P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |1
G.R. No. 195374 March 10, 2014
PEDRO LUKANG, Petitioner,
vs.
PAGBILAO DEVELOPMENT CORPORATION and EDUARDO T.
RODRIGUEZ, Respondents.
DECISION
MENDOZA, J.:
This petition for review under Rule 45 of the Rules of Court assails the October 21,
2010 Decision1 and the January 19, 2011 Resolution2 of the Court of Appeals (CA)
in CA-G.R. SP No. 108809, which nullified and set aside the May 13, 2008 Order 3 of
the Regional Trial Court (RTCJ. Branch 53, Lucena City, granting the petitioner's
application for a writ of preliminary injunction.
The Facts:
The patriarch of the family, Arsenio Lukang (Arsenio), and Mercedes Dee
(Mercedes) lived as husband and wife in Calamba, Laguna, from 1922 to 1934 and
begot three (3) children, namely, Domingo, Rosalina and Olympia.
In 1935, he started cohabiting with Leoncia Martinez (Leoncia), with whom he had
ten (10) children, namely, Elpidio, Socorro, Manuel, Pedro, Teresita, Simeon,
Eugenio, Hilaria, Concepcion, and Carlos. During their cohabitation in Lucena,
Quezon, they acquired several real properties located in Pagbilao, Quezon, to wit:
(a) Transfer Certificate of Title (TCT) Nos. T-44547 4 with an area of
257,967 square meters;
(b) TCT No. T-445485 with an area of 40,000 square meters;
(c) TCT No. T-445496 with an area of 5.0078 hectares; and
7
(d) TCT No. T-44550 consisting of 5.0803 hectares.
The said properties were then registered in the name of "ARSENIO LUKANG,
married to Mercedes Dee, 1/2 share and Leoncia Martinez, single, 1/2 share."
Arsenio and Leoncia later acquired four (4) more parcels of land covered by TCT
No. T-103094, TCT No. T- 101425, TCT No. T-125349, and TCT No. T-125348. It was
allegedly agreed that the said properties should be registered in the name of
Simeon, one of their children, in trust for the other heirs and should be owned in
common by their family.
When Arsenio died in 1976, his 13 children and Mercedes, executed the
Extrajudicial Settlement of Estate,8 in which they agreed to adjudicate and transfer
among themselves the rights, interest and ownership of the four (4) parcels of land
covered by TCT Nos. T-44547, T-44548, T-44549, and T-44550. There was, however,
no agreement to partition the properties as they remained common to all the
heirs.
Years later, after the execution of the Extrajudicial Settlement of Estate, Mercedes,
together with her three (3) children, Rosalina, Domingo, and Olympia, executed
another document, denominated as Pagbabahaging Labas sa Hukuman Na May
Pagtalikod sa Karapatan, 9 dated December 19, 1987, wherein the parties declared
that they were the only heirs of Arsenio and partitioned the half portion of the four
(4) parcels of land covered by TCT Nos. T-44547, T-44548, T-44549, and T-44550
among themselves, with Mercedes waiving her supposed share in favor of her
three (3) children.
In 1988, Simeon, alleging that the certificates of title of the properties covered by
TCT Nos. T-103094, T-101425, T-125349, and T-125348 were lost, filed a petition for
the issuance of the owners duplicate copy before the RTC, Branch 57, Lucena City.
As a result, new owners duplicate copies of the allegedly lost titles were issued in
his favor. Thereafter, Simeon, in a deed of donation, transferred the said properties
in favor of his children, Benedict, Heile and Madeleine. Consequently, TCT Nos. T-
103094, T-125348 and T-125349 were cancelled, and TCT No. T-241034 was issued
in the name of Benedict; TCT No. 241035 in the name of Heile; and TCT No. 241036
in the name of Madeleine.10 Furthermore, Simeon purportedly executed the
Bilihang Lampasan and Pagbibilihang Lubusan, where he sold the land covered by
TCT No. 101425 in favor of Mercedes, Rosalina, Leoncia, and Elpidio.
In the meantime, on February 15, 1989, Mercedes, through Rosalinda, filed the
Petition for the Issuance of the Owners Duplicate of TCT Nos. T-44547, T-44548, T-
44549 and T-4455011 before the RTC, Branch 58, Lucena City. The RTC, in its
Order,12 dated March 27, 1989, granted the petition and new titles were issued in
favor of Mercedes. Unknown to Leoncia, Rosalina caused the segregation of the
one-half portion of the said properties in her (Leoncias) favor and the division of
the remaining half among her and her siblings, Domingo and Olympia. Hence, TCT
Nos. T-44547, T-44548, T-44549, and T-44550 were cancelled and new titles were
issued: TCT Nos. T-247219,13 T-247221,14 T-247223,15 and T-24722516 in the names
of Rosalina, Domingo and Olympia, while TCT Nos. T-247220, 17 T-247222,18 T-
247224,19 and T-24722620 were registered in the name of Leoncia.
On September 26, 1990, Leoncia and her children, claiming that the titles of TCT
Nos. T-44547, T-44548, T-44549, and T-44550 were not lost but in her (Leoncias)
possession, filed a complaint 21 for annulment of extrajudicial partition, affidavit of
segregation and annulment of the new certificates of title, which was docketed as
Civil Case No. 90-124. The said case was consolidated with Civil Case No. 89-79, a
case for recovery of four (4) owners duplicate copy of TCTs filed by Simeon against
his brother Pedro. The cases were raffled to RTC, Branch 53, Lucena City.
Subsequently, Leoncia, through Pedro, registered her adverse claim on February 3,
1989 on TCT Nos. T-241034, T-242429, TCT No. T-241036, T-241035, and T-242427
as Entry No. 530545. He further caused the annotation of a notice of lis pendens
on TCT No. T-247221 as Entry No. 556192 on October 1, 1990, and on TCT Nos. T-
241034, T-242429, TCT No. T-241036, T-241035, and T-242427 as Entry No. 538916
on November 6, 1989.
In 1993, while Civil Case No. 89-79 and Civil Case No. 90-124 were still pending,
respondent Pagbilao Development Corporation (PDC) purchased from Simeon,
Mercedes and Rosalina the six (6) properties which were the subject of the two
cases. Thus, TCT Nos. T-241034, T-242429, T-241036, T-241035, T-247221, and T-
242427 were cancelled and new titles, TCT Nos. T-282100, 22 T-282101,23 T-
282102,24 T-282103,25 T-282104,26and T-28210527 were issued in favor of PDC.
Accordingly, the annotations were carried over to PDCs titles.
When Pedro and the other heirs learned of the sale of the subject properties to
PDC, they filed a motion to require Simeon and Rosalina to explain why they sold
the properties without permission from the RTC. 28 On April 23, 2008, they also filed
an application for a writ of preliminary injunction with ex-parte prayer for
temporary restraining order (TRO). 29 They alleged that they were in actual and
physical possession of the subject properties; and that PDC entered into the said
premises, destroyed some structures therein and started to construct
improvements on the properties without their consent.
In its Order, dated April 23, 2008, the RTC 30 granted the issuance of the TRO
effective for a period of twenty (20) days.
On May 13, 2008, after due hearing, the RTC issued the Order 31 granting the
application for writ of preliminary injunction by which it restrained PDC from
wresting possession of the subject properties and ordering the movant, Pedro, to
file a bond.
PDC filed a motion for reconsideration but it was denied in the RTC Order, 32 dated
March 18, 2009.
On May 29, 2009, Pedro posted a bond in the amount of One Million Pesos
(P1,000,000.000).33
PDC filed a petition for certiorari before the CA assailing the issuance of the writ of
preliminary injunction. The CA, in its Decision, dated October 21, 2010, granted the
petition and set aside the May 13, 2008 and March 18, 2009 Orders of the RTC.
The CA explained that Pedros right over the said properties was not clear as it was
contingent on the outcome or result of the cases pending before the RTC; that it
was not a present right but a contingent or future right which was not covered by
injunction; and that there was no paramount necessity because there would be no
great and irreparable injury. Moreover, PDC, as the registered owner of the said
properties, had the right to enjoy the same as provided under Articles 428 and 429
of the Civil Code.
Pedro filed a motion for reconsideration but it was denied in the CA Resolution,
dated January 19, 2011. Hence, this petition, anchored on the following
ISSUES
I
THE COURT OF APPEALS ERRED IN CONSISTENTLY TURNING AWAY
FROM THE ISSUE OF RESPONDENT PAGBILAOS STATUS AS A
TRANSFEREE PENDENTE LITE WHEN THAT IS THE MAIN ISSUE IN THE
FIRST PLACE
II
THE COURT OF APPEALS ERRED IN RULING THAT PAGBILAO AS
REGISTERED OWNER OF THE SUBJECT PROPERTIES HAVE THE RIGHT TO
ENJOY AND EXCLUDE OTHER PERSONS FROM THE ENJOYMENT
THEREOF
III
THE COURT OF APPEALS ERRED IN RULING THAT THE TRIAL COURT PRE-
JUDGED THE MAIN CASE AND SHIFTED THE BURDEN OF PROOF ON THE
HEIRS OF SIMEON LUKANG

IV
THE COURT OF APPEALS ERRED IN RULING THAT NON-ISSUANCE OF THE
INJUNCTIVE RELIEF IS NOT OF PARAMOUNT NECESSITY NOR WILL IT
CAUSE GREAT AND IRREPARABLE INJURY TO PEDRO LUKANG
V been inscribed in the certificates of titles on the following dates February 3, 1989,
THE COURT OF APPEALS ERRED IN HOLDING THAT THE TRIAL COURT
COMMITTED GRAVE ABUSE OF DISCRETION IN NOT FIXING THE BOND.
Synthesized, the issues boil down to the question of whether or not the RTC
committed grave abuse of discretion when it issued the May 13, 2008 Order
granting the writ of preliminary injunction.
A writ of preliminary injunction is a provisional remedy which is adjunct to a main
suit, as well as a preservative remedy issued to maintain the status quo of the
things subject of the action or the relations between the parties during the
pendency of the suit.34 The purpose of injunction is to prevent threatened or
continuous irremediable injury to the parties before their claims can be thoroughly
studied and educated. Its sole aim is to preserve the status quo until the merits of
the case are fully heard.35 Under Section 3, Rule 58 of the Rules of Court, an
application for a writ of preliminary injunction may be granted if the following
grounds are 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) 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
(c) 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.
Thus, a writ of preliminary injunction may be issued upon the concurrence of the
following essential requisites, to wit: (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.36 While a clear showing of the right is necessary, its
existence need not be conclusively established. Hence, to be entitled to the writ, it
is sufficient that the complainant shows that he has an ostensible right to the final
relief prayed for in his complaint. 37
The well-entrenched rule is that the grant or denial of the writ of preliminary
injunction rests upon the sound discretion of the court. The trial court is given a
wide latitude in this regard. Thus, in the absence of a manifest abuse, such
discretion must not be interfered with. 38 "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."39
In the present case, the Court finds the RTC grant of injunction to be in
order.1wphi1 The pertinent parts of its order read:
It is to be emphasized that the deeds of sale between the vendors of the six parcels
of land and the Pagbilao Development Corporation were executed on June 1, 1993.
The Affidavit of Adverse Claim of Leoncia Martinez Vda. De Lukang and the Notice
of Lis Pendens of Pedro Lukang over the six properties were all inscribed on
February 3, 1989.
There is no question, therefore, that when the Pagbilao Development Corporation
bought the properties from the vendors, it had full knowledge that there were
questions involving ownership of the parcels of land it bought.
Likewise there is no question that Pagbilao Development Corporation did not take
any step to have the annotation or encumbrance in each title cancelled. [Emphases
supplied]
The annotation of an adverse claim and notice of lis pendens over the subject
properties is a notice to third persons that there is a controversy over the
ownership of the land and serves to preserve and protect the right of the adverse
claimants during the pendency of the controversy. 40 The principle of filing a notice
of lis pendens is based on public policy and necessity, the purpose of which is to
keep the properties in litigation within the power of the court until the litigation is
terminated in order to prevent the defeat of the judgment by subsequent
alienation; and in order to bind a purchaser, bona fide or otherwise, to the
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |2
judgment that the court would subsequently promulgate. It serves as an
announcement to the whole world that a particular real property is in litigation and
as a warning that those who acquire an interest in the property do so at their own
risk -- they gamble on the result of the litigation over it.41
Here, it must be noted that the annotations of adverse claim and lis pendens have
November 6, 1989 and October 1, 1990, more than three (3) years before PDC
bought the subject properties in 1993. It would have been different if the adverse
claims and lis pendens were not annotated in the titles. With PDC having been
officially aware of them, there can be no grave abuse of discretion that can be
attributed to the RTC for issuing the writ of preliminary injunction. There is no
question that when PDC purchased the property, the petitioner and other
intervenors were in actual possession of the property and their claims adverse to
its predecessors-in-interest were annotated in the very titles of the properties. In
fact, these annotations were carried over to PDCs title. PDC cannot invoke its
being the registered owner to dispossess the present possessors for, precisely,
when it brought the properties, it was charged with the knowledge that the
ownership and sale of the subject properties by its predecessors-in-interest have
been questioned by their co-heirs. Inevitably, PDC is deemed to have obtained the
properties subject to the outcome of the litigation among the heirs of Arsenio.
During the hearing, Pedro and the other heirs were able to convince the RTC that
they had a right over the properties which should be protected while being
litigated. Convinced, the RTC made a preliminary determination that their right
should be protected by a writ of preliminary injunction. Their claimed ownership
and actual possession were then being violated by PDC which had started entering
the premises and preparing the property for the construction of a power plant for
liquefied natural gas. Unless legally stopped, such act would indeed cause
irreparable damage to the petitioner and other claimants. As claimed co-owners,
the petitioner and the other heirs have the right to remain in possession of the
subject properties pendente lite. The legal or practical remedy of PDC, who
gambled its lot in purchasing the properties despite the annotations, is to await the
final outcome of the cases or to amicably settle its problems with all the co-
owners, co-heirs or claimants.
With regard to the issue of the injunctive bond, the Court has time and again ruled
that the posting of the bond is a condition sine qua non before a writ of
preliminary injunction may issue.42 Its purpose is to secure the person enjoined
against any damage that he may sustain in case the court should finally decide that
the applicant was not entitled thereto. 43 The rule, does not mean, however, that
the injunction maybe disregarded since it becomes effective only after the bond is
actually filed in court.44 In fact, in the case of Consolidated Workers Union v. Court
of Industrial Relations,45 the Court declared that it was erroneous for the labor
court not to require the party to file a bond. Yet, the Court did not annul the writ of
injunction but instead ordered the said court to determine the appropriate amount
of bond to be posted by the party.
In fine, it is erroneous for the CA to rule that the RTC committed grave abuse of
discretion simply because it failed to fix the amount of the bond. This error caused
"no substantial prejudice" that would warrant the quashal of the writ of
injunction.46 As a matter of fact, Pedro posted a bond in the amount of One Million
Pesos (P1,000,000.00), the sufficiency or insufficiency of which was never
questioned by PDC before the RTC.
Hence, the Court will not discuss the sufficiency of the bond not only because the
issue was not raised before the RTC but also it involves a question of fact.
WHEREFORE, the petition is GRANTED. The assailed October 21, 2010 Decision and
the January 19, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 108809
are hereby REVERSED and SET ASIDE. The May 13, 2008 Order of the Regional Trial
Court, Branch 53, Lucena City, in Civil Case No. 89-79 and Civil Case No. 90-124
ordering the issuance of a Writ of Preliminary Injunction, is hereby ordered
REINSTATED.
G.R. No. 205875 June 30, 2015
LIBERTY BROADCASTING NETWORK, INC., now known as WI-TRIBE TELECOMS,
INC., Petitioner,
vs.
ATLOCOM WIRELESS SYSTEM, INC., Respondent.
x-----------------------x
G.R. No. 208916
NATIONAL TELECOMMUNICATIONS COMMISSION, Petitioner,
vs.
ATLOCOM WIRELESS SYSTEM, INC., Respondent.
DECISION
VILLARAMA, JR., J.:

The consolidated petitions before us assail the Decision1 dated June 29, 2012 and
Resolution2 dated February 18, 2013 of the Court of Appeals (CA) in CA-G.R. SP No.
119868. The CA reversed and set aside the Orders3dated December 9, 2010 and
March 21, 2011 of the Regional Trial Court (RTC) of Quezon City, Branch 95 denying
the application for a writ of Prohibitory or mandatory injunction in Civil Case No.
Q-09-65566.
Antecedent Facts
Atlocom Wireless System, Inc. (Atlocom) is a grantee of a legislative franchise
under Republic Act (R.A.) No. 8605.4 On October 8, 2003, the National
Telecommunications Commission (NTC) issued an Order5 in NTC Case No. 98-158
relative to the application of Atlocom for a Certificate of Public Convenience (CPC),
as follows:
WHEREFORE, it appearing that applicant is financially and technically capable of
undertaking the proposed project and that the operation thereof will promote the
interest of the people in Metro Manila, in a proper and suitable manner, the
Commission hereby grants to herein applicant ATLOCOM WIRELESS SYSTEM, INC. a
Provisional Authority (PA) to install, operate and maintain a Multi-Point Multi-
Channel Distribution System [MMDS] in METRO MANILA, subject to the
assignment of frequency by the Frequency Management Division of t his
Commission and to the following CONDITIONS
As stated in the above order, the PA shall be valid for a period of eighteen
(18)months, or until April 8, 2005. In a letter7 dated April 5, 2004, Atlocom thru its
counsel requested for "an extension of time of the allocation of the above-
enumerated frequencies and for the period for the construction and installation of
the radio stations in the condition no. 2 of the Order." Earlier, Atlocom filed an
Application for Permit to Import8 the necessary equipment. Atlocom followed up
its application for extension of PA through a letter9 dated June 2, 2005 addressed
to Deputy Commissioner Jorge V. Sarmiento. Subsequently, Atlocom filed a Motion
for Extension of Provisional Authority10 in NTC Case No. 98-158 on March 3, 2005.
On August 23, 2005, NTC issued Memorandum Circular No. (MC) 06-08-200511 re-
allocating the following bands for broadband wireless access for fixed, nomadic
and mobile networks:
450-470 Mhz
1900 - 1910.MHz
1980-1990 MHz
2400 - 2483 MHz
2500 - 2700 MHz
3400-3600 MHz
5150-5350 MHz
5470-5850 MHz
10150 - 10650 MHz
On December 23, 2008, NTC denied Atlocom's motion for extension of PA, citing
the re-allocation of MMDS frequencies for Broadband Wireless Access in
accordance with MC 06-08-2005 and the unavailability of other alternative
frequencies.12
On September 8, 2009, Atlocom filed in the RTC a Petition13 to enjoin the
implementation of MC 06-08-2005 and reinstate the frequencies of Atlocom. It was
further prayed that after hearing the court render judgment declaring the said
issuance as null and void because NTC unlawfully deprived Atlocom of the right to
its assigned frequencies without notice and hearing. The case was docketed as Civil
Case No. Q-09-65566.
Liberty Broadcasting Network, Inc. (LBNI), also a grantee of a legislative franchise
(R.A. No. 1553, as amended by R.A. No. 4154) for radio and television
broadcasting, as well as radio stations for international and domestic
communications of all types and services, and holder of a Certificate of Public
Convenience and Necessity (CPCN) to operate a radio communications network,
was allowed to intervene in the case, joining the defendant NTC in opposing
Atlocom's claims. Pursuant to MC 06-08-2005, frequency bands 2535-2545 MHz
and 2565-2595 MHz were re-allocated and assigned to LBNI, which covered the
2572-2596 MHz being claimed by Atlocom as allegedly assigned to it.
Per Certification14 dated October 22, 2003 issued by Alvin N. Blanco, Chief,
Broadcast Services Division of NTC, the following frequencies were "identified" for
Atlocom's MMDS (Metro Manila) system: -
C3 2572 - 2578 Mhz
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |3
D3 2578 - 2584 Mhz
C4 2584 - 2590 Mhz
D4 2590 - 2596 Mhz
On December 9, 2010, the RTC, after due hearing, issued an Order denying
Atlocom's application for a writ of preliminary prohibitory or mandatory injunction.
Atlocom filed a motion for reconsideration but it was likewise denied by the RTC
under Order dated March 21, 2011.
In a petition for certiorari filed before the CA, Atlocom questioned the validity of
the aforesaid orders of the RTC.
In its Resolution15 dated August 12, 2011, the CA denied Atlocom's prayer for the
issuance of a writ of preliminary prohibitory injunction and its alternative prayer
for a provisional mandatory injunction.
However, in its Decision dated June 29, 2012, the CA ruled in favor of Atlocom and
reversed the RTC's denial of application for preliminary injunction. The fallo of the
decision reads:
WHEREFORE, premises considered, the petition is GRANTED.
The assailed Orders dated December 9, 2010 and March 21, 2011 of the
Regional Trial Court (RTC) of Quezon City,. Branch 95 are hereby REVERSED and SET
ASIDE. The plea for the issuance of a Preliminary Prohibitory Injunction is
GRANTED. Let therefore a writ of preliminary prohibitory injunction issue enjoining
Respondent NTC from il_I1plementing Memorandum Circular No. 06-08-2005,
insofar as the frequencies ranging from 2572-2596 Mhz are concerned and for its
Co-Respondent LBNI from using the said frequencies during the pendency of Civil
Case No. Q-09-65566 pending before Branch 95 of the Regional Trial Court of
Quezon City upon the posting of a bond in the amount of Php 200,000.00 to
answer for all damages which they may sustain by reason of the injunction if the
RTC should finally decide that petitioner is not entitled thereto. The alternative
plea for a writ of Preliminary Mandatory Injunction is DENIED.
SO ORDERED.16
LBNI filed a Motion for Reconsideration with Ad Cautelam Offer to File Counter-
Bond and Addendum to Motion for Reconsideration with Ad Cautelam Offer to File
Counter-Bond. NTC also filed a Motion for Reconsideration and Supplemental
Motion for Reconsideration. The CA denied these motions.
LBNI filed its petition (G.R. No. 205875) in this Court on April 22, 2013. Acting on
LBNI's motion for the issuance of a temporary restraining order (TRO) and/or writ
of preliminary injunction, we issued a TRO enjoining the implementation of the
writ of preliminary injunction issued by the CA, conditioned upon LBNI's posting of
a cash bond in the sum of P300,000.00.
On April 18, 2013, NTC filed its separate petition (G.R. No. 208916) for review from
the same CA Decision and Resolution. We ordered the consolidation of the two
cases as they arose from the same factual setting, involve the same parties and
raise identical issues.
Issues
The main issues to be resolved are: (1) whether Atlocom complied with the
requisites for issuance of a writ of preliminary injunction; and (2) whether LBNI's
motion to file counter-bond was correctly denied by the CA.
Specifically, LBNI asserts that the CA erred: (1) in finding that the NTC did not
observe due process when it issued MC 06-08-2005 and basing such conclusion on
a mistaken notion that the grant of PA is tantamount to a frequency assignment;
(2) in failing to recognize that Atlocom has not sufficiently established its claim that
it had been assigned the 2572-2596 frequency bands by the NTC; (3) in granting
the provisional injunctive writ that in effect pre-judged the civil case pending in the
RTC; and (4) in denying LBNI's motion to file counter-bond on the basis of a
technical conclusion it is not qualified to make in the first place.
NTC faults the CA in finding that Atlocom's right to due process was violated
because it was not notified of the hearing prior to the issuance of MC 06-08-2005,
and concluding that Atlocom has a clear and unmistakable property right over the
2572-2596 frequency range.
Our Ruling
The petitions are meritorious.
A preliminary injunction is defined as "[a]n order granted at any stage of an action
prior to the judgment or final order, requiring a party or a court, agency or a
person to refrain from a particular act or acts."17 It may be a prohibitory injunction,
 P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |4

