed before encumbrances, in this case the condition of the lots
registration as being subject to the law, may be discharged and before road
lots may be appropriated26 gratuity assuming that the lot in question was
indeed one, TCT Nos. 247778-R and 269758-R enjoy the presumption of
regularity27 and the legal requirements for the removal of the
memorandum annotated on TCT No. 185702-R are presumed to have been
followed.28
At all events, given the following factual observations of the trial court
after conducting an ocular inspection of Lot 3783-E, viz:
x x x The ocular inspection showed that [petitioners] will not lose access to
their residences. As a matter of fact, lot 3783-E is not being used as an
access road to their residences and there is an existing secondary road
within St. Benedict Subdivision that serves as the main access road to the
highway.29 With respect to the blocking of ventilation and light of the
residence of the Sps. Castro, suffice it to state that they are not deprived of
light and ventilation. The perimeter wall of the defendants is situated on
the left side of the garage and its front entrance is still open and freely
accessible,30
and the absence of a showing that petitioners have an urgent and
paramount need for a writ of preliminary mandatory injunction to prevent
irreparable damage, they are not entitled to such writ.
WHEREFORE, the petition is DENIED. SO ORDERED.
G.R. No. L-4891
March 23, 1909
SOFIA DEVESA, plaintiff-appellee,
vs. CRISPIN ARBES, defendantappellant.
CARSON, J.:
Plaintiff alleging that the defendant, acting as administrator of the estate of
Gregoria Arbes, deceased, had unlawfully taken possession of certain rice
lands and cocoanut groves, the property of the plaintiff, prayed for an
injunction restraining defendant from continuing in possession and

enjoying the fruits of the land in question until and unless he obtained a
final judgment in a proper action declaring these lands to be the property
of the estate of which he is administrator, and prayed further that a
preliminary injunction be issued restraining defendant from continuing in
possession or enjoying the fruits of the land in question pending the trial of
the cause.
The complaint alleges that the property in question was assigned to
plaintiff's deceased husband under the terms of an extra judicial partition
contract executed in the year 1887 by the heirs of Gregoria Arbes,
plaintiff's husband's first wife, and that ever since that date until the
defendant took possession of this land, plaintiff and her husband had
continued in the quiet, peaceable, and exclusive possession thereof. The
trial court, apparently without giving the defendant an opportunity to be
heard, granted the preliminary injunction prayed for, conditioned upon the
execution of a bond for costs and damages, whereupon the defendant
presented a motion which though irregular in form may fairly be regarded
as a demurrer to the complaint on the ground that the facts alleged do not
constitute a cause of action, and prayed that the preliminary injunction be
dissolved.
The trial court overruled the demurrer and declined to dissolve the
preliminary injunction, and defendant without excepting to the ruling of
the court withdrew his motion and filed his answer. In this answer
defendant admitted having taken possession of the land in question, as
alleged by the plaintiff, but denied plaintiff's allegation that she and her
husband had been in the exclusive possession thereof, and alleged that the
land in question was the property of Gregoria Arbes, deceased, of whose
estate he is the administrator, and that after the death of Gregoria Arbes, it
passed pro indiviso to her heirs, who from the time of her death continued
in joint possession thereof, until he took possession upon his appointment
as administrator; he also alleged that one of the heirs, Vicente Sola,
widower of Gregoria Arbes, deceased, married the plaintiff; that plaintiff's
claim to an interest in the property in question is or should be strictly
limited to the interest which she is entitled to take from her husband, since
deceased; and that while it is true that she and her husband exercised
certain rights of possession of the land in question, they never had
exclusive possession, and such rights of possession as they did exercise
were exercised not only on their behalf but on behalf of all the heirs of
Gregoria Arbes.
Upon these pleadings the parties went to trial, and plaintiff introduced
evidence tending to prove that the land in question was originally the
property of her husband, Vicente Sola, acquired by him, not from his wife,
Gregoria Arbes, but by purchase, in part prior to, and in part after his
marriage with his first wife; she also introduced in evidence a document,
dated January 31, 1887, purporting to be a partition agreement between
her husband Sola, and the other heirs of Gregoria Arbes who died a short
time prior to the execution of the instrument, whereby the land in question
was assigned to Sola as his property. Plaintiff further introduced testimony
which clearly established her allegation that from the date of that
instrument until the time when defendant took possession of the land, she
and her husband had had the exclusive possession thereof.
Defendant did not deny the execution of the partition agreement, and
wholly failed to proved that the land in question was or is a part of the
estate of Gregoria Arbes, deceased, or to establish his allegation that
plaintiff and her husband were not in the exclusive possession of the land
in question from the date of its execution to the time when he took

possession as administrator, or that they held possession thereof jointly


with the other heirs of Gregoria Arbes. He insisted, however, that the
agreement was not binding upon the heirs of Gregoria Arbes, because at
the date of its execution two of them, a niece and a nephew, were minors
and incapable of executing such a document, although it appears that they
were represented upon that occasion by their respective fathers who
married sisters of Gregoria Arbes, and signed the instrument as the legal
representatives of these minor heirs.
The trial court on the pleadings and proof submitted at the trial found that
the plaintiff was entitled to the possession of the land in question, and
rendered final judgment in accordance with the prayer of the complaint,
granting a final injunction perpetually restraining the defendant
administrator from continuing in possession of the land in question or
enjoying the fruits thereof.
We are in entire accord with the trial judge as to his findings of fact, and
agree with him that the evidence of record establishes plaintiff's right of
possession in and to the lands in question: for without deciding whether
the extrajudicial partition agreement between the heirs of Gregoria Arbes,
deceased, executed in 1887, conveyed to plaintiff's deceased husband the
absolute right of ownership in the land assigned to him thereby; or
whether that agreement, which was executed before the present Code of
Civil Procedure went into effect, can be successfully attacked at this time
by the minor heirs, because of the apparent lack of judicial approbation of
the action of their legal representatives; it is sufficient, for the purposes of
this decision, to point out that plaintiff, and her husband having been in
exclusive possession of this land, under a claim based on the partition
agreement, for more than fifteen years, the defendant, in his capacity of
administrator, had no lawful authority to take possession thereof without
plaintiff's consent, in the absence of a final judgment of a competent court
securing to him his alleged right of possession; and that defendant having
failed to prove that the estate of which he is administrator is the true
owner of all any part of the land in question, the plaintiff is entitled to be
replaced in possession.
We are of opinion, however, that the remedy by injunction sought by the
plaintiff and allowed the trial court was not the proper remedy for the
cause of action set out in the pleadings and established by the evidence,
and that, in accordance with the provisions of section 126 of the Code of
Civil Procedure, the court should have granted "relief consistent with the
case made by the complaint and supported by the evidence and embraced
within the issue," and to that end should have required an amendment of
the complaint by striking out the prayer for an injunction and substituting
therefor a prayer for a judgment for possession of the land described in the
complaint, and upon the complaint thus amended, judgment should have
been rendered in favor of the plaintiff.
Both the parties to this action appear to have labored under a
misapprehension as to the purpose, scope, and limitations of the special
remedy, known as an injunction, and defined in section 162 of the Code of
Civil Procedure. The records in many cases in this court disclose a
considerable degree of doubt and uncertainty in the minds of counsel as to
the function of this remedy, and in some cases a wholly erroneous concept
of the purpose and object for which it is provided. This erroneous concept
may, perhaps, be due to the fact that in the Spanish version of the new
Code of Civil Procedure, the term injunction is translated interdicto
prohibitorio, which may thus have given rise to the impression that the
remedy by injunction is similar in character to the summary interdictal

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 8

actions of the Spanish procedural law; but while the injunction resembles
in many respects the interdicto of the Roman law, especially the decretal
(decretale, quod praetor re nata implorantibus decrevit), and while it also
resembles to a certain degree in its operation and effect, the interdictos de
adquirir, de retener, and de recobrar or de despojo of the Spanish
procedural law; nevertheless, it is wholly distinct therefrom, and, as a rule,
the circumstances under which, in accordance with the former procedural
law, these interdictos properly issued, would not justify nor sustain the
issuance of an injunction, as defined and provided in the new Code of Civil
Procedure. An injunction is a "special remedy" adopted in that code from
American practice, and originally borrowed from English legal procedure,
which was there issued by the authority and under the seal of a court of
equity, and limited, as in other cases where equitable relief is sought, to
cases where there is no "plain, adequate, and complete remedy at law" (30
Barb., 549; 5 R. I., 472; 121 N. Y., 46; 31 Pa., 387; 32 Ala., N. S., 723; 37 N.
H., 254; 61 Hun., 140; 145 U. S., 459; 141 Ill., 572; 49 Fed. Rep., 517; 37 id.,
357; 129 Md., 464; 109 N. C., 21; 83 Wis., 426; 115 Mo., 613), which "will
not be granted while the rights between the parties are undetermined,
except in extraordinary cases where material and irreparable injury will
done," which can not be compensated in damages, and where there will be
no adequate remedy (3 Bosw., 607; 1 Beasl., 247, 542; 15 Md., 22; 13 Cal.,
156, 190; 6 Wis., 680; 16 Tex., 410; 28 Mo., 210; 24 Fla., 542; 39 N. H., 182;
12 Cush., 410; 27 Ga., 499; 1 McAll., 271; 54 Fed. Rep., 1005; 64 Vt., 643),
and which will not, as a rule, be granted, to take property out of the
possession of one party and put it into that of another whose title has not
been established by law. (144 U. S., 119; 40 W. N. C. Pa., 121.)
This court has frequently held, when treating of the special remedies by
injunction, mandamus and prohibition, which are provided in the new
Code of Procedure in Civil Cases, that the accepted American doctrine
limiting the use of these remedies to cases where there is no other
adequate remedy, and otherwise controlling the issuance of these writs,
and must be deemed to limit their use in like manner in this jurisdiction,
when not otherwise provided by law: to hold otherwise would be to render
practically of no effect the various provisions of the code touching many if
not most of the ordinary actions, and the enforcement of judgment in such
actions; for it may well be supposed that if a complainant could secure
relief by injunction in every case where "the defendant is doing or
threatens or is about to do, or is procuring or suffering to be done, some
act probably in violation of the plaintiff's rights" and could enforce the
judgment granting the injunction by the summary contempt proceedings
authorized in section 172 of the code to punish violations of injunctions, he
would seldom elect to enforce his rights in such cases by the ordinary
remedies, involving as they do the difficult and ofttimes fruitless labor of
enforcing judgments obtained therein by execution. But so many cases
have come before us where preliminary injunctions have been issued
apparently without regard to this rule, that we are satisfied that the
erroneous impression still prevails, in some quarters, that a preliminary
injunction must issue where a prima facie showing is made of the existence
of the circumstances under which such injunctions may be granted as set
out in section 164 of the Code of Civil Procedure, without keeping in mind
the fact that applications for injunctions are made to the sound discretion
of the court, and the exercise of that discretion is controlled by the
accepted doctrines touching the granting of injunctions in such cases; and
we may add that the records also disclose a dangerous tendency to grant
permanent injunctions on insufficient grounds, as a result of a similar
erroneous construction of the provisions of the code in that regard.

No brief was filed by plaintiff on appeal, and the contentions of the parties
in the court below are not very clearly set out in the very short brief of the
defendant and appellant. It appears, however, that defendant challenged
the jurisdiction of the trial court, on the ground that the summary
interdictal actions of the Spanish procedural law have been done away
with by the provisions of the new Code of Procedure in Civil Cases, the
interdicto de recobrar or de despojo having been expressly displaced by the
summary remedies prescribed in section 80 of the new code, for the
recovery of lands or buildings of which one is deprived by force,
intimidation, fraud, or strategy within a year prior to the institution of the
action; and defendant insists that the action instituted by plaintiff, while in
form a proceeding praying for an injunction under the new code,
assimilated to the former proceeding praying for an interdicto de recobrar
or de despojo, is in fact an action which could only be maintained under the
provisions of section 80 of the new code, of which original jurisdiction is
conferred upon the courts of the justice of the peace, exclusive of the
Court of First Instance. Plaintiff and appellee on the other hand seems to
have insisted that the injunction proceedings instituted by her were
assimilated rather to the summary action known as the interdicto de
retener and that the facts alleged and proven establishing her right to an
interdicto de retener, under the old law, she is entitled to an injunction
under the new code, that remedy being the equivalent provided by the
new code for the interdicto of the old law.

the course of the administration proceedings; and it should be necessary to


add that the mere fact that an administrator holds letters of appointment
from some court, in nowise authorizes him to take possession of property
held by another under a claim of a right to possession until and unless he
successfully establishes his right to possession of such property in a proper
proceeding in a competent court.

But while we agree with defendant and appellant that the summary
remedies provided in section 80 may be said to replace and perhaps
abrogate the old interdicto de recobrar or de despojo, and that if the facts
alleged and proven made out a cause of action under that section and,
therefore, within the exclusive jurisdiction of the court of the justice of the
peace, it would be necessary to hold that the trial court was wholly without
original jurisdiction; and while we can not agree with the plaintiff and
appellee that the facts set out in the pleadings and evidence would support
the issuance of an interdicto de retener, even under the former procedure,
because possession of the land and buildings had been actually lost to
plaintiff when the action was instituted, nor can we agree with her that
even if a proper case for the granting of an interdicto de retener under the
old procedure had been established, it necessarily follows that an
injunction should issue under the new procedure; and without deciding
whether all the summary interdictal remedies of the Spanish law have been
wholly and in all cases abolished under the provisions of the new code, it is
sufficient for the purpose of this decision to hold that since there is nothing
in the allegations or proof to show that defendant obtained possession of
the land in question by force, intimidation, fraud, or strategy, the action is
not in the nature of the summary remedy known to the old law as an
interdicto de recobrar or de despojo, nor is it the summary remedy of
forcible entry and wrongful detainer provided in section 80 of the new
code, and therefore it does not fall within the exclusive jurisdiction of the
court of the justice of the peace, to the exclusion of the Court of First
Instance, which tried the case.

This petition for review assails the Decision1 dated January 20, 2003 and
Resolution2 dated May 20, 2003 of the Court of Appeals in CA-G.R. SP No.
52946. The Court of Appeals lifted the amended writ of preliminary
injunction dated December 29, 1998 issued by the Regional Trial Court,
Branch 14 of Nasugbu, Batangas in Civil Case No. 345 and reinstated the
original writ dated December 12, 1996.

What has been said disposes of all the errors assigned by appellant, except
his assignment of error based on his contention that the administrator
having taken possession as an officer of the court wherein the estate was
being administered, his conduct in that regard should not be questioned,
except in the course of the administration proceedings.
We have frequently held that a contested claim of an administrator that
certain rights of possession and ownership are the property of the estate
which he represents must be determined in a separate action, and not in

Ten days from the date of this decision let judgment be entered, reversing
the judgment of the trial court and dissolving the preliminary and
permanent injunctions issued therein, without costs either party in this
instance, and ten days thereafter let the record be returned to the court
below where, upon the amendment of the complaint along the lines
therein indicated, judgment will be rendered in favor of the plaintiff for the
possession of the lands described in the complaint, together with the costs
in the Court of First Instance, but without damages, which were not
satisfactorily established by the evidence of record. So ordered.
G.R. No. 158141
July 11, 2006
FAUSTO R. PREYSLER, JR., petitioner, vs. COURT OF APPEALS and FAR
EAST ENTERPRISES, INC., respondents.
DECISION
QUISUMBING, J.:

The antecedent facts are as follows:


Private respondent Far East Enterprises, Inc., owns Tali Beach Subdivision.
Petitioner Fausto Preysler, Jr. and his wife owned lots therein and also two
parcels of land adjacent to the subdivision. These two parcels were
bounded on the North and West by the China Sea and on the East and
South by the subdivision. To gain access to the two parcels petitioner has
to pass through private respondent's subdivision. Petitioner offered
P10,000 for the easement of right of way but private respondent refused it
for being grossly inadequate. Private respondent then barricaded the front
gate of petitioner's property to prevent petitioner and his family from using
the subdivision roads to access said parcels.
The petitioner filed, with the Regional Trial Court of Nasugbu, Batangas, a
Complaint for Right of Way with prayer for preliminary prohibitive
injunction against private respondent. After due hearing, the trial court, in
an Order dated November 5, 1996, held that barricading the property to
prevent the petitioner from entering it deprived him of his ownership
rights and caused irreparable damage and injuries. It ordered herein
private respondent:
1)

2)

To remove or cause or allow the removal of the barricade (six


concrete posts) installed by it on the front gate of the plaintiffs'
properties fronting Sea Cliff Drive;
To cease, desist and refrain from obstructing or hindering
plaintiffs' entry into and exit from their subject properties
and/or their free passage over Sea Cliff Drive from and to the
public highway near the gate of the Tali Beach Subdivision

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 9

pending termination of this litigation on the merits and/or


unless a contrary order is issued henceforth.3
Accordingly, the writ of preliminary injunction was issued on December 12,
1996.
On July 8, 1998, petitioner used the subdivision road to transport heavy
equipment and construction materials to develop his property.
Consequently, private respondent moved to dissolve the writ claiming that
the petitioner violated its right to peaceful possession and occupation of
Tali Beach Subdivision when petitioner brought in heavy equipment and
construction materials. Private respondent maintained that the damages
that may be caused to it far outweigh the alleged damages sought to be
prevented by the petitioner. It alleged that there is an alternate route
available to petitioner, particularly the barangay road leading to Balaytigue
and the Calabarzon Road.
For his part, the petitioner moved to clarify the December 12, 1996 writ
and asked the court to clearly define the action required of private
respondent to avert further damage and inconvenience to petitioner.
Petitioner prayed that his contractors, visitors, and other representatives
be allowed access and persons he has authorized be allowed to install
power lines over private respondent's property.
On December 29, 1998, the trial court issued a Joint Resolution amending
the order in the original writ to read as follows:
1.

2.

3.

4.

To remove or cause or allow the removal of the barricade (six


concrete posts) installed by it on the front gate of the plaintiffs'
properties fronting Sea Cliff Drive.
To cease, desist and refrain from obstructing or hindering
plaintiffs' (including plaintiffs' visitors, guests, contractors, and
other persons authorized by or acting for and/or under said
plaintiffs) entry into and exit from their subject properties
and/or their free passage over Sea Cliff Drive and other
connecting subdivision roads, from and to the public highway
near the gate of the Tali Beach Subdivision, pending the
termination of this litigation on the merits and/or unless a
contrary order is issued henceforth.
To cease, desist and refrain from hindering or obstructing
plaintiffs' contractors, guests, visitors and other authorized
persons to bring along with them their motor vehicles,
equipments, materials, supplies, machineries and other items
necessary for the needs of the plaintiffs' properties.
To cease, desist and refrain from hindering or obstructing the
plaintiffs and/or persons authorized by them, to install electric
power lines over the Tali Beach Subdivision for plaintiffs'
electric power requirements.4

Private respondent filed a petition for certiorari with the Court of Appeals,
which set aside the amended writ dated December 29, 1998 and reinstated
the original writ dated December 12, 1996 with modification as to the
amount of the bond. The petitioner moved for reconsideration, but the
same was denied.
Petitioner now comes before us claiming that the Court of Appeals:
I.

[GRAVELY] ERRED IN FINDING AND CONCLUDING THAT THE


TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION IN
ISSUING: (1) THE JOINT RESOLUTION DATED 29 DECEMBER

II.

III.

1998, (2) THE AMENDED WRIT OF PRELIMINARY INJUNCTION


(MANDATORY AND PROHIBITORY) OF EVEN DATE AND (3)
THE ORDER DATED 8 MARCH 1999 DENYING THE MOTION FOR
RECONSIDERATION TO RECONSIDER AND SET ASIDE THE JOINT
RESOLUTION.
OVERSTEPPED THE BOUNDARY OF ITS AUTHORITY AND
JURISDICTION IN RESOLVING FACTUAL MATTERS, HOWEVER,
ERRONEOUS, COULD NOT BE REVIEWED UNDER THE
EXTRAORDINARY WRIT OF CERTIORARI BUT BY ORDINARY
APPEAL, INSTEAD OF CONFINING ITSELF TO DETERMINE
WHETHER OR NOT THE TRIAL COURT COMMITTED GRAVE
ABUSE OF DISCRETION IN ISSUING THE JOINT RESOLUTION,
THE AMENDED WRIT OF PRELIMINARY INJUNCTION
(MANDATORY AND PROHIBITORY), AND THE ORDER DATED 6
MARCH 1996 DENYING THE MOTION TO RECONSIDER THE
JOINT RESOLUTION.
EXCEEDED ITS JURISDICTION AND AUTHORITY IN SETTING
ASIDE THE JOINT RESOLUTION, LIFTING THE AMENDED WRIT
OF PRELIMINARY INJUNCTION DATED 29 DECEMBER 1998,
AND RESTRICTING OR LIMITING PASSAGE OVER THE TALI
BEACH SUBDIVISION ROADS TO INGRESS AND EGRESS OF
PETITIONER AND MEMBERS OF THE LATTER'S HOUSEHOLD IN
UTTER VIOLATION OF THE LAW ON EASEMENT, IN GENERAL,
AND LEGAL EASEMENT OF RIGHT OF WAY IN PARTICULAR.5

Simply, the issue is whether there was a legal basis for the issuance of the
amended writ of injunction. Likewise, we need to resolve whether the right
of passage allowed in the uncontested original writ applies not only to the
petitioner and his household, but also to his visitors, contractors,
construction workers, authorized persons, heavy equipment machinery,
and construction materials as well as the installation of power lines.
Petitioner contends that inherent in the right of way under Article 649 6 of
the New Civil Code is the right to cultivate and develop the property, which
is an attribute of ownership provided under Article 428. 7 According to
petitioner, the passage of heavy equipment and construction materials
through the subdivision is granted by Article 656.8 Petitioner adds that he
was not seeking the right of way only for occasional visits to his property
but also to develop, use and enjoy it.
Private respondent claims that what was granted in the original writ was
not the easement of right of way but only the maintenance of the status
quo. It maintains that from the very beginning, petitioner and his
household were allowed into the subdivision only because petitioner
owned several lots in the subdivision. Hence, according to private
respondent, the Court of Appeals properly dissolved the amended writ as
the status quo protected by the original writ did not include the passage of
construction workers in petitioner's property outside the subdivision.
Private respondent stresses that at the time the original writ was applied
for there was no construction work yet.
Private respondent argues that its recognition of the original writ should
not be construed as admitting that petitioner had a right of way; and with
no easement of right of way, petitioner cannot claim other rights under the
law on easement. It further contends that acts prohibited and allowed
under the amended writ amounted to a premature adjudication on the
merits of the main case on whether or not petitioner has a right of way,
which is still pending before the trial court.

Prefatorily, we note that what was granted by the trial court was the
preliminary injunction, and that the main case for right of way has not yet
been settled. We have in previous cases9 said that the objective of a writ of
preliminary injunction is to preserve the status quo until the merits of the
case can be fully heard. Status quo is the last actual, peaceable and
uncontested situation which precedes a controversy.10 The Court of
Appeals was correct in its findings that the last actual, peaceful and
uncontested situation that preceded the controversy was solely the access
of petitioner and his household to his property outside the subdivision for
visits and inspections. At the time the writ was applied for in 1995, there
was still no construction going on in the property. It was merely raw land.
The use of the subdivision roads for ingress and egress of construction
workers, heavy equipment, delivery of construction materials, and
installation of power lines, are clearly not part of the status quo in the
original writ. Along this line, the Court of Appeals properly set aside the
amended writ and reinstated the original writ.
However, under Article 656 of the New Civil Code, if the right of way is
indispensable for the construction, repair, improvement, alteration or
beautification of a building, a temporary easement is granted after
payment of indemnity for the damage caused to the servient estate. In our
view, however, "indispensable" in this instance is not to be construed
literally. Great inconvenience is sufficient.11 In the present case, the trial
court found that irrespective of which route petitioner used in gaining
access to his property, he has to pass private respondent's subdivision.
Thus we agree that petitioner may be granted a temporary easement. This
temporary easement in the original writ differs from the permanent
easement of right of way now being tried in the main case.
The law provides that temporary easement is allowed only after the
payment of the proper indemnity. As there are neither sufficient
allegations nor established facts in the record to help this Court determine
the proper amount of indemnity, it is best to remand the case to the trial
court for such determination.
Additionally, we find that the installation of electric power lines is a
permanent easement not covered by Article 656. Article 656 deals only
with the temporary easement of passage. Neither can installation of
electric power lines be subject to a preliminary injunction for it is not part
of the status quo. Besides, more damage would be done to both parties if
the power lines are installed only to be removed later upon a contrary
judgment of the court in the main case.
WHEREFORE, the petition is PARTIALLY GRANTED.
We hereby order (a) private respondent to allow the right of passage thru
the subdivision by the petitioner's visitors and guests, contractors,
construction workers, heavy equipment vehicles, and delivery construction
materials; and (b) petitioner to pay private respondent the indemnity
therefor to be determined by the trial court. The case is hereby
REMANDED to the trial court for the determination of the proper amount
of indemnity for the temporary easement under Article 649.
No pronouncement as to costs. SO ORDERED.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 10

G.R. No. L-5734


August 17, 1911
MARCELO MANTILE, ET AL., plaintiffs-appellees, vs. ALEJANDRO
CAJUCOM, ET AL., defendants-appellants.
TORRES, J.:
This is an appeal by the defendants from the judgment rendered in the
matter of the principal issue, and in the incidental one of contempt of
court.
THE INCIDENTAL ISSUE OF CONTEMPT
On June 22, 1908, the attorneys for the plaintiffs Marcelo Mantile,
Sebastian Bancod, Adriano Espaol, Gregorio Corpus, Claudio Angeles,
Doroteo Dacuno, Fernando Polintan, Maximino Fajardo, Catalino Rubio,
Alejandro Caisip, Diego Santiago, Eugenio Ronquillo, Raymundo Santiago,
Simon de la Cruz, Anacleto de los Reyes, Rafael Mendoza, Marcelino
Fajardo, Tomas Marcelo, Inocencio Santiago, Eugenio Angeles, Segundo
Ramos, and Geronimo Rojas, filed a written complaint against Alejandro
Cajucom and Timoteo Cajucom wherein they prayed for the issuance of
writ of preliminary injunction to restrain the defendants from continuing to
close the canal or estero called Paligui ng Buquid Puntang Piniping, in the
barrio of Biga of the pueblo of Bongabon, and through which the water ran
that irrigated the sementeras, or rice fields of which the plaintiffs were the
owners, and from obstructing the course of such water, and furthermore
that, after the hearing of the case, a writ of perpetual injunction be issued
against the said defendants, and that the latter be sentenced to pay to
each of the twenty-two plaintiffs the amount of the losses and damages
caused him, and the costs.
The plaintiffs having furnished bond, the court, by order of July 26, 1908,
directed that preliminary injunction issue against the said defendants, their
agents and representatives, restraining them from performing any act
whatever that might tend to close or obstruct the canal or estero called
Paligui ng Buquid Puntang Piniping, in the barrio and pueblo beforementioned, of the Province of Nueva Ecija, and to refrain from hindering
the passage of the water that flowed through the said canal. The
defendants were notified of this writ and it was served upon them on the
29th of the same month.
By a petition of July 6, 1908, counsel for the plaintiffs set forth under oath
that, according to information he had received, the defendants were
continuing to obstruct and hinder the passage of the water, in
disobedience to the judicial order, and prayed that the said defendants be
notified to appear and state their reasons, if any they had, why they should
not be punished for contempt of court for disobedience to the writ of
preliminary injunction issued. This petition was granted and the defendants
having been notified, they alleged in writing, on the 14th of the same
month, that they had been notified on the 3rd of July of the said writ by
the sheriff of Nueva Ecija and since then had complied with the order of
the court, but called attention to the fact that the stream had been closed
by two tenants of the defendant, Alejandro Cajucom, on the 1st of the
preceding month of July, since which date neither they, the defendants,
nor any other person in their representation, had done anything whatever
to the stream or ditch in question; wherefore they prayed that the two
men who closed the said stream be examined, and that, in view of such
facts, the charge of contempt of court be dismissed, and the plaintiffs be
sentenced to pay the costs, and the damages occasioned.

The court, after the witnesses summoned had been examined, decided, on
August 20, 1908, that the defendants had committed contempt of court
and imposed upon each of them a fine of P200, and imprisonment until
they should duly comply with the writ of injunction, and sentenced each of
them to pay one-half of the costs.
Defendants excepted to this judgment and, the required bill of exceptions
having been submitted, the Supreme Court, in its decision of January 11,
[31] 1910,1 dismissed the appeal on the ground that the said bill of
exceptions had been improperly admitted, inasmuch as the order issued in
connection with the incidental question of contempt of court, could be
reviewed only after the rendition of judgment on the main issue, and not
until then could the said incident of contempt be, by means of a bill of
exceptions, submitted to this court; therefore the records in the case were
remanded to the court below, later to be transmitted to the clerk of this
court upon the filing of the main record with the bill of exceptions.
By the writ of preliminary injunction issued on June 26, 1908, the original
of which is on file, page 7 of the main record, the defendants Alejandro and
Timoteo Cajucom, their attorneys, representatives and agents, were
enjoined from performing any act whatever that might tend to close and
obstruct the canal, a branch, called Paligui ng Buquid Puntang Piniping, of
an estero situated in the barrio of Biga of the pueblo of Bongabon, Nueva
Ecija, and to cease to obstruct or hinder the course of the water that
should flow through the said branch.
In the written complaint presented on June 22, 1908, it is averred that the
said canal or estero was closed by the representatives of the defendants,
on the 1st of June of the year therein stated, and that since then the water
which it ordinarily carried had ceased to flow through it, the plaintiff's
lands thereby being deprived of irrigation. So that when the writ of
injunction was issued on the 26th of the said month, it was taken for
granted that the estero or canal in question was closed and that the water
did not run through it, as occurred prior to the said 1st of June; and counsel
for the plaintiffs, in charging, by a writing of July 6, 1908, that contempt of
court was committed, stated that the defendants, according to the
information he had, were still obstructing and hindering the passage of the
water, in disobedience of the writ of injunction.
The defendants having been notified to show cause why they should not be
punished for contempt of court and disobedience of the preliminary
injunction issued by the court, answered that since the 3rd of July, the date
when they were notified by the deputy sheriff, they had complied with the
prohibitory order and had not done anything whatever, by themselves or
through others in their representation, to the stream or ditch in question,
which was closed by two tenants of one of the defendants, Alejandro
Cajucom, on June 1, 1908; as acknowledged by said tenants.
The writ issued by the court contained no order instructing the defendants
to raise or remove the obstructions that prevented the water from flowing
through the said canal or ditch.
The canal was obstructed and closed on June 1st, and when the persons
who closed it were notified on July 3 that they should abstain from
performing any act whatever tending to obstruct and prevent the flow of
water, the canal or ditch still remained closed, and the record shows no
proof that it was afterwards opened to the passage of water, nor that,
after the defendants had been notified of the injunction, they again closed
it. The fact that the latter failed to remove the obstruction they had placed
in the said canal or estero for the purpose of preventing the passage of the

water, since they were not ordered so to do by the judicial writ, is not
sufficient to make them liable for contempt of court.
The act of the closing of the canal occurred prior to the issuance of the
writ, and, since a thing that has already been done can not be prohibited,
by the mere fact of there not having been done what was not ordered in
the writ it can not be held that a judicial order was disobeyed and willfully
disregarded.
Section 162 of the Code of Civil Procedure prescribes:
An injunction is a writ or order requiring a person to refrain from
particular act.
The said writ prohibited the performance of any act that would obstruct,
close, or hinder the course of the water through the Piniping canal or
creek, when it was already obstructed and closed; and as the removal of
the impediment or obstruction was not ordered, the defendants were not
obliged to perform any particular act, and their inaction in leaving the canal
closed does not constitute contempt of court, as they did not violate any
judicial prohibition.
The record shows that the prohibition was issued after the closing of the
canal; hence, if the defendants did not remove the obstruction, they
disobeyed no order. In the syllabus of decision No. 1697, Municipal council
of Santa Rosa vs. Provincial Board of La Laguna (3 Phil. Rep., 206), the rule
was laid down that the commission of an act already done can not be
enjoined. To say that it could, would be nonsense.
THE MAIN ISSUE
On January 28, 1909, the plaintiffs filed an amended complaint, with the
permission of the court, wherein they alleged that certain of them named
Maria Marcelo, Crisanto Rubio, Alipio Espaol or Estaol, Marcelo Mantile,
Adriano Espaol or Estaol, Sebastian Bancod, Claudio Angeles, Diego
Santiago, Raymundo Santiago, Anacleto de los Reyes, Rafael Mendoza,
Clemente Alivia, Marcelino Fajardo, and Segundo Ramos had been, on or
about June 1, 1908, and were at the time, the proprietors and owners of
rice lands situated in the barrio of Biga of the pueblo of Bongabon, and that
the other plaintiffs were planters and cultivators of some portions of the
said islands; that (following the statement in the complaint as to the
boundaries or adjacent lands of each of their respective properties) the
said Paligui ng Buquid Puntang Piniping estero or creek existed and had
always existed in the afore-mentioned barrio; that water flowed through it
on or about June 1, 1908, and the plaintiffs used that water in the
cultivation of their above-mentioned lands; that, on or about the date
aforesaid, the defendants, by themselves and through their agents and
representatives, obstructed and closed the mouth of the estero in such
manner that the lands described were deprived of the water that had
flowed and should flow through the said estero; that, on or about the 4th
of October of the same year before mentioned, the continual heavy rains
and high floods carried away the obstruction in the said Paligui ng Buquid
Puntang Piniping estero; that, in view of the statements made by the
defendants, they believed that the latter would again close the estero in
order to obstruct the passage of the water to their (the plaintiffs')
properties; and that the plaintiffs, through the closing of the said estero or
creek, suffered losses and damages in the following amounts: Maria
Marcelo, P1,500; Crisanto Rubio, P250; Alipio Espaol, P75; Marcelo
Mantile, P2,500; Adriano Espaol, P75; Sebastian Bancod, P400; Gregorio
Corpus, P150; Claudio Angeles, P250; Doroteo Dacuno, P250; Fernando

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 11

Polintan, P250; Maximino Fajardo, P200; Catalino Rubio, P300; Alejandro


Caisip, P270; Diego Santiago, P800; Eugenio Ronquillo, P486; Raymundo
Santiago, P650; Simeon [Simon] de la Cruz, P480; Anacleto de los Reyes,
P180; Rafael Mendoza, P300; Marcelino Fajardo, P340; Tomas Marcelo,
P270; Inocencio Santiago, P375; Eugenio Angeles, P375; Geronimo Rojas,
P135; Segundo Ramos, P390, and Clemente Alivia, P219; and the complaint
concluded by asking the court to render judgment against the defendants,
and, at the termination of the trial, to issue a perpetual injunction
enjoining them from closing the said estero or creek, or in any manner
obstructing the course of the water therein, and furthermore, to sentence
them to pay to the plaintiffs the losses and damages suffered by them, and
the costs of the suit.
On February 11, 1909, the defendants' counsel, answering the amended
complaint, made a general denial of each and all the allegations of the said
complaint and alleged, as a special defense, that the irrigation canal in
question belonged to the defendants; that the mouth of the said Paligui ng
Buquid Puntang Piniping canal did not previously exist and was opened
only at the request of Marcelo Mantile; and that the plaintiff's lands were
provided with another irrigation ditch independent of the one herein
concerned. Said counsel therefore prayed that his clients be absolved from
the complaint, that the irrigation canal in question be declared to belong to
the defendants, and that the plaintiffs be sentenced to pay the costs.
On April 26, 1909, the case came up for hearing, testimony was adduced by
both parties and the court, after consideration of the evidence, rendered
judgment on July 26,1909, enjoining the defendant Alejandro Cajucom
from closing the Paligui ng Buquid Puntang Piniping estero or creek, or in
any manner obstructing the course of the water running therein. the
preliminary injunction issued against the defendant, his agents and
representatives, by the Hon. Judge Estanislao Yusay, was thus rendered
perpetual, and the said defendant was sentenced to pay the following
sums, for losses and damages; To Maria Marcelo, P196.50; Crisanto Rubio,
P139.50; Alipio Espaol, P75; Marcelo Mantile P800.25; Adriano Espaol,
P75; Sebastian Bancod, P142.50; Gregorio Corpus, P90.12; Claudio Angeles,
P97.87; Doroteo Dacumo, P90.37; Fernando Polintan, P80.87; Maximino
Fajardo, P75.37; Alejandro Caisip, P75; Catalino Rubio, P84; Diego Santiago,
P131.25; Eugenio Ronquillo, P131.25; Raymundo Santiago, P540; Simon de
la Cruz, P135; Anacleto de los Reyes, P90; Rafael Mendoza, P195;
Marcelino Fajardo, P180; Geronimo Rojas, P90; Segundo Ramos, P210;
Clemente Alivia, P109.50, and to Tomas Marcelo, Inocencio Santiago, and
Angeles, tenants-on- shares of Maria Marcelo, the sum of P196.50. Counsel
for the defendant, Alejandro Cajucom, excepted to this judgment and
prayed for a new trial on the grounds that the said judgment was not
sufficiently supported by the weight of the evidence and was contrary to
law. This motion was overruled by an order of September 2, and exception
thereto was taken by the appellant who duly filed the proper bill of
exceptions, which was certified to and forwarded to the clerk of this court.

to be perpetual. This claim, which is opposed by the defendants,


presupposes a right on the part of the plaintiffs to use and profit by the
water that runs through the Piniping estero or creek, to the benefit of their
respective agricultural lands.
The law applicable to the present contention is found in articles 407 to 425
of the Civil Code, in the last of which it is provided:
In all that is not expressly determined by the provisions of this
chapter, the special law of waters shall be observed.
This law is that of August 3, 1866, which was extended to the Philippine
Islands by the royal decree of the 8th of the same month and year and
published with the Decreto de cumplase of the Gobierno General of
September 21, 1871, in the Official Gazette of the 24th of the same month
and year, on account of the subsequent law of June 13, 1879, in force in
Spain, not having been promulgated in these Islands. It contains, among
others, the provisions found in articles 30 to 65 applicable to the case at
bar.
The scant data and the insufficiency of the evidence offered by the record,
preclude this court's deciding, in accordance with the law, upon the
pleadings and the proofs submitted by the parties, the several issues raised
in the course of this litigation, and for this reason we esteem it proper that
the case be reopened for the conduct of the following proceedings:
1.

2.

3.

4.

An ocular inspection shall be made by the justice or auxiliary


justice of the peace, attended by expert surveyors one of
which latter to be appointed by each of the parties to the suit
for the purpose of determining whether the water from the
estero named Sapang Cabasan issues from a spring called Sibul;
whether this spring and the said estero are upon the land
owned by the defendants, and, if not, who is the owner of the
land on which they are located, and whether he is a third
person who is not a party to this suit.
Whether the creek, estero, or ditch, named Paligui Puntang
Piniping, is connected or united with the Sapang Cabasan
estero, and whether the said Puntang Piniping creek or canal
crosses the lands of defendants or those of the plaintiffs.
To ascertain at what point or place either of the said Cabasan
or Piniping canals was closed; whether the closure was made
on the lands of defendants or on that of the plaintiffs, and
whether, on account of such closure, the course of the water
was completely obstructed and prevented from entering the
lands of the plaintiffs.
Whether the Paligui Puntang Piniping creek, canal, or estero
passes through the sitio called Pinagtubuhan, or receives water
from some other spring, creek, or canal, stating the name of
the same and whether it is distinct and separate from the
Sapang Cabasan estero.

Counsel for the appellants having been authorized, by an order of February


12, 1910, to present the facts relative to the charge of contempt of court,
as an incident of the main issue, and upon his petition, the Supreme Court
ruled that the bill of exceptions relative to the matter of the contempt of
court, together with the evidence therewith submitted should be held to
be an integral part of the said main issue with the bill of exceptions thereto
pertaining.

A rough sketch must be drawn that shall show the location of the lands of
the defendants and those of the plaintiffs; the points where the said two
esteros and the Sibul Spring are situated; the exact point where the closure
of the canal was effected; which of the lands are situated in high places and
which in low places; and in what direction the water flows after arising
from the Sibul Spring and entering into the Sapang Cabasan estero.

With regard to main issues of this suit, the object of the plaintiffs is to
obtain from the court an order decreeing the former preliminary injunction

5. An investigation and report shall be made as to whether the Puntang


Piniping canal or estero is of recent formation and was excavated but a

short time ago, or whether, by the signs observed on its banks, it appears
that it was opened many years ago, stating since when it has been opened.
6. Investigation and report shall be made as to whether the plaintiffs' lands
receive irrigation water from any spring, estero, or creek, other than those
before mentioned, and, if so, their names and the distances between them,
and the latter shall be noted on the rough sketch drawn by the surveyors.
From the result obtained from the proceedings, and the rough sketch
drawn by the experts, we shall easily be able to arrive at a conclusion as to
whether the defendants had or had not a right to close the Cabasan or
Puntang Piniping creek, thus depriving the plaintiffs' sementeras of the
water flowing through it, or whether, on the other hand, the plaintiff had a
right to the enjoyment and use of such water for the irrigation of their
lands, and whether, through the want of the same, they suffered losses
and damages by fault of the said defendants.
For the foregoing reasons, justice demands, in our opinion, that we find
that the defendants Alejandro and Timoteo Cajucom did not commit any
act whatever constituting contempt of a judicial order. The order of August
20, 1908 is reversed. No special findings is made as to the costs of the
incidental proceedings.
The judgment appealed from, of July 26, 1909, is set aside, and the record
of the case shall be remanded, with a certified copy of this decision, to the
court below in order that the judge may proceed with a rehearing and
conduct the proceedings hereinbefore specified, and in due season render
judgment wherein he shall take into account the evidence already
contained in the record, together with such new evidence as may be
admitted, in accordance with this decision and in harmony with the law. So
ordered.
G.R. No. L-5656
March 24, 1954
JUAN G. FELICIANO, ET AL., petitioners-appellants, vs. MARIANO ALIPIO,
ET AL., respondents-appellee.
JUGO, J.:
On September 21, 1951, the Director of Public Schools issued Circular No.
20, series of 1951, which reads as follows:
PUBLIC SCHOOL PUPILS AND STUDENTS MAY BE REQUIRED TO
SALUTE THE FLAG
To Division Superintendents:
1. Quoted in the inclosure to this Circular for the information and
guidance of school officials and teachers, is Opinion No. 370, series of
1951, of the Honorable, the Secretary of Justice, "regarding the
power of the Director of Public Schools to require all pupils and
students in public schools to salute the flag, on pain of being barred
from admission to, or expelled from, such schools."
This Circular revokes Circular No. 33, series of 1948.

(Sgd.) BENITO PANGILINAN


Director of Public Schools

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 12

The petitioners filed before the Court of First Instance of Tarlac a petition
for declaratory relief and mandatory injunction, praying that the above
circular be declared null and void, that preliminary injunction be issued
prohibiting the respondents Mariano Alipio and other teachers of the
Malacampa Elementary School, and the Director of Public Schools, from
carrying out the provisions of said circular, and that, after trial, the
preliminary injunction be made permanent.
The Provincial Fiscal of Tarlac filed a motion to dismiss the petition on the
ground that under section 2, Rule 66, it was not a case in which a
declaratory judgment could be rendered. The court dismissed the case.
Hence, the petitioners have appealed to this Court.
It is not necessary to decide whether the petition for declaratory judgment
be granted in this case, because in the petition presented in the court
below, in addition to the declaratory judgment, the petitioners prayed for
the issuance of a permanent injunction, which is equivalent to an action for
prohibition against public officers, and as such we consider it, without
passing at this stage of the proceedings on the merits of said action.
In the present case, we cannot consider the question as to the
constitutionality of the circular as this will be decided after the regular
hearing.
In view of the foregoing, the order of the court dismissing the petition is
reversed, and the case returned to the Court of First Instance of Tarlac for
further proceedings as in an action for prohibition, without costs. So
ordered.
G.R. No. 168008
August 17, 2011
PETRONILO J. BARAYUGA, Petitioner, vs. ADVENTIST UNIVERSITY OF THE
PHILIPPINES, THROUGH ITS BOARD OF TRUSTEES, REPRESENTED BY ITS
CHAIRMAN, NESTOR D. DAYSON, Respondents.
DECISION
BERSAMIN, J.:
The injunctive relief protects only a right in esse. Where the plaintiff does
not demonstrate that he has an existing right to be protected by injunction,
his suit for injunction must be dismissed for lack of a cause of action.
The dispute centers on whether the removal of the petitioner as President
of respondent Adventist University of the Philippines (AUP) was valid, and
whether his term in that office was five years, as he insists, or only two
years, as AUP insists.
1

We hereby review the decision promulgated on August 5, 2004, by which


the Court of Appeals (CA) nullified and set aside the writ of preliminary
injunction issued by the Regional Trial Court (RTC), Branch 21, in Imus,
Cavite to prevent AUP from removing the petitioner.
Antecedents
AUP, a non-stock and non-profit domestic educational institution
incorporated under Philippine laws on March 3, 1932, was directly under
the North Philippine Union Mission (NPUM) of the Southern Asia Pacific
Division of the Seventh Day Adventists. During the 3rd Quinquennial
Session of the General Conference of Seventh Day Adventists held from
November 27, 2000 to December 1, 2000, the NPUM Executive Committee
elected the members of the Board of Trustees of AUP, including the

Chairman and the Secretary. Respondent Nestor D. Dayson was elected


Chairman while the petitioner was chosen Secretary.
On January 23, 2001, almost two months following the conclusion of the
3rd Quinquennial Session, the Board of Trustees appointed the petitioner
President of AUP.2 During his tenure, or from November 11 to November
13, 2002, a group from the NPUM conducted an external performance
audit. The audit revealed the petitioners autocratic management style, like
making major decisions without the approval or recommendation of the
proper committees, including the Finance Committee; and that he had
himself done the canvassing and purchasing of materials and made
withdrawals and reimbursements for expenses without valid supporting
receipts and without the approval of the Finance Committee. The audit
concluded that he had
committed serious violations of fundamental rules and procedure in the
disbursement and use of funds.
The NPUM Executive Committee and the Board of Trustees decided to
immediately request the services of the General Conference Auditing
Service (GCAS) to determine the veracity of the audit findings. Accordingly,
GCAS auditors worked in the campus from December 4 to December 20,
2002 to review the petitioners transactions during the period from April
2002 to October 2002. On December 20, 2002, CGAS auditors reported the
results of their review, and submitted their observations and
recommendations to the Board of Trustees.
Upon receipt of the CGAS report that confirmed the initial findings of the
auditors on January 8, 2003, the NPUM informed the petitioner of the
findings and required him to explain.
On January 15, 2003, Chairman Dayson and the NPUM Treasurer likewise
informed the petitioner inside the NPUM office on the findings of the
auditors in the presence of the AUP Vice-President for Financial Affairs, and
reminded him of the possible consequences should he fail to satisfactorily
explain the irregularities cited in the report. He replied that he had already
prepared his written explanation.
The Board of Trustees set a special meeting at 2 p.m. on January 22, 2003.
Being the Secretary, the petitioner himself prepared the agenda and
included an item on his case. In that meeting, he provided copies of the
auditors report and his answers to the members of the Board of Trustees.
After hearing his explanations and oral answers to the questions raised on
issues arising from the report, the members of the Board of Trustees
requested him to leave to allow them to analyze and evaluate the report
and his answers. Despite a long and careful deliberation, however, the
members of the Board of Trustees decided to adjourn that night and to set
another meeting in the following week considering that the meeting had
not been specifically called for the purpose of deciding his case. The
adjournment would also allow the Board of Trustees more time to ponder
on the commensurate disciplinary measure to be meted on him.
On January 23, 2003, Chairman Dayson notified the petitioner in writing
that the Board of Trustees would hold in abeyance its deliberation on his
answer to the auditors report and would meet again at 10:00 a.m. on
January 27, 2003. Chairman Dayson indicated that some sectors in the
campus had not been properly represented in the January 22, 2003 special
meeting, and requested the petitioner as Secretary to ensure that all
sectors are duly represented in the next meeting of the Board of Trustees. 3

In the January 27, 2003 special meeting, the petitioner sent a letter to the
Board of Trustees. The members, by secret ballot, voted to remove him as
President because of his serious violations of fundamental rules and
procedures in the disbursement and use of funds as revealed by the special
audit; to appoint an interim committee consisting of three members to
assume the powers and functions of the President; and to recommend him
to the NPUM for consideration as Associate Director for Secondary
Education.4
On January 28, 2003, the petitioner was handed inside the NPUM office a
letter, together with a copy of the minutes of the special meeting held the
previous day. In turn, he handed to Chairman Dayson a letter requesting
two weeks within which to seek a reconsideration, stating that he needed
time to obtain supporting documents because he was then attending to his
dying mother.5
In the evening of January 28, 2003, the Board of Trustees, most of whose
members had not yet left Cavite, reconvened to consider and decide the
petitioners request for reconsideration. During the meeting, he made an
emotional appeal to allow him to continue as President, promising to
immediately vacate his office should he again commit any of the
irregularities cited in the auditors report. He added that should the Board
of Trustees not favor his appeal, he would settle for a retirement package
for him and his wife and would leave the church.
The Board of Trustees denied the petitioners request for reconsideration
because his reasons were not meritorious. Board Member Elizabeth Role
served the notice of the denial on him the next day, but he refused to
receive the notice, simply saying Alam ko na yan.6
The petitioner later obtained a copy of the inter-school memorandum
dated January 31, 2003 informing AUP students, staff, and faculty members
about his relief as President and the appointment of an interim committee
to assume the powers and duties of the President.
On February 4, 2003, the petitioner brought his suit for injunction and
damages in the RTC, with prayer for the issuance of a temporary
restraining order (TRO), impleading AUP and its Board of Trustees,
represented by Chairman Dayson, and the interim committee. His
complaint alleged that the Board of Trustees had relieved him as President
without valid grounds despite his five-year term; that the Board of Trustees
had thereby acted in bad faith; and that his being denied ample and
reasonable time to present his evidence deprived him of his right to due
process.7
The suit being intra-corporate and summary in nature, the application for
TRO was heard by means of affidavits. In the hearing of February 7, 2003,
the parties agreed not to harass each other. The RTC used the mutual
agreement as its basis to issue a status quo order on February 11, 2003. 8
In their answer with counterclaim, the respondents denied the allegations
of the petitioner, and averred that he had been validly removed for cause;
and that he had been granted ample opportunity to be heard in his
defense.9
Order of the RTC
On March 21, 2003, after summary hearing, the RTC issued the TRO
enjoining the respondents and persons acting for and in their behalf from
implementing the resolution removing him as President issued by the

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 13

Board of Trustees during the January 27, 2003 special meeting, and
enjoining the interim committee from performing the functions of
President of AUP. The RTC did not require a bond. 10
After further hearing, the RTC issued on April 25, 2003 its controversial
order,11 granting the petitioners application for a writ of preliminary
injunction. It thereby resolved three issues, namely: (a) whether the special
board meetings were valid; (b) whether the conflict-of-interest provision in
the By-Laws and Working Policy was violated; and (c) whether the
petitioner was denied due process. It found for the petitioner upon all the
issues. On the first issue, it held that there was neither a written request
made by any two members of the Board of Trustees nor proper notices
sent
to the members as required by AUPs By-Laws, which omissions, being
patent defects, tainted the special board meetings with nullity. Anent the
second issue, it ruled that the purchase of coco lumber from his balae (i.e.,
mother-in-law of his son) was not covered by the conflict-of-interest
provision, for AUPs Model Statement of Acceptance form mentioned only
the members of the immediate family and did not extend to the
relationship between him and his balae. On the third issue, it concluded
that he was deprived of due process when the Board of Trustees refused to
grant his motion for reconsideration and his request for additional time to
produce his evidence, and instead immediately implemented its decision
by relieving him from his position without according him the treatment
befitting a university President.
Proceedings in the CA
With the Interim Rules for Intra-Corporate Controversies prohibiting a
motion for reconsideration, the respondents forthwith filed a petition for
certiorari in the CA,12 contending that the petitioners complaint did not
meet the requirement that an injunctive writ should be anchored on a legal
right; and that he had been merely appointed, not elected, as President for
a term of office of only two years, not five years, based on AUPs amended
By-Laws.
In the meanwhile, on September 17, 2003, the petitioner filed a
supplemental petition in the CA,13 alleging that after the commencement
of his action, he filed in the RTC an urgent motion for the issuance of a
second TRO to enjoin the holding of an AUP membership meeting and the
election of a new Board of Trustees, capitalizing on the admission in the
respondents answer that he had been elected in 2001 to a five-year term
of office. He argued that the admission estopped the respondents from
insisting to the contrary.
The respondents filed in the CA a verified urgent motion for a TRO and to
set a hearing on the application for preliminary injunction to enjoin the RTC
from implementing the assailed order granting a writ of preliminary
injunction and from further proceeding in the case. The petitioner opposed
the motion for TRO, but did not object to the scheduling of preliminary
injunctive hearings.
On February 24, 2004, the CA issued a TRO to enjoin the RTC from
proceeding for a period of 60 days, and declared that the prayer for
injunctive relief would be resolved along with the merits of the main case.
The petitioner sought a clarification of the TRO issued by the CA,
considering that his cause of action in his petitions to cite the respondents
in indirect contempt dated March 5, 2004 and March 16, 2004 filed in the

RTC involved the election of a certain Robin Saban as the new President of
AUP in blatant and malicious violation of the writ of preliminary injunction
issued by the RTC. In clarifying the TRO, the CA explained that it did not go
beyond the reliefs prayed for in the respondents motion for TRO and
preliminary injunctive hearings.
On August 5, 2004, the CA rendered its decision nullifying the RTCs writ of
preliminary injunction. It rejected the petitioners argument that Article IV,
Section 3 of AUPs Constitution and By-Laws and Working Policy of the
Conference provided a five-year term for him, because the provision was
inexistent. It ruled that the petitioners term of office had expired on
January 22, 2003, or two years from his appointment, based on AUPs
amended By-Laws; that, consequently, he had been a mere de facto officer
appointed by the members of the Board of Trustees; and that he held no
legal right warranting the issuance of the writ of preliminary injunction.
The CA declared that the rule on judicial admissions admitted of
exceptions, as held in National Power Corporation v. Court of Appeals,14
where the Court held that admissions were not evidence that prevailed
over documentary proof; that the petitioners being able to answer the
results of the special audit point-by-point belied his allegation of denial of
due process; that AUP was the party that stood to be injured by the
issuance of the injunctive writ in the form of a "demoralized
administration, studentry, faculty and staff, sullied reputation, and
dishonest leadership;" and that the assailed RTC order sowed confusion
and chaos because the RTC thereby chose to subordinate the interest of
the entire AUP community to that of the petitioner who had been deemed
not to have satisfied the highest ideals required of his office.

VI.

The petitioner argues that the assailed RTC order, being supported by
substantial evidence, accorded with law and jurisprudence; that his tenure
as President under the Constitution, By-Laws and the Working Policy of the
Conference was for five years, contrary to the CAs findings that he held
the position in a hold-over capacity; that instead, the CA should have
applied the rule on judicial admission, because the holding in National
Power Corporation v. Court of Appeals, cited by the CA, did not apply, due
to AUP not having presented competent evidence to prove that he had not
been elected by the Board of Trustees as President of AUP; and that his
removal during the special board meeting that was invalidly held for lack of
notice denied him due process.
AUP counters that:
I.

II.

Issues
Undeterred, the petitioner has appealed, contending that:
I.

II.

III.

IV.

V.

