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. 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. 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

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: I. 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.

II. III.

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?

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?

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:

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

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.

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. 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. 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

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

2. 3.

4.

5.

6.

7.

8.

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. Anent the third issue, WE rule against the petitioner. This Court finds that the petitioner was not deprived of due process. 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. 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. WE are not persuaded. 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,

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. Anent the fourth issue, WE rule against the petitioner. 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. 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. Hence, the public respondent is no longer duty bound to resolve the subsequent, reiterative and second motion for reconsideration. Anent the fifth issue, WE rule against the petitioner. 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. 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,

Licenses, and Other Permits Issued by Public Administrative Officials or Bodies for the Exploitation of Natural Resources." 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." 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. 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. 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. WHEREFORE, the instant petition for certiorari is DENIED and consequently, the assailed Resolution is hereby AFFIRMED. 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. 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

II.

III.

IV.

V.

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

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.

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.

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. . . . 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.

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

II.

III.

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.

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. 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. 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

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. 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.: 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. 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) 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

2)

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. 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 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

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.

2.

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.

3.

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

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. 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. 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

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. 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.

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.

2.

3.

4.

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. 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

(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. 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
1

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

VI.

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.

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. 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.

II.

III. IV.

II.

V.

III.

IV.

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.

V.

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

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.

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

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

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

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. Still, the petitioner fails to convince us. 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 assailed Resolution denied petitioner Philippine National Bank's (PNB's) Motion for Reconsideration dated 3 May 2004. The Antecedents 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. 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. 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. 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

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. 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 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 PNB recites the following statement of the issues, viz: I. 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;

(b)

(c)

II.

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.

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)?

III.

IV.

V.

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

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. 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?

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. 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. DECISION

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. Factual Antecedents 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.

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?

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

RESOLVED further, that the OWWA Structure be immediately submitted for the appropriate actions of competent authorities, particularly the DBM and CSC.6 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. 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

3.

4.

5.

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.

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

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

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. The Courts Ruling The petition is bereft of merit. 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.

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. Issuance of writ of preliminary injunction was also proper. 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 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 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 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

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) 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)

(b) (c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

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. 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

2.

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. 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

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

2.

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.

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 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 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.

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. 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. 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

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

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. 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. 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.

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

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

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] 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. 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 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. 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

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.

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

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

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. 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 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 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 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.

The Jurisdictional Issue On to the merits of the present petition. 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: 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. 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 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

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 36

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. 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. 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.

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 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 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: 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

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. 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

2.

3.

4.

5.

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

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

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

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 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

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. 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

II.

III.

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 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 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 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:

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. 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). 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). 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). 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. 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. 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.

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: WHEREFORE, in view of all the foregoing, the Motion for Reconsideration of the Petition is hereby DISMISSED. SO ORDERED. 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. 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
8

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) 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. 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 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

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: 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. 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

(b)

(c)

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

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. 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.

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,

II. III.

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) 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.

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

(b)

(c)

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

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. 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:

I.

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

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

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. 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. 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. 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

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. 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. 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. 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. SO ORDERED.

INJUNCTION & PROVISIONAL REMEDIES | RULE 58 CASES | IZOBELLE T. PULGO | 59