which requires a party to refrain from doing a particular act, or a mandatory The CA explained that since it is only through a frequency that Atlocom can provide
injunction, which commands a party to perform a positive act to correct a wrong in adequate broadcast service to the public, the withdrawal of frequency assignment
the past.18 It is a provisional remedy that a party may resort to in order to preserve without observance of due process defeats its legislative grant and reduces
and protect certain rights and interests during the pendency of an action.19 Atlocom to a mere repository of transmitters and equipment devoid of any
purpose or value. It cited the following provisions of R.A. No. 8605:
Section 3, Rule 58 of the Rules of Court provides:
SEC. 3. Prior Approval of the National Telecommunications Commission. - The
SEC. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction grantee shall secure from the National Telecommunications Commission,
may be granted when it is established: hereinafter referred to as the Commission, the appropriate permits and licenses for
the construction and operation of its stations, transmitters or facilities and shall not
use any frequency in the radio and television spectrum without having been
(a) That the applicant is entitled to the relief demanded, and the whole
authorized by the Commission. The Commission, however, shall not unreasonably
or part of such relief consists in restraining the commission or
withhold or delay the grant of any such authority.
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;
The radio spectrum is a finite resource that is a part of the national patrimony and
the use thereof is a privilege conferred upon the grantee by the State and may be
(b) That the commission, continuance or nonperformance of the act or
withdrawn anytime, after due process.
acts complained of during the litigation would probably work injustice
to the applicant; or
On the withdrawal of the frequencies previously identified for Atlocom, the CA
insisted that NTC did not observe due process, viz.:
(c) 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 While it is true that there was a publication of a Notice of Public Hearing on June
subject of the action or proceeding, and tending to render the 21, 2005 before the issuance of Memorandum Circular No. 06-08-2005 on August
judgment ineffectual. 23, 2005, the fact is, the publication or notice was a general one and was not
meant to dispose of petitioner's previous requests for an extension of its
provisional authority and/or application for permit to purchase equipment. The
The following requisites must be proved before a writ of preliminary injunction will
order which dealt with these requests was the Order dated December 23, 2008,
issue: (1) The applicant must have a clear and unmistakable right to be protected,
which was issued almost four (4) years after the filing of the first request on April 5,
that is, a right in esse; (2) There is a material and substantial invasion of such right;
2004 and almost three (3) years from the issuance of Memorandum Circular No.
(3) There is an urgent need for the writ to prevent irreparable injury to the
06-08-2005. Withal and subject to whatever proof it may submit to the RTC
applicant; and ( 4) No other ordinary, speedy, and adequate remedy exists to
regarding the delay, the Respondent NTC should have first acted on petitioner's
prevent the infliction of irreparable injury.20
requests for extension before setting for public hearing the re-allocation of the
frequencies.23
The grant or denial of a writ of preliminary injunction is discretionary upon the trial
court because the assessment and evaluation of evidence towards that end involve
We do not concur with the CA in holding that NTC's inaction or delay on Atlocom' s
findings of fact left to the said court for its conclusive determination. For this
application for extension of PA had violated the latter's right to due process
reason, the grant or denial of a writ of preliminary injunction shall not be disturbed
because it resulted in depriving Atlocom of the use of frequencies which were re-
unless it was issued with grave abuse of discretion amounting to lack or in excess
allocated through the issuance of MC 06-08-2005. Such declaration rather conveys
of jurisdiction.21
an inaccurate picture of the regulatory process for public broadcasting and
telecommunications services.
In denying Atlocom's application for a writ of preliminary injunction, the RTC held
that Atlocom failed to demonstrate a clear and unmistakable legal right thereto, as
Under existing laws and regulations, it is clear that a frequency assignment is not
evidence showed Atlocom has no more right to be protected considering that its
automatically included in the PA granted by the NTC to an applicant for a CPC.
PA had already expired and its application for extension was subsequently denied
Thus, the Order dated October 8, 2003 expressly provided that the PA granted to
by the NTC. As to the claim of violation of right to due process, the R TC found that
Atlocom, valid for 18 months, is subject to several conditions, foremost of which is
prior to the issuance of MC 06-08-2005, NTC published a notice of public hearing in
the assignment of frequency by the Frequency Management Division (FMD).
The Manila Times, a newspaper of general circulation, and at the said hearing the
participants were given opportunity to be heard through oral arguments and
submission of position papers. Atlocom's alternative plea for a writ of mandatory While Atlocom presented a Certification24 dated October 22, 2003 issued by Alvin
injunction was likewise denied. According to the RTC, ordering the NTC to reinstate N. Blanco, Chief of NTC's Broadcast Division, stating that certain frequencies were
Atlocom' s frequencies would create an impression that the court had pre-judged "identified" for Atlocom's MMDS (Metro Manila) covering 2572-2596 frequency
the main case by nullifying MC 06-08-2005 as prayed for by Atlocom in its petition. bands, there is no document evidencing that these frequencies were actually
assigned to Atlocom by the FMD. There is likewise nothing in the records to
suggest that NTC "unreasonably" withheld or delayed authority to use such
However, the CA rendered a contrary ruling. The CA underscored the fact that NTC
frequencies identified for Atlocom.
failed to act upon Atlocom's motion for extension for more than three years, and
concluded that because of NTC's inordinate delay or refusal to renew the PA
granted to Atlocom, the latter was deprived of its right to use the frequencies Atlocom blamed NTC's three-year delay in resolving the motion for extension of PA
"granted to it by" the PA. The CA thus held: for its inability to use the frequencies identified for its MMDS, as these were
eventually re-allocated in 2005 under MC 06-08-2005. But as Atlocom was fully
aware, Section 6 of R.A. No. 8605 provides that the Government may at anytime
In deciding whether to grant an injunction, a court must consider established
withdraw the frequency after due process. Records showed that a notice was duly
principles of equity and all the circumstances of the test for issuing an injunction is
published and a public hearing was actually conducted on July 12, 2005 by NTC on
whether the facts show a necessity for the intervention of equity in order to
the proposed Memo Circular: Frequency Band Allocations for Broadcast Wireless
protect rights cognizable in equity. Here, there are factual and legal justification for
Access. Saidevent was attended by representatives of the different broadcasting
issuance of the writ of injunction. To reiterate to the point of being pedantic,
and telecommunication companies, including Atlocom.25 The position papers and
petitioner's right to its frequencies is covered by a provisional authority. The
feedback submitted by various companies in connection with the proposed
provisional authority was withdrawn by MC No. 06-08-2005 without the
memorandum circular on wireless broadband access were all presented as
Respondent NTC acting on petitioner's plea for previous extensions. The propriety
evidence in the RTC.26 We have held that the essence of due process is simply an
for the issuance of MC No. 06-08-2005 is placed in issue on the ground of fairness.
opportunity to be heard, or as applied to administrative proceedings, an
Petitioner as the rightful grantee thereof has the right, in the meantime, to enjoin
opportunity to explain one's side.27 The requirements of due process were thus
its implementation.
satisfied by the NTC in the re-allocation of frequency.

We are not unaware of Our Resolution promulgated on August 12, 2011 denying
Contrary to the CA's pronouncement, the re-allocation of frequency cannot be
petitioner's plea for the ancillary remedy of both prohibitory and/or mandatory
conditioned on resolution of any pending request for extension of PA previously
injunction. Indeed, as of said date, the denial of petitioner's prayer is appropriate.
granted. Even entities with unexpired PA cannot claim a vested right on a specific
We have now the complete facts of the case and, as the legal consequence of Our
frequency assignment. This proceeds from the nature of its franchise which is not
declaration that the RTC committed grave abuse of discretion in issuing the
solely for commercial purposes but one imbued with public interest. As earlier
assailed orders, We consider it proper to enjoin the Respondent NTC from
quoted, Atlocom's franchise (R.A. No. 8605) declared the use of radio spectrum as
implementing Memorandum Circular No. 06-08-2005, but insofar as the
a mere privilege conferred upon the grantee by the State that may be withdrawn
frequencies ranging from 2572-2596 Mhz are involved and for its Co-Respondent
anytime provided that due process is observed. It further emphasized that the
LBNI from using the aforestated frequencies. This is not to preempt the RTC of
radio spectrum is a finite resource and its use and distribution should be aligned
whatever judgment it may thereafter issue with respect to the merits of the case
with existing laws and policies.
before it but is issued in order to maintain the status quo in view of petitioner's
claim of a breach of due process and a continuing violation of its right over the
aforestated frequencies. 22 R.A. No. 7925 likewise recognizes the vital role of telecommunications to national
development and security and provides that the radio frequency shall be managed
and directed to serve the public interest. Being a limited resource, the law
mandates a periodic review of frequency allocation.

SEC. 4. Declaration of National Policy. - Telecommunications is essential to the
economic development, integrity and security of the Philippines, and as such shall
be developed and administered as to safeguard, enrich and strengthen the
economic, cultural, social and political fabric of the Philippines. The growth and
development of telecommunications services shall be pursued in accordance with
the following policies:
c) The radio frequency spectrum is a scarce public resource that shall be
administered in the public interest and in accordance with international
agreements and conventions to which the Philippines is a party and granted to the
best qualified. The government shall allocate the spectrum to service providers
who will use it efficiently and effectively to meet public demand for
telecommunications service and may avail of new and cost effective technologies
in the use of methods for its utilization;
SEC. 15. Radio Frequency Spectrum. - The radio frequency spectrum allocation and
assignment shall be subject to periodic review. The use thereof shall be subject to
reasonable spectrum user fees. Where demand for specific frequencies exceed
availability, the Commission shall hold open tenders for the same and ensure wider
access to this limited resource.
As a grantee of PA, Atlocom can only invoke the condition in MC 06-08-2005 that
"[t]he transfer of previously authorized persons or entities operating radio stations
within the above listed radio frequency bands shall be governed by Rule 603 of MC
3-3-96."28Said rule states:
603. TRANSFER OF AFFECTED AUTHORIZED RADIO FREQUENCY USER
a. The commission shall allocate available radio frequencies for
assignment to those affected by the reallocation as a result of the
review of the radio spectrum pursuant to Rule 601.
b. The cost of the transfer to new radio frequencies of affected
authorized users shall be borne by the new assignees to the radio
frequency channel/band where the radio frequencies of the previously
authorized users fall within.
c. When the transfer to a new set of radio frequencies would require
additional radio links, the cost of these links shall also be taken into
consideration.
d. The manner and the cost of the transfer shall be negotiated in good
faith between the affected authorized users and the assignees within 90
days from receipt of notice of relocation.
e. The Commission shall extend all the necessary assistance to all
affected authorized users and shall mandate settlement if the parties
fail to come to an agreement within 90 days from receipt of notice of
relocation or when warranted under the circumstances.
f. Other means/mode of transmission comparable in quality to the
existing facility shall be taken into consideration in the negotiation for
the transfer.
g. Transfer of radio frequency assignment shall only take effect upon
activation of service by relocated party using its newly assigned or
relocated frequency as agreed or mandated.
Considering that Atlocom has not even launched its MMDS network nor
constructed radio stations, it is doubtful whether Atlocom can exercise the
foregoing rights of an affected frequency user. Neither can Atlocom attribute its
non-operational state to the delayed action on its motion for extension of PA.
Among the conditions of its PA is the commencement of the construction and
installation of its station within six months from issuance of the order granting it
the provisional authority and its complete three months thereafter. Perusal of the
motion for extension reveals that Atlocom at the time .was still in the process of
identifying and finalizing arrangements with its potential investors for the
establishment of a nationwide MMDS network coverage.
Based on its evaluation, the NTC found that: (1) Atlocom filed an application for
Permit to Purchase MMDS transmitter on February 9, 2005, but no permit of any
kind was issued to it; (2) In the clarificatory hearing held on September 4, 2006,
concerns were raised regarding reports of foreign equity on Atlocom's capital
structure and status of band allocated for MMDS within the 2.5-2.7 Ghz band; and
(3) On June 21, 2008, Atlocom is requesting for an allocation of a Digital Terrestrial
TV frequency (Ch 14-20 & Ch 21-51) in replacement for their MMDS frequency, but
the NTC thru FMD denied such request because the proposed frequency band for
DTT service is not yet approved/allocated. With the re-allocation of MMDS
frequency bands for the Broadband Wireless Access under MC 06-8-2005, and the
aforesaid findings, the NTC en bane decided not to grant the extension sought by
Atlocom.
A right to be protected by injunction, means a right clearly founded on or granted
by law or is enforceable as a matter of law. 29 An injunction is not a remedy to
protect or enforce contingent, abstract, or future rights; it will not issue to protect
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |5
a right not in esse, and which may never arise, or to restrain an act which does not
give rise to a cause of action.30
From the evidence on record, no clear, actual and existing right to the subject
frequencies or to the extension of PA had been shown by Atlocom. Accordingly, no
grave abuse of discretion was committed by the RTC in denying Atlocom's
application for a writ of preliminary injunction to restrain the implementation of
MC 06-08-2005 insofar as the use of the re-allocated frequencies claimed by
Atlocom. The CA thus seriously erred in reversing the RTC and holding that Atlocom
was entitled to injunctive relief due to alleged violation of its right by the NTC.
A writ of preliminary injunction being an extraordinary event, one deemed as a
strong arm of equity or a transcendent remedy, 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.31
Pursuant to Section 6,32 Rule 5 8 of the 1997 Rules of Civil Procedure, 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 counterbond.33
In denying LBNI's offer to file counterbond, the CA relied on the
Affidavit34 executed by Rene Rosales, Atlocom's technical consultant, to refute the
earlier Affidavit35 submitted by LBNI, which was executed by its Director for
Network Engineering, Edwin C. Mabitazan. Mabitazan stated that the injunction
issued by the CA will result in reducing LBNI's usable bandwidth from 40 Mhz to
only 15 Mhz, which is inadequate to serve LBNI's thousands of subscribers.
Mabitazan's opinion should have been given more weight in view of his intimate
knowledge of LBNI' s operations and technical requirements. Moreover, it should
be stressed that LBNI's business projections were based on its existing technical
capability which stands to be greatly diminished once the frequency bands re-
assigned to it will be reduced as a result of the CA's injunction order. The possibility
of irreparable damage is indeed present, not only in terms of financial losses -the
total investment by LBNI has already reached billions of pesos - but on the
reputation of LBNI as a new player in the telecommunications industry for
reliability and dependability of its services. In contrast, whatever damage Atlocom
stands to suffer should the injunction be dissolved, can be fully compensated
considering that it has not constructed stations nor launched any network service.
No single document was submitted by Atlocom to show it had actually complied
with the conditions of its PA and invested in the establishment of MMDS network,
which never materialized.
In gross abuse of discretion, the CA brushed aside evidence presented by LBNI in
support of its offer to file counter-bond, stating that these were submitted only
after the appellate court had rendered its decision granting Atlocom's prayer for
preliminary injunction. The CA failed to consider the fact that it was Atlocom which
misled the courts and the NTC in claiming that the subject frequencies had been
assigned to it. The matter was raised by NTC and LBNI only in their motions for
reconsideration because it was only at that time when their inquiry from FMD
disclosed that said office had not actually granted a frequency assignment to
Atlocom. Thus, NTC in its Supplemental Motion for Reconsideration, submitted a
Certification36 dated August 2, 2012 issued by the FMD Chief, Pricilla F. Demition,
together with attached documents, setting forth the sam facts relativ to Atlocom's
non-operational state. Atlocom countered that said evidence was just an
afterthought because the absence of frequency assignment was not mentioned by
Engr. Demition when she testified before the RTC on January 14, 2009 during the
hearing on the application for writ of preliminary injunction. Atlocom, however
never disputed the findings of the FMD.
The pertinent portions of the FMD Certification are herein reproduced:
2. In a memo addressed to the Chief, Broadcast Services Division dated
January 10, 2006 (copy attached as Annex "B"); signed by then Deputy
Commissioner Jorge V. Sarmiento, an inquiry was made to the
Broadcast Services Division (BSD) regarding the status of usage of the
frequency assignments granted to broadcast companies for MMDS use
and to provide information thru the FMD of the latest related
information to include among others permits/licenses issued to their
favor; such information was needed in view of the re-allocation of the
band in use for BW A (MC No. 06-08-2005);
3. In a memo dated January 12, 2006 (copy attached as Annex "C") in
compliance to the January 10, 2006 Memo, BSD's report shows under
the column Latest Permits/License issued, that the latest permit or
license issued for A TLOCOM was only its PA dated 10.08.03;

4. In a memo addressed to the Records Verification Committee dated 06
September 2006 (copy attached as Annex "D") signed by then
Commissioner Ronald Olivar Solis, citing a memo dated 21 September
2005 from then DOTC Secretary Leonardo R. Mendoza and Office Order
No. 71-08-2006, the Records Verification Committee was directed to
verify the status of several radio frequency bands therein listed, and to
submit its report to include, among others, SUF payments, latest
permits, and licenses issued and photocopies of the same;
5. The Records Verification Committee reported in a memo dated 08
September 2006 (copy attached as Annex "E"), that with respect to
Atlocom Wireless System, Inc., no record on file was found as to station
location, frequency, license/permit no., radio station license or permit
to purchase and possess;
6. In a memo addressed to the Acting Chief BSD dated 07 January 2008
by then FMD Acting Chief Engr. Joselito C. Leynes (copy attached as
Annex "F") [w]ith reference to the 03 January 2008 indorsement letter
from BSD (copy attached as Annex "G) regarding the request of Atlocom
Wireless System, Inc. for an allocation of a Digital Television (DTT)
frequency (copy attached
as Annex "H"), the BSD was informed of the following for
guidance:
"that the proposed frequency band from Channel 14-20 and
Channel 21-51 is not yet been finally allocated/approved for
the purpose ofDTT operation. Further, in the event that said
frequency band re-allocation is approved, only broadcasting
company with existing TV station/s and/or authority to
operate is entitled for application/issuance of a DTT
frequency channel."
7. A Memo addressed to the Chief, Frequency Management Division
dated 27 July 2012 (copy attached as Annex "I") Chief, BSD in
connection with the "certification" issued to Atlocom Wireless System,
Inc clarifies the following:
"that the frequencies stated in the subject certification were
simply identified as candidate frequencies for the MMDS
service under NTC Case No. 98-158, subject to final
frequency assignment by the Frequency Management
Division (FMD) of this Commission." and
"Furthermore inasmuch as frequency assignments covering
the band 2500-2700 Mhz are issued by the Frequency
Management Division (FMD), the undersigned is of the view
that the determination of the assignment of the subject
frequencies to Atlocom Wireless, or to any other entity, can
best be certified by the Frequency Management Division
(FMD)"
8. As per NTC Office Order No. 59-07-2003 dated July 30, 2003 (copy
attached as Annex "J), all requests, applications requiring clearance
and/or new radio frequency assignments, except for frequencies that
have been pre-allocated and/or decentralized, shall be cleared with the
Office of the Commissioner thru the Frequency Management Division:
"Henceforth, except for frequencies that have been pre-
allocated and/or decentralized, all requests applications
requiring clearance and/or new radio frequency assignment
shall be cleared with the Office of the Commissioner thru
the Frequency Management Division."
9. No records/documents were however found at the Frequency
Management Division showing frequency assignment clearance for the
use of ATLOCOM's MMDS system.
In light of all the foregoing established facts, we hold that the CA gravely abused its
discretion when it issued a writ of preliminary injunction against the
implementation of MC 06-08-2005 in the absence of a clear legal right on the part
of Atlocom, and subsequently denying LBNI' s offer to file counter bond despite
compliance with the requisites provided in Section 6 of Rule 58. However, with our
ruling that the writ of preliminary injunction was improperly issued, hence, null
and void, the matter of allowing LBNI to post a counter-bond has been rendered
moot.
A final note. In its Memorandum,37 Atlocom argues that LBNI is part of mass media
and its franchise violates Article XVI, Section 11 (1) of the Constitution 38 because it
is not wholly-owned by Filipino citizens.39
Unless properly raised and the very /is mota of the case, we do not pass upon
constitutional issues. The resolution of the constitutional issues must be absolutely
necessary for the determination of the case.40 In the spirit of deference to the acts
of other constitutional departments and organs, issues before this Court should
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |6
address only the narrowest issues necessary to determine whether the reliefs
prayed for can be granted. As in this case, reliefs can be determined on procedural
issues.
The main issue presented in this case is the validity of Atlocom' s application for a
writ of preliminary injunction against the NTC.1wphi1 This issue can be resolved
without passing upon the constitutionality of LBNI' s franchise. The resolution of
the issue on LBNI's eligibility thus has no bearing on whether Atlocom has the right
to be granted a frequency allocation for Broadband Wireless Access by the NTC.
The constitutional issue raised by the respondent may be raised and resolved in
proper cases when necessary in the future.
WHEREFORE, the petitions are GRANTED. The Decision dated June 29, 2012 and
Resolution dated February 18, 2013 of the Court of Appeals in CA-G.R. SP No.
119868 are REVERSED and SET ASIDE. Consequently, the writ of preliminary
injunction issued in said case, if any, is hereby declared NULL and VOID.
The Orders dated December 9, 2010 and March 21, 2011 of the Regional Trial
Court of Quezon City, Branch 95 in Q-09-65566 are hereby REINSTATED and
UPHELD.
The Temporary Restraining Order issued by this Court on April 30, 2013 is hereby
made PERMANENT.
No pronouncement as to costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
G.R. No. 196864 July 8, 2015
SPOUSES VICTOR P. DULNUAN and JACQUELINE P. DULNUAN, Petitioners,
vs.
METROPOLITAN BANK & TRUST COMPANY, Respondent.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari1 filed by petitioners Spouses Victor
Dulnuan and Jacqueline Dulnuan (Spouses Dulnuan) seeking to reverse and set
aside the 14 January 2011 Decision2 of the Court of Appeals. and its 29 April 2011
Resolution3 in CA-G.R. SP No. 108628. The assailed decision and resolution
reversed the 3 December 2008 Order of the Regional Trial Court (RTC) of La
Trinidad, Benguet, which, in turn, enjoined the extrajudicial foreclosure sale or' a
parcel of land covered by Transfer Certificate of Title (TCT) No. T-46390 registered
under the name of the Spouses Dulnuan. The dispositive portion of the Court of
Appeals Decision reads:
WHEREFORE, the petition is GRANTED. The Order dated December 3, 2008 of the
Regional Trial Court, Branch 63 of La Trinidad, Benguet in Civil Case No. 08-CV-2470
which granted [the Spouses Dulnuans] application for writ of preliminary
injunction and the RTCs Order dated March 24, 2009, which denied [Metropolitan
Bank and Trust Companys] motion for reconsideration, are hereby REVERSED and
SET ASIDE.4
The Facts
On several occasions, the Spouses Dulnuan obtained loans from Metropolitan Bank
and Trust Company (Metrobank), the total of which reached the
sum P3,200,000.00, as evidenced by promissory notes executed by them.5
As a security for the loan obligations, the Spouses Dulnuan executed a Real Estate
Mortgage (REM) over a parcel of land covered by TCT No. 46390 registered under
their names and located at La Trinidad, Benguet with an area of 392 square meters
(subject property).6 Subsequently, however, the Spouses Dulnuan incurred default
and therefore the loan obligations became due and demandable.
On 22 April 2008, Metrobank filed an application for extra-judicial foreclosure
proceedings over the subject property before the RTC of La Trinidad, Benguet.
After due notice and publication, the mortgaged property was sold at a public
auction where Metrobank was declared as the highest bidder after tendering the
bid of P6,189,000.00, as shown in the Certificate of Sale.7 In order to validly effect
the foreclosure, a copy of the said Notice of Public Auction Sale was posted on the
bulletin boards of Barangay Betag, Municipal Hall of La Trinidad, Benguet,
Provincial Capitol Benguet.8 Before the expiration of the one-year redemption
period allowed by law, Metrobank filed a Petition for the Issuance of Writ of
Possession docketed as LRC Case No. 08-60 which was raffled before Branch 63 of
the RTC.9
On 30 September 2008, the Spouses Dulnuan instituted a Complaint seeking the
issuance of a temporary restraining order and preliminary and final injunction and,