THE COURT OF APPPEALS HAS DECIDED CONTRARY TO LAW


AND JURISPRUDENCE WHEN IT RULED THAT THE
EXTRAORDINARY WRIT OF CERTIORARI APPLIED IN THE CASE
AT BAR.
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE
IN A WAY NOT IN ACCORD WITH THE ESTABLISHED LAW AND
JURISPRUDENCE THAT "ADMISSIONS, VERBAL OR WRITTEN,
MADE BY A PARTY IN THE COURSE OF THE PROCEEDINGS IN
THE SAME CASE, DOES NOT REQUIRE PROOF," BY REQUIRING
PETITIONER BARAYUGA TO PRESENT EVIDENCE THAT HIS TERM
AS PRESIDENT OF AUP IS FOR FIVE (5) YEARS.
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE
IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED FACTS
WHEN IT RULED THAT PETITIONER BARAYUGA HAS ONLY A
TERM OF TWO (2) YEARS INSTEAD OF FIVE (5) YEARS AS
CLEARLY ADMITTED BY PRIVATE RESPONDENT AUP IN ITS
ANSWER.
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE
IN A WAY NOT IN ACCORD WITH LAW AND JURISPRUDENCE BY
SOLELY RELYING ON THE CASE OF NATIONAL POWER
CORPORATION v. COURT OF APPEALS, WHICH INVOLVE FACTS
DIFFERENT FROM THE PRESENT CASE.
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE
IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED FACTS
WHEN IT UNJUSTIFIABLY ALLOWED THE WAIVER OF NOTICE
FOR THE SPECIAL MEETING OF THE BOARD OF TRUSTEES.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE


IN A WAY NOT IN ACCORD WITH LAW AND ESTABLISHED FACTS
WHEN IT ERRONEOUSLY CONCLUDED THAT PETITIONER
BARAYUGA WAS MERELY OCCUPYING THE POSITION OF AUP
PRESIDENT IN A HOLD-OVER CAPACITY.

III.
IV.

V.

PETITIONER IS NOT AN ELECTED TRUSTEE OF THE AUP BOARD,


NOR WAS (HE) ELECTED AS PRESIDENT, AND AS SUCH, HE CAN
CLAIM NO RIGHT TO THE AUP PRESIDENCY, BEING TWICE
DISQUALIFIED BY LAW, WHICH RENDERS MOOT AND
ACAMEDIC ALL OF THE ARGUMENTS IN THIS PETITION.
EVEN IF WE FALSELY ASSUME EX GRATIA THAT PETITIONER IS
AN ELECTED TRUSTEE AND ELECTED PRESIDENT, THE TWO (2)
YEAR TERM PROVIDED IN AUPS BY-LAWS REQUIRED BY THE
CORPORATION CODE AND APPROVED BY THE SEC IS WHAT
GOVERNS THE INTRA-CORPORATE CONTROVERSY, THE AUPS
ADMISSION IN ITS ANSWER THAT HE HAS A FIVE (5) YEAR TERM
BASED ON HIS INVOKED SAMPLE CONSTITUTION, BY-LAWS
AND POLICY OF THE SEVENTH DAY ADVENTIST
NOTWITHSTANDING.
PURSUANT TO THE RULES AND SETTLED JURISPRUDENCE, THE
ADMISSION IN THE ANSWER IS NOT EVEN PREJUDICIAL AT ALL.
IV EVEN IF WE FALSELY ASSUME, JUST FOR THE SAKE OF
ARGUMENT, THAT THE PETITIONER HAD A FIVE (5) YEAR TERM
AS UNIVERSITY PRESIDENT, HE WAS NONETHELESS VALIDLY
TERMINATED FOR LOSS OF CONFIDENCE, GIVEN THE
NUMEROUS ADMITTED ANOMALIES HE COMMITTED.
V PETITIONER CANNOT COMPLAIN THAT NOTICES OF THE
BOARD MEETING WERE NOT SENT TO ALL "THE TWENTY FIVE
(25) TRUSTEES OF THE AUP BOARD", SINCE: [1] AS THE AUP
SECRETARY, IT WAS HE WHO HAD THE DUTY TO SEND THE
NOTICES; [2] WORSE, HE ATTENDED AND EXHAUSTIVELY
DEFENDED HIS WRITTEN ANSWER IN THE AUP BOARD OF
TRUSTEES MEETING, THUS, WAIVING ANY "NOTICE
OBJECTION"; [3] WORST OF ALL, HIS AFTERTHOUGHT
OBJECTION IS DECEPTIVELY FALSE IN FACT.

The decisive question is whether the CA correctly ruled that the petitioner
had no legal right to the position of President of AUP that could be
protected by the injunctive writ issued by the RTC.
Ruling
We deny the petition for review for lack of merit.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 14

1.

Petition is already moot

The injunctive writ issued by the RTC was meant to protect the petitioners
right to stay in office as President. Given that the lifetime of the writ of
preliminary injunction was co-extensive with the duration of the act sought
to be prohibited,15 this injunctive relief already became moot in the face of
the admission by the petitioner himself, through his affidavit,16 that his
term of office premised on his alleged five-year tenure as President had
lasted only until December 2005. In short, the injunctive writ granted by
the RTC had expired upon the end of the term of office (as posited by him).
The mootness of the petition warranted its denial. When the resolution of
the issue submitted in a case has become moot and academic, and the
prayer of the complaint or petition, even if granted, has become impossible
of enforcement for there is nothing more to enjoin the case should be
dismissed.17 No useful purpose would then be served by passing on the
merits of the petition, because any ruling could hardly be of any practical
or useful purpose in the premises. It is a settled rule that a court will not
determine a moot question or an abstract proposition, nor express an
opinion in a case in which no practical relief can be granted. 18 Indeed, moot
and academic cases cease to present any justiciable controversies by virtue
of supervening events,19 and the courts of law will not determine moot
questions,20 for the courts should not engage in academic declarations and
determine a moot question.21
2.

RTC acted in patently grave abuse of discretion


in issuing the TRO and writ of injunction

Nonetheless, the aspect of the case concerning the petitioners claim for
damages has still to be decided. It is for this reason that we have to resolve
whether or not the petitioner had a right to the TRO and the injunctive writ
issued by the RTC.
A valid writ of preliminary injunction rests on the weight of evidence
submitted by the plaintiff establishing: (a) a present and unmistakable right
to be protected; (b) the acts against which the injunction is directed violate
such right; and (c) a special and paramount necessity for the writ to
prevent serious damages.22 In the absence of a clear legal right, the
issuance of the injunctive writ constitutes grave abuse of discretion23 and
will result to nullification thereof. Where the complainants right is
doubtful or disputed, injunction is not proper. The possibility of irreparable
damage sans proof of an actual existing right is not a ground for a
preliminary injunction.24
It is clear to us, based on the foregoing principles guiding the issuance of
the TRO and the writ of injunction, that the issuance of the assailed order
constituted patently grave abuse of discretion on the part of the RTC, and
that the CA rightly set aside the order of the RTC.
To begin with, the petitioner rested his claim for injunction mainly upon his
representation that he was entitled to serve for five years as President of
AUP under the Constitution, By-Laws and Working Policy of the General
Conference of the Seventh Day Adventists (otherwise called the Bluebook).
All that he presented in that regard, however, were mere photocopies of
pages 225-226 of the Bluebook, which read:
Article IV-Board of Directors
Sec. 1. This school operated by the _____________ Union
Conference/Mission of Seventh-Day Adventists shall be under the direct

control of a board of directors, elected by the constituency in its


quinquennial sessions. The board of directors shall consist of 15 to 21
members, depending on the size of the institution. Ex officio members shall
be the union president as chairperson, the head of the school as secretary,
the union secretary, the union treasurer, the union director of education,
the presidents of the conferences/missions within the union. xxx.
Sec. 2. The term of office of members of the board of directors shall be five
years to coincide with the ______________ Union Conference/Mission
quinquennial period.
Sec. 3. The duties of the board of directors shall be to elect quinquenially
the president, xxx.
Yet, the document had no evidentiary value. It had not been officially
adopted for submission to and approval of the Securities and Exchange
Commission. It was nothing but an unfilled model form. As such, it was, at
best, only a private document that could not be admitted as evidence in
judicial proceedings until it was first properly authenticated in court.
Section 20, Rule 132 of the Rules of Court requires authentication as a
condition for the admissibility of a private document, to wit:
Section 20. Proof of private document. Before any private document
offered as authentic is received in evidence, its due execution and
authenticity must be proved either:
(a)
(b)

By anyone who saw the document executed or written; or


By evidence of the genuineness of the signature or handwriting
of the maker.

Any other private document need only be identified as that which it is


claimed to be. (21 a)
For the RTC to base its issuance of the writ of preliminary injunction on the
mere photocopies of the document, especially that such document was
designed to play a crucial part in the resolution of the decisive issue on the
length of the term of office of the petitioner, was gross error.
Secondly, even assuming that the petitioner had properly authenticated
the photocopies of the Bluebook, the provisions contained therein did not
vest the right to an office in him. An unfilled model form creates or
establishes no rights in favor of anyone.
Thirdly, the petitioners assertion of a five-year duration for his term of
office lacked legal basis.
Section 108 of the Corporation Code determines the membership and
number of trustees in an educational corporation, viz:
Section 108. Board of trustees. Trustees of educational institutions
organized as educational corporations shall not be less than five (5) nor
more than fifteen (15): Provided, however, That the number of trustees
shall be in multiples of five (5).
Unless otherwise provided in the articles of incorporation or the by-laws,
the board of trustees of incorporated schools, colleges, or other
institutions of learning shall, as soon as organized, so classify themselves
that the term of office of one-fifth (1/5) of their number shall expire every
year. Trustees thereafter elected to fill vacancies, occurring before the
expiration of a particular term, shall hold office only for the unexpired

period. Trustees elected thereafter to fill vacancies caused by expiration of


term shall hold office for five (5) years. A majority of the trustees shall
constitute a quorum for the transaction of business. The powers and
authority of trustees shall be defined in the by-laws.
For institutions organized as stock corporations, the number and term of
directors shall be governed by the provisions on stock corporations.
The second paragraph of the provision, although setting the term of the
members of the Board of Trustees at five years, contains a proviso
expressly subjecting the duration to what is otherwise provided in the
articles of incorporation or by-laws of the educational corporation. That
contrary provision controls on the term of office.25
In AUPs case, its amended By-Laws provided the term of the members of
the Board of Trustees, and the period within which to elect the officers,
thusly:
Article I
Board of Trustees
Section 1. At the first meeting of the members of the corporation, and
thereafter every two years, a Board of Trustees shall be elected. It shall be
composed of fifteen members in good and regular standing in the Seventhday Adventist denomination, each of whom shall hold his office for a term
of two years, or until his successor has been elected and qualified. If a
trustee ceases at any time to be a member in good and regular standing in
the Seventh-day Adventist denomination, he shall thereby cease to be a
trustee.
xxxx
Article IV
Officers
Section 1. Election of officers. At their organization meeting, the
members of the Board of Trustees shall elect from among themselves a
Chairman, a Vice-Chairman, a President, a Secretary, a Business Manager,
and a Treasurer. The same persons may hold and perform the duties of
more than one office, provided they are not incompatible with each
other.26
In light of foregoing, the members of the Board of Trustees were to serve a
term of office of only two years; and the officers, who included the
President, were to be elected from among the members of the Board of
Trustees during their organizational meeting, which was held during the
election of the Board of Trustees every two years. Naturally, the officers,
including the President, were to exercise the powers vested by Section 2 of
the amended By-Laws for a term of only two years, not five years.
Ineluctably, the petitioner, having assumed as President of AUP on January
23, 2001, could serve for only two years, or until January 22, 2003. By the
time of his removal for cause as President on January 27, 2003, he was
already occupying the office in a hold-over capacity, and could be removed
at any time, without cause, upon the election or appointment of his
successor. His insistence on holding on to the office was untenable,
therefore, and with more reason when one considers that his removal was
due to the loss of confidence on the part of the Board of Trustees.
4. Petitioner was not denied due process

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 15

The petitioner complains that he was denied due process because he was
deprived of the right to be heard and to seek reconsideration; and that the
proceedings of the Board of Trustees were illegal due to its members not
being properly notified of the meeting.

The assailed Resolution denied petitioner Philippine National Bank's


(PNB's) Motion for Reconsideration dated 3 May 2004.

Still, the petitioner fails to convince us.

As culled from the records, the facts show that on 26 February 1999,
respondents RJ Ventures Realty & Development Corporation (RJVRD) and
Rajah Broadcasting Network, Inc. (RBN) filed a Complaint for Injunction
with Prayer for Issuance of Temporary Restraining Order and Writ of
Preliminary Injunction4 against petitioner PNB and Juan S. Baun, Jr.5 with
the Regional Trial Court (RTC), Branch 66 of Makati City, and docketed as
Civil Case No. 99-452.

The requirements of due process in an administrative context are satisfied


when the parties are afforded fair and reasonable opportunity to explain
their respective sides of the controversy,27 for the essence of due process is
an opportunity to be heard.28 Here, the petitioner was accorded the full
opportunity to be heard, as borne by the fact that he was granted the
opportunity to refute the adverse findings contained in the GCAS audit
report and that the Board of Trustees first heard his side during the board
meetings before his removal. After having voluntarily offered his
refutations in the proceedings before the Board of Trustees, he should not
now be permitted to denounce the proceedings and to plead the denial of
due process after the decision of the Board of Trustees was adverse to
him.1avvphi1
Nor can his urging that the proceedings were illegal for lack of prior
notification be plausible in light of the fact that he willingly participated
therein without raising the objection of lack of notification. Thereby, he
effectively waived his right to object to the validity of the proceedings
based on lack of due notice.29
5. Conclusion
The removal of the petitioner as President of AUP, being made in
accordance with the AUP Amended By-Laws, was valid. With that, our
going into the other issues becomes unnecessary. We conclude that the
order of the RTC granting his application for the writ of preliminary
injunction was tainted with manifestly grave abuse of discretion; that the
CA correctly nullified and set aside the order; and that his claim for
damages, being bereft of factual and legal warrant, should be dismissed.
WHEREFORE, we DENY the petition for review on certiorari for lack of
merit, and hereby DISMISS SEC Case No. 028-03 entitled Dr. Petronilo
Barayuga v. Nelson D. Dayson, et al.
The petitioner shall pay the cost of suit. SO ORDERED.
G.R. No. 164548
September 27, 2006
PHILIPPINE NATIONAL BANK, petitioner, vs. RJ VENTURES REALTY &
DEVELOPMENT CORPORATION and RAJAH BROADCASTING NETWORK,
INC., respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review filed under Rule 45 of the Rules of
Court assailing the 31 March 2004 Decision1 and the 8 July 2004
Resolution2 of the Court of Appeals in CA-G.R. SP No. 56119. The
challenged Decision disposed, thus:
IN VIEW OF ALL THE FOREGOING, the instant petition is hereby
GRANTED, the assailed Orders dated July 28, 1999 and October 26,
1999, respectively, [are] REVERSED AND SET ASIDE, and the
preliminary injunction earlier issued is reinstated. No cost. 3

The Antecedents

In its Complaint, respondents contended that on 13 June 1996, First


Women's Credit Corporation (FWCC) received an invitation to bid from PNB
anent the sale of an 8,000 square meter property, located at Paseo de
Roxas corner Sen. Gil. Puyat Avenue, Makati City, and covered by Transfer
Certificate of Title No. S-15223 (Buendia Property).6 On 10 July 1996, FWCC
bid the amount of P455,000.00 per square meter or a total of
P3,640,000,000.00; and pursuant to PNB Rules and Regulations on the
Acceptance and Evaluation of Proposals, it deposited ten percent (10%) of
the offered price or P364,000,000.00 with the PNB by way of two checks,
No. 418796 and No. 418797, in the amounts of P312,000,000.00 and
P52,000,000.00, respectively.7 On 11 July 1996, FWCC submitted a revised
offer increasing its bid by P5,000.00 per square meter or a total additional
amount of P40,000,000.00. In view of the increase, FWCC deposited with
PNB an additional amount of P4,000,000.00.8 On 17 July 1996, FWCC was
awarded the Buendia Property.9 PNB's Notice of Award to FWCC set a
condition that within thirty (30) calendar days from receipt of the same,
the successful offeror shall tender payment of the balance of the purchase
price in the form of a manager's or cashier's check.10 On 24 July 1996,
FWCC, invoking Section 7.211 of the PNB Rules requested PNB to finance
the entire balance of the purchase price.12 On 17 September 1996 and
pending action on its loan application, FWCC assigned all its rights, claims,
interest, and title over the Buendia Property to RJVRD.13 The latter
assumed the right to purchase the Buendia Property and the obligations of
FWCC to PNB on the balance of the bid price.
Respondents further posited that PNB initially refused to finance the entire
balance of the purchase price except to the extent of seventy-five percent
(75%) thereof.14 However, PNB finally agreed to grant a loan to RJVRD
equivalent to eighty percent (80%) of the purchase price or for the amount
of P2,944,000,000.00. The grant was conditioned on the deposit by RJVRD
with PNB of an additional ten percent (10%) of the purchase price to the
first ten percent (10%) downpayment which the former had paid.
Otherwise stated, RJVRD was required to raise an additional amount of
P368,000,000.00.15 Moreover, to allow RJVRD to raise the additional
amount, PNB proposed to lend RBN the required amount, the latter being
an affiliate company of RJVRD, which amount will be available for relending
to RJVRD.
Respondents described the said arrangement in this wise:
15.0 PNB shall extend a loan to RBN in the amount of
P350,000,000.00 which in turn would be loaned to RJVRD.
15.1 The proceeds of the loan shall be used by RJVRD to partially pay
the additional 10% or P368,000,000.00 deposit on the Property. PNB
documents would however show that the loan was for the expansion
of RBN.

15.2 Mr. Ramon P. Jacinto, the majority stockholder of RJVRD will


pledge to PNB 70% of his shares of stock in RBN and 40% of his
shares of stock in FWCC.17
Moreover, in their Complaint a quo, respondents avowed that on 30
September 1996, following the payment by RJVRD to PNB of the additional
deposit of P368,000,000.00, the parties entered into a loan agreement
wherein PNB will finance the balance of the purchase price in the amount
of P2,944,000,000.00 subject to conditions, inter alia, that after the
transfer of the Buendia Property in the name of RJVRD, the same shall be
mortgaged in favor of PNB. On even date, RJVRD and PNB executed a Loan
Agreement.18 A Deed of Sale19 and a Real Estate Mortgage,20 both dated 30
September 1996 were similarly executed between RJVRD and PNB over the
Buendia Property. The Loan Agreement included a two-way peso/dollar
convertibility feature at the option of RJVRD; hence, to avail of a lower
interest rate, RJVRD converted its peso loan to US dollar based on a rate of
exchange of P26.23 to US$1.00, or for a total amount of
US$112,237,895.54.
Respondents claimed that RJVRD undertook to engage foreign investors for
the project. It entered into negotiations with Hyundai Construction of
South Korea which were eventually suspended. Its talks with Siemens of
Austria, and Property Investment and Development Management
Corporation of Singapore failed.21 Respondents interposed further that the
Asian currency crisis on 11 July 1997 caused a depreciation of the
Philippine peso which correspondingly increased the obligation of RJVRD to
PNB from P2,944,000,000.00 to P5,405,301,470.82 inclusive of interest.22
On 30 September 1997, in an effort to continue the project, RJVRD entered
into a joint venture agreement with Fil-Estate Management Incorporated
for the development of the Buendia Property. RBN secured another loan
from PNB in the amount of P100,000,000.00, part of which was used in
paying the interest for the loan it had secured in favor of RJVRD. In
addition, as and by way of security, RBN assigned in favor of PNB, all its
rights and interest over radio and television frequencies issued by the
National Telecommunications Commission, located in Tuguegarao, Baguio,
Manila, Cebu, Bacolod, Iloilo, including those in Cagayan de Oro (FM
Stations), and Manila (AM Station and TV-UHF Station). On September
1997, RJVRD paid PNB the accrued interest on the loan amounting to
P353,478,628.88. RBN also updated its first account with PNB by paying
about P41,000,00.00. In March 1998, RJVRD, RBN and PNB entered into
discussions on the restructuring of the loans. Respondents alleged that
while discussions were ongoing, the accounts of RJVRD and RBN became
delinquent. PNB sent RJVRD, a notice, dated 2 June 1998, declaring their
accounts delinquent and demanding the settlement of the same.
Respondents asserted that prior to 11 June 1998, in line with the
continuing discussions between PNB and RBN for the restructuring of the
loan, PNB required the redenomination of RBN's loan as a condition for its
restructuring.27 On 11 June 1998, RBN sent a letter to PNB in agreement to
the redenomination of the loan, stating therein the agreed terms for the
restructuring of the loan. RJVRD sent a letter to PNB agreeing to
redenominate its own loan based on PNB's initial proposal, which letter
was returned to RJVRD for the reason that, at that time, the proposals for
the restructuring of the RJVRD loan component did not call for the
redenomination of the loan of RJVRD. 28 On 24 June 1998, RBN sent a letter
to PNB, confirming to redenominate the loan under the terms stated in its
letter of 11 June 1998.29 On 9 September 1998, respondents asseverated
that PNB made a call to RJVRD, asking the latter to redenominate its loans.
On the same date, RJVRD sent PNB, a letter in agreement to the

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 16

redenomination.30 On 23 October 1998, the RJ Groups of Companies sent


Mr. Benjamin Palma Gil, president of PNB, a proposal for the settlement of
respondents' accounts, including a request for the restructuring of the
loans.

work injustice to RJVRD and RBN. They manifested their willingness to post
a bond as the court a quo may fix in its discretion, to answer for whatever
damages PNB may sustain for the reason of the restraining order or
injunction, if finally determined that respondents are not entitled thereto.

On 25 January 1999, PNB, through its counsel, sent RBN a demand letter,
requiring the latter to settle their outstanding account of
P841,460,891.91.32 In a letter similarly dated 25 January 1999, PNB by
counsel, demanded from RJVRD the settlement of its total obligation of
P5,405,301,470.82.33 On 28 January 1999, RBN sent a letter to PNB's
counsel, expressing its surprise to receive the demand letter despite their
continuing negotiations with PNB for the restructuring of its accounts. In its
letter, RBN said that it was, in fact, required by PNB to redenominate its
dollar loans into pesos as an initial step for the restructuring of the
account, and which it has complied.35 On even date, RJVRD sent a letter to
PNB's counsel emphasizing that it had not been advised of any adverse
development in their negotiation with PNB nor had it been informed of the
discontinuance of the negotiation. RJVRD sought for additional time to
justify its proposal to PNB with the aim of arriving at a friendly settlement.

Acting on respondent's prayer for the issuance of a Temporary Restraining


Order, the RTC, issued an Order42 dated 2 March 1999, denying the same.
The RTC held that the evidence showed that respondents are in default of
payment of its loan from PNB, amounting to P5,405,301,470.82, including
interests and penalties. According to the RTC, the respondents failed to
prove that they have a clear right to restrain the foreclosure of the Buendia
Property; whereas, it is PNB which has a clear right to the Buendia
Property. The RTC opined that the evidence failed to prove that
respondents will suffer "irreparable injury" if the foreclosure of the
Buendia Property is not enjoined, for under the law, respondents have one
(1) year from the date of the registration of the sale with the Register of
Deeds within which to redeem the Buendia Property; thus, respondents
will have a chance to recover the ownership thereof by way of redemption.
Finally, the RTC ruled that the rule of equity is on the side of PNB
considering that the Buendia Property was formerly owned by PNB. The
RTC denied the application for Temporary Restraining Order for lack of
merit, and held that the exposure of PNB in the transaction amounted to
P5,405,301,470.82, while the exposure of respondents is
P1,089,478,628.00.

On 18 February 1999, PNB made a demand to RBN to turnover the


possession and/or control of Broadcasting Equipment Inventory located at
No. 33, Dominican Hills, Baguio City. 37 On 18 February 1999, RJVRD
received a Notice of Extrajudicial Sale, dated 1 February 1999 for the sale
of the Buendia Property38 to be held on 2 March 1999 at the City Hall,
Makati City.
Respondents manifested in their Complaint that when RJVRD, as assignee
of FWCC purchased the Buendia Property from PNB, the Philippine
economy was progressive; that it was under this favorable economic
scenario that RJVRD agreed to the terms and conditions of the loan
agreements; however, following the Asian economic crisis of July 1997, and
with the depreciation of the Philippine peso, the loan of RJVRD which was
denominated
in
US
dollars
rose
from P2,944,000,000.00
(US$112,237,895.54) to P5,405,301,470.82.39 According to respondents,
from the original contract price of P3,680,000,000.00, RJVRD already made
a payment of P736,000,000.00, representing twenty-percent (20%) of the
value of the Buendia Property and P353,478,628.88, representing interest
on the loan or a total of P1,089,478,628.88; and that PNB never effectively
lost control over the Buendia Property, considering that simultaneous with
the execution of the Loan Agreement between RJVRD and PNB, RJVRD
executed a Real Estate Mortgage over the Buendia Property in favor of
PNB. Furthermore, respondents sought to find recourse under Article 1940
of the Civil Code. They contended that the action on the part of PNB to
foreclose the collaterals pledged or mortgaged by RJVRD and RBN,
including the extrajudicial sale of the Buendia Property on 2 March 1999 at
the City Hall of Makati City, and the planned take over of RBN's radio
facilities in Baguio City would be, among others, premature. 41
Finally, in support of its Application for the Issuance of a Temporary
Restraining Order and a Writ of Preliminary Injunction, respondents alleged
that RJVRD and RNB would suffer great and irreparable injury by the
extrajudicial foreclosure of the property and the take over of RBN's radio
facilities in Baguio, unless a Temporary Restraining Order and/or Writ of
Preliminary Injunction is issued enjoining defendants from implementing
the Notice of Extrajudicial Sale dated 1 February 1999, and enjoining PNB
from taking possession and control of RBN's radio facilities in Baguio City.
Respondents maintained that the commission or continuance of the acts
complained of during the litigation or the non-performance thereof would

On 2 March 1999, the Buendia Property was sold in a public auction


conducted by Atty. Juan S. Buan, Notary Public of Makati City.44 There
being no other bidder, the Buendia Property was sold to PNB for the
amount of P2,800,000,000.00. On 3 May 1999, RBN received a Notice of
Extrajudical Sale from PNB, specifying therein that the property covered by
Broadcating Equipment Inventory located at No. 33 Dominical Hills, Baguio
City will be sold for cash at public auction to the highest bidder on 10 May
1999, at the City Hall, Baguio City, pursuant to the terms of the Deed of
Chattel Mortage dated 19 June 1994 to satisfy the mortgage indebtedness
of P841,460,491.91.45
Following this development, on 4 May 1999, respondents filed an Urgent
Application for the Issuance of a Temporary Restraining Order and/or Writ
of Preliminary Injunction.46 Respondents prayed that a Temporary
Restraining Order be issued enjoining PNB or any persons acting under its
instructions from foreclosing on any other collaterals pledged or
mortgaged by respondents to PNB, particularly that which is subject of the
Notice of Extrajudicial Sale to be conducted by Notary Public Perlita ChanRondez in Baguio City on 10 May 1999. It was likewise prayed that after
due proceedings, a Writ of Preliminary Injunction be similarly issued. 47
On 7 May 1999, the RTC issued an Order48 granting the Writ of Preliminary
Injunction respondents' application for the issuance of a Temporary
Restraining Order (TRO), upon posting of a bond in the amount of
P1,000,000.00.
On 27 May 1999, the RTC issued an Order, granting the Writ of Preliminary
Injunction, enjoining PNB from foreclosing all collaterals pledged or
mortgaged by respondents to PNB, in particular those described in Exhibits
A to L thereof, after the posting of a bond in the amount of
P5,000,000.00.50 According to the court, the right of PNB to foreclose the
chattel mortgages is still challenged by the respondents and therefore, is
not yet clearly established. Hence, if PNB is allowed to foreclose the subject
chattel mortgages, the determination of the right of PNB to foreclose the

subject properties will become moot and academic. Subsequently, on 28


May 1999, a Writ of Preliminary Injunction was issued.
On 9 June 1999, PNB filed a Motion for Reconsideration51 of the Order of
27 May 1999. PNB averred, inter alia, that RBN failed to produce any
evidence to substantiate and support its claim that it is entitled to the Writ
of Preliminary Injunction in order to enjoin PNB from foreclosing on the
subject chattels. According to PNB, it was able to show that RBN failed
without justifiable cause or reason to service the credit facilities extended
to it. PNB advanced the argument that RBN has no clear right in esse;
therefore, it cannot seek relief from the court. PNB claimed that they were
able to prove irreparable damage to the bank if PNB will be enjoined from
foreclosing on the chattel mortgages. PNB maintained that proceeding with
the auction sale of the subject properties would lower the bank's "past due
ratio" approximately by 2%; hence, with the decrease in the bank's "past
due ratio percentage," there would be no legal impediment to PNB's
resumption to full lending operations since the Bangko Sentral ng Pilipinas'
recommendation for stoppage of grants of new loans is anchored on PNB's
current high "past due ratio." In support of its Motion for Reconsideration,
PNB further theorized that decreasing its "past due ratio" would improve
investors' confidence; hence, substantially enhancing the viability of PNB in
its move to attain full privatization by the year 2000.
In its Opposition,52 respondents submitted that during the hearing of the
application for a Writ of Preliminary Injunction, the court expressed its
position that it will not receive evidence relative to the merits of the case
as the same would pre-empt the resolution of the merits or dispose of the
main case without trial; therefore, by agreement of the parties, the
principal issue was limited to whether RBN will suffer irreparable injury if
the writ of preliminary injunction is not issued. According to respondents,
the damage to RBN's image, loss of listenership, advertisers, staff and
employees is unquantifiable in monetary terms. Irreparable damage would
be caused to RBN if PNB is allowed to foreclose its equipments. It would
also disrupt, if not, paralyze, the operations of RBN's stations. They further
asserted that there is no reason to disturb the injunction issued by the
court absent a showing of manifest abuse.
On 28 July 1999, the RTC issued an Order53 granting PNB's Motion for
Reconsideration. This was subsequently rectified in the Order of 29 July
1999 as to the date of the Writ of Preliminary Injunction from May 28,
1998 to May 28, 1999.54 In lifting the Writ of Preliminary Injunction of 28
May 1999, the RTC rationalized that the failure of RBN to pay the three (3)
credit facilities it obtained from defendant PNB was established; thus, RBN
was considered to have effectively "defaulted" on its loan obligation. In the
same Order, the RTC concluded that RBN made express admission of its
delinquency in its Complaint. Moreover, the RTC held that the "crossdefault provision"55 embodied in the Loan Agreement between the parties
establishes against the grant of the injunction.
Respondents moved for a reconsideration of the 28 July 1999 Order,
submitting that there was no reason to disturb the preliminary injunction
order as there was no showing of a manifest abuse by then Presiding Judge
Hon. Eriberto U. Rosario, in the issuance thereof. Respondents explicated,
inter alia, that the sufficiency of their application was already passed upon
by the RTC through the Order dated 27 May 1999.
On 26 October 1999, the RTC issued an Order,56 denying respondents'
Motion for Reconsideration for the lifting of the Writ of Preliminary
Injunction dated 28 May 1999.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 17

Aggrieved, on 7 December 1999, respondents filed with the Court of


Appeals a Petition for Certiorari under Rule 65 of the Rules of Court
assailing the Orders dated 28 July 1999 and 26 October 1999, imputing
grave abuse of discretion on the part of the RTC in dissolving the Writ of
Preliminary Injunction earlier issued.
Before the appellate court, respondents argued that the sufficiency of their
application for preliminary injunction was already raised and passed upon
by the RTC in the Injunction Order dated 27 May 1999; however, PNB was
not able to allege "other grounds" for the lifting thereof as mandated by
Section 6 of Rule 58 of the Rules of Court. 57 Moreover, respondents
asserted that on the issue of the purported delinquency, the RTC failed to
consider PNB's judicial admissions, whereby the rights of PNB should be
those of a seller covered by the law on Sales (Title VI, Book IV, Civil Code),
and not those of a money-lender covered by the law on Loans (TitleXI,
Book IV, Civil Code); hence, PNB's rights as a seller are either to rescind the
sale, retrieve the title to the property transferred to the buyer, and exact
payment of damages or to leave the property with the buyer, to exact
payment of the entire price with interest, and recover damages thereby
suffered. According to the respondents, the PNB as seller had recovered
through foreclosure the Buendia Property. They alleged that: PNB had
forfeited in its favor as mortgagor, the payments already made by RJVRD
and the interest thereon; PNB is in the process of recovering as mortgagor
and seller additional damages in the form of interests, penalties, charges,
attorney's fees, etc; and PNB is in the process of recovering as mortgagor,
by way of the foreclosure of mortgage, other realty and chattels of
significant value. Respondents contended that there was no grave abuse of
discretion in the issuance of the Writ of Preliminary Injunction because the
contemplated foreclosure of the other properties will work injustice to RBN
and would render ineffectual any judgment on the merits of the case
ineffectual.
Anent the issue of whether respondents will suffer irreparable injury,
respondents pleaded that although the immediate effect of a Writ of
Preliminary Injunction may be quantifiable in pesos, the effect on the
respondents is its viability that stands to be affected in the long-term.
Respondents rationalized that the foreclosure of the radio equipment will
result in the stoppage of operations, and eventually, the loss of the image
of the station. These factors will cause the loss of its listenership and client
confidence, which cannot be quantifiable in monetary terms. Moreover,
respondents set forth the contention that even as PNB suggested that after
foreclosure, the radio equipment would either be sold to improve PNB's
liquidity or disposed by way of lease-purchase agreement, there exists no
assurance that RBN can repurchase the foreclosed collaterals.
The Ruling of the Court of Appeals
On 9 December 1999, the Court of Appeals issued a Resolution temporarily
enjoining PNB from foreclosing any collateral pledged or mortgaged by
RJVRD and RBN, and from taking possession and control of the latter's
radio facilities in Baguio City, until further orders from the appellate court.
In granting the same, the Court of Appeals underscored that the purpose of
the temporary injunctive relief is to preserve the status quo ante between
the parties, and so as not to render moot and academic the relief prayed
for in the Petition. Accordingly, the Court of Appeals set the hearing on the
application for the issuance of a preliminary injunction on 11 January 2000.
On 10 January 2000, the PNB filed a Comment with the Court of Appeals,
disputing the imputation of grave abuse of discretion on the part of the
RTC when it lifted the preliminary injunction. The PNB opposed

respondents' claim that there exists in their favor a right to be protected.


According to PNB, the foreclosure of the collaterals shall be effective upon
the default of RBN, which default had been established as RBN was unable
to properly service the loan agreements without justifiable cause and
despite due demand. Anent the issue on the existence of irreparable injury,
PNB challenged respondents' contention by arguing that there is, in fact, a
pecuniary standard by which RBN's damage can be measured per the
testimony of RBN's witness that it will suffer a loss of P1.2 Billion for the
next ten (10) years. PNB further posited that there were no judicial
admissions on their part to the effect that RJVRD and RBN are not
delinquent. In furtherance of its opposition, PNB averred that it acted in
two separate capacities as seller and lender. As a seller, PNB owned the
Buendia Property and offered it for sale to interested parties. PNB
accepted the bid of RJVRD and the property was sold to the latter. As a
lender, PNB supplied the credit facility to RJVRD as the latter needed to
borrow money to finance the payment of the remaining balance. PNB
insisted that these two transactions cannot be treated as one and the
same; hence, there is nothing that prevents it from acting as a seller and
lender at the same time. In fine, PNB maintained that RJVRD did not
default on the payment of the purchase price for such was completely
paid; rather, it defaulted on the payment of the loan, on its principal, and
interest.
On 4 February 2000, the Court of Appeals issued a Resolution,59 granting
the Writ of Preliminary Injunction, enjoining PNB and its agents from
foreclosing the collaterals pledged and mortgaged by RJVRD and RBN and
from taking over possession and control of RBN radio facilities in Baguio
City. The appellate court, held, viz:
The principal action in the petition at bar dwells on the controversy
on whether or not the respondent court committed grave abuse of
discretion in issuing the order lifting and setting aside the injunctive
relief earlier issued in Civil Case No. 4592 (sic). If no preliminary
injunction is issued in this case, pending resolution of such main
petition, respondent will proceed to foreclose the pledged or
mortgaged collaterals. In that eventuality, petitioners stand to
sustain injury and irreparable damage, the loss of its properties,
income[,] and clientele listeners in the subject radio broadcasting
station in Baguio City, even before the instant certiorari proceeding
could be resolved. To allow the impending foreclosure to proceed, at
this point in time, will surely be violative of petitioners' right to be
heard and to due process. It is for this reason, for the preservation of
the status quo between the parties, pending decision of the main
petition and in order not to render the same moot and academic, We
feel justified to grant the preliminary injunction prayed for.
IN VIEW OF ALL THE FOREGOING, pending final resolution of the
petition at bar, let a Writ of Preliminary Injunction be issued in this
case enjoining the respondent PNB, its officers or agents from
foreclosing the collateral pledged and mortgaged by petitioners, RJ
Ventures Realty & Development Corporation and Rajah Broadcasting
Network, Inc., from taking over possession and control of RBN radio
facilities in Baguio City, upon the posting of a P1,000,000.00
injunction bond.
Undeterred, PNB filed a Motion for Reconsideration praying that the Order
of 4 February 2000 be set aside and the Writ of Preliminary Injunction
issued by the Court of Appeals be immediately lifted and dissolved.

Acting on the Motion, the Court of Appeals, rendered the assailed Decision
dated 31 March 2004, denying the same. In the same order, the appellate
court, reversed and set aside the Orders dated 28 July 1999 and 26 October
1999 of the RTC; hence, effectively reinstating the Writ of Preliminary
Injunction earlier issued on 28 May 1999. The Court of Appeals held that
the RTC was not asked to make a definitive conclusion on the issue of
whether RBN was indeed guilty of default in paying its loan nor was it
asked to resolve whether RBN committed a breach against PNB which
necessitated foreclosure. A determination of whether there was default or
breach can be only be reached after the principal action is set for trial on
the merits after the parties are given opportunity to present evidence in
support of their respective claims.
The appellate court decreed, to wit:
It must be emphasized that a preliminary injunction may be granted
at any stage of an action prior to final judgment, requiring a person
to refrain from a particular act. As the term itself suggests, it is
merely temporary, subject to the final disposition of the principal
action. The justification for the preliminary injunction is urgency. It is
based on evidence tending to show that the action complained of
must be stayed lest the movant suffer irreparable injury or the final
judgment granting the relief sought become ineffectual. Necessarily,
that evidence need only be a "sampling," as it were, and intended
merely to give the court an idea of the justification for the preliminary
injunction pending the decision of the case on the merits. The
evidence submitted at the hearing on the motion for preliminary
injunction is not conclusive of the principal action, which has yet to
be decided. (Olalia vs. Hizon, 196 SCRA 665 [1991]).
Anent the issue of whether RBN would sustain "irreparable injury"
should the chattel mortgage be foreclosed, it bears repeating that
the evidence to be submitted at the hearing on the motion for
preliminary injunction need not be conclusive and complete. On this
score, We find petitioners to have sufficiently established the
existence of irreparable injury to justify, albeit provisionally, the
restraint of the act complained against them.
We find that the potential injury demonstrated by the various
testimonies presented by petitioners more than satisfies the legal
and jurisprudential requirements of "irreparable injury." There is no
gainsaying in that the foreclosure of the subject radio equipment[s]
would inevitably result in stoppage of operations. This, in turn, shall
result to (sic) the station's tarnished image and consequent loss of
public listenership. Loss of listenership then leads to loss of
confidence of the station's patrons and advertising clients that would
cause serious repercussions on its ability to sustain its operations.
Undoubtedly, the loss of image and reputation by a radio station are
matters that are not quantifiable in terms of monetary value.
All told, We find the court a quo's lifting of the injunction earlier
issued tainted with grave abuse of discretion properly correctable by
the special writ of certiorari.
On 4 May 2004, PNB moved for the reconsideration thereon. On 8 July
2004, the Court of Appeals rendered a Resolution, finding no justification
to compel a modification or reversal of the 31 March 2004 Decision.
Hence, the instant Petition.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 18

The Issues

(b)

PNB recites the following statement of the issues, viz:


I.

II.

III.

IV.

V.

I WHETHER OR NOT THE PETITION FILED BY PNB INVOLVES


QUESTIONS OF FACTS WHICH SHOULD BE A CAUSE FOR ITS
DISMISSAL;
II WHETHER OR NOT THE DEFAULT BY RJVRD AND RBN IN THE
PAYMENT OF THEIR RESPECTIVE LOAN OBLIGATIONS TO PNB
JUSTIFIES THE DENIAL OF THE ISSUANCE OF THE WRIT OF
PRELIMINARY INJUNCTION FOR THE FORECLOSURE OF THE
MORTGAGED PROPERTIES;
III WHETHER OR NOT RBN'S ADMISSION OF ITS FAILURE TO
SETTLE ITS LOAN OBLIGATION IN FULL GIVES PNB A CLEAR
RIGHT TO FORECLOSE THE MORTGAGE;
IV WHETHER OR NOT [THE] RIGHT OF RJVRD AND RBN TO A
WRIT OF INJUNCTION IS CLEAR, EXISTING[,] AND
UNMISTAKABLE; and
V WHETHER OR NOT THE HONORABLE COURT OF APPEALS HAD
LEGAL BASIS IN REVERSING AND SETTING ASIDE THE ORDER
DATED JULY 28, 1999 AND OCTOBER 26, 1999 OF THE
REGIONAL TRIAL COURT OF MAKATI, BRANCH 66, AND
THEREBY ISSUING A WRIT OF CERTIOARI IN FAVOR OF RJVRD
AND RBN.
The Ruling of the Court

The pivotal issue in the instant Petition is whether the Court of Appeals
correctly reinstated the Writ of Preliminary Injunction dated 28 May 1999.
Hence, the question is whether respondents RJVRD and RBN are entitled to
the Writ of Preliminary Injunction. It is for this reason that we shall address
and concern ourselves only with the assailed writ, but not with the merits
of the case pending before the trial court. A preliminary injunction is
merely a provisional remedy, adjunct to the main case subject to the
latter's outcome.62 It is not a cause of action in itself.
This Petition has no merit.
Foremost, we reiterate that the sole object of a preliminary injunction is to
maintain the status quo until the merits can be heard. 64 A preliminary
injunction65 is an order granted at any stage of an action prior to judgment
of final order, requiring a party, court, agency, or person to refrain from a
particular act or acts. It is a preservative remedy to ensure the protection
of a party's substantive rights or interests pending the final judgment in the
principal action. A plea for an injunctive writ lies upon the existence of a
claimed emergency or extraordinary situation which should be avoided for
otherwise, the outcome of a litigation would be useless as far as the party
applying for the writ is concerned.66
The grounds for the issuance of a Writ of Preliminary Injunction are
prescribed in Section 3 of Rule 58 of the Rules of Court. Thus:
SEC. 3. Grounds for issuance of preliminary injunction. A
preliminary injunction may be granted when it is established:
(a)

That the applicant is entitled to the relief demanded, and the


whole or part of such relief consists in restraining the
commission or continuance of the act or acts complained of, or
in requiring the performance of an act or acts, either for a
limited period or perpetually;

(c)

That the commission, continuance or nonperformance of the


act or acts complained of during the litigation would probably
work injustice to the applicant; or
That a party, court, agency or a person is doing, threatening, or
is attempting to do, or is procuring or suffering to be done,
some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.

Otherwise stated, for a Writ of Preliminary Injunction to issue, the


following requisites must be present, to wit: (1) the existence of a clear and
unmistakable right that must be protected, and (2) an urgent and
paramount necessity for the writ to prevent serious damage. 67 Indubitably,
this Court has likewise stressed that the very foundation of the jurisdiction
to issue a writ of injunction rests in the existence of a cause of action and in
the probability of irreparable injury, inadequacy of pecuniary
compensation and the prevention of multiplicity of suits. 68 Sine dubio, the
grant or denial of a writ of preliminary injunction in a pending case rests in
the sound discretion of the court taking cognizance of the case since the
assessment and evaluation of evidence towards that end involve findings
of facts left to the said court for its conclusive determination.69 Hence, the
exercise of judicial discretion by a court in injunctive matters must not be
interfered with except when there is grave abuse of discretion.70 Grave
abuse of discretion in the issuance of writs of preliminary injunction implies
a capricious and whimsical exercise of judgment that is equivalent to lack
of jurisdiction, or where the power is exercised in an arbitrary or despotic
manner by reason of passion, prejudice or personal aversion amounting to
an evasion of positive duty or to a virtual refusal to perform the duty
enjoined, or to act at all in contemplation of law. 71
We find the conclusions reached by the Court of Appeals to be in accord
with law.
The Supreme Court is not a trier of facts. 72 While this is perhaps one of our
more emphatic doctrines, it admits of certain exceptions, inter alia, when
the findings of the Court of Appeals are contrary to those of the trial
court.73 In the case at bar, we apply the exception and proceed to make a
determination of whether there is a factual and legal bases for a Writ of
Preliminary Injunction to issue.
First, respondents were able to establish a clear and unmistakable right to
the possession of the subject collaterals. Evidently, as owner of the subject
collaterals that stand to be extrajudicially foreclosed, respondents are
entitled to the possession and protection thereof. RBN as the owner and
operator of the subject radio equipment and radio stations have a clear
right over them. The instant case does not involve abstract rights, or a
future and contingent rights, but a right that is already in existence. To our
minds, petitioner's claim that respondents have lost their rights to the
subject collaterals in the face of their admission of default is best threshed
out in a full-blown trial a quo where the merits of the case can be tried and
determined. Significantly, to give the trial court a fair idea of whether a
justification for the issuance of the writ exists, only a "sampling" of the
evidence is needed, pending a decision on the merits of the case.74 Hence,
the determination of respondents' default and the legality of the defenses
they adduced are matters appropriately subject of the trial on the merits.
Second, there is an urgent and paramount necessity to prevent serious
damage. Indeed, an injunctive remedy may only be resorted to when there
is a pressing necessity to avoid injurious consequences which cannot be
remedied under any standard compensation.75 PNB assails the existence of

this ground by raising the argument that there is, in actuality, a pecuniary
standard by which RBN's damage can be measured, as evidenced by the
testimony of RBN's witness that it will suffer a loss of P1.2 Billion for the
next ten (10) years.
To be sure, this court has declared that the term irreparable injury has a
definite meaning in law. It does not have reference to the amount of
damages that may be caused but rather to the difficulty of measuring the
damages inflicted. If full compensation can be obtained by way of
damages, equity will not apply the remedy of injunction.76 The Court of
Appeals declared that the evidence adduced by respondents more than
satisfies the legal and jurisprudential requirements of irreparable injury. It
behooves this court to appreciate the unique character of the collaterals
that stand to be affected should the Writ of Preliminary Injunction be
dissolved as PNB would have it. The direct and inevitable result would be
the stoppage of the operations of respondents' radio stations,
consequently, losing its listenership, and tarnishing the image that it has
built over time. It does not stretch one's imagination to see that the cost of
a destroyed image is significantly the loss of its good name and reputation.
As aptly appreciated by the appellate court, the value of a radio station's
image and reputation are not quantifiable in terms of monetary value. This
conclusion can be gleaned from the testimony of respondents' witness,
Jose E. Escaner, Jr., General Manager of RBN, thus:
Atty. Mendoza:
Q: Now, in your forty (40) years in the broadcast (sic) industry, have
you had any personal experience in (sic) any actual interruption in
the operations of a radio station programming?
Witness:
A: Yes, when I was handling the network of the then Ambassador
Nanding Cojuanco within which the radio stations were sequestered
and sometime or the other it (sic) went off the air and immediately,
we do not have any revenues, so much so that we actually suffered
two (2) to three (3) years.
Atty. Mendoza:
Q: And how long did it take for that station in Cebu that you
mentioned to retain its listenership day? (sic)
Witness:
A: Well, honestly, until now its airtime, because of its image, status
image (sic) which is the reputation of an AM Station while they are
still recouping other stations, the other reports came over (sic) and
practically brought their ratings down, so, until now they still have to
recoup.
Atty. Mendoza:
Q: What radio station are you referring to?
Witness:
A: DYRB.
Atty. Mendoza:
Q: What would be the consequence if the radio stations of RBN stops
(sic) operation (sic)?

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 19

Witness:
A: It will lose whatever image it has generated to this point and (sic)
time, it will cost irreparable damage not only to its operation but
most of all (sic) its image as being built by RNB. Rajah Broadcasting
Network and I doubt very much if it will still be able to recoup to a
very good result, what we are now generating.
Atty. Mendoza:
That is all for the witness, Your Honor.
COURT:
Alright (sic), cross.
Atty. dela Vega:
With the permission of the Honorable Court.

the Rules of Court, assailing the 22 September 2005 Decision 1 of the Court
of Appeals in CA-G.R. SP No. 87702, which affirmed the Order2 dated 30
September 2004, of the Regional Trial Court (RTC), Pasay City, Branch 117,
in Civil Case No. 04-0415-CFM. The RTC granted the issuance of a writ of
preliminary injunction restraining OWWA from implementing its new
organizational structure.

Witness:
A: Still it will.
Atty. dela vega:
Q: In what way?
Witness:
A: Because that will have an effect now on our relation with our
clientele. The image will be doubt (sic). The will be doubt, there be
vacillation in the planning of the media plans, vacillation in the
buying of airtime.
Atty. dela Vega:
Q It will affect?
Witness:
A: It will affect. The confidence is there.

xxxx
Atty. dela Vega:
Q: Based from (sic) your experienced (sic) as the person engaged in
media practice Mr. Witness, with respect to the possession, let us go
to the heart of the matter as of this point and time.
COURT:
You shoot the question straight.
Atty. dela Vega:
Yes, Your Honor.
(continuing to (sic) the witness
Q Will it made a difference to the operations of a radio station and
relation with the listeners and their clients if technical equipments, in
(sic) the technical equipments, the ownership over the sale are
transferred to another person?
Witness:
A: If you take the equipment immediately that would mean stopping
our operations. That would mean stopping our day to day
communication with our listenership. That they will be wondering,
that will cost damage and (sic) our image immediately. That will cost
damage to our contracts right now without keeping with our clients.
Atty. dela Vega:
Q: Usually that person who owns that particular equipment will get
the particular equipment. When you say get, what do you mean by
get Mr. Witness?
Witness:
A: If for instance was what we are talking about right now, you are
going to foreclose, ok, (sic), what will we use?

Atty. dela Vega:


Q: It will affect?
Witness:
A: We do not want our clientele to lose confidence.77
Evidently, there exists in the case at bar a pressing necessity to avoid
injurious consequences to respondents which cannot be remedied under
any standard compensation. After a careful scrutiny of the attendant
circumstances, we do not find herein a reason for reversing the
reinstatement by the Court of Appeals of the Writ of Preliminary Injunction
earlier issued.
The Fallo
WHEREFORE, the Petition is DENIED. The Decision dated 31 March 2004
and the Resolution dated 8 July 2004 of the Court of Appeals in CA-G.R. SP
No. 56119, reversing and setting aside the 28 July 1999 and 26 October
1999 Orders of the RTC, Branch 66 of Makati City in Civil Case No. 99-452,
and reinstating the Writ of Preliminary Injunction issued on 28 May 1999
are AFFIRMED. Costs against petitioners.
G.R. No. 169802
June 8, 2007
OVERSEAS WORKERS WELFARE ADMINISTRATION, represented by
Administrator Marianito D. Roque, petitioner, vs. ATTY. CESAR L. CHAVEZ,
OPHELIA N. ALMENARIO, ELVIRA ADOR, REYNALDO TAYAG, TORIBIO
ROBLES, JR., ROSSANE BAHIA, RACQUEL LLAGAS-KUNTING, MA. STELLA A.
DULCE, ROSSANA SIRAY, EDUARDO MENDOZA, JR., PRISCILLA BARTOLO,
ROSE VILLANUEVA, CHERRY MOLINA, MARY ROSE RAMOS, MA. MINERVA
PAISO, RODERIC DELOS REYES, RENATO DELA CRUZ, MARIVIC DIGMA,
JESSIE BALLESTEROS, DONATO DAGDAG, MARK TUMIBAY, CYNTHIA
FRUEL, DEMETRIO SORIANO, MILAGROS GUEVARRA, ANGELITA LACSON,
BERT BUQUID, JUN SAMORANAS, TEODORO TUTAY, LEAH YOGYOG,
MARIE CRUZ and CONCEPCION BRAGAS REGALADO, respondents.

OWWA is a government agency tasked primarily to protect the interest and


promote the welfare of overseas Filipino workers (OFWs). 3 OWWA traces
its beginnings to 1 May 1977, when the Welfare and Training Fund for
Overseas Workers in the Department of Labor and Employment (DOLE)
was created by virtue of Letter of Instructions No. 537, with the main
objective, inter alia, of providing social and welfare services to OFW,
including insurance coverage, social work, legal and placement assistance,
cultural and remittances services, and the like. On 1 May 1980, Presidential
Decree No. 1694 was signed into law, formalizing the operations of a
comprehensive Welfare Fund (Welfund), as authorized and created under
Letter of Instructions No. 537. Presidential Decree No. 1694 further
authorized that contributions to the Welfare and Training Fund collected
pursuant to Letter of Instructions No. 537 be transferred to the Welfund.
On 16 January 1981, Presidential Decree No. 1809 was promulgated,
amending certain provisions of Presidential Decree No. 1694. 4
Subsequently, Executive Order No. 126 was passed which reorganized the
Ministry of Labor and Employment. Executive Order No. 126 also renamed
the Welfare Fund as the OWWA.
From the records, it is undisputed that on 9 January 2004, as there was yet
no formal OWWA structure duly approved by the Department of Budget
and Management (DBM) and the Civil Service Commission (CSC), the
OWWA Board of Trustees passed Resolution No. 001,5 Series of 2004,
bearing the title "Approving the Structure of the Overseas Workers Welfare
Administration," and depicting the organizational structure and staffing
pattern of the OWWA, as approved by Patricia A. Sto. Tomas (Sto. Tomas),
then Chair of the OWWA Board of Trustees and then Secretary of the
DOLE. According to Resolution No. 001, the structuring of the OWWA will
stabilize the internal organization and promote careerism among the
employees. It will also ensure a more efficient and effective delivery of
programs and services to member-OFWs. Resolution No. 001 resolved,
thus:
RESOLVED therefore, to approve as it is hereby approved, the OWWA
Structure which is hereto attached and made an integral part of this
Resolution, comprising mainly of the approved organizational chart,
functional descriptions and staffing pattern, subject to the following:
a.
b.
c.

There will be no displacement of existing regular employees;


There will be no temporary appointments; and
There will be no hiring of casuals, contractuals or consultants in
the new structure.

RESOLVED further, that the OWWA Structure be immediately submitted for


the appropriate actions of competent authorities, particularly the DBM and
CSC.6

DECISION
Atty. dela Vega:
Q: Assuming Mr. Witness, that the creditor of Rajah Broadcasting
Network will not get, will not get the equipment, will not get their
account, will it adversely affect the operations of Rajah Broadcating?

Factual Antecedents

CHICO-NAZARIO, J.:
The Case
Petitioner Overseas Workers Welfare Administration (OWWA), comes to
this Court via the instant Petition for Review on Certiorari under Rule 45 of

On 24 March 2004, DBM Secretary Emilia T. Boncodin (Boncodin),


approved the organizational structure and staffing pattern of the OWWA.7
In her approval thereof, she stated that the total funding requirements for
the revised organizational structure shall be P107,546,379 for four hundred

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 20

(400) positions. Moreover, DBM Secretary Boncodin underscored that the


funding shall come solely from the OWWA funds and that no government
funds shall be released for the implementation of the changes made.
On 31 May 2004, OWWA Administrator Virgilio R. Angelo (Angelo), issued
Advisory No. 01,8 advising the officials and employees of the OWWA that
the DBM had recently approved OWWAs organizational chart, functional
statements, and the staffing pattern. Advisory No. 01 also announced that
a Placement Committee will be created to evaluate and recommend
placement of all regular/permanent incumbents of OWWA in the new
organizational chart and staffing pattern. All employees were asked to
indicate in writing their interest or preference in any of the approved
plantilla item, especially for promotion to the Human Resources
Management Division, not later than 11 June 2004. Further, Advisory No.
01 emphasized that the OWWA Board of Trustees, thru its Resolution No.
001, Series of 2004, had declared the policy that there will be no
displacement of existing regular/permanent employees. Qualified casual
and contractual personnel may apply for any vacant item only after all
regular/permanent employees of OWWA had been placed.
Subsequently, on 3 June 2004, DOLE Secretary Sto. Tomas issued
Administrative Order No. 171, Series of 2004, creating a Placement
Committee to evaluate qualifications of employees; and to recommend
their appropriate placement in the new organizational chart, functional
statements and staffing pattern of the OWWA. Administrative Order No.
171 was partially amended by Administrative Order No. 171-A, issued by
DOLE Acting Secretary Manuel G. Imson (Imson), authorizing the Placement
Committee to recommend to the OWWA Administrator their evaluations,
which shall thereafter be endorsed to the DOLE Secretary for
consideration.
The Placement Committee was directed to comply with the pertinent
CESB/CSC/DBM rules and regulations on its recommended placement of all
personnel of OWWA based on the following parameters, to wit10 :
1.
2.

3.

4.

5.

There would be no diminution nor displacement of


permanent/regular employees of OWWA.
Qualified casuals and contractual personnel may likewise be
considered in the staffing pattern only after ensuring that the
regular(s)/permanent employees of OWWA have already been
placed.
Decentralization of functions to bring OWWA services closer to
the public shall be adopted. Thus, priority in some promotions
shall be given to those who opt to be assigned in the regional
offices, aside from performance.
Deployment in the overseas posts shall be made on rotation
basis from both the frontline and the administrative staff,
based on performance.
Regular/permanent incumbents interested for promotion
should indicate their interest in writing to the Placement
Committee: Attn: The Chairperson.
6. Those who may opt to retire should submit to the HRMD,
their application for retirement, copy furnished the Budget
Division for budget allocation purposes.

The Placement Committee should complete its task not later than June 30,
2004.

On 8 June 2004, OWWA Administrator Angelo issued Advisory No. 02,


inviting OWWA officials and employees to an orientation on the new
structure, functions and staffing pattern of the OWWA. Moreover, Advisory
No. 02 required the holding of elections for the First and Second Level
Representatives who will elect from among themselves the regular official
representatives and alternates in the Placement Committee deliberations.
On 11 June 2004, Advisory No. 03 was issued, announcing the conduct of
an election for representatives and alternates representing the employees
in the first [Salary Grades (SG) 1-9] and second level (SG 10-24), pursuant
to Administrative Order No. 171, dated 3 June 2004, as amended by
Administrative Order No. 171-A.
On 18 June 2004, DOLE Acting Secretary Imson issued Administrative Order
No. 186, Series of 2004,11 prescribing the guidelines on the placement of
personnel in the new staffing pattern of the OWWA.
On 29 June 2004, herein respondents filed with the RTC, a Complaint for
Annulment of the Organizational Structure of the OWWA, as approved by
OWWA Board Resolution No. 001, Series of 2004, with Prayer for the
Issuance of a Writ of Preliminary Injunction12 against herein petitioner
OWWA and its Board of Trustees.13 The case was docketed as Civil Case No.
04-0415-CFM.
In their Complaint, respondents alleged that the OWWA has around 24
consultants, 29 casual employees, 76 contractual workers, and 356 officers
and employees, which number does not include the 85 contractual
employees in the Office of the Secretariat of the OWWA Medicare.14
Respondents posited that the approved Organizational Structure and
Staffing Pattern of the OWWA increases the number of regular plantilla
positions from 356 to 400; however, the increase of 42 positions will not
absorb the aforementioned consultants and casual and contractual
workers. They further averred that the plantilla positions in the Central
Office will be reduced from 250 to 140, while the regional offices will have
an increase of 164 positions. According to the respondents, the resulting
decrease in the number of employees in the Central Office will result in the
constructive dismissal of at least 110 employees. Meanwhile, the
deployment of the regular central office personnel to the regional offices
will displace the said employees, as well as their families.
Respondents challenged the validity of the new organizational structure of
the OWWA. In fine, they contended that the same is null and void; hence,
its implementation should be prohibited.
Respondents prayed for the issuance of a writ of preliminary injunction to
restrain petitioners from: 1) implementing its organizational structure as
approved by the OWWA Board of Trustees in its Resolution dated 9 January
2004; and 2) advertising and proceeding with the recruitment and
placement of new employees under the new organizational structure. 15
Further, respondents prayed that after trial on the merits, OWWAs
organizational structure be declared as unconstitutional and contrary to
law; and the OWWA Board of Trustees be declared as having acted
contrary to the Constitution and existing laws, and with grave abuse of
discretion in approving Resolution No. 001, dated 9 January 2004.16
The Ruling of the RTC
On 30 September 2004, the RTC rendered an Order17 granting respondents
prayer for a writ of preliminary injunction upon the filing of a bond in the
sum of P100,000.00. In the grant thereof, the RTC reasoned that any move

to reorganize the structure of the OWWA requires an amendatory law. It


deemed Resolution No. 001 was not merely a "formalization of the
organizational structure and staffing pattern of the OWWA," but a
disruption of the existing organization which disturbs and displaces a
number of regular employees, including consultants and casual and
contractual employees.
The RTC ratiocinated in this wise:
x x x All told, what is being done now at OWWA is a reorganization of its
structure as originally conceived under P.D. No. 1694 [Organization and
Administration of the Welfare for Overseas Workers] and P.D. No. 1809
[Amending Certain Provisions of Presidential Decree 1694, Creating the
"Welfare Fund for Overseas Workers"]. In the (sic) light of Section 11 of
R.A. No. 6656 which provides that "the executive branch of the
government shall implement reorganization schemes within a specified
period of time authorized by law", this court doubts whether a
reorganization of OWWA can be effected without an enabling law.
Further, defendants do not dispute the fact that while the mechanics of the
reorganization is still being forged, the DOLE already processed
applications and eventually hired employees not from among the existing
employees of the OWWA. This appears to be in contravention of Section 4
of R.A. No. 6656 which provides:
"Sec. 4. Officers and employees holding permanent appointments shall be
given preference for appointment to the new positions in the approved
staffing pattern comparable to their former position or in case there are
not enough comparable positions, to positions next lower in rank.
"No new employees shall be taken in until all permanent officers and
employees have been appointed, including temporary and casual
employees who possess the necessary qualification requirements, among
which is the appropriate civil service eligibility for permanent appointment
to positions in the approved staffing pattern, in case there are still
positions to be filled, unless such positions are policy-determining,
primarily confidential or highly technical in nature."
Furthermore, defendants (sic) do not dispute the fact that the Placement
Committee was hastily constituted, that its members were not educated of
their task of job placement, that there was no real to goodness (sic)
personnel evaluation and, finally, the Chairman of the Committee was
simply hand-picked by the DOLE Secretary contrary to the explicit
injunction of Section 8 of the Implementing Rules of R.A .No. 6656 that
"the members shall elect their Chairman."18
The RTC also cited the protection afforded by the Constitution to workers,
specifically, officers or employees of the Civil Service in ruling that the
existing organization of the OWWA need not be disturbed in any way and
no single worker will be removed or displaced. Thus:
This court entertains no doubt that as workers, plaintiffs enjoy a right that
is protected both by the Constitution and statutes. Thus, "(n)o officer or
employee of the civil service shall be removed or suspended except for
cause provided by law. "(Sec. 2, par. 3, Art. IX, Constitution). "No person
shall be deprived of life, liberty, or property without due process of law,
nor shall any person be denied the equal protection of the laws." (Sec. 1,
Art. III; ibid.). A persons job is his property. In many cases, as in the
Philippine setting, ones job also means ones life and the lives of those
who depended on him. Hence, it is a policy of the State to "free the people

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 21

from poverty through policies that provide adequate social services,


promote full employment, a rising standard of living, and an improved
quality of life for all." (Sec. 8, Art. II, ibid.) Any act that, contrary to law,
tends to deprive a worker of his work, violates his rights. 19
Finally, the RTC defended its jurisdiction over the controversy despite
petitioners protestations that jurisdiction over respondents complaint is
lodged in the administrative agencies tasked to implement the new OWWA
structure. It ruled that the doctrine of primary jurisdiction is applicable only
where the administrative agency exercises its quasi-judicial or
administrative function; but, where what is challenged is the
constitutionality of a rule or regulation issued by the administrative agency
in the performance of its quasi-legislative functions, regular courts have
jurisdiction over the matter.20
Therefore, the RTC, in its Order, dated 30 September 2004, granted
respondents prayer for a writ of preliminary injunction, to wit:
WHEREFORE, upon plaintiffs (sic) filing of a bond in the sum of
P100,000.00, let a writ of preliminary injunction issue in: 1) restraining the
defendants from implementing the new organizational structure of OWWA
approved by the Board of Trustees on January 9, 2004 and 2) restraining
the defendants from advertising and proceeding with the recruitment and
placement of new employees under the new organizational structure. 21
Without filing a Motion for Reconsideration, petitioner, thru the Office of
the Solicitor General (OSG),22 filed with the Court of Appeals, a Petition for
Certiorari and Prohibition with Prayer for Issuance of a Temporary
Restraining Order and Writ of Preliminary Injunction under Rule 65 of the
Rules of Court, assailing the RTC Order of 30 September 2004.23
The Ruling of the Appellate Court
On 22 September 2005, the Court of Appeals rendered the assailed
Decision, which dismissed the petition. It affirmed the court a quos
findings that respondents possess a clear and legal right to the immediate
issuance of the writ. It resolved that it was proper for the RTC to restrain,
for the meantime, the implementation of OWWAs reorganization to
prevent injury until after the main case is heard and decided. 24 It found
respondents allegations sufficient to prove the existence of a right that
should be protected by a writ of preliminary injunction. Thus:
Petitioner averred, too, that majority of the casuals, contractuals and
consultants have been employed for more than ten (10) years, if not
twenty (20) years, and were not regularized simply due to lack of regular
positions in the plantilla or the freezing of recruitment thereto.
To be sure, private respondents have convincingly adduced evidence of
specific acts to substantiate their claim of impending injury and not merely
allegations of facts and conclusions of law, but factual evidence of a clear
and unmistakable right of being displaced or dismissed by the planned
reorganization. These allegations are substantial enough to prove the right
in esse. At best, the anxiety of being dismissed or displaced is not
premature, speculative and purely anticipatory, but based on real fear
which shows a threatened or direct injury[,] it appearing that the
reorganization of the OWWA is already slowly being put into motion.
Apropos, having successfully established a direct and personal injury as a
consequence of the new reorganization[al] structure, it was only proper for
the court a quo to grant the writ of preliminary injunction to restrain, for

the meantime, the implementation of the reorganization to prevent injury


on respondents until after the main case is heard and decided. Truly, as
correctly observed by the trial court, private respondents enjoy a right that
is protected both by the Constitution and statutes. A persons job is not
only his property but his very life. The constitutional protection of the right
to life is not just a protection of the right to be alive or to the security of
ones limb against physical harm. The right to life is also a right to a good
life (Bernas, The Constitution of the Republic of the Philippines, A
Commentary, Volume I, First Edition, 1997) which includes the right to earn
a living or the right to a livelihood. A fortiori, the requisites for preliminary
injunction to issue have adequately been established: the existence of a
clear and unmistakable right, and the acts violative of said right.
While the evidence to be submitted at the hearing on the motion for
preliminary injunction need not be conclusive and complete, We find that
private respondents have adequately shown that they are in clear danger
of being irreparably injured unless the status quo is observed, in the
meantime x x x.25
The appellate court was likewise of the opinion that the substantial issues
raised before the court a quo anent the validity of the organizational
structure of the OWWA; the alleged lack of authority of the DBM to
approve the same including the alleged violation by the OWWA of relevant
statutes; the lack of consultation prior to the reorganization; and the
supposed illegal constitution of the Placement Committee, are matters
which the RTC is behooved to resolve. In finding no error on the part of the
RTC, the Court of Appeals said that without an injunctive relief, any
decision that may be rendered in the suit would already be ineffective,
moot and academic.26
Aggrieved, petitioner through the OSG,27 filed the instant petition.
In the instant petition, petitioner prays that the appealed Decision of the
Court of Appeals be reversed and set aside, and that Civil Case No. 040415-CFM before the RTC be dismissed for lack of merit.28
The Issue
The issue to be resolved is, whether the court a quo gravely abused its
discretion in issuing the writ of preliminary injunction. Stated otherwise,
the issue is whether the Court of Appeals erred in affirming the RTC in its
grant of the assailed writ of preliminary injunction. Clearly, we are thus
confined to the matter of the propriety of the issuance of the writ of
preliminary injunction by the trial court, and not to the merits of the case
which is still pending before the latter.
The Case for the Petitioner
First, in support of their petition, petitioner posits that the OWWA has
already implemented the new organizational structure as the
advertisement, recruitment, and placement of OWWA employees have
been accomplished; and in the process, none of the respondents have
been dismissed. Moreover, the act sought to be prevented has long been
consummated; hence, the remedy of injunction should no longer be
entertained.
Second, petitioner adduces the proposition that the reorganization of the
OWWA does not require an amendatory law contrary to the holding of the
court a quo. The OSG maintains that there was no previous OWWA
structure in the first place; and neither did Presidential Decree No. 169429

nor Presidential Decree No. 1809,30 provide for an organizational structure


for the OWWA.
Third, petitioner disputes the existence of the rights of respondents to be
protected by the preliminary injunctive writ sought on the ground that the
latter did not shown any legal right which needs the protection thereof,
nor did they show that any such right was violated to warrant the issuance
of a preliminary injunction. Petitioner asserts that respondents did not
claim that they are the consultants or casual or contractual workers who
would allegedly be displaced; and neither did respondents show that there
is only one right or cause of action pertaining to all of them. Neither was
there a violation of their rights because respondents have all been given
appointments in the new OWWA organizational structure. 31
Finally, on respondents allegation that the reorganization of the OWWA
will reassign permanent employees to its regional offices, and
consequently, displace them and their families, petitioner counters that an
employee may be reassigned from one organizational unit to another in
the same agency, provided that such reassignment shall not involve a
reduction in rank, status or salary.32
The Case for the Respondents
Respondents argue that the petitioner railroaded and raced against time to
implement the new OWWA organizational structure. They claim that in the
process, petitioner exhibited manifest bad faith and injustice. What existed
was a hasty reorganization and restructuring of the OWWA without
adequate study and consultation, which was thereafter submitted and
immediately approved by the Board of Trustees. They insist that the
creation of an organizational structure of the OWWA would require a
presidential fiat or a legislative enactment pursuant to Republic Act No.
6656.
Further, respondents maintain that their right in esse was established
during the proceedings for the issuance of the writ of preliminary
injunction, as their complaint sufficiently showed the rights and interests of
the parties. They alleged that at no stage in the proceedings did petitioner
question such rights. In fact, petitioner made a waiver in open court to the
effect that it was not presenting testimonial evidence. According to the
respondents, such an act was constitutive of an admission by petitioner of
the existence of a right in esse in their favor.
The Ruling of the Court
Section 1, Rule 58 of the Rules of Court, defines a preliminary injunction as
an order granted at any stage of an action prior to the judgment or final
order requiring a party or a court, an agency or a person to refrain from a
particular act or acts.34 Section 3, Rule 58 of the Rules of Court, enumerates
the grounds for the issuance of a writ of preliminary injunction as follows:
Sec. 3. Grounds for issuance of preliminary injunction. A preliminary
injunction may be granted when it is established:
(a)

That the applicant is entitled to the relief demanded, and the


whole or part of such relief consists in restraining the
commission or continuance of the act or acts complained of, or
in requiring the performance of an act or acts, either for a
limited period or perpetually;

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 22

(b)

(c)

That the commission, continuance or non-performance of the


act or acts complained of during the litigation would probably
work injustice to the applicant; or
That a party, court, agency or a person is doing, threatening, or
is attempting to do, or is procuring or suffering to be done,
some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.

A preliminary injunction is granted at any stage of an action or proceeding


prior to the judgment or final order.35 It persists until it is dissolved or until
the termination of the action without the court issuing a final injunction.36
To be entitled to an injunctive writ, petitioner must show, inter alia, the
existence of a clear and unmistakable right and an urgent and paramount
necessity for the writ to prevent serious damage.37 A writ of preliminary
injunction is generally based solely on initial and incomplete evidence.38
The evidence submitted during the hearing on an application for a writ of
preliminary injunction is not conclusive or complete for only a "sampling" is
needed to give the trial court an idea of the justification for the preliminary
injunction pending the decision of the case on the merits.39 In fact, the
evidence required to justify the issuance of a writ of preliminary injunction
in the hearing thereon need not be conclusive or complete. 40 It must also
be stressed that it does not necessarily proceed that when a writ of
preliminary injunction is issued, a final injunction will follow.41
Moreover, the grant or denial of a preliminary injunction is discretionary on
the part of the trial court.42 Thus, the rule is, the matter of the issuance of a
writ of preliminary injunction is addressed to the sound discretion of the
trial court, unless the court commits grave abuse of discretion.43 In Toyota
Motor Phils. Corporation Workers Association (TMPCWA) v. Court of
Appeals,44 this Court pronounced that grave abuse of discretion in the
issuance of writs of preliminary injunction implies a capricious and
whimsical exercise of judgment that is equivalent to lack of jurisdiction; or
the exercise of power in an arbitrary or despotic manner by reason of
passion, prejudice or personal aversion amounting to an evasion of positive
duty or to a virtual refusal to perform the duty enjoined, or to act at all in
contemplation of law. It is clear that the assessment and evaluation of
evidence in the issuance of the writ of preliminary injunction involve
findings of facts ordinarily left to the trial court for its conclusive
determination.45 The duty of the court taking cognizance of a prayer for a
writ of preliminary injunction is to determine whether the requisites
necessary for the grant of an injunction are present in the case before it.46
However, as earlier stated, if the court commits grave abuse of its
discretion in the issuance of the writ of preliminary injunction, such that
the act amounts to excess or lack of jurisdiction, the same may be nullified
through a writ of certiorari or prohibition.
More significantly, a preliminary injunction is merely a provisional remedy,
an adjunct to the main case subject to the latters outcome, the sole
objective of which is to preserve the status quo until the trial court hears
fully the merits of the case.47 The status quo should be that existing at the
time of the filing of the case.48 The status quo usually preserved by a
preliminary injunction is the last actual, peaceable and uncontested status
which preceded the actual controversy.49 The status quo ante litem is,
ineluctably, the state of affairs which is existing at the time of the filing of
the case. Indubitably, the trial court must not make use of its injunctive
power to alter such status.50

We hold that the RTC, in granting the assailed writ of preliminary


injunction, committed grave abuse of discretion amounting to lack of
jurisdiction.
In the case at bar, the RTC did not maintain the status quo when it issued
the writ of preliminary injunction. Rather, it effectively restored the
situation prior to the status quo, in effect, disposing the issue of the main
case without trial on the merits. What was preserved by the RTC was the
state of affairs before the issuance of Resolution No. 001, which approved
the structure of the OWWA, and the subsequent administrative orders
pursuant to its passing. The RTC forgot that what is imperative in
preliminary injunction cases is that the writ can not be effectuated to
establish new relations between the parties. Hence, we find herein an
application of the lessons that can be learned from Rualo v. Pitargue.51 In
Rualo, this Court determined, among others, the propriety of the writ of
preliminary injunction which was issued restraining the Bureau of Internal
Revenue from further implementing its reorganization, and enforcing the
orders52 pursuant thereto. This Court, in lifting the therein assailed writ,
underscored the legal proscription which states that courts should avoid
issuing a writ of preliminary injunction which would in effect dispose of the
main case without trial.53 According to the Court in Rualo, the trial court, in
issuing the writ of preliminary injunction, did not maintain the status quo
but restored the situation before the status quo, that is, the situation
before the issuance of the Revenue Travel Assignment Orders.54 The Court
further declared that what existed was an acceptance of therein
respondents premise of the illegality of the reorganization, and a
prejudgment on the constitutionality of the assailed issuances. 55 As in
Rualo, we find herein a similar case where the RTC admitted hook, line and
sinker the mere allegations of respondents that the reorganization as
instituted was unlawful without the benefit of a full trial on the merits. It
also did not maintain the status quo but restored the landscape before the
implementation of OWWAs reorganization. In thus issuing the writ of
preliminary injunction, the substantive issues of the main case were
resolved by the trial court. What was done by the RTC was quite simply a
disposition of the case without trial. This is an error in law and an exercise
of grave abuse of discretion. Furthermore, we find that the RTC similarly
prejudged the validity of the issuances released by the OWWA Board of
Trustees, as well as the other governmental bodies (i.e., DBM, DOLE),
which approved the organizational structure and staffing pattern of the
OWWA. In Rualo, this Court asserted the presumption of regularity of the
therein assailed government issuances. In this case, we accentuate the
same presumption.
Ineluctably, this Court is compelled to rule against the propriety of the
grant of the assailed ancillary writ of preliminary injunction on the material
ground that the records do not support respondents entitlement thereto.
We do not find attendant the requisites for the issuance of a preliminary
injunctive writ. This Court is not convinced that respondents were able to
show a clear and unmistakable legal right to warrant their entitlement to
the writ. A mere blanket allegation that they are all officers and employees
of the OWWA without a showing of how they stand to be directly injured
by the implementation of its questioned organizational structure does not
suffice to prove a right in esse. As was aptly raised by the petitioner,
respondents did not show that they were dismissed due to the challenged
reorganization. There was no showing that they are the employees who are
in grave danger of being displaced. Respondents were similarly wanting in
proving that they are the consultants and contractual and casual
employees, who will allegedly suffer by reason of the re-organization. This

Court is consistently adamant in demanding that a clear and positive right


especially calling for judicial protection must be established. As has been
reiterated, injunction is not a remedy to protect or enforce contingent,
abstract, or future rights; it will not issue to protect a right not in esse and
which may never arise, or to restrain an action which did not give rise to a
cause of action.57 In contrast, the rights of OWWA are accorded to it by
law. The importance of the reorganization within the body and the benefits
that will accrue thereto were accentuated by the Board of Trustees in its
Resolution No. 001. The aforesaid resolution declared, inter alia, that the
structuring of the OWWA will stabilize the internal organization and
promote careerism among the employees, as well as ensure a more
efficient and effective delivery of programs and services to member-OFWs.
However, we go further to opine that even the question of whether the
OWWA requires an amendatory law for its reorganization is one that
should be best threshed out in the disposition of the merits of the case.
Indeed, the question as to the validity of the OWWA reorganization
remains the subject in the main case pending before the trial court. Its
annulment is outside the realm of the instant Petition.
Assuming arguendo that respondents stand to be in danger of being
transferred due to the reorganization, under the law, any employee who
questions the validity of his transfer should appeal to the CSC.59 Even then,
administrative remedies must be exhausted before resort to the regular
courts can be had.
Finally, as aptly pointed out by the OSG, the acts sought to be prohibited
had been accomplished. Injunction will not lie where the acts sought to be
enjoined have already been accomplished or consummated. 60 The wheels
of OWWAs reorganization started to run upon the approval by the Board
of Trustees of its Resolution No. 001 entitled, "Approving the Structure of
the Overseas Workers Welfare Administration." Subsequently, a series of
issuances which approved the organizational structure and staffing pattern
of the agency was issued by the DBM, the OWWA Administrator, and by
the DOLE. Resolution No. 001 has already been implemented. Case law has
it that a writ of preliminary injunction will not issue if the act sought to be
enjoined is a fait accompli.1avvphi1
A writ of preliminary injunction being an extraordinary event,61 one
deemed as a strong arm of equity or a transcendent remedy,62 it must be
granted only in the face of actual and existing substantial rights. In the
absence of the same, and where facts are shown to be wanting in bringing
the matter within the conditions for its issuance, the ancillary writ must be
struck down for having been rendered in grave abuse of discretion.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of
Appeals, dated 22 September 2005 in CA-G.R. SP No. 87702, is REVERSED
and SET ASIDE. The Writ of Preliminary Injunction issued by the Regional
Trial Court pursuant to its Order, dated 30 September 2004, in Civil Case
No. 04-0415-CFM is LIFTED and SET ASIDE. SO ORDERED.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 23

G.R. No. 139767


August 5, 2003
FELIPE SY DUNGOG, Petitioner, vs. COURT OF APPEALS, JUAN A. GATO, in
his official capacity as RTC Sheriff, Lapu-Lapu City and CARLOS GOTHONG
LINES, INC., Respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari1 assails the Decision2 dated 14 May
1999 of the Court of Appeals in CA-G.R. SP No. 48788, as well as the
Resolution dated 24 August 1999 denying the motion for reconsideration.
The Court of Appeals dismissed outright the petition for certiorari,
prohibition and mandamus filed by petitioner Felipe Sy Dungog ("Felipe")
against respondents. The petition questioned the propriety of the Order 3
dated 14 August 1998 ("Order") and the writ of preliminary injunction
("Writ") dated 18 August 1998 issued by the Regional Trial Court of Cebu,
Lapu-Lapu City, Branch 53 ("trial court") in Civil Case No. 5020-L.
The Antecedents
Tracing the roots of this controversy, Felipe alleges4 that he and his sister,
Fortune, agreed to sell their lots in Canjulao, Cebu, through their parents,
Juan L. Dungog and Emma S. Dungog ("Spouses Dungog"). The Spouses
Dungog convinced other lot owners in Canjulao to sell their lots either
directly to them or to Felipe and his sister. On 31 December 1996, the
Spouses Dungog entered into a Contract to Sell ("Contract") with private
respondent Carlos A. Gothong Lines, Inc. ("Gothong Lines") covering
several lots in Canjulao. The lots which the Spouses Dungog contracted to
sell to Gothong Lines belonged to various individuals as listed in the
Contracts Annex "A"5 which specified the corresponding approximate land
areas of each lot. Among these was Lot 1031-F registered in the name of
Felipe and covered by Transfer Certificate of Title No. 10359 of the Register
of Deeds of Lapu-Lapu City. Under the Contract, Gothong Lines was to pay
on installment basis the purchase price of P65,520,475.00 computed at
P500 per square meter. Thus, Gothong Lines paid a down payment of
P12,000,000.00. For the balance of P53,520,475.00,6 Gothong Lines issued
15 postdated checks of P3,568,031.00 each beginning on 31 January 1997
as payment for 15 equal monthly installments. Gothong Lines made good
all the checks, except the last 4 checks dated 30 December 1997, 31
January 1998, 28 February 1998 and 30 March 1998, which bounced due to
Gothong Lines stop payment order.
Felipe alleges further that as of 31 December 1997, his parents had
delivered 66 parcels of land to Gothong Lines with a total area of
101,104.20 square meters valued at P50,552,100.00. Felipe also states that
as of the same date, Gothong Lines had paid P51,248,345.00 in encashed
checks plus the initial down payment of P12,000,000.00. This left an
overpayment of P696,245.00 in the hands of the Spouses Dungog. Felipe
claims, however, that despite Gothong Lines stop payment order of its last
four checks, the Spouses Dungog still delivered in February 1998, 8 parcels
of land with a total land area of 11,590 square meters valued at
P5,795,000.00. Among those delivered was Lot 1031-F. The Spouses
Dungog demanded payment for these 8 parcels of land, but Gothong Lines
refused to pay. The Spouses Dungog became frustrated with Gothong
Lines complete silence on their demands for payment, as well as the
earlier stop payment order on the last 4 checks. Thus, the Spouses Dungog

informed Gothong Lines in a letter dated 18 June 1998 that they would no
longer push through with their offer to sell the remaining lots.
On 6 July 1998, Gothong Lines filed a complaint for Specific Performance,
Damages with Writ of Preliminary Mandatory Injunction against the
Spouses Dungog to enforce the Contract. Gothong Lines faulted the
Spouses Dungog for non-delivery of some of the parcels of land in breach
of the Contract. Gothong Lines alleged that while the total amount of
P51,248,348.26 paid to the Spouses Dungog corresponds to 102,496.69
square meters, the Spouses Dungog actually delivered to Gothong Lines
only 100,613.69 square meters. Gothong Lines claimed that it paid an
excess of P941,848.007 corresponding to 1,883 square meters. To protect
its interest, Gothong Lines ordered the bank to stop payment on the
remaining postdated checks. Gothong Lines asked the trial court to issue a
writ of preliminary injunction to restrain the Spouses Dungog from
canceling the Contract and from preventing its representatives and vehicles
from passing through the properties subject of the Contract. Gothong Lines
offered to post a bond of P500,000.00 and consigned the P4,048,950.00
representing the balance of the purchase price.
Traversing Gothong Lines allegations, the Spouses Dungog contended that
it was Gothong Lines which breached the Contract by stopping payment on
the last 4 checks. The Spouses Dungog also charged Gothong Lines with
competing with them in acquiring one of the lots subject of the Contract.
They further countered that Gothong Lines violated a verbal agreement
between them not to develop the roads until after 30 June 1998, the last
day for the Spouses Dungog to deliver and turn over the lots. The Spouses
Dungog opposed Gothong Lines application for a writ of preliminary
injunction on the ground that Gothong Lines violated the terms of the
Contract and the other contemporaneous agreements between them.
Based on the pleadings and affidavits presented by the parties, the trial
court granted on 14 August 1998 Gothong Lines prayer for injunction. The
dispositive portion of the Order reads:
WHEREFORE, in the light of the foregoing considerations, plaintiffs
application for the issuance of a writ of preliminary injunction is GRANTED.
Consequently, after the filing and approval of a bond in the amount of
Three Hundred Thousand Pesos (P300,000.00), let a writ of preliminary
injunction issue, enjoining defendants, their representatives, or anyone
acting in their behalf; (a) from canceling the contract to sell dated
December 31, 1996; and (b) from disallowing or preventing the entry and
exit of plaintiffs vehicles and those of its representatives through Lot 1031F and other undelivered lots concerned.8
Based on this Order, the trial court issued the Writ on 18 August 1998
which the sheriff served on the same date.
Felipe assailed the Order and the Writ in a special civil action for certiorari
before the Court of Appeals. The appellate court, however, dismissed
outright Felipes petition. The appellate court also denied on 24 August
1999 Felipes motion for reconsideration. Thus, Felipe filed the instant
petition questioning the propriety of the writ of preliminary injunction
issued by the trial court.
The Rulings of the Trial Court and the Court of Appeals
In granting the Writ, the trial court stated -

There is no dispute that plaintiff has already paid defendants the amount
of P51,248,348.26 out of the total consideration of P65,520,475.00.
Plaintiff has also deposited with the Office of the Clerk of Court the amount
of P4,048,950.00, leaving a balance of P10,223,176.74.
Plaintiff had already started the road development in the properties
delivered to it. In other words, it has already spent much to develop the
properties which form the bulk of the parcels of land subject of the
contract.
Ingress to and egress from plaintiffs development activities lie on an
undelivered parcel of land. Through it pass the vehicles, equipment,
supplies and materials, as well as the workers, required by the project. The
closure of this passage has apparently stymied the development in the
area.
About 78% of the properties are in the hands of plaintiff. Access to these
properties is under the control of defendants, the entrance being located
in Lot 1031-F, one of the remaining undelivered lots. Since the entrance
gate has been closed by defendants, it strikes the mind of the court that
Lot 1031-F and the other undelivered lots have now, in a manner of
speaking, imprisoned the delivered properties.
It is not therefore hard to see that the closure of the entrance gate has
worked to the prejudice of plaintiff and will certainly jeopardize the
development work in the delivered properties. Elementary justice and the
spirit of fair play thus dictate that the status quo ante, which is the
situation before the closure when plaintiffs representatives were able to
pass through Lot 1031-F, be restored.
Insofar as defendants threatened cancellation of the contract to sell, the
Court has seen that out of the total area of 131,040.95 square meters
covered by the contract, plaintiff had already paid for 102,496.69 square
meters, and that it had deposited P4,048,950.00 to pay for some of the
undelivered parcels. It is but fair that such a move be, in the meantime,
disallowed.9
In dismissing outright Felipes petition for certiorari, prohibition and
mandamus assailing the trial courts Order and the Writ, the Court of
Appeals stated The petition should be dismissed outright, the petitioner has no standing
here. He may be the owner of the lot in question but he is not a party
litigant in the case a quo. His being a son of defendant spouse in the lower
court does not give him the capacity to sue. Of course, he is not without
legal remedy to protect his interest. 10
The Issue
In his Memorandum, Felipe narrows the inquiry to MAY PETITIONER BE DEPRIVED OF HIS PROPERTY WITHOUT DUE PROCESS
OF LAW AND PAYMENT OF JUST COMPENSATION FOR THE BENEFIT OF
PRIVATE RESPONDENT?11
Felipe laments that the dismissal of his petition resulted in the outright
confiscation of his property for the private use of Gothong Lines, without
due process of law and just compensation. Felipe claims that in dismissing
his petition, the Court of Appeals effectively sustained the trial courts
Order divesting him of his rights over Lot 1031-F.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 24

The question of whether Gothong Lines may demand the turn over of the
parcels of land listed in Annex "A" of the Contract is not our concern here.
The issue in this petition is whether the Court of Appeals erred in
dismissing Felipes petition.

A resolution affirming the Court of Appeals outright dismissal of Felipes


petition for these reasons would have been sufficient. Nevertheless, we
deem it best to address the propriety of the issuance by the trial court of
the writ of preliminary injunction before writing finis to this petition.

The Courts Ruling

Issuance of writ of preliminary injunction was also proper.

The petition is bereft of merit.

Preliminary injunction is an order granted at any stage of an action, prior to


the judgment or final order, requiring a party, court, agency or person to
perform or to refrain from performing a particular act or acts.16 A
preliminary injunction, as the term itself suggests, is merely temporary,
subject to the final disposition of the principal action. Its purpose is to
preserve the status quo of the matter subject of the action to protect the
rights of the plaintiff during the pendency of the suit. Otherwise, if no
preliminary injunction is issued, the defendant may, before final judgment,
do the act which the plaintiff is seeking the court to restrain. This will make
ineffectual the final judgment that the court may afterwards render in
granting relief to the plaintiff.17

Dismissal by the Court of Appeals of Felipes petition was proper.


Felipe committed a procedural blunder in filing a special civil action for
certiorari to assail the Order and the Writ. Felipe was not a party in Civil
Case No. 5020-L. He could not, therefore, assail the writ of preliminary
injunction through a petition for certiorari before the Court of Appeals. As
correctly pointed out by the Court of Appeals, Felipe does not possess the
requisite standing to file such suit.
In Ciudad Real v. Court of Appeals,12 this Court ruled that there is grave
abuse of discretion if the appellate court recognizes the standing of a party,
not a litigant in the trial court proceedings, to join a petition for certiorari.
The Court explained:
Worse was the ruling of the respondent appellate court sanctioning the
standing of Magdiwang Realty Corporation to join said petition for
certiorari. As the records show, Magdiwang filed a Motion for Intervention
on July 18, 1989 invoking its alleged Memorandum of Agreement with
Doa Juana Development Corporation dated July 15, 1982. The trial court,
however, denied this motion and Magdiwang did not question the ruling in
the appellate court. The ruling thus, became final. After about two (2) years
or on August 27, 1991, Magdiwang again filed a Motion to Substitute
and/or Join as Party/Plaintiff relying on the same Memorandum of
Agreement. The trial court similarly denied the motion, and the denial also
attained finality as Magdiwang did not further challenge its correctness.
Despite the finality of the order denying Magdiwangs intervention way
back in 1989, the respondent court in its Decision of August 20, 1992
recognized the standing of Magdiwang to assail in the appellate court the
Compromise Agreement. Again, this ruling constitutes grave abuse of
discretion for Magdiwang was not a party in interest in Civil Case No. Q35393.
The wisdom of this ruling is all too apparent. If a person not a party to an
action is allowed to file a certiorari petition assailing an interlocutory order
of the trial court, such as an injunctive order and writ, proceedings will
become unnecessarily complicated, expensive and interminable.
Eventually, this will defeat the policy of our remedial laws to secure partylitigants a speedy and inexpensive disposition of every action.
Felipe could have simply intervened13 in the trial court proceedings to
enable him to protect or preserve a right or interest which may be affected
by such proceedings. A motion to intervene may be filed at any time before
rendition of judgment by the trial court. 14 The purpose of intervention is
not to obstruct or unnecessarily delay the placid operation of the
machinery of trial. The purpose is merely to afford one, not an original
party but possessing a certain right or interest in the pending case, the
opportunity to appear and be joined so he could assert or protect such
right or interest.15 Indeed, Felipe could have easily joined his parents as
defendants in resisting the claim of Gothong Lines.

The issuance of a writ of preliminary injunction rests entirely within the


discretion of the court and is generally not interfered with except in cases
of manifest abuse.18 The assessment and evaluation of evidence in the
issuance of the writ of preliminary injunction involve findings of facts
ordinarily left to the trial court for its conclusive determination. 19
We find that there was adequate justification for the issuance of the
assailed writ of preliminary injunction. There is no dispute that the Spouses
Dungog entered into the Contract with Gothong Lines which included Lot
1031-F owned by Felipe. Felipe admitted that he authorized his parents to
sell this lot. He also admitted that his parents had delivered to Gothong
Lines Lot 1031-F along with other parcels of land. However, the Spouses
Dungog threatened to cancel the Contract and to deny Gothong Lines
passage through Lot 1031-F allegedly due to non-payment of the
subsequent installments.1wphi1
In applying for the Writ, Gothong Lines sought to restrain in the meantime
the Spouses Dungog from canceling the Contract in order not to render the
judgment ineffectual. Gothong Lines also sought to preserve its right of
way through Lot 1031-F to maintain access to the other parcels of land
previously delivered by the Spouses Dungog to Gothong Lines.
A careful reading of the trial courts assailed Order discloses that the Writ
enjoined the cancelation of the Contract on the basis of Gothong Lines
substantial performance of the Contract. The trial court also enjoined the
closure of the entrance gate in Lot 1031-F to preserve the status quo ante.
Under Section 3, Rule 5820 of the 1997 Rules on Civil Procedure, a
preliminary injunction is proper when the plaintiff appears entitled to the
relief demanded in the complaint. The trial court found that Gothong Lines
had already paid P51,248,348.26 out of the total consideration of
P65,520,475.00. Gothong Lines also consigned with the court an additional
P4,048,950.00 leaving a balance of P10,223,176.74. The trial court likewise
found that 78% of the properties were already in the possession of
Gothong Lines. Moreover, the status quo, which is the last actual peaceable
uncontested status that preceded the controversy,21 was that Gothong
Lines had access to the lots subject of the Contract through the entrance
gate in Lot 1031-F. That is why Gothong Lines commenced construction of
its pier and the development of the roads within the parcels of land
covered by the Contract. The issuance of the Writ would no doubt preserve
the status quo between the Spouses Dungog and Gothong Lines that

existed prior to the filing of the case. We agree with the trial court that the
status quo should be maintained until the issue on the parties respective
rights and obligations under the Contract is determined after the trial.
Clearly, in issuing the Writ, the trial court did not forthwith deprive Felipe
of his ownership of Lot 1031-F. Neither did the Writ have the effect of
ousting Felipe from possession of the lot. The trial court did not rule on the
merits of the case so as to amount to a deprivation or confiscation of
property without due process of law or just compensation. There was no
adjudication on the rightful possession or ownership of the contested
parcels of land subject of the Contract. The trial court issued the injunction
only as a preventive remedy to protect during the pendency of the action
Gothong Lines right to a final and effective relief.
WHEREFORE, the petition is DENIED for lack of merit. SO ORDERED.
G.R. No. 131719
May 25, 2004
THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, THE SECRETARY
OF LABOR AND EMPLOYMENT, AND THE SECRETARY OF FOREIGN
AFFAIRS, OWWA PUNO, ADMINISTRATOR, and POEA ADMINISTRATOR,
petitioners, vs. THE HON. COURT OF APPEALS and ASIAN RECRUITMENT
COUNCIL PHILIPPINE CHAPTER (ARCO-PHIL.), INC., representing its
members: Worldcare Services Internationale, Inc., Steadfast
International Recruitment Corporation, Dragon International Manpower
Services Corporation, Verdant Manpower Mobilization Corporation,
Brent Overseas Personnel, Inc., ARL Manpower Services, Inc., Dahlzhen
International Services, Inc., Interworld Placement Center, Inc., Lakas Tao
Contract Services, Ltd. Co., and SSC Multiservices, respondents.
DECISION
CALLEJO, SR., J.:
In this petition for review on certiorari, the Executive Secretary of the
President of the Philippines, the Secretary of Justice, the Secretary of
Foreign Affairs, the Secretary of Labor and Employment, the POEA
Administrator and the OWWA Administrator, through the Office of the
Solicitor General, assail the Decision1 of the Court of Appeals in CA-G.R. SP
No. 38815 affirming the Order2 of the Regional Trial Court of Quezon City
dated August 21, 1995 in Civil Case No. Q-95-24401, granting the plea of
the petitioners therein for a writ of preliminary injunction and of the writ
of preliminary injunction issued by the trial court on August 24, 1995.
The Antecedents
Republic Act No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, took effect on July 15, 1995. The Omnibus
Rules and Regulations Implementing the Migrant Workers and Overseas
Filipino Act of 1995 was, thereafter, published in the April 7, 1996 issue of
the Manila Bulletin. However, even before the law took effect, the Asian
Recruitment Council Philippine Chapter, Inc. (ARCO-Phil.) filed, on July 17,
1995, a petition for declaratory relief under Rule 63 of the Rules of Court
with the Regional Trial Court of Quezon City to declare as unconstitutional
Section 2, paragraph (g), Section 6, paragraphs (a) to (j), (l) and (m), Section
7, paragraphs (a) and (b), and Sections 9 and 10 of the law, with a plea for
the issuance of a temporary restraining order and/or writ of preliminary
injunction enjoining the respondents therein from enforcing the assailed
provisions of the law.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 25

In a supplement to its petition, the ARCO-Phil. alleged that Rep. Act No.
8042 was self-executory and that no implementing rules were needed. It
prayed that the court issue a temporary restraining order to enjoin the
enforcement of Section 6, paragraphs (a) to (m) on illegal recruitment,
Section 7 on penalties for illegal recruitment, and Section 9 on venue of
criminal actions for illegal recruitments, viz:
Viewed in the light of the foregoing discussions, there appears to be
urgent an imperative need for this Honorable Court to maintain the
status quo by enjoining the implementation or effectivity of the
questioned provisions of RA 8042, by way of a restraining order
otherwise, the member recruitment agencies of the petitioner will
suffer grave or irreparable damage or injury. With the effectivity of
RA 8042, a great majority of the duly licensed recruitment agencies
have stopped or suspended their operations for fear of being
prosecuted under the provisions of a law that are unjust and
unconstitutional. This Honorable Court may take judicial notice of the
fact that processing of deployment papers of overseas workers for
the past weeks have come to a standstill at the POEA and this has
affected thousands of workers everyday just because of the
enactment of RA 8042. Indeed, this has far reaching effects not only
to survival of the overseas manpower supply industry and the active
participating recruitment agencies, the countrys economy which has
survived mainly due to the dollar remittances of the overseas
workers but more importantly, to the poor and the needy who are in
dire need of income-generating jobs which can only be obtained
from abroad. The loss or injury that the recruitment agencies will
suffer will then be immeasurable and irreparable. As of now, even
foreign employers have already reduced their manpower
requirements from the Philippines due to their knowledge that RA
8042 prejudiced and adversely affected the local recruitment
agencies.3

agents employing them shall be encourages (sic). Appropriate


incentives may be extended to them.

II. ILLEGAL RECRUITMENT


SEC. 6. Definition. For purposes of this Act, illegal recruitment shall
mean any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers and includes referring, contract
services, promising or advertising for employment abroad, whether
for profit or not, when undertaken by a non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential Decree No.
442, as amended, otherwise known as the Labor Code of the
Philippines: Provided, That any such non-licensee or non-holder who,
in any manner, offers or promises for a fee employment abroad to
two or more persons shall be deemed so engaged. It shall, likewise,
include the following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority:
(a)

(b)
(c)

(d)

On August 1, 1995, the trial court issued a temporary restraining order


effective for a period of only twenty (20) days therefrom.
After the petitioners filed their comment on the petition, the ARCO-Phil.
filed an amended petition, the amendments consisting in the inclusion in
the caption thereof eleven (11) other corporations which it alleged were its
members and which it represented in the suit, and a plea for a temporary
restraining order enjoining the respondents from enforcing Section 6
subsection (i), Section 6 subsection (k) and paragraphs 15 and 16 thereof,
Section 8, Section 10, paragraphs 1 and 2, and Sections 11 and 40 of Rep.
Act No. 8042.
The respondent ARCO-Phil. assailed Section 2(g) and (i), Section 6
subsection (a) to (m), Section 7(a) to (b), and Section 10 paragraphs (1) and
(2), quoted as follows:
(g) THE STATE RECOGNIZES THAT THE ULTIMATE PROTECTION TO ALL
MIGRANT WORKERS IS THE POSSESSION OF SKILLS. PURSUANT TO
THIS AND AS SOON AS PRACTICABLE, THE GOVERNMENT SHALL
DEPLOY AND/OR ALLOW THE DEPLOYMENT ONLY OF SKILLED
FILIPINO WORKERS.4

(e)

(f)

(g)

(h)

(i)

Sec. 2 subsection (i, 2nd par.)


Nonetheless, the deployment of Filipino overseas workers, whether
land-based or sea-based, by local service contractors and manning

(j)

To charge or accept directly or indirectly any amount


greater than that specified in the schedule of allowable
fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay any amount
greater than that actually received by him as a loan or
advance;
To furnish or publish any false notice or information or
document in relation to recruitment or employment;
To give any false notice, testimony, information or
document or commit any act of misrepresentation for the
purpose of securing a license or authority under the
Labor Code;
To induce or attempt to induce a worker already
employed to quit his employment in order to offer him
another unless the transfer is designed to liberate a
worker from oppressive terms and conditions of
employment;
To influence or attempt to influence any person or entity
not to employ any worker who has not applied for
employment through his agency;
To engage in the recruitment or placement of workers in
jobs harmful to public health or morality or to the dignity
of the Republic of the Philippines;
To obstruct or attempt to obstruct inspection by the
Secretary of Labor and Employment or by his duly
authorized representative;
To fail to submit reports on the status of employment,
placement vacancies, remittance of foreign exchange
earnings, separation from jobs, departures and such
other matters or information as may be required by the
Secretary of Labor and Employment;
To substitute or alter to the prejudice of the worker,
employment contracts approved and verified by the
Department of Labor and Employment from the time of
actual signing thereof by the parties up to and including
the period of the expiration of the same without the
approval of the Department of Labor and Employment;
For an officer or agent of a recruitment or placement
agency to become an officer or member of the Board of

any corporation engaged in travel agency or to be


engaged directly or indirectly in the management of a
travel agency;
(k) To withhold or deny travel documents from applicant
workers before departure for monetary or financial
considerations other than those authorized under the
Labor Code and its implementing rules and regulations;
(l)
Failure to actually deploy without valid reason as
determined by the Department of Labor and
Employment; and
(m) Failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for
purposes of deployment, in cases where the deployment
does not actually take place without the workers fault.
Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving
economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out
by a group of three (3) or more persons conspiring or confederating
with one another. It is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.
The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical persons,
the officers having control, management or direction of their
business shall be liable.

SEC. 7. Penalties.
(a) Any person found guilty of illegal recruitment shall suffer the
penalty of imprisonment of not less than six (6) years and one (1) day
but not more than twelve (12) years and a fine of not less than two
hundred thousand pesos (P200,000.00) nor more than five hundred
thousand pesos (P500,000.00).
(b) The penalty of life imprisonment and a fine of not less than five
hundred thousand pesos (P500,000.00) nor more than one million
pesos (P1,000,000.00) shall be imposed if illegal recruitment
constitutes economic sabotage as defined herein.
Provided, however, That the maximum penalty shall be imposed if
the person illegally recruited is less than eighteen (18) years of age or
committed by a non-licensee or non-holder of authority.
Sec. 8.
Prohibition on Officials and Employees. It shall be unlawful for any
official or employee of the Department of Labor and Employment,
the Philippine Overseas Employment Administration (POEA), or the
Overseas Workers Welfare Administration (OWWA), or the
Department of Foreign Affairs, or other government agencies
involved in the implementation of this Act, or their relatives within
the fourth civil degree of consanguinity or affinity, to engage, directly
or indirectly, in the business of recruiting migrant workers as defined
in this Act. The penalties provided in the immediate preceding
paragraph shall be imposed upon them. (underscoring supplied)

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 26

Sec. 10, pars. 1 & 2.


Money Claims. Notwithstanding any provision of law to the
contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction
to hear and decide, within ninety (90) calendar days after the filing of
the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages.
The liability of the principal/employer and the recruitment/
placement agency for any and all claims under this section shall be
joint and several. This provision shall be incorporated in the contract
for overseas employment and shall be a condition precedent for its
approval. The performance bond to be filed by the recruitment/
placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate
officers and directors and partners as the case may be, shall
themselves be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.

SEC. 11. Mandatory Periods for Resolution of Illegal Recruitment


Cases. The preliminary investigations of cases under this Act shall
be terminated within a period of thirty (30) calendar days from the
date of their filing. Where the preliminary investigation is conducted
by a prosecution officer and a prima facie case is established, the
corresponding information shall be filed in court within twenty-four
(24) hours from the termination of the investigation. If the
preliminary investigation is conducted by a judge and a prima facie
case is found to exist, the corresponding information shall be filed by
the proper prosecution officer within forty-eight (48) hours from the
date of receipt of the records of the case.
The respondent averred that the aforequoted provisions of Rep. Act No.
8042 violate Section 1, Article III of the Constitution.5 According to the
respondent, Section 6(g) and (i) discriminated against unskilled workers
and their families and, as such, violated the equal protection clause, as well
as Article II, Section 126 and Article XV, Sections 17 and 3(3) of the
Constitution.8 As the law encouraged the deployment of skilled Filipino
workers, only overseas skilled workers are granted rights. The respondent
stressed that unskilled workers also have the right to seek employment
abroad. According to the respondent, the right of unskilled workers to due
process is violated because they are prevented from finding employment
and earning a living abroad. It cannot be argued that skilled workers are
immune from abuses by employers, while unskilled workers are merely
prone to such abuses. It was pointed out that both skilled and unskilled
workers are subjected to abuses by foreign employers. Furthermore, the
prohibition of the deployment of unskilled workers abroad would only
encourage fly-by-night illegal recruiters.
According to the respondent, the grant of incentives to service contractors
and manning agencies to the exclusion of all other licensed and authorized
recruiters is an invalid classification. Licensed and authorized recruiters are
thus deprived of their right to property and due process and to the
"equality of the person." It is understandable for the law to prohibit illegal

recruiters, but to discriminate against licensed and registered recruiters is


unconstitutional.
The respondent, likewise, alleged that Section 6, subsections (a) to (m) is
unconstitutional because licensed and authorized recruitment agencies are
placed on equal footing with illegal recruiters. It contended that while the
Labor Code distinguished between recruiters who are holders of licenses
and non-holders thereof in the imposition of penalties, Rep. Act No. 8042
does not make any distinction. The penalties in Section 7(a) and (b) being
based on an invalid classification are, therefore, repugnant to the equal
protection clause, besides being excessive; hence, such penalties are
violative of Section 19(1), Article III of the Constitution.9 It was also pointed
out that the penalty for officers/officials/employees of recruitment
agencies who are found guilty of economic sabotage or large-scale illegal
recruitment under Rep. Act No. 8042 is life imprisonment. Since
recruitment agencies usually operate with a manpower of more than three
persons, such agencies are forced to shut down, lest their officers and/or
employees be charged with large scale illegal recruitment or economic
sabotage and sentenced to life imprisonment. Thus, the penalty imposed
by law, being disproportionate to the prohibited acts, discourages the
business of licensed and registered recruitment agencies.
The respondent also posited that Section 6(m) and paragraphs (15) and
(16), Sections 8, 9 and 10, paragraph 2 of the law violate Section 22, Article
III of the Constitution10 prohibiting ex-post facto laws and bills of attainder.
This is because the provisions presume that a licensed and registered
recruitment agency is guilty of illegal recruitment involving economic
sabotage, upon a finding that it committed any of the prohibited acts
under the law. Furthermore, officials, employees and their relatives are
presumed guilty of illegal recruitment involving economic sabotage upon
such finding that they committed any of the said prohibited acts.
The respondent further argued that the 90-day period in Section 10,
paragraph (1) within which a labor arbiter should decide a money claim is
relatively short, and could deprive licensed and registered recruiters of
their right to due process. The period within which the summons and the
complaint would be served on foreign employees and, thereafter, the filing
of the answer to the complaint would take more than 90 days. This would
thereby shift on local licensed and authorized recruiters the burden of
proving the defense of foreign employers. Furthermore, the respondent
asserted, Section 10, paragraph 2 of the law, which provides for the joint
and several liability of the officers and employees, is a bill of attainder and
a violation of the right of the said corporate officers and employees to due
process. Considering that such corporate officers and employees act with
prior approval of the board of directors of such corporation, they should
not be liable, jointly and severally, for such corporate acts.
The respondent asserted that the following provisions of the law are
unconstitutional:
SEC. 9. Venue. A criminal action arising from illegal recruitment as
defined herein shall be filed with the Regional Trial Court of the
province or city where the offense was committed or where the
offended party actually resides at the time of the commission of the
offense: Provided, That the court where the criminal action is first
filed shall acquire jurisdiction to the exclusion of other courts:
Provided, however, That the aforestated provisions shall also apply
to those criminal actions that have already been filed in court at the
time of the effectivity of this Act.

SEC. 10. Money Claims. Notwithstanding any provision of law to the


contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction
to hear and decide, within ninety (90) calendar days after the filing of
the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages.
Sec. 40.
The departments and agencies charged with carrying out the
provisions of this Act shall, within ninety (90) days after the effectiviy
of this Act, formulate the necessary rules and regulations for its
effective implementation.
According to the respondent, the said provisions violate Section 5(5),
Article VIII of the Constitution11 because they impair the power of the
Supreme Court to promulgate rules of procedure.
In their answer to the petition, the petitioners alleged, inter alia, that (a)
the respondent has no cause of action for a declaratory relief; (b) the
petition was premature as the rules implementing Rep. Act No. 8042 not
having been released as yet; (c) the assailed provisions do not violate any
provisions of the Constitution; and, (d) the law was approved by Congress
in the exercise of the police power of the State. In opposition to the
respondents plea for injunctive relief, the petitioners averred that:
As earlier shown, the amended petition for declaratory relief is devoid of
merit for failure of petitioner to demonstrate convincingly that the assailed
law is unconstitutional, apart from the defect and impropriety of the
petition. One who attacks a statute, alleging unconstitutionality must prove
its invalidity beyond reasonable doubt (Caleon v. Agus Development
Corporation, 207 SCRA 748). All reasonable doubts should be resolved in
favor of the constitutionality of a statute (People v. Vera, 65 Phil. 56). This
presumption of constitutionality is based on the doctrine of separation of
powers which enjoin upon each department a becoming respect for the
acts of the other departments (Garcia vs. Executive Secretary, 204 SCRA
516 [1991]). Necessarily, the ancillary remedy of a temporary restraining
order and/or a writ of preliminary injunction prayed for must fall. Besides,
an act of legislature approved by the executive is presumed to be within
constitutional bounds (National Press Club v. Commission on Elections, 207
SCRA 1).
After the respective counsels of the parties were heard on oral arguments,
the trial court issued on August 21, 1995, an order granting the petitioners
plea for a writ of preliminary injunction upon a bond of P50,000. The
petitioner posted the requisite bond and on August 24, 1995, the trial court
issued a writ of preliminary injunction enjoining the enforcement of the
following provisions of Rep. Act No. 8042 pending the termination of the
proceedings:
Section 2, subsections (g) and (i, 2nd par.); Section 6, subsections
(a) to (m), and pars. 15 & 16; Section 7, subsections (a) & (b); Section
8; Section 9; Section 10; pars. 1 & 2; Section 11; and Section 40 of
Republic Act No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995. 13

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 27

The petitioners filed a petition for certiorari with the Court of Appeals
assailing the order and the writ of preliminary injunction issued by the trial
court on the following grounds:
1.