for the annulment of extra-judicial foreclosure and real estate mortgage before the
RTC of LaTrinidad, Benguet, Branch 10, which case was docketed as Civil Case No.
08-CV-2470. The complaint alleged that the mortgage constituted over the
property is null and void because at the time the agreement was entered on
18October 2000, no contract of loan was yet executed by the parties. It was only
on 19 December 2003 that they received the proceeds of the loan, as evidenced by
the Promissory Note. In other words, there is no principal obligation upon which
the ancillary contract of mortgage was attached to.
Upon motion of the Spouses Dulnuan, Civil Case No. 08-CV-2470 was consolidated
before Branch 63 of the RTC wherein the LRC Case No. 08-60 was pending. After
summary hearing, the court a quoin an Order dated 5 November 2008, issued a
Temporary Restraining Order and set the hearing for the issuance of Writ of
Preliminary Injunction. Both parties proceeded to adduce evidence for and against
the issuance of the writ of preliminary injunction.
Finding an imperative need to protect and preserve the rights of the Spouses
Dulnuan during the pendency of the principal action, the RTC issued an Order
dated 3 December 2008, enjoining Metrobank from taking possession of the
subject property until the final disposition of the annulment of mortgage case. The
decretal portion of the Order reads:
WHEREFORE, premises considered, and finding compelling reason at this point in
time to grant for the application for preliminary injunction, the same is hereby
granted upon posting of preliminary injunction bond in the amount of P200,000.00
duly approved by the court, let the writ of preliminary injunction be issued to take
effect pendente lite, commanding the [Metrobank] including its agents and
representatives, as well as persons acting under its control, supervision,
instruction, order or authorization, to desist from entering, occupying, possessing,
using, or from performing any act of possession and occupation of the
aforedescribed property, as well as from causing the cancellation of the existing
transfer certificate of title of the [Spouses Dulnuan] and from securing in lieu
thereof a transfer certificate of title over the aforedescribed property in its favor. 10
In an Order dated 24 March 2009, the RTC refused to reconsider its earlier Order.
Arguing that the RTC gravely abused its discretion in enjoining its taking of
possession over the subject realties, Metrobank filed a Petition for Certiorari
before the Court of Appeals.
On 14 January 2011, the Court of Appeals rendered a Decision reversing the
questioned Orders and declared that the issuance of the writ of preliminary
injunction is unjustified under the circumstances. The appellate court made a
pronouncement that as the highest bidder at the auction sale, Metrobank is
entitled to occupy the subject property, and, any question regarding the validity of
the mortgage or the foreclosure thereof shall not preclude the purchaser from
taking possession. The disquisition the Court of Appeals reads:
WHEREFORE, the petition is GRANTED. The Order dated December 3, 2008 of the
Regional Trial Court, Branch 63 of La Trininidad, Benguet in Civil Case 08-CV-2470
which granted respondents application for writ of preliminary injunction and the
RTCs Order dated March 24, 2009 which denied [Metrobanks] motion for
reconsideration are hereby RESERVED and SET ASIDE.11
For lack of merit, the Spouses Dulnuans Motion for Reconsideration was denied by
the Court of Appeals in a Resolution dated 29 April 2011.
The Spouses Dulnuan is now before this Court via this instant Petition for Review
on Certiorari seeking the reversal of the Court of Appeals Decision and Resolution
on the following grounds:
I.
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN
OVERLOOKING THE UNDISPUTED FACT THAT THE PETITION FOR WRIT OF
POSSESSION WAS FILED DURING THE REDEMPTION PERIOD AND NO BOND HAD
BEEN POSTED BY RESPONDENT TO WARRANT ITS ISSUANCE; AND
II.
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND SERIOUS ERROR
IN OVERLOOKING THE FACT THAT CIVIL CASE NO. 08-CV-2470 AND LRC CASE NO.
08-60 WERE CONSOLIDATED. 12
The Court's Ruling
The Court is urged to resolve the issue of whether or not the Court of Appeals
erred in dissolving the writ of preliminary injunction issued against Metrobank. The
writ of preliminary injunction enjoined Metrobank from entering, occupying,
possessing, using, or performing any act of possession and occupation over the
subject property. Without going into the merits of this case, the Court will confine
itself in the determination of the propriety of the preliminary injunction, such
being a preservative remedy for the protection of substantive rights or interests, is
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |7
not a cause of action in itself but merely a provisional remedy, an adjunct to a main
suit.13
A writ of preliminary injunction and a TRO are injunctive reliefs and preservative
remedies for the protection of substantive rights and interests.1wphi1 An
application for the issuance of a writ of preliminary injunction and/or TRO may be
granted upon the filing of a verified application showing facts entitling the
applicant to the relief demanded.14 The purpose of injunction is to prevent
threatened or continuous irremediable injury to some of the parties before their
claims can be thoroughly studied and educated. Its sole aim is to preserve the
status quo until the merits of the case is heard fully. 15
The status quo is the last actual, peaceable and uncontested situation which
precedes a controversy.16 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 pre-existing
relationship between them.
Pertinent are the provisions of Section 3, Rule 58 of the Rules of Court, enumerates
the grounds for the issuance of a writ of preliminary injunction, to wit:
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) 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
(c) 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.
Thus, to be entitled to the injunctive writ, petitioners must show that (1) there
exists a clear and unmistakable right to be protected; (2) this right is directly
threatened by an act sought to be enjoined; (3) the invasion of the right is material
and substantial; and (4) there is an urgent and paramount necessity for the writ to
prevent serious and irreparable damage.17
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 requisites of a valid injunction are the existence of the right and its actual or
threatened violations. Thus, to be entitled to an injunctive writ, the right to be
protected and the violation against the right must be shown. 18
Extant from the pleadings of the parties is the failure of the Spouses Dulnuan to
establish the essential requisites for the issuance of the writ of preliminary
injunction.
First. The court a quo cannot enjoin Metrobank, at the instance of the Spouses
Dulnuan, from taking possession of the subject property simply because the period
of redemption has not yet expired. As the highest bidder in the foreclosure sale
upon whom a certificate sale was issued by the sheriff, Metrobank has the right to
be placed in possession of the subject property even during the redemption period
provided that the necessary amount of bond is posted. As elucidated by the Court
in Spouses Tolosa v. United Coconut Planters Bank:19
A writ of possession is simply an order by which the sheriff is commanded by the
court to place a person in possession of a real or personal property. Under Section
7 of Act No. 3135, as amended, a writ of possession may be issued in favor of a
purchaser in a foreclosure sale either (1) within the one-year redemption period,
upon the filing of a bond; or (2) after the lapse of the redemption period, without
need of a bond. Within the one-year redemption period, the purchaser may apply
for a writ of possession by filing a petition in the form of an ex parte motion under
oath, in the registration or cadastral proceedings of the registered property. The
law requires only that the proper motion be filed, the bond approved and no third
person is involved. After the consolidation of title in the buyers name for failure of
the mortgagor to redeem the property, entitlement to the writ of possession
becomes a matter of right. In the latter case, the right of possession becomes
absolute because the basis thereof is the purchasers ownership of the property.
It is an established rule that the purchaser in an extra-judicial foreclosure sale is
entitled to the possession of the property and can demand that he be placed in
possession of the same either during (with bond) or after the expiration (without
bond) of the redemption period therefor. 20 The non-expiration of the period of
redemption shall not preclude the purchaser from taking possession of the
property provided that the necessary is posted. The buyer can in fact demand
possession of the land even during the redemption period except that he has to
post a bond in accordance with Section 721 of Act No. 3135, as amended. In the

case at bar, Metrobank manifested its willingness to post a bond but its application
for the issuance of the writ of possession was unjustly denied by the RTC.
Second. The pendency of the action assailing the validity of the mortgage should
not bar the issuance of the writ of possession.1wphi1 A pending action for
annulment of mortgage or foreclosure does not stay the issuance of a writ of
possession.22 Regardless of the pendency of such suit, the purchaser remains
entitled to a writ of possession, without prejudice, of course, to the eventual
outcome of the pending annulment case. Emphatic to the point is the ruling of the
Court in Spouses Fortaleza v. Spouses Lapitan:23
Lastly, we agree with the CA that any question regarding the regularity and validity
of the mortgage or its foreclosure cannot be raised as a justification for opposing
the petition for the issuance of the writ of possession. The said issues may be
raised and determined only after the issuance of the writ of possession. Indeed,
"[t]he judge with whom an application for writ of possession is filed need not look
into the validity of the mortgage or the manner of its foreclosure." The writ issues
as a matter of course. "The rationale for the rule is to allow the purchaser to have
possession of the foreclosed property without delay, such possession being
founded on the right of ownership."
Without prejudice to the final disposition of the annulment case, Metrobank is
entitled to the writ of possession and cannot be barred from enjoying the property,
possession being one of the essential attributes of ownership.
Third. While the grant or denial of the preliminary injunction rests on the sound
discretion of the court taking cognizance of the case, and judicial discretion of the
court in injunctive matters should not be interfered with,24 in the absence of clear
and legal right, however, the issuance of a writ of injunction constitutes a grave
abuse of discretion.25
Grave abuse of discretion in the issuance of writs of preliminary injunction implies
a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction;
or the exercise of power in an arbitrary despotic manner by reason of passion,
prejudice or personal aversion amounting to an evasion of a positive duty or to a
virtual refusal to perform a duty enjoined or to act at all in contemplation of
law.26 The burden is thus on petitioner to show in his application that there is
meritorious ground for the issuance of TRO in his favor.27 When the complainants
right is doubtful or disputed, he does not have a clear legal right and, therefore,
the issuance of injunctive writ is improper. 28 Herein, the Spouses Dulnuan failed to
show that they have clear and unmistakable right to the issuance of writ in
question.
In fine, we find that the Court of Appeals committed no reversible error in
reversing the injunction issued by the RTC. The record shows that Metrobank
caused the extrajudicial foreclosure of the mortgage on the subject realties as a
consequence of the Spouses Dulnuan's default on their mortgage obligation. As
the highest bidder at the foreclosure sale, Metrobank can exercise its right of
possession over the subject realty, and the issuance of writ of preliminary
injunction, enjoining the bank from occupying the property in question, is
erroneous. WHEREFORE, premises considered, the instant petition is hereby .
DENIED. The assailed Decision dated 14 January 2011 and Resolution dated 29
April 2011 of the Court of Appeals in CA-G.R. SP No. 108628 are hereby AFFIRMED.
SO ORDERED.
G.R. No. 170038 July 11, 2012
CHINA BANKING CORPORATION, Petitioner,
vs.
SPS. HARRY CIRIACO and ESTHER CIRIACO, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 filed by China Banking
Corporation (petitioner) to challenge the April 15, 2005 decision 2 and the October
10, 2005 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 64349. The CA
decision denied the petitioners petition for certiorari for lack of merit. The CA
resolution denied the petitioners subsequent motion for reconsideration.
FACTUAL BACKGROUND
On March 11, 1996, Spouses Harry and Esther Ciriaco (respondents) obtained a
P1,500,000.00 loan4 from the petitioner, secured by a real estate mortgage5 over
their 526-square meter land in La Trinidad, Benguet, covered by Transfer Certificate
of Title (TCT) No. T-21710.6
When the respondents defaulted in the payment of their loan, the petitioner
extrajudicially foreclosed7 the mortgaged property and sold it at public auction
where the petitioner emerged as the highest bidder. The Sheriff executed a
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |8
Certificate of Sale8 in the petitioners favor on March 11, 1998. The Register of
Deeds annotated the Certificate of Sale on TCT No. T-21710 on March 24, 1998.9
On March 23, 1999, a day before the expiration of the redemption period, the
respondents filed a complaint with the Regional Trial Court (RTC) of La Trinidad,
Benguet, Branch 8, for Injunction to enjoin the consolidation of title in the
petitioners favor, assailing the redemption price of the foreclosed property. 10
On July 26, 1999, the RTC dismissed the complaint for being moot due to the
consolidation of title in the petitioners favor on March 31, 1999, "without
prejudice to the filing of an appropriate action."11
On August 17, 1999, the respondents filed a complaint with the RTC of La Trinidad,
Benguet, Branch 63, for Cancellation of Consolidation of Ownership over a Real
Property, Specific Performance, and Damages. 12 They again questioned the
redemption price of the foreclosed property.
On September 23, 1999, the petitioner filed its Answer with Compulsory
Counterclaim, denying the allegations of the respondents complaint. 13
On March 16, 2000, the respondents filed an Omnibus Motion for Leave to Amend
Complaint and to Admit Attached Amended Complaint as well as Motion for
Hearing on the Issuance of a Writ of Preliminary Injunction and/or Temporary
Restraining Order (TRO), with a notice of hearing on the omnibus motion
scheduled on March 22, 2000.14 The respondents sought to amend the complaint
to allege further that fraud attended the consolidation of title in the petitioners
favor and to include a prayer for the issuance of a writ of preliminary injunction
and/or TRO to enjoin the petitioner from disposing of the foreclosed property or
taking possession thereof.
At the March 22, 2000 hearing, the RTC gave the petitioner ten (10) days within
which to file its comment to the respondents omnibus motion, and set the hearing
on the omnibus motion on April 24, 2000.15
The petitioner subsequently filed its Opposition to the omnibus motion, 16 arguing
that the respondents further allegation of fraud changes the theory of the case
which is not allowed, and that the respondents failed to show that they have a
clear right in esse that should be protected by an injunctive relief.
At the April 24, 2000 hearing on the omnibus motion, the RTC gave the
respondents ten (10) days to file their comment to the petitioners opposition, and
gave the petitioner ten (10) days to file its reply to the respondents
comment.17 The respondents did not file a reply to the petitioners opposition.
THE RTCs RULING
In its August 1, 2000 order, the RTC admitted the amended complaint and directed
the petitioner to file an answer. It noted that the 1997 Rules of Civil Procedure
relaxed the rule on amendments to pleadings, subject only to the limitation that
they are not dilatory. It also granted the respondents application for the issuance
of a writ of preliminary injunction and/or TRO, since the respondents were entitled
to prove their claim of fraud, and their claim that the interests and penalty charges
imposed by the bank had no factual basis.18
The RTC denied19 the petitioners subsequent motion for reconsideration. 20 On
August 24, 2000, the RTC issued a writ of preliminary injunction, restraining the
petitioner from disposing of the foreclosed property or taking possession thereof. 21
The petitioner then filed a Rule 65 petition for certiorari with the CA, arguing that
the RTC gravely abused its discretion in precipitately granting the respondents
application for the issuance of a writ of preliminary injunction without any
hearing.22
THE CAs RULING
In its April 15, 2005 decision, the CA denied the petition. It found that the RTC did
not commit any grave abuse of discretion since it gave the parties ample
opportunity to present their respective positions on the propriety of an injunctive
writ during the hearings on March 22, 2000 and
April 24, 2000, and that the petitioner was also heard on its motion for
reconsideration of the August 1, 2000 order. 23
When the CA denied24 the petitioners motion for reconsideration, 25 the latter filed
the present petition.26
THE PETITION
The petitioner argues that the RTC granted the respondents application for the
issuance of a writ of preliminary injunction and/or TRO, despite the lack of a
hearing thereon; the RTC conducted hearings on the respondents omnibus motion
only, not on the respondents application for the issuance of a writ of preliminary
injunction and/or TRO, which has not yet been set for hearing.

THE CASE FOR THE RESPONDENTS
The respondents submit that the RTC gave the petitioner ample opportunity to be
heard on his opposition to the respondents application for the issuance of a writ
of preliminary injunction and/or TRO at the March 22, 2000 and April 24, 2000
hearings, and on the petitioners motion for reconsideration of the August 1, 2000
order.
THE ISSUE
The core issue boils down to whether the CA erred in finding that the RTC did not
commit any grave abuse of discretion in granting the respondents application for
the issuance of a writ of preliminary injunction and/or TRO.
OUR RULING
We find merit in the petition.
A preliminary injunction is an order granted at any stage of an action prior to the
judgment or final order requiring a party or a court, agency or a person to refrain
from a particular act or acts.27 It is the "strong arm of equity," 28 an extraordinary
peremptory remedy that must be used with extreme caution, 29 affecting as it does
the respective rights of the parties.30
Sections 3 and 5, Rule 58 of the 1997 Rules of Civil Procedure on preliminary
injunction, pertinent to this case, provide the requirements for the issuance of a
writ of preliminary injunction or a TRO:
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) 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
(c) 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.
SEC. 5. Preliminary injunction not granted without notice; exception. - No
preliminary injunction shall be granted without hearing and prior notice to the
party or persons sought to be enjoined. If it shall appear from facts shown by
affidavits or by the verified application that great or irreparable injury would result
to the applicant before the matter can be heard on notice, the court to which the
application for preliminary injunction was made, may issue ex parte a temporary
restraining order to be effective only for a period of twenty (20) days from service
on the party or person sought to be enjoined, except as herein provided. Within
the twenty-day period, the court must order said party or person to show cause at
a specified time and place, why the injunction should not be granted. The court
shall also determine, within the same period, whether or not the preliminary
injunction shall be granted, and accordingly issue the corresponding order.
However, subject to the provisions of the preceding sections, if the matter is of
extreme urgency and the applicant will suffer grave injustice and irreparable injury,
the executive judge of a multiple-sala court or the presiding judge of a single-sala
court may issue ex parte a temporary restraining order effective for only seventy-
two (72) hours from issuance but shall immediately comply with the provisions of
the next preceding section as to service of summons and the documents to be
served therewith. Thereafter, within the aforesaid seventy-two (72) hours, the
judge before whom the case is pending shall conduct a summary hearing to
determine whether the temporary restraining order shall be extended until the
application for preliminary injunction can be heard. In no case shall the total period
of effectivity of the temporary restraining order exceed twenty (20) days, including
the original seventy-two hours provided herein.31
From the provisions, it appears clearly that before a writ of preliminary injunction
may be issued, a clear showing must be made that there exists a right to be
protected and that the acts against which the writ is to be directed are violative of
an established right.32 The holding of a hearing, where both parties can introduce
evidence and present their side, is also required before the courts may issue a TRO
or an injunctive writ.33
Generally, an RTC's decision to grant or to deny injunctive relief will not be set
aside on appeal, unless the trial court abused its discretion. In granting or denying
injunctive relief, a court abuses its discretion when it lacks jurisdiction; fails to
consider and make a record of the factors relevant to its determination; relies on
clearly erroneous factual findings; considers clearly irrelevant or improper factors;
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s |9
clearly gives too much weight to one factor; relies on erroneous conclusions of law
or equity; or misapplies its factual or legal conclusions.34
In this case, we find that the RTC abbreviated the proceedings and precipitately
granted the respondents application for injunctive relief. The RTC did not conduct
a hearing for reception of a "sampling" of the parties respective evidence to give it
an idea of the justification for its issuance pending the decision of the case on the
merits.35 It failed to make any factual finding to support the issuance of the writ of
preliminary injunction since it did not conduct any hearing on the application for
the issuance of the writ of preliminary injunction or TRO. The RTC conducted the
March 22, 2000 and April 24, 2000 hearings on the respondents omnibus motion
only whether to admit the amended complaint and whether to hold a hearing on
the respondents application for a writ of preliminary injunction.1wphi1
In fact, a perusal of the August 1, 2000 order shows that the RTC granted the
respondents application for a writ of preliminary injunction based only on the
respondents unsubstantiated allegations, thus:
Going now to the application for a writ of preliminary injunction and/or temporary
restraining order, the plaintiffs aver that a writ should issue forbidding the
defendant bank from taking possession of the subject property and disposing of
the same beyond recovery by them tending to make any favorable judgment in
their favor ineffective.
The Complaint alleges that had defendant bank not committed fraud, plaintiffs
could have redeemed the property subject matter hereof. Furthermore,
considering that the redemption price of the property foreclosed appears to have
been bloated, thereby making it difficult for plaintiffs to redeem their property, to
deny the application would in effect be condoning the act of the defendant bank in
imposing interests and penalty charges which plaintiffs claim as not having been
agreed upon by them.
In view of the foregoing, plaintiffs are entitled to prove their claim of fraud and
their claim that the interests and penalty charges imposed by the bank have no
factual basis.36
Clearly, the respondents right to injunctive relief has not been clearly and
unmistakably demonstrated. The respondents have not presented evidence,
testimonial or documentary, other than the bare allegations contained in their
pleadings, to support their claim of fraud that brings about the irreparable injury
sought to be avoided by their application for injunctive relief. Thus, the RTCs grant
of the writ of preliminary injunction in favor of the respondents, despite the lack of
any evidence of a clear and unmistakable right on their part, constitutes grave
abuse of discretion amounting to lack of jurisdiction.
Every court should remember that an injunction is a limitation upon the freedom
of the defendants action and should not be granted lightly or precipitately. It
should be granted only when the court is fully satisfied that the law permits it and
the emergency demands it; 37 no power exists whose exercise is more delicate,
which requires greater caution and deliberation, or is more dangerous in a doubtful
case, that the issuance of an injunction.38
WHEREFORE, the petition is GRANTED. The April 15, 2005 decision and the
October 10, 2005 resolution of the Court of Appeals in CA-G.R. SP No. 64349 are
REVERSED and SER ASIDE. The August 1, 2000 and March 7, 2001 orders of the
Regional Trial Court of La Trinidad, Benguet, Branch 63 are MODIFIED. The Writ of
Preliminary Injunction issued in Civil Case No. 99-CV-1395 is declared VOID and is
therefore SET ASIDE.
Costs against the respondents.
SO ORDERED.
G.R. No. 157163 June 25, 2014
BANK OF THE PHILIPPINE ISLANDS, Petitioner,
vs.
HON. JUDGE AGAPITO L. HONTANOSAS, JR., REGIONAL TRIAL COURT, BRANCH
16, CEBU CITY, SILVERIO BORBON, SPOUSES XERXES AND ERLINDA FACULTAD,
AND XM FACULTAD & DEVELOPMENT CORPORATION, Respondents.
DECISION
BERSAMIN, J.:
Injunction should not issue except upon a clear showing that the applicant has a
right in esse to be protected, and that the acts sought to be enjoined are violative
of such right. A preliminary injunction should not determine the merits of a case,
or decide controverted facts, for, being a preventive remedy, it only seeks to
prevent threatened wrong, further injury, and irreparable harm or injustice until
the rights of the parties can be settled.
The Case