2.

Respondent ARCO-PHIL. had utterly failed to show its clear


right/s or that of its member-agencies to be protected by the
injunctive relief and/or violation of said rights by the
enforcement of the assailed sections of R.A. 8042;
Respondent Judge fixed a P50,000 injunction bond which is
grossly inadequate to answer for the damage which petitionerofficials may sustain, should respondent ARCO-PHIL. be finally
adjudged as not being entitled thereto.14

The petitioners asserted that the respondent is not the real party-ininterest as petitioner in the trial court. It is inconceivable how the
respondent, a non-stock and non-profit corporation, could sustain direct
injury as a result of the enforcement of the law. They argued that if, at all,
any damage would result in the implementation of the law, it is the
licensed and registered recruitment agencies and/or the unskilled Filipino
migrant workers discriminated against who would sustain the said injury or
damage, not the respondent. The respondent, as petitioner in the trial
court, was burdened to adduce preponderant evidence of such irreparable
injury, but failed to do so. The petitioners further insisted that the petition
a quo was premature since the rules and regulations implementing the law
had yet to be promulgated when such petition was filed. Finally, the
petitioners averred that the respondent failed to establish the requisites
for the issuance of a writ of preliminary injunction against the enforcement
of the law and the rules and regulations issued implementing the same.
On December 5, 1997, the appellate court came out with a four-page
decision dismissing the petition and affirming the assailed order and writ of
preliminary injunction issued by the trial court. The appellate court,
likewise, denied the petitioners motion for reconsideration of the said
decision.
The petitioners now come to this Court in a petition for review on certiorari
on the following grounds:
1.

2.

Private respondent ARCO-PHIL. had utterly failed to show its


clear right/s or that of its member-agencies to be protected by
the injunctive relief and/or violation of said rights by the
enforcement of the assailed sections of R.A. 8042;
The P50,000 injunction bond fixed by the court a quo and
sustained by the Court of Appeals is grossly inadequate to
answer for the damage which petitioners-officials may sustain,
should private respondent ARCO-PHIL. be finally adjudged as
not being entitled thereto.15

On February 16, 1998, this Court issued a temporary restraining order


enjoining the respondents from enforcing the assailed order and writ of
preliminary injunction.
The Issues
The core issue in this case is whether or not the trial court committed grave
abuse of its discretion amounting to excess or lack of jurisdiction in issuing
the assailed order and the writ of preliminary injunction on a bond of only
P50,000 and whether or not the appellate court erred in affirming the trial
courts order and the writ of preliminary injunction issued by it.

The petitioners contend that the respondent has no locus standi. It is a


non-stock, non-profit organization; hence, not the real party-in-interest as
petitioner in the action. Although the respondent filed the petition in the
Regional Trial Court in behalf of licensed and registered recruitment
agencies, it failed to adduce in evidence a certified copy of its Articles of
Incorporation and the resolutions of the said members authorizing it to
represent the said agencies in the proceedings. Neither is the suit of the
respondent a class suit so as to vest in it a personality to assail Rep. Act No.
8042; the respondent is service-oriented while the recruitment agencies it
purports to represent are profit-oriented. The petitioners assert that the
law is presumed constitutional and, as such, the respondent was burdened
to make a case strong enough to overcome such presumption and establish
a clear right to injunctive relief.
The petitioners bewail the P50,000 bond fixed by the trial court for the
issuance of a writ of preliminary injunction and affirmed by the appellate
court. They assert that the amount is grossly inadequate to answer for any
damages that the general public may suffer by reason of the nonenforcement of the assailed provisions of the law. The trial court
committed a grave abuse of its discretion in granting the respondents plea
for injunctive relief, and the appellate court erred in affirming the order
and the writ of preliminary injunction issued by the trial court.
The respondent, for its part, asserts that it has duly established its locus
standi and its right to injunctive relief as gleaned from its pleadings and the
appendages thereto. Under Section 5, Rule 58 of the Rules of Court, it was
incumbent on the petitioners, as respondents in the RTC, to show cause
why no injunction should issue. It avers that the injunction bond posted by
the respondent was more than adequate to answer for any injury or
damage the petitioners may suffer, if any, by reason of the writ of
preliminary injunction issued by the RTC. In any event, the assailed
provisions of Rep. Act No. 8042 exposed its members to the immediate and
irreparable damage of being deprived of their right to a livelihood without
due process, a property right protected under the Constitution.
The respondent contends that the commendable purpose of the law to
eradicate illegal recruiters should not be done at the expense and to the
prejudice of licensed and authorized recruitment agencies. The writ of
preliminary injunction was necessitated by the great number of duly
licensed recruitment agencies that had stopped or suspended their
business operations for fear that their officers and employees would be
indicted and prosecuted under the assailed oppressive penal provisions of
the law, and meted excessive penalties. The respondent, likewise, urges
that the Court should take judicial notice that the processing of
deployment papers of overseas workers have come to a virtual standstill at
the POEA.
The Courts Ruling
The petition is meritorious.
The Respondent Has Locus Standi
To File the Petition in the RTC in Representation of the Eleven Licensed and
Registered Recruitment Agencies Impleaded in the Amended Petition
The modern view is that an association has standing to complain of injuries
to its members. This view fuses the legal identity of an association with
that of its members.16 An association has standing to file suit for its
workers despite its lack of direct interest if its members are affected by the

action. An organization has standing to assert the concerns of its


constituents.17
In Telecommunications and Broadcast Attorneys of the Philippines v.
Commission on Elections,18 we held that standing jus tertii would be
recognized only if it can be shown that the party suing has some substantial
relation to the third party, or that the right of the third party would be
diluted unless the party in court is allowed to espouse the third partys
constitutional claims.
In this case, the respondent filed the petition for declaratory relief under
Rule 64 of the Rules of Court for and in behalf of its eleven (11) licensed
and registered recruitment agencies which are its members, and which
approved separate resolutions expressly authorizing the respondent to file
the said suit for and in their behalf. We note that, under its Articles of
Incorporation, the respondent was organized for the purposes inter alia of
promoting and supporting the growth and development of the manpower
recruitment industry, both in the local and international levels; providing,
creating and exploring employment opportunities for the exclusive benefit
of its general membership; enhancing and promoting the general welfare
and protection of Filipino workers; and, to act as the representative of any
individual, company, entity or association on matters related to the
manpower recruitment industry, and to perform other acts and activities
necessary to accomplish the purposes embodied therein. The respondent
is, thus, the appropriate party to assert the rights of its members, because
it and its members are in every practical sense identical. The respondent
asserts that the assailed provisions violate the constitutional rights of its
members and the officers and employees thereof. The respondent is but
the medium through which its individual members seek to make more
effective the expression of their voices and the redress of their
grievances.19
However, the respondent has no locus standi to file the petition for and in
behalf of unskilled workers. We note that it even failed to implead any
unskilled workers in its petition. Furthermore, in failing to implead, as
parties-petitioners, the eleven licensed and registered recruitment
agencies it claimed to represent, the respondent failed to comply with
Section 2 of Rule 6320 of the Rules of Court. Nevertheless, since the eleven
licensed and registered recruitment agencies for which the respondent
filed the suit are specifically named in the petition, the amended petition is
deemed amended to avoid multiplicity of suits. 21
The Assailed Order and Writ of Preliminary Injunction Is Mooted By Case
Law
The respondent justified its plea for injunctive relief on the allegation in its
amended petition that its members are exposed to the immediate and
irreparable danger of being deprived of their right to a livelihood and other
constitutional rights without due process, on its claim that a great number
of duly licensed recruitment agencies have stopped or suspended their
operations for fear that (a) their officers and employees would be
prosecuted under the unjust and unconstitutional penal provisions of Rep.
Act No. 8042 and meted equally unjust and excessive penalties, including
life imprisonment, for illegal recruitment and large scale illegal recruitment
without regard to whether the recruitment agencies involved are licensed
and/or authorized; and, (b) if the members of the respondent, which are
licensed and authorized, decide to continue with their businesses, they
face the stigma and the curse of being labeled "illegal recruiters." In
granting the respondents plea for a writ of preliminary injunction, the trial
court held, without stating the factual and legal basis therefor, that the

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 28

enforcement of Rep. Act No. 8042, pendente lite, would cause grave and
irreparable injury to the respondent until the case is decided on its merits.
We note, however, that since Rep. Act No. 8042 took effect on July 15,
1995, the Court had, in a catena of cases, applied the penal provisions in
Section 6, including paragraph (m) thereof, and the last two paragraphs
therein defining large scale illegal recruitment committed by officers
and/or employees of recruitment agencies by themselves and in
connivance with private individuals, and imposed the penalties provided in
Section 7 thereof, including the penalty of life imprisonment.22 The
Informations therein were filed after preliminary investigations as provided
for in Section 11 of Rep. Act No. 8042 and in venues as provided for in
Section 9 of the said act. In People v. Chowdury,23 we held that illegal
recruitment is a crime of economic sabotage and must be enforced.
In People v. Diaz,24 we held that Rep. Act No. 8042 is but an amendment of
the Labor Code of the Philippines and is not an ex-post facto law because it
is not applied retroactively. In JMM Promotion and Management, Inc. v.
Court of Appeals,25 the issue of the extent of the police power of the State
to regulate a business, profession or calling vis--vis the equal protection
clause and the non-impairment clause of the Constitution were raised and
we held, thus:
A profession, trade or calling is a property right within the meaning of
our constitutional guarantees. One cannot be deprived of the right to
work and the right to make a living because these rights are property
rights, the arbitrary and unwarranted deprivation of which normally
constitutes an actionable wrong.
Nevertheless, no right is absolute, and the proper regulation of a
profession, calling, business or trade has always been upheld as a
legitimate subject of a valid exercise of the police power by the state
particularly when their conduct affects either the execution of
legitimate governmental functions, the preservation of the State, the
public health and welfare and public morals. According to the maxim,
sic utere tuo ut alienum non laedas, it must of course be within the
legitimate range of legislative action to define the mode and manner
in which every one may so use his own property so as not to pose
injury to himself or others.
In any case, where the liberty curtailed affects at most the rights of
property, the permissible scope of regulatory measures is certainly
much wider. To pretend that licensing or accreditation requirements
violates the due process clause is to ignore the settled practice,
under the mantle of the police power, of regulating entry to the
practice of various trades or professions. Professionals leaving for
abroad are required to pass rigid written and practical exams before
they are deemed fit to practice their trade. Seamen are required to
take tests determining their seamanship. Locally, the Professional
Regulation Commission has begun to require previously licensed
doctors and other professionals to furnish documentary proof that
they had either re-trained or had undertaken continuing education
courses as a requirement for renewal of their licenses. It is not
claimed that these requirements pose an unwarranted deprivation of
a property right under the due process clause. So long as
professionals and other workers meet reasonable regulatory
standards no such deprivation exists.
Finally, it is a futile gesture on the part of petitioners to invoke the
non-impairment clause of the Constitution to support their argument

that the government cannot enact the assailed regulatory measures


because they abridge the freedom to contract. In Philippine
Association of Service Exporters, Inc. vs. Drilon, we held that "[t]he
non-impairment clause of the Constitution must yield to the loftier
purposes targeted by the government." Equally important, into every
contract is read provisions of existing law, and always, a reservation
of the police power for so long as the agreement deals with a subject
impressed with the public welfare.
A last point. Petitioners suggest that the singling out of entertainers
and performing artists under the assailed department orders
constitutes class legislation which violates the equal protection
clause of the Constitution. We do not agree.
The equal protection clause is directed principally against undue
favor and individual or class privilege. It is not intended to prohibit
legislation which is limited to the object to which it is directed or by
the territory in which it is to operate. It does not require absolute
equality, but merely that all persons be treated alike under like
conditions both as to privileges conferred and liabilities imposed. We
have held, time and again, that the equal protection clause of the
Constitution does not forbid classification for so long as such
classification is based on real and substantial differences having a
reasonable relation to the subject of the particular legislation. If
classification is germane to the purpose of the law, concerns all
members of the class, and applies equally to present and future
conditions, the classification does not violate the equal protection
guarantee.
The validity of Section 6 of R.A. No. 8042 which provides that employees of
recruitment agencies may be criminally liable for illegal recruitment has
been upheld in People v. Chowdury:27
As stated in the first sentence of Section 6 of RA 8042, the persons
who may be held liable for illegal recruitment are the principals,
accomplices and accessories. An employee of a company or
corporation engaged in illegal recruitment may be held liable as
principal, together with his employer, if it is shown that he actively
and consciously participated in illegal recruitment. It has been held
that the existence of the corporate entity does not shield from
prosecution the corporate agent who knowingly and intentionally
causes the corporation to commit a crime. The corporation obviously
acts, and can act, only by and through its human agents, and it is
their conduct which the law must deter. The employee or agent of a
corporation engaged in unlawful business naturally aids and abets in
the carrying on of such business and will be prosecuted as principal if,
with knowledge of the business, its purpose and effect, he
consciously contributes his efforts to its conduct and promotion,
however slight his contribution may be.
By its rulings, the Court thereby affirmed the validity of the assailed penal
and procedural provisions of Rep. Act No. 8042, including the imposable
penalties therefor. Until the Court, by final judgment, declares that the said
provisions are unconstitutional, the enforcement of the said provisions
cannot be enjoined.
The RTC Committed Grave Abuse of Its Discretion Amounting to Excess or
Lack of Jurisdiction in Issuing the Assailed Order and the Writ of Preliminary
Injunction

The matter of whether to issue a writ of preliminary injunction or not is


addressed to the sound discretion of the trial court. However, if the court
commits grave abuse of its discretion in issuing the said writ amounting to
excess or lack of jurisdiction, the same may be nullified via a writ of
certiorari and prohibition.
In Social Security Commission v. Judge Bayona,29 we ruled that a law is
presumed constitutional until otherwise declared by judicial interpretation.
The suspension of the operation of the law is a matter of extreme delicacy
because it is an interference with the official acts not only of the duly
elected representatives of the people but also of the highest magistrate of
the land.
In Younger v. Harris, Jr.,30 the Supreme Court of the United States
emphasized, thus:
Federal injunctions against state criminal statutes, either in their
entirety or with respect to their separate and distinct prohibitions,
are not to be granted as a matter of course, even if such statutes are
unconstitutional. No citizen or member of the community is immune
from prosecution, in good faith, for his alleged criminal acts. The
imminence of such a prosecution even though alleged to be
unauthorized and, hence, unlawful is not alone ground for relief in
equity which exerts its extraordinary powers only to prevent
irreparable injury to the plaintiff who seeks its aid. 752 Beal v.
Missouri Pacific Railroad Corp., 312 U.S. 45, 49, 61 S.Ct. 418, 420, 85
L.Ed. 577.
And similarly, in Douglas, supra, we made clear, after reaffirming this rule,
that:
"It does not appear from the record that petitioners have been
threatened with any injury other than that incidental to every
criminal proceeding brought lawfully and in good faith " 319 U.S., at
164, 63 S.Ct., at 881.31
The possible unconstitutionality of a statute, on its face, does not of itself
justify an injunction against good faith attempts to enforce it, unless there
is a showing of bad faith, harassment, or any other unusual circumstance
that would call for equitable relief.32 The "on its face" invalidation of
statutes has been described as "manifestly strong medicine," to be
employed "sparingly and only as a last resort," and is generally disfavored.
To be entitled to a preliminary injunction to enjoin the enforcement of a
law assailed to be unconstitutional, the party must establish that it will
suffer irreparable harm in the absence of injunctive relief and must
demonstrate that it is likely to succeed on the merits, or that there are
sufficiently serious questions going to the merits and the balance of
hardships tips decidedly in its favor. 34 The higher standard reflects judicial
deference toward "legislation or regulations developed through
presumptively reasoned democratic processes." Moreover, an injunction
will alter, rather than maintain, the status quo, or will provide the movant
with substantially all the relief sought and that relief cannot be undone
even if the defendant prevails at a trial on the merits.35 Considering that
injunction is an exercise of equitable relief and authority, in assessing
whether to issue a preliminary injunction, the courts must sensitively
assess all the equities of the situation, including the public interest. 36 In
litigations between governmental and private parties, courts go much
further both to give and withhold relief in furtherance of public interest
than they are accustomed to go when only private interests are involved. 37

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 29

Before the plaintiff may be entitled to injunction against future


enforcement, he is burdened to show some substantial hardship.38
The fear or chilling-effect of the assailed penal provisions of the law on the
members of the respondent does not by itself justify prohibiting the State
from enforcing them against those whom the State believes in good faith
to be punishable under the laws:
Just as the incidental "chilling effect" of such statutes does not
automatically render them unconstitutional, so the chilling effect
that admittedly can result from the very existence of certain laws on
the statute books does not in itself justify prohibiting the State from
carrying out the important and necessary task of enforcing these
laws against socially harmful conduct that the State believes in good
faith to be punishable under its laws and the Constitution.39
It must be borne in mind that subject to constitutional limitations,
Congress is empowered to define what acts or omissions shall constitute a
crime and to prescribe punishments therefor.40 The power is inherent in
Congress and is part of the sovereign power of the State to maintain peace
and order. Whatever views may be entertained regarding the severity of
punishment, whether one believes in its efficiency or its futility, these are
peculiarly questions of legislative policy.41 The comparative gravity of
crimes and whether their consequences are more or less injurious are
matters for the State and Congress itself to determine.42 Specification of
penalties involves questions of legislative policy. 43
Due process prohibits criminal stability from shifting the burden of proof to
the accused, punishing wholly passive conduct, defining crimes in vague or
overbroad language and failing to grant fair warning of illegal conduct.44
Class legislation is such legislation which denies rights to one which are
accorded to others, or inflicts upon one individual a more severe penalty
than is imposed upon another in like case offending.45 Bills of attainder are
legislative acts which inflict punishment on individuals or members of a
particular group without a judicial trial. Essential to a bill of attainder are a
specification of certain individuals or a group of individuals, the imposition
of a punishment, penal or otherwise, and the lack of judicial trial. 46
Penalizing unlicensed and licensed recruitment agencies and their officers
and employees and their relatives employed in government agencies
charged with the enforcement of the law for illegal recruitment and
imposing life imprisonment for those who commit large scale illegal
recruitment is not offensive to the Constitution. The accused may be
convicted of illegal recruitment and large scale illegal recruitment only if,
after trial, the prosecution is able to prove all the elements of the crime
charged.
The possibility that the officers and employees of the recruitment agencies,
which are members of the respondent, and their relatives who are
employed in the government agencies charged in the enforcement of the
law, would be indicted for illegal recruitment and, if convicted sentenced
to life imprisonment for large scale illegal recruitment, absent proof of
irreparable injury, is not sufficient on which to base the issuance of a writ
of preliminary injunction to suspend the enforcement of the penal
provisions of Rep. Act No. 8042 and avert any indictments under the law. 48
The normal course of criminal prosecutions cannot be blocked on the basis
of allegations which amount to speculations about the future. 49
There is no allegation in the amended petition or evidence adduced by the
respondent that the officers and/or employees of its members had been

threatened with any indictments for violations of the penal provisions of


Rep. Act No. 8042. Neither is there any allegation therein that any of its
members and/or their officers and employees committed any of the acts
enumerated in Section 6(a) to (m) of the law for which they could be
indicted. Neither did the respondent adduce any evidence in the RTC that
any or all of its members or a great number of other duly licensed and
registered recruitment agencies had to stop their business operations
because of fear of indictments under Sections 6 and 7 of Rep. Act No. 8042.
The respondent merely speculated and surmised that licensed and
registered recruitment agencies would close shop and stop business
operations because of the assailed penal provisions of the law. A writ of
preliminary injunction to enjoin the enforcement of penal laws cannot be
based on such conjectures or speculations. The Court cannot take judicial
notice that the processing of deployment papers of overseas workers have
come to a virtual standstill at the POEA because of the assailed provisions
of Rep. Act No. 8042. The respondent must adduce evidence to prove its
allegation, and the petitioners accorded a chance to adduce controverting
evidence.
The respondent even failed to adduce any evidence to prove irreparable
injury because of the enforcement of Section 10(1)(2) of Rep. Act No. 8042.
Its fear or apprehension that, because of time constraints, its members
would have to defend foreign employees in cases before the Labor Arbiter
is based on speculations. Even if true, such inconvenience or difficulty is
hardly irreparable injury.
The trial court even ignored the public interest involved in suspending the
enforcement of Rep. Act No. 8042 vis--vis the eleven licensed and
registered recruitment agencies represented by the respondent. In People
v. Gamboa,50 we emphasized the primary aim of Rep. Act No. 8042:
Preliminarily, the proliferation of illegal job recruiters and syndicates
preying on innocent people anxious to obtain employment abroad is
one of the primary considerations that led to the enactment of The
Migrant Workers and Overseas Filipinos Act of 1995. Aimed at
affording greater protection to overseas Filipino workers, it is a
significant improvement on existing laws in the recruitment and
placement of workers for overseas employment. Otherwise known as
the Magna Carta of OFWs, it broadened the concept of illegal
recruitment under the Labor Code and provided stiffer penalties
thereto, especially those that constitute economic sabotage, i.e.,
Illegal Recruitment in Large Scale and Illegal Recruitment Committed
by a Syndicate.
By issuing the writ of preliminary injunction against the petitioners sans
any evidence, the trial court frustrated, albeit temporarily, the prosecution
of illegal recruiters and allowed them to continue victimizing hapless and
innocent people desiring to obtain employment abroad as overseas
workers, and blocked the attainment of the salutary policies52 embedded in
Rep. Act No. 8042. It bears stressing that overseas workers, land-based and
sea-based, had been remitting to the Philippines billions of dollars which
over the years had propped the economy.
In issuing the writ of preliminary injunction, the trial court considered
paramount the interests of the eleven licensed and registered recruitment
agencies represented by the respondent, and capriciously overturned the
presumption of the constitutionality of the assailed provisions on the
barefaced claim of the respondent that the assailed provisions of Rep. Act
No. 8042 are unconstitutional. The trial court committed a grave abuse of
its discretion amounting to excess or lack of jurisdiction in issuing the

assailed order and writ of preliminary injunction. It is for this reason that
the Court issued a temporary restraining order enjoining the enforcement
of the writ of preliminary injunction issued by the trial court.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed
decision of the appellate court is REVERSED AND SET ASIDE. The Order of
the Regional Trial Court dated August 21, 1995 in Civil Case No. Q-95-24401
and the Writ of Preliminary Injunction issued by it in the said case on
August 24, 1995 are NULLIFIED. No costs. SO ORDERED.
G.R. No. 140058
August 1, 2002
MABAYO FARMS, INC., herein represented by its President MRS.
RORAIMA SILVA, petitioner, vs. HON. COURT OF APPEALS and ANTONIO
SANTOS, respondents.
RESOLUTION
QUISUMBING, J.:
This petition for review seeks to reverse the decision1 promulgated on
August 27, 1999, of the Court of Appeals in CA-G.R. SP No. 51375. The
appellate court enjoined the enforcement of the writ of preliminary
injunction dated April 14, 1998, issued by the Regional Trial Court of
Balanga, Bataan, Branch 1, in Civil Case No. 6695 against private
respondent, Antonio Santos.
The factual antecedents of this case are as follows:
On August 22, 1969, the Bureau of Lands declared Francisco Domingo,
Reynaldo Florida, Cornelio Pilipino and Severino Vistan, lawful possessors
of Lot 1379 of the Morong, Bataan Cadastre. Lot 1379 consists of 144
hectares. Domingo, Florida, Pilipino and Vistan through their forebears and
by themselves had been in open, notorious, and exclusive possession of
portions of Lot 1379 since 1933 in the concept of owners. The Bureau then
directed them to confirm their titles over the property by filing the
appropriate applications for the portions of the property respectively
occupied by them.1wphi1.nt
In October 1970, petitioner bought the respective portions of Domingo,
Florida, Pilipino and Vistan, totaling 69,932 square meters and entered into
a compromise settlement with six other persons occupying the property,
whose applications had been rejected by the Bureau. Petitioner then filed
an application for land registration docketed as LRC Cad. Rec. No. N-209
with the then Court of First Instance of Bataan, Branch 1. The application
was contested by several oppositors, among them the heirs of one Toribio
Alejandro.
On December 20, 1991, the trial court decided the land registration case in
petitioners favor. The losing parties appealed to the Court of Appeals,
where the case was docketed as CA-G.R. CV No. 40452. On March 14, 2000,
the appellate court affirmed the lower courts decision. 2
In June 1997, a group of occupants entered the land, destroyed the fences
and drove away livestock owned by petitioner.
On October 9, 1997, petitioner filed a complaint for injunction with
damages, with a prayer for a temporary restraining order, docketed as Civil
Case No. 6695, with the RTC of Balanga, Bataan. Named as defendants
were Juanito Infante, Domingo Infante, Lito Mangalidan, Jaime Aquino,
John Doe, Peter Doe, and Richard Doe.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 30

The trial court issued the temporary restraining order (TRO) and on January
16, 1998, the sheriff served copies on the defendants. The sheriff
accompanied petitioners president to the property where they found five
(5) persons cultivating the land. The latter refused to give their names or
receive copies of the TRO. They claimed that they were only farm workers
of a certain Antonio Santos who allegedly owned the land.3

injunctive writ in the aforementioned civil case. Private respondent avers


that what petitioner wants is to have a continuing writ in its favor, to
include not only the defendants in Civil Case No. 6695 but also all those
who may subsequently intrude into the land dispute. Private respondent
submits that the court a quo committed no error in describing petitioners
posture as a violation of the fundamental rights to notice and hearing.

On April 14, 1998, the trial court issued a writ of preliminary injunction
restraining the defendants or persons acting on their behalf from entering
and cultivating the disputed property. The aforementioned writ was also
served upon respondent who was occupying a portion of Lot No. 1379. 4

We have minutely scrutinized the order granting the writ of preliminary


injunction and are unable to say that the writ applied to private
respondent. The order merely stated "[L]et a writ of preliminary injunction
be issued enjoining and restraining the defendants or any person or
persons acting in their place or stead from further entering and cultivating
the said land of the plaintiff subject matter of this case until further order
from the Court."7 The persons specifically enjoined in the order were the
defendants in Civil Case No. 6695 or persons acting in their stead.
Petitioner itself admitted that private respondent was not a defendant in
Civil Case No. 6695 since "at the institution of the case in 1997, he (private
respondent) did not have a right over any portion of petitioners lot."8
Neither was he a trespasser then.9 Also, nothing in the records indicate
that private respondent was acting on behalf of any of the defendants.
Taking all these into consideration, we must hold that the writ of
preliminary injunction thus cannot be made to apply to private respondent.

On February 24, 1999, private respondent filed a special civil action for
certiorari docketed as CA-G.R. SP No. 51375 with the Court of Appeals.
Private respondent averred that he only learned about the writ of
preliminary injunction on February 16, 1999, when he secured a copy of
the order. He claimed that he was an innocent purchaser for value of the
property from Francisco, Armando, and Conchita, all surnamed Alejandro
and the injunction prevented him from using his property. He alleged that
he was not a party to Civil Case No. 6695 and that it was grave abuse of
discretion for the trial court to enforce the injunctive writ against him since
it did not have jurisdiction over him.
On August 27, 1999, the appellate court decided CA-G.R. SP No. 51375 in
private respondents favor, thus:
WHEREFORE, premises considered the instant Petition is hereby
GRANTED. Public respondent is enjoined from imposing the
questioned writ of preliminary injunction dated April 14, 199[8]
against petitioner [Santos].
SO ORDERED.
Hence, the instant petition, submitting the following issues for our
consideration:
A.
B.

WHETHER [PRIVATE] RESPONDENT WAS DEPRIVED OF HIS


CONSTITUTIONAL RIGHT TO BE HEARD.
WHETHER RULE 3, SEC. 11 OF THE 1997 RULES OF CIVIL
PROCEDURE6 IS APPLICABLE IN THE ABOVE-ENTITLED CASE.

We find the lone issue to be: Is private respondent bound by the writ of
preliminary injunction issued by the trial court?
First, petitioner contends that the injunctive writ of April 14, 1998 was
issued not only against all named defendants in Civil Case No. 6695, but
also against three unnamed "Does." It now argues that the "Does" in the
complaint are all those who violated its rights, including private
respondent. Petitioner asks us to note that the writ of injunction was
served not only against the defendants in Civil Case No. 6695, but also
against other persons who were seen entering and cultivating petitioners
property, including private respondent. Since the latter personally received
the injunctive order on June 5, 1998, he was already forewarned to
intervene in Civil Case No. 6695 if he had any right or interest to protect in
the disputed property. This he failed to do. Since private respondent did
not then take the opportunity to present his side, he cannot now claim that
he was denied due process when the writ was enforced against him.
In his comment, private respondent counters that he was not legally bound
nor required by law to file his pleadings in Civil Case No. 6695 as he was not
a party in said case. Likewise, he was not required to act on or protest the

A preliminary injunction is an order granted at any stage of an action prior


to final judgment, requiring a person to refrain from a particular act.10 As
an ancillary or preventive remedy, a writ of preliminary injunction may
therefore be resorted to by a party to protect or preserve his rights and for
no other purpose during the pendency of the principal action.11 Its object is
to preserve the status quo until the merits of the case can be heard. 12 It is
not a cause of action in itself but merely a provisional remedy, an adjunct
to a main suit.13 Thus, a person who is not a party in the main suit, like
private respondent in the instant case, cannot be bound by an ancillary
writ, such as the writ of preliminary injunction issued against the
defendants in Civil Case No. 6695. He cannot be affected by any proceeding
to which he is a stranger.14
Second, petitioner contends that the Court of Appeals erred when it
observed that petitioner should have impleaded private respondent as
defendant in Civil Case No. 6695 pursuant to Section 11, Rule 3 of the 1997
Rules of Civil Procedure.15 Instead, private respondent should have
intervened in Civil Case No. 6695 to protect his rights. Petitioner avers that
at the time the injunctive writ was issued, it had already rested its case and
to require it to amend its complaint to include private respondent was too
late.
Private respondent counters that there was no reason why Section 11, Rule
3 of the 1997 Rules of Civil Procedure should not be made to apply to Civil
Case No. 6695. He argues that contrary to petitioners posture, his
inclusion as a defendant in Civil Case No. 6695 is procedurally correct since
no final judgment had yet been rendered in said case. Moreover, he avers
that petitioner cannot insist that private respondent be vigilant in
protecting his rights by intervening in Civil Case No. 6695.1wphi1.nt
We agree with private respondent. First, private respondent had no duty to
intervene in the proceedings in Civil Case No. 6695. Intervention in an
action is neither compulsory nor mandatory but only optional and
permissive.16 Second, to warrant intervention, two requisites must concur:
(a) the movant has a legal interest in the matter in litigation,17 and (b)
intervention must not unduly delay or prejudice the adjudication of the
rights of the parties18 nor should the claim of the intervenor be capable of

being properly decided in a separate proceeding. 19 The interest, which


entitles a person to intervene in a suit, must involve the matter in litigation
and of such direct and immediate character that the intervenor will either
gain or lose by the direct legal operation and effect of the judgment.20 Civil
Case No. 6695 was an action for permanent injunction and damages. As a
stranger to the case, private respondent had neither legal interest in a
permanent injunction nor an interest on the damages to be imposed, if
any, in Civil Case No. 6695. To allow him to intervene would have
unnecessarily complicated and prolonged the case.
We agree with the Court of Appeals that to make the injunctive writ
applicable against private respondent, petitioner should have impleaded
the latter as an additional defendant in Civil Case No. 6695. Petitioners
insistence that it had rested its case and hence was too late to include
defendant finds no support in Section 11. The rule categorically provides
that "Parties may be dropped or added by order of the court on motion of
any party or on its own initiative at any stage of the action (stress supplied)
and on such terms as are just."21 We find it inexplicable why petitioner
pointedly resisted the advice of the appellate court to implead private
respondent as an additional defendant in Civil Case No. 6695.
WHEREFORE, the instant petition is DENIED and the assailed decision of
the Court of Appeals in CA-G.R. SP No. 51375 AFFIRMED. No
pronouncement as to costs. SO ORDERED.
[G.R. No. 136760. July 29, 2003] THE SENATE BLUE RIBBON COMMITTEE,
represented by its Chairman, SENATOR AQUILINO Q. PIMENTEL, JR.,
petitioner, vs. HON. JOSE B. MAJADUCON, Presiding Judge of Branch 23,
Regional Trial Court of General Santos City, and ATTY. NILO J. FLAVIANO,
respondents.
[G.R. No. 138378. July 29, 2003] AQUILINO Q. PIMENTEL, JR., petitioner,
vs. THE HONORABLE JOSE S. MAJADUCON, in his capacity as Presiding
Judge of Branch 23, Regional Trial Court, General Santos City, respondent.
DECISION
YNARES-SANTIAGO, J.:
For resolution are two consolidated petitions: (a) G.R. No. 136760, for
certiorari, prohibition, mandamus and preliminary injunction, assailing the
resolution dated November 11, 1998 of Judge Jose S. Majaducon of the
Regional Trial Court of General Santos City, Branch 23, which denied the
Senate Blue Ribbon Committees motion to dismiss the petition for
prohibition, injunction with writ of preliminary injunction filed by private
respondent Atty. Nilo J. Flaviano; and (b) G.R. No. 138378, for review of the
resolution dated April 15, 1999 of respondent Judge Majaducon declaring
petitioner Senator Aquilino Q. Pimentel, Jr. guilty of indirect contempt of
court.
The antecedent facts are as follows:
G.R. No. 136760:
On August 28, 1998, Senator Blas F. Ople filed Senate Resolution No. 157
directing the Committee on National Defense and Security to conduct an
inquiry, in aid of legislation, into the charges of then Defense Secretary
Orlando Mercado that a group of active and retired military officers were
organizing a coup detat to prevent the administration of then President

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 31

Joseph Estrada from probing alleged fund irregularities in the Armed Forces
of the Philippines.[1]
On the same date, Senator Vicente C. Sotto III also filed Resolution No. 160,
directing the appropriate senate committee to conduct an inquiry, in aid
of legislation, into the alleged mismanagement of the funds and
investment portfolio of the Armed Forces Retirement and Separation
Benefits System (AFP-RSBS) xxx. [2]
The Senate President referred the two resolutions to the Committee on
Accountability of Public Officers and Investigations (Blue Ribbon
Committee) and the Committee on National Defense and Security.
During the public hearings conducted by the Senate Blue Ribbon
Committee (hereafter called the Committee), it appeared that the AFPRSBS purchased a lot in General Santos City, designated as Lot X, MR-1160,
for P10,500.00 per square meter from private respondent Atty. Nilo J.
Flaviano. However, the deed of sale filed with the Register of Deeds
indicated that the purchase price of the lot was only P3,000.00 per square
meter.
The Committee thereafter caused the service of a subpoena to respondent
Atty. Flaviano, directing him to appear and testify before it. Respondent
refused to appear at the hearing. Instead, he filed a petition for prohibition
and preliminary injunction with prayer for temporary restraining order with
the Regional Trial Court of General Santos City, Branch 23, which was
docketed as SP Civil Case No. 496.
On October 21, 1998, the trial court issued a Temporary Restraining Order
directing the Committee to CEASE and DESIST from proceeding with the
inquiry in P.S. 160 particularly in General Santos City and/or anywhere in
Region XI or Manila on matters affecting the patenting/titling and sale of
Lot X, MR-1160-D to AFP-RSBS, and from issuing subpoenas to witnesses
from Region XI, particularly from General Santos City, pending the hearing
of the petition for prohibition and injunction.[3]
On November 5, 1998, the Committee filed a motion to dismiss the
petition on the grounds of (a) lack of jurisdiction, and (b) failure to state a
valid cause of action. It further argued that the issuance of the Temporary
Restraining Order was invalid for violating the rule against ex-parte
issuance thereof; and that the same was not enforceable beyond the
territorial jurisdiction of the trial court.
On November 11, 1998, the trial court denied petitioners motion to
dismiss and granted the writ of preliminary injunction, thus:
WHEREFORE, PREMISES CONSIDERED, the motion to dismiss is DENIED, and
the WRIT OF PRELIMINARY INJUNCTION is hereby issued against
respondent. It is enjoined from enforcing its subpoenas to petitioner in
Region XI to appear and testify before it in any of its inquiry or
investigation anywhere in the Philippines regarding the acquisition by the
AFP-RSBS of Lot X, MR-1160-D, located in General Santos City. The bond of
petitioner filed on October 21, 1998, for P500,000.00 for the TRO also
serves as his bond in this injunction.
SO ORDERED.[4]
Hence, the instant petition for certiorari which was docketed as G.R. No.
136760, alleging that respondent Judge Majaducon committed grave abuse
of discretion and/or acted without or in excess of jurisdiction when he:

I.

DENIED PETITIONERS MOTION TO DISMISS THE PETITION FOR


PROHIBITION AND PRELIMINARY INJUNCTION FILED BY
PRIVATE RESPONDENT, ATTY. NILO J. FLAVIANO, AGAINST THE
PETITIONER IN SP. CIVIL CASE NO. 496.
II. ISSUED (1) A TEMPORARY RESTRAINING ORDER EX-PARTE FOR
A PERIOD OF TWENTY (20) DAYS AGAINST THE PETITIONER ON
OCTOBER 21, 1998, AND (2) A WRIT OF PRELIMINARY
INJUNCTION ON NOVEMBER 11, 1998 ENJOINING THE
PETITIONER FROM ENFORCING ITS SUBPOENAS TO PRIVATE
RESPONENT IN REGION XI.
III. APPLIED THE RULING OF BENGZON VS. SENATE BLUE RIBBON
IN GRANTING INJUNCTIVE RELIEF TO PRIVATE RESPONDENT.[5]
G.R. No. 138378:
On January 13, 1999, the newspaper, The Philippine Star published a news
report on the filing by the Committee with this Court of the petition for
certiorari which was docketed as G.R. No. 136760. The news report quoted
portions of the petition filed by the Committee, alleging that Regional Trial
Court Judge Majaducon was guilty of gross ignorance of the rules and
procedures when he issued the temporary restraining order and the writ of
preliminary injunction because, under the principle of separation of
powers, courts cannot interfere with the exercise by the legislature of its
authority to conduct investigations in aid of legislation.[6]
Reacting to the aforesaid news report, respondent Judge Majaducon motu
proprio initiated a charge for indirect contempt of court against Senator
Aquilino Q. Pimentel, Jr., news reporter Perseus Echeminada, Philippine
Star publisher Maximo Soliven, editor-in-chief Ramon J. Farolan, and
executive editor Bobby G. dela Cruz, which was docketed as Special Civil
Case No. 496. Judge Majaducon averred that the news report created in
the minds of the reader the impression that he violated the separation of
powers clause of the Constitution and that he was guilty of gross ignorance
of the rules and procedures.
After the respondents submitted their respective answers, a decision was
rendered on April 15, 1999 finding petitioner Pimentel guilty of indirect
contempt.
Hence, the instant petition based on the following grounds:
I.

THE EXPRESSION GROSS IGNORANCE OF THE RULES OF


PROCEDURE OR GROSS IGNORANCE OF THE LAW IN
REFERENCE TO THE RESPONDENTS EX-PARTE ISSUANCE OF
INJUNCTIVE RELIEF IS NOT PEJORATIVE AS TO CONSTITUTE A
GROUND FOR INDIRECT CONTEMPT.
II. THIS HONORABLE COURT ITSELF USES GROSS IGNORANCE OF
THE LAW AND OTHER EXPRESSIONS OF SIMILAR FORCEFUL
IMPORT IN DESCRIBING GROSS AND PALPABLE ERRORS OF
JUDGES.
III. BY UPHOLDING HIS CONTEMPT CHARGE AGAINST THE
PETITIONER, THE RESPONDENT JUDGE HAS, IN EFFECT,
PREEMPTED THIS HONORABLE COURT IN RESOLVING THE
ISSUES RAISED AGAINST HIM IN G.R. NO. 136760.
IV. THE PUBLICATION BY PHILIPPINE STAR OF THE BLUE RIBBON
PETITION IN G.R. NO. 136760, OR EXCERPTS THEREOF WAS A
LEGITIMATE EXERCISE OF FREEDOM OF EXPRESSION AND OF
THE PRESS.

The two petitions, namely, G.R. No. 136760 and G.R. No. 138378, were
ordered consolidated on December 11, 2000.
The issues for resolution in these joint petitions are: (a) whether or not
respondent Judge Jose Majaducon committed grave abuse of discretion
when he dismissed petitioners motion to dismiss the petition for
prohibition and issued the writ of preliminary injunction; and (b) whether
or not respondent Judge erred in convicting petitioner Pimentel of indirect
contempt of court.
On the first issue, petitioner Committee contends that courts have no
jurisdiction to restrain Congress from performing its constitutionally vested
function to conduct investigations in aid of legislation, following the
principle of separation of powers. Moreover, the petition filed by
respondent Flaviano before the trial court failed to state a cause of action
considering that the legislative inquiry did not deal with the issuance of the
patent and title to Lot X, MR-1160-D in the name of AFP-RSBS, which is well
within the courts jurisdiction, but with the anomaly in the purchase
thereof, which falls squarely within the ambit of Senate Resolutions Nos.
157[7] and 160.[8]
On the other hand, respondent Flaviano contends that the trial court may
properly intervene into investigations by Congress pursuant to the power
of judicial review vested in it by the Constitution. He avers that he has a
valid cause of action to file the petition for prohibition considering that the
Committees investigation will delve into the validity of the patenting and
titling of Lot X, MR-1160-D which, as admitted by petitioner, falls within the
competence of judicial courts. In fact, the validity of the purchase by AFPRSBS of the subject lot is already the subject of a pending action before the
Regional Trial Court of General Santos City and the Ombudsman of
Mindanao. Finally, he cites the case of Bengzon v. Senate Blue Ribbon
Committee,[9] and argues that preliminary injunction may issue in cases
pending before administrative bodies such as the Ombudsman or the
Office of the Prosecutor as long as the right to self-incrimination
guaranteed by the Bill of Rights is in danger. Furthermore, an information
against him has been filed with the Sandiganbayan.
We find for petitioner. There is grave abuse of discretion when the
respondent acts in a capricious, whimsical, arbitrary or despotic manner in
the exercise of his judgment, as when the assailed order is bereft of any
factual and legal justification.[10] In this case, the assailed resolution of
respondent Judge Majaducon was issued without legal basis.
The principle of separation of powers essentially means that legislation
belongs to Congress, execution to the Executive, and settlement of legal
controversies to the Judiciary. Each is prevented from invading the domain
of the others.[11] When the Senate Blue Ribbon Committee served
subpoena on respondent Flaviano to appear and testify before it in
connection with its investigation of the alleged misuse and
mismanagement of the AFP-RSBS funds, it did so pursuant to its authority
to conduct inquiries in aid of legislation. This is clearly provided in Article
VI, Section 21 of the Constitution, thus:
The Senate or the House of Representatives or any of its respective
committees may conduct inquiries in aid of legislation in accordance with
its duly published rules of procedure. The rights of persons appearing in or
affected by such inquiries shall be respected.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 32

Hence, the Regional Trial Court of General Santos City, or any court for that
matter, had no authority to prohibit the Committee from requiring
respondent to appear and testify before it.
The ruling in Bengzon, cited by respondent, does not apply in this case. We
agree with petitioner Committee that the factual circumstances therein are
different from those in the case at bar. In Bengzon, no intended legislation
was involved and the subject matter of the inquiry was more within the
province of the courts rather than of the legislature. More specifically, the
investigation in the said case was an offshoot of the privilege speech of
then Senator Enrile, who urged the Senate to look into a possible violation
of the Anti-Graft and Corrupt Practices Act by the relatives of then
President Corazon Aquino, particularly Mr. Ricardo Lopa, in connection
with the alleged sale of 36 to 39 corporations belonging to Benjamin
Romualdez. On the other hand, there was in this case a clear legislative
purpose, as stated in Senate Resolution No. 160, and the appropriate
Senate Committee was directed to look into the reported misuse and
mismanagement of the AFP-RSBS funds, with the intention of enacting
appropriate legislation to protect the rights and interests of the officers
and members of the Armed Forces of the Philippines. Further, in Bengzon,
the validity of the sale of Romualdezs corporations was pending with the
Sandiganbayan when the Senate Blue Ribbon Committee decided to
conduct its investigation. In short, the issue had already been pre-empted
by the court.
In the instant case, the complaint against respondent Flaviano regarding
the anomaly in the sale of Lot X, MR-1160 was still pending before the
Office of the Ombudsman when the Committee served subpoena on him.
In other words, no court had acquired jurisdiction over the matter. Thus,
there was as yet no encroachment by the legislature into the exclusive
jurisdiction of another branch of the government. Clearly, there was no
basis for the respondent Judge to apply the ruling in Bengzon. Hence, the
denial of petitioners motion to dismiss the petition for prohibition
amounted to grave abuse of discretion.

Respondent Judge counters that Pimentel was guilty of indirect contempt


of court, first, for causing the publication of the Committees petition in the
Philippine Star notwithstanding that the same was sub judice; second, for
making derogatory remarks in the petition itself which affected the honor
and integrity of the respondent judge and degraded the administration of
justice; and third, for making it appear that an administrative complaint
was filed against respondent Judge for gross ignorance of the law. These,
he said, constituted malicious and false report which obstructed the
administration of justice.
Rule 71, Section 3(d) of the 1997 Rules of Civil Procedure provides:
Section 3. Indirect contempt to be punished after charge and hearing.
After a charge in writing has been filed, and an opportunity given to the
respondent to comment thereon within such period as may be fixed by the
court and to be heard by himself or counsel, a person guilty of any of the
following acts may be punished for indirect contempt:
xxx

xxx

xxx

d)
Any improper conduct tending, directly or indirectly, to
impede, obstruct, or degrade the administration of justice; x x x.
After deliberating on the parties arguments, we find that petitioner
Pimentel is not guilty of improper conduct which obstructs or degrades the
administration of justice.
Verily, it does not appear that Pimentel caused the publication in the
Philippine Star of the fact of filing of the petition for certiorari by the
Committee and the reproduction of excerpts thereof. He had no right to
choose which news articles will see print in the newspaper. Rather, it is the
publisher thereof which decides which news events will be reported in the
broadsheet. In doing so, it is allowed the widest latitude of choice as to
what items should see the light of day so long as they are relevant to a
matter of public interest, pursuant to its right of press freedom.[12]

In G.R. No. 138378, petitioner, Senator Aquilino Pimentel, Jr., contends


that respondent judge erred in finding him, as representative of the
Committee, guilty of indirect contempt of court under Rule 71, Section 3(d)
of the 1997 Rules of Civil Procedure. According to Pimentel, the phrase
gross ignorance of the rules of law and procedure, which the Committee
used in the petition, is not depreciatory, but merely a description of normal
usage in petitions where the acts of lower courts are challenged before
higher judicial bodies. In fact, this Court often uses the phrase in its
decisions to describe judges who commit gross and palpable mistakes in
their interpretation and application of the law. Petitioner further
maintains that when the Committee used the phrase, it did so without
malice. Rather, it was only to stress the unfamiliarity of or disregard by the
respondent Judge of a basic rule of procedure, and to buttress its
arguments in support of its petition for certiorari.

Respondent Judges allegation that petitioner made it appear that an


administrative complaint was filed against him is without basis. From a
careful perusal of the records, it appears that while the Committee prayed
for the imposition of administrative sanctions against respondent Judge
Majaducon for gross ignorance of the law, no formal administrative
complaint was instituted separately from the petition for certiorari.

Petitioner Pimentel also contends that he had no participation in the


publication in the Philippine Star of excerpts from the Committees petition
for certiorari. Even assuming arguendo that it was within his control, he
pointed out that he could not have prevented the editors and writers of
the newspaper from publishing the same, lest he violate their
constitutional right of free expression. Indeed, the report by the Philippine
Star of the filing of the petition and the reproduction of its contents was a
legitimate exercise of press freedom.

In Spouses Bacar v. Judge De Guzman, Jr.,[13] it was held that when the law
is so elementary, not to know it or to act as if a judge does not know it,
constitutes gross ignorance of the law. In this case, there was no showing
that petitioner Pimentel, as representative of the Committee, used the
phrase to malign the trial court. Rather, it was used to express what he
believed as a violation of the basic principle of separation of powers.

Finally, the statement that respondent Judge was grossly ignorant of the
rules of law and procedure does not constitute improper conduct that
tends to impede, obstruct or degrade the administration of justice. As
correctly argued by petitioner, the phrase gross ignorance of the rules of
law and procedure is ordinarily found in administrative complaints and is a
necessary description to support a petition which seeks the annulment of
an order of a judge wherein basic legal principles are disregarded.

In this connection, it bears stressing that the power to declare a person in


contempt of court must be exercised on the preservative, not vindictive

principle, and on the corrective and not retaliatory idea of punishment.[14]


This was aptly expressed in the case of Nazareno v. Barnes:[15]
A judge, as a public servant, should not be so thin-skinned or sensitive as to
feel hurt or offended if a citizen expresses an honest opinion about him
which may not altogether be flattering to him. After all, what matters is
that a judge performs his duties in accordance with the dictates of his
conscience and the light that God has given him. A judge should never
allow himself to be moved by pride, prejudice, passion, or pettiness in the
performance of his duties. He should always bear in mind that the power of
the court to punish for contempt should be exercised for purposes that are
impersonal, because that power is intended as a safeguard not for the
judges as persons but for the functions that they exercise.
WHEREFORE, in view of the foregoing, the petitions docketed as G.R. Nos.
136760 and 138378 are GRANTED. The resolution of the Regional Trial
Court of General Santos City, Branch 23, in Special Civil Case No. 496 dated
November 11, 1998, which denied the Senate Blue Ribbon Committees
motion to dismiss, is REVERSED and SET ASIDE. The Writ of Preliminary
Injunction issued by the trial court on November 11, 1998 is DISSOLVED.
The resolution dated April 15, 1999, which declared Senator Aquilino Q.
Pimentel, Jr. guilty of indirect contempt of court, is REVERSED and SET
ASIDE. The petition for indirect contempt is ordered DISMISSED. SO
ORDERED.
G.R. No. 158540
July 8, 2004
SOUTHERN CROSS CEMENT CORPORATION, petitioner,
vs. THE
PHILIPPINE CEMENT MANUFACTURERS CORP., THE SECRETARY OF THE
DEPARTMENT OF TRADE & INDUSTRY, THE SECRETARY OF THE
DEPARTMENT OF FINANCE, and THE COMMISSIONER OF THE BUREAU OF
CUSTOMS, respondents.
DECISION
TINGA, J.:
"Good fences make good neighbors," so observed Robert Frost, the
archetype of traditional New England detachment. The Frost ethos has
been heeded by nations adjusting to the effects of the liberalized global
market.1 The Philippines, for one, enacted Republic Act (Rep. Act) No. 8751
(on the imposition of countervailing duties), Rep. Act No. 8752 (on the
imposition of anti-dumping duties) and, finally, Rep. Act No. 8800, also
known as the Safeguard Measures Act ("SMA")2 soon after it joined the
General Agreement on Tariff and Trade (GATT) and the World Trade
Organization (WTO) Agreement.3
The SMA provides the structure and mechanics for the imposition of
emergency measures, including tariffs, to protect domestic industries and
producers from increased imports which inflict or could inflict serious
injury on them.4 The wisdom of the policies behind the SMA, however, is
not put into question by the petition at bar. The questions submitted to the
Court relate to the means and the procedures ordained in the law to
ensure that the determination of the imposition or non-imposition of a
safeguard measure is proper.
Antecedent Facts
Petitioner Southern Cross Cement Corporation ("Southern Cross") is a
domestic corporation engaged in the business of cement manufacturing,
production, importation and exportation. Its principal stockholders are

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 33

Taiheiyo Cement Corporation and Tokuyama Corporation, purportedly the


largest cement manufacturers in Japan.5
Private respondent Philippine Cement Manufacturers Corporation6
("Philcemcor") is an association of domestic cement manufacturers. It has
eighteen (18) members,7 per Record. While Philcemcor heralds itself to be
an association of domestic cement manufacturers, it appears that
considerable equity holdings, if not controlling interests in at least twelve
(12) of its member-corporations, were acquired by the three largest
cement manufacturers in the world, namely Financiere Lafarge S.A. of
France, Cemex S.A. de C.V. of Mexico, and Holcim Ltd. of Switzerland
(formerly Holderbank Financiere Glaris, Ltd., then Holderfin B.V.).8
On 22 May 2001, respondent Department of Trade and Industry ("DTI")
accepted an application from Philcemcor, alleging that the importation of
gray Portland cement9 in increased quantities has caused declines in
domestic production, capacity utilization, market share, sales and
employment; as well as caused depressed local prices. Accordingly,
Philcemcor sought the imposition at first of provisional, then later,
definitive safeguard measures on the import of cement pursuant to the
SMA. Philcemcor filed the application in behalf of twelve (12) of its
member-companies.10
After preliminary investigation, the Bureau of Import Services of the DTI,
determined that critical circumstances existed justifying the imposition of
provisional measures.11 On 7 November 2001, the DTI issued an Order,
imposing a provisional measure equivalent to Twenty Pesos and Sixty
Centavos (P20.60) per forty (40) kilogram bag on all importations of gray
Portland cement for a period not exceeding two hundred (200) days from
the date of issuance by the Bureau of Customs (BOC) of the implementing
Customs Memorandum Order.12 The corresponding Customs Memorandum
Order was issued on 10 December 2001, to take effect that same day and
to remain in force for two hundred (200) days.13
In the meantime, the Tariff Commission, on 19 November 2001, received a
request from the DTI for a formal investigation to determine whether or
not to impose a definitive safeguard measure on imports of gray Portland
cement, pursuant to Section 9 of the SMA and its Implementing Rules and
Regulations. A notice of commencement of formal investigation was
published in the newspapers on 21 November 2001. Individual notices
were likewise sent to concerned parties, such as Philcemcor, various
importers and exporters, the Embassies of Indonesia, Japan and Taiwan,
contractors/builders associations, industry associations, cement workers'
groups, consumer groups, non-government organizations and concerned
government agencies. A preliminary conference was held on 27 November
2001, attended by several concerned parties, including Southern Cross.
Subsequently, the Tariff Commission received several position papers both
in support and against Philcemcor's application. The Tariff Commission also
visited the corporate offices and manufacturing facilities of each of the
applicant companies, as well as that of Southern Cross and two other
cement importers.
On 13 March 2002, the Tariff Commission issued its Formal Investigation
Report ("Report"). Among the factors studied by the Tariff Commission in
its Report were the market share of the domestic industry, production and
sales, capacity utilization, financial performance and profitability, and
return on sales. The Tariff Commission arrived at the following conclusions:
1.

The circumstances provided in Article XIX of GATT 1994 need


not be demonstrated since the product under consideration

2.

3.
4.

5.
6.
7.

(gray Portland cement) is not the subject of any Philippine


obligation or tariff concession under the WTO Agreement.
Nonetheless, such inquiry is governed by the national
legislation (R.A. 8800) and the terms and conditions of the
Agreement on Safeguards.
The collective output of the twelve (12) applicant companies
constitutes a major proportion of the total domestic
production of gray Portland cement and blended Portland
cement.
Locally produced gray Portland cement and blended Portland
cement (Pozzolan) are "like" to imported gray Portland cement.
Gray Portland cement is being imported into the Philippines in
increased quantities, both in absolute terms and relative to
domestic production, starting in 2000. The increase in volume
of imports is recent, sudden, sharp and significant.
The industry has not suffered and is not suffering significant
overall impairment in its condition, i.e., serious injury.
There is no threat of serious injury that is imminent from
imports of gray Portland cement.
Causation has become moot and academic in view of the
negative determination of the elements of serious injury and
imminent threat of serious injury.

Accordingly, the Tariff Commission made the following recommendation,


to wit:
The elements of serious injury and imminent threat of serious injury
not having been established, it is hereby recommended that no
definitive general safeguard measure be imposed on the importation
of gray Portland cement.
The DTI received the Report on 14 March 2002. After reviewing the report,
then DTI Secretary Manuel Roxas II ("DTI Secretary") disagreed with the
conclusion of the Tariff Commission that there was no serious injury to the
local cement industry caused by the surge of imports. 25 In view of this
disagreement, the DTI requested an opinion from the Department of
Justice ("DOJ") on the DTI Secretary's scope of options in acting on the
Commission's recommendations. Subsequently, then DOJ Secretary
Hernando Perez rendered an opinion stating that Section 13 of the SMA
precluded a review by the DTI Secretary of the Tariff Commission's
negative finding, or finding that a definitive safeguard measure should not
be imposed.26
On 5 April 2002, the DTI Secretary promulgated a Decision. After quoting
the conclusions of the Tariff Commission, the DTI Secretary noted the DTI's
disagreement with the conclusions. However, he also cited the DOJ
Opinion advising the DTI that it was bound by the negative finding of the
Tariff Commission. Thus, he ruled as follows:
The DTI has no alternative but to abide by the [Tariff] Commission's
recommendations.
IN VIEW OF THE FOREGOING, and in accordance with Section 13 of
RA 8800 which states:
"In the event of a negative final determination; or if the cash
bond is in excess of the definitive safeguard duty assessed, the
Secretary shall immediately issue, through the Secretary of
Finance, a written instruction to the Commissioner of
Customs, authorizing the return of the cash bond or the

remainder thereof, as the case may be, previously collected as


provisional general safeguard measure within ten (10) days
from the date a final decision has been made; Provided, that
the government shall not be liable for any interest on the
amount to be returned. The Secretary shall not accept for
consideration another petition from the same industry, with
respect to the same imports of the product under
consideration within one (1) year after the date of rendering
such a decision."
The DTI hereby issues the following:
The application for safeguard measures against the importation of
gray Portland cement filed by PHILCEMCOR (Case No. 02-2001) is
hereby denied. (Emphasis in the original)
Philcemcor received a copy of the DTI Decision on 12 April 2002. Ten days
later, it filed with the Court of Appeals a Petition for Certiorari, Prohibition
and Mandamus28 seeking to set aside the DTI Decision, as well as the Tariff
Commission's Report. Philcemcor likewise applied for a Temporary
Restraining Order/Injunction to enjoin the DTI and the BOC from
implementing the questioned Decision and Report. It prayed that the Court
of Appeals direct the DTI Secretary to disregard the Report and to render
judgment independently of the Report. Philcemcor argued that the DTI
Secretary, vested as he is under the law with the power of review, is not
bound to adopt the recommendations of the Tariff Commission; and, that
the Report is void, as it is predicated on a flawed framework, inconsistent
inferences and erroneous methodology.29
On 10 June 2002, Southern Cross filed its Comment.30 It argued that the
Court of Appeals had no jurisdiction over Philcemcor's Petition, for it is on
the Court of Tax Appeals ("CTA") that the SMA conferred jurisdiction to
review rulings of the Secretary in connection with the imposition of a
safeguard measure. It likewise argued that Philcemcor's resort to the
special civil action of certiorari is improper, considering that what
Philcemcor sought to rectify is an error of judgment and not an error of
jurisdiction or grave abuse of discretion, and that a petition for review with
the CTA was available as a plain, speedy and adequate remedy. Finally,
Southern Cross echoed the DOJ Opinion that Section 13 of the SMA
precludes a review by the DTI Secretary of a negative finding of the Tariff
Commission.
After conducting a hearing on 19 June 2002 on Philcemcor's application for
preliminary injunction, the Court of Appeals' Twelfth Division 31 granted the
writ sought in its Resolution dated 21 June 2002.32 Seven days later, on 28
June 2002, the two-hundred (200)-day period for the imposition of the
provisional measure expired. Despite the lapse of the period, the BOC
continued to impose the provisional measure on all importations of
Portland cement made by Southern Cross. The uninterrupted assessment
of the tariff, according to Southern Cross, worked to its detriment to the
point that the continued imposition would eventually lead to its closure.33
Southern Cross timely filed a Motion for Reconsideration of the Resolution
on 9 September 2002. Alleging that Philcemcor was not entitled to
provisional relief, Southern Cross likewise sought a clarificatory order as to
whether the grant of the writ of preliminary injunction could extend the
earlier imposition of the provisional measure beyond the two hundred
(200)-day limit imposed by law. The appeals' court failed to take immediate
action on Southern Cross's motion despite the four (4) motions for early
resolution the latter filed between September of 2002 and February of

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 34

2003. After six (6) months, on 19 February 2003, the Court of Appeals
directed Philcemcor to comment on Southern Cross's Motion for
Reconsideration.34 After Philcemcor filed its Opposition35 on 13 March
2003, Southern Cross filed another set of four (4) motions for early
resolution.
Despite the efforts of Southern Cross, the Court of Appeals failed to
directly resolve the Motion for Reconsideration. Instead, on 5 June 2003, it
rendered a Decision,36 granting in part Philcemcor's petition. The appellate
court ruled that it had jurisdiction over the petition for certiorari since it
alleged grave abuse of discretion. It refused to annul the findings of the
Tariff Commission, citing the rule that factual findings of administrative
agencies are binding upon the courts and its corollary, that courts should
not interfere in matters addressed to the sound discretion and coming
under the special technical knowledge and training of such agencies.37
Nevertheless, it held that the DTI Secretary is not bound by the factual
findings of the Tariff Commission since such findings are merely
recommendatory and they fall within the ambit of the Secretary's
discretionary review. It determined that the legislative intent is to grant the
DTI Secretary the power to make a final decision on the Tariff Commission's
recommendation.38 The dispositive portion of the Decision reads:
WHEREFORE, based on the foregoing premises, petitioner's prayer to
set aside the findings of the Tariff Commission in its assailed Report
dated March 13, 2002 is DENIED. On the other hand, the assailed
April 5, 2002 Decision of the Secretary of the Department of Trade
and Industry is hereby SET ASIDE. Consequently, the case is
REMANDED to the public respondent Secretary of Department of
Trade and Industry for a final decision in accordance with RA 8800
and its Implementing Rules and Regulations.
SO ORDERED.39
On 23 June 2003, Southern Cross filed the present petition, assailing the
appellate court's Decision for departing from the accepted and usual
course of judicial proceedings, and not deciding the substantial questions
in accordance with law and jurisprudence. The petition argues in the main
that the Court of Appeals has no jurisdiction over Philcemcor's petition, the
proper remedy being a petition for review with the CTA conformably with
the SMA, and; that the factual findings of the Tariff Commission on the
existence or non-existence conditions warranting the imposition of general
safeguard measures are binding upon the DTI Secretary.
The timely filing of Southern Cross's petition before this Court necessarily
prevented the Court of Appeals Decision from becoming final.40 Yet on 25
June 2003, the DTI Secretary issued a new Decision, ruling this time that
that in light of the appellate court's Decision there was no longer any legal
impediment to his deciding Philcemcor's application for definitive
safeguard measures.41 He made a determination that, contrary to the
findings of the Tariff Commission, the local cement industry had suffered
serious injury as a result of the import surges. 42 Accordingly, he imposed a
definitive safeguard measure on the importation of gray Portland cement,
in the form of a definitive safeguard duty in the amount of P20.60/40 kg.
bag for three years on imported gray Portland Cement.43
On 7 July 2003, Southern Cross filed with the Court a "Very Urgent
Application for a Temporary Restraining Order and/or A Writ of Preliminary
Injunction" ("TRO Application"), seeking to enjoin the DTI Secretary from
enforcing his Decision of 25 June 2003 in view of the pending petition
before this Court. Philcemcor filed an opposition, claiming, among others,

that it is not this Court but the CTA that has jurisdiction over the
application under the law.

The Jurisdictional Issue


On to the merits of the present petition.

On 1 August 2003, Southern Cross filed with the CTA a Petition for Review,
assailing the DTI Secretary's 25 June 2003 Decision which imposed the
definite safeguard measure. Prescinding from this action, Philcemcor filed
with this Court a Manifestation and Motion to Dismiss in regard to
Southern Cross's petition, alleging that it deliberately and willfully resorted
to forum-shopping. It points out that Southern Cross's TRO Application
seeks to enjoin the DTI Secretary's second decision, while its Petition
before the CTA prays for the annulment of the same decision.44

In its assailed Decision, the Court of Appeals, after asserting only in brief
that it had jurisdiction over Philcemcor's Petition, discussed the issue of
whether or not the DTI Secretary is bound to adopt the negative
recommendation of the Tariff Commission on the application for safeguard
measure. The Court of Appeals maintained that it had jurisdiction over the
petition, as it alleged grave abuse of discretion on the part of the DTI
Secretary, thus:

Reiterating its Comment on Southern Cross's Petition for Review,


Philcemcor also argues that the CTA, being a special court of limited
jurisdiction, could only review the ruling of the DTI Secretary when a
safeguard measure is imposed, and that the factual findings of the Tariff
Commission are not binding on the DTI Secretary.45

A perusal of the instant petition reveals allegations of grave abuse of


discretion on the part of the DTI Secretary in rendering the assailed
April 5, 2002 Decision wherein it was ruled that he had no alternative
but to abide by the findings of the Commission on the matter of
safeguard measures for the local cement industry. Abuse of
discretion is admittedly within the ambit of certiorari.

After giving due course to Southern Cross's Petition, the Court called the
case for oral argument on 18 February 2004.46 At the oral argument,
attended by the counsel for Philcemcor and Southern Cross and the Office
of the Solicitor General, the Court simplified the issues in this wise: (i)
whether the Decision of the DTI Secretary is appealable to the CTA or the
Court of Appeals; (ii) assuming that the Court of Appeals has jurisdiction,
whether its Decision is in accordance with law; and, (iii) whether a
Temporary Restraining Order is warranted.47

Grave abuse of discretion implies such capricious and whimsical


exercise of judgment as is equivalent to lack of jurisdiction. It is
alleged that, in the assailed Decision, the DTI Secretary gravely
abused his discretion in wantonly evading to discharge his duty to
render an independent determination or decision in imposing a
definitive safeguard measure.54

During the oral arguments, counsel for Southern Cross manifested that due
to the imposition of the general safeguard measures, Southern Cross was
forced to cease operations in the Philippines in November of 2003.48
Propriety of the Temporary Restraining Order
Before the merits of the Petition, a brief comment on Southern Cross's
application for provisional relief. It sought to enjoin the DTI Secretary from
enforcing the definitive safeguard measure he imposed in his 25 June 2003
Decision. The Court did not grant the provisional relief for it would be
tantamount to enjoining the collection of taxes, a peremptory judicial act
which is traditionally frowned upon,49 unless there is a clear statutory basis
for it.50 In that regard, Section 218 of the Tax Reform Act of 1997 prohibits
any court from granting an injunction to restrain the collection of any
national internal revenue tax, fee or charge imposed by the internal
revenue code.51 A similar philosophy is expressed by Section 29 of the
SMA, which states that the filing of a petition for review before the CTA
does not stop, suspend, or otherwise toll the imposition or collection of the
appropriate tariff duties or the adoption of other appropriate safeguard
measures.52 This evinces a clear legislative intent that the imposition of
safeguard measures, despite the availability of judicial review, should not
be enjoined notwithstanding any timely appeal of the imposition.
The Forum-Shopping Issue
In the same breath, we are not convinced that the allegation of forumshopping has been duly proven, or that sanction should befall upon
Southern Cross and its counsel. The standard by Section 5, Rule 7 of the
1997 Rules of Civil Procedure in order that sanction may be had is that "the
acts of the party or his counsel clearly constitute willful and deliberate
forum shopping."53 The standard implies a malicious intent to subvert
procedural rules, and such state of mind is not evident in this case.

We do not doubt that the Court of Appeals' certiorari powers extend to


correcting grave abuse of discretion on the part of an officer exercising
judicial or quasi-judicial functions.55 However, the special civil action of
certiorari is available only when there is no plain, speedy and adequate
remedy in the ordinary course of law.56 Southern Cross relies on this
limitation, stressing that Section 29 of the SMA is a plain, speedy and
adequate remedy in the ordinary course of law which Philcemcor did not
avail of. The Section reads:
Section 29. Judicial Review. Any interested party who is adversely
affected by the ruling of the Secretary in connection with the
imposition of a safeguard measure may file with the CTA, a petition
for review of such ruling within thirty (30) days from receipt thereof.
Provided, however, that the filing of such petition for review shall not
in any way stop, suspend or otherwise toll the imposition or
collection of the appropriate tariff duties or the adoption of other
appropriate safeguard measures, as the case may be.
The petition for review shall comply with the same requirements and
shall follow the same rules of procedure and shall be subject to the
same disposition as in appeals in connection with adverse rulings on
tax matters to the Court of Appeals.57 (Emphasis supplied)
It is not difficult to divine why the legislature singled out the CTA as the
court with jurisdiction to review the ruling of the DTI Secretary in
connection with the imposition of a safeguard measure. The Court has long
recognized the legislative determination to vest sole and exclusive
jurisdiction on matters involving internal revenue and customs duties to
such a specialized court.58 By the very nature of its function, the CTA is
dedicated exclusively to the study and consideration of tax problems and
has necessarily developed an expertise on the subject. 59
At the same time, since the CTA is a court of limited jurisdiction, its
jurisdiction to take cognizance of a case should be clearly conferred and

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 35

should not be deemed to exist on mere implication.60 Concededly, Rep. Act


No. 1125, the statute creating the CTA, does not extend to it the power to
review decisions of the DTI Secretary in connection with the imposition of
safeguard measures.61 Of course, at that time which was before the advent
of trade liberalization the notion of safeguard measures or safety nets was
not yet in vogue.
Undeniably, however, the SMA expanded the jurisdiction of the CTA by
including review of the rulings of the DTI Secretary in connection with the
imposition of safeguard measures. However, Philcemcor and the public
respondents agree that the CTA has appellate jurisdiction over a decision of
the DTI Secretary imposing a safeguard measure, but not when his ruling is
not to impose such measure.
In a related development, Rep. Act No. 9282, enacted on 30 March 2004,
expressly vests unto the CTA jurisdiction over "[d]ecisions of the Secretary
of Trade and Industry, in case of nonagricultural product, commodity or
article xxx involving xxx safeguard measures under Republic Act No. 8800,
where either party may appeal the decision to impose or not to impose
said duties."62 Had Rep. Act No. 9282 already been in force at the
beginning of the incidents subject of this case, there would have been no
need to make any deeper inquiry as to the extent of the CTA's jurisdiction.
But as Rep. Act No. 9282 cannot be applied retroactively to the present
case, the question of whether such jurisdiction extends to a decision not to
impose a safeguard measure will have to be settled principally on the basis
of the SMA.
Under Section 29 of the SMA, there are three requisites to enable the CTA
to acquire jurisdiction over the petition for review contemplated therein:
(i) there must be a ruling by the DTI Secretary; (ii) the petition must be filed
by an interested party adversely affected by the ruling; and (iii) such ruling
must be in connection with the imposition of a safeguard measure. The
first two requisites are clearly present. The third requisite deserves closer
scrutiny.
Contrary to the stance of the public respondents and Philcemcor, in this
case where the DTI Secretary decides not to impose a safeguard measure,
it is the CTA which has jurisdiction to review his decision. The reasons are
as follows:
First. Split jurisdiction is abhorred.
Essentially, respondents' position is that judicial review of the DTI
Secretary's ruling is exercised by two different courts, depending on
whether or not it imposes a safeguard measure, and in either case the
court exercising jurisdiction does so to the exclusion of the other. Thus, if
the DTI decision involves the imposition of a safeguard measure it is the
CTA which has appellate jurisdiction; otherwise, it is the Court of Appeals.
Such setup is as novel and unusual as it is cumbersome and unwise.
Essentially, respondents advocate that Section 29 of the SMA has
established split appellate jurisdiction over rulings of the DTI Secretary on
the imposition of safeguard measure.
This interpretation cannot be favored, as the Court has consistently refused
to sanction split jurisdiction.63 The power of the DTI Secretary to adopt or
withhold a safeguard measure emanates from the same statutory source,
and it boggles the mind why the appeal modality would be such that one
appellate court is qualified if what is to be reviewed is a positive
determination, and it is not if what is appealed is a negative determination.
In deciding whether or not to impose a safeguard measure, provisional or

general, the DTI Secretary would be evaluating only one body of facts and
applying them to one set of laws. The reviewing tribunal will be called upon
to examine the same facts and the same laws, whether or not the
determination is positive or negative.
In short, if we were to rule for respondents we would be confirming the
exercise by two judicial bodies of jurisdiction over basically the same
subject matterprecisely the split-jurisdiction situation which is anathema
to the orderly administration of justice. 64 The Court cannot accept that
such was the legislative motive especially considering that the law
expressly confers on the CTA, the tribunal with the specialized competence
over tax and tariff matters, the role of judicial review without mention of
any other court that may exercise corollary or ancillary jurisdiction in
relation to the SMA. The provision refers to the Court of Appeals but only
in regard to procedural rules and dispositions of appeals from the CTA to
the Court of Appeals.65
The principle enunciated in Tejada v. Homestead Property Corporation 66 is
applicable to the case at bar:
The Court agrees with the observation of the [that] when an
administrative agency or body is conferred quasi-judicial functions,
all controversies relating to the subject matter pertaining to its
specialization are deemed to be included within the jurisdiction of
said administrative agency or body. Split jurisdiction is not favored.
Second. The interpretation of the provisions of the SMA favors vesting
untrammeled appellate jurisdiction on the CTA.
A plain reading of Section 29 of the SMA reveals that Congress did not
expressly bar the CTA from reviewing a negative determination by the DTI
Secretary nor conferred on the Court of Appeals such review authority.
Respondents note, on the other hand, that neither did the law expressly
grant to the CTA the power to review a negative determination. However,
under the clear text of the law, the CTA is vested with jurisdiction to review
the ruling of the DTI Secretary "in connection with the imposition of a
safeguard measure." Had the law been couched instead to incorporate the
phrase "the ruling imposing a safeguard measure," then respondent's claim
would have indisputable merit. Undoubtedly, the phrase "in connection
with" not only qualifies but clarifies the succeeding phrase "imposition of a
safeguard measure." As expounded later, the phrase also encompasses the
opposite or converse ruling which is the non-imposition of a safeguard
measure.
In the American case of Shaw v. Delta Air Lines, Inc.,68 the United States
Supreme Court, in interpreting a key provision of the Employee Retirement
Security Act of 1974, construed the phrase "relates to" in its normal sense
which is the same as "if it has connection with or reference to." 69 There is
no serious dispute that the phrase "in connection with" is synonymous to
"relates to" or "reference to," and that all three phrases are broadly
expansive. This is affirmed not just by jurisprudential fiat, but also the
acquired connotative meaning of "in connection with" in common
parlance. Consequently, with the use of the phrase "in connection with,"
Section 29 allows the CTA to review not only the ruling imposing a
safeguard measure, but all other rulings related or have reference to the
application for such measure.
Now, let us determine the maximum scope and reach of the phrase "in
connection with" as used in Section 29 of the SMA. A literalist reading or
linguistic survey may not satisfy. Even the US Supreme Court in New York

State Blue Cross Plans v. Travelers Ins.70 conceded that the phrases "relate
to" or "in connection with" may be extended to the farthest stretch of
indeterminacy for, universally, relations or connections are infinite and
stop nowhere.71 Thus, in the case the US High Court, examining the same
phrase of the same provision of law involved in Shaw, resorted to looking
at the statute and its objectives as the alternative to an "uncritical
literalism."72 A similar inquiry into the other provisions of the SMA is in
order to determine the scope of review accorded therein to the CTA. 73
The authority to decide on the safeguard measure is vested in the DTI
Secretary in the case of non-agricultural products, and in the Secretary of
the Department of Agriculture in the case of agricultural products.74
Section 29 is likewise explicit that only the rulings of the DTI Secretary or
the Agriculture Secretary may be reviewed by the CTA. 75 Thus, the acts of
other bodies that were granted some powers by the SMA, such as the
Tariff Commission, are not subject to direct review by the CTA.
Under the SMA, the Department Secretary concerned is authorized to
decide on several matters. Within thirty (30) days from receipt of a petition
seeking the imposition of a safeguard measure, or from the date he made
motu proprio initiation, the Secretary shall make a preliminary
determination on whether the increased imports of the product under
consideration substantially cause or threaten to cause serious injury to the
domestic industry.76 Such ruling is crucial since only upon the Secretary's
positive preliminary determination that a threat to the domestic industry
exists shall the matter be referred to the Tariff Commission for formal
investigation, this time, to determine whether the general safeguard
measure should be imposed or not.77 Pursuant to a positive preliminary
determination, the Secretary may also decide that the imposition of a
provisional safeguard measure would be warranted under Section 8 of the
SMA.78 The Secretary is also authorized to decide, after receipt of the
report of the Tariff Commission, whether or not to impose the general
safeguard measure, and if in the affirmative, what general safeguard
measures should be applied.79 Even after the general safeguard measure is
imposed, the Secretary is empowered to extend the safeguard measure,80
or terminate, reduce or modify his previous rulings on the general
safeguard measure.81
With the explicit grant of certain powers involving safeguard measures by
the SMA on the DTI Secretary, it follows that he is empowered to rule on
several issues. These are the issues which arise in connection with, or in
relation to, the imposition of a safeguard measure. They may arise at
different stages the preliminary investigation stage, the post-formal
investigation stage, or the post-safeguard measure stage yet all these
issues do become ripe for resolution because an initiatory action has been
taken seeking the imposition of a safeguard measure. It is the initiatory
action for the imposition of a safeguard measure that sets the wheels in
motion, allowing the Secretary to make successive rulings, beginning with
the preliminary determination.
Clearly, therefore, the scope and reach of the phrase "in connection with,"
as intended by Congress, pertain to all rulings of the DTI Secretary or
Agriculture Secretary which arise from the time an application or motu
proprio initiation for the imposition of a safeguard measure is taken.
Indeed, the incidents which require resolution come to the fore only
because there is an initial application or action seeking the imposition of a
safeguard measure. From the legislative standpoint, it was a matter of
sense and practicality to lump up the questions related to the initiatory
application or action for safeguard measure and to assign only one court

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and; that is the CTA to initially review all the rulings related to such
initiatory application or action. Both directions Congress put in place by
employing the phrase "in connection with" in the law.
Given the relative expanse of decisions subject to judicial review by the
CTA under Section 29, we do not doubt that a negative ruling refusing to
impose a safeguard measure falls within the scope of its jurisdiction. On a
literal level, such negative ruling is "a ruling of the Secretary in connection
with the imposition of a safeguard measure," as it is one of the possible
outcomes that may result from the initial application or action for a
safeguard measure. On a more critical level, the rulings of the DTI Secretary
in connection with a safeguard measure, however diverse the outcome
may be, arise from the same grant of jurisdiction on the DTI Secretary by
the SMA.82 The refusal by the DTI Secretary to grant a safeguard measure
involves the same grant of authority, the same statutory prescriptions, and
the same degree of discretion as the imposition by the DTI Secretary of a
safeguard measure.
The position of the respondents is one of "uncritical literalism"83
incongruent with the animus of the law. Moreover, a fundamentalist
approach to Section 29 is not warranted, considering the absurdity of the
consequences.
Third. Interpretatio Talis In Ambiguis Semper Fienda Est, Ut Evitur
Inconveniens Et Absurdum.84
Even assuming arguendo that Section 29 has not expressly granted the CTA
jurisdiction to review a negative ruling of the DTI Secretary, the Court is
precluded from favoring an interpretation that would cause inconvenience
and absurdity.85 Adopting the respondents' position favoring the CTA's
minimal jurisdiction would unnecessarily lead to illogical and onerous
results.
Indeed, it is illiberal to assume that Congress had intended to provide
appellate relief to rulings imposing a safeguard measure but not to those
declining to impose the measure. Respondents might argue that the right
to relief from a negative ruling is not lost since the applicant could, as
Philcemcor did, question such ruling through a special civil action for
certiorari under Rule 65 of the 1997 Rules of Civil Procedure, in lieu of an
appeal to the CTA. Yet these two reliefs are of differing natures and
gravamen. While an appeal may be predicated on errors of fact or errors of
law, a special civil action for certiorari is grounded on grave abuse of
discretion or lack of or excess of jurisdiction on the part of the decider. For
a special civil action for certiorari to succeed, it is not enough that the
questioned act of the respondent is wrong. As the Court clarified in Sempio
v. Court of Appeals:
A tribunal, board or officer acts without jurisdiction if it/he does not
have the legal power to determine the case. There is excess of
jurisdiction where, being clothed with the power to determine the
case, the tribunal, board or officer oversteps its/his authority as
determined by law. And there is grave abuse of discretion where the
tribunal, board or officer acts in a capricious, whimsical, arbitrary or
despotic manner in the exercise of his judgment as to be said to be
equivalent to lack of jurisdiction. Certiorari is often resorted to in
order to correct errors of jurisdiction. Where the error is one of law
or of fact, which is a mistake of judgment, appeal is the remedy. 86
It is very conceivable that the DTI Secretary, after deliberate thought and
careful evaluation of the evidence, may either make a negative preliminary

determination as he is so empowered under Section 7 of the SMA, or


refuse to adopt the definitive safeguard measure under Section 13 of the
same law. Adopting the respondents' theory, this negative ruling is
susceptible to reversal only through a special civil action for certiorari, thus
depriving the affected party the chance to elevate the ruling on appeal on
the rudimentary grounds of errors in fact or in law. Instead, and despite
whatever indications that the DTI Secretary acted with measure and within
the bounds of his jurisdiction are, the aggrieved party will be forced to
resort to a gymnastic exercise, contorting the straight and narrow in an
effort to discombobulate the courts into believing that what was within
was actually beyond and what was studied and deliberate actually
whimsical and capricious. What then would be the remedy of the party
aggrieved by a negative ruling that simply erred in interpreting the facts or
the law? It certainly cannot be the special civil action for certiorari, for as
the Court held in Silverio v. Court of Appeals: "Certiorari is a remedy narrow
in its scope and inflexible in its character. It is not a general utility tool in
the legal workshop."87
Fortunately, this theoretical quandary need not come to pass. Section 29 of
the SMA is worded in such a way that it places under the CTA's judicial
review all rulings of the DTI Secretary, which are connected with the
imposition of a safeguard measure. This is sound and proper in light of the
specialized jurisdiction of the CTA over tax matters. In the same way that a
question of whether to tax or not to tax is properly a tax matter, so is the
question of whether to impose or not to impose a definitive safeguard
measure.
On another note, the second paragraph of Section 29 similarly reveals the
legislative intent that rulings of the DTI Secretary over safeguard measures
should first be reviewed by the CTA and not the Court of Appeals. It reads:
The petition for review shall comply with the same requirements and
shall follow the same rules of procedure and shall be subject to the
same disposition as in appeals in connection with adverse rulings on
tax matters to the Court of Appeals.
This is the only passage in the SMA in which the Court of Appeals is
mentioned. The express wish of Congress is that the petition conform to
the requirements and procedure under Rule 43 of the Rules of Civil
Procedure. Since Congress mandated that the form and procedure adopted
be analogous to a review of a CTA ruling by the Court of Appeals, the
legislative contemplation could not have been that the appeal be directly
taken to the Court of Appeals.
Issue of Binding Effect of Tariff Commission's Factual Determination
on DTI Secretary.

Undoubtedly, Section 13 prescribes certain limitations and restrictions


before general safeguard measures may be imposed. However, the most
fundamental restriction on the DTI Secretary's power in that respect is
contained in Section 5 of the SMAthat there should first be a positive
final determination of the Tariff Commissionwhich the Court of Appeals
curiously all but ignored. Section 5 reads:
Sec. 5. Conditions for the Application of General Safeguard Measures.
The Secretary shall apply a general safeguard measure upon a
positive final determination of the [Tariff] Commission that a
product is being imported into the country in increased quantities,
whether absolute or relative to the domestic production, as to be a
substantial cause of serious injury or threat thereof to the domestic
industry; however, in the case of non-agricultural products, the
Secretary shall first establish that the application of such safeguard
measures will be in the public interest. (emphasis supplied)
The plain meaning of Section 5 shows that it is the Tariff Commission that
has the power to make a "positive final determination." This power lodged
in the Tariff Commission, must be distinguished from the power to impose
the general safeguard measure which is properly vested on the DTI
Secretary.88
All in all, there are two condition precedents that must be satisfied before
the DTI Secretary may impose a general safeguard measure on grey
Portland cement. First, there must be a positive final determination by the
Tariff Commission that a product is being imported into the country in
increased quantities (whether absolute or relative to domestic production),
as to be a substantial cause of serious injury or threat to the domestic
industry. Second, in the case of non-agricultural products the Secretary
must establish that the application of such safeguard measures is in the
public interest.89 As Southern Cross argues, Section 5 is quite clear-cut, and
it is impossible to finagle a different conclusion even through overarching
methods of statutory construction. There is no safer nor better settled
canon of interpretation that when language is clear and unambiguous it
must be held to mean what it plainly expresses:90 In the quotable words of
an illustrious member of this Court, thus:
[I]f a statute is clear, plain and free from ambiguity, it must be given
its literal meaning and applied without attempted interpretation. The
verba legis or plain meaning rule rests on the valid presumption that
the words employed by the legislature in a statute correctly express
its intent or will and preclude the court from construing it differently.
The legislature is presumed to know the meaning of the words, to
have used words advisedly, and to have expressed its intent by the
use of such words as are found in the statute.91

The next issue for resolution is whether the factual determination made by
the Tariff Commission under the SMA is binding on the DTI Secretary.
Otherwise stated, the question is whether the DTI Secretary may impose
general safeguard measures in the absence of a positive final
determination by the Tariff Commission.

Moreover, Rule 5 of the Implementing Rules and Regulations of the SMA,92


which interprets Section 5 of the law, likewise requires a positive final
determination on the part of the Tariff Commission before the application
of the general safeguard measure.

The Court of Appeals relied upon Section 13 of the SMA in ruling that the
findings of the Tariff Commission do not necessarily constitute a final
decision. Section 13 details the procedure for the adoption of a safeguard
measure, as well as the steps to be taken in case there is a negative final
determination. The implication of the Court of Appeals' holding is that the
DTI Secretary may adopt a definitive safeguard measure, notwithstanding a
negative determination made by the Tariff Commission.

The SMA establishes a distinct allocation of functions between the Tariff


Commission and the DTI Secretary. The plain meaning of Section 5 shows
that it is the Tariff Commission that has the power to make a "positive final
determination." This power, which belongs to the Tariff Commission, must
be distinguished from the power to impose general safeguard measure
properly vested on the DTI Secretary. The distinction is vital, as a "positive
final determination" clearly antecedes, as a condition precedent, the
imposition of a general safeguard measure. At the same time, a positive

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 37

final determination does not necessarily result in the imposition of a


general safeguard measure. Under Section 5, notwithstanding the positive
final determination of the Tariff Commission, the DTI Secretary is tasked to
decide whether or not that the application of the safeguard measures is in
the public interest.
It is also clear from Section 5 of the SMA that the positive final
determination to be undertaken by the Tariff Commission does not entail a
mere gathering of statistical data. In order to arrive at such determination,
it has to establish causal linkages from the statistics that it compiles and
evaluates: after finding there is an importation in increased quantities of
the product in question, that such importation is a substantial cause of
serious threat or injury to the domestic industry.
The Court of Appeals relies heavily on the legislative record of a
congressional debate during deliberations on the SMA to assert a
purported legislative intent that the findings of the Tariff Commission do
not bind the DTI Secretary.93 Yet as explained earlier, the plain meaning of
Section 5 emphasizes that only if the Tariff Commission renders a positive
determination could the DTI Secretary impose a safeguard measure. Resort
to the congressional records to ascertain legislative intent is not warranted
if a statute is clear, plain and free from ambiguity. The legislature is
presumed to know the meaning of the words, to have used words
advisedly, and to have expressed its intent by the use of such words as are
found in the statute.94
Indeed, the legislative record, if at all to be availed of, should be
approached with extreme caution, as legislative debates and proceedings
are powerless to vary the terms of the statute when the meaning is clear. 95
Our holding in Civil Liberties Union v. Executive Secretary96 on the resort to
deliberations of the constitutional convention to interpret the Constitution
is likewise appropriate in ascertaining statutory intent:
While it is permissible in this jurisdiction to consult the debates and
proceedings of the constitutional convention in order to arrive at the
reason and purpose of the resulting Constitution, resort thereto may
be had only when other guides fail as said proceedings are powerless
to vary the terms of the Constitution when the meaning is clear.
Debates in the constitutional convention "are of value as showing the
views of the individual members, and as indicating the reasons for
their votes, but they give us no light as to the views of the large
majority who did not talk xxx. We think it safer to construe the
constitution from what appears upon its face."97
Moreover, it is easy to selectively cite passages, sometimes out of their
proper context, in order to assert a misleading interpretation. The effect
can be dangerous. Minority or solitary views, anecdotal ruminations, or
even the occasional crude witticisms, may improperly acquire the mantle
of legislative intent by the sole virtue of their publication in the
authoritative congressional record. Hence, resort to legislative
deliberations is allowable when the statute is crafted in such a manner as
to leave room for doubt on the real intent of the legislature.
Section 5 plainly evinces legislative intent to restrict the DTI Secretary's
power to impose a general safeguard measure by preconditioning such
imposition on a positive determination by the Tariff Commission. Such
legislative intent should be given full force and effect, as the executive
power to impose definitive safeguard measures is but a delegated
powerthe power of taxation, by nature and by command of the
fundamental law, being a preserve of the legislature. 98 Section 28(2),

Article VI of the 1987 Constitution confirms the delegation of legislative


power, yet ensures that the prerogative of Congress to impose limitations
and restrictions on the executive exercise of this power:
The Congress may, by law, authorize the President to fix within
specified limits, and subject to such limitations and restrictions as it
may impose, tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts within the framework of
the national development program of the Government.
The safeguard measures which the DTI Secretary may impose under the
SMA may take the following variations, to wit: (a) an increase in, or
imposition of any duty on the imported product; (b) a decrease in or the
imposition of a tariff-rate quota on the product; (c) a modification or
imposition of any quantitative restriction on the importation of the product
into the Philippines; (d) one or more appropriate adjustment measures,
including the provision of trade adjustment assistance; and (e) any
combination of the above-described actions. Except for the provision of
trade adjustment assistance, the measures enumerated by the SMA are
essentially imposts, which precisely are the subject of delegation under
Section 28(2), Article VI of the 1987 Constitution.100
This delegation of the taxation power by the legislative to the executive is
authorized by the Constitution itself.101 At the same time, the Constitution
also grants the delegating authority (Congress) the right to impose
restrictions and limitations on the taxation power delegated to the
President.102 The restrictions and limitations imposed by Congress take on
the mantle of a constitutional command, which the executive branch is
obliged to observe.
The SMA empowered the DTI Secretary, as alter ego of the President,103 to
impose definitive general safeguard measures, which basically are tariff
imposts of the type spoken of in the Constitution. However, the law did not
grant him full, uninhibited discretion to impose such measures. The DTI
Secretary authority is derived from the SMA; it does not flow from any
inherent executive power. Thus, the limitations imposed by Section 5 are
absolute, warranted as they are by a constitutional fiat.104
Philcemcor cites our 1912 ruling in Lamb v. Phipps105 to assert that the DTI
Secretary, having the final decision on the safeguard measure, has the
power to evaluate the findings of the Tariff Commission and make an
independent judgment thereon. Given the constitutional and statutory
limitations governing the present case, the citation is misplaced. Lamb
pertained to the discretion of the Insular Auditor of the Philippine Islands,
whom, as the Court recognized, "[t]he statutes of the United States
require[d] xxx to exercise his judgment upon the legality xxx [of] provisions
of law and resolutions of Congress providing for the payment of money,
the means of procuring testimony upon which he may act."106
Thus in Lamb, while the Court recognized the wide latitude of discretion
that may have been vested on the Insular Auditor, it also recognized that
such latitude flowed from, and is consequently limited by, statutory grant.
However, in this case, the provision of the Constitution in point expressly
recognizes the authority of Congress to prescribe limitations in the case of
tariffs, export/import quotas and other such safeguard measures. Thus, the
broad discretion granted to the Insular Auditor of the Philippine Islands
cannot be analogous to the discretion of the DTI Secretary which is
circumscribed by Section 5 of the SMA.

For that matter, Cario v. Commissioner on Human Rights,107 likewise cited


by Philcemcor, is also inapplicable owing to the different statutory regimes
prevailing over that case and the present petition. In Cario, the Court
ruled that the constitutional power of the Commission on Human Rights
(CHR) to investigate human rights' violations did not extend to adjudicating
claims on the merits.108 Philcemcor claims that the functions of the Tariff
Commission being "only investigatory," it could neither decide nor
adjudicate.109
The applicable law governing the issue in Cario is Section 18, Article XIII of
the Constitution, which delineates the powers and functions of the CHR.
The provision does not vest on the CHR the power to adjudicate cases, but
only to investigate all forms of human rights violations. 110 Yet, without
modifying the thorough disquisition of the Court in Cario on the general
limitations on the investigatory power, the precedent is inapplicable
because of the difference in the involved statutory frameworks. The
Constitution does not repose binding effect on the results of the CHR's
investigation.111 On the other hand, through Section 5 of the SMA and
under the authority of Section 28(2), Article VI of the Constitution,
Congress did intend to bind the DTI Secretary to the determination made
by the Tariff Commission.112 It is of no consequence that such
determination results from the exercise of investigatory powers by the
Tariff Commission since Congress is well within its constitutional mandate
to limit the authority of the DTI Secretary to impose safeguard measures in
the manner that it sees fit.
The Court of Appeals and Philcemcor also rely on Section 13 of the SMA
and Rule 13 of the SMA's Implementing Rules in support of the view that
the DTI Secretary may decide independently of the determination made by
the Tariff Commission. Admittedly, there are certain infelicities in the
language of Section 13 and Rule 13. But reliance should not be placed on
the textual imprecisions. Rather, Section 13 and Rule 13 must be viewed in
light of the fundamental prescription imposed by Section 5. 113
Section 13 of the SMA lays down the procedure to be followed after the
Tariff Commission renders its report. The provision reads in full:
SEC. 13. Adoption of Definitive Measures. Upon its positive
determination, the Commission shall recommend to the Secretary an
appropriate definitive measure, in the form of:
(a)
(b)
(c)
(d)
(e)

An increase in, or imposition of, any duty on the imported


product;
A decrease in or the imposition of a tariff-rate quota (MAV) on
the product;
A modification or imposition of any quantitative restriction on
the importation of the product into the Philippines;
One or more appropriate adjustment measures, including the
provision of trade adjustment assistance;
Any combination of actions described in subparagraphs (a) to
(d).

The Commission may also recommend other actions, including the


initiation of international negotiations to address the underlying
cause of the increase of imports of the product, to alleviate the injury
or threat thereof to the domestic industry, and to facilitate positive
adjustment to import competition.
The general safeguard measure shall be limited to the extent of
redressing or preventing the injury and to facilitate adjustment by

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 38

the domestic industry from the adverse effects directly attributed to


the increased imports: Provided, however, That when quantitative
import restrictions are used, such measures shall not reduce the
quantity of imports below the average imports for the three (3)
preceding representative years, unless clear justification is given that
a different level is necessary to prevent or remedy a serious injury.
A general safeguard measure shall not be applied to a product
originating from a developing country if its share of total imports of
the product is less than three percent (3%): Provided, however, That
developing countries with less than three percent (3%) share
collectively account for not more than nine percent (9%) of the total
imports.
The decision imposing a general safeguard measure, the duration of
which is more than one (1) year, shall be reviewed at regular
intervals for purposes of liberalizing or reducing its intensity. The
industry benefiting from the application of a general safeguard
measure shall be required to show positive adjustment within the
allowable period. A general safeguard measure shall be terminated
where the benefiting industry fails to show any improvement, as may
be determined by the Secretary.
The Secretary shall issue a written instruction to the heads of the
concerned government agencies to implement the appropriate
general safeguard measure as determined by the Secretary within
fifteen (15) days from receipt of the report.
In the event of a negative final determination, or if the cash bond is
in excess of the definitive safeguard duty assessed, the Secretary
shall immediately issue, through the Secretary of Finance, a written
instruction to the Commissioner of Customs, authorizing the return
of the cash bond or the remainder thereof, as the case may be,
previously collected as provisional general safeguard measure within
ten (10) days from the date a final decision has been made: Provided,
That the government shall not be liable for any interest on the
amount to be returned. The Secretary shall not accept for
consideration another petition from the same industry, with respect
to the same imports of the product under consideration within one
(1) year after the date of rendering such a decision.
When the definitive safeguard measure is in the form of a tariff
increase, such increase shall not be subject or limited to the
maximum levels of tariff as set forth in Section 401(a) of the Tariff
and Customs Code of the Philippines.
To better comprehend Section 13, note must be taken of the distinction
between the investigatory and recommendatory functions of the Tariff
Commission under the SMA.
The word "determination," as used in the SMA, pertains to the factual
findings on whether there are increased imports into the country of the
product under consideration, and on whether such increased imports are a
substantial cause of serious injury or threaten to substantially cause
serious injury to the domestic industry.114 The SMA explicitly authorizes the
DTI Secretary to make a preliminary determination,115 and the Tariff
Commission to make the final determination. 116 The distinction is
fundamental, as these functions are not interchangeable. The Tariff
Commission makes its determination only after a formal investigation
process, with such investigation initiated only if there is a positive

preliminary determination by the DTI Secretary under Section 7 of the


SMA.117 On the other hand, the DTI Secretary may impose definitive
safeguard measure only if there is a positive final determination made by
the Tariff Commission.118
In contrast, a "recommendation" is a suggested remedial measure
submitted by the Tariff Commission under Section 13 after making a
positive final determination in accordance with Section 5. The Tariff
Commission is not empowered to make a recommendation absent a
positive final determination on its part.119 Under Section 13, the Tariff
Commission is required to recommend to the [DTI] Secretary an
"appropriate definitive measure."120 The Tariff Commission "may also
recommend other actions, including the initiation of international
negotiations to address the underlying cause of the increase of imports of
the products, to alleviate the injury or threat thereof to the domestic
industry and to facilitate positive adjustment to import competition."121
The recommendations of the Tariff Commission, as rendered under Section
13, are not obligatory on the DTI Secretary. Nothing in the SMA mandates
the DTI Secretary to adopt the recommendations made by the Tariff
Commission. In fact, the SMA requires that the DTI Secretary establish that
the application of such safeguard measures is in the public interest,
notwithstanding the Tariff Commission's recommendation on the
appropriate safeguard measure based on its positive final determination.122
The non-binding force of the Tariff Commission's recommendations is
congruent with the command of Section 28(2), Article VI of the 1987
Constitution that only the President may be empowered by the Congress to
impose appropriate tariff rates, import/export quotas and other similar
measures.123 It is the DTI Secretary, as alter ego of the President, who
under the SMA may impose such safeguard measures subject to the
limitations imposed therein. A contrary conclusion would in essence unduly
arrogate to the Tariff Commission the executive power to impose the
appropriate tariff measures. That is why the SMA empowers the DTI
Secretary to adopt safeguard measures other than those recommended by
the Tariff Commission.
Unlike the recommendations of the Tariff Commission, its determination
has a different effect on the DTI Secretary. Only on the basis of a positive
final determination made by the Tariff Commission under Section 5 can the
DTI Secretary impose a general safeguard measure. Clearly, then the DTI
Secretary is bound by the determination made by the Tariff Commission.
Some confusion may arise because the sixth paragraph of Section 13124
uses the variant word "determined" in a different context, as it
contemplates "the appropriate general safeguard measure as determined
by the Secretary within fifteen (15) days from receipt of the report." Quite
plainly, the word "determined" in this context pertains to the DTI
Secretary's power of choice of the appropriate safeguard measure, as
opposed to the Tariff Commission's power to determine the existence of
conditions necessary for the imposition of any safeguard measure. In
relation to Section 5, such choice also relates to the mandate of the DTI
Secretary to establish that the application of safeguard measures is in the
public interest, also within the fifteen (15) day period. Nothing in Section
13 contradicts the instruction in Section 5 that the DTI Secretary is allowed
to impose the general safeguard measures only if there is a positive
determination made by the Tariff Commission.
Unfortunately, Rule 13.2 of the Implementing Rules of the SMA is
captioned "Final Determination by the Secretary." The assailed Decision
and Philcemcor latch on this phraseology to imply that the factual

determination rendered by the Tariff Commission under Section 5 may be


amended or reversed by the DTI Secretary. Of course, implementing rules
should conform, not clash, with the law that they seek to implement, for a
regulation which operates to create a rule out of harmony with the statute
is a nullity.125 Yet imperfect draftsmanship aside, nothing in Rule 13.2
implies that the DTI Secretary can set aside the determination made by the
Tariff Commission under the aegis of Section 5. This can be seen by
examining the specific provisions of Rule 13.2, thus:
RULE 13.2. Final Determination by the Secretary
RULE 13.2.a. Within fifteen (15) calendar days from receipt of
the Report of the Commission, the Secretary shall make a
decision, taking into consideration the measures recommended
by the Commission.
RULE 13.2.b. If the determination is affirmative, the Secretary
shall issue, within two (2) calendar days after making his
decision, a written instruction to the heads of the concerned
government agencies to immediately implement the
appropriate general safeguard measure as determined by him.
Provided, however, that in the case of non-agricultural
products, the Secretary shall first establish that the imposition
of the safeguard measure will be in the public interest.
RULE 13.2.c. Within two (2) calendar days after making his
decision, the Secretary shall also order its publication in two (2)
newspapers of general circulation. He shall also furnish a copy
of his Order to the petitioner and other interested parties,
whether affirmative or negative. (Emphasis supplied.)
Moreover, the DTI Secretary does not have the power to review the
findings of the Tariff Commission for it is not subordinate to the
Department of Trade and Industry ("DTI"). It falls under the supervision,
not of the DTI nor of the Department of Finance (as mistakenly asserted by
Southern Cross),126 but of the National Economic Development Authority,
an independent planning agency of the government of co-equal rank as
the DTI.127 As the supervision and control of a Department Secretary is
limited to the bureaus, offices, and agencies under him,128 the DTI
Secretary generally cannot exercise review authority over actions of the
Tariff Commission. Neither does the SMA specifically authorize the DTI
Secretary to alter, amend or modify in any way the determination made by
the Tariff Commission. The most that the DTI Secretary could do to express
displeasure over the Tariff Commission's actions is to ignore its
recommendation, but not its determination.
The word "determination" as used in Rule 13.2 of the Implementing Rules
is dissonant with the same word as employed in the SMA, which in the
latter case is undeviatingly in reference to the determination made by the
Tariff Commission. Beyond the resulting confusion, however, the divergent
use in Rule 13.2 is explicable as the Rule textually pertains to the power of
the DTI Secretary to review the recommendations of the Tariff
Commission, not the latter's determination. Indeed, an examination of the
specific provisions show that there is no real conflict to reconcile. Rule 13.2
respects the logical order imposed by the SMA. The Rule does not remove
the essential requirement under Section 5 that a positive final
determination be made by the Tariff Commission before a definitive
safeguard measure may be imposed by the DTI Secretary.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 39

The assailed Decision characterizes the findings of the Tariff Commission as


merely recommendatory and points to the DTI Secretary as the authority
who renders the final decision.129 At the same time, Philcemcor asserts that
the Tariff Commission's functions are merely investigatory, and as such do
not include the power to decide or adjudicate. These contentions, viewed
in the context of the fundamental requisite set forth by Section 5, are
untenable. They run counter to the statutory prescription that a positive
final determination made by the Tariff Commission should first be obtained
before the definitive safeguard measures may be laid down.
Was it anomalous for Congress to have provided for a system whereby the
Tariff Commission may preclude the DTI, an office of higher rank, from
imposing a safeguard measure? Of course, this Court does not inquire into
the wisdom of the legislature but only charts the boundaries of powers and
functions set in its enactments. But then, it is not difficult to see the
internal logic of this statutory framework.
For one, as earlier stated, the DTI cannot exercise review powers over the
Tariff Commission which is not its subordinate office.
Moreover, the mechanism established by Congress establishes a measure
of check and balance involving two different governmental agencies with
disparate specializations. The matter of safeguard measures is of such
national importance that a decision either to impose or not to impose then
could have ruinous effects on companies doing business in the Philippines.
Thus, it is ideal to put in place a system which affords all due deliberation
and calls to fore various governmental agencies exercising their particular
specializations.
Finally, if this arrangement drawn up by Congress makes it difficult to
obtain a general safeguard measure, it is because such safeguard measure
is the exception, rather than the rule. The Philippines is obliged to observe
its obligations under the GATT, under whose framework trade
liberalization, not protectionism, is laid down. Verily, the GATT actually
prescribes conditions before a member-country may impose a safeguard
measure. The pertinent portion of the GATT Agreement on Safeguards
reads:

The SMA was designed not to contradict the GATT, but to complement it.
The two requisites laid down in Section 5 for a positive final determination
are the same conditions provided under the GATT Agreement on
Safeguards for the application of safeguard measures by a member
country. Moreover, the investigatory procedure laid down by the SMA
conforms to the procedure required by the GATT Agreement on
Safeguards. Congress has chosen the Tariff Commission as the competent
authority to conduct such investigation. Southern Cross stresses that
applying the provision of the GATT Agreement on Safeguards, the Tariff
Commission is clearly empowered to arrive at binding conclusions. 132 We
agree: binding on the DTI Secretary is the Tariff Commission's
determinations on whether a product is imported in increased quantities,
absolute or relative to domestic production and whether any such increase
is a substantial cause of serious injury or threat thereof to the domestic
industry.133
Satisfied as we are with the proper statutory paradigm within which the
SMA should be analyzed, the flaws in the reasoning of the Court of Appeals
and in the arguments of the respondents become apparent. To better
understand the dynamics of the procedure set up by the law leading to the
imposition of definitive safeguard measures, a brief step-by-step recount
thereof is in order.
1.

2.

3.

2. A Member may only apply a safeguard measure to a product only


if that member has determined, pursuant to the provisions set out
below, that such product is being imported into its territory in such
increased quantities, absolute or relative to domestic production,
and under such conditions as to cause or threaten to cause serious
injury to the domestic industry that produces like or directly
competitive products.
3. (a) A Member may apply a safeguard measure only following an
investigation by the competent authorities of that Member pursuant
to procedures previously established and made public in consonance
with Article X of the GATT 1994. This investigation shall include
reasonable public notice to all interested parties and public hearings
or other appropriate means in which importers, exporters and other
interested parties could present evidence and their views, including
the opportunity to respond to the presentations of other parties and
to submit their views, inter alia, as to whether or not the application
of a safeguard measure would be in the public interest. The
competent authorities shall publish a report setting forth their
findings and reasoned conclusions reached on all pertinent issues of
fact and law.131

4.

5.

After the initiation of an action involving a general safeguard


measure,134 the DTI Secretary makes a preliminary
determination whether the increased imports of the product
under consideration substantially cause or threaten to
substantially cause serious injury to the domestic industry,135
and whether the imposition of a provisional measure is
warranted under Section 8 of the SMA.136 If the preliminary
determination is negative, it is implied that no further action
will be taken on the application.
When his preliminary determination is positive, the Secretary
immediately transmits the records covering the application to
the Tariff Commission for immediate formal investigation.
The Tariff Commission conducts its formal investigation, keyed
towards making a final determination. In the process, it holds
public hearings, providing interested parties the opportunity to
present evidence or otherwise be heard. To repeat, Section 5
enumerates what the Tariff Commission is tasked to determine:
(a) whether a product is being imported into the country in
increased quantities, irrespective of whether the product is
absolute or relative to the domestic production; and (b)
whether the importation in increased quantities is such that it
causes serious injury or threat to the domestic industry. The
findings of the Tariff Commission as to these matters constitute
the final determination, which may be either positive or
negative.
Under Section 13 of the SMA, if the Tariff Commission makes a
positive determination, the Tariff Commission "recommends to
the [DTI] Secretary an appropriate definitive measure." The
Tariff Commission "may also recommend other actions,
including the initiation of international negotiations to address
the underlying cause of the increase of imports of the products,
to alleviate the injury or threat thereof to the domestic
industry, and to facilitate positive adjustment to import
competition."140
If the Tariff Commission makes a positive final determination,
the DTI Secretary is then to decide, within fifteen (15) days

6.

from receipt of the report, as to what appropriate safeguard


measures should he impose.
However, if the Tariff Commission makes a negative final
determination, the DTI Secretary cannot impose any definitive
safeguard measure. Under Section 13, he is instructed instead
to return whatever cash bond was paid by the applicant upon
the initiation of the action for safeguard measure.

The Effect of the Court's Decision


The Court of Appeals erred in remanding the case back to the DTI
Secretary, with the instruction that the DTI Secretary may impose a general
safeguard measure even if there is no positive final determination from the
Tariff Commission. More crucially, the Court of Appeals could not have
acquired jurisdiction over Philcemcor's petition for certiorari in the first
place, as Section 29 of the SMA properly vests jurisdiction on the CTA.
Consequently, the assailed Decision is an absolute nullity, and we declare it
as such.
What is the effect of the nullity of the assailed Decision on the 5 June 2003
Decision of the DTI Secretary imposing the general safeguard measure? We
have recognized that any initial judicial review of a DTI ruling in connection
with the imposition of a safeguard measure belongs to the CTA. At the
same time, the Court also recognizes the fundamental principle that a null
and void judgment cannot produce any legal effect. There is sufficient
cause to establish that the 5 June 2003 Decision of the DTI Secretary
resulted from the assailed Court of Appeals Decision, even if the latter had
not yet become final. Conversely, it can be concluded that it was because
of the putative imprimatur of the Court of Appeals' Decision that the DTI
Secretary issued his ruling imposing the safeguard measure. Since the 5
June 2003 Decision derives its legal effect from the void Decision of the
Court of Appeals, this ruling of the DTI Secretary is consequently void. The
spring cannot rise higher than the source.
The DTI Secretary himself acknowledged that he drew stimulating force
from the appellate court's Decision for in his own 5 June 2003 Decision, he
declared:
From the aforementioned ruling, the CA has remanded the case to
the DTI Secretary for a final decision. Thus, there is no legal
impediment for the Secretary to decide on the application.
The inescapable conclusion is that the DTI Secretary needed the assailed
Decision of the Court of Appeals to justify his rendering a second Decision.
He explicitly invoked the Court of Appeals' Decision as basis for rendering
his 5 June 2003 ruling, and implicitly recognized that without such Decision
he would not have the authority to revoke his previous ruling and render a
new, obverse ruling.
It is clear then that the 25 June 2003 Decision of the DTI Secretary is a
product of the void Decision, it being an attempt to carry out such null
judgment. There is therefore no choice but to declare it void as well, lest
we sanction the perverse existence of a fruit from a non-existent tree. It
does not even matter what the disposition of the 25 June 2003 Decision
was, its nullity would be warranted even if the DTI Secretary chose to
uphold his earlier ruling denying the application for safeguard measures.
It is also an unfortunate spectacle to behold the DTI Secretary, seeking to
enforce a judicial decision which is not yet final and actually pending
review on appeal. Had it been a judge who attempted to enforce a decision

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 40

that is not yet final and executory, he or she would have readily been
subjected to sanction by this Court. The DTI Secretary may be beyond the
ambit of administrative review by this Court, but we are capacitated to
allocate the boundaries set by the law of the land and to exact fealty to the
legal order, especially from the instrumentalities and officials of
government.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court
of Appeals is DECLARED NULL AND VOID and SET ASIDE. The Decision of the
DTI Secretary dated 25 June 2003 is also DECLARED NULL AND VOID and
SET ASIDE. No Costs. SO ORDERED.
G.R. No. 118216
March 9, 2000
DELTAVENTURES RESOURCES, INC., petitioner, vs. HON. FERNANDO P.
CABATO, Presiding Judge Regional Trial Court, La Trinidad, Benguet,
Branch 62; HON. GELACIO L. RIVERA, JR., Executive Labor Arbiter, NLRCCAR, Baguio City, ADAM P. VENTURA, Deputy-Sheriff, NLRC-CAR, Baguio
City; ALEJANDRO BERNARDINO, AUGUSTO GRANADOS, PILANDO
TANGAY, NESTOR RABANG, RAY DAYAP, MYRA BAYAONA, VIOLY LIBAO,
AIDA LIBAO, JESUS GATCHO and GREGORIO DULAY, respondents.
QUISUMBING, J.:
This special civil action for certiorari seeks to annual the Order dated
November 7, 1994,1 of respondent Judge Fernando P. Cabato of the
Regional Trial Court of La Trinidad, Benguet, Branch 62, in Civil Case No. 94CV-0948, dismissing petitioner's amended third-party complaint, as well as
the Order dated December 14, 1994,2 denying motion for reconsideration.
On July 15, 1992, a Decision3 was rendered by Executive Labor Arbiter
Norma Olegario, National Labor Relations Commission Regional
Arbitration Board, Cordillera Autonomous Region (Commission), in NLRC
Case No. 01-08-0165-89 entitled "Alejandro Bernardino, et al, vs. Green
Mountain Farm, Roberto Ongpin and Almus Alabe", the dispositive portion
of which reads as follows:
WHEREFORE, judgment is hereby rendered declaring the
respondents guilty of Illegal Dismissal and Unfair Labor Practice and
ordering them to pay the complainants, in solidum, in the amount
herein below listed:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Violy Libao P131,368.07


Myra Bayaona 121,470.23
Gregorio Dulay 128,362.17
Jesus Gatcho 126,475.17
Alejandro Bernardino 110,158.20
Pilando Tangay 107,802.66
Aida Libao 129,967.34
Rey Dayap 123,289.21
Nestor Rabang 90,611.69
Augusto Granados 108,106.03

plus attorney's fees in the amount of P10.000.00.