Under review at the instance of the defendant, now the petitioner herein, is the
decision promulgated on July 9, 2002,1 whereby the Court of Appeals (CA) upheld
the order issuedon July 5, 2001 in Civil Case No. CEB-26468 entitled Spouses
Silverio & Zosima Borbon, et al. v. Bank of the Philippine Islandsby the Regional
Trial Court (RTC), Branch 16, in Cebu City, presided by Hon. Judge Agapito L.
Hontanosas, Jr.
Antecedents
On May 22, 2001, respondents Spouses Silverio and Zosima Borbon, Spouses
Xerxes and Erlinda Facultad,and XM Facultad and Development Corporation
commenced Civil Case No. CEB-26468 to seek the declaration of the nullity of the
promissory notes,real estate and chattel mortgages and continuing surety
agreement they had executed in favor of the petitioner. They further sought
damages and attorneys fees, and applied for a temporary restraining order (TRO)
orwrit of preliminary injunction to prevent the petitioner from foreclosing on the
mortgages against their properties.
The complaintalleged that the respondents had obtained a loan from the
petitioner, and had executed promissory notes binding themselves, jointly and
severally, to pay the sum borrowed; that as security for the payment of the loan,
they had constituted real estate mortgages on several parcels of land in favor of
the petitioner; and that they had been made to sign a continuing surety agreement
and a chattel mortgage on their Mitsubishi Pajero.
It appears that the respondentsobligation to the petitioner had
reached P17,983,191.49, but they had only been able to pay P13 Million because
they had been adversely affected by the economic turmoil in Asia in 1997. The
petitioner required them to issue postdated checks to cover the loan under threat
of foreclosing on the mortgages. Thus, the complaint sought a TRO or a writ of
preliminary injunction to stay the threatened foreclosure.
On June 6, 2001, the petitioner filed its answer with affirmative defenses and
counterclaim, as well as its oppositionto the issuance of the writ of preliminary
injunction, contending that the foreclosure of the mortgages was within itslegal
right to do.2
Also on June 6, 2001 the petitioner filed a motion to dismiss reiterating its
affirmative defenses, to wit:
I) THAT THE COMPLAINT SHOULD BE DISMISSED BECAUSE VENUE IS
IMPROPERLYLAID. (RULE 16, SECITON 1, PARAGRAPH (C);
II) THAT THE COURT HAS NOTACQUIRED JURISDICTION OVER THE
SUBJECT MATTER OFTHE CLAIM BECAUSE THE PROPER LEGAL FEES HAS
NOT BEEN PAID IN ACCORDANCE WITH RULE 14, OF THE RULES OF
COURT AND CIRCULAR NO. 7 OF THE SUPREME COURT, SERIES OF 1988;
III) THAT ZOSIMA BORBONS COMPLAINT SHOULD BE DISMISSED
BECAUSE PLAINTIFF ZOSIMA BORBON HAS NO LEGAL PERSONALITY TO
SUE BEING DECEASED, SPOUSE OF PLAINTIFF SILVERIO BORBON. (RULE
16, SECTION 1(d);
IV) THAT THE ESTATE OF ZOSIMA BORBON BEING AN INDISPENSABLE
PARTY, THE COMPLAINT SHOULD BE AMENDED TO INCLUDE THE ESTATE
OF ZOSIMA BORBON. (RULE 16, SECTION 1(j);
V) THAT THE COMPLAINT OFPLAINTIFF XM FACULTAD AND
DEVELOPMENT CORPORATION, SHOULD BE DISMISSED BECAUSE THERE
IS NO BOARD RESOLUTION AUTHORIZING THE FILING OF THIS CASE.
[RULE 16, SECTION 1 (d)];
VI) THAT THE PLEADING ASSERTING THE CLAIM STATES NO CAUSE OF
ACTION.3
On July 5, 2001, the RTC denied the petitioners motion to dismissfor being
unmeritorious,4 but granted the respondents application for preliminary
injunction,5 to wit:
WHEREFORE, premises considered, the application for preliminary injunction is
GRANTED. Upon filing by the plaintiffapplicants of a bond in the amount
of P2,000,000 in favor of defendant to the effect that applicants will pay to adverse
party all damages which it may sustain by reason of the injunction, let a writ of
preliminary injunction be issued directing the defendant and its agents or
representatives, to cease and desist from commencing foreclosure and sale
proceedings of the mortgaged properties; from taking possession of the Mitsubishi
Pajero subject of the chattel mortgage; and from using the questioned post-dated
checks as evidence for the filing of complaint against plaintiffs Facultad for
violation of Batas Pambansa Blg. 22, while the present case is pending litigation.
This writ of preliminary injunction shall continue until further orders from the
Court.
Notify the parties of this Order.
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 10
SO ORDERED.6
The RTC later denied the petitioners motion for reconsideration through its
order7 of August 22, 2001.
Ruling of the CA
Dissatisfied, the petitioner assailed the orders of the RTC by petition for certiorariin
the CA, submitting the lone issue of:
WHETHER OR NOT THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT ISSUED AN ORDER DENYING THE MOTION TO DISMISS AND
GRANTING THE WRIT OF PRELIMINARY MANDATORY INJUNCTION.
On July 9, 2002, however, the CArendered the adverse decision under review, to
wit:
WHEREFORE, premises considered, the assailed order of the Regional Trial Court
(RTC) of Cebu City, Branch 16 dated July 5, 2001 and August 22, 2001 are hereby
AFFIRMED. Let the original records of this case be remanded immediately to the
court a quo for further proceedings. SO ORDERED.8
The CA held that the petitioners averment of non-payment of the proper docket
fee by the respondents asthe plaintiffs in Civil Case No. CEB-26468 was not
substantiated; that even if the correct docket fee was not in fact paid, the strict
application of the rule thereon could be mitigated in the interest of justice;9 and
that Civil Case No. CEB-26468, being a personal action, was properly filed in Cebu
City where respondent XM Facultad and Development Corporations principal
office was located.10
The CA further held that ZosimaBorbons death rendered respondent Silverio
Borbon, her surviving spouse, the successor to her estate; that although there was
a valid transfer of interest pending the litigation, the dismissal of the
complaintwould not be in order because it was permissible under the rules to
continue the action in the name of the original party; 11 and that the RTC did not
commit grave abuse of discretion in issuing the writ of preliminary injunction
because it thereby only applied the pertinent law and jurisprudence.12
The CA denied the petitioners motion for reconsiderationthrough its resolution of
February 12, 2003.13
Issues
Hence, this appeal, with the petitioner positing as follows:
1. Whether or not Civil Case No. CEB-26468 should be dismissed for (a)
non-payment of the correct amount of docket fee; and (b) improper
venue;14
2. Whether or not the issuance of the writ of preliminary injunction
against the petitioner, its agents and representatives, was in order.
Ruling of the Court
The appeal is partly meritorious.
1. Civil Case No. CEB-26468 was a personal action; hence, venue was properly laid
The CA and the RTC held that Civil Case No. CEB-26468, being for the declaration of
the nullity of a contract of loan and its accompanying continuing surety agreement,
and the real estate and chattel mortgages, was a personal action; hence, its filing in
Cebu City, the place of business of one of the plaintiffs, was correct under Section
2, Rule 4 of the Rules of Court.
The petitioner contends, however, that Civil Case No. CEB-26468 was a real action
that should be commenced and tried in the proper court having jurisdiction over
the area wherein the real property involved, or a portion thereof, was situated;
and thatconsequently the filing and docket fees for the complaintshould be based
on the value of the property as stated in the certificate of sale attached thereto.
We sustain the lower courts holdings.
The determinants of whether an action is of a real or a personal nature have been
fixed by the Rules of Courtand relevant jurisprudence. According to Section 1, Rule
4 of the Rules of Court, a real action is one that affects title to or possession of real
property, or an interest therein. Such action is to be commenced and tried in the
proper court having jurisdiction over the area wherein the real property involved,
ora portion thereof, is situated, which explains why the action is also referred to as
a localaction. In contrast, the Rules of Courtdeclares all other actionsas personal
actions.15 Such actions may include those brought for the recovery of personal
property, or for the enforcement of some contract or recovery of damages for its
breach, or for the recovery of damages for the commission of an injury to the
person or property.16 The venue of a personal action isthe place where the plaintiff

or any of the principal plaintiffs resides,or where the defendant or any of the
principal defendants resides, or in the case of a non-resident defendant where he
may be found, at the election of the plaintiff, 17 for which reason the action is
considered a transitory one.
The complaintin Civil Case No. CEB-26468 pertinently alleged as follows: 18
xxxx
3.1 Plaintiffs signed blank pre-printed forms of promissory note no.
501253-000, continuing surety agreement, real estate mortgages,
chattel mortgage which violates the principle of mutuality of contracts.
These contracts are in the nature of contracts of adhesion with
provisions favouring defendant bank and plaintiffs had nothing to do
except to sign the unjust stipulations which should be declared as NULL
AND VOID. These contracts do not reflect the real agreement of the
parties and the stipulations are tilted infavor of defendant bank.
3.2 Moreover, these real estate mortgages, chattel mortgages and
continuing surety agreement are securing specific amounts of obligation
and upon the payment of P13,000,000 to defendant bank,
automatically, these became functus de oficioand should be released
immediately without the encumbrance.
3.3 As the chattel mortgage involving the Mitsubishi Pajero secured
only P600,000.00, upon liquidation of more than P800,000.00 principal
payment, the same became null and void, and defendant bank should
be ordered to cancel the mortgage and to be directed not to take any
appropriate action to take possession.
3.4 In addition, Penbank Checks Nos. 11237 to 11242 with amounts
of P200,000.00 each and BPI Check Nos. 019098 & 019099 with
amounts of P400,000.00 each, issued against the will of plaintiffs
Facultad and without any consideration, should be declared null and
void. Defendant bank should be directed not to deposit the samefor
collection with the drawee bank.
xxxx
3.6 Furthermore, the total obligation of plaintiffs is void and baseless
because it is based on illegal impositions of exorbitant interest and
excessive charges. Interest was converted into principal which in turn
earns interest. These illegal impositions are considered by law and
jurisprudence as null and void. These excessive interest and charges
should be applied to the principal unless there isapplication, defendant
bank is enriching itself at the expense of plaintiffs. x x x x
Based on the aforequoted allegations of the complaintin Civil Case No. CEB-26468,
the respondents seek the nullification of the promissory notes, continuing surety
agreement, checks and mortgage agreements for being executed against their will
and vitiated by irregularities, not the recovery of the possession or title to the
properties burdened by the mortgages. There was no allegation that the
possession of the properties under the mortgages had already been transferred to
the petitioner in the meantime. Applying the determinants, Civil Case No. CEB-
26468 was unquestionably a personal action, for, as ruled in Chua v. Total Office
Products and Services (Topros),Inc.: 19
Well-settled is the rule that an action to annul a contract of loan and its accessory
real estate mortgageis a personal action. In a personal action, the plaintiff seeks
the recovery of personal property, the enforcement of a contractor the recovery of
damages. In contrast, in a real action, the plaintiff seeks the recovery of real
property, or, as indicated in Section 2 (a), Rule 4 of the then Rules of Court, a real
action is an action affecting title to real property or for the recovery of possession,
or for partition or condemnation of, or foreclosure of mortgage on, real property.
In the Pascual case, relied upon by petitioner, the contract of sale of the fishpond
was assailed as fictitious for lack of consideration. We held that there being no
contract to begin with, there is nothing to annul. Hence, we deemed the action for
annulment of the said fictitious contract therein as one constituting a real action
for the recovery of the fishpond subject thereof.
We cannot, however, apply the foregoing doctrine to the instant case. Note that in
Pascual, title to and possession of the subject fishpond had already passed to the
vendee. There was, therefore, a need to recover the said fishpond. But in the
instant case, ownership of the parcels of land subject of the questioned real
estatemortgage was never transferred to petitioner, but remained with TOPROS.
Thus, no real action for the recovery of real property is involved. This being the
case, TOPROS action for annulment of the contracts of loan and real estate
mortgage remains a personal action.
xxxx
The Court of Appeals finds that Hernandez v. Rural Bank of Lucena, Inc.provides
the proper precedent in this case. In Hernandez, appellants contended that the
action of the Hernandez spouses for the cancellation of the mortgage on their lots
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 11
was a real action affecting title to real property, which should have been filed in the
place where the mortgaged lots were situated. Rule 4, Section 2 (a), of the then
Rules of Court, was applied, to wit:
SEC. 2. Venue in Courts of First Instance. (a) Real actions. Actions affecting title
to, or for recovery of possession, or for partition or condemnation of, or
foreclosure of mortgage on, real property, shall be commenced and tried in the
province where the property or any part thereof lies.
The Court pointed out in the Hernandezcase that with respect to mortgage, the
rule on real actions only mentions an action for foreclosure of a real estate
mortgage. It does not include an action for the cancellation of a real estate
mortgage. Exclusio unios est inclusio alterius. The latter thus falls under the catch-
all provision on personal actions under paragraph (b) of the above-cited section, to
wit:
SEC. 2 (b) Personal actions. All other actions may be commenced and tried where
the defendant or any of the defendants resides or may be found, or where the
plaintiff or any of the plaintiffs resides, at the election of the plaintiff.
In the same vein, the action for annulment of a real estate mortgage in the present
case must fall under Section 2 of Rule 4, to wit:
SEC. 2. Venue of personal actions. All other actions may be commenced and tried
where the plaintiff or any of the principal plaintiffs resides, orwhere the defendant
or any of the principal defendants resides, or in the case of a nonresident
defendant where he may be found, at the election of the plaintiff.
Thus, Pasig City, where the parties reside, is the proper venue of the action to
nullify the subject loan and real estate mortgage contracts. The Court of Appeals
committed no reversible error in upholding the orders of the Regional Trial Court
denying petitioners motion to dismiss the case on the ground of improper venue.
Being a personal action, therefore, Civil Case No. CEB-26468 was properly brought
in the RTC in Cebu City, where respondent XM Facultad and Development
Corporation, a principal plaintiff, had its address.
Upon the same consideration, the petitioners contention that the filing and docket
fees for the complaintshould be based on the assessed values of the mortgaged
real properties due to Civil Case No. CEB-26468 being a real action cannot be
upheld for lack of factual and legal bases.
2. Respondents were not entitled to the writ of preliminary injunction
In their application for the issuance of the writ of preliminary injunction, the
respondents averred that the nullity of the loan and mortgage agreements entitled
them to the relief of enjoining the petitioner from: (a) foreclosing the real
estateand chattel mortgages; (b)taking possession, by replevin, of the Mitsubishi
Pajero; and (c) depositing the postdated checks; that respondents Spouses
Facultad would suffer injustice and irreparable injury should the petitioner
foreclose the mortgages and file criminal complaints for violation of Batas
Pambansa Blg.22 against them; and that such threatened acts, if done, would
render ineffectual the judgment of the trial court. 20 They prayed that the petitioner
be enjoined from doing acts that would disturb their material possession of the
mortgaged properties, manifesting their willingness to post a bond for the issuance
of the writ of preliminary injunction.21
As mentioned, the RTC issued the writ of preliminary injunction on July 16, 2001
based on the foregoing allegations of the respondents application, 22 and the CA
upheld the issuance in its assailed July 9, 2002 decision.23
The petitioner submits that the issuance of the writ of preliminary injunction
constituted a violation of Administrative Circular (AC) No. 07-99 dated June 25,
1999, and thus subjected respondent Judge to administrative sanction; 24that
injunction could not issue to enjoin the prosecution of the criminal offenses
because such prosecution was imbued with public interest; 25 and that the
petitioner, as the mortgagee, could not be prohibited from exercising its legal right
to foreclose the mortgages because foreclosure of the mortgages was its proper
remedy under the law. 26
AC No. 07-99 was issued as a guideline for lower court judges in the issuance of
TROs and writs of preliminary injunctions to prevent the implementation of
infrastructure projects, or the seizure and forfeiture proceedings by the Bureau of
Customs, viz:
ADMINISTRATIVE CIRCULAR NO. 07-99 June 25, 1999
TO: ALL JUDGES OF LOWER COURTS RE: EXERCISE OF UTMOST CAUTION,
PRUDENCE, AND JUDICIOUSNESS IN ISSUANCE OF TEMPORARY RESTRAINING
ORDERS AND WRITS OF PRELIMINARY INJUNCTIONS
Despite well-entrenched jurisprudence and circulars regarding exercise of
judiciousness and care in the issuance of temporary restraining orders (TRO) or
grant of writs ofpreliminary injunction, reports or complaints on abuses committed

by trial judges in connection therewith persist. Some even intimated
thatirregularities, including corruption, might have influenced the issuance ofthe
TRO or the writ of preliminary injunction.
No less than the President of the Philippines has requested this Court to issue a
circular reminding judges to respect P.D. No. 1818, which prohibits the issuance of
TROs in cases involving implementation of government infrastructure projects. The
Office of the President has likewise brought to the attention of this Court orders of
judges releasing imported articles under seizure and forfeiture proceedings by the
Bureau of Customs.
Judges are thus enjoined to observe utmost caution, prudence and judiciousness in
the issuance of TRO and in the grant of writs of preliminary injunction to avoid any
suspicion that its issuance or grant was for considerations other than the strict
merits of the case.
Judges should bear in mind that in Garcia v. Burgos(291 SCRA 546, 571-572 [1998]),
this Court explicitly stated:
Sec. 1 of PD 1818 distinctly provides that "[n]o court in the Philippines shall have
jurisdiction to issue any restraining order, preliminary injunction, or preliminary
mandatory injunction in any case, dispute, orcontroversy involvingan infrastructure
project . . . of the government, . . . to prohibit any person or persons, entity or
government official from proceeding with, or continuing the execution or
implementation of any such project . . . or pursuing any lawful activity necessary
for such execution, implementation or operation." At the risk of being repetitious,
we stress that the foregoing statutory provision expressly deprives courts of
jurisdiction to issue injunctive writs against the implementation or execution of an
infrastructure project.
Their attention is further invited to Circular No. 68-94, issued on 3 November 1994
by the OCA OIC Deputy Court Administrator Reynaldo L. Suarez, on the subject
"Strict Observance of Section 1 of P.D. 1818 Envisioned by Circular No. 13-93 dated
March 5, 1993, and Circular No. 20-92 dated March 24, 1992.
Finally, judges should never forget what the Court categorically declared in Mison
v. Natividad(213 SCRA 734, 742 [1992] that "[b]y express provision of law, amply
supported by well-settled jurisprudence, the Collector of Customs has exclusive
jurisdiction over seizure and forfeiture proceedings, and regular courts cannot
interfere with his exercise thereof or stifleor put it to naught."
The Office of the Court Administrator shall see to it that this circular is immediately
disseminated and shall monitor implementation thereof.
STRICT OBSERVANCE AND COMPLIANCE of this Circular is hereby enjoined.
AC No. 07-99 was irrelevant herein, however, because Civil Case No. CEB-26468 did
not involve the implementation of infrastructure projects, or the seizure and
forfeiture proceedings by the Bureau of Customs. Consequently, the petitioners
urging that respondent Judge be held administratively liable for violating AC No.
07-99 was misplaced.
However, the RTCs issuance of the writ of preliminary injunction to enjoin the
petitioner from proceeding withthe foreclosure of the mortgages was plainly
erroneous and unwarranted.
A preliminary injunction is an order granted at any stage of an action prior to the
judgment or final order requiring a party or a court, agency or a person to refrain
from a particular act or acts.27 It is the "strong arm of equity," an extraordinary
peremptory remedy that must be used with extreme caution, affecting as it does
the respective rights of the parties.28 The requirements for the issuance of a writ of
preliminary injunction or TRO are enumerated in Section 3, Rule 58 of the Rules of
Court, to wit:
Section 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, eitherfor a limited period or perpetually;
(b) 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
(c) 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.
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 12
In City Government of Butuan v. Consolidated Broadcasting System (CBS),
Inc.,29 the Court restated the nature and concept of a writ of preliminary
injunction, as follows:
A preliminary injunction is an order granted at any stage of an action or proceeding
prior to the judgment orfinal order requiring a party or a court, an agency, or a
person to refrain from a particular act or acts. It may also require the performance
of a particular act or acts, in which case it is known as a preliminary mandatory
injunction. Thus, a prohibitory injunction is one that commands a party to refrain
from doing a particular act, while a mandatory injunction commands the
performance of some positive act to correct a wrong in the past.
As with all equitable remedies, injunction must be issued only at the instance of a
party who possesses sufficient interest in or title to the right or the property
sought to be protected. It is proper only when the applicant appears to be entitled
to the relief demanded in the complaint, which must aver the existence of the right
and the violation of the right, or whose averments must in the minimum constitute
a prima facieshowing of a right to the final relief sought. Accordingly, the
conditions for the issuance of the injunctive writ are: (a) that the right to be
protected exists prima facie; (b) that the act sought to be enjoined is violative of
that right; and (c) that there is an urgent and paramount necessity for the writ to
prevent serious damage. An injunction will not issue to protect a right not in esse,
or a right which is merely contingent and may never arise; or to restrain an act
which does not give rise to a cause of action; or to prevent the perpetration of an
act prohibited bystatute. Indeed, a right, to be protected by injunction, means a
right clearly founded on or granted by law or is enforceable as a matter of law.
(Bold emphasis supplied)
Under the circumstances averred in the complaintin Civil Case No. CEB-26468, the
issuance ofthe writ of preliminary injunction upon the application of the
respondents was improper. They had admittedly constituted the real estate and
chattel mortgages to secure the performance of their loan obligation to the
petitioner, and, as such, they were fully aware of the consequences on their rights
in the properties given as collaterals should the loan secured be unpaid. The
foreclosure of the mortgages would be the remedy provided by law for the
mortgagee to exact payment. 30 In fact, they did not dispute the
petitionersallegations that they had not fully paid their obligation, and that Civil
Case No. CEB-26468 was precisely brought by them in order to stave off the
impending foreclosure of the mortgages based on their claim that they had been
compelled to sign pre-printed standard bank loan forms and mortgage
agreements.
It is true that the trial courts are given generous latitude to act on applications for
the injunctive writ for the reason that conflicting claims in an application for the
writ more often than not involve a factual determination that is not the function of
the appellate courts;31 and that the exercise of sound discretion by the issuing
courts in injunctive matters ought not to be interfered with exceptwhen there is
manifest abuse.32 Nonetheless, the exercise of such discretion must be sound, that
is, the issuance of the writ, though discretionary, should be upon the grounds and
in the manner provided by law. 33 Judges should always bear in mind that the writ
of preliminary injunction is issued uponthe satisfaction of two requisite conditions,
namely: (1) the right to be protected exists prima facie; and (2) the acts sought to
be enjoined are violative of that right. According toSaulog v. Court of Appeals, 34 the
applicant must have a sufficient interest or right to be protected, but it is enough
that:-
x x x for the court to act, there must be an existing basis of facts affording a present
right which is directly threatened by an act sought to be enjoined. And while a
clear showing ofthe right claimed is necessary, its existence need not be
conclusively established. In fact, the evidence to be submitted to justify preliminary
injunction at the hearing thereon need not be conclusive or complete but need
only be a "sampling" intended merely to give the court an idea of the justification
for the preliminary injunction pending the decision of the case on the merits. This
should really be so since our concern here involves only the propriety of the
preliminary injunction and not the merits of the case still pending with the trial
court.
Thus, to be entitled to the writ ofpreliminary injunction, the private respondent
needs only to show that it has the ostensible right to the final relief prayed for in its
complaint x x x.
It is also basic that the power to issue a writ of injunction is to be exercised only
where the reason and necessity therefor are clearly established, and only in cases
reasonably free from doubt. 35 For, truly, a preliminary injunction should not
determine the merits of a case, 36 or decide controverted facts.37 As a preventive
remedy, injunction only seeks to prevent threatened wrong, 38 further injury,39 and
irreparable harm40 or injustice41 until the rights of the parties can be
settled.1wphi1 As an ancillary and preventive remedy, it may be resorted to by a
party to protect or preserve his rights during the pendency of the principal action,
and for no other purpose.42 Such relief will accordingly protect the ability of the
court to render a meaningful decision; 43 it will further serve to guard against a
change of circumstances that will hamper orprevent the granting of proper relief
after a trial on the merits.44 Verily, its essential function is to preserve the status
quo between the parties until the merits of the case can be heard. 45

Moreover, the applicant must prove that the violation sought to be prevented
would cause an irreparable injustice.46 But the respondents failed to establish the
irreparable injury they would suffer should the writ of preliminary injunction not
be issued. Theyprincipally feared the loss of their possession and ownership of the
mortgaged properties, and faced the possibility of a criminal prosecution for the
post-dated checks they issued. But such fear of potential loss ofpossession and
ownership, or facing a criminal prosecution did not constitute the requisite
irreparable injury that could have warranted the issuance of the writ of injunction.
"An injury is considered irreparable," according to Philippine National Bank v.
Castalloy Technology Corporation,47
x x x if it is of such constant and frequent recurrence that no fair or reasonable
redress can be had therefor ina court of law, or where there is no standard by
which their amount canbe measured with reasonable accuracy, that is, it is not
susceptible of mathematical computation. The provisional remedy of preliminary
injunction may only be resorted to when there is a pressing necessity to avoid
injurious consequences which cannot be remedied under any standard of
compensation.
The injury being fearedby the herein respondents is not of such nature. Ultimately,
the amount to which the mortgagee-bank shall be entitled will be determined by
the disposition of the trial court in the main issue of the case. We have explained in
Equitable PCI Bank, Inc. v. OJMark Trading, Inc.that all is not lost for defaulting
mortgagors whose properties were foreclosed by creditors-mortgagees. The
respondents will not be deprived outrightly of their property, given the right of
redemption granted to them under the law. Moreover, in extrajudicial foreclosures,
mortgagors have the right toreceive any surplus in the selling price. Thus, if the
mortgagee is retaining more of the proceeds of the sale than he is entitled to, this
fact alone will not affect the validity of the sale but will give the mortgagor a cause
of action to recover such surplus.
As a general rule, the courts will not issue writs of prohibition or injunction
whether preliminary or final in order to enjoin or restrain any criminal
prosecution.48 But there are extreme cases in which exceptions to the general rule
have been recognized, including: (1) when the injunction is necessary to afford
adequate protection to the constitutional rights of the accused; (2) when it is
necessary for the orderly administration of justice or to avoid oppression or
multiplicity of actions; (3) when there is a prejudicial question that is sub judice; (4)
when the acts of the officer are without or in excess of authority; (5) when the
prosecution is under an invalid law, ordinance or regulation; (6) when double
jeopardy is clearly apparent; (7) when the court has no jurisdiction over the
offense; (8) when it is a case of persecution rather than prosecution; (9) when the
charges are manifestly false and motivated by the lust for vengeance; and (10)
when there is clearly no prima faciecase against the accused and a motion to
quash on that ground has been denied. 49 However, the respondents did not
sufficiently show that Civil Case No. CEB-26468 came under any of the foregoing
exceptions. Hence, the issuance by the RTC of the writ of preliminary injunction to
enjoin the petitioner from instituting criminal complaints for violation of BP No. 22
against the respondents was unwarranted.
Every court should remember that an injunction should not be granted lightly or
precipitately because it isa limitation upon the freedom of the defendant's action.
It should be granted only when the court is fully satisfied that the law permits it
and the emergency demands it,50 for no power exists whose exercise is more
delicate, which requires greater caution and deliberation, or is more dangerous in a
doubtful case, than the issuance of an injunction.51
In view of the foregoing, the CA grossly erred in not declaring that the RTC
committed grave abuse of discretion in granting the application of the respondents
as the plaintiffs in Civil Case No. CEB-26468. The RTC apparently disregarded the
aforecited well-known norms and guidelines governing the issuance of the writ of
injunction. Thereby, the RTC acted capriciously and arbitrarily. Grave abuse of
discretion means either that the judicial or quasi-judicial power was exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, or that the
respondent judge, tribunal or board evaded a positive duty, or virtually refused to
perform the duty enjoined or to act in contemplation of law, such as when such
judge, tribunal or board exercising judicial or quasi-judicial powers acted in a
capricious or whimsical manner as to be equivalent to lack of jurisdiction. 52
WHEREFORE, the Court PARTIALLY GRANTS the petition for review on certiorari;
MODIFIES the decision promulgated on July 9, 2002 by annulling and setting aside
the writ of preliminary injunction in Civil Case No. CEB-26468 issued by the
Regional Trial Court, Branch 16, in Cebu City for being devoid of factual and legal
bases; ORDERS the Regional Trial Court, Branch 16, in Cebu City to proceed with
dispatch in Civil Case No. CEB-26468; and DIRECTS the respondents to pay the
costs of suit.
SO ORDERED
INSERT ZUNECA PHARMA VS NATRAPHARM
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 13
G.R. No. 172909 March 5, 2014
SPOUSES SILVESTRE O. PLAZA AND ELENA Y. PLAZA, Petitioners,
vs.
GUILLERMO LUSTIVA, ELEODORA VDA. DE MARTINEZ AND VICKY SAYSON
GOLOSENO, Respondents.
DECISION
BRION, J.:
Through a petition for review on certiorari, 1 filed under Rule 45 of the Rules of
Court, the petitioners, spouses Silvestre O. Plaza and Elena Y. Plaza, seek the
reversal of the decision2 dated October 24, 2005 and the Resolution 3 dated April 6,
2006 of the Court of Appeals (CA) in CA-G.R. SP No. 59859.
THE FACTS
On August 28, 1997, the CA4 ruled that among the Plaza siblings, namely:
Aureliano, Emiliana, Vidal, Marciano, and Barbara, Barbara was the owner of the
subject agricultural land. The decision became final and executory and Barbara's
successors, respondents Guillermo Lustiva, Eleodora Vda. de Martinez and Vicky
Sayson Goloseno, have continued occupying the property.
On September 14, 1999, Vidals son and daughter-in-law, the petitioners, filed a
Complaint for Injunction, Damages, Attorneys Fees with Prayer for the Issuance of
the Writ of Preliminary Injunction and/or Temporary Restraining Order against the
respondents and the City Government of Butuan. They prayed that the
respondents be enjoined from unlawfully and illegally threatening to take
possession of the subject property. According to the petitioners, they acquired the
land from Virginia Tuazon in 1997; Tuazon was the sole bidder and winner in a tax
delinquency sale conducted by the City of Butuan on December 27, 1996.
In their answer, the respondents pointed out that they were never delinquent in
paying the land taxes and were in fact not aware that their property had been
offered for public auction. Moreover, Tuazon, being a government employee, was
disqualified to bid in the public auction, as stated in Section 89 of the Local
Government Code of 1991.5 As Tuazons participation in the sale was void, she
could have not transferred ownership to the petitioners. Equally important, the
petitioners merely falsified the property tax declaration by inserting the name of
the petitioners father, making him appear as a co-owner of the auctioned land.
Armed with the falsified tax declaration, the petitioners, as heirs of their father,
fraudulently redeemed the land from Tuazon. Nonetheless, there was nothing to
redeem as the land was not sold. For these irregularities, the petitioners had no
right to the Writ of Preliminary Injunction and/or Temporary Restraining Order
prayed for against them.
THE RTCS RULING
In its December 14, 1999 order, 6 the Regional Trial Court (RTC) of Butuan City,
Branch 5, reconsidered its earlier order,7 denied the prayer for a Writ of Preliminary
Injunction, and ordered that the possession and occupation of the land be
returned to the respondents. The RTC found that the auction sale was tainted with
irregularity as the bidder was a government employee disqualified in accordance
with Section 89 of the Local Government Code of 1991. The petitioners are not
buyers in good faith either. On the contrary, they were in bad faith for having
falsified the tax declaration they redeemed the property with.
THE CAS RULING
Through a petition for review on certiorari under Rule 65, the petitioners
challenged the RTCs order before the CA.
While the petition for review on certiorari was pending before the CA, the
petitioners filed an action for specific performance 8 against the City Government of
Butuan. According to the petitioners, they acquired possession and ownership over
the auctioned property when they redeemed it from Tuazon. The City Government
of Butuan must therefore issue them a certificate of sale.9
In its October 24, 2005 decision, 10 the CA affirmed the RTCs ruling, found the
petitioners guilty of forum shopping, dismissed the case, and referred the case to
the Court and to the Integrated Bar of the Philippines for investigation and
institution of the appropriate administrative action. 11 The CA, after legal analysis,
similarly concluded that for being disqualified to bid under Section 89 of the Local
Government Code of 1991, Tuazon never obtained ownership over the property;
much less transmit any proprietary rights to the petitioners. Clearly, the petitioners
failed to establish any clear and unmistakable right enforceable by the injunctive
relief.
On April 6, 2006, the CA rejected the petitioners motion for reconsideration.
THE PARTIES ARGUMENTS

The petitioners filed the present petition for review on certiorari with this Court to
challenge the CA rulings. The petitioners maintain that they did not falsify the tax
declaration in acquiring the auctioned property. Moreover, assuming that Tuazon,
the sole bidder, was indeed disqualified from participating in the public auction,
Section 18112 of the Local Government Code of 1991 finds application. Applying the
law, it is as if there was no bidder, for which the City Government of Butuan was to
be considered the purchaser of the land in auction. Therefore, when the
petitioners bought the land, they bought it directly from the purchaser - City
Government of Butuan - and not from Tuazon, as redeemers.
Also, the respondents may not question the validity of the public auction for failing
to deposit with the court the amount required by Section 267 13 of the Local
Government Code of 1991.
Finally, the petitioners argue that they did not commit forum shopping, as the
reliefs prayed for in the present case and in the specific performance case are not
the same. In the present case, they merely impleaded the City Government of
Butuan as a nominal party to pay for the value of the land only if possession of the
land was awarded to the respondents. On the other hand, the complaint for
specific performance prayed that the City Government of Butuan execute the
necessary certificate of sale and other relevant documents pertaining to the
auction.
The respondents, for their part, reiterate the lower courts findings that there
could have been no legal redemption in favor of the petitioners as the highest
bidder was disqualified from bidding. Moreover, the CA correctly applied the law in
finding the petitioners guilty of forum shopping. Most importantly, the grant of
preliminary injunction lies in the sound discretion of the court and the petitioners
failed to show proof that they are entitled to it.
Meanwhile, on August 8, 2013, the RTC dismissed the main action and ordered the
petitioners to pay the respondents attorneys fees and litigation expenses.14
THE COURTS RULING
We resolve to deny the petition for lack of merit.
The petitioners may not
raise factual issues
The petitioners maintain that they did not falsify the tax declaration they
reimbursed the property with. According to them, the document already existed in
1987, way before they acquired the land in 1997. Contrary likewise to the lower
courts finding, they did not purchase the land from Tuazon as redemptioners; they
directly bought the property from the City Government of Butuan.
These factual contests are not appropriate for a petition for review on certiorari
under Rule 45. The Court is not a trier of facts. 15 The Court will not revisit, re-
examine, and re-evaluate the evidence and the factual conclusions arrived at by
the lower courts.16 In the absence of compelling reasons, the Court will not disturb
the rule that factual findings of the lower tribunals are final and binding on this
Court.17
Sections 181 and 267 of the Local Government Code of 1991 are inapplicable;
these provisions do not apply to the present case
The petitioners may not invoke Section 181 18 of the Local Government Code of
1991 to validate their alleged title. The law authorizes the local government unit to
purchase the auctioned property only in instances where "there is no bidder" or
"the highest bid is xxx insufficient." A disqualified bidder is not among the
authorized grounds. The local government also never undertook steps to purchase
the property under Section 181 of the Local Government Code of 1991,
presumably because it knew the invoked provision does not apply.
Neither can the Court agree with the petitioners stance that the respondents
defense the petitioners defective title must fail for want of deposit to the
court the amount required by Section 267 of the Local Government Code. The
provision states:
Section 267. Action Assailing Validity of Tax Sale. - No court shall entertain any
action assailing the validity or any sale at public auction of real property or rights
therein under this Title until the taxpayer shall have deposited with the court the
amount for which the real property was sold, together with interest of two percent
(2%) per month from the date of sale to the time of the institution of the action.
The amount so deposited shall be paid to the purchaser at the auction sale if the
deed is declared invalid but it shall be returned to the depositor if the action fails.
Neither shall any court declare a sale at public auction invalid by reason or
irregularities or informalities in the proceedings unless the substantive rights of the
delinquent owner of the real property or the person having legal interest therein
have been impaired. [underscores ours; italics supplied]
A simple reading of the title readily reveals that the provision relates to actions for
annulment of tax sales. The section likewise makes use of terms "entertain" and
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 14
"institution" to mean that the deposit requirement applies only to initiatory
actions assailing the validity of tax sales. The intent of the provision to limit the
deposit requirement to actions for annulment of tax sales led to the Courts ruling
in National Housing Authority v. Iloilo City, et al. 19 that the deposit requirement is
jurisdictional a condition necessary for the court to entertain the action:
As is apparent from a reading of the foregoing provision, a deposit equivalent to
the amount of the sale at public auction plus two percent (2%) interest per month
from the date of the sale to the time the court action is instituted is a condition
a "prerequisite," to borrow the term used by the acknowledged father of the Local
Government Code which must be satisfied before the court can entertain any
action assailing the validity of the public auction sale. The law, in plain and
unequivocal language, prevents the court from entertaining a suit unless a deposit
is made. xxx. Otherwise stated, the deposit is a jurisdictional requirement the
nonpayment of which warrants the failure of the action.
xxxx
Clearly, the deposit precondition is an ingenious legal device to guarantee the
satisfaction of the tax delinquency, with the local government unit keeping the
payment on the bid price no matter the final outcome of the suit to nullify the tax
sale.20
The Court would later reiterate the jurisdictional nature of the deposit in Wong v.
City of Iloilo,21 and pronounce:
In this regard, National Housing Authority v. Iloilo City holds that the deposit
required under Section 267 of the Local Government Code is a jurisdictional
requirement, the nonpayment of which warrants the dismissal of the action.
Because petitioners in this case did not make such deposit, the RTC never acquired
jurisdiction over the complaints.22
These rulings clearly render inapplicable the petitioners insistence that the
respondents should have made a deposit to the court. The suit filed by the
petitioners was an action for injunction and damages; the issue of nullity of the
auction was raised by the respondents themselves merely as a defense and in no
way converted the action to an action for annulment of a tax sale.
The petitioners failed to show clear
and unmistakable rights to be protected
by the writ; the present action has been
rendered moot and academic by the
dismissal of the main action
As the lower courts correctly found, Tuazon had no ownership to confer to the
petitioners despite the latters reimbursement of Tuazons purchase expenses.
Because they were never owners of the property, the petitioners failed to establish
entitlement to the writ of preliminary injunction. "[T]o be entitled to an injunctive
writ, the right to be protected and the violation against that right must be shown.
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. 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." 23
Likewise, upon the dismissal of the main case by the RTC on August 8, 2013, the
question of issuance of the writ of preliminary injunction has become moot and
academic. In Arevalo v. Planters Development Bank, 24 the Court ruled that a case
becomes moot and academic when there is no more issue between the parties or
object that can be served in deciding the merits of the case. Upon the dismissal of
the main action, the question of the non-issuance of a writ of preliminary
injunction automatically died with it. A writ of preliminary injunction is a
provisional remedy; it is auxiliary, an adjunct of, and subject to the determination
of the main action. It is deemed lifted upon the dismissal of the main case, any
appeal therefrom notwithstanding.25
The petitioners are guilty
of forum shopping
We agree with the CA that the petitioners committed forum shopping when they
filed the specific performance case despite the pendency of the present case
before the CA. In the recent case of Heirs of Marcelo Sotto, etc., et al. v. Matilde S.
Palicte,26 the Court laid down the three ways forum shopping may be committed:
1) through litis pendentia filing multiple cases based on the same cause of
action and with the same prayer, the previous case not having been resolved yet;
2) through res judicata filing multiple cases based on the same cause of action
and the same prayer, the previous case having been finally resolved; and 3)
splitting of causes of action filing multiple cases based on the same cause of
action but with different prayers the ground to dismiss being either litis
pendentia or res judicata. "The requisites of litis pendentia are: (a) the identity of
parties, or at least such as representing the same interests in both actions; (b) the
identity of rights asserted and relief prayed for, the relief being founded on the
same facts; and (c) the identity of the two cases such that judgment in one,
regardless of which party is successful, would amount to res judicata in the
other."27

Noticeable among these three types of forum shopping is the identity of the cause
of action in the different cases filed. Cause of action is "the act or omission by
which a party violates the right of another."28
The cause of action in the present case (and the main case) is the petitioners claim
of ownership of the land when they bought it, either from the City Government of
Butuan or from Tuazon. This ownership is the petitioners basis in enjoining the
respondents from dispossessing them of the property. On the other hand, the
specific performance case prayed that the City Government of Butuan be ordered
to issue the petitioners the certificate of sale grounded on the petitioners
ownership of the land when they had bought it, either from the City Government
of Butuan or from Tuazon. While it may appear that the main relief prayed for in
the present injunction case is different from what was prayed for in the specific
performance case, the cause of action which serves as the basis for the reliefs
remains the same the petitioners alleged ownership of the property after its
purchase in a public auction.
Thus, the petitioners' subsequent filing of the specific performance action is forum
shopping of the third kind-splitting causes of action or filing multiple cases based
on the same cause of action, but with different prayers. As the Court has held in
the past, "there is still forum shopping even if the reliefs prayed for in the two
cases are different, so long as both cases raise substantially the same issues." 29
Similarly, the CA correctly found that the petitioners and their counsel were guilty
of forum shopping based on litis pendentia. Not only were the parties in both cases
the same insofar as the City Government of Butuan is concerned, there was also
identity of rights asserted and identity of facts alleged. The cause of action in the
specific performance case had already been ruled upon in the present case,
although it was still pending appeal before the CA. Likewise, the prayer sought in
the specific performance case-for the City Government ofButuan to execute a deed
of sale in favor of the petitioners - had been indirectly ruled upon in the present
case when the R TC declared that no certificate of sale could be issued because
there had been no valid sale.
WHEREFORE, premises considered, the Court DENIES the petition for review on
certiorari.1wphi1 The decision dated October 24, 2005 and the resolution dated
April 6, 2006 of the Court of Appeals in CA-G.R. SP No. 59859 are hereby
AFFIRMED.
SO ORDERED.
G.R. No. 206808-09, September 07, 2016
LOCAL WATER UTILITIES ADMINISTRATION EMPLOYEES ASSOCIATION FOR
PROGRESS (LEAP), MELANIO B. CUCHAPIN II, GREARDO* G. PERU, ROLAND S.
CABAHUG, GLORIA P. VELASQUEZ, ERLINDA G. VILLANUEVA, TEODORO M.
REYNOSO, FERNANDO L. NICANDRO, JOSEPHINE P. SIMENE, LAMBERTO R.
RIVERA, REYNALDO M. VIDA, and RUCTICO ** B. TUTOL, Petitioners, v. LOCAL
WATER UTILITIES ADMINISTRATION (LWUA) and DEPARTMENT OF BUDGET AND
MANAGEMENT, Respondents.
DECISION
PERALTA, J.:
Challenged in the present petition for certiorari under Rule 65 of the Rules of Court
are the Decision1and Resolution2 of the Court of Appeals (CA), dated August 28,
2012 and January 15, 2013, respectively, in two (2) consolidated cases docketed as
CA-G.R. SP Nos. 100482 and 100662. The assailed CA Decision reversed and set
aside the: (1) December 7, 2006 Order3 of the Regional Trial Court (RTC) of Quezon
City, Branch 92 in SP. Proc. No. Q-06-59047, which granted petitioners' prayer for
the issuance of a writ of preliminary injunction; and (2) the June 6, 2007
Resolution4 of the RTC which denied respondents' Motion for Reconsideration. The
questioned CA Resolution denied herein petitioners' Motion for Reconsideration.
The facts of the case are as follows:
On February 2, 2004, former President Gloria Macapagal-Arroyo enacted Executive
Order (E.O.) No. 2795 for the purpose of reviewing and rationalizing the then
existing financing policies for the Philippine water supply and sewerage sector to
allow for the efficient flow of resources thereto. Under the said E.O., all concerned
government agencies and instrumentalities of the water supply and sewerage
sector, which includes, among others, the Local Water Utilities Administration
(LWUA), were directed to pursue and implement reform objectives and policies.
The said E.O. particularly provided for the rationalization of LWUA's organizational
structure and operations.
On October 4, 2004, President Arroyo issued E.O. No. 366 directing all departments
of the executive branch and their component units/bureaus including government-
owned and controlled corporations, boards, task forces, councils, commissions and
all other agencies attached thereto or under the administrative supervision of a
Department, to conduct a strategic review of the operations and organization of
the Executive Branch and to prepare a rationalization plan which includes the
phasing of activities and availment of incentives by affected employees.
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 15
On April 13, 2005, President Arroyo issued E.O. No. 421,6 specifying LWUA's core
functions and providing for shifts in its policy direction, functions, programs,
activities and strategies. Cognizant of the effect of the rationalization of the
functions of LWUA, the E.O. gave affected LWUA personnel the option to either
remain or retire, or be separated from government service.
Pursuant to the provisions of E.O. No. 421, then LWUA Administrator Lorenzo
Zamora came up with Office Order No. 077-05 creating Task Force 421 and its
Action Team. The said Task Force was charged, among others, with the duty of
preparing the LWUA's staffing pattern and the corresponding plantilla positions
therein as directed by E.O. No. 421. The Action Team, on the other hand, was given
the responsibility of reporting to the Task Force and assisting it in the execution of
its duties and responsibilities. Among the appointed members of the Action Team
was herein petitioner Melanio Cuchapin II, who was then the Chairperson of
petitioner LWUA Employees' Association for Progress (LEAP). Subsequently, Task
Force 421 was able to come up with a staffing pattern, consisting of 467 plantilla
positions which it submitted to the LWUA Board of Trustees for approval.
On April 18, 2006, the LWUA Board of Trustees issued Board Resolution No. 69
which approved the staffing pattern proposed by Task Force 421. Thereafter, the
approved staffing pattern was submitted to the Department of Budget and
Management (DBM) for review and approval.
In its letter dated September 27, 2006, the DBM approved 447 plantilla positions
out of the 467 proposed positions. Twenty (20) positions were excluded from the
plantilla because they were classified as coterminous with the members of the
LWUA Board of Trustees and are not considered critical in the agency's operations.
On October 18, 2006, LWUA issued Office Order No. 168-06 requiring the
immediate implementation of the following: (a) posting of the DBM-approved
staffing pattern; (b) finalization by the Staffing Committee of the staffing guidelines
to be submitted to the Management and the Board of Trustees for approval; and
(c) finalization by the Task Analysis Committee of the job descriptions under the
rationalized LWUA structure. The said Office Order also provided that the
guidelines for the implementation of the approved staffing pattern shall include a
general provision declaring that all employees may apply for a maximum of five
positions in the rationalized structure where they may qualify.
On October 19, 2006, petitioners filed a petition for certiorari, prohibition
and mandamus with prayer for temporary restraining order (TRO) and preliminary
injunction with the RTC of Quezon City. Alleging that LWUA and DBM acted with
grave abuse of discretion in adopting and implementing the reorganization plan of
LWUA, petitioners prayed that LWUA and DBM be restrained from implementing
the following: (1) DBM-approved staffing pattern; (2) Resolution No. 69 of the
LWUA Board of Trustees, and (3) E.O. Nos. 279, 366 and 421, on the ground that
petitioners will suffer injustice and sustain irreparable injury as 233 LWUA
employees face immediate and outright dismissal from service.
Respondents filed their respective Oppositions to the petitioners' prayer for TRO
and/or preliminary injunction.
After hearing, the RTC issued its assailed Order 7 granting petitioners' prayer for the
issuance of a writ of preliminary injunction, disposing as follows:
WHEREFORE, let a writ of preliminary injunction be issued, restraining the
respondents from enforcing and effecting the assailed questioned DBM-Approved
Staffing Pattern dated 27 September 2006, LWUA Board Resolution No. 69, series
of 2006, and Executive Order Nos. 279, 366 and 421, including the issuance of any
orders, resolutions and/or decisions relating to the same, upon the filing of a bond
in the amount of one hundred thousand (P100,000.00) pesos for any damage that
may be sustained by the respondents by reason of the injunction if the Court will
finally decide that the petitioners are not entitled thereto.
SO ORDERED.8
LWUA and DBM filed separate Motions for Reconsideration, but these were denied
in the RTC's questioned Resolution9 dated June 6, 2007.
LWUA and DBM then filed separate special civil actions for certiorari with the CA
questioning the subject RTC Order and Resolution. These petitions were
subsequently consolidated.
On August 28, 2012, the CA promulgated its presently disputed Decision, with the
following dispositive portion:
WHEREFORE, the instant petitions are GRANTED. Accordingly, the Order dated 07
December 2006 and the Resolution dated 06 June 2007 issued by Branch 92 of the
Regional Trial Court in Quezon City in SP Proc. No. Q-06-59047
are REVERSED and SET ASIDE. The Writ of Preliminary Injunction issued by the said
court pursuant to its Order dated 07 December 2006 is LIFTED and SET ASIDE.
SO ORDERED.10