Respondent Almus Alabe is also ordered to answer in exemplary
damages in the amount of P5,00.00 each to all the complainants.
xxx
SO ORDERED. 4

xxx

xxx

On May 19, 1994, complainants in the abovementioned labor case filed


before the Commission a motion for the issuance of a writ of execution as
respondent's appeal to the Commission and this Court5 were respectively
denied.
On June 16, 1994, Executive Labor Arbiter Gelacio C. Rivera, Jr. to whom
the case was reassigned in view of Labor Arbiter Olegario's transfer, issued
a writ of execution6 directing NLRC Deputy Sheriff Adam Ventura to
execute the judgment against respondents, Green Mountain Farm, Roberto
Ongpin and Almus Alabe Sheriff Ventura then proceeded to enforce the
writ by garnishing certain personal properties of respondents. Findings that
said judgment debtors do not have sufficient personal properties to satisfy
the monetary award, Sheriff Ventura proceeded to levy upon a real
property covered by Tax Declaration No. 9697, registered in the name of
Roberto Ongpin, one of the respondents in the labor case. Thereafter,
Sheriff Ventura caused the publication on the July 17, 1994 edition of the
Baguio Midland Courier the date of the public auction of said real property.
On July 27, 1994, a month before the scheduled auction sale, herein
petitioner filed before the Commission a third-party claim7 asserting
ownership over the property levied upon and subject of the Sheriff notice
of sale. Labor Arbiter Rivera thus issued an order directing the suspension
of the auction sale until the merits of petitioner's claim has been resolved.8
However, on August 16, 1994, petitioner filed with the Regional Trial Court
of La Trinidad, Benguet a complaint for injunction and damages, with a
prayer for the issuance of a temporary retraining order against Sheriff
Ventura, reiterating the same allegations it raised in the third party claim it
field with the Commission. The petition was docketed as Civil Case No. 94CV-0948, entitled "Deltaventures Resources, Inc., petitioner vs. Adam P.
Ventura, et al., defendants." The next day, August 17, 1994, respondent
Judge Cabato issued a temporary restraining order, enjoining respondents
in the civil case before him to hold in abeyance any action relative to the
enforcement of the decision in the labor case.9
Petitioner likewise filed on August 30, 1994, an amended complaintto
implead Labor arbiter Rivera and herein private respondent-laborers.
Further, on September 20, 1994, petitioner, filed with the Commission a
manifestation questioning the latter's authority to hear the case, the
matter being within the jurisdiction of the regular courts. The
manifestation however, was dismissed by Labor arbiter Rivera on October
3, 1994.
Meanwhile, on September 20, 1994, private respondent-laborers, moved
for the dismissal of the civil case on the ground of the court's lack of
jurisdiction. Petitioner filed its opposition to said motion on October 4,
1994.
On November 7, 1994, after both parties had submitted their respective
briefs, respondent court rendered its assailed decision premised on the
following grounds:
First, this Court is equal rank with the NLRC, hence, has no
jurisdiction to issue an injunction against the execution of the NLRC
decision. . . .
Second, the NLRC retains authority over all proceedings anent the
execution of its decision. This power carries with it the right to

determine every question which may be involved in the execution of


its decision. . . .
Third, Deltaventures Resources, Inc. should rely on and comply with
the Rules of the NLRC because it is the principal procedure to be
followed, the Rules of Court being merely suppletory in application, .
..
Fourth, the invocation of estoppel by the plaintiffs is misplaced. . . . .
[B]efore the defendants have filed their formal answer to the
amended complaint, they moved to dismiss it for lack of jurisdiction.
Lastly, the plaintiff, having in the first place addressed to the
jurisdiction of the NLRC by filing with it a Third Party Claim may not at
the same time pursue the present amended Complaint under the
forum shopping rule.15
Their motion for reconsideration having been denied by respondent Judge,
petitioner promptly filed this petition now before us.
In spite of the many errors assigned by petitioner, we find that here the
core issue is whether or not the trial court may take cognizance of the
complaint filed by petitioner and consequently provide the injunction relief
sought. Such cognizance in turn, would depend on whether the acts
complained of are related to, connected or interwoven with the cases
falling under the exclusive jurisdiction of the Labor arbiter or the NLRC.
Petitioner avers that court a quo erred in dismissing the third-party claim
on the ground of lack of jurisdiction. Further, it contends that the NLRCCAR did not acquire jurisdiction over the claim for it did not impugn the
decision of the NLRC-CAR but merely questioned the propriety of the levy
made by Sheriff Ventura. In support of its claim, petitioner asserts that the
instant case does not involve a labor dispute, as no-employer-employee
relationship exists between the parties. Nor is the petitioner's case related
in any way to either parties' case before the NLRC-CAR hence, not within
the jurisdiction of the Commission.
Basic as a hornbook principle, jurisdiction over the subject matter of a case
is conferred by law and determined by the allegations in the complainant18
which comprise a concise statement of the ultimate facts constituting the
petitioner's cause of action.19 Thus we have held that:
Jurisdiction over the subject-matter is determined upon the
allegations made in the complainant, irrespective of whether the
plaintiff is entitled or not entitled to recover upon the claim asserted
therein - a matter resolved only after and as a result of the trial.
Petitioner filed the third-party claim before the court a quo by reason of a
writ of execution issued by the NLRC-CAR Sheriff against a property to
which it claims ownership. The writ was issued to enforce and execute the
commission's decision in NLRC Case No. 01-08-0165-89 (Illegal Dismissal
and Unfair Labor Practice) against Green Mountain Farm, Roberto Ongpin
and Almus Alabe.
Ostensibly the complaint before the trial court was for the recovery of
possession and injunction, but in essence it was an action challenging the
legality or propriety of the levy vis-a-vis the alias writ of execution,
including the acts performed by the Labor Arbiter and the Deputy Sheriff
implementing the writ. The complainant was in effect a motion to quash
the writ of execution of a decision rendered on a case properly within the
jurisdiction of the Labor Arbiter, to wit: Illegal Dismissal and Unfair Labor

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 41

Practice. Considering the factual setting, it is then logical to conclude that


the subject matter of the third party claim is but an incident of the labor
case, a matter beyond the jurisdiction of regional trial courts.
Precedents abound confirming the rule that said courts have no labor
jurisdiction to act on labor cases or various incidents arising therefrom,
including the execution of decisions, awards or orders.21 Jurisdiction to try
and adjudicate such cases pertains exclusively to the proper labor official
concerned under the Department of Labor and Employment. To hold
otherwise is to sanction split jurisdiction which is obnoxious to the orderly
administration of justice.
Petitioner failed to realize that by filing its third-party claim with the
deputy sheriff, it submitted itself to the jurisdiction of the Commission
acting through the Labor Arbiter.1wphi1 It failed to perceive the fact that
what it is really controverting is the decision of the Labor arbiter and not
the act of the deputy sheriff in executing said order issued as a
consequence of said decision rendered.
Jurisdiction once acquired is not lost upon the instance of the parties but
continues until the case is terminated. Whatever irregularities attended the
issuance and execution of the alias writ of execution should be referred to
the same administrative tribunal which rendered the decision. This is
because any court which issued a writ of execution has the inherent power,
for the advancement of justice, to correct errors of its ministerial officers
and to control its own processes.
The broad powers granted to the Labor Arbiter and to the National Labor
Relations Commission by Articles 217, 218 and 224 of the Labor Code can
only be interpreted as vesting in them jurisdiction over incidents arising
from, in connection with or relating to labor disputes, as the controversy
under consideration, to the exclusion of the regular courts.
Having established that jurisdiction over the case rests with the
Commission, we find no grave abuse of discretion on the part of
respondent Judge Cabato in denying petitioner's motion for the issuance of
an injunction against the execution of the decision of the National Labor
Relations Commission.
Moreover, it must be noted that the Labor Code in Article 254 explicitly
prohibits issuance of a temporary or permanent injunction or restraining
order in any case involving or growing out of labor disputes by any court or
other entity (except as otherwise provided in Arts. 218 and 264). As
correctly observed by court a quo, the main issue and the subject of the
amended complaint for injunction are questions interwoven with the
execution of the Commission's decision. No doubt the aforecited
prohibition in Article 254 is applicable.1wphi1
Petitioner should have filed its third-party claim before the Labor Arbiter,
from whom the writ of execution originated, before instituting said civil
case. The NLRC's Manual on Execution of Judgment,26 issued pursuant to
Article 218 of the Labor Code, provides the mechanism for a third-party
claimant to assert his claim over a property levied upon by the sheriff
pursuant to an order or decision of the Commission or of the Labor Arbiter.
The power of the Labor Arbiter to issue a writ of execution carries with it
the power to inquire into the correctness of the execution of his decision
and to consider whatever supervening events might transpire during such
execution.

Moreover, in denying petitioner's petition for injunction, the court a quo is


merely upholding the time-honored principle that a Regional Trial Court,
being a co-equal body of the National Labor Relations Commission, has no
jurisdiction to issue any restraining order or injunction to enjoin the
execution of any decision of the latter.27
WHEREFORE, the petition for certiorari and prohibition is DENIED. The
assailed Orders of respondent Judge Fernando P. Cabato dated November
7, 1994 and December 14, 1994, respectively are AFFIRMED. The records of
this case are hereby REMANDED to the National Labor Relations
Commission for further proceedings.1wphi1.nt
Costs against petitioner. SO ORDERED.
G.R. No. 184778
October 2, 2009
BANGKO SENTRAL NG PILIPINAS MONETARY BOARD and CHUCHI
FONACIER, Petitioners, vs. HON. NINA G. ANTONIO-VALENZUELA, in her
capacity as Regional Trial Court Judge of Manila, Branch 28; RURAL BANK
OF PARAAQUE, INC.; RURAL BANK OF SAN JOSE (BATANGAS), INC.;
RURAL BANK OF CARMEN (CEBU), INC.; PILIPINO RURAL BANK, INC.;
PHILIPPINE COUNTRYSIDE RURAL BANK, INC.; RURAL BANK OF
CALATAGAN (BATANGAS), INC. (now DYNAMIC RURAL BANK); RURAL
BANK OF DARBCI, INC.; RURAL BANK OF KANANGA (LEYTE), INC. (now
FIRST INTERSTATE RURAL BANK); RURAL BANK OF BISAYAS MINGLANILLA
(now BANK OF EAST ASIA); and SAN PABLO CITY DEVELOPMENT BANK,
INC., Respondents.
DECISION
VELASCO, JR., J.:
The Case
This is a Petition for Review on Certiorari under Rule 45 with Prayer for
Issuance of a Temporary Restraining Order (TRO)/Writ of Preliminary
Injunction, questioning the Decision dated September 30, 20081 of the
Court of Appeals (CA) in CA-G.R. SP No. 103935. The CA Decision upheld
the Order2 dated June 4, 2008 of the Regional Trial Court (RTC), Branch 28
in Manila, issuing writs of preliminary injunction in Civil Case Nos. 08119243, 08-119244, 08-119245, 08-119246, 08-119247, 08-119248, 08119249, 08-119250, 08-119251, and 08-119273, and the Order dated May
21, 2008 that consolidated the civil cases.
The Facts
In September of 2007, the Supervision and Examination Department (SED)
of the Bangko Sentral ng Pilipinas (BSP) conducted examinations of the
books of the following banks: Rural Bank of Paraaque, Inc. (RBPI), Rural
Bank of San Jose (Batangas), Inc., Rural Bank of Carmen (Cebu), Inc.,
Pilipino Rural Bank, Inc., Philippine Countryside Rural Bank, Inc., Rural Bank
of Calatagan (Batangas), Inc. (now Dynamic Rural Bank), Rural Bank of
Darbci, Inc., Rural Bank of Kananga (Leyte), Inc. (now First Interstate Rural
Bank), Rural Bank de Bisayas Minglanilla (now Bank of East Asia), and San
Pablo City Development Bank, Inc.
After the examinations, exit conferences were held with the officers or
representatives of the banks wherein the SED examiners provided them
with copies of Lists of Findings/Exceptions containing the deficiencies
discovered during the examinations. These banks were then required to
comment and to undertake the remedial measures stated in these lists

within 30 days from their receipt of the lists, which remedial measures
included the infusion of additional capital. Though the banks claimed that
they made the additional capital infusions, petitioner Chuchi Fonacier,
officer-in-charge of the SED, sent separate letters to the Board of Directors
of each bank, informing them that the SED found that the banks failed to
carry out the required remedial measures. In response, the banks
requested that they be given time to obtain BSP approval to amend their
Articles of Incorporation, that they have an opportunity to seek investors.
They requested as well that the basis for the capital infusion figures be
disclosed, and noted that none of them had received the Report of
Examination (ROE) which finalizes the audit findings. They also requested
meetings with the BSP audit teams to reconcile audit figures. In response,
Fonacier reiterated the banks failure to comply with the directive for
additional capital infusions.
On May 12, 2008, the RBPI filed a complaint for nullification of the BSP ROE
with application for a TRO and writ of preliminary injunction before the
RTC docketed as Civil Case No. 08-119243 against Fonacier, the BSP,
Amado M. Tetangco, Jr., Romulo L. Neri, Vicente B. Valdepenas, Jr., Raul A.
Boncan, Juanita D. Amatong, Alfredo C. Antonio, and Nelly F. Villafuerte.
RBPI prayed that Fonacier, her subordinates, agents, or any other person
acting in her behalf be enjoined from submitting the ROE or any similar
report to the Monetary Board (MB), or if the ROE had already been
submitted, the MB be enjoined from acting on the basis of said ROE, on the
allegation that the failure to furnish the bank with a copy of the ROE
violated its right to due process.
The Rural Bank of San Jose (Batangas), Inc., Rural Bank of Carmen (Cebu),
Inc., Pilipino Rural Bank, Inc., Philippine Countryside Rural Bank, Inc., Rural
Bank of Calatagan (Batangas), Inc., Rural Bank of Darbci, Inc., Rural Bank of
Kananga (Leyte), Inc., and Rural Bank de Bisayas Minglanilla followed suit,
filing complaints with the RTC substantially similar to that of RBPI, including
the reliefs prayed for, which were raffled to different branches and
docketed as Civil Cases Nos. 08-119244, 08-119245, 08-119246, 08-119247,
08-119248, 08-119249, 08-119250, and 08-119251, respectively.
On May 13, 2008, the RTC denied the prayer for a TRO of Pilipino Rural
Bank, Inc. The bank filed a motion for reconsideration the next day.
On May 14, 2008, Fonacier and the BSP filed their opposition to the
application for a TRO and writ of preliminary injunction in Civil Case No. 08119243 with the RTC. Respondent Judge Nina Antonio-Valenzuela of
Branch 28 granted RBPIs prayer for the issuance of a TRO.
The other banks separately filed motions for consolidation of their cases in
Branch 28, which motions were granted. Judge Valenzuela set the
complaint of Rural Bank of San Jose (Batangas), Inc. for hearing on May 15,
2008. Petitioners assailed the validity of the consolidation of the nine cases
before the RTC, alleging that the court had already prejudged the case by
the earlier issuance of a TRO in Civil Case No. 08-119243, and moved for
the inhibition of respondent judge. Petitioners filed a motion for
reconsideration regarding the consolidation of the subject cases.
On May 16, 2008, San Pablo City Development Bank, Inc. filed a similar
complaint against the same defendants with the RTC, and this was
docketed as Civil Case No. 08-119273 that was later on consolidated with
Civil Case No. 08-119243. Petitioners filed an Urgent Motion to
Lift/Dissolve the TRO and an Opposition to the earlier motion for
reconsideration of Pilipino Rural Bank, Inc.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 42

On May 19, 2008, Judge Valenzuela issued an Order granting the prayer for
the issuance of TROs for the other seven cases consolidated with Civil Case
No. 08-119243. On May 21, 2008, Judge Valenzuela issued an Order
denying petitioners motion for reconsideration regarding the
consolidation of cases in Branch 28. On May 22, 2008, Judge Valenzuela
granted the urgent motion for reconsideration of Pilipino Rural Bank, Inc.
and issued a TRO similar to the ones earlier issued.
On May 26, 2008, petitioners filed a Motion to Dismiss against all the
complaints (except that of the San Pablo City Development Bank, Inc.), on
the grounds that the complaints stated no cause of action and that a
condition precedent for filing the cases had not been complied with. On
May 29, 2008, a hearing was conducted on the application for a TRO and
for a writ of preliminary injunction of San Pablo City Development Bank,
Inc.
The Ruling of the RTC
After the parties filed their respective memoranda, the RTC, on June 4,
2008, ruled that the banks were entitled to the writs of preliminary
injunction prayed for. It held that it had been the practice of the SED to
provide the ROEs to the banks before submission to the MB. It further held
that as the banks are the subjects of examinations, they are entitled to
copies of the ROEs. The denial by petitioners of the banks requests for
copies of the ROEs was held to be a denial of the banks right to due
process.
The dispositive portion of the RTCs order reads:
WHEREFORE, the Court rules as follows:
1) Re: Civil Case No. 08-119243. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Rural Bank of Paranaque Inc. is
directed to post a bond executed to the defendants, in the amount of
P500,000.00 to the effect that the plaintiff will pay to the defendants
all damages which they may sustain by reason of the injunction if the
Court should finally decide that the plaintiff was not entitled thereto.
After posting of the bond and approval thereof, let a writ of
preliminary injunction be issued to enjoin and restrain the
defendants from submitting the Report of Examination or any other
similar report prepared in connection with the examination
conducted on the plaintiff, to the Monetary Board. In case such a
Report on Examination [sic] or any other similar report prepared in
connection with the examination conducted on the plaintiff has been
submitted to the Monetary Board, the latter and its members (i.e.
defendants Tetangco, Neri, Valdepenas, Boncan, Amatong, Antonio,
and Villafuerte) are enjoined and restrained from acting on the basis
of said report.
2) Re: Civil Case No. 08-119244. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Rural Bank of San Jose
(Batangas), Inc. is directed to post a bond executed to the
defendants, in the amount of P500,000.00 to the effect that the
plaintiff will pay to the defendants all damages which they may
sustain by reason of the injunction if the Court should finally decide
that the plaintiff was not entitled thereto. After posting of the bond
and approval thereof, let a writ of preliminary injunction be issued to
enjoin and restrain the defendants from submitting the Report of
Examination or any other similar report prepared in connection with
the examination conducted on the plaintiff, to the Monetary Board.

In case such a Report on Examination [sic] or any other similar report


prepared in connection with the examination conducted on the
plaintiff has been submitted to the Monetary Board, the latter and its
members (i.e. defendants Tetangco, Neri, Valdepenas, Boncan,
Amatong, Antonio, and Villafuerte) are enjoined and restrained from
acting on the basis of said report.
3) Re: Civil Case No. 08-119245. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Rural Bank of Carmen (Cebu), Inc.
is directed to post a bond executed to the defendants, in the amount
of P500,000.00 to the effect that the plaintiff will pay to the
defendants all damages which they may sustain by reason of the
injunction if the Court should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and approval thereof, let a
writ of preliminary injunction be issued to enjoin and restrain the
defendants from submitting the Report of Examination or any other
similar report prepared in connection with the examination
conducted on the plaintiff, to the Monetary Board. In case such a
Report on Examination [sic] or any other similar report prepared in
connection with the examination conducted on the plaintiff has been
submitted to the Monetary Board, the latter and its members (i.e.
defendants Tetangco, Neri, Valdepenas, Boncan, Amatong, Antonio,
and Villafuerte) are enjoined and restrained from acting on the basis
of said report.
4) Re: Civil Case No. 08-119246. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Pilipino Rural Bank Inc. is directed
to post a bond executed to the defendants, in the amount of
P500,000.00 to the effect that the plaintiff will pay to the defendants
all damages which they may sustain by reason of the injunction if the
Court should finally decide that the plaintiff was not entitled thereto.
After posting of the bond and approval thereof, let a writ of
preliminary injunction be issued to enjoin and restrain the
defendants from submitting the Report of Examination or any other
similar report prepared in connection with the examination
conducted on the plaintiff, to the Monetary Board. In case such a
Report on Examination [sic] or any other similar report prepared in
connection with the examination conducted on the plaintiff has been
submitted to the Monetary Board, the latter and its members (i.e.
defendants Tetangco, Neri, Valdepenas, Boncan, Amatong, Antonio,
and Villafuerte) are enjoined and restrained from acting on the basis
of said report.
5) Re: Civil Case No. 08-119247. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Philippine Countryside Rural Bank
Inc. is directed to post a bond executed to the defendants, in the
amount of P500,000.00 to the effect that the plaintiff will pay to the
defendants all damages which they may sustain by reason of the
injunction if the Court should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and approval thereof, let a
writ of preliminary injunction be issued to enjoin and restrain the
defendants from submitting the Report of Examination or any other
similar report prepared in connection with the examination
conducted on the plaintiff, to the Monetary Board. In case such a
Report on Examination [sic] or any other similar report prepared in
connection with the examination conducted on the plaintiff has been
submitted to the Monetary Board, the latter and its members (i.e.
defendants Tetangco, Neri, Valdepenas, Boncan, Amatong, Antonio,

and Villafuerte) are enjoined and restrained from acting on the basis
of said report.
6) Re: Civil Case No. 08-119248. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Dynamic Bank Inc. (Rural Bank of
Calatagan) is directed to post a bond executed to the defendants, in
the amount of P500,000.00 to the effect that the plaintiff will pay to
the defendants all damages which they may sustain by reason of the
injunction if the Court should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and approval thereof, let a
writ of preliminary injunction be issued to enjoin and restrain the
defendants from submitting the Report of Examination or any other
similar report prepared in connection with the examination
conducted on the plaintiff, to the Monetary Board. In case such a
Report on Examination [sic] or any other similar report prepared in
connection with the examination conducted on the plaintiff has been
submitted to the Monetary Board, the latter and its members (i.e.
defendants Tetangco, Neri, Valdepenas, Boncan, Amatong, Antonio,
and Villafuerte) are enjoined and restrained from acting on the basis
of said report.
7) Re: Civil Case No. 08-119249. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Rural Bank of DARBCI, Inc. is
directed to post a bond executed to the defendants, in the amount of
P500,000.00 to the effect that the plaintiff will pay to the defendants
all damages which they may sustain by reason of the injunction if the
Court should finally decide that the plaintiff was not entitled thereto.
After posting of the bond and approval thereof, let a writ of
preliminary injunction be issued to enjoin and restrain the
defendants from submitting the Report of Examination or any other
similar report prepared in connection with the examination
conducted on the plaintiff, to the Monetary Board. In case such a
Report on Examination [sic] or any other similar report prepared in
connection with the examination conducted on the plaintiff has been
submitted to the Monetary Board, the latter and its members (i.e.
defendants Tetangco, Neri, Valdepenas, Boncan, Amatong, Antonio,
and Villafuerte) are enjoined and restrained from acting on the basis
of said report.
8) Re: Civil Case No. 08-119250. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Rural Bank of Kananga Inc. (First
Intestate Bank), is directed to post a bond executed to the
defendants, in the amount of P500,000.00 to the effect that the
plaintiff will pay to the defendants all damages which they may
sustain by reason of the injunction if the Court should finally decide
that the plaintiff was not entitled thereto. After posting of the bond
and approval thereof, let a writ of preliminary injunction be issued to
enjoin and restrain the defendants from submitting the Report of
Examination or any other similar report prepared in connection with
the examination conducted on the plaintiff, to the Monetary Board.
In case such a Report on Examination [sic] or any other similar report
prepared in connection with the examination conducted on the
plaintiff has been submitted to the Monetary Board, the latter and its
members (i.e. defendants Tetangco, Neri, Valdepenas, Boncan,
Amatong, Antonio, and Villafuerte) are enjoined and restrained from
acting on the basis of said report.
9) Re: Civil Case No. 08-119251. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff Banco Rural De Bisayas

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 43

Minglanilla (Cebu) Inc. (Bank of East Asia) is directed to post a bond


executed to the defendants, in the amount of P500,000.00 to the
effect that the plaintiff will pay to the defendants all damages which
they may sustain by reason of the injunction if the Court should
finally decide that the plaintiff was not entitled thereto. After posting
of the bond and approval thereof, let a writ of preliminary injunction
be issued to enjoin and restrain the defendants from submitting the
Report of Examination or any other similar report prepared in
connection with the examination conducted on the plaintiff, to the
Monetary Board. In case such a Report on Examination [sic] or any
other similar report prepared in connection with the examination
conducted on the plaintiff has been submitted to the Monetary
Board, the latter and its members (i.e. defendants Tetangco, Neri,
Valdepenas, Boncan, Amatong, Antonio, and Villafuerte) are enjoined
and restrained from acting on the basis of said report.
10) Re: Civil Case No. 08-119273. Pursuant to Rule 58, Section 4(b) of
the Revised Rules of Court, plaintiff San Pablo City Development
Bank, Inc. is directed to post a bond executed to the defendants, in
the amount of P500,000.00 to the effect that the plaintiff will pay to
the defendants all damages which they may sustain by reason of the
injunction if the Court should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and approval thereof, let a
writ of preliminary injunction be issued to enjoin and restrain the
defendants from submitting the Report of Examination or any other
similar report prepared in connection with the examination
conducted on the plaintiff, to the Monetary Board. In case such a
Report on Examination [sic] or any other similar report prepared in
connection with the examination conducted on the plaintiff has been
submitted to the Monetary Board, the latter and its members (i.e.
defendants Tetangco, Neri, Valdepenas, Boncan, Amatong, Antonio,
and Villafuerte) are enjoined and restrained from acting on the basis
of said report.3

found that the joint trial of these cases would prejudice any substantial
right of petitioners.
Finding that no grave abuse of discretion attended the issuance of the
orders by the RTC, the CA denied the petition.
On November 24, 2008, a TRO was issued by this Court, restraining the CA,
RTC, and respondents from implementing and enforcing the CA Decision
dated September 30, 2008 in CA-G.R. SP No. 103935.4
By reason of the TRO issued by this Court, the SED was able to submit their
ROEs to the MB. The MB then prohibited the respondent banks from
transacting business and placed them under receivership under Section 53
of Republic Act No. (RA) 87915 and Sec. 30 of RA
76536 through MB Resolution No. 1616 dated December 9, 2008;
Resolution Nos. 1637 and 1638 dated December 11, 2008; Resolution Nos.
1647, 1648, and 1649 dated December 12, 2008; Resolution Nos. 1652 and
1653 dated December 16, 2008; and Resolution Nos. 1692 and 1695 dated
December 19, 2008, with the Philippine Deposit Insurance Corporation as
the appointed receiver.
Now we resolve the main petition.
Grounds in Support of Petition
I.

II.

The Ruling of the CA


Petitioners then brought the matter to the CA via a petition for certiorari
under Rule 65 claiming grave abuse of discretion on the part of Judge
Valenzuela when she issued the orders dated May 21, 2008 and June 4,
2008.
The CA ruled that the RTC committed no grave abuse of discretion when it
ordered the issuance of a writ of preliminary injunction and when it
ordered the consolidation of the 10 cases.
It held that petitioners should have first filed a motion for reconsideration
of the assailed orders, and failed to justify why they resorted to a special
civil action of certiorari instead.
The CA also found that aside from the technical aspect, there was no grave
abuse of discretion on the part of the RTC, and if there was a mistake in the
assessment of evidence by the trial court, that should be characterized as
an error of judgment, and should be correctable via appeal.
The CA held that the principles of fairness and transparency dictate that
the respondent banks are entitled to copies of the ROE.
Regarding the consolidation of the 10 cases, the CA found that there was a
similarity of facts, reliefs sought, issues raised, defendants, and that
plaintiffs and defendants were represented by the same sets of counsels. It

III.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT


FINDING THAT THE INJUNCTION ISSUED BY THE REGIONAL
TRIAL COURT VIOLATED SECTION 25 OF THE NEW CENTRAL
BANK ACT AND EFFECTIVELY HANDCUFFED THE BANGKO
SENTRAL FROM DISCHARGING ITS FUNCTIONS TO THE GREAT
AND IRREPARABLE DAMAGE OF THE COUNTRYS BANKING
SYSTEM;
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT RESPONDENTS ARE ENTITLED TO BE FURNISHED
COPIES OF THEIR RESPECTIVE ROEs BEFORE THE SAME IS
SUBMITTED TO THE MONETARY BOARD IN VIEW OF THE
PRINCIPLES OF FAIRNESS AND TRANSPARENCY DESPITE LACK
OF EXPRESS PROVISION IN THE NEW CENTRAL BANK ACT
REQUIRING BSP TO DO THE SAME
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
DEPARTING FROM WELL-ESTABLISHED PRECEPTS OF LAW AND
JURISPRUDENCE
A.
THE EXCEPTIONS CITED BY PETITIONER JUSTIFIED RESORT
TO PETITION FOR CERTIORARI UNDER RULE 65 INSTEAD
OF FIRST FILING A MOTION FOR RECONSIDERATION
B.
RESPONDENT BANKS ACT OF RESORTING IMMEDIATELY
TO THE COURT WAS PREMATURE SINCE IT WAS MADE IN
UTTER DISREGARD OF THE PRINCIPLE OF PRIMARY
JURISDICTION AND EXHAUSTION OF ADMINISTRATIVE
REMEDY
C.
THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION
BY THE REGIONAL TRIAL COURT WAS NOT ONLY
IMPROPER BUT AMOUNTED TO GRAVE ABUSE OF
DISCRETION7
Our Ruling

The petition is meritorious.

In Lim v. Court of Appeals it was stated:


The requisites for preliminary injunctive relief are: (a) the invasion of right
sought to be protected is material and substantial; (b) the right of the
complainant is clear and unmistakable; and (c) there is an urgent and
paramount necessity for the writ to prevent serious damage.
As such, a writ of preliminary injunction may be issued only upon clear
showing of an actual existing right to be protected during the pendency of
the principal action. The twin requirements of a valid injunction are the
existence of a right and its actual or threatened violations. Thus, to be
entitled to an injunctive writ, the right to be protected and the violation
against that right must be shown.8
These requirements are absent in the present case.
In granting the writs of preliminary injunction, the trial court held that the
submission of the ROEs to the MB before the respondent banks would
violate the right to due process of said banks.
This is erroneous.
The respondent banks have failed to show that they are entitled to copies
of the ROEs. They can point to no provision of law, no section in the
procedures of the BSP that shows that the BSP is required to give them
copies of the ROEs. Sec. 28 of RA 7653, or the New Central Bank Act, which
governs examinations of banking institutions, provides that the ROE shall
be submitted to the MB; the bank examined is not mentioned as a
recipient of the ROE.
The respondent banks cannot claim a violation of their right to due process
if they are not provided with copies of the ROEs. The same ROEs are based
on the lists of findings/exceptions containing the deficiencies found by the
SED examiners when they examined the books of the respondent banks. As
found by the RTC, these lists of findings/exceptions were furnished to the
officers or representatives of the respondent banks, and the respondent
banks were required to comment and to undertake remedial measures
stated in said lists. Despite these instructions, respondent banks failed to
comply with the SEDs directive.
Respondent banks are already aware of what is required of them by the
BSP, and cannot claim violation of their right to due process simply because
they are not furnished with copies of the ROEs. Respondent banks were
held by the CA to be entitled to copies of the ROEs prior to or
simultaneously with their submission to the MB, on the principles of
fairness and transparency. Further, the CA held that if the contents of the
ROEs are essentially the same as those of the lists of findings/exceptions
provided to said banks, there is no reason not to give copies of the ROEs to
the banks. This is a flawed conclusion, since if the banks are already aware
of the contents of the ROEs, they cannot say that fairness and transparency
are not present. If sanctions are to be imposed upon the respondent banks,
they are already well aware of the reasons for the sanctions, having been
informed via the lists of findings/exceptions, demolishing that particular
argument. The ROEs would then be superfluities to the respondent banks,
and should not be the basis for a writ of preliminary injunction. Also, the
reliance of the RTC on Banco Filipino v. Monetary Board9 is misplaced. The
petitioner in that case was held to be entitled to annexes of the
Supervision and Examination Sectors reports, as it already had a copy of
the reports themselves. It was not the subject of the case whether or not
the petitioner was entitled to a copy of the reports. And the ruling was

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 44

made after the petitioner bank was ordered closed, and it was allowed to
be supplied with annexes of the reports in order to better prepare its
defense. In this instance, at the time the respondent banks requested
copies of the ROEs, no action had yet been taken by the MB with regard to
imposing sanctions upon said banks.
The issuance by the RTC of writs of preliminary injunction is an
unwarranted interference with the powers of the MB. Secs. 29 and 30 of
RA 765310 refer to the appointment of a conservator or a receiver for a
bank, which is a power of the MB for which they need the ROEs done by
the supervising or examining department. The writs of preliminary
injunction issued by the trial court hinder the MB from fulfilling its function
under the law. The actions of the MB under Secs. 29 and 30 of RA 7653
"may not be restrained or set aside by the court except on petition for
certiorari on the ground that the action taken was in excess of jurisdiction
or with such grave abuse of discretion as to amount to lack or excess of
jurisdiction." The writs of preliminary injunction order are precisely what
cannot be done under the law by preventing the MB from taking action
under either Sec. 29 or Sec. 30 of RA 7653.
As to the third requirement, the respondent banks have shown no
necessity for the writ of preliminary injunction to prevent serious damage.
The serious damage contemplated by the trial court was the possibility of
the imposition of sanctions upon respondent banks, even the sanction of
closure. Under the law, the sanction of closure could be imposed upon a
bank by the BSP even without notice and hearing. The apparent lack of
procedural due process would not result in the invalidity of action by the
MB. This was the ruling in Central Bank of the Philippines v. Court of
Appeals.11 This "close now, hear later" scheme is grounded on practical and
legal considerations to prevent unwarranted dissipation of the banks
assets and as a valid exercise of police power to protect the depositors,
creditors, stockholders, and the general public. The writ of preliminary
injunction cannot, thus, prevent the MB from taking action, by preventing
the submission of the ROEs and worse, by preventing the MB from acting
on such ROEs.
The trial court required the MB to respect the respondent banks right to
due process by allowing the respondent banks to view the ROEs and act
upon them to forestall any sanctions the MB might impose. Such
procedure has no basis in law and does in fact violate the "close now, hear
later" doctrine. We held in Rural Bank of San Miguel, Inc. v. Monetary
Board, Bangko Sentral ng Pilipinas:
It is well-settled that the closure of a bank may be considered as an
exercise of police power. The action of the MB on this matter is final and
executory. Such exercise may nonetheless be subject to judicial inquiry and
can be set aside if found to be in excess of jurisdiction or with such grave
abuse of discretion as to amount to lack or excess of jurisdiction. 12
The respondent banks cannotthrough seeking a writ of preliminary
injunction by appealing to lack of due process, in a roundabout manner
prevent their closure by the MB. Their remedy, as stated, is a subsequent
one, which will determine whether the closure of the bank was attended
by grave abuse of discretion. Judicial review enters the picture only after
the MB has taken action; it cannot prevent such action by the MB. The
threat of the imposition of sanctions, even that of closure, does not violate
their right to due process, and cannot be the basis for a writ of preliminary
injunction.

The "close now, hear later" doctrine has already been justified as a
measure for the protection of the public interest. Swift action is called for
on the part of the BSP when it finds that a bank is in dire straits. Unless
adequate and determined efforts are taken by the government against
distressed and mismanaged banks, public faith in the banking system is
certain to deteriorate to the prejudice of the national economy itself, not
to mention the losses suffered by the bank depositors, creditors, and
stockholders, who all deserve the protection of the government.13

Sometime on March 18, 1983 herein petitioner Traders Royal Bank


instituted a suit against the Remco Alcohol Distillery, Inc. REMCO
before the Regional Trial Court, Branch CX, Pasay City, in Civil Case
No. 9894-P, for the recovery of the sum of Two Million Three
Hundred Eighty Two Thousand Two Hundred Fifty Eight & 71/100
Pesos (P2,382,258.71) obtaining therein a writ of pre attachment
directed against the assets and properties of Remco Alcohol
Distillery, Inc.

The respondent banks have failed to show their entitlement to the writ of
preliminary injunction. It must be emphasized that an application for
injunctive relief is construed strictly against the pleader.14 The respondent
banks cannot rely on a simple appeal to procedural due process to prove
entitlement. The requirements for the issuance of the writ have not been
proved. No invasion of the rights of respondent banks has been shown, nor
is their right to copies of the ROEs clear and unmistakable. There is also no
necessity for the writ to prevent serious damage. Indeed the issuance of
the writ of preliminary injunction tramples upon the powers of the MB and
prevents it from fulfilling its functions. There is no right that the writ of
preliminary injunction would protect in this particular case. In the absence
of a clear legal right, the issuance of the injunctive writ constitutes grave
abuse of discretion.15 In the absence of proof of a legal right and the injury
sustained by the plaintiff, an order for the issuance of a writ of preliminary
injunction will be nullified.16

Pursuant to said writ of attachment issued in Civil Case No. 9894-P,


Deputy Sheriff Edilberto Santiago levied among others about 4,600
barrels of aged or rectified alcohol found within the premises of said
Remco Distillery Inc. A third party claim was filed with the Deputy
Sheriff by herein respondent La Tondea, Inc. on April 1, 1982
claiming ownership over said attached property (Complaint, p. 17,
Rollo).

Courts are hereby reminded to take greater care in issuing injunctive relief
to litigants, that it would not violate any law. The grant of a preliminary
injunction in a case rests on the sound discretion of the court with the
caveat that it should be made with great caution.17 Thus, the issuance of
the writ of preliminary injunction must have basis in and be in accordance
with law. All told, while the grant or denial of an injunction generally rests
on the sound discretion of the lower court, this Court may and should
intervene in a clear case of abuse.18

Subsequently, private respondent La Tondea, Inc., without the


foregoing complaint-in- intervention having been passed upon by the
Regional Trial Court, Branch CX, (Pasay City), filed in Civil Case No.
9894-P a "Motion to Withdraw" dated October 8, 1983, praying that
it be allowed to withdraw alcohol and molasses from the Remco
Distillery Plant (Annex 4 to Petitioner's Motion to Dismiss-Annex C,
Petition) and which motion was granted per order of the Pasay Court
dated January 27, 1983, authorizing respondent La Tondea, Inc. to
withdraw alcohol and molasses from the Remco Distillery Plant at
Calumpit, Bulacan (Annex "I" to Reply to Plaintiff's Opposition dated
August 2, 1983 Annex E to the Petition).

WHEREFORE, the petition is hereby GRANTED. The assailed CA Decision


dated September 30, 2008 in CA-G.R. SP No. 103935 is hereby REVERSED.
The assailed order and writ of preliminary injunction of respondent Judge
Valenzuela in Civil Case Nos. 08-119243, 08-119244, 08-119245, 08119246, 08-119247, 08-119248, 08-119249, 08-119250, 08-119251, and
08-119273 are hereby declared NULL and VOID. SO ORDERED.
G.R. No. L-66321 October 31 1984
TRADERS ROYAL BANK, petitioner,
vs. THE HON INTERMEDIATE
APPELATE COURT, HON., JESUS R. DE VEGA, AS PRESIDING JUDGE OF THE
RETIONAL TRIA COURT, THIRD JUDICIAL REGION, BRANCH IX, MALOLOS,
Bulacan, LA TONDEA, INC., VICTORINO P. EVANGELISTA IN HIS CAPACITY
AS Ex-Officio Provincial Sheriff of Bulacan, and/or any and all his
deputies, respondents.
ESCOLIN, J.:
The issue posed for resolution in this petition involves the authority of a
Regional Trial Court to issue, at the instance of a third-party claimant, an
injunction enjoining the sale of property previously levied upon by the
sheriff pursuant to a writ of attachment issued by another Regional Trial
Court.
The antecedent facts, undisputed by the parties, are set forth in the
decision of the respondent Intermediate Appellate Court thus:

On May 12, 1982, private respondent La Tondea, Inc. filed a


complaint-in- intervention in said Civil Case No. 9894, alleging among
others, that 'it had made advances to Remco Distillery Inc. which
totalled P3M and which remains outstanding as of date' and that the
'attached properties are owned by La Tondea, Inc.' (Annex '3' to
petitioner's Motion to Dismiss dated July 27, 1983 Annex "C" to
the petition).

The foregoing order dated January 27, 1983 was however


reconsidered by the Pasay Court by virtue of its order dated February
18, 1983 (Annex A Petition, p. 15) declaring that the alcohol
"which has not been withdrawn remains in the ownership of
defendant Remco Alcohol Distillery Corporation" and which order
likewise denied La Tondea's motion to intervene.
A motion for reconsideration of the foregoing order of February 18,
1983 was filed by respondent La Tondea, Inc., on March 8, 1983
reiterating its request for leave to withdraw alcohol from the Remco
Distillery Plant, and praying further that the "portion of the order
dated February 18, 1983" declaring Remco to be the owner of
subject alcohol, "be reconsidered and striken off said order". This
motion has not been resolved (p. 4, Petition) up to July 18, 1983
when a manifestation that it was withdrawing its motion for
reconsideration was filed by respondent La Tondea Inc.
On July 19, 1983, private respondent La Tondea Inc. instituted
before the Regional Trial Court, Branch IX, Malolos, Bulacan presided
over by Respondent Judge, Civil Case No. 7003-M, in which it
asserted its claim of ownership over the properties attached in Civil
Case No. 9894-P, and likewise prayed for the issuance of a writ of
Preliminary Mandatory and Prohibitory Injunction (Annex B,id ).

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 45

A Motion to Dismiss and/or Opposition to the application for a writ of


Preliminary Injunction by herein respondent La Tondea Inc. was
filed by petitioner on July 27, 1983 (Annex C, p. 42, Id.)
This was followed by respondent La Tondea's opposition to
petitioner's Motion to Dismiss on August 1, 1983 (Annex D, p. 67, Id.).
A reply on the part of petitioner was made on the foregoing
opposition on August 3, 1983 (p. 92, Id.).
Hearings were held on respondent La Tondea's application for
injunctive relief and on petitioner's motion to dismiss on August 8, 19
& 23, 1983 (p. 5, Id.).
Thereafter, the parties filed their respective memoranda (Annex F, p.
104; Annex G, p. 113, Rollo).
Subsequently, the questioned order dated September 28, 1983 was
issued by the respondent Judge declaring respondent La Tondea Inc.
to be the owner of the disputed alcohol, and granting the latter's
application for injunctive relief (Annex H-1, Id.).
On October 6, 1983, respondent Sheriff Victorino Evangelista issued
on Edilberto A. Santiago Deputy Sheriff of Pasay City the
corresponding writ of preliminary injunction (Annex N, p. 127, Id.).
This was followed by an order issued by the Pasay Court dated
October 11, 1983 in Civil Case No. 9894-P requiring Deputy Sheriff
Edilberto A. Santiago to enforce the writ of preliminary attachment
previously issued by said court, by preventing respondent sheriff and
respondent La Tondea, Inc. from withdrawing or removing the
disputed alcohol from the Remco ageing warehouse at Calumpit,
Bulacan, and requiring the aforenamed respondents to explain and
show cause why they should not be cited for contempt for
withdrawing or removing said attached alcohol belonging to Remco,
from the latter's ageing warehouse at Calumpit, Bulacan (Annex F, p.
141, Petition).
Thereafter, petitioner Traders Royal Bank filed with the Intermediate
Appellate Court a petition for certiorari and prohibition, with application
for a writ of preliminary injunction, to annul and set aside the Order dated
September 28, 1983 of the respondent Regional Trial Court of Malolos,
Bulacan, Branch IX, issued in Civil Case No. 7003-M; to dissolve the writ of
preliminary injunction dated October 6, 1983 issued pursuant to said order;
to prohibit respondent Judge from taking cognizance of and assuming
jurisdiction over Civil Case No. 7003-M, and to compel private respondent
La Tondea, Inc., and Ex- Oficio Provincial Sheriff of Bulacan to return the
disputed alcohol to their original location at Remco's ageing warehouse at
Calumpit, Bulacan.
In its decision, the Intermediate Appellate Court dismissed the petition for
lack of legal and factual basis, holding that the respondent Judge did not
abuse his discretion in issuing the Order of September 28, 1983 and the
writ of preliminary injunction dated October 3, 1983. citing the decision in
Detective and Protective Bureau vs. Cloribel (26 SCRA 255). Petitioner
moved for reconsideration, but the respondent court denied the same in
its resolution dated February 2, 1984.
Hence, this petition.

Petitioner contends that respondent Judge of the Regional T- trial Court of


Bulacan acted without jurisdiction in entertaining Civil Case No. 7003-M, in
authorizing the issuance of a writ of preliminary mandatory and prohibitory
injunction, which enjoined the sheriff of Pasay City from interferring with
La Tondea's right to enter and withdraw the barrels of alcohol and
molasses from Remco's ageing warehouse and from conducting the sale
thereof, said merchandise having been previously levied upon pursuant to
the attachment writ issued by the Regional Trial Court of Pasay City in Civil
Case No. 9894-P. It is submitted that such order of the Bulacan Court
constitutes undue and illegal interference with the exercise by the Pasay
Court of its coordinate and co-equal authority on matters properly brought
before it.
We find the petition devoid of merit.
There is no question that the action filed by private respondent La
Tondea, Inc., as third-party claimant, before the Regional Trial Court of
Bulacan in Civil Case No. 7003-M wherein it claimed ownership over the
property levied upon by Pasay City Deputy Sheriff Edilberto Santiago is
sanctioned by Section 14, Rule 57 of the Rules of Court. Thus
If property taken be claimed by any person other than the party
against whom attachment had been issued or his agent, and such
person makes an affidavit of his title thereto or right to the
possession thereof, stating the grounds of such right or title, and
serves such affidavit upon the officer while the latter has possession
of the property, and a copy thereof upon the attaching creditor, the
officer shall not be bound to keep the property under the
attachment, unless the attaching creditor or his agent, on demand of
said officer, secures aim against such claim by a bond in a sum not
greater than the value of the property attached. In case of
disagreement as to such value, the same shall be decided by the
court issuing the writ of attachment. The officer shall not be liable for
damages, for the taking or keeping of such property, to any such
third-party claimant, unless such a claim is so made and the action
upon the bond brought within one hundred and twenty (120) days
from the date of the filing of said bond. But nothing herein contained
shall prevent such third person from vindicating his claim to the
property by proper action ...
The foregoing rule explicitly sets forth the remedy that may be availed of
by a person who claims to be the owner of property levied upon by
attachment, viz: to lodge a third- party claim with the sheriff, and if the
attaching creditor posts an indemnity bond in favor of the sheriff, to file a
separate and independent action to vindicate his claim (Abiera vs. Court of
Appeals, 45 SCRA 314). And this precisely was the remedy resorted to by
private respondent La Tondea when it filed the vindicatory action before
the Bulacan Court.
The case before us does not really present an issue of first impression. In
Manila Herald Publishing Co., Inc. vs. Ramos, 1 this Court resolved a similar
question in this wise:
The objection that at once suggests itself to entertaining in Case No.
12263 the motion to discharge the preliminary attachment levied in
Case No. 11531 is that by so doing one judge would interfere with
another judge's actuations. The objection is superficial and will not
bear analysis.