Petitioners filed a Motion for Reconsideration, but the CA denied it in its Resolution
dated January 15, 2013.
Hence, the instant petition based on the following grounds:
6.1 THE HONORABLE FOURTEENTH DIVISION OF THE COURT OF APPEALS ACTED
WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF
JURISDICTION IN ISSUING THE RESOLUTION DATED 15 JANUARY 2013, DENYING
THE INSTANT MOTION FOR RECONSIDERATION FILED BY THE PETITIONERS AND
AFFIRMING THE DECISION PROMULGATED ON 28 AUGUST 2012, AND REVERSING
THE DECISION OF THE TRIAL COURT.
6.2 THE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION IN HOLDING THAT THE
PETITIONERS ARE NOT ENTITLED TO THE [INJUNCTIVE] WRIT.
6.3 THERE IS NO APPEAL, OR ANY PLAIN AND SPEEDY REMEDY IN THE ORDINARY
COURSE OF LAW OTHER THA[N] THE INSTANT PETITION. 11
At the outset, the Court notes that in its Decision 12 dated December 27, 2012, the
RTC dismissed the petition for certiorari, mandamus and prohibition which was
filed by petitioners on the ground of lack of justiciable controversy and resort to a
wrong remedy.
On this basis, the Court deems it proper to address the procedural matters raised
by respondents as it finds the instant petition dismissible for reasons to be
discussed hereunder.
First, is the propriety of the remedy availed of by petitioners. Petitioners come to
this Court questioning the Decision and Resolution of the CA via a special civil
action for certiorari contending that there is "a very urgent need to resolve the
issues presented herein and considering that public respondents are hell-bent on
proceeding with [the] removal and deprivation of economic benefits, causing great
injury to petitioners and LWUA employees, and having no other plain, speedy and
adequate remedy in the ordinary course of the law x x x."13
It is settled that a petition for certiorari under Rule 65 of the Rules of Court is a
pleading limited to correction of errors of jurisdiction or grave abuse of discretion
amounting to lack or excess of jurisdiction. Its principal office is to keep the inferior
court within the parameters of its jurisdiction or to prevent it from committing
such a grave abuse of discretion amounting to lack or excess of jurisdiction. It may
issue only when the following requirements are alleged in and established by the
petition: (1) that the writ is directed against a tribunal, a board or any officer
exercising judicial or quasi-judicial functions; (2) that such tribunal, board or officer
has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) that there is no appeal or any
plain, speedy and adequate remedy in the ordinary course of law. 14
This Court has repeatedly held that a special civil action for certiorari under Rule 65
of the Rules of Court is proper only when there is neither appeal nor plain, speedy
and adequate remedy in the ordinary course of law. The extraordinary remedy
of certiorari is not a substitute for a lost appeal; it is not allowed when a party to a
case fails to appeal a judgment to the proper forum, especially if one's own
negligence or error in one's choice of remedy occasioned such loss or lapse. 15
On the other hand, Section 1, Rule 45 of the Rules of Court provides that the
proper remedy to question a judgment, final order or resolution of the CA, as in
the present case, is a petition for review on certiorari regardless of the nature of
the action or proceeding involved. 16 The petition must be filed within fifteen (15)
days from notice of the judgment, final order or resolution appealed from; or of
the denial of petitioner's motion for reconsideration filed in due time after notice
of the judgment.17
This Court has ruled that because an appeal was available to the aggrieved party,
the action for certiorari would not be entertained. We emphasized in that case that
the remedies of appeal and certiorari are mutually exclusive, not alternative or
successive.18 Where an appeal is available, certiorari will not prosper, even if the
ground is grave abuse of discretion.19
By filing the present special civil action for certiorari under Rule 65, petitioners,
therefore, clearly availed themselves of the wrong remedy. Under Supreme Court
Circular 2-90, an appeal taken to this Court or to the CA by a wrong or an
inappropriate mode merits outright dismissal. On this score alone, the instant
petition is dismissible.
The second issue raised by respondents that the dismissal of petitioners' principal
action for certiorari, prohibition and mandamus filed with the RTC results in the
automatic dissolution of the ancillary writ of preliminary injunction issued by the
same court.
The Court agrees with respondents.
A writ of preliminary injunction is an order granted at any stage of an action or
proceeding prior to the judgment or final order, requiring a party or a court,
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 16
agency or a person to refrain from a particular act or acts.20 It is merely a
provisional remedy, adjunct to the main case subject to the latter's outcome. It is
not a cause of action in itself. The writ is provisional because it constitutes a
temporary measure availed of during the pendency of the action and it is ancillary
because it is a mere incident in and is dependent upon the result of the main
action.21 Being an ancillary or auxiliary remedy, it is available during the pendency
of the action which may be resorted to by a litigant to preserve and protect certain
rights and interests therein pending rendition, and for purposes of the ultimate
effects, of a final judgment in the case.22
It is well settled that the sole object of a preliminary injunction, whether
prohibitory or mandatory, is to preserve the status quo until the merits of the case
can be heard.23 It is usually granted when it is made to appear that there is a
substantial controversy between the parties and one of them is committing an act
or threatening the immediate commission of an act that will cause irreparable
injury or destroy the status quo of the controversy before a full hearing can be had
on the merits of the case.24 It persists until it is dissolved or until the termination of
the action without the court issuing a final injunction.25cralawred
Indubitably, in the present case, the writ of preliminary injunction was granted by
the RTC based on its finding that there was a need to protect petitioners' rights to
security of tenure during the pendency of the principal action. After trial, however,
the lower court found, among others, that, in questioning the constitutionality of
E.O. Nos. 279, 366 and 421 as well as Resolution No. 69 of the LWUA Board of
Trustees, petitioners failed to establish the existence of an actual case or
controversy which is ripe for judicial determination. Thus, the RTC dismissed the
principal action for certiorari, prohibition and mandamus.
The principal action having been heard and found dismissible as it was in fact
dismissed, the writ of preliminary injunction issued by the RTC is deemed lifted, its
purpose as a provisional remedy having been served, the appeal from the main
case notwithstanding.26 In this regard, this Court's ruling in the case of Unionbank
of the Philippines v. Court of Appeals27 is instructive, to wit:
x x x "a dismissal, discontinuance or non-suit of an action in which a restraining
order or temporary injunction has been granted operates as a dissolution of the
restraining order or temporary injunction," regardless of whether the period for
filing a motion for reconsideration of the order dismissing the case or appeal
therefrom has expired. The rationale therefor is that even in cases where an appeal
is taken from a judgment dismissing an action on the merits, the appeal does not
suspend the judgment, hence the general rule applies that a temporary injunction
terminates automatically on the dismissal of the action.28
Finally, the Court agrees with the RTC and the CA that even assuming that
petitioners have a valid cause of action, in that their security of tenure may be
violated as a result of their transfer or termination from service, the law,
particularly Republic Act No. 665629 (RA 6656), provides them with ample remedies
to address their alleged predicament, prior to filing an action in court. Sections 7
and 8 of RA 6656 provide, thus:
Section 7. A list of the personnel appointed to the authorized positions in the
approved staffing pattern shall be made known to all the officers and employees of
the department or agency. Any of such officers and employees aggrieved by the
appointments made may file an appeal with the appointing authority who shall
make a decision within thirty (30) days from the filling thereof.
Section 8. An officer or employee who is still not satisfied with the decision of the
appointing authority may further appeal within ten (10) days from the receipt
thereof to the Civil Service Commission which shall render a decision thereon
within thirty (30) days and whose decision shall be final and executory. 30
Under the doctrine of exhaustion of administrative remedies, before a party is
allowed to seek the intervention of the court, he or she should have availed
himself or herself of all the means of administrative processes afforded him or
her.31 Hence, if resort to a remedy within the administrative machinery can still be
made by giving the administrative officer concerned every opportunity to decide
on a matter that comes within his or her jurisdiction, then such remedy should be
exhausted first before the court's judicial power can be sought.32 The premature
invocation of the intervention of the court is fatal to one's cause of action.33 The
doctrine of exhaustion of administrative remedies is based on practical and legal
reasons. The availment of administrative remedy entails lesser expenses and
provides for a speedier disposition of controversies. 34Furthermore, the courts of
justice, for reasons of comity and convenience, will shy away from a dispute until
the system of administrative redress has been completed and complied with, so as
to give the administrative agency concerned every opportunity to correct its error
and dispose of the case.35
Corollary to the doctrine of exhaustion of administrative remedies is the doctrine
of primary jurisdiction; that is, courts cannot or will not determine a controversy
involving a question which is within the jurisdiction of the administrative tribunal
prior to the resolution of that question by the administrative tribunal, where the
question demands the exercise of sound administrative discretion requiring the
special knowledge, experience and services of the administrative tribunal to
determine technical and intricate matters of fact.36

Thus, petitioners should have first brought their case to the appointing authority,
which in this case, is the LWUA Board of Trustees, and, thereafter, to the Civil
Service Commission, which has primary jurisdiction over the case. On the basis of
the abovequoted provisions, it is clear that petitioners failed to exhaust the
administrative remedies given them by law before resorting to the filing of a
petition for certiorari, prohibition and mandamus.
WHEREFORE, the instant petition is DISMISSED. The Decision and Resolution of the
Court of Appeals, dated August 28, 2012 and January 15, 2013, respectively, in CA-
G.R. SP Nos. 100482 and 100662 are AFFIRMED.
SO ORDERED.
G.R. No. 173036 September 26, 2012
AGOO RICE MILL CORPORATION (represented by its President, Kam Biak Y. Chan,
Jr.), Petitioner,
vs.
LAND BANK OF THE PHILIPPINES, Respondent.
DECISION
BRION, J.:
Before us is a petition for review on certiorari1 of the March 28, 2006 Decision2 and
the June 6, 2006 resolution 3 of the Court of Appeals (CA) in CA-Ci.R. CV No. 84458.
The CA affirmed the decision4 of the Regional Trial Court(RTC), Branch 30, San
Fernando City, La Union, in Civil Case No. 6255 which denied the complaint for
injunction tiled by Agoo Rice Mill Corporation (ARMC) against the Land Bank of the
Philippines (LBP). The CA denied the petitioner's subsequent motion for
reconsideration.
Background Facts
The facts, as gathered from the records, are as follows:
From October 1993 to October 1996,5 the ARMC obtained from the LBP a Term
Loan (TL) for P 2,000,000.00 and two (2) Short-Term Loan Lines (STLLs) amounting
to a total of P 15,000,000.00,6 evidenced by promissory notes. These loans were
secured by a Real and Chattel Mortgage over the ARMCs four (4) commercial lots,
including their improvements, and its rice mill machineries and generator. 7
Payment for the P 2,000,000.00 TL was due on October 29, 1996, and payments for
the STLLs, of P12,000,000.00 and P 3,000,000.00, were due on April 28, 1996 and
April 8, 1997, respectively.8
ARMC made several partial payments to cover the loans interests, 9 but found it
difficult to fully settle its loan obligations on time due to the companys financial
liquidity problems; the negative effect of the governments rice importation in
1996 on its sales of rice;10 and problems brought by the El Nio phenomenon in the
regions rice production.11
In a letter12 dated January 6, 1997, the ARMC, through its President Mr. Kam Biak Y.
Chan, Jr., requested the LBP for an extension of time to pay its obligations; he
asked for a period ending on February 28, 1997.
The LBP, through a letter13 dated February 25, 1997, reminded ARMC of its
commitment to pay on February 28, 1997.
On February 27, 1997, still foreseeing its inability to pay its obligations on the
requested date, the ARMC wrote the LBP for the renewal of its loans, particularly
the P 15,000,000.00 STLLs.14 The LBP allegedly replied with the advice to have the
loans restructured instead of renewed. 15
Accordingly, in a letter16 dated March 12, 1997, ARMC requested the LBP to
restructure its STLLs. It suggested a payment arrangement of P 5,000,000.00 every
six (6) months, until the whole loan of P 15,000,000.00 was paid in full.17
The LBP deferred the ARMCs proposal and advised it to first secure a waiver of its
penalty charges prior to the loans restructuring.18
In a letter19 dated November 3, 1997, the LBP informed the ARMC that the banks
Domestic Banking Loan Committee has agreed to require an additional collateral
from the ARMC, which must be offered on or before November 7, 1997; otherwise,
the LBP would be forced to pursue legal action.
20
In another letter dated November 10, 1997, the LBP informed ARMC that its
existing collateral was short of P3,400,000.00, based on its
outstanding P 15,000,000.00 loan, and reiterated that ARMC needed to offer
additional collateral and to submit the necessary documents; ARMC was given up
to November 14, 1997 to comply, but this was extended to November 25,
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 17
1997.21 ARMC responded by asking for a reappraisal of its properties, but the LBP
denied the request, insisting that the valuation made by its Property Assessors was
fair and reasonable.22
On April 15, 1998, the LBP wrote to the ARMC regarding the latters failure to
comply with the LBPs required offer of an additional collateral or to pay its due
obligations. The LBP informed the ARMC that noncompliance on or before April 30,
1998 would result in the referral of the matter to the banks Legal Office for
appropriate action.23
In a letter24 dated May 22, 1998, the LBP informed the ARMC that its requested
loan restructuring was under evaluation with the banks Loan Approving
Authorities; in the meantime, the bank reminded ARMC of its payment for the
month, which must be paid on or before May 29, 1998.
Application for Extrajudicial Foreclosure
On July 8, 1998, the LBP sent the ARMC a Final Notice of Payment, 25 informing the
ARMC that it had filed, on the same date, an application for the extrajudicial
foreclosure of ARMCs mortgaged properties with the Office of the Ex-Officio
Sheriff of San Fernando City, La Union.26
In its application for extrajudicial foreclosure, 27 the LBP alleged, among others,
that: (1) despite repeated demands, the ARMC failed to pay its overdue
obligations, in violation of the terms and conditions of the Real and Chattel
Mortgage; (2) as of July 8, 1998, the ARMCs total unpaid obligation amounted
to P 23,473,320.83, broken down as follows principal amount of P 15,000,000.00,
interests amounting to P 7,363,320.83, and penalties amounting to P 1,110,000.00;
and (3) the ARMC had been duly notified, through a letter-notice dated July 8,
1998, of the foreclosure proceedings and of the time, date and place of public
auction.
The extrajudicial foreclosure was set for August 26, 1998 at nine oclock in the
morning.28
Complaint for Injunction
On August 24, 1998, ARMC, through its President, filed with the RTC, Branch 30,
San Fernando City, La Union, a complaint for injunction with application for a writ
of preliminary injunction and temporary restraining order, and for recovery of
damages.29
ARMC mainly alleged that LBPs proposed extrajudicial foreclosure should be
enjoined for being premature, improper and in violation of ARMCs contractual and
property rights since negotiations for the restructuring of its loans were still
ongoing. ARMC contended that, unless enjoined, the foreclosure would cause its
company grave injustice and irreparable injury.
ARMC also alleged that the LBPs petition for extrajudicial foreclosure contained
inconsistent statements on the total amount of its principal obligation, and omitted
the following relevant facts: that the P 15,000,000.00 STLLs and the P 2,000,000.00
TL were separately secured by a real estate mortgage and a chattel mortgage,
respectively; that the P 2,000,000.00 TL had been fully paid, evidenced by a
voucher dated February 27, 1997; and that despite full payment of
the P 2,000,000.00 TL, the LBP did not release the chattel mortgage and still
included it in the petition for extrajudicial foreclosure.
Further, ARMC contended that the Real and Chattel Mortgage attached to the LBPs
petition for extrajudicial foreclosure referred to a loan previously obtained by
ARMC in 1995, which does not reflect the recent loan transactions between the
parties, and that the mortgage contract was altered without ARMCs consent by
including in the mortgaged chattel the ARMCs "stocks (rice/palay) inventories." 30
ARMC denied receipt of the LBPs July 8, 1998 Final Notice of Payment.
Temporary Restraining Order and Writ of Preliminary Injunction
On August 24, 1998, Executive Judge Vicente A. Pacquing, RTC, La Union, issued a
72hour Temporary Restraining Order (TRO) directing the Ex-Officio Provincial
Sheriff of La Union to cease and desist from proceeding with the August 26, 1998
foreclosure sale.31 The following day, the RTC ordered the extension of the TRO for
seventeen (17) days. 32
On September 8, 1998, the RTC ordered the proceedings suspended in view of the
parties manifestation to have the case amicably settled. 33 The contemplated
settlement, however, failed. Thus, the RTC proceeded with the hearing on the
issuance of the writ of preliminary injunction on January 12, 1999.34
In an order35 dated March 18, 1999, Judge Adolfo Alagar, RTC, Branch 30, San
Fernando City, La Union, issued a writ of preliminary injunction upon the ARMCs
filing of a bond of P 4,000,000.00.
The RTCs Ruling

In a decision dated August 5, 2004, the RTC found no merit in the ARMCs
complaint for injunction.
Contrary to the allegation that the LBP reneged on its commitment to restructure
the ARMCs loans, the RTC found that the LBP never agreed to the ARMCs
proposed restructuring and, thus, was not in bad faith when it exercised its right to
foreclose the ARMCs mortgaged properties; that no agreement was forged
between the parties because the ARMC failed to offer an additional collateral, as
the LBP required for the approval of the proposed restructuring.
Further, the RTC found no inconsistency or vagueness in the petition for
extrajudicial foreclosure as to the amount of the ARMCs principal
obligation, i.e., P 15,000,000.00, and that the settlement of the P 2,000,000.00 TL
could not operate to discharge the mortgaged chattel because the Real and Chattel
Mortgage was found to be indivisible, i.e., the mortgaged real estate and chattel
could not be discharged until the ARMCs total indebtedness under the Real and
Chattel Mortgage is fully settled.
The RTC denied the ARMCs complaint on the ground that injunction cannot issue
against the exercise of a valid right, the right of the creditormortgagee to foreclose
on the mortgage where the debtor-mortgagor has defaulted in the payment of its
obligations.
The RTC likewise ruled that the LBPs foreclosure was not merely an exercise of its
right, but also the performance of its legal obligation under Presidential Decree No.
(P.D.) 385;36 the decree requires government financial institutions, such as the LBP,
to foreclose mandatorily all loans with arrearages, including interest and charges,
amounting to at least twenty percent (20%) of the total outstanding obligation. The
same decree also provides that no restraining order, temporary or permanent
injunction shall be issued by the court against the foreclosing government financial
institution unless 20% of the outstanding arrearages have been paid after the filing
of the foreclosure proceedings.
The ARMC moved to reconsider the RTCs decision, but the trial court denied the
motion in an order dated February 2, 2005.37 The ARMC filed a notice of appeal to
the CA on February 8, 2005.38
In its appeal to the CA, the ARMC insisted that the restructuring of
its P 15,000,000.00 STLLs was still under negotiation when the LBP filed its
application for extrajudicial foreclosure on July 8, 1998, and contended that the
LBP was in bad faith and guilty of promissory estoppel when it led the ARMC to
believe that it would restructure its loans, yet refused to have the mortgaged
properties reappraised by an independent appraiser.
The ARMC further contended that the charges imposed by the LBP were
unwarranted and that the stipulated interest on the promissory notes was
excessive and unconscionable and should be voided.
Foreclosure Sale
On May 12, 2005, the Sheriff of the RTC of San Fernando City, La Union issued a
Notice of Extrajudicial Sale that set the auction sale of the mortgaged properties
on June 3, 2005.39
The ARMC sought to enjoin the foreclosure sale by filing with the CA an application
for the issuance of a writ of preliminary injunction and temporary restraining order,
which the CA denied in a resolution dated June 14, 2005.40
The LBP emerged as the winning bidder in the auction sale.41
The CAs Ruling
In a decision42 dated March 28, 2006, the CA found no merit in the ARMCs appeal.
The CA affirmed the RTC in ruling that, under P.D. 385, an injunction, whether
permanent or temporary, could not be issued to enjoin the foreclosure
proceedings instituted by the LBP.
The CA likewise found that the LBP did not approve, or even promised to approve,
the ARMCs proposed loan restructuring; that, in LBPs letter dated May 22, 1998
to ARMCs president, the LBP merely informed the ARMC that its proposal was
"under evaluation by [its] Loan Approving Authorities"; 43 that nothing in the letter
suggested that the LBP made any commitment or assurance to ARMC that it would
approve the latters proposal, thus, the LBP could not be held liable for promissory
estoppel; and that, in fact, the LBP repeatedly sent notices demanding payment
from ARMC but the latter failed to comply, prompting LBP to file for extrajudicial
foreclosure.
The CA did not also find the LBP in bad faith for refusing to have the ARMCs
mortgaged properties reappraised by an independent appraiser; the LBPs low
valuation on the reappraised properties would even be more beneficial to ARMC in
case of redemption.
Neither did the CA find the stipulated interest rates on the promissory notes and
the imposed penalty charges excessive, unconscionable and unwarranted, as the
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 18
interest on the promissory notes ranged from 15.50% to 18.25% per annum and
was last fixed at the "prevailing bank rate," while the penalty charge was imposed
at 12% per annum. The CA found these rates reasonable and cannot be compared
with the 5.5% per month, or 66% per annum, interest that this Court found to be
excessive, illegal, iniquitous and unconscionable in Medel v. Court of Appeals.44
The CA denied the motion for reconsideration that the ARMC subsequently filed,
paving the way for the present petition for review on certiorari filed with this Court
on August 2, 2006.
The Courts Ruling
The basic issue posed for our resolution is the ARMCs entitlement to an
injunctive remedy.
"Injunction is a judicial writ, process or proceeding whereby a party is ordered to
do or refrain from doing a certain act. It may be the main action or merely a
provisional remedy for and as an incident in the main action." 45 For an injunction to
issue, the following essential requisites must be present: (1) there must be a right
in esse or the existence of a right to be protected; and (2) the act against which the
injunction is directed to constitute a violation of such right.46
The ARMC filed a complaint for injunction against the LBP on the ground that the
latters then impending foreclosure of its mortgaged properties was in violation of
its contractual and property rights, particularly the right of the ARMC to have its
outstanding loan restructured by the LBP. The ARMC alleged that the LBP acted in
bad faith and in wanton disregard of its commitment to restructure the formers
loans when it hastily filed for extrajudicial foreclosure while negotiations for the
loan restructuring were still ongoing.
The existence of the ARMCs claimed right to the loan restructuring, however, was
not clearly established by the ARMC. A party seeking to avail of an injunctive relief
must prove that he or she possesses a right in esse or one that is actual or
existing.47 Such right must be clear and unmistakable, 48 and not contingent,
abstract or future rights, or one that may never arise. 49
In the present case, both the RTC and the CA found that no agreement was forged
between the ARMC and the LBP on the restructuring of the ARMCs loans at the
time the LBP filed an application to extra-judicially foreclose the ARMCs
mortgaged properties; the proposed loan restructuring was not approved by the
LBP because the ARMC failed to offer an additional collateral sufficient enough to
cover its outstanding loan with the bank. Thus, the ARMC, then, had no actual right
to protect or to enforce against the LBP. It failed to satisfy the first
requisite, i.e., the existence of a clear and unmistakable right for the issuance of an
injunction.
On the other hand, the LBP had every right to foreclose on the Real and Chattel
Mortgage since the ARMC had defaulted in the payment of its overdue loan
obligation with the bank. The foreclosure is supported by the express mandate of
P.D. 385, which provides:
Section 1. It shall be mandatory for government financial institutions, after the
lapse of sixty (60) days from the issuance of this Decree, to foreclose the collaterals
and/or securities for any loan, credit, accommodation, and/or guarantees granted
by them whenever the arrearages on such account, including accrued interest and
other charges, amount to at least twenty percent (20%) of the total outstanding
obligations, including interest and other charges, as appearing in the books of
account and/or related records of the financial institution concerned. This shall be
without prejudice to the exercise by the government financial institutions of such
rights and/or remedies available to them under their respective contracts with
their debtors, including the right to foreclose on loans, credits, accommodations
and/or guarantees on which the arrearages are less than twenty percent (20%).
Section 2 of the same decree further provides that:
Section 2. No restraining order. temporary or permanent injunction shall be issued
by the court against any government financial institution in any action taken by
such institution in compliance with the mandatory foreclosure provided in Section
1 hereof whether such restraining order. temporary or permanent injunction is
sought by the borrower(s) or any third party or parties, except after due hearing in
which it is established by the borrower and admitted by the government financial
institution concerned that twenty percent (20%) of the outstanding arrearages has
been paid after the filing of foreclosure proceedings.1wphi1
Under these terms, the ARMC cannot secure an injunction against the LBP, a
government financial institution.
Injunction Became Moot and Academic
The present petition must also be denied because the act sought to be enjoined by
the ARMC is already a consummated act. The records show that the foreclosure
sale on the ARMC's JTIOligaged properties was held sometime in June 2005 and
the LBP emerged as the winning bidder. An injunction suit becomes moot and
academic after the act sought to be enjoined had already been consummated. 50

WHEREFORE, we DENY the present petition for review on certiorari for lack of
merit and for being moot and academic. Costs against petitioner Agoo
Rice Mill Corporation.
SO ORDERED
September 7, 2015
GR. No. 197472
REPUBLIC OF THE PHILIPPINES, represented by Commander Raymond Alpuerto of
the Naval Base Camillo Osias, Port San Vicente, Sta. Ana, Cagayan, Petitioner,
vs.
REV. CLAUDIO R. CORTEZ, SR., Respondent.
DECISION
DEL CASTILLO, J.:
An inalienable public land cannot be appropriated and thus may not be the proper
object of possession. Hence, injunction cannot be issued in order to protect ones
alleged right of possession over the same.
This Petition for Review on Certiorari1 assails the June 29, 2011 Decision2 of the
Court of Appeals (CA) in CA-GR. CV No. 89968, which dismissed the appeal
therewith and affirmed the July 3, 2007 Decision3 of the Regional Trial Court (RTC)
of Aparri, Cagayan, Branch 8 in Spl. Civil Action Case No. II-2403.
Factual Antecedents
Respondent Rev. Claudio R. Cortez, Sr. (Rev. Cortez), a missionary by vocation
engaged in humanitarian and charitable activities, established an orphanage and
school in Punta Verde, Palaui Island, San Vicente, Sta. Ana, Cagayan. He claimed
that since 1962, he has been in peaceful possession of about 50 hectares of land
located in the western portion of Palaui Island in Sitio Siwangag, Sta. Ana, Cagayan
which he, with the help of Aetas and other people under his care, cleared and
developed for agricultural purposes in order to support his charitable,
humanitarian and missionary works. 4
On May 22, 1967, President Ferdinand E. Marcos issued Proclamation No. 201
reserving for military purposes a parcel of the public domain situated in Palaui
Island. Pursuant thereto, 2,000 hectares of the southern half portion of the Palaui
Island were withdrawn from sale or settlement and reserved for the use of the
Philippine Navy, subject, however, to private rights if there be any.
More than two decades later or on August 16, 1994, President Fidel V. Ramos
issued Proclamation No. 447 declaring Palaui Island and the surrounding waters
situated in the Municipality of Sta. Ana, Cagayan as marine reserve. Again subject
to any private rights, the entire Palaui Island consisting of an aggregate area of
7,415.48 hectares was accordingly reserved as a marine protected area.
On June 13, 2000, Rev. Cortez filed a Petition for Injunction with Prayer for the
Issuance of a Writ of Preliminary Mandatory Injunction5 against Rogelio C. Bias
(Bias) in his capacity as Commanding Officer of the Philippine Naval Command in
Port San Vicente, Sta. Ana, Cagayan.1wphi1 According to him, some members of
the Philippine Navy, upon orders of Bias, disturbed his peaceful and lawful
possession of the said 50-hectare portion of Palaui Island when on March 15, 2000,
they commanded him and his men, through the use of force and intimidation, to
vacate the area. When he sought assistance from the Office of the Philippine Naval
Command, he was met with sarcastic remarks and threatened with drastic military
action if they do not vacate. Thus, Rev. Cortez and his men were constrained to
leave the area. In view of these, Rev. Cortez filed the said Petition with the RTC
seeking preliminary mandatory injunction ordering Bias to restore to him
possession and to not disturb the same, and further, for the said preliminary writ,
if issued, to be made permanent.
Proceedings before the Regional Trial Court
After the conduct of hearing on the application for preliminary mandatory
injunction6 and the parties submission of their respective memoranda, 7 the RTC
issued an Order8 dated February 21, 2002 granting the application for a writ of
preliminary mandatory injunction. However, the same pertained to five hectares
(subject area) only, not to the whole 50 hectares claimed to have been occupied by
Rev. Cortez, viz.:
It should be noted that the claim of [Rev. Cortez] covers an area of 50 hectares
more or less located at the western portion of Palaui Island which is within the
Naval reservation. [Rev. Cortez] presented what he called as a survey map (Exh.
"H") indicating the location of the area claimed by the Church of the Living God
and/or Rev. Claudio Cortez with an approximate area of 50 hectares identified as
Exh. "H-4". However, the Survey Map allegedly prepared by [a] DENR personnel is
only a sketch map[,] not a survey map as claimed by [Rev. Cortez]. Likewise, the
exact boundaries of the area [are] not specifically indicated. The sketch only shows
some lines without indicating the exact boundaries of the 50 hectares claimed by
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 19
[Rev. Cortez]. As such, the identification of the area and its exact boundaries have
not been clearly defined and delineated in the sketch map. Therefore, the area of
50 hectares that [Rev. Cortez] claimed to have peacefully and lawfully possessed
for the last 38 years cannot reasonably be determined or accurately identified.
For this reason, there is merit to the contention of [Bias] that [Rev. Cortez] claim
to the 50 hectares of land identified as Exh. ["]H-4" is unclear and ambiguous. It is
a settled jurisprudence that mandatory injunction is the strong arm of equity that
never ought to be extended unless to cases of great injury, where courts of law
cannot afford an adequate and commensurate remedy in damages. The right must
be clear, the injury impending or threatened, so as to be averted only by the
protecting preventive process of injunction. The reason for this doctrine is that
before the issue of ownership is determined in the light of the evidence presented,
justice and equity demand that the [status quo be maintained] so that no
advantage may be given to one to the prejudice of the other. And so it was ruled
that unless there is a clear pronouncement regarding ownership and possession of
the land, or unless the land is covered by the torrens title pointing to one of the
parties as the undisputed owner, a writ of preliminary injunction should not issue
to take the property out of possession of one party to place it in the hands of
another x x x.
Admittedly, the documentary exhibits of [Rev. Cortez] tended only to show that
[he] has a pending application of patent with the DENR. Even so, [Rev. Cortez]
failed to present in evidence the application for patent allegedly filed by [him]
showing that he applied for patent on the entire 50 hectares of land which he
possessed or occupied for a long period of time. Under the circumstances,
therefore, the title of petitioner to the 50 hectares of land in Palaui Island remains
unclear and doubtful, and [is] seriously disputed by the government.
More significantly, at the time that Proc. No. 201 was issued on May 22, 1967, [Rev.
Cortez] has not perfected his right over the 50 hectares of land nor acquired any
vested right thereto considering that he only occupied the land as alleged by him in
1962 or barely five (5) years before the issuance of the Presidential Proclamation.
Proclamation No. 201 had the effect of removing Palaui Island from the alienable
or disposable portion of the public domain and therefore the island, as of the date
of [the] issuance [of the proclamation], has ceased to be disposable public land.
However, the court is not unmindful that [Rev. Cortez] has lawfully possessed and
occupied at least five (5) hectares of land situated at the western portion of the
Palaui Island identified as Exh "H-4". During the hearing, Cmdr.
Rogelio Bias admitted that when he was assigned as Commanding Officer in
December 1999, he went to Palaui Island and [saw only] two (2) baluga families
tilling the land consisting of five (5) hectares. Therefore, it cannot be seriously
disputed that [Rev. Cortez] and his baluga tribesmen cleared five (5) hectares of
land for planting and cultivation since 1962 on the western portion identified as
Exhibit "H-4". The Philippine Navy also admitted that they have no objection to
settlers of the land prior to the Presidential Proclamation and [Rev. Cortez] had
been identified as one of the early settlers of the area before the Presidential
Proclamation. The DENR also acknowledged that [Rev. Cortez] has filed an
application for patent on the western area and that he must be allowed to pursue
his claim.
Although the court is not persuaded by the argument of [Rev. Cortez] that he has
already acquired vested rights over the area claimed by him, the court must
recognize that [Rev. Cortez] may have acquired some propriety rights over the area
considering the directive of the DENR to allow [Rev. Cortez] to pursue his
application for patent. However, the court wants to make clear that the application
for patent by [Rev. Cortez] should be limited to an area not to exceed five (5)
hectares situated at the western portion of x x x Palaui Island identified in the
sketch map as Exh. "H-4." This area appears to be the portion where [Rev. Cortez]
has clearly established his right or title by reason of his long possession and
occupation of the land.9
In his Answer,10 Bias countered that: (1) Rev. Cortez has not proven that he has
been in exclusive, open, continuous and adverse possession of the disputed land in
the concept of an owner; (2) Rev. Cortez has not shown the exact boundaries and
identification of the entire lot claimed by him; (3) Rev. Cortez has not substantiated
his claim of exemption from Proclamation No. 201; (4) under Proclamation No.
447, the entire Palaui Island, which includes the land allegedly possessed and
occupied by Rev. Cortez, was reserved as a marine protected area; and, (4)
injunction is not a mode to wrest possession of a property from one person by
another.
Pre-trial and trial thereafter ensued.
On July 3, 2007, the RTC rendered its Decision11 making the injunction final and
permanent. In so ruling, the said court made reference to the Indigenous Peoples
[Right] Act (IPRA) as follows:
The Indigenous [Peoples Right] Act should be given effect in this case. The affected
community belongs to the group of indigenous people which are protected by the
State of their rights to continue in their possession of the lands they have been
tilling since time immemorial. No subsequent passage of law or presidential
decrees can alienate them from the land they are tilling.12

Ultimately, the RTC held, thus:
WHEREFORE, finding the petition to be meritorious, the same is hereby GRANTED.
xxxx
SO DECIDED.13
Representing Bias, the Office of the Solicitor General (OSG) filed a Notice of
Appeal14 which was given due course by the RTC in an Order15 dated August 6,
2007.
Ruling of the Court of Appeals
In its brief,16 the OSG pointed out that Rev. Cortez admitted during trial that he filed
the Petition for injunction on behalf of the indigenous cultural communities in
Palaui Island and not in his capacity as pastor or missionary of the Church of the
Living God. He also claimed that he has no interest over the land. Based on these
admissions, the OSG argued that the Petition should have been dismissed outright
on the grounds that it did not include the name of the indigenous cultural
communities that Rev. Cortez is supposedly representing and that the latter is not
the real party-in-interest. In any case, the OSG averred that Rev. Cortez failed to
show that he is entitled to the issuance of the writ of injunction. Moreover, the
OSG questioned the RTCs reference to the IPRA and argued that it is not applicable
to the present case since Rev. Cortez neither alleged in his Petition that he is
claiming rights under the said act nor was there any showing that he is a member
of the Indigenous Cultural Communities and/or the Indigenous Peoples as defined
under the IPRA.
In its Decision17 dated June 29, 2011, the CA upheld the RTCs issuance of a final
injunction based on the following ratiocination:
The requisites necesary for the issuance of a writ of preliminary injunction are: (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. Here,
[Rev. Cortez] has shown the existence of a clear and unmistakable right that must
be protected and an urgent and paramount necessity for the writ to prevent
serious damage. Records reveal that [Rev. Cortez] has been in peaceful possession
and occupation of the western portion of Palaui Island, Sitio Siwangag, San Vicente,
Sta. Ana[,] Cagayan since 1962 or prior to the issuance of Proclamation Nos. 201
and 447 in 1967 and 1994, respectively. There he built an orphanage and a school
for the benefit of the members of the Dumagat Tribe, in furtherance of his
missionary and charitable works. There exists a clear and unmistakable right in
favor [of Rev. Cortez] since he has been in open, continuous and notorious
possession of a portion of Palaui island. To deny the issuance of a writ of injunction
would cause grave and irreparable injury to [Rev. Cortez] since he will be displaced
from the said area which he has occupied since 1962. It must be emphasized that
Proclamation Nos. 201 and 447 stated that the same are subject to private rights, if
there be [any]. Though Palaui Island has been declared to be part of the naval
reservation and the whole [i]sland as a marine protected area, both recognized the
existence of private rights prior to the issuance of the same.
From the foregoing, we rule that the trial court did not err when it made
permanent the writ of preliminary mandatory injunction. Section 9, Rule 58 of the
Rules of Court provides that if after the trial of the action it appears that the
applicant is entitled to have the act or acts complained of permanently enjoined,
the court shall grant a final injunction perpetually restraining the party or person
enjoined from the commission or continuance of the act or acts or confirming the
preliminary mandatory injunction.18
Anent the issue of Rev. Cortez not being a real party-in-interest, the CA noted that
this was not raised before the RTC and therefore cannot be considered by it.
Finally, with respect to the RTCs mention of the IPRA, the CA found the same to be
a mere obiter dictum.
The dispositive portion of the CA Decision reads:
WHEREFORE, premise[s] considered, the instant Appeal is hereby DENIED. The
assailed 3 July 2007 Decision of the Regional Trial Court of Aparri, Cagayan, Branch
8 in Civil Case No. II-2403 is AFFIRMED.
SO ORDERED.19
Hence, this Petition brought by the OSG on behalf of the Republic of the
Philippines (the Republic).
The Issue
The ultimate issue to be resolved in this case is whether Rev. Cortez is entitled to a
final writ of mandatory injunction.
The Parties Arguments
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 20
The bone of contention as the OSG sees it is the injunctive writ since Rev. Cortez
failed to prove his clear and positive right over the 5-hectare portion of Palaui
Island covered by the same. This is considering that by his own admission, Rev.
Cortez started to occupy the said area only in 1962. Hence, when the property was
declared as a military reserve in 1967, he had been in possession of the 5-hectare
area only for five years or short of the 30-year possession requirement for a bona
fide claim of ownership under the law. The OSG thus argues that the phrase
"subject to private rights" as contained in Proclamation No. 201 and Proclamation
No. 447 cannot apply to him since it only pertains to those who have already
complied with the requirements for perfection of title over the land prior to the
issuance of the said proclamations.
Rev. Cortez, for his part, asserts that the arguments of the OSG pertaining to
ownership are all immaterial as his Petition for injunction does not involve the
right to possess based on ownership but on the right of possession which is a right
independent from ownership. Rev. Cortez avers that since he has been in peaceful
and continuous possession of the subject portion of Palaui Island, he has the right
of possession over the same which is protected by law. He asserts that based on
this right, the writ of injunction was correctly issued by the RTC in his favor and
aptly affirmed by the CA. On the technical side, Rev. Cortez avers that the Republic
has no legal personality to assail the CA Decision through the present Petition since
it was not a party in the appeal before the CA.
The Courts Ruling
We grant the Petition.
For starters, the Court shall distinguish a preliminary injunction from a final
injunction.
"Injunction is a judicial writ, process or proceeding whereby a party is directed
either to do a particular act, in which case it is called a mandatory injunction, [as in
this case,] or to refrain from doing a particular act, in which case it is called a
prohibitory injunction."20 "It may be the main action or merely a provisional
remedy for and as an incident in the main action."21
"The main action for injunction is distinct from the provisional or ancillary remedy
of preliminary injunction."22 A preliminary injunction does not determine the
merits of a case or decide controverted facts.23 Since it is a mere preventive
remedy, it only seeks to prevent threatened wrong, further injury and irreparable
harm or injustice until the rights of the parties are settled.24 "It is usually granted
when it is made to appear that there is a substantial controversy between the
parties and one of them is committing an act or threatening the immediate
commission of an act that will cause irreparable injury or destroy the status quo of
the controversy before a full hearing can be had on the merits of the case." 25 A
preliminary injunction is granted at any stage of an action or proceeding prior to
judgment or final order.26 For its issuance, the applicant is required to show, at least
tentatively, that he has a right which is not vitiated by any substantial challenge or
contradiction.27 Simply stated, the applicant needs only to show that he has the
ostensible right to the final relief prayed for in his complaint.28 On the other hand,
the main action for injunction seeks a judgment that embodies a final
injunction.29 A final injunction is one which perpetually restrains the party or
person enjoined from the commission or continuance of an act, or in case of
mandatory injunctive writ, one which confirms the preliminary mandatory
injuction.30 It is issued when the court, after trial on the merits, is convinced that
the applicant is entitled to have the act or acts complained of permanently
enjoined.31 Otherwise stated, it is only after the court has come up with a definite
pronouncement respecting an applicants right and of the act violative of such
right, based on its appreciation of the evidence presented, that a final injunction is
issued. To be a basis for a final and permanant injunction, the right and the act
violative thereof must be established by the applicant with absolute certainty. 32
What was before the trial court at the time of the issuance of its July 3, 2007
Decision is whether a final injunction should issue. While the RTC seemed to realize
this as it in fact made the injunction permanent, the Court, however, finds the
same to be wanting in basis.
Indeed, the RTC endeavored to provide a narrow distinction between a preliminary
injunction and a final injunction. Despite this, the RTC apparently confused itself.
For one, what it cited in its Decision were jurisprudence relating to preliminary
injunction and/or mandatory injunction as an ancillary writ and not as a final
injunction. At that point, the duty of the RTC was to determine, based on the
evidence presented during trial, if Rev. Cortez has conclusively established his
claimed right (as opposed to preliminary injunction where an applicant only needs
to at least tentatively show that he has a right) over the subject area. This is
considering that the existence of such right plays an important part in determining
whether the preliminary writ of mandatory injunction should be confirmed.
Surprisingly, however, the said Decision is bereft of the trial courts factual findings
on the matter as well as of its analysis of the same vis-a-vis applicable
jurisprudence. As it is, the said Decision merely contains a restatement of the
parties respective allegations in the Complaint and the Answer, followed by a
narration of the ensuing proceedings, an enumeration of the evidence submitted
by Rev. Cortez, a recitation of jurisprudence relating to preliminary injunction
and/or specifically, to mandatory injunction as an ancillary writ, a short reference
to the IPRA which the Court finds to be irrelevant and finally, a conclusion that a