It has been seen that a separate action by the third party who claims
to be the owner of the property attached is appropriate. If this is so,
it must be admitted that the judge trying such action may render
judgment ordering the sheriff of whoever has in possession the
attached property to deliver it to the plaintiff-claimant or desist from
seizing it. It follows further that the court may make an interlocutory
order, upon the filing of such bond as may be necessary, to release
the property pending final adjudication of the title. Jurisdiction over
an action includes jurisdiction over an interlocutory matter incidental
to the cause and deemed necessary to preserve the subject matter of
the suit or protect the parties' interests. This is self-evident.
xxx xxx xxx
It is true of course that property in custody of the law can not be
interfered without the permission of the proper court, and property
legally attached is property in custodia legis. But for the reason just
stated, this rule is confined to cases where the property belongs to
the defendant or one in which the defendant has proprietary
interest. When the sheriff acting beyond the bounds of his office
seizes a stranger's property, the rule does not apply and interference
with his custody is not interference with another court's order of
attachment.
It may be argued that the third-party claim may be unfounded; but so
may it be meritorious, for that matter. Speculations are however
beside the point. The title is the very issue in the case for the
recovery of property or the dissolution of the attachment, and
pending final decision, the court may enter any interlocutory order
calculated to preserve the property in litigation and protect the
parties' rights and interests.
Generally, the rule that no court has the power to interfere by injunction
with the judgments or decrees of a concurrent or coordinate jurisdiction
having equal power to grant the injunctive relief sought by injunction, is
applied in cases where no third-party claimant is involved, in order to
prevent one court from nullifying the judgment or process of another court
of the same rank or category, a power which devolves upon the proper
appellate court . 2 The purpose of the rule is to avoid conflict of power
between different courts of coordinate jurisdiction and to bring about a
harmonious and smooth functioning of their proceedings.
It is further argued that since private respondent La Tondea, Inc., had
voluntarily submitted itself to the jurisdiction of the Pasay Court by filing a
motion to intervene in Civil Case No. 9894-P, the denial or dismissal thereof
constitutes a bar to the present action filed before the Bulacan Court.
We cannot sustain the petitioner's view. Suffice it to state that intervention
as a means of protecting the third-party claimant's right in an attachment
proceeding is not exclusive but cumulative and suppletory to the right to
bring an independent suit. 3 The denial or dismissal of a third-party claim to
property levied upon cannot operate to bar a subsequent independent
action by the claimant to establish his right to the property even if he failed
to appeal from the order denying his original third-party claim. 4
WHEREFORE, the instant petition is hereby dismissed and the decision of
the Intermediate Appellate Court in AC-G.R. No. SP-01860 is affirmed, with
costs against petitioner Traders Royal Bank. SO ORDERED.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 46

G.R. No. 155108. April 27, 2005


REPUBLIC OF THE PHILIPPINES, Represented by Department of Public
Works and Highways (DPWH) under Secretary Simeon Datumanong and
Undersecretary Edmundo V. Mir, then Chairman Of Bid and Awards
Committee (BAC), Assistant Secretary Bashir D. Rasuman, BAC ViceChairman, Director Oscar D. Abundo, BAC Member Director OIC-Director
Antonio V. Malano, Jr., BAC Member and Project Director Philip F. Menez,
Petitioners, vs. EMILIANO R. NOLASCO, Respondent.
DECISION
TINGA, J.:
An obiter dictum is a nonessential, welcome and sublime like a poem of
love in a last will or unwanted and asinine as in brickbats in a funeral
oration. It is neither enforceable as a relief nor the source of a judicially
actionable claim. However, by reason of its non-binding nature, the
pronouncement does not generally constitute error of law or grave abuse
of discretion, even if it proves revelatory of the erroneous thinking on the
part of the judge. It is chiefly for that reason that this petition is being
denied, albeit with all clarifications necessary to leave no doubt as to the
status and legal effect of the controvertible Order dated 6 September 2002
issued by Judge Juan C. Nabong, Jr. (Petitioner) of the Regional Trial Court
(RTC) of Manila, Branch 32.
The root of the dispute is a public works project, the Agno River Flood
Control Project ("Project"), the undertaking of which has been
unfortunately delayed due to the present petition. Funding for the project
was to be derived primarily through a loan from the Japan Bank for
International Cooperation (JBIC). A Bid and Awards Committee (BAC) was
constituted by the Department of Public Works and Highways (DPWH) for
the purpose of conducting international competitive bidding for the
procurement of the contract for Package IIthe Guide Channel to
Bayambang under Phase II of the Project. 1 Six (6) pre-qualified contractors
submitted their bids for the project, among them the present intervenors
Daewoo Engineering and Construction Co., Ltd. (Daewoo), and China
International Water and Electric Corp. (China International).
However, even before the BAC could come out with its recommendations,
a legal challenge had already been posed to preempt the awarding of the
contract to Daewoo. On 19 February 2002, Emiliano R. Nolasco, a selfidentified taxpayer and newspaper publisher/editor-in-chief,2 filed a
Petition, seeking a temporary restraining order and/or preliminary
injunction, with the RTC of Manila, naming the DPWH and the members of
the BAC as respondents. He alleged having obtained copies of "Confidential
Reports from an Unnamed DPWH Consultant," which he attached to his
petition. Nolasco argued that based on the confidential reports it was
apparent that Daewoos bid was unacceptable and the putative award to
Daewoo, illegal, immoral, and prejudicial to the government and the
Filipino taxpayers. Invoking his right as a taxpayer, Nolasco prayed that the
DPWH and BAC be restrained from awarding the contract to Daewoo and
Daewoo disqualified as a bidder.3
The petition was raffled to the sala of Judge Nabong and docketed as Civil
Case No. 02-102923. An ex-parte hearing was conducted on the prayer for
a temporary restraining order (TRO), with Nolasco alone in attendance.
Petitioner issued an Order dated 4 March 2002 directing the issuance of a
TRO, enjoining the DPWH and the BAC from awarding the contract to
Daewoo "and that [Daewoo] be disqualified as bidder and its bidders be

rejected" from carrying out the Project.4 The term of the TRO was for a
period of twenty (20) days.
Upon learning of the TRO, the DPWH and the BAC, through the Office of
the Solicitor General (OSG), filed a Motion to Dismiss Petition with Motion
for Dissolution of Temporary Restraining Order Dated March 4, 2002. 5
While noting the impropriety of a twenty (20)-day TRO without prior notice
or hearing, they pointed out that Republic Act No. 8975 precisely
prohibited the issuance by any court, save the Supreme Court, of a TRO or
preliminary injunction which restrains or prohibits the bidding for or
awarding of a contract/project of the national government. Accordingly,
they prayed that the petition be dismissed and the TRO dissolved.
This new motion was set for hearing on 21 March 2002, and thereupon the
parties were afforded the opportunity to argue their case. Then, on 27
March 2002, the RTC issued an order dismissing Nolascos petition. The
dismissal of the petition was warranted, according to the RTC, as it was a
suit against the State, which had been sued without its consent. 6 The RTC
also noted that Nolasco had not established that he would sustain a direct
injury should the contract be awarded to Daewoo, and that the general
interest which may have been possessed by Nolasco along with all
members of the public would not suffice.7
Interestingly, on 2 April 2002, the OSG claims to have received a copy of an
alleged order dated 22 March 2002 purportedly signed by Judge Nabong
which denied the motion to dismiss, gave the petition due course, and
granted the preliminary injunction subject to the posting of an injunction
bond in the amount of Five Hundred Thousand Pesos (P500,000.00).8
However, in a Certification signed by Loida P. Moralejo, Officer-in-Charge of
RTC Branch 32, it was attested that the signature in this order was
spurious, and affirmed instead the Order dated 22 March 2002 dismissing
the petition.
In the meantime, the BAC issued Resolution No. MFCDP-RA-02 dated 1
April 2002. The BAC noted therein that among the three lowest bidders
were Daewoo and China International, and that based on the bid amounts
"as corrected," the bid of Daewoo was the lowest of the three, followed by
China Internationals.10 As a result, the BAC resolved to recommend the
award of the contract for the Project to Daewoo. Then DPWH Secretary
Simeon Datumanong approved the recommendation by affixing his
signature on the Resolution on the same day.11 A copy of the Resolution
and the Bid Evaluation Report was furnished to JBIC for "review and
concurrence."12
For his part, Nolasco filed a motion for reconsideration dated 3 April 2002,
seeking the reversal of the Order dated 27 March 2002 dismissing his
petition. Nolasco set this motion for reconsideration for hearing on 18 April
2002, but none apparently ensued.13 The OSG filed its Opposition/
Comment/Manifestation dated 24 April 2002 wherein it prayed that it be
allowed to adopt its earlier motion to dismiss as its opposition to the
motion for reconsideration. The RTC granted OSGs prayer in an Order
dated 13 May 2002.14 In the same Order, the RTC likewise stated that "in
the spirit of comprehensive fairness, this Court must, and hereby, [set] the
hearing on the reception of petitioners evidence on this Motion [for
Reconsideration]" on 17 May 2002.15
During the hearing of 17 May 2002, the OSG asked Judge Nabong to clarify
his directive that a hearing be had for the reception of Nolascos evidence.
Judge Nabong clarified that his bent was for petitioner to present his
evidence but no longer on the question of whether a TRO or injunction

should be issued. The RTC granted the OSGs prayer to submit a motion for
reconsideration of this order, which the OSG did on 31 May 2002. 16 In the
motion for reconsideration, the OSG argued that it was unnecessary to
receive Nolascos evidence, considering that the dismissal of the petition
was grounded on pure questions of law. It also sought clarification of Judge
Nabongs remarks during the 17 May 2002 hearing, which seemed to imply
that this new hearing would actually be on the merits of the petition.
This new OSG motion was submitted to the RTC during the hearing of 28
June 2002, wherein Petitioner announced that the motion was to be
resolved in due time. At the same time, the RTC allowed Nolasco to adduce
his evidence over the objections of the OSG. Nolasco presented a witness,
Engineer Shohei Ezaki, a DPWH consultant hired by JBIC who testified
pursuant to a subpoena earlier issued by the court. Ezaki testified as to the
Evaluation Report and Result prepared by his consultant firm and which
had been earlier attached to Nolascos petition. Nolasco also intimated its
intention to present DPWH Director Philip F. Meez as a witness on his
behalf. In the hearing of 2 August 2002, the OSG manifested that it would
file motions opposing the presentation of witnesses by Nolasco and the
issuance of subpoenas requiring their testimony. In its order issued in open
court on 2 August 2002, the RTC deferred the further presentation of
Nolascos witnesses pending the filing of OSGs motions.
At that point, the proceedings thus far undertaken had been unorthodox.
Then the course veered sharply to the bizarre. Nolasco filed a motion dated
12 August 2002, seeking the rendition of a partial judgment and dismissal
of his own petition, based on the proceedings that had transpired during
the hearings held on 28 June and 2 August 2002.17 In the motion, Nolasco
reiterated his submission that based on the evidence presented thus far,
Daewoo should have been disqualified from bidding on the project. While
the prayer for the dismissal of the motion for reconsideration was
anchored on the need "to abbreviate the proceedings" so as to implement
the projects, the motion nonetheless urged the court, to issue a partial
judgment and award the bid for the Project to China International. Nolasco
likewise filed a Formal Offer of Evidence dated 29 August 2002. The offered
evidence included various documents and the testimony of Nolasco and his
witnesses previously heard by the court. Both submissions of Nolasco were
vigorously objected to by the OSG in pleadings filed to that effect. 18
Then, on 6 September 2002, the RTC issued the Order now assailed before
this Court. It included a brief discussion of the factual antecedents, as well
as the 27 March 2002 Order dismissing the petition and the various
pleadings filed by the parties prior and subsequent to the dismissal of the
petition. The last two pages of the four (4)-page Order proceeded to dissect
the testimonies and ultimate dispositions therein. The last three
paragraphs of the Order and its fallo are replicated below in full:
In the hearing, however, on August 21, 2002, Atty. Abelardo M. Santos for
petitioner in open court, formally offered the testimony of Mr. Ezaki,
although, before the start of his testimony Atty. Santos Manifested: "Your
Honor, the purpose of the testimony of this witness is to show that they had
made a technical study of all the pre-qualified bidders referring to the Agno
River Flood Control Project, Phase II."
Engr Shohel Ezaki, hired by the Japan Bank for International Cooperation
(JBIC) through which the funding, granted by the Overseas Development
Assistance (ODA), is covered and flows through, and the DPWH and
President, Philippines Office, Nippon Koie Company, Ltd., (testifying under
an issued subpoena duces tecum ad testificandum) testified that the
Evaluation Report and Result of their consultant firm in association with

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 47

the PKII and the Basic Team Inc., (doing evaluation works for the DPWH)
disqualified DAEWOO and ITALIAN THAI on Packages 1 and 2, Phase II.
Insofar, moreover, as regards Package 1, Phase II, the bids submitted by
TOA Corporation is the lowest evaluated responsive bid. The second lowest
evaluated responsive bid is that of China State Construction Engineering. In
open court, on August 2, 2002, Director Engr. Philip F. Menez, Major Floor
Control & Drainage Project-Project Management Office, Cluster II, DPWH,
confirmed the award to TOA Corporation, the evaluated responsive bid,
Package 1.
All told, and presently, and urgently, there is the need to implement the
PROJECTS in this petition so as not to affect the ODA funding, harnessed
through JBIC. More so, in addition, and a thoughtful consideration of
pleadings and argument, from the Formal Offer of Evidence ADMITTED,
facts, hearing, respondent BAC has strayed from fairly applying the Bidding
Laws, Guidelines, Rules, and Regulations, and Bid Tender Documents and,
as a matter of fairness, and in the interest of justice, considering other
bidders whose bids have been evaluated by the Technical Working Group
including the consultant, Nippon Koie Company, Ltd., in association with
the PKII and the Basic Team, Inc., to be substantially responsive, the
Honorable Simeon P. Datumanong must now seriously consider and
effect the award of Package 2, PHASE II, of the Agno River Floor Control
Project, as duly recommended by the Consultants and the Technical
Working Group, DPWH, to China International Water & Electric
Corporation being the lowest evaluated responsive bid.
WHEREFORE, in view of all the foregoing, the Motion for Reconsideration
of the Petition is hereby DISMISSED.
SO ORDERED. (Emphasis supplied)19
The OSG received a copy of the Order dated 6 September 2002 on 17
September 2002. It opted to file a Petition for Review on Certiorari under
Rule 45 with this Court, instead of resorting to a motion for
reconsideration, to avert unnecessary delay of the implementation of the
Project which would result in millions of pesos in damages. The OSG thus
alleges that the petition raises pure questions of law, thereby dispensing
with recourse to the Court of Appeals.20
The OSG also notes that in a letter to the DPWH dated 21 June 2002, JBIC,
through Chief Representative Mitsuru Taruki, let it be known that it had
decided to hold in abeyance its concurrence to the project, as "the issue
[was] now under the jurisdiction of the appropriate Philippine courts and
other relevant organizations of the Philippine government," and that it
would be prudent to wait "for the decisions of the proper authorities
before taking any action on the matter."21 It is likewise worth noting at this
juncture that Nolasco had also filed a verified complaint against the
Chairman and members of the BAC with the Presidential Anti-Graft
Commission, as well as another complaint with the National Economic
Development Authority and a complaint-letter with JBIC itself requesting
that the bank reject the award to Daewoo.22
Since the filing of the present petition, both Daewoo and China
International have since participated in the case. Daewoo filed a Commentin-Intervention dated 10 January 2003, which this Court treated as a
petition-In-intervention.23 Upon order of this Court, China International
filed a Comment-in-Intervention dated 5 February 2003.
Petitioner imputes error to the RTC in taking notice of and resolving
Nolascos Motion to Issue Partial Judgment and Motion to Dismiss Petition,

which they characterize as a "trifle." Substantively, it asserts that the RTC


erred in directing the DPWH to perform an affirmative act even though the
court had no more jurisdiction over the petition, considering that the RTC
never resolved the motion for reconsideration filed by Nolasco. It also
avers that Nolascos original petition had been substantially amended,
without leave of court and without notice to the Petitioner, and that they
had not been afforded the opportunity to file an answer to the petition.
Moreover, the RTC is alleged to have erred in directing the award of the
subject package to China International, a stranger to the case, without
ordering the inclusion of Daewoo as an indispensable party.
We can recast the legal question within the framework of whether the RTC
committed a reversible error in assailed Order dated 6 September 2002. It
is a mark of the strangeness of this case that Petitioner seeks the
nullification of a dispositive order that affirms the very dismissal of the case
they likewise seek. However, given the circumstances, the dilemma of
Petitioner is understandable. While the fallo of the assailed Order is indeed
favorable to them, the body thereof is a palpable source of mischief.
The Petitioner assails only the Order of 6 September 2002. However, it
behooves this Court to be more comprehensive in approach, in part to
elucidate on the proper steps that should be undertaken by lower court
judges when confronted with complaints or petitions affecting national
government infrastructure projects. Our review will necessarily entail an
examination of the propriety of the procedure adopted by the RTC in
disposing of Nolascos petition. It would be best for the Court to diagram
the procedures undertaken below like a grammar school teacher to
illustrate the multiple errors attendant in this case. From a chronological
standpoint, the first matter for discussion would be Nolascos Petition
before the RTC.
The caption of the Petition states that it is for "Issuance of a Temporary
Restraining Order and/or Preliminary Injunction."24 In the Petition, Nolasco
averred that he received a letter from a resident of Bayambang,
Pangasinan, regarding the latters "observations on the Public Bidding"
made on the Project; that Nolasco contacted his sources at the DPWH and
learned that the Project would be awarded to Daewoo; that he obtained a
Confidential Report from "an Unnamed DPWH Consultant" which allegedly
concluded that Daewoos bid was unacceptable. From these premises,
Nolasco argued that he was entitled to the issuance of a temporary
restraining order or preliminary injunction, as the award to the contracts to
Daewoo would probably cause injustice to him as a taxpayer. As prayer,
Nolasco asked that the respondents therein (herein Petitioner) be
restrained from awarding the contracts to Daewoo and that Daewoo be
disqualified as a bidder and its bid rejected.
It would be difficult to ascertain the nature of Nolascos action if the Court
were obliged to rely alone on the caption of his pleading. The caption
describes the Petition as one for issuance of a temporary restraining order
and/or preliminary injunction; hence, implying that the action seeks only
provisional reliefs without the necessary anchor of a final relief. Moreover,
the use of "Petition" in lieu of "Complaint" seemingly implies that the
action brought forth is the special civil action of prohibition under Rule 65,
yet this is not supported by the body of the pleading itself as it is bereft of
the necessary allegations of grave abuse of discretion or absence/excess of
jurisdiction and the absence of any other plain speedy and adequate
remedy.
Nonetheless, the principle consistently adhered to in this jurisdiction is that
it is not the caption but the allegations in the complaint or other initiatory

pleading which give meaning to the pleading and on the basis of which
such pleading may be legally characterized.26 An examination of the
"petition" reveals that it should be considered as a complaint for
injunction, with a prayer for the provisional relief of temporary restraining
order/preliminary injunction. After all, the Petition prayed that
respondents therein (Petitioner herein) be restrained from awarding the
contracts to Daewoo, citing as basis thereof its "unacceptability," as
purportedly established by the evaluation report.
Nonetheless, the prayer for the issuance of a temporary restraining order
or preliminary injunction affecting the bidding or awarding of a national
government contract or project, would have called for the application of
Republic Act No. 8975 and the corresponding denial of the prayer for
provisional relief. Still, the RTC instead issued a TRO in its Order dated 4
March 2002.
Republic Act No. 8975 definitively enjoins all courts, except the Supreme
Court, from issuing any temporary restraining order, preliminary injunction,
or preliminary mandatory injunction against the government, or any of its
subdivisions, officials or any person or entity to restrain, prohibit or compel
the bidding or awarding of a contract or project of the national
government,27 precisely the situation that obtains in this case with respect
to the Agno River Project. The only exception would be if the matter is of
extreme urgency involving a constitutional issue, such that unless the
temporary restraining order is issued, grave injustice and irreparable injury
will arise.28 The TRO issued by the RTC failed to take into consideration said
law. Neither did it advert to any extreme urgency involving a constitutional
issue, as required by the statute. The law ordains that such TRO is void,29
and the judge who issues such order should suffer the penalty of
suspension of at least sixty (60) days without pay.30
Nevertheless, there is no need to belabor this point since the TRO no
longer subsists. It appears that the RTC subsequently realized the import of
Republic Act No. 8975 as it cited the same in its 27 March 2002 Order
dismissing the Petition:
Applying Republic Act No. 8975, most particularly Section 3 thereof, and
Administrative Circular No. 11-2000 issued on November 13, 2000 by the
Honorable Hilario G. Davide, Jr., Chief Justice, Supreme Court, all parties
having copies, the Petition at bench ought to be dismissed outrightly (sic).31
However, it must be clarified that Republic Act No. 8975 does not ordinarily
warrant the outright dismissal of any complaint or petition before the
lower courts seeking permanent injunctive relief from the implementation
of national government infrastructure projects. What is expressly
prohibited by the statute is the issuance of the provisional reliefs of
temporary restraining orders, preliminary injunctions, and preliminary
mandatory injunctions. It does not preclude the lower courts from
assuming jurisdiction over complaints or petitions that seek as ultimate
relief the nullification or implementation of a national government
infrastructure project. A statute such as Republic Act No. 8975 cannot
diminish the constitutionally mandated judicial power to determine
whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of
government.32 Section 3 of the law in fact mandates, thus:
If after due hearing the court finds that the award of the contract is null
and void, the court may, if appropriate under the circumstances, award the
contract to the qualified and winning bidder or order a rebidding of the

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 48

same, without prejudice to any liability that the guilty party may incur
under existing laws.
Thus, when a court is called upon to rule on an initiatory pleading assailing
any material aspect pertinent to a national government infrastructure
project, the court ordinarily may not dismiss the action based solely on
Republic Act No. 8975 but is merely enjoined from granting provisional
reliefs. If no other ground obtains to dismiss the action, the court should
decide the case on the merits. As we recently held in Opia v. NHA:33
Unquestionably, the power to issue injunctive writs against the
implementation of any government infrastructure project is exclusively
lodged with this Court, pursuant to Section 3 of Rep. Act No. 8975. But
while lower courts are proscribed thereunder from issuing restraining
orders and/or writs of preliminary injunction to stop such projects, the
proscription does not mean that such courts are likewise bereft of authority
to take cognizance of the issue/issues raised in the principal action, as long
as such action and the relief sought are within their jurisdiction.
Accordingly, it was not proper for the RTC to cite Republic Act No. 8975 as
basis for the dismissal of Nolascos petition since the statute does not bar
the institution of an action that seeks to enjoin the implementation of a
national government project, but merely the issuance of provisional orders
enjoining the same. However, the RTC cited two other grounds for the
dismissal of the casethat Nolascos general interest as a taxpayer was not
sufficient to establish any direct injury to him should the Project be
awarded to Daewoo; and that the petition was a suit against the State,
which may not be sued without its consent.
We shall defer for now a review of these two grounds cited by the RTC for
the dismissal of Nolascos petition, and instead focus on the proper steps
that should have been undertaken owing to the dismissal of the case.
Nolasco filed a motion for reconsideration or the dismissal of the case, a
remedy available to him since the 27 March 2002 Order is a final order that
disposed of the case.34 Petitioner responded with an all-encompassing
Opposition/Comment/Mani-festation (Re: Petitioners Motion for
Reconsideration). Both of these submissions were set for hearing before
the RTC. The RTC could have very well resolved the motion for
reconsideration based on the pleadings submitted. Yet, in its Order dated
13 May 2002, it declared:
However, be that as it may, in the spirit of comprehensive fairness, this
Court must, and hereby, sets the hearing on the Reception of Petitioners
evidence on this Motion on May 17, 2002 at 9:00 A.M. 35
As far as determinable, there is no legal or jurisprudential standard of
"comprehensive fairness," a phrase that reeks of pomposity without
admitting to any concrete meaning. Neither is there any mandatory rule
directing a court to conduct a hearing to receive evidence on a motion for
reconsideration. Nonetheless, a motion for reconsideration, as with all
other motions which may not be acted upon without prejudicing the rights
of the adverse party, is required to be set for hearing by the applicant,36
and to be heard with due notice to all parties concerned. 37
It is certainly within acceptable bounds of discretion for the trial judge to
require or allow the movant for reconsideration to present evidence in
support of the arguments in the motion, and in fact desirable if such
evidence should be necessarily appreciated for a fair and correct
disposition of the motion for reconsideration. Yet caution should be had. At
this stage, the issues and evidence submitted for appreciation and

resolution of the trial court should be limited to the matters pertinent to


the motion for reconsideration. In this case, the RTC in hearing the motion
for reconsideration, should have focused on the issues of lack of standing
on the part of Nolasco and non-suability of the State, as these were the
grounds on which dismissal of the petition was predicated. It would entail a
fundamental reconsideration of these two key concerns for Nolascos
motion to have been granted and the petition readmitted.

Now, the Motion for Partial Judgment and to Dismiss Petition seeks reliefs
A and B that China International be awarded the project; and that the
motion for reconsideration be dismissed. There is no doubt that relief B
was unequivocally granted by the trial court, with the following disposal:

Instead, the RTC, upon Nolascos insistence, proceeded instead to hear the
case on the merits. The RTC allowed Nolascos witness, Engineer Ezaki to
testify as to the authenticity and veracity of the bid evaluation report
attached to Nolascos petition, and to affirm the conclusion that Daewoo
was not a qualified bidder.38 This unusual turn of events arouses suspicion.
The RTC had earlier dismissed the petition on legal grounds, yet it was now
considering factual matters as basis for review on reconsideration. The
petitioner, through counsel, appears to have strenuously objected to this
furtive and dubious recourse by Nolasco, but to no avail.

SO ORDERED.

Then, despite the fact that other witnesses of Nolasco were still scheduled
to be heard, Nolasco filed the Motion to Issue Partial Judgment and to
Dismiss Petition. He expressly prayed that his very own motion for
reconsideration of the petition be dismissed. From this motion, it is difficult
to ascertain why exactly Nolasco wanted the RTC to deny his own motion
for reconsideration and to affirm the dismissal of his own petition, though
there is the expressed concern "in order to abbreviate the proceedings in
view of the need to implement the subject projects of this petition the
soonest possible time."39 At the same time, and in the same pleading,
Nolasco still asserted that Daewoo was not qualified to be awarded the
project, and emphasizes that such contention was borne out by the
evidence he had presented thus far. Accordingly, he likewise prayed that
partial judgment be rendered on the petition, calling on the RTC to
conclude that China International won the Project, it being the lowest
evaluated responsive bid.40
It bears noting that at this stage, there were two pending motions before
the RTC, both filed by Nolasco, which had at issue whether or not his
petition should be dismissed. The first was Nolascos motion for
reconsideration praying for the reinstatement of his petition. The second
was Nolascos Motion for Partial Judgment and to Dismiss Petition, praying
for the dismissal of his petition. Palpably, Nolasco had opted to hedge his
chips on both red and black, which is not normally done for obvious
reasons. Neither did Nolasco, in his latter pleading, expressly withdraw his
earlier motion for reconsideration, although his subsequent prayer for the
dismissal of his own earlier motion sufficiently evinced such intent.
This Motion for Partial Judgment and to Dismiss Petition is truly an odd
duckling of a pleading, which unfortunately did not blossom into a swan
but from it instead emerged an even uglier duckthe 6 September 2002
Order, which dismissed the petition yet intoned that DPWH Secretary
Datumanong "must now seriously consider and effect the award" of the
project to China International.
There is no doubt that the assailed Order dated 6 September 2002 sought
to resolve the Motion for Partial Judgment and to Dismiss Petition. This is
evident from the first sentence of the Order, which states: "Before the
Court is petitioners Motion to Issue Partial Judgment and to Dismiss
Petition filed on August 16, 2002." No other pending motion, such as the
motion for reconsideration, was adverted to as being subject for resolution
by the said Order.

WHEREFORE, in view of all the foregoing, the Motion for Reconsideration


of the Petition is hereby DISMISSED.

But did the trial court grant relief A that China International be awarded
the project?
All told, and presently, and urgently, there is the need to implement the
PROJECTS in this petition so as not to affect the ODA funding, harnessed
through JBIC. More so, in addition, and a thoughtful consideration of
pleadings and argument, from the Formal Offer of Evidence ADMITTED,
facts, hearing, respondent BAC has strayed from fairly applying the Bidding
Laws, Guidelines, Rules, and Regulations, and Bid Tender Documents and,
as a matter of fairness, and in the interest of justice, considering other
bidders whose bids have been evaluated by the Technical Working Group
including the consultant, Nippon Koie Company, Ltd., In association with
the PKII and the Basic Team, Inc., to be substantially responsive, the
Honorable Simeon P. Datumanong must now seriously consider and
effect the award of Package 2, PHASE II, of the Agno River Floor Control
Project, as duly recommended by the Consultants and the Technical
Working Group, DPWH, to China International Water & Electric
Corporation being the lowest evaluated responsive bid.42 (emphasis
supplied)
Contrast this with Nolascos prayer on the same relief in his Motion for
Partial Judgment and to Dismiss Petition, thus:
WHEREFORE, in view of the foregoing premises, and in consideration of
equity and petitioners moral obligation and in order to abbreviate the
proceedings in view of the need to implement the subject projects of this
petition the soonest possible time so an not to jeopardize the funding
granted by the Overseas Development Assistance (ODA) fund through the
Japan Bank For International Cooperation (JBIC), it is respectfully prayed
unto this Honorable Court to issue its partial judgment on the petition. An
[sic] in view of the foregoing findings that clear violation of bidding laws,
rules and regulations, the respondents Bid Tender Documents, has been
committed by the respondents members of the BAC, and in fairness to the
other bidder whose bids have been evaluated by the Technical Working
Group including the consultant, Nippon Koie Company, Ltd., in association
with the PKIII and the Basic Team, Inc. to be substantially responsive, the
Bid of China International Water & Electric Corporation being the lowest
evaluated responsive bid must be awarded the project, package 2, Phase
II, of the Agno River Flood Control Projects as recommended by the
Consultants and the Technical Working Group of the respondents. The
respondent, Honorable Secretary Simeon Datumanong is hereby directed
to take steps to attain this end.43 (Emphasis supplied)
Unmistakably though, the controverted portion of the Order, urging the
DPWH Secretary "to consider" awarding the Project to China International
does not form part of the dispositive portion or fallo. What should be
deemed as the dispositive portion in this case is the final paragraph of the
Resolution, which reads: "WHEREFORE, in view of all the foregoing, the
Motion for Reconsideration of the Petition is hereby DISMISSED."

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 49

The Court recently explicated the contents of a proper dispositive portion


in Velarde v. Social Justice Society:44
In a civil case as well as in a special civil action, the disposition should state
whether the complaint or petition is granted or denied, the specific relief
granted, and the costs. The following test of completeness may be applied.
First, the parties should know their rights and obligations. Second, they
should know how to execute the decision under alternative contingencies.
Third, there should be no need for further proceedings to dispose of the
issues. Fourth, the case should be terminated by according the proper
relief. The "proper relief" usually depends upon what the parties seek in
their pleadings. It may declare their rights and duties, command the
performance of positive prestations, or order them to abstain from specific
acts. The disposition must also adjudicate costs. 45
We have ruled before against recognizing statements in the body of a
decision as part of the dispositive portion. In Velarde, the respondents
insisted that a statement by the trial court found on page ten (10) of the
fourteen (14)-page decision should be considered as part of the dispositive
portion. The Court disagreed,46 and cited the precedent in Magdalena
Estate, Inc. v. Hon. Caluag:47
. . . The quoted finding of the lower court cannot supply deficiencies in the
dispositive portion. It is a mere opinion of the court and the rule is settled
that where there is a conflict between the dispositive part and the opinion,
the former must prevail over the latter on the theory that the dispositive
portion is the final order while the opinion is merely a statement ordering
nothing.48
In Contreras v. Felix,49 the Court reasoned:
More to the point is another well-recognized doctrine, that the final
judgment as rendered is the judgment of the court irrespective of all
seemingly contrary statements in the decision. "A judgment must be
distinguished from an opinion. The latter is the informal expression of the
views of the court and cannot prevail against its final order or decision.
While the two may be combined in one instrument, the opinion forms no
part of the judgment. So, . . . there is a distinction between the findings and
conclusions of a court and its Judgment. While they may constitute its
decision and amount to the rendition of a judgment, they are not the
judgment itself. They amount to nothing more than an order for judgment,
which must, of course, be distinguished from the judgment." (1 Freeman
on Judgments, p. 6.) At the root of the doctrine that the premises must
yield to the conclusion is perhaps, side by side with the needs of writing
finis to litigations, the recognition of the truth that "the trained intuition of
the judge continually leads him to right results for which he is puzzled to
give unimpeachable legal reasons." "It is an everyday experience of those
who study judicial decisions that the results are usually sound, whether the
reasoning from which the results purport to flow is sound or not." (The
Theory of Judicial Decision, Pound, 36 Harv. Law Review, pp. 9, 51.) It is not
infrequent that the grounds of a decision fail to reflect the exact views of
the court, especially those of concurring justices in a collegiate court. We
often encounter in judicial decisions, lapses, findings, loose statements and
generalities which do not bear on the issues or are apparently opposed to
the otherwise sound and considered result reached by the court as
expressed in the dispositive part, so called, of the decision. 50
Moreover, we are guided by the evident fact that the respondent-judge did
not intend to make his conclusions on who should be awarded the Project
as part of the dispositive portion of his order. The language deliberately

employed in the order, "must now seriously consider and effect the
award," indicates that the judge was hesitant to definitively grant the relief
sought by Nolasco, which was that the trial court award the bid to China
International and direct Sec. Datumanong to take steps towards this end.
Instead, it stated that Sec. Datumanong "must now seriously consider and
effect the award" to China International. Undoubtedly, the word "must" is
mandatory in character, but it is used in conjunction with "consider". In
short, the trial court noted that the DPWH Secretary "must think about"
effecting an award to China International.
Imagine if Nolasco had tried to judicially enforce this portion of the
decision. Agents of the court would be sent over to the DPWH offices to
confront the DPWH Secretary. What else could they say but, "Sir, have you
seriously considered effecting the award to China International?" Of
course, the DPWH Secretary can reply, "Yes, but I decided to award the bid
anyway to Daewoo," and such averment would evince satisfactory
compliance with the assailed Order. After all, the Order did not require that
the DPWH award the bid to China International, only that the DPWH
consider such a measure.
These premises considered, we cannot agree with Petitioner
characterization of this portion of the Order as granting affirmative relief in
favor of China International.51 No such affirmative relief was rendered in
favor of China International, as such was not included as part of the fallo.
Nor was there an evident intent on the part of the judge to grant such
affirmative relief, on account of the language he employed,
recommendatory in character as it ultimately was.
Still, if the Court were to construe this assailed portion of the Order as
belonging to the dispository part, such disposition, effectively concluding
that China International and not DAEWOO should be awarded the bid,
would run contrary to law.
It must be remembered that Nolascos prayer that the trial court award the
bid to China International utilized as legal basis the power of the trial
courts to issue partial or separate judgments. Yet by any objective
standard, there is no merit in allowing for such a relief in this case. Section
5, Rule 36 of the Rules of Civil Procedure, which governs separate
judgments, states:
Sec. 5. Separate judgments. When more than one claim for relief is
presented in an action, the court, at any stage, upon a determination of the
issues material to a particular claim and all counterclaims arising out of the
transaction or occurrence which is the subject matter of the claim, may
render a separate judgment disposing of such claim. The judgment shall
terminate the action with respect to the claim so disposed of and the
action shall proceed as to the remaining claims. . . .
On paper, Nolascos petition prays for two reliefs, that the petitioner be
restrained from awarding the Project to Daewoo, and that Daewoo be
disqualified as a bidder and its bid be rejected. Yet these reliefs are
obviously intertwined for the allowance of one would necessarily lead to
the grant of the other. The multiple reliefs referred to in the provision refer
to those sufficiently segregate from each other that the allowance of one
at a preliminary stage will not preclude litigation on the merits of the
others.
More importantly, the rule is explicit that partial judgment with regards
one of the reliefs is warranted only after "a determination of the issues
material to a particular claim and all counterclaims arising out of the

transaction or occurrence which is the subject matter of the claim." Herein,


the partial judgment was sought even before the respondents had the
chance to file their answer to the petition. Moreover, it was prayed for at a
point when, at even such a preliminary stage, the claimant was actually
somehow able to already present evidence in support of his claim, but
before the respondents had the chance to rebut this claim or support
countervailing evidence.
At bare minimum, the allowance of a partial judgment at this stage would
constitute a denial of constitutional due process. It would condemn before
hearing, and render judgment before trial.52 Had indeed partial judgment
been granted in the assailed Order, it would have been rendered before
the Petitioner were afforded the opportunity to rebut the evidence of
Nolasco, or to present their own countervailing evidence. While the
allowance of partial judgments may expedite the litigation of claims, it
cannot be sanctioned at a stage when the trial judge has not had the
opportunity to hear all sides to the claim. In fact, it was highly imprudent
for the respondent judge to have concluded, as he did in his Order, that it
was an admitted fact that the BAC had strayed from fairly applying the
Bidding Laws, Guidelines, Rules, and Regulations, and Bid Tender
Documents, considering that the Petitioner had not even filed an answer or
been allowed the opportunity to present any evidence on its behalf.
And there is the fact that as of the moment the assailed Order was
rendered, Nolascos petition had already been dismissed by the earlier
Order dated 27 March 2002. In order that the prayer for partial judgment
could have been granted by the RTC, it would have been first necessary to
reinstate Nolascos dismissed petition, such as by granting Nolascos
motion for reconsideration. The respondent judge never reinstated the
petition, which has stood dismissed since 27 March 2002. Thus, none of the
reliefs prayed for by Nolasco in his Petition, much less the prayer for partial
judgment, could have ever been granted by the respondent-judge.
Thus, the dispositive portion of the assailed Order correctly limited itself to
the denial of Nolascos motion for reconsideration without allowing any
other relief that Nolasco prayed for in his Motion for Partial Judgment and
to Dismiss Petition. Had the respondent judge instead opted to grant
partial judgment and direct the award of the Project to China International,
the Court would not hesitate to strike down such award. Yet the
respondent judge did not act so unequivocally, and merely advised that the
DPWH Secretary should consider such an option. Perhaps the propriety of
such advice can be appropriately questioned, in light of our view that such
conclusion was derived without allowing the DPWH or an injured party
such as Daewoo opportunity to be heard and to present their own
evidence. Nonetheless, such advisory opinion has no binding effect,
especially if construed as directing the award of the Project to China
International. Accordingly, for that reason alone and with the necessary
clarifications made, there is no reason to set aside the assailed Order dated
6 September 2002, especially considering that its final disposition
dismissing Nolascos motion for reconsideration is ultimately correct.
Nolascos petition had been correctly dismissed by the RTC on two
grounds: that Nolascos general interest as a taxpayer was not sufficient to
establish any direct injury to him should the Project be awarded to
Daewoo; and that the petition was a suit against the State, which may not
prosper without its consent. Given that none of the parties are actually
praying that Nolascos motion for reconsideration be granted or that
Nolascos petition be reinstated, we need not review in depth the rationale
of the RTC in dismissing Nolascos petition. The mere invocation of standing

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 50

as a tax payer does not mean that in each and every instance where such a
ground is invoked courts are left with no alternative except to hear the
parties, for the courts are vested with discretion whether or not a
taxpayers suit should be entertained.53 We likewise find no error on the
part of the RTC when it cited as basis for the dismissal of Nolascos petition,
our ruling in Bugnay Construction & Development Corp. v. Laron54 that the
taxpayer-plaintiff must specifically prove that he has sufficient interest in
preventing the illegal expenditure of money raised by taxation, and that he
will sustain a direct injury as a result of the enforcement of the questioned
statute or contract.55
We also find no error on the part of the RTC in regarding Nolascos petition
as a suit against the State without the latters consent. An unincorporated
government agency such as the DPWH is without any separate juridical
personality of its own and hence enjoys immunity from suit.56 Even in the
exercise of proprietary functions incidental to its primarily governmental
functions, an unincorporated agency still cannot be sued without its
consent.57 Moreover, it cannot be said that the DPWH was deemed to have
given its consent to be sued by entering into a contract, for at the time the
petition was filed by Nolasco, the DPWH had not yet entered into a
contract with respect to the Project.
Surprisingly, and with no apparent benefit on its behalf, Petitioner imputes
error on the part of the RTC when the court, in the fallo of the assailed
Order, directed the dismissal of the "Motion for Reconsideration of the
Petition," pointing out that such pleading was never filed by Nolasco,58 and
accordingly prays "that the order dismissing the alleged Motion for
Reconsideration of Petition be declared null and void."59 However, Nolasco
did file a "Motion for Reconsideration" to the order dismissing the petition,
and in his Motion for Partial Judgment and to Dismiss Petition, Nolasco
similarly prays that "the Motion for Reconsideration of the Petition be
dismissed." We have no doubt, infelicitous wording aside, that the "Motion
for Reconsideration of the Petition" adverted to in the fallo refers to
Nolascos own motion for reconsideration, the denial of which Nolasco also
prayed for in the Motion for Partial Judgment and to Dismiss Petition that
was the subject of the assailed Order. And as just discussed, the denial of
the Nolascos motion for reconsideration was in order.
Notably, this Court has not engaged in a review of the award of the Project
to Daewoo. Notwithstanding the fact that the parties have prayed that the
Court either effect the award of the Project to Daewoo or direct the award
to China International, the Court deems it improper to conduct a de novo
factual finding on which entity should be awarded the project. The Court is
not a trier of facts, and it would be offensive to established order and the
hierarchy of courts for this Court to initiate such factual review. Had the
RTC conducted a valid trial on the merits, perhaps this Court could
eventually review the lower courts findings on the matter, but the RTC
properly dismissed the case, and it would be unbecoming on the part of
this Court to suddenly engage in an initial trial on the merits on appellate
review.
This is a stance not borne out of hesitance to tackle the issue, or avoid the
sort of ruling that may satisfy one party or the other as "definitive," but
arrived at out of necessity to preserve the integrity of our civil procedure,
including the hierarchy of our courts and the limits of this Courts power of
judicial review. Precisely, the messy milieu presented before us occurred
because the RTC and Nolasco compromised our court processes to
destructive ends, and it is this Courts function to reassert the rules, to

restore order, and not compound to the sloppiness by itself violating


procedural order.
The executive department is acknowledged to have wide latitude to accept
or reject a bid, or even after an award has been made, to revoke such
award. From these actions taken, the court will not generally interfere with
the exercise of discretion by the executive department, unless it is
apparent that the exercise of discretion is used to shield unfairness or
injustice.60 This policy of non-interference can hardly be countermanded by
reason of a claim anchored on an unofficial document such as the
"Confidential Reports from an Unnamed DPWH Consultant" presented by
Nolasco, especially when the probative value thereof has hardly been
passed upon by a proper trier of facts.
More importantly, the Court, the parties, and the public at large are bound
to respect the fact that official acts of the Government, including those
performed by governmental agencies such as the DPWH, are clothed with
the presumption of regularity in the performance of official duty. and
cannot be summarily, prematurely and capriciously set aside. 61 Such
presumption is operative not only upon the courts, but on all persons,
especially on those who deal with the government on a frequent basis.
There is perhaps a more cynical attitude fostered within the popular
culture, or even through anecdotal traditions. Yet, such default pessimism
is not embodied in our system of laws, which presumes that the State and
its elements act correctly unless otherwise proven. To infuse within our
legal philosophy a contrary, gloomy pessimism would assure that the State
would bog down, wither and die.
Instead, our legal framework allows the pursuit of remedies against errors
of the State or its components available to those entitled by reason of
damage or injury sustained. Such litigation involves demonstration of legal
capacity to sue or be sued, an exhaustive trial on the merits, and
adjudication that has basis in duly proven facts and law. No proper and
viable legal challenge has emerged impugning the award of the Project by
DPWH to Daewoo, Nolascos Petition being woefully insufficient to that
purpose. It is tragic perhaps that the irresponsible actions of Judge Nabong,
and their ultimate embodiment in his obiter dicta in the assailed Order,
somehow fostered the illusion that there was a serious legal cloud hovering
over the award by DPWH to Daewoo. We rule that there is none, that the
RTC acted correctly in granting the Petitioners motion to dismiss Nolascos
Petition and in denying the subsequent motion for reconsideration to the
dismissal. These are the only relevant matters properly brought for judicial
review and everything else is unnecessary verbiage.
For the same reason, we cannot allow the Petitioners prayer for damages
against Nolasco. The matter of damages is one that has to be properly
litigated before the triers of fact, and certainly has not been passed upon
by the RTC. Yet it does not necessarily follow that no liability arises from
the filing of the initiatory petition, or the facts succeeding thereto. It does
not escape our attention that on 2 April 2002, the OSG was served a
spurious order purportedly giving due course to Nolascos petition and
granting the sought-for preliminary injunction. This incident cannot pass
without comment by this Court, which cannot sanction the circulation of
fake judicial orders, and should be duly investigated by the National Bureau
of Investigation for appropriate action.
Finally, it likewise appears that Judge Nabong, by issuing the temporary
restraining order dated 4 March 2002, violated Section 6 of Republic Act
No. 8975, which penalizes the judge who issues a temporary restraining
order enjoining the bidding or awarding of a contract or project of the

national government.62 Yet to his credit, Judge Nabong recalled the TRO
upon realizing his error, thus a REPRIMAND should suffice under the
circumstances.
WHEREFORE, premises considered, the Petition is DENIED. The assailed
Order dated 6 September 2004 is AFFIRMED, with the QUALIFICATION that
last paragraph of the body of the Order, which states that the DPWH
Secretary "must now seriously consider and effect the award of Package 2,
Phase II of the Agno River Flood Control Project" is OBITER DICTA and
hence of no binding force.
The National Bureau of Investigation is hereby DIRECTED to investigate the
circumstances surrounding the alleged spurious order dated 22 March
2002 served on the Office of the Solicitor General and determine possible
criminal liabilities for the creation of such forged document.
Judge Juan Nabong is hereby REPRIMANDED for failure to observe Section
6 of Republic Act No. 8975, and WARNED that a subsequent repetition of
the same shall be dealt with more severely.
No costs. SO ORDERED.
G.R. No. 145328 March 23, 2006
EDUARDO F. HERNANDEZ, MA. ENCARBACION R. LEGASPI, JAIME
BLANCO, JR., ENRIQUE BELO, CARLOS VIAPLANA, CARL FURER, VIVENCIO
TINIO, MICHAEL BRIGGS, ROSA CARAM, FAUSTO PREYSLER, ROBERT KUA,
GEORGE LEE, GUILLERMO LUCHANGCO, PETER DEE, LUISA MARQUEZ,
ANGELITA LILLES, JUAN CARLOS, HOMER GO, AMADEO VALENZUELA,
EMILIO CHING, ANTONIO CHAN, MURLI SABNANI, MARCOS ROCES,
RAYMUNDO FELICIANO, NORMA GAFFUD, ALF HOLST, LOURDES P.
ROQUE, MANUEL DY, RAUL FERNANDEZ, VICTORIA TENGCO, CHI MO
CHENG, BARANGAY DASMARIAS, and HON. FRANCISCO B. IBAY,
petitioners vs. NATIONAL POWER CORPORATION, respondent
DECISION
CHICO-NAZARIO, J.:
Although Presidential Decree No. 1818 prohibits any court from issuing
injunctions in cases involving infrastructure projects, the prohibition
extends only to the issuance of injunctions or restraining orders against
administrative acts in controversies involving facts or the exercise of
discretion in technical cases. On issues clearly outside this dimension and
involving questions of law, this Court declared that courts could not be
prevented from exercising their power to restrain or prohibit
administrative acts.1 In such cases, let the hammer fall and let it fall hard.
With health risks linked to exposure to electromagnetic radiation as their
battle cry, petitioners, all residents of Dasmarias Village, are clamoring for
the reversal of the decision2 dated 3 May 2000 of the Court of Appeals in
CA-G.R. SP No. 57849 as well as the resolution dated 27 September 2000,
denying their motion for reconsideration.
The assailed decision3 of the Court of Appeals reversed the order of the
Regional Trial Court of Makati, issuing a writ of preliminary injunction
against respondent National Power Corporation (NAPOCOR) to stay the
latter from energizing and transmitting high voltage electric current
through its cables erected from Sucat, Paraaque to Araneta Ave., Quezon
City.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 51

But, first, the facts:


Sometime in 1996, NAPOCOR began the construction of 29 decagonshaped steel poles or towers with a height of 53.4 meters to support
overhead high tension cables in connection with its 230 Kilovolt SucatAraneta-Balintawak Power Transmission Project. Said transmission line
passes through the Sergio Osmea, Sr. Highway (South Superhighway), the
perimeter of Fort Bonifacio, and Dasmarias Village proximate to Tamarind
Road, where petitioners homes are.
Said project later proved to be petitioners bane of existence.
Alarmed by the sight of the towering steel towers, petitioners scoured the
internet on the possible adverse effects that such a structure could cause
to their health and well-being. Petitioners got hold of published articles
and studies linking the incidence of a fecund of illnesses to exposure to
electromagnetic fields. These illnesses range from cancer to leukemia.
Petitioners left no stones unturned to address their malady. They aired this
growing concern to the NAPOCOR, which conducted a series of meetings
with them.
NAPOCOR received flak from Representative Francis Joseph G. Escudero,
who in his Privilege Speech dated 10 May 1999, denounced the cavalier
manner with which Napocor ignored safety and consultation requirements
in the questioned project.
Petitioners brought their woes to the attention of Rep. Arnulfo
Fuentebella, Chairman of the House Committee on Energy, wherein
NAPOCOR was asked to shed light on the petitioners problem. In a letter
dated 8 November 1999, Napocor President Federico Puno stated that
NAPOCOR was still in the process of coming up with a "win-win" solution to
the concerns of the Dasmarias Village and Forbes Park residents.4
In a letter dated 10 August 1999 addressed to Congressman Arnulfo P.
Fuentebella, NAPOCORs President wrote:
We have discussed the matter with the Dasmarias and Forbes residents
and we have come up with four (4) options on how to address the
problem, to wit:
Option Cost
Option 1: Transfer the line to Lawton Avenue P 111.84 million
(proposal of Dasmarias/Forbes)
Option 2: Maintain 12 meters distance along P 77.60 million the
village
Option 3: Construct an underground line P 482.00 million
Option 4: Reroute along C-5 and South Luzon P 1,018.83 million
Expressway (combination of overhead and underground)5
Negotiations between petitioners and the NAPOCOR reached an impass,
with petitioners vying for the relocation of the transmission lines to Fort
Bonifacio on one hand, and the NAPOCOR insisting on a 12-meter
easement widening, on the other.6
Thus, petitioners, on 9 March 2000 filed a Complaint 7 for Damages with
Prayer for the Issuance of a Temporary Restraining Order and/or a Writ of
Preliminary Injunction against NAPOCOR. Harping on the hazardous effects
of exposure to electromagnetic radiation to the health and safety to

themselves and their families, petitioners, through the instant case, sought
what they had failed to achieve through amicable means with NAPOCOR
and prayed, inter alia, for damages and the relocation of the transmission
lines to Lawton Avenue, Fort Bonifacio.
8

On 13 March 2000, Judge Francisco B. Ibay issued an order in Civil Case


No. 00-352, which temporarily restrained the respondent from energizing
and transmitting high voltage electric current through the said project. The
pertinent portion of the said order reads:
Acting on the plaintiffs "Urgent Omnibus Motion," it appearing that the
subject area will be energized by midnight tonight based on a report taken
from Representative Joker P. Arroyo by plaintiffs counsel, so as not to
render moot and academic the instant case, as prayed for, defendant
National Power Corporation is ordered to maintain the status quo and/or
be enjoined from energizing and transmitting high voltage electric current
through its cables for forty eight (48) hours starting 4 oclock in the
afternoon today and ending 4 oclock in the afternoon of 15 March 2000. 9
By order10 of 15 March 2000, the trial court extended the restraining order
for 18 more days.
NAPOCOR filed a Petition for Certiorari with Prayer for Temporary
Restraining Order and Preliminary Injunction with the Court of Appeals
assailing the above order by the trial court. Alluding to Presidential Decree
No. 1818 (1981), "Prohibiting Courts from Issuing Restraining Orders or
Preliminary Injunctions in Cases Involving Infrastructure and Natural
Resource Development Projects of, and Public Utilities Operated by, the
Government," particularly Sec. 1, NAPOCOR stalwartly sought the dismissal
of the case on the ground of lack jurisdiction. Presidential Decree No. 1818
provides:
Section 1. No Court in the Philippines shall have jurisdiction to issue any
restraining order, preliminary injunction or preliminary mandatory
injunction in any case, dispute, or controversy involving an infrastructure
project, or a mining, fishery, forest or other natural resource development
project of the government, or any public utility operated by the
government, including among other public utilities for transport of the
goods or commodities, stevedoring and arrastre contracts, to prohibit any
person or persons, entity or government official from proceeding with or
continuing the execution or implementation of any such project, or the
operation of such public utility or pursuing any lawful activity necessary for
such execution, implementation or operation.
In the interregnum, by order dated 3 April 2000, the trial court ordered the
issuance of a writ of preliminary injunction against NAPOCOR. 11 The trial
court articulated that an injunction was necessary to stay respondent
NAPOCORs activation of its power lines due to the possible health risks
posed to the petitioners. Asserting its jurisdiction over the case, the trial
court was of the view that Presidential Decree No. 1818 and jurisprudence
proscribing injunctions against infrastructure projects do not find
application in the case at bar because of the health risks involved.
The trial court, thus, enjoined the NAPOCOR from further preparing and
installing high voltage cables to the steel pylons erected near petitioners
homes and from energizing and transmitting high voltage electric current
through said cables while the case is pending final adjudication, upon
posting of the bond amounting to P5,000,000.00 executed to the effect
that petitioners will pay all the damages the NAPOCOR may sustain by

reason of the injunction if the Court should finally decide that the
petitioners are not entitled thereto.12
In light of the foregoing order of the trial court, the petition which
NAPOCOR filed with the Court of Appeals was later amended to include the
prayer for the nullification and injunction of the Order dated 3 April 2000
of the trial court.
In the challenged decision of 3 May 2000, the Court of Appeals reversed
the trial courts order, with the following fallo:
WHEREFORE, premises considered, the instant petition for certiorari is
hereby GRANTED. The assailed orders of the respondent court, dated
March 13, 2000 and April 3, 2000, are hereby REVERSED and SET ASIDE.13
In the Court of Appeals rationale, the proscription on injunctions against
infrastructure projects of the government is clearly mandated by the
above-quoted Section 1 of Presidential Decree No. 1818, as reiterated by
the Supreme Court in its Circulars No. 2-91 and No. 13-93, dated 15 March
1991 and 5 March 1993, respectively.
As their motion for reconsideration was met with similar lack of success,
petitioners, in a last attempt at vindication, filed the present petition for
review on the following arguments:
I.
Temporary restraining orders and preliminary injunctions were purposely
designed to address matters of extreme urgency where there is probability
of grave injustice and irreparable injury.14
II.
The rule on preliminary injunction merely requires that unless restrained,
the act complained of will probably work injustice to the applicant or
probably violate his rights and tends to render the judgment ineffectual.15
(Emphasis in the original.)
Fundamental to the resolution of the instant petition is the issue of
whether or not the trial court may issue a temporary restraining order and
preliminary injunction to enjoin the construction and operation of the 29
decagon-shaped steel poles or towers by the NAPOCOR, notwithstanding
Presidential Decree No. 1818.
Petitioners clutch on their stand that Presidential Decree No. 1818 could
not be construed to apply to cases of extreme urgency as in the present
case when no less than the rights of the petitioners to health and safety
hangs on the balance.
We find the petition to be imbued with merit.
Presidential Decree No. 1818 was issued on 16 January 1981, prohibiting
judges from issuing restraining orders against government infrastructure
projects. In part, the decree says, "No court in the Philippines shall have
jurisdiction to issue any restraining order, preliminary injunction or
preliminary order, preliminary mandatory injunction in any case, dispute or
controversy involving an infrastructure project." Realizing the importance
of this decree, this Tribunal had issued different circulars to implement this
particular law.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 52

Presidential Decree No. 181816 prohibits courts from issuing injunctions


against government infrastructure projects. In Garcia v. Burgos,17
Presidential Decree No. 1818 was held to prohibit courts from issuing an
injunction against any infrastructure project in order not to disrupt or
hamper the pursuit of essential government projects or frustrate the
economic development effort of the nation.
While its sole provision would appear to encompass all cases involving the
implementation of projects and contracts on infrastructure, natural
resource development and public utilities, this rule, however, is not
absolute as there are actually instances when Presidential Decree No. 1818
should not find application. In a spate of cases, this Court declared that
although Presidential Decree No. 1818 prohibits any court from issuing
injunctions in cases involving infrastructure projects, the prohibition
extends only to the issuance of injunctions or restraining orders against
administrative acts in controversies involving facts or the exercise of
discretion in technical cases. On issues clearly outside this dimension and
involving questions of law, this Court declared that courts could not be
prevented from exercising their power to restrain or prohibit
administrative acts.18
In the case at bar, petitioners sought the issuance of a preliminary
injunction on the ground that the NAPOCOR Project impinged on their right
to health as enshrined in Article II, Section 15 of the 1987 Constitution,
which provides:
Sec. 15. The State shall protect and promote the right to health of the
people and instill consciousness among them.
To boot, petitioners, moreover, harp on respondents failure to conduct
prior consultation with them, as the community affected by the project, in
stark violation of Section 27 of the Local Government Code which provides:
"no project or program shall be implemented by government authorities
unless the consultations mentioned are complied with, and prior approval
of the Sanggunian concerned is observed."
From the foregoing, whether there is a violation of petitioners
constitutionally protected right to health and whether respondent
NAPOCOR had indeed violated the Local Government Code provision on
prior consultation with the affected communities are veritable questions of
law that invested the trial court with jurisdiction to issue a TRO and
subsequently, a preliminary injunction. As such, these questions of law
divest the case from the protective mantle of Presidential Decree No. 1818.
Moreover, the issuance by the trial court of a preliminary injunction finds
legal support in Section 3 of Rule 58 of the Rules of Court which provides:
Sec. 3. Grounds for issuance of preliminary injunction. - A preliminary
injunction may be granted when it is established:
(a)

(b)

(c)

That the applicant is entitled to the relief demanded, and the


whole or part of such relief consists in restraining the
commission or continuance of the act or acts complained of, or
in requiring the performance of an act or acts, either for a
limited period or perpetually;
That the commission, continuance or non-performance of the
act or acts complained of during the litigation would probably
work injustice to the applicant; or
That a party, court, agency or a person is doing, threatening, or
is attempting to do, or is procuring or suffering to be done,

some act or acts probably in violation of the rights of the


applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual. (3a) (Emphasis
supplied.)
The rule on preliminary injunction merely requires that unless restrained,
the act complained of will probably violate his rights and tend to render the
judgment ineffectual.
Here, there is adequate evidence on record to justify the conclusion that
the project of NAPOCOR probably imperils the health and safety of the
petitioners so as to justify the issuance by the trial court of a writ of
preliminary injunction.
Petitioners adduced in evidence copies of studies linking the incidence of
illnesses such as cancer and leukemia to exposure to electromagnetic
fields. The records bear out, to boot, a copy of a brochure of NAPOCOR
regarding its Quezon Power Project from which will be supplying NAPOCOR
with the power which will pass through the towers subject of the
controversy. The NAPOCOR brochure provides that because of the danger
concomitant with high voltage power, Philippine laws mandate that the
power lines should be located within safe distances from residences. And
the Quezon Power Project mandates an easement of 20 meters to the right
and 20 meters to the left which falls short of the 12-meter easement that
NAPOCOR was proposing to petitioners.
Likewise on record, are copies of letters of Napocor President Federico
Puno to Rep. Arnulfo Fuentebella, Chairman of the House Committee on
Energy, stating updates on the negotiations being undertaken by the
NAPOCOR and the Dasmarias Village and Forbes Park residents. Also on
file is the Privilege Speech dated 10 May 1999 of Representative Francis
Joseph G. Escudero, who denounced the cavalier manner with which
Napocor ignored safety and consultation requirements in the questioned
project.
With a member of Congress denouncing the subject project of NAPOCOR
because of the very same health and safety ills that petitioners now hew to
in this petition, and with documents on record to show that NAPOCOR
made representations to petitioners that they are looking into the
possibility of relocating the project, added to the fact that there had been
series of negotiations and meetings between petitioners and NAPOCOR as
well as related agencies, there is ample indicia to suggest to the mind of
the court that the health concerns of the petitioners are, at the very least,
far from imaginary.

possibility that the exposure to electromagnetic radiation causes cancer


and other disorders is still, indeed, within the realm of scientific scale of
probability.
Equally important, we take judicial notice that the area alluded to as
location of the NAPOCOR project is a fragile zone being proximate to local
earthquake faults, particularly the Marikina fault, among other zones. This
is not to mention the risks of falling structures caused by killer tornadoes
and super typhoons, the Philippines, especially Central Luzon, being
situated along the typhoon belt.
Moreover, the Local Government Code, requires conference with the
affected communities of a government project. NAPOCOR, palpably, made
a shortcut to this requirement. In fact, there appears a lack of exhaustive
feasibility studies on NAPOCORs part before making a go with the project
on hand; otherwise, it should have anticipated the legal labyrinth it is now
caught in.
These are facts, which the trial court could not ignore, and form as
sufficient basis to engender the cloud of doubt that the NAPOCOR project
could, indeed, endanger the lives of the petitioners. A preliminary
injunction is likewise justified prior to a final determination of the issues of
whether or not NAPOCOR ignored safety and consultation requirements in
the questioned project. Indeed, the court could, nay should, grant the writ
of preliminary injunction if the purpose of the other party is to shield a
wrongdoing. A ruling to the contrary would amount to an erosion of
judicial discretion.
After all, for a writ of preliminary injunction to be issued, the Rules do not
require that the act complained of be in violation of the rights of the
applicant. Indeed, what the Rules require is that the act complained of be
probably in violation of the rights of the applicant. Under the Rules of
Court, probability is enough basis for injunction to issue as a provisional
remedy, which is different from injunction as a main action where one
needs to establish absolute certainty as basis for a final and permanent
injunction.
Pending the final determination of the trial court on the main case for
damages, of whether or not the NAPOCOR Project infringes on petitioners
substantive right to health and pending determination of the question of
whether there was non-observance of the prior-consultation proviso under
the Local Government Code, it is prudent to preserve the status quo. In
Phil. Ports Authority v. Cipres Stevedoring & Arrastre, Inc.,20 we held:

Indeed, if there is no cause for concern, NAPOCOR would not have been
stirred to come up with options to address the woes of petitioners, nor
would Congressman Escudero have fired away those strong words of
censure, assailing what to Congressman Escudero smacks of a "cavalier
manner by which the NAPOCOR has responded to earnest pleas for a
review of its practice of installing massive pylons supporting high tension
cables in densely populated areas."19

A preliminary injunction is an order granted at any stage of an action prior


to judgment of final order, requiring a party, court, agency, or person to
refrain from a particular act or acts. It is a preservative remedy to ensure
the protection of a partys substantive rights or interests pending the final
judgment in the principal action. A plea for an injunctive writ lies upon the
existence of a claimed emergency or extraordinary situation which should
be avoided for otherwise, the outcome of a litigation would be useless as
far as the party applying for the writ is concerned.

True, the issue of whether or not the transmission lines are safe is
essentially evidentiary in nature, and pertains to the very merits of the
action below. In fact, petitioners recognize that the conclusiveness of their
life, health and safety concerns still needs to be proved in the main case
below and they are prepared to do so especially in the light of some studies
cited by respondent that yield contrary results in a disputed subject.
Despite the parties conflicting results of studies made on the issue, the

At times referred to as the "Strong Arm of Equity," we have consistently


ruled that there is no power the exercise of which is more delicate and
which calls for greater circumspection than the issuance of an injunction. It
should only be extended in cases of great injury where courts of law cannot
afford an adequate or commensurate remedy in damages; "in cases of
extreme urgency; where the right is very clear; where considerations of
relative inconvenience bear strongly in complainants favor; where there is

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 53

a willful and unlawful invasion of plaintiffs right against his protest and
remonstrance, the injury being a continuing one, and where the effect of
the mandatory injunction is rather to reestablish and maintain a
preexisting continuing relation between the parties, recently and arbitrarily
interrupted by the defendant, than to establish a new relation." (Emphasis
supplied.)
What is more, contrary to respondents assertion, there is not a single
syllable in the circulars issued by this Court enjoining the observance of
Presidential Decree No. 1818, which altogether and absolutely, ties the
hands of the courts from issuing a writ of preliminary injunction. What
Circular 2-9121 dated 15 March 1991 seeks to enjoin is the indiscriminate
issuance of court injunctions. The same holds for Circular 13-9322 dated 5
March 1993 and Circular 68-94.23 And, in Circular No. 7-99, judges are
enjoined to observe utmost caution, prudence and judiciousness in the
issuance of temporary restraining order and in the grant of writs of
preliminary injunction to avoid any suspicion that its issuance or grant was
for consideration other than the strict merits of the case.24
There is not a hint from the foregoing circulars suggesting an unbridled
prohibition against the issuance of temporary restraining orders or
preliminary injunctions.
In sum, what Presidential Decree No. 1818 aims to avert is the untimely
frustration of government infrastructure projects, particularly by
provisional remedies, to the detriment of the greater good by disrupting
the pursuit of essential government projects or frustrate the economic
development effort of the nation. Presidential Decree No. 1818, however,
was not meant to be a blanket prohibition so as to disregard the
fundamental right to health, safety and well-being of a community
guaranteed by the fundamental law of the land. 25
Lest we be misconstrued, this decision does not undermine the purpose of
the NAPOCOR project which is aimed towards the common good of the
people. But, is the promotion of the general welfare at loggerheads with
the preservation of the rule of law? We submit that it is not. 26
In the present case, the far-reaching irreversible effects to human safety
should be the primordial concerns over presumed economic benefits per
se as alleged by the NAPOCOR.
Not too long ago, the Court, in Metropolitan Manila Development
Authority (MMDA) v. Bel-Air Village Association, Inc.,27 upheld the validity
of the writ of preliminary injunction issued by the Court of Appeals
enjoining the implementation of the Metropolitan Manila Development
Authoritys proposed action of opening of the Neptune Street to public
vehicular traffic. We were categorical Not infrequently, the government is tempted to take legal shortcuts to
solve urgent problems of the people. But even when government is armed
with the best of intention, we cannot allow it to run roughshod over the
rule of law. Again, we let the hammer fall and fall hard on the illegal
attempt of the MMDA to open for public use a private road in a private
subdivision. While we hold that the general welfare should be promoted,
we stress that it should not be achieved at the expense of the rule of law.28
In hindsight, if, after trial, it turns out that the health-related fears that
petitioners cleave on to have adequate confirmation in fact and in law, the
questioned project of NAPOCOR then suffers from a paucity of purpose, no
matter how noble the purpose may be. For what use will modernization

serve if it proves to be a scourge on an individuals fundamental right, not


just to health and safety, but, ostensibly, to life preservation itself, in all of
its desired quality?
WHEREFORE, the petition is granted. The decision dated 3 May 2000 of the
Court of Appeals in CA-G.R. SP No. 57849 is REVERSED as well as the
resolution dated 27 September 2000. The Order dated 3 April 2000 of the
Regional Trial Court of Makati in Civil Case No. 00-352 is hereby
REINSTATED. No pronouncement as to costs SO ORDERED.
G.R. No. 156015. August 11, 2005
REPUBLIC OF THE PHILIPPINES, represented by LT. GEN. JOSE M.
CALIMLIM, in his capacity as former Chief of the Intelligence Service,
Armed Forces of the Philippines (ISAFP), and former Commanding
General, Presidential Security Group (PSG), and MAJ. DAVID B. DICIANO,
in his capacity as an Officer of ISAFP and former member of the PSG,
Petitioners, vs. HON. VICTORINO EVANGELISTA, in his capacity as
Presiding Judge, Regional Trial Court, Branch 223, Quezon City, and
DANTE LEGASPI, represented by his attorney-in-fact, Paul Gutierrez,
Respondent.
DECISION
PUNO, J.:
The case at bar stems from a complaint for damages,
issuance of a writ of preliminary injunction, filed by
Dante Legaspi, through his attorney-in-fact Paul
petitioners Gen. Jose M. Calimlim, Ciriaco Reyes and
before the Regional Trial Court (RTC) of Quezon City. 1

with prayer for the


private respondent
Gutierrez, against
Maj. David Diciano

The Complaint alleged that private respondent Legaspi is the owner of a


land located in Bigte, Norzagaray, Bulacan. In November 1999, petitioner
Calimlim, representing the Republic of the Philippines, and as then head of
the Intelligence Service of the Armed Forces of the Philippines and the
Presidential Security Group, entered into a Memorandum of Agreement
(MOA) with one Ciriaco Reyes. The MOA granted Reyes a permit to hunt
for treasure in a land in Bigte, Norzagaray, Bulacan. Petitioner Diciano
signed the MOA as a witness.2 It was further alleged that thereafter, Reyes,
together with petitioners, started, digging, tunneling and blasting works on
the said land of Legaspi. The complaint also alleged that petitioner Calimlim
assigned about 80 military personnel to guard the area and encamp
thereon to intimidate Legaspi and other occupants of the area from going
near the subject land.
On February 15, 2000, Legaspi executed a special power of attorney (SPA)
appointing his nephew, private respondent Gutierrez, as his attorney-infact. Gutierrez was given the power to deal with the treasure hunting
activities on Legaspis land and to file charges against those who may enter
it without the latters authority.3 Legaspi agreed to give Gutierrez 40% of
the treasure that may be found in the land.
On February 29, 2000, Gutierrez filed a case for damages and injunction
against petitioners for illegally entering Legaspis land. He hired the legal
services of Atty. Homobono Adaza. Their contract provided that as legal
fees, Atty. Adaza shall be entitled to 30% of Legaspis share in whatever
treasure may be found in the land. In addition, Gutierrez agreed to pay
Atty. Adaza P5,000.00 as appearance fee per court hearing and defray all
expenses for the cost of the litigation.4 Upon the filing of the complaint,

then Executive Judge Perlita J. Tria Tirona issued a 72-hour temporary


restraining order (TRO) against petitioners.
The case5 was subsequently raffled to the RTC of Quezon City, Branch 223,
then presided by public respondent Judge Victorino P. Evangelista. On
March 2, 2000, respondent judge issued another 72-hour TRO and a
summary hearing for its extension was set on March 7, 2000.
On March 14, 2000, petitioners filed a Motion to Dismiss 6 contending: first,
there is no real party-in-interest as the SPA of Gutierrez to bring the suit
was already revoked by Legaspi on March 7, 2000, as evidenced by a Deed
of Revocation,7 and, second, Gutierrez failed to establish that the alleged
armed men guarding the area were acting on orders of petitioners. On
March 17, 2000, petitioners also filed a Motion for Inhibition8 of the
respondent judge on the ground of alleged partiality in favor of private
respondent.
On March 23, 2000, the trial court granted private respondents application
for a writ of preliminary injunction on the following grounds: (1) the
diggings and blastings appear to have been made on the land of Legaspi,
hence, there is an urgent need to maintain the status quo to prevent
serious damage to Legaspis land; and, (2) the SPA granted to Gutierrez
continues to be valid.9 The trial court ordered thus:
WHEREFORE, in view of all the foregoing, the Court hereby resolves to
GRANT plaintiffs application for a writ of preliminary injunction. Upon
plaintiffs filing of an injunction bond in the amount of ONE HUNDRED
THOUSAND PESOS (P100,000.00), let a Writ of Preliminary Injunction issue
enjoining the defendants as well as their associates, agents or
representatives from continuing to occupy and encamp on the land of the
plaintiff LEGASPI as well as the vicinity thereof; from digging, tunneling and
blasting the said land of plaintiff LEGASPI; from removing whatever
treasure may be found on the said land; from preventing and threatening
the plaintiffs and their representatives from entering the said land and
performing acts of ownership; from threatening the plaintiffs and their
representatives as well as plaintiffs lawyer.
On even date, the trial court issued another Order10 denying petitioners
motion to dismiss and requiring petitioners to answer the complaint. On
April 4, 2000, it likewise denied petitioners motion for inhibition.11
On appeal, the Court of Appeals affirmed the decision of the trial court.12
Hence this petition, with the following assigned errors:
I.

II.
III.

I WHETHER THE CONTRACT OF AGENCY BETWEEN LEGASPI


AND PRIVATE RESPONDENT GUTIERREZ HAS BEEN EFFECTIVELY
REVOKED BY LEGASPI.
II WHETHER THE COMPLAINT AGAINST PETITIONERS SHOULD
BE DISMISSED.
III WHETHER RESPONDENT JUDGE OUGHT TO HAVE INHIBITED
HIMSELF FROM FURTHER PROCEEDING WITH THE CASE.

We find no merit in the petition.


On the first issue, petitioners claim that the special power of attorney of
Gutierrez to represent Legaspi has already been revoked by the latter.
Private respondent Gutierrez, however, contends that the unilateral
revocation is invalid as his agency is coupled with interest.
We agree with private respondent.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 54

Art. 1868 of the Civil Code provides that by the contract of agency, an
agent binds himself to render some service or do something in
representation or on behalf of another, known as the principal, with the
consent or authority of the latter.13
A contract of agency is generally revocable as it is a personal contract of
representation based on trust and confidence reposed by the principal on
his agent. As the power of the agent to act depends on the will and license
of the principal he represents, the power of the agent ceases when the will
or permission is withdrawn by the principal. Thus, generally, the agency
may be revoked by the principal at will.14
However, an exception to the revocability of a contract of agency is when it
is coupled with interest, i.e., if a bilateral contract depends upon the
agency.15 The reason for its irrevocability is because the agency becomes
part of another obligation or agreement. It is not solely the rights of the
principal but also that of the agent and third persons which are affected.
Hence, the law provides that in such cases, the agency cannot be revoked
at the sole will of the principal.
In the case at bar, we agree with the finding of the trial and appellate
courts that the agency granted by Legaspi to Gutierrez is coupled with
interest as a bilateral contract depends on it. It is clear from the records
that Gutierrez was given by Legaspi, inter alia, the power to manage the
treasure hunting activities in the subject land; to file any case against
anyone who enters the land without authority from Legaspi; to engage
the services of lawyers to carry out the agency; and, to dig for any
treasure within the land and enter into agreements relative thereto. It
was likewise agreed upon that Gutierrez shall be entitled to 40% of
whatever treasure may be found in the land. Pursuant to this authority
and to protect Legaspis land from the alleged illegal entry of petitioners,
agent Gutierrez hired the services of Atty. Adaza to prosecute the case for
damages and injunction against petitioners. As payment for legal services,
Gutierrez agreed to assign to Atty. Adaza 30% of Legaspis share in
whatever treasure may be recovered in the subject land. It is clear that
the treasure that may be found in the land is the subject matter of the
agency; that under the SPA, Gutierrez can enter into contract for the legal
services of Atty. Adaza; and, thus Gutierrez and Atty. Adaza have an
interest in the subject matter of the agency, i.e., in the treasures that may
be found in the land. This bilateral contract depends on the agency and
thus renders it as one coupled with interest, irrevocable at the sole will of
the principal Legaspi.16 When an agency is constituted as a clause in a
bilateral contract, that is, when the agency is inserted in another
agreement, the agency ceases to be revocable at the pleasure of the
principal as the agency shall now follow the condition of the bilateral
agreement.17 Consequently, the Deed of Revocation executed by Legaspi
has no effect. The authority of Gutierrez to file and continue with the
prosecution of the case at bar is unaffected.
On the second issue, we hold that the issuance of the writ of preliminary
injunction is justified. A writ of preliminary injunction is an ancilliary or
preventive remedy that is resorted to by a litigant to protect or preserve
his rights or interests and for no other purpose during the pendency of the
principal action.18 It is issued by the court to prevent threatened or
continuous irremediable injury to the applicant before his claim can be
thoroughly studied and adjudicated.19 Its aim is to preserve the status quo
ante until the merits of the case can be heard fully, upon the applicants
showing of two important conditions, viz.: (1) the right to be protected

prima facie exists; and, (2) the acts sought to be enjoined are violative of
that right.20
Section 3, Rule 58 of the 1997 Rules of Civil Procedure provides that a writ
of preliminary injunction may be issued when it is established:
(a)

(b)

(c)

that the applicant is entitled to the relief demanded, the whole


or part of such relief consists in restraining the commission or
continuance of the act or acts complained of, or in requiring
the performance of an act or acts, either for a limited period or
perpetually;
that the commission, continuance or non-performance of the
act or acts complained of during the litigation would probably
work injustice to the applicant; or
that a party, court, agency or a person is doing, threatening, or
is attempting to do, or is procuring or suffering to be done,
some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.

It is crystal clear that at the hearing for the issuance of a writ of preliminary
injunction, mere prima facie evidence is needed to establish the applicants
rights or interests in the subject matter of the main action. 21 It is not
required that the applicant should conclusively show that there was a
violation of his rights as this issue will still be fully litigated in the main
case.22 Thus, an applicant for a writ is required only to show that he has
an ostensible right to the final relief prayed for in his complaint. 23
In the case at bar, we find that respondent judge had sufficient basis to
issue the writ of preliminary injunction. It was established, prima facie,
that Legaspi has a right to peaceful possession of his land, pendente lite.
Legaspi had title to the subject land. It was likewise established that the
diggings were conducted by petitioners in the enclosed area of Legaspis
land. Whether the land fenced by Gutierrez and claimed to be included in
the land of Legaspi covered an area beyond that which is included in the
title of Legaspi is a factual issue still subject to litigation and proof by the
parties in the main case for damages. It was necessary for the trial court to
issue the writ of preliminary injunction during the pendency of the main
case in order to preserve the rights and interests of private respondents
Legaspi and Gutierrez.
On the third issue, petitioners charge that the respondent judge lacked the
neutrality of an impartial judge. They fault the respondent judge for not
giving credence to the testimony of their surveyor that the diggings were
conducted outside the land of Legaspi. They also claim that respondent
judges rulings on objections raised by the parties were biased against
them.
We have carefully examined the records and we find no sufficient basis to
hold that respondent judge should have recused himself from hearing the
case. There is no discernible pattern of bias on the rulings of the
respondent judge. Bias and partiality can never be presumed. Bare
allegations of partiality will not suffice in an absence of a clear showing
that will overcome the presumption that the judge dispensed justice
without fear or favor.24 It bears to stress again that a judges appreciation
or misappreciation of the sufficiency of evidence adduced by the parties, or
the correctness of a judges orders or rulings on the objections of counsels
during the hearing, without proof of malice on the part of respondent
judge, is not sufficient to show bias or partiality. As we held in the case of
Webb vs. People,25 the adverse and erroneous rulings of a judge on the

various motions of a party do not sufficiently prove bias and prejudice to


disqualify him. To be disqualifying, it must be shown that the bias and
prejudice stemmed from an extrajudicial source and result in an opinion on
the merits on some basis other than what the judge learned from his
participation in the case. Opinions formed in the course of judicial
proceedings, although erroneous, as long as based on the evidence
adduced, do not prove bias or prejudice. We also emphasized that
repeated rulings against a litigant, no matter how erroneously, vigorously
and consistently expressed, do not amount to bias and prejudice which can
be a bases for the disqualification of a judge.
Finally, the inhibition of respondent judge in hearing the case for damages
has become moot and academic in view of the latters death during the
pendency of the case. The main case for damages shall now be heard and
tried before another judge.
IN VIEW WHEREOF, the impugned Orders of the trial court in Civil Case No.
Q-00-40115, dated March 23 and April 4, 2000, are AFFIRMED. The
presiding judge of the Regional Trial Court of Quezon City to whom Civil
Case No. Q-00-40115 was assigned is directed to proceed with dispatch in
hearing the main case for damages. No pronouncement as to costs. SO
ORDERED.
G.R. No. 136114
January 22, 2004
LANDBANK OF THE PHILIPPINES, Petitioner,
vs. CONTINENTAL
WATCHMAN AGENCY INCORPORATED AND THE COURT OF APPEALS,
Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
We have consistently held that there is no grave abuse of discretion in the
issuance of a writ of preliminary injunction where a party was not deprived
of its day in court, as it was heard and had exhaustively presented all its
arguments and defenses.1 Hence, when contending parties were both
given ample time and opportunity to present their respective evidence and
arguments in support of their opposing contentions, no grave abuse of
discretion can be attributed to the trial court which issued the writ of
preliminary injunction, as it is given a generous latitude in this regard,
pursuant to Section 4, Rule 58 of the 1997 Rules of Civil Procedure, as
amended.
Assailed in this petition for certiorari under Rule 65 of the same Rules is the
Decision2 dated July 31, 1998 of the Court of Appeals in CA-G.R. SP No.
46890, entitled "Land Bank of the Philippines versus Judge Vivencio S.
Baclig and Continental Watchman Agency Incorporated," the dispositive
portion of which reads:
"WHEREFORE, premises considered, the petition is hereby denied due
course and the same DISMISSED. Let the original record of the case be
remanded to the court a quo immediately upon the finality hereof.
"SO ORDERED."3
On September 28, 1996, Land Bank of the Philippines (LBP), herein
petitioner, caused to be published in the Philippine Daily Inquirer, a
newspaper of general circulation, an "Invitation to Pre-Qualify," inviting
reputable security agencies to pre-qualify for security guard services in the
different LBP offices, properties and installations nationwide. Continental

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 55

Watchmen Agency Incorporated (CWAI), herein private respondent, and


other security agencies responded to the invitation and participated in the
public bidding.
In the bidding proper held on June 10, 1997, all the pre-qualified security
agencies, private respondent included, submitted their individual sealed
bid proposals to petitioner's Special Committee for the Selection of
Security Agencies (Bid Committee). Private respondent submitted a bid for
three (3) areas, namely, Area I, Area III, and Area V, all in Luzon.
After all the bids were opened and evaluated, it turned out that private
respondent was the lowest bidder for those three areas.
However, on June 18, 1997, the Bid Committee declared private
respondent disqualified because (1) its bid price was below the monthly
salary of a guard prescribed by the Philippine Association of Detective and
Protective Agency Operators, Inc.; and (2) it violated petitioner's Bid
Bulletin No. 1 requiring that the bid price should include night differential
pay for all the guards.
Private respondent asked for reconsideration but was denied by the Bid
Committee.
Hence, on July 22, 1997, private respondent filed with the Regional Trial
Court, Branch 17, Manila, a petition for injunction and damages with a
prayer for a preliminary mandatory injunction against petitioner LBP,
docketed as Civil Case No. 97-84264.
On August 1, 1997, after the hearing wherein both parties presented their
respective evidence, the trial court issued a temporary restraining order
(TRO) effective for twenty (20) days. At the same time, the trial court set
for hearing private respondent's application for preliminary injunction. This
incident was heard on August 22, 1997. Thereafter, the trial court issued an
Order directing the issuance of a writ of preliminary injunction, thus:
"WHEREFORE, the petition for the issuance of a writ of preliminary
injunction is hereby granted. Upon the filing of a bond in the sum of Fifty
Thousand Pesos (P50,000.00), Philippine currency, and the approval
thereof by the Court, let a writ issue directing the defendant, its attorneys,
representatives and other persons assisting it, to cease and desist from
awarding the contract for security agencies for Area I, Area III and Area V in
Luzon to any security agency, until further orders from the Court.
"SO ORDERED."4
Meanwhile, on August 27, 1997, petitioner filed its "Answer with Special
and/or Affirmative Defenses and Compulsory Counterclaim."5
On September 2, 1997, a writ of preliminary injunction6 was accordingly
issued.
On January 12, 1998, the trial court issued an Order denying petitioner's
motion for reconsideration of its Order directing the issuance of a writ of
preliminary injunction.
Consequently, on February 23, 1998, petitioner filed with respondent Court
of Appeals a "Petition for Certiorari and Prohibition with Preliminary
Injunction and Temporary Restraining Order" under Rules 58 and 65 of the
1997 Rules of Civil Procedure, as amended, alleging that the two Orders of
the trial court dated August 22, 1997 and January 12, 1998 were issued
without jurisdiction or with grave abuse of discretion. 7

On July 31, 1999, the Court of Appeals issued its assailed Decision
dismissing the petition, thus:
"WHEREFORE, premises considered, the petition is hereby denied due
course and the same DISMISSED. Let the original record of the case be
remanded to the court a quo immediately upon the finality hereof.
"SO ORDERED."8
The Court of Appeals ratiocinated as follows:
"After a fine filtration of the record ('expediente') and a close look at the
two assailed orders, We agree with the private respondent that the
respondent court did not commit any grave abuse of discretion in issuing
them. At this juncture, it is well to state that the special civil action for
certiorari is a remedy designed for the correction of errors of jurisdiction
and not errors of judgment (Ramnani vs. Court of Appeals, 221 SCRA 582).
It will not even issue for simple abuse of discretion (University of the
Philippines vs. Civil Service Commission, 228 SCRA 207). Parenthetically,
grave abuse of discretion implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction (Planters Products, Inc. vs.
Court of Appeals, 193 SCRA 563), or in other words, where the power is
exercised in an arbitrary or despotic manner by reason of passion or
personal hostilityand it must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined
or to act at all in contemplation of law (Bustamante vs. Commission on
Audit, 216 SCRA 134; Philippine Airlines, Inc. vs. Confesor, 231 SCRA 41). In
the case at bench, the record does not show such kind of actuation on the
part of the respondent judge. As long as a court or quasi-judicial body acts
within its jurisdiction, any alleged errors committed in the exercise of its
jurisdiction will amount to nothing more than errors of judgment which are
reviewable by timely appeal and not by a special civil action of certiorari
(New York Marine Managers, Inc. vs. Court of Appeal, 249 SCRA 416;
Commissioner on Internal Revenue vs. Court of Appeals, 257 SCRA 200).
"Furthermore, this being a petition for certiorari, factual matters are not
proper for consideration (Insular Bank of Asia and America vs. Court of
Appeals, 228 SCRA 420; Navarro vs. Commission on Elections, 228 SCRA
596), for this Court has to confine itself to the issue of whether of not the
respondent court lacked or exceeded its jurisdiction or committed grave
abuse of discretion (San Pedro vs. Court of Appeals, 253 SCRA 145)it
cannot review conclusion of fact (Holy Cross of Davao College, Inc. vs.
Joaquin, 263 SCRA 358). Anyway, it should be stated that the grant or
denial of an injunction rests on the sound discretion of the trial court
(Technology Developers, Inc. vs. Court of Appeals, 193 SCRA 147; Avila vs.
Tapucar, 201 SCRA 148)and the same will not be interfered with by
appellate courts except on a clear abuse of discretion (S & A Gaisano
Incorporated vs. Hidalgo, 19 SCRA 224), which situation appeared wanting
in the case at bench. We took note that the respondent court conducted
hearings before issuing a writ of preliminary injunction. More. The private
respondent was even required to put a bond to answer for possible
damages which may arise from the issuance of said writ of preliminary
injunction. On this score, We wish to advert to Supreme Court rulings that
erroneous conclusions or errors of judgment or of procedure, not relating
to the court's jurisdiction or involving grave abuse of discretion, are not
reviewable by certiorari under Rule 65 of the Rules of Court (Rodriguez vs.
Court of Appeals, 245 SCRA 150; Commissioner on Internal Revenue vs.
Court of Appeals, supra; Santiago Land Development Company vs. Court of
Appeals, 258 SCRA 535). For, as already stated, such errors are reviewable
by timely appeal.

"Similarly, the special civil action of prohibition must be based on


jurisdictional grounds against the trial court's judgment (Vda. De Suan vs.
Unson, 185 SCRA 437). It is designed to prevent the use of the strong arm
of the law in an oppressive or vindictive manner (Planas vs. Gil, 67 SCRA 62;
Lopez vs. City Judge, 18 SCRA 616). To justify its issuance, there are certain
requisites which must be complied with (Guingona vs. City Fiscal of Manila,
137 SCRA 597), which requisites the petitioner failed to comply. Also, said
recourse is available only when there is no appeal or any plain, speedy or
adequate remedy in the ordinary course of law (Pilar Development
Corporation vs. Court of Appeal, 225 SCRA 549). Undeniably, appeal will be
available in the case at bench."9
Petitioner filed a motion for reconsideration but was denied by the
Appellate Court in its Resolution dated September 22, 1998.
Hence, the present petition for certiorari alleging:
"IT IS MOST RESPECTFULLY SUBMITTED THAT THE HONORABLE COURT OF
APPEALS GRAVELY ABUSED ITS DISCRETION WHEN IT PROMULGATED AND
ISSUED THE DECISION DATED JULY 31, 1998 AND RESOLUTION DATED
SEPTEMBER 22, 1998 UPHOLDING THE QUESTIONED ORDERS OF THE
RESPONDENT COURT IN CIVIL CASE NO. 97-84264 DATED AUGUST 22, 1997
AND JANUARY 12, 1998."10
Petitioner submits inter alia that the Court of Appeals, by dismissing its
petition, in effect compelled it to enter into a contract for security guard
services with private respondent and as a result, Civil Case No. 97-84264
has been prematurely resolved.
Private respondent, on the other hand, counters that respondent Court of
Appeals did not act with grave abuse of discretion in affirming the Order of
the trial court directing the issuance of the writ of preliminary injunction. In
the first place, the Order was issued after a hearing wherein the parties
were given the opportunity to present their respective evidence. Secondly,
private respondent, being the lowest bidder, has a clear right to an
injunction. Lastly, whatever error the trial court may have committed is
only an error of judgment, not correctible by certiorari.
The petition must fail.
First, petitioner's remedy is an appeal to this Court from the Court of
Appeals' Decision dated July 31, 1998 by way of a petition for review on
certiorari under Rule 45. Instead, it filed this petition for certiorari under
Rule 65 only on November 18, 1998 or forty three (43) days after it
received the Appellate Court's Decision denying its motion for
reconsideration. Apparently, petitioner resorted to certiorari because it
failed to interpose an appeal seasonably. This, of course, is a procedural
flaw. Time and again we have reminded members of the bench and bar
that the special civil action of certiorari cannot be used as a substitute for a
lost appeal.11
Admittedly, this Court, in accordance with the liberal spirit pervading the
Rules of Court and in the interest of justice, has the discretion to treat a
petition for certiorari as a petition for review on certiorari under Rule 45,
especially if filed within the reglementary period for filing a petition for
review. 12 In this case, however, we find no reason to justify a liberal
application of the Rules.
Even assuming that the present petition is a proper remedy, still it is
dismissible.1wphi1 Based on the evidence presented by private

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 56

respondent, the trial court found that all the requisites for the issuance of
an injunctive writ were present.13 Although petitioner presented evidence
to rebut private respondent's assertions, those will be better assessed and
considered in the trial proper. The assailed injunctive writ is not a judgment
on the merits of the case, contrary to the submission of petitioner, for a
writ of preliminary injunction is generally based solely on initial and
incomplete evidence. The evidence submitted during the hearing of the
incident is not conclusive or complete for only a "sampling" is needed to
give the trial court an idea of the justification for the preliminary injunction
pending the decision of the case on the merits.14 As such, the findings of
fact and opinion of a court when issuing the writ of preliminary injunction
are interlocutory in nature and made before the trial on the merits is
commenced or terminated. Furthermore, it does not necessarily proceed
that when a writ of preliminary injunction is issued, a final injunction will
follow, as erroneously argued by petitioner. There are vital facts that have
yet to be presented during the trial which may not be obtained or
presented during the hearing on the application for the injunctive writ. 15
Clearly, petitioner's contention that the trial court and the Court of Appeals
had already disposed of the main case lacks merit.
Also, the sole object of a preliminary injunction is to preserve the status
quo until the merits of the case can be heard. 16 Here, after evaluating the
evidence presented by both contending parties, the trial court held that
justice would be better served if the status quo is preserved until the final
determination of the merits of the case. We find nothing whimsical,
arbitrary, or capricious in such ruling.
Significantly, the rule is well-entrenched that the issuance of the writ of
preliminary injunction rests upon the sound discretion of the trial court. It
bears reiterating that Section 4 of Rule 58 gives generous latitude to the
trial courts in this regard for the reason that conflicting claims in an
application for a provisional writ more often than not involve a factual
determination which is not the function of the appellate courts. Hence, the
exercise of sound judicial discretion by the trial court in injunctive matters
must not be interfered with except when there is manifest abuse,17 which
is wanting in the present case.
In sum, we find the petition bereft of merit. It is not the proper remedy and
even if it is, no grave abuse of discretion was committed by respondent
Court of Appeals.
WHEREFORE, the petition is DISMISSED. SO ORDERED.
G.R. No. 175145
March 28, 2008
SPOUSES ALFREDO and SHIRLEY YAP, Petitioners, vs. INTERNATIONAL
1
EXCHANGE BANK, SHERIFF RENATO C. FLORA and/or OFFICE OF THE
CLERK OF COURT, REGIONAL TRIAL COURT, MAKATI CITY, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the 1997
Rules of Civil Procedure which seeks to set aside the Resolution2 of the
Court of Appeals in CA-G.R. SP No. 95074 dated 11 July 2006 which
dismissed petitioner-spouses Alfredo and Shirley Yaps petition for
certiorari which questioned the Order3 of Branch 264 of the Regional Trial
Court (RTC) of Pasig City in Civil Case No. 68088 recalling and dissolving the
Writ of Preliminary Injunction dated 13 August 2001, and its Resolution4
dated 9 October 2006 denying petitioners Motion for Reconsideration.

The factual antecedents are as follows:


Respondent International Exchange Bank (iBank, for brevity) filed a
collection suit with application for the issuance of a writ of preliminary
attachment against Alberto Looyuko and Jimmy T. Go in the RTC of Makati.
The case was raffled to Branch 150 and was docketed as Civil Case No. 98791. On 7 October 1999, the trial court rendered a Decision in favor of
respondent iBank and found Alberto Looyuko and Jimmy T. Go liable,
ordering them to pay the amount of ninety-six million pesos
(P96,000,000.00), plus penalty.
A Writ of Execution on the judgment against Mr. Looyuko was
implemented. Thereafter, a Writ of Execution was issued against Mr. Go for
his part of the liability. Thereupon, respondent Renato C. Flora, Sheriff of
Branch 150 of the RTC of Makati City, issued a Notice of Sheriffs Sale on 12
May 2000 notifying all the parties concerned, as well as the public in
general, that the following real properties, among other properties,
covered by Transfer Certificates of Title (TCTs) No. PT-66751, No. PT-66749,
No. 55469 and No. 45229 of the Registry of Deeds of Pasig City, TCT No.
36489 of the Registry of Quezon City, and TCTs No. 4621 and No. 52987 of
the Registry of Deeds of Mandaluyong City, allegedly owned by Mr. Go will
be sold at public auction on 15 June 2000.5 Said public auction did not push
through.
On 13 June 2000, petitioner-spouses Alfredo and Shirley Yap filed a
Complaint for Injunction with Prayer for Temporary Restraining Order
and/or Preliminary Injunction with the RTC of Pasig City. The case was
docketed as Civil Case No. 67945 and was raffled to Branch 158 thereof.
Petitioners sought to stop the auction sale alleging that the properties
covered by TCTs No. PT-66751, No. PT-66749, No. 55469 and No. 45229 of
the Registry of Deeds of Pasig City, TCT No. 36489 of the Registry of
Quezon City, and TCTs No. 4621 and No. 52987 of the Registry of Deeds of
Mandaluyong City, are already owned by them by virtue of Deeds of
Absolute Sale6 executed by Jimmy Go in their favor. They further alleged
that respondent sheriff disregarded their right over the properties despite
their execution of an Affidavit of Adverse Claim to prove their claim over
the properties and the publication of a Notice to the Public warning that
various deeds had already been issued in their favor evidencing their right
over the same.
A second Notice of Sheriffs Sale dated 30 June 2000 was issued by Sheriff
Flora scheduling a public auction on 24 July 2000 for the afore-mentioned
properties. The public auction did not happen anew. Thereafter, a third
Notice of Sheriffs Sale dated 21 July 2000 scheduling a public auction on
22 August 2000 was issued.
On 21 August 2000, the RTC of Pasig City, Branch 158, issued an Order in
Civil Case No. 67945 denying petitioners application for a writ of
preliminary injunction.7
As scheduled, the public auction took place on 22 August 2000 for which
respondent sheriff issued a Certificate of Sale stating that the subject
properties had been sold at public auction in favor of respondent iBank,
subject to the third-party claims of petitioners.8
Petitioners filed with the RTC of Pasig City the instant case for Annulment
of Sheriffs Auction Sale Proceedings and Certificate of Sale against iBank,
the Clerk of Court and Ex-Officio Sheriff of RTC Makati City, and Sheriff
Flora. The case was docketed as Civil Case No. 68088 and was raffled to
Branch 264. The Complaint was amended to include a prayer for the

issuance of a Temporary Restraining Order and/or Writ of Preliminary


Injunction.9
Engracio M. Escarias, Jr., Clerk of Court VII and Ex-Officio Sheriff of RTC
Makati City, filed his Answer while respondents iBank and Sheriff Flora filed
an Omnibus Motion (Motion to Refer the Complaint to the Office of the
Clerk of Court for Raffle in the Presence of Adverse Party and Motion to
Dismiss) dated 17 October 2000.10
In an Order dated 20 February 2001, Hon. Leoncio M. Janolo, Jr. denied the
Omnibus Motion for lack of merit.11 Respondents iBank and Sheriff Flora
filed a Motion for Reconsideration dated 26 February 2001.12
A hearing was held on the application for preliminary injunction. On 18 July
2001, an Order was issued by Judge Janolo granting petitioners application
for issuance of a writ of preliminary injunction. The Order reads:
WHEREFORE, premises considered, plaintiffs application for issuance of a
Writ of Preliminary Injunction is GRANTED, and defendants and their
representatives are enjoined from proceeding further with the execution,
including consolidating title and taking possession thereof, against
plaintiffs real properties covered by Transfer Certificates of Title Nos. PT66751, PT-66749, 55469, 45229, 4621, 52987 and 36489.
The Writ of Preliminary Injunction shall be issued upon plaintiffs posting of
a bond executed to defendant in the amount of Three Million Pesos
(P3,000,000.00) to the effect that plaintiffs will pay defendants all damages
which the latter may sustain by reason of the injunction if it be ultimately
decided that the injunction is unwarranted.13
On 13 August 2001, upon posting a bond in the amount of three million
pesos (P3,000,000.00), Judge Janolo issued the Writ of Preliminary
Injunction.14
Respondents iBank and Sheriff Flora filed on 29 August 2001 a Motion for
Reconsideration15 of the order granting the Writ of Preliminary Injunction
which the trial court denied in an Order dated 21 November 2001. 16
With the denial of their Motion for Reconsideration, respondents iBank
and Sheriff Flora filed with the Court of Appeals a Petition for Certiorari,
Prohibition and Mandamus with prayer for issuance of Temporary
Restraining Order and/or Preliminary Injunction17 praying that it: (a) issue
immediately a temporary restraining order enjoining Judge Janolo from
taking any action or conducting any further proceeding on the case; (b)
annul the Orders dated 18 July 2001 and 21 November 2001; and (c) order
the immediate dismissal of Civil Case No. 68088.
In its decision dated 18 July 2003, the Court of Appeals dismissed the
Petition.18 It explained that no grave abuse of discretion was committed by
Judge Janolo in promulgating the two Orders. It emphasized that its ruling
only pertains to the propriety or impropriety of the issuance of the
preliminary injunction and has no bearing on the main issues of the case
which are still to be resolved on the merits. The Very Urgent Motion for
Reconsideration filed by respondents iBank and Sheriff Flora was denied
for lack of merit.19
Respondents iBank and Sheriff Flora thereafter filed with this Court a
Petition for Certiorari which we dismissed. The Courts Resolution dated 7
March 2005 reads:

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 57

Considering the allegations, issues and arguments adduced in the petition


for certiorari, the Court Resolves to DISMISS the petition for being a wrong
remedy under the Rules and evidently used as a substitute for the lost
remedy of appeal under Rule 45 of the 1997 Rules of Civil Procedure, as
amended. Besides, even if treated as a petition under Rule 65 of the said
Rules, the same would be dismissed for failure to sufficiently show that the
questioned judgment is tainted with grave abuse of discretion. 20
Accordingly, an Entry of Judgment was issued by the Supreme Court
certifying that the resolution dismissing the case had become final and
executory on 30 July 2005.21
Subsequently, respondents iBank and Sheriff Flora filed with the RTC of
Pasig City, Branch 264, an Omnibus Motion (To Resolve Motion to Dismiss
Complaint and/or Dissolve Injunction) dated 31 January 2006 praying that
their pending Motion for Reconsideration dated 26 February 2001 which
seeks for the dismissal of the case be resolved and/or the Writ of
Preliminary Injunction previously issued be dissolved. 22
On 9 February 2006, petitioners filed their Comment thereon with Motion
to Cite in Contempt the counsel23 of respondents. They pray that the
pending Motion for Reconsideration be denied for being devoid of merit,
and that the Motion to Dissolve Writ of Preliminary Injunction be also
denied, it being a clear defiance of the directive of the Supreme Court
which ruled with finality that the injunction issued by the trial court was
providently issued and was not tainted with grave abuse of discretion. They
further ask that respondents counsel be cited in contempt of court and be
meted out the appropriate penalty.24 Respondents filed a Reply dated 20
February 2006.
In a Manifestation dated 24 March 2006, respondents iBank and Sheriff
Flora submitted an Affidavit of Merit to emphasize their resolve and
willingness, among other things, to file a counter-bond to cover whatever
damages petitioners may suffer should the trial court decide to dissolve the
writ of preliminary injunction.25 Petitioners filed a Counter-Manifestation
with Second Motion to Cite Respondents Counsel in Direct Contempt of
Court26 to which respondents filed an Opposition.27 Petitioners filed a
Reply thereto.28
In an Order29 dated 29 April 2006, the trial court recalled and dissolved the
Writ of Preliminary Injunction dated 13 August 2001, and ordered
respondents to post a counter-bond amounting to ten million pesos. It
directed the Branch Clerk of Court to issue a Writ Dissolving Preliminary
Injunction upon the filing and approval of the required counter-bond. The
dispositive portion of the Order reads:
WHEREFORE, this Courts writ of preliminary injunction dated August 13,
2001 is recalled and dissolved. Defendants are hereby ordered to post a
counter-bond amounting to ten million pesos (P10,000,000.00) to cover
the damages plaintiffs would incur should a favorable judgment be
rendered them after trial on the merits.
The Branch Clerk of Court is directed to issue a Writ Dissolving Preliminary
Injunction upon the filing and approval of defendants counter-bond.30
The trial court explained its ruling in this wise:
In our jurisdiction, the provisions of Rule 58 of the Revised Rules of Court
allow the issuance of preliminary injunction. This court granted plaintiffs

prayer preliminary injunction in the Order dated July 18, 2001 and the
corresponding writ issued on August 13, 2001.

I.

Defendants in this case, however, are not without remedy to pray for
dissolution of preliminary injunction already granted because it is only
interlocutory and not permanent in nature.
The provisions of Section 6, Rule 58 of the Revised Rules of Court allow
dissolution of the injunction granted provided there is affidavit of party or
persons enjoined; an opportunity to oppose by the other party; hearing on
the issue, and filing of a bond to be fixed by the court sufficient to
compensate damages applicant may suffer by dissolution thereby.
A preliminary injunction is merely a provisional remedy, an adjunct to the
main case subject to the latters outcome. Its sole objective is to preserve
the status quo until the trial court hears fully the merits of the case. The
status quo is the last actual, peaceable and uncontested situation which
precedes a controversy. The status quo should be that existing at the time
of the filing of the case. A preliminary injunction should not establish new
relations between the parties, but merely maintain or re-establish the preexisting relationship between them. x x x.
When the complainants right or title is doubtful or disputed, he does not
have a clear legal right and, therefore, the issuance of injunctive relief is
not proper and constitutes grave abuse of discretion. x x x. In the case at
bar, plaintiffs deed of sale was purported to be not duly notarized. As
such, the legal right of what the plaintiffs claim is still doubtful and such
legal right can only be threshed out in a full blown trial where they can
clearly establish the right over the disputed properties.
Moreover, defendants are willing to post a counter bond which could cover
up to the damages in favor of plaintiffs in case the judgment turns out to
be adverse to them. Under the Rules of Civil Procedure, this is perfectly
allowed and the dissolution of the writ of injunction can accordingly be
issued. In the case of Lasala vs. Fernandez, the highest court has
enunciated that "a court has the power to recall or modify a writ of
preliminary injunction previously issued by it. The issuance or recall of a
preliminary writ of injunction is an interlocutory matter that remains at all
times within the control of the court." (G.R. No. L-16628, May 23, 1962).
The defendants had shown that dissolution of the writ of injunction is just
and proper. It was duly shown that great and irreparable injury would
severely cause the defendants if the writ of injunction shall continue to
exist.31
On 5 May 2006, petitioners filed a Petition for Certiorari before the Court
of Appeals asking that the trial courts Order dated 29 April 2006 be set
aside.32
During the pendency of the Petition for Certiorari, petitioners filed before
the trial court a Very Urgent Motion to Suspend Proceedings 33 to which
respondents filed a Comment.34
On 11 July 2006, the Court of Appeals resolved to dismiss outright the
Petition for Certiorari for failure of petitioners to file a motion for
reconsideration of the Order dated 29 April 2006.35 The Motion for
Reconsideration36 filed by petitioners was denied.37
After being granted an extension of thirty days within which to file a
petition for certiorari, petitioners filed the instant Petition on 14 December
2006. They made the following assignment of errors:

II.

III.

IV.

I THE HONORABLE PUBLIC RESPONDENT JUDGE LEONCIO M.


JANOLO, JR. GRAVELY ABUSED HIS DISCRETION TANTAMOUNT
TO LACK OR EXCESS OF JURISDICTION IN DISSOLVING THE WRIT
OF PRELIMINARY INJUNCTION DATED 13 AUGUST 2001.
1.
DESPITE THE FACT THAT THE COURT OF APPEALS
RESOLVED WITH FINALITY THAT YOUR PERITIONERS WILL
"SUFFER IRREPARABLE INJURY" (C.A.s emphasis) IF NO
INJUNCTION IS ISSUED.
2.
DESPITE THE FACT THAT THE HON. SUPREME COURT
RULED WITH FINALITY THAT THE COURT A QUO DID NOT
ABUSE ITS JURISDICTION WHEN IT ISSUED THE
INJUNCTION DATED 13 AUGUST 2001, THUS, SUSTAINING
THE REGULARITY OF THE WRIT OF PRELIMINARY
INJUNCTION.
II THE HONORABLE PUBLIC RESPONDENT JUDGE LEONCIO M.
JANOLO, JR. GRAVELY ABUSED HIS DISCRETION TANTAMOUNT
TO LACK OR EXCESS OF JURISDICTION BY FIXING THE
PHP10,000,000.00 COUNTER-BOND DESPITE THE FACT THAT
THE IRREPARABLE DAMAGE TO PETITIONERS AS A RESULT OF
DISSOLVING THE WRIT OF PRELIMINARY INJUNCTION IS
INCAPABLE OF PECUNIARY ESTIMATION OR COULD NOT BE
QUANTIFIED.
III THE HONORABLE COURT OF APPEALS ERRED AND GRAVELY
ABUSED ITS DISCRETION IN OUTRIGHTLY DISMISSING YOUR
PETITIONERS PETITION FOR CERTIORARI IN CA-GR SP NO.
95074, AS IT FAILED TO APPLY EXISTING JURISPRUDENCE TO
THE EFFECT THAT A MOTION FOR RECONSIDERATION MAY BE
DISPENSED WITH WHERE THE CONTROVERTED ACT IS
PATENTLY ILLEGAL OR WAS PERFORMED WITHOUT
JURISDICTION OR IN EXCESS OF JURISDICTION AS HELD IN
HAMILTON VS. LEVY, (344 SCRA 821)
IV THE HONORABLE COURT OF APPEALS LIKEWISE ERRED AND
GRAVELY ABUSED ITS DISCRETION WHEN IT DENIED
PETITIONERS MOTION FOR RECONSIDERATION CLEARLY
POINTING OUT TO THE COURT THAT AS AN EXCEPTION TO THE
RULE, THE REQUIRED MOTION FOR RECONSIDERATION MAY BE
DISPENSED WITH.

At the outset, it must be said that the Writ of Preliminary Injunction dated
13 August 2001 issued by the trial court has not yet been actually dissolved
because respondents have not posted the required counter-bond in the
amount of P10,000,000.00. The dissolution thereof is primed on the filing
of the counter-bond.
Petitioners argue that the trial court abused its discretion when it ordered
the dissolution of the Writ of Preliminary Injunction, the propriety of its
issuance having been affirmed by both the Court of Appeals and the
Supreme Court. There being an Order by this Court that the injunction
issued by the trial court was not tainted with grave abuse of discretion, the
dissolution of said writ is a clear defiance of this Courts directive.
Respondents, on the other hand, contend that the trial court has the
authority and prerogative to set aside the Writ of Preliminary Injunction.
They add that since petitioners Deed of Sale was not duly notarized, the
latters application for preliminary injunction is devoid of factual and legal
bases. They assert that, not being public documents, the subject deeds of
sale are nothing but spurious, if not falsified, documents. They add that the
continuance of the Writ of Preliminary Injunction would cause them
irreparable damage because it continues to incur damage not only for the

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nonpayment of the judgment award (in Civil Case No. 98-791 before the
RTC of Makati City, Br. 150), but also for opportunity losses resulting from
the continued denial of its right to consolidate title over the levied
properties.
There is no dispute that both the Court of Appeals and this Court have
ruled that the issuance of the Writ of Preliminary Injunction by the trial
court was not tainted with grave abuse of discretion. Respondents tried to
undo the issuance of said writ but to no avail. The Resolution on the matter
attained finality on 30 July 2005 and an entry of judgment was made.
This, notwithstanding, respondents filed with the RTC of Pasig City, Branch
264, an Omnibus Motion (To Resolve Motion to Dismiss Complaint and/or
Dissolve Injunction) dated 31 January 2006 praying that their Motion for
Reconsideration dated 26 February 2001 of the trial courts denial of their
Motion to Dismiss which the trial court failed to resolve, be resolved
and/or the Writ of Preliminary Injunction previously issued be dissolved.
With this Omnibus Motion, the trial court issued the Order dated 13
August 2001 recalling and dissolving the Writ of Preliminary Injunction
conditioned on the filing of a P10,000,000.00 counter-bond.
The question is: Under the circumstances obtaining in this case, may the
trial court recall and dissolve the preliminary injunction it issued despite
the rulings of the Court of Appeals and by this Court that its issuance was
not tainted with grave abuse of discretion?
We hold that the trial court may still order the dissolution of the
preliminary injunction it previously issued.1avvphi1 We do not agree with
petitioners argument that the trial court may no longer dissolve the
preliminary injunction because this Court previously ruled that its issuance
was not tainted with grave abuse of discretion.
The issuance of a preliminary injunction is different from its dissolution. Its
issuance is governed by Section 3,38 Rule 58 of the 1997 Rules of Civil
Procedure while the grounds for its dissolution are contained in Section 6,
Rule 58 of the 1997 Rules of Civil Procedure. As long as the party seeking
the dissolution of the preliminary injunction can prove the presence of any
of the grounds for its dissolution, same may be dissolved notwithstanding
that this Court previously ruled that its issuance was not tainted with grave
abuse of discretion.
Section 6 of Rule 58 reads:
Section 6. Grounds for objection to, or for motion of dissolution of,
injunction or restraining order. The application for injunction or
restraining order may be denied, upon a showing of its insufficiency. The
injunction or restraining order may also be denied, or, if granted, may be
dissolved, on other grounds upon affidavits of the party or person
enjoined, which may be opposed by the applicant also by affidavits. It may
further be denied, or, if granted, may be dissolved, if it appears after
hearing that although the applicant is entitled to the injunction or
restraining order, the issuance or continuance thereof, as the case may be,
would cause irreparable damage to the party or person enjoined while the
applicant can be fully compensated for such damages as he may suffer, and
the former files a bond in an amount fixed by the court conditioned that he
will pay all damages which the applicant may suffer by the denial or the
dissolution of the injunction or restraining order. If it appears that the
extent of the preliminary injunction or restraining order granted is too
great, it may be modified.

Under the afore-quoted section, a preliminary injunction may be dissolved


if it appears after hearing that although the applicant is entitled to the
injunction or restraining order, the issuance or continuance thereof, as the
case may be, would cause irreparable damage to the party or person
enjoined while the applicant can be fully compensated for such damages as
he may suffer, and the former files a bond in an amount fixed by the court
on condition that he will pay all damages which the applicant may suffer by
the denial or the dissolution of the injunction or restraining order. Two
conditions must concur: first, the court in the exercise of its discretion,
finds that the continuance of the injunction would cause great damage to
the defendant, while the plaintiff can be fully compensated for such
damages as he may suffer; second, the defendant files a counter-bond.39
The Order of the trial court dated 29 April 2006 is based on this ground.
In the case at bar, the trial court, after hearing, found that respondents
duly showed that they would suffer great and irreparable injury if the
injunction shall continue to exist. As to the second condition, the trial court
likewise found that respondents were willing to post a counter-bond which
could cover the damages that petitioners may suffer in case the judgment
turns out to be adverse to them. The Order of the trial court to recall and
dissolve the preliminary injunction is subject to the filing and approval of
the counter-bond that it ordered. Failure to post the required counterbond will necessarily lead to the non-dissolution of the preliminary
injunction. The Order of Dissolution cannot be implemented until and
unless the required counter-bond has been posted.

appeal, or any plain, speedy and adequate remedy in the course of law
except via a petition for certiorari. When same was dismissed by the Court
of Appeals for failure to file a motion for reconsideration of the trial courts
Order, they argue that while the filing of a motion for reconsideration is a
sine qua non before a petition for certiorari is instituted, the same is not
entirely without exception like where the controverted act is patently
illegal or was performed without jurisdiction or in excess of jurisdiction. It
was only when the Court of Appeals dismissed their Petition did they argue
that exceptions to the general rule should apply. Their invocation of the
application of the exceptions was belatedly made. The application of the
exceptions should be raised in their Petition for Certiorari and not when
their Petition has already been dismissed. They must give their reasons and
explain fully why their case falls under any of the exceptions. This,
petitioners failed to do.
Petitioners argument that they filed the Petition for Certiorari without
filing a motion for reconsideration because there is no appeal, or any plain,
speedy and adequate remedy in the course of law except via a Petition for
Certiorari does not convince. We have held that the "plain" and "adequate
remedy" referred to in Section 1, Rule 65 of the Rules of Court is a motion
for reconsideration of the assailed Order or Resolution. 43 The mere
allegation that there is "no appeal, or any plain, speedy and adequate
remedy" is not one of the exceptions to the rule that a motion for
reconsideration is a sine qua non before a petition for certiorari may be
filed.

The well-known rule is that the matter of issuance of a writ of preliminary


injunction is addressed to the sound judicial discretion of the trial court,
and its action shall not be disturbed on appeal unless it is demonstrated
that it acted without jurisdiction or in excess of jurisdiction or, otherwise,
in grave abuse of discretion. By the same token, the court that issued such
a preliminary relief may recall or dissolve the writ as the circumstances
may warrant.40 In the case on hand, the trial court issued the order of
dissolution on a ground provided for by the Rules of Court. The same being
in accordance with the rules, we find no reason to disturb the same.

All told, we hold that the act of the trial court of issuing the Order dated 29
April 2006 was not patently illegal or performed without or in excess of
jurisdiction. The Court of Appeals was correct in dismissing outright
petitioners Petition for Certiorari for failing to file a motion for
reconsideration of the trial courts Order.

Petitioners contend that the Court of Appeals erred and gravely abused its
discretion when it dismissed outright their Petition for Certiorari by failing
to apply existing jurisprudence that a motion for reconsideration may be
dispensed with where the controverted act is patently illegal or was
performed without jurisdiction or in excess of jurisdiction. On the other
hand, respondents urge the Court to deny the Petition for Review, arguing
that the Court of Appeals properly applied the general rule that the filing of
a motion for reconsideration is a condition sine qua non in order that
certiorari will lie.

WHEREFORE, all considered, the Petition is hereby DENIED. The


Resolutions of the Court of Appeals in CA-GR SP No. 95074 dated 11 July
2006 and 9 October 2006 are AFFIRMED. The Order dated 29 April 2006 of
Branch 264 of the Regional Trial Court (RTC) of Pasig City in Civil Case No.
68088 recalling and dissolving the Writ of Preliminary Injunction dated 13
August 2001 is AFFIRMED. Upon the posting by respondents of the
counter-bond required, the trial court is directed to issue the Writ
Dissolving Preliminary Injunction. No costs.

Our pronouncements in this case are confined only to the issue of the
dissolution of the preliminary injunction and will not apply to the merits of
the case.

SO ORDERED.

We find petitioners contention to be untenable.


The rule is well settled that the filing of a motion for reconsideration is an
indispensable condition to the filing of a special civil action for certiorari.41
It must be stressed that a petition for certiorari is an extraordinary remedy
and should be filed only as a last resort. The filing of a motion for
reconsideration is intended to afford the trial court an opportunity to
correct any actual error attributed to it by way of re-examination of the
legal and factual issues.42 By their failure to file a motion for
reconsideration, they deprived the trial court of the opportunity to rectify
any error it committed, if there was any.
Moreover, a perusal of petitioners petition for certiorari filed with the
Court of Appeals shows that they filed the same because there was no

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