final and permanent injunction should issue. No discussion whatsoever was made
with respect to whether Rev. Cortez was able to establish with absolute certainty
hisclaimed right over the subject area.
Section 14, Article VIII of the Constitution, as well as Section 1 of Rule 36 and
Section 1, Rule 120 of the Rules on Civil Procedure, similarly state that a decision,
judgment or final order determining the merits of the case shall state, clearly and
distinctly, the facts and the law on which it is based. Pertinently, the Court issued
on January 28, 1988 Administrative Circular No. 1, which requires judges to make
complete findings of facts in their decision, and scrutinize closely the legal aspects
of the case in the light of the evidence presented, and avoid the tendency to
generalize and to form conclusion without detailing the facts from which such
conclusions are deduced.33
Clearly, the Decision of the RTC in this case failed to comply with the aforestated
guidelines.
In cases such as this, the Court would normally remand the case to the court a
quo for compliance with the form and substance of a Decision as required by the
Constitution. In order, however, to avoid further delay, the Court deems it proper
to resolve the case based on the merits.34
"Two requisites must concur for injunction to issue: (1) there must be a right to be
protected and (2) the acts against which the injunction is to be directed are
violative of said right."35 Thus, it is necessary that the Court initially determine
whether the right asserted by Rev. Cortez indeed exists. As earlier stressed, it is
necessary that such right must have been established by him with absolute
certainty.
Rev. Cortez argues that he is entitled to the injunctive writ based on the
right of possession (jus possesionis) by reason of his peaceful and continuous
possession of the subject area since 1962. He avers that as this right is protected
by law, he cannot be peremptorily dispossessed therefrom, or if already
dispossessed, is entitled to be restored in possession. Hence, the mandatory
injunctive writ was correctly issued in his favor.
Jus possessionis or possession in the concept of an owner36 is one of the two
concepts of possession provided under Article 52537 of the Civil Code. Also referred
to as adverse possession, 38 this kind of possesion is one which can ripen into
ownership by prescription. 39 As correctly asserted by Rev. Cortez, a possessor in the
concept of an owner has in his favor the legal presumption that he possesses with
a just title and he cannot be obliged to show or prove it.40 In the same manner, the
law endows every possessor with the right to be respected in his possession. 41
It must be emphasized, however, that only things and rights which are susceptible
of being appropriated may be the object of possession. 42 The following cannot be
appropriated and hence, cannot be possessed: property of the public dominion,
common things (res communes) such as sunlight and air, and things specifically
prohibited by law.43
Here, the Court notes that while Rev. Cortez relies heavily on his asserted right of
possession, he, nevertheless, failed to show that the subject area over which he
has a claim is not part of the public domain and therefore can be the proper object
of possession.
Pursuant to the Regalian Doctrine, all lands of the public domain belong to the
State.44 Hence, "[a]ll lands not appearing to be clearly under private ownership are
presumed to belong to the State. Also, public lands remain part of the inalienable
land of the public domain unless the State is shown to have reclassified or
alienated them to private persons."45 To prove that a land is alienable, the
existence of a positive act of the government, such as presidential proclamation or
an executive order; an administrative action; investigation reports of Bureau of
Lands investigators; and a legislative act or a statute declaring the land as alienable
and disposable must be established.46
In this case, there is no such proof showing that the subject portion of Palaui Island
has been declared alienable and disposable when Rev. Cortez started to occupy the
same. Hence, it must be considered as still inalienable public domain. Being such, it
cannot be appropriated and therefore not a proper subject of possession under
Article 530 of the Civil Code. Viewed in this light, Rev. Cortez claimed right of
possession has no leg to stand on. His possession of the subject area, even if the
same be in the concept of an owner or no matter how long, cannot produce any
legal effect in his favor since the property cannot be lawfully possessed in the first
place.
The same goes true even if Proclamation No. 201 and Proclamation No. 447 were
made subject to private rights. The Court stated in Republic v. Bacas,47 viz.:
Regarding the subject lots, there was a reservation respecting private rights.
In Republic v. Estonilo, where the Court earlier declared that Lot No. 4319 was part
of the Camp Evangelista Military Reservation and, therefore, not registrable, it
noted the proviso in Presidential Proclamation No. 265 requiring the reservation to
be subject to private rights as meaning that persons claiming rights over the
reserved land were not precluded from proving their claims. Stated differently, the
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 21
said proviso did not preclude the LRC from determining whether x x x the
respondents indeed had registrable rights over the property.
As there has been no showing that the subject parcels of land had been
segregated from the military reservation, the respondents had to prove that the
subject properties were alienable or disposable land of the public
domain prior to its withdrawal from sale and settlement and reservation for
military purposes under Presidential Proclamation No. 265. The question is
primordial importance because it is determinative if the land can in fact be subject
to acquisitive prescription and, thus, registrable under the Torrens system. Without
first determining the nature and character of the land, all other requirements
such as length and nature of possession and occupation over such land do not
come into play. The required length of possession does not operate when the
land is part of the public domain.
In this case, however, the respondents miserably failed to prove that, before the
proclamation, the subject lands were already private lands. They merely relied on
such recognition of possible private rights. In their application, they alleged that
at the time of their application, they had been in open, continuous, exclusive and
notorious possession of the subject parcels of land for at least thirty (30) years and
became its owners by prescription. There was, however, no allegation or showing
that the government had earlier declared it open for sale or settlement, or that it
was already pronounced as inalienable and disposable.48
In view of the foregoing, the Court finds that Rev. Cortez failed to conclusively
establish his claimed right over the subject portion of Palaui Island as would entitle
him to the issuance of a final injunction.
Anent the technical issue raised by Rev. Cortez, i. e, that the Republic has no
personality to bring this Petition since it was not a party before the CA, the Court
deems it prudent to set aside this procedural barrier. After all, "a party's standing
before [the] Court is a [mere] procedural technicality which may, in the exercise of
[its] discretion, be set aside in view of the importance of the issue raised." 49
We note that Rev. Cortez alleged that he sought the injunction so that he could
continue his humanitarian works. However, considering that inalienable public land
was involved, this Court is constrained to rule in accordance with the
aforementioned.
WHEREFORE, the Petition is GRANTED. The June 29, 2011 Decision of the Court of
Appeals in CA-GR. CV No. 89968 denying the appeal and affirming the July 3, 2007
Decision of the Regional Trial Court of Aparri, Cagayan-Branch 08 in Spl. Civil Action
Case No. II-2403, is REVERSED and SET ASIDE. Accordingly, the final injunction
issued in this case is ordered DISSOLVED and the Petition for Injunction in Spl. Civil
Action Case No. II-2403, DISMISSED.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice
EN BANC
G.R. No. L-11390 March 26, 1918
EL BANCO ESPAOL-FILIPINO, plaintiff-appellant,
vs.
VICENTE PALANCA, administrator of the estate of Engracio Palanca
Tanquinyeng, defendant-appellant.
Aitken and DeSelms for appellant.
Hartigan and Welch for appellee.
STREET, J.:
This action was instituted upon March 31, 1908, by "El Banco Espanol-Filipino" to
foreclose a mortgage upon various parcels of real property situated in the city of
Manila. The mortgage in question is dated June 16, 1906, and was executed by the
original defendant herein, Engracio Palanca Tanquinyeng y Limquingco, as security
for a debt owing by him to the bank. Upon March 31, 1906, the debt amounted to
P218,294.10 and was drawing interest at the rate of 8 per centum per annum,
payable at the end of each quarter. It appears that the parties to this mortgage at
that time estimated the value of the property in question at P292,558, which was
about P75,000 in excess of the indebtedness. After the execution of this
instrument by the mortgagor, he returned to China which appears to have been his
native country; and he there died, upon January 29, 1810, without again returning
to the Philippine Islands.
As the defendant was a nonresident at the time of the institution of the present
action, it was necessary for the plaintiff in the foreclosure proceeding to give notice
to the defendant by publication pursuant to section 399 of the Code of Civil
Procedure. An order for publication was accordingly obtained from the court, and

publication was made in due form in a newspaper of the city of Manila. At the
same time that the order of the court should deposit in the post office in a
stamped envelope a copy of the summons and complaint directed to the
defendant at his last place of residence, to wit, the city of Amoy, in the Empire of
China. This order was made pursuant to the following provision contained in
section 399 of the Code of Civil Procedure:
In case of publication, where the residence of a nonresident or absent
defendant is known, the judge must direct a copy of the summons and
complaint to be forthwith deposited by the clerk in the post-office,
postage prepaid, directed to the person to be served, at his place of
residence
Whether the clerk complied with this order does not affirmatively appear. There is,
however, among the papers pertaining to this case, an affidavit, dated April 4,
1908, signed by Bernardo Chan y Garcia, an employee of the attorneys of the bank,
showing that upon that date he had deposited in the Manila post-office a
registered letter, addressed to Engracio Palanca Tanquinyeng, at Manila, containing
copies of the complaint, the plaintiff's affidavit, the summons, and the order of the
court directing publication as aforesaid. It appears from the postmaster's receipt
that Bernardo probably used an envelope obtained from the clerk's office, as the
receipt purports to show that the letter emanated from the office.
The cause proceeded in usual course in the Court of First Instance; and the
defendant not having appeared, judgment was, upon July 2, 1908, taken against
him by default. Upon July 3, 1908, a decision was rendered in favor of the plaintiff.
In this decision it was recited that publication had been properly made in a
periodical, but nothing was said about this notice having been given mail. The
court, upon this occasion, found that the indebtedness of the defendant amounted
to P249,355. 32, with interest from March 31, 1908. Accordingly it was ordered
that the defendant should, on or before July 6, 1908, deliver said amount to the
clerk of the court to be applied to the satisfaction of the judgment, and it was
declared that in case of the failure of the defendant to satisfy the judgment within
such period, the mortgage property located in the city of Manila should be
exposed to public sale. The payment contemplated in said order was never made;
and upon July 8, 1908, the court ordered the sale of the property. The sale took
place upon July 30, 1908, and the property was bought in by the bank for the sum
of P110,200. Upon August 7, 1908, this sale was confirmed by the court.
About seven years after the confirmation of this sale, or to the precise, upon June
25, 1915, a motion was made in this cause by Vicente Palanca, as administrator of
the estate of the original defendant, Engracio Palanca Tanquinyeng y Limquingco,
wherein the applicant requested the court to set aside the order of default of July
2, 1908, and the judgment rendered upon July 3, 1908, and to vacate all the
proceedings subsequent thereto. The basis of this application, as set forth in the
motion itself, was that the order of default and the judgment rendered thereon
were void because the court had never acquired jurisdiction over the defendant or
over the subject of the action.
At the hearing in the court below the application to vacate the judgment was
denied, and from this action of the court Vicente Planca, as administrator of the
estate of the original defendant, has appealed. No other feature of the case is here
under consideration than such as related to the action of the court upon said
motion.
The case presents several questions of importance, which will be discussed in what
appears to be the sequence of most convenient development. In the first part of
this opinion we shall, for the purpose of argument, assume that the clerk of the
Court of First Instance did not obey the order of the court in the matter of mailing
the papers which he was directed to send to the defendant in Amoy; and in this
connection we shall consider, first, whether the court acquired the necessary
jurisdiction to enable it to proceed with the foreclosure of the mortgage and,
secondly, whether those proceedings were conducted in such manner as to
constitute due process of law.
The word "jurisdiction," as applied to the faculty of exercising judicial power, is
used in several different, though related, senses since it may have reference (1) to
the authority of the court to entertain a particular kind of action or to administer a
particular kind of relief, or it may refer to the power of the court over the parties,
or (2) over the property which is the subject to the litigation.
The sovereign authority which organizes a court determines the nature and extent
of its powers in general and thus fixes its competency or jurisdiction with reference
to the actions which it may entertain and the relief it may grant.
Jurisdiction over the person is acquired by the voluntary appearance of a party in
court and his submission to its authority, or it is acquired by the coercive power of
legal process exerted over the person.
Jurisdiction over the property which is the subject of the litigation may result
either from a seizure of the property under legal process, whereby it is brought
into the actual custody of the law, or it may result from the institution of legal
proceedings wherein, under special provisions of law, the power of the court over
the property is recognized and made effective. In the latter case the property,
though at all times within the potential power of the court, may never be taken
into actual custody at all. An illustration of the jurisdiction acquired by actual
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 22
seizure is found in attachment proceedings, where the property is seized at the
beginning of the action, or some subsequent stage of its progress, and held to
abide the final event of the litigation. An illustration of what we term potential
jurisdiction over the res, is found in the proceeding to register the title of land
under our system for the registration of land. Here the court, without taking actual
physical control over the property assumes, at the instance of some person
claiming to be owner, to exercise a jurisdiction in rem over the property and to
adjudicate the title in favor of the petitioner against all the world.
In the terminology of American law the action to foreclose a mortgage is said to be
a proceeding quasi in rem, by which is expressed the idea that while it is not
strictly speaking an action in rem yet it partakes of that nature and is substantially
such. The expression "action in rem" is, in its narrow application, used only with
reference to certain proceedings in courts of admiralty wherein the property alone
is treated as responsible for the claim or obligation upon which the proceedings
are based. The action quasi rem differs from the true action in rem in the
circumstance that in the former an individual is named as defendant, and the
purpose of the proceeding is to subject his interest therein to the obligation or lien
burdening the property. All proceedings having for their sole object the sale or
other disposition of the property of the defendant, whether by attachment,
foreclosure, or other form of remedy, are in a general way thus designated. The
judgment entered in these proceedings is conclusive only between the parties.
In speaking of the proceeding to foreclose a mortgage the author of a well known
treaties, has said:
Though nominally against person, such suits are to vindicate liens; they
proceed upon seizure; they treat property as primarily indebted; and,
with the qualification above-mentioned, they are substantially property
actions. In the civil law, they are styled hypothecary actions, and their
sole object is the enforcement of the lien against the res; in the
common law, they would be different in chancery did not treat the
conditional conveyance as a mere hypothecation, and the creditor's
right ass an equitable lien; so, in both, the suit is real action so far as it is
against property, and seeks the judicial recognition of a property debt,
and an order for the sale of the res. (Waples, Proceedings In Rem. sec.
607.)
It is true that in proceedings of this character, if the defendant for whom
publication is made appears, the action becomes as to him a personal action and is
conducted as such. This, however, does not affect the proposition that where the
defendant fails to appear the action is quasi in rem; and it should therefore be
considered with reference to the principles governing actions in rem.
There is an instructive analogy between the foreclosure proceeding and an action
of attachment, concerning which the Supreme Court of the United States has used
the following language:
If the defendant appears, the cause becomes mainly a suit in personam,
with the added incident, that the property attached remains liable,
under the control of the court, to answer to any demand which may be
established against the defendant by the final judgment of the court.
But, if there is no appearance of the defendant, and no service of
process on him, the case becomes, in its essential nature, a
proceeding in rem, the only effect of which is to subject the property
attached to the payment of the defendant which the court may find to
be due to the plaintiff. (Cooper vs. Reynolds, 10 Wall., 308.)
In an ordinary attachment proceeding, if the defendant is not personally served,
the preliminary seizure is to, be considered necessary in order to confer jurisdiction
upon the court. In this case the lien on the property is acquired by the seizure; and
the purpose of the proceedings is to subject the property to that lien. If a lien
already exists, whether created by mortgage, contract, or statute, the preliminary
seizure is not necessary; and the court proceeds to enforce such lien in the manner
provided by law precisely as though the property had been seized upon
attachment. (Roller vs. Holly, 176 U. S., 398, 405; 44 L. ed., 520.) It results that the
mere circumstance that in an attachment the property may be seized at the
inception of the proceedings, while in the foreclosure suit it is not taken into legal
custody until the time comes for the sale, does not materially affect the
fundamental principle involved in both cases, which is that the court is here
exercising a jurisdiction over the property in a proceeding directed essentially in
rem.
Passing now to a consideration of the jurisdiction of the Court of First Instance in a
mortgage foreclosure, it is evident that the court derives its authority to entertain
the action primarily from the statutes organizing the court. The jurisdiction of the
court, in this most general sense, over the cause of action is obvious and requires
no comment. Jurisdiction over the person of the defendant, if acquired at all in
such an action, is obtained by the voluntary submission of the defendant or by the
personal service of process upon him within the territory where the process is
valid. If, however, the defendant is a nonresident and, remaining beyond the range
of the personal process of the court, refuses to come in voluntarily, the court never
acquires jurisdiction over the person at all. Here the property itself is in fact the
sole thing which is impleaded and is the responsible object which is the subject of
the exercise of judicial power. It follows that the jurisdiction of the court in such
case is based exclusively on the power which, under the law, it possesses over the

property; and any discussion relative to the jurisdiction of the court over the
person of the defendant is entirely apart from the case. The jurisdiction of the
court over the property, considered as the exclusive object of such action, is
evidently based upon the following conditions and considerations, namely: (1) that
the property is located within the district; (2) that the purpose of the litigation is to
subject the property by sale to an obligation fixed upon it by the mortgage; and (3)
that the court at a proper stage of the proceedings takes the property into custody,
if necessary, and expose it to sale for the purpose of satisfying the mortgage debt.
An obvious corollary is that no other relief can be granted in this proceeding than
such as can be enforced against the property.
We may then, from what has been stated, formulated the following proposition
relative to the foreclosure proceeding against the property of a nonresident
mortgagor who fails to come in and submit himself personally to the jurisdiction of
the court: (I) That the jurisdiction of the court is derived from the power which it
possesses over the property; (II) that jurisdiction over the person is not acquired
and is nonessential; (III) that the relief granted by the court must be limited to such
as can be enforced against the property itself.
It is important that the bearing of these propositions be clearly apprehended, for
there are many expressions in the American reports from which it might be
inferred that the court acquires personal jurisdiction over the person of the
defendant by publication and notice; but such is not the case. In truth the
proposition that jurisdiction over the person of a nonresident cannot be acquired
by publication and notice was never clearly understood even in the American
courts until after the decision had been rendered by the Supreme Court of the
United States in the leading case of Pennoyer vs. Neff (95 U. S. 714; 24 L. ed., 565).
In the light of that decision, and of other decisions which have subsequently been
rendered in that and other courts, the proposition that jurisdiction over the person
cannot be thus acquired by publication and notice is no longer open to question;
and it is now fully established that a personal judgment upon constructive or
substituted service against a nonresident who does not appear is wholly invalid.
This doctrine applies to all kinds of constructive or substituted process, including
service by publication and personal service outside of the jurisdiction in which the
judgment is rendered; and the only exception seems to be found in the case where
the nonresident defendant has expressly or impliedly consented to the mode of
service. (Note to Raher vs. Raher, 35 L. R. A. [N. S. ], 292; see also 50 L .R. A., 585;
35 L. R. A. [N. S.], 312
The idea upon which the decision in Pennoyer vs. Neff (supra) proceeds is that the
process from the tribunals of one State cannot run into other States or countries
and that due process of law requires that the defendant shall be brought under the
power of the court by service of process within the State, or by his voluntary
appearance, in order to authorize the court to pass upon the question of his
personal liability. The doctrine established by the Supreme Court of the United
States on this point, being based upon the constitutional conception of due
process of law, is binding upon the courts of the Philippine Islands. Involved in this
decision is the principle that in proceedings in rem or quasi in rem against a
nonresident who is not served personally within the state, and who does not
appear, the relief must be confined to the res, and the court cannot lawfully render
a personal judgment against him. (Dewey vs. Des Moines, 173 U. S., 193; 43 L. ed.,
665; Heidritter vs. Elizabeth Oil Cloth Co., 112 U. S., 294; 28 L. ed., 729.) Therefore
in an action to foreclose a mortgage against a nonresident, upon whom service has
been effected exclusively by publication, no personal judgment for the deficiency
can be entered. (Latta vs. Tutton, 122 Cal., 279; Blumberg vs. Birch, 99 Cal., 416.)
It is suggested in the brief of the appellant that the judgment entered in the court
below offends against the principle just stated and that this judgment is void
because the court in fact entered a personal judgment against the absent debtor
for the full amount of the indebtedness secured by the mortgage. We do not so
interpret the judgment.
In a foreclosure proceeding against a nonresident owner it is necessary for the
court, as in all cases of foreclosure, to ascertain the amount due, as prescribed in
section 256 of the Code of Civil Procedure, and to make an order requiring the
defendant to pay the money into court. This step is a necessary precursor of the
order of sale. In the present case the judgment which was entered contains the
following words:
Because it is declared that the said defendant Engracio Palanca
Tanquinyeng y Limquingco, is indebted in the amount of P249,355.32,
plus the interest, to the 'Banco Espanol-Filipino' . . . therefore said
appellant is ordered to deliver the above amount etc., etc.
This is not the language of a personal judgment. Instead it is clearly intended
merely as a compliance with the requirement that the amount due shall be
ascertained and that the evidence of this it may be observed that according to the
Code of Civil Procedure a personal judgment against the debtor for the deficiency
is not to be rendered until after the property has been sold and the proceeds
applied to the mortgage debt. (sec. 260).
The conclusion upon this phase of the case is that whatever may be the effect in
other respects of the failure of the clerk of the Court of First Instance to mail the
proper papers to the defendant in Amoy, China, such irregularity could in no wise
impair or defeat the jurisdiction of the court, for in our opinion that jurisdiction
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 23
rest upon a basis much more secure than would be supplied by any form of notice
that could be given to a resident of a foreign country.
Before leaving this branch of the case, we wish to observe that we are fully aware
that many reported cases can be cited in which it is assumed that the question of
the sufficiency of publication or notice in a case of this kind is a question affecting
the jurisdiction of the court, and the court is sometimes said to acquire jurisdiction
by virtue of the publication. This phraseology was undoubtedly originally adopted
by the court because of the analogy between service by the publication and
personal service of process upon the defendant; and, as has already been
suggested, prior to the decision of Pennoyer vs. Neff (supra) the difference
between the legal effects of the two forms of service was obscure. It is accordingly
not surprising that the modes of expression which had already been molded into
legal tradition before that case was decided have been brought down to the
present day. But it is clear that the legal principle here involved is not effected by
the peculiar language in which the courts have expounded their ideas.
We now proceed to a discussion of the question whether the supposed irregularity
in the proceedings was of such gravity as to amount to a denial of that "due
process of law" which was secured by the Act of Congress in force in these Islands
at the time this mortgage was foreclosed. (Act of July 1, 1902, sec. 5.) In dealing
with questions involving the application of the constitutional provisions relating to
due process of law the Supreme Court of the United States has refrained from
attempting to define with precision the meaning of that expression, the reason
being that the idea expressed therein is applicable under so many diverse
conditions as to make any attempt ay precise definition hazardous and
unprofitable. As applied to a judicial proceeding, however, it may be laid down
with certainty that the requirement of due process is satisfied if the following
conditions are present, namely; (1) There must be a court or tribunal clothed with
judicial power to hear and determine the matter before it; (2) jurisdiction must be
lawfully acquired over the person of the defendant or over the property which is
the subject of the proceeding; (3) the defendant must be given an opportunity to
be heard; and (4) judgment must be rendered upon lawful hearing.
Passing at once to the requisite that the defendant shall have an opportunity to be
heard, we observe that in a foreclosure case some notification of the proceedings
to the nonresident owner, prescribing the time within which appearance must be
made, is everywhere recognized as essential. To answer this necessity the statutes
generally provide for publication, and usually in addition thereto, for the mailing of
notice to the defendant, if his residence is known. Though commonly called
constructive, or substituted service of process in any true sense. It is merely a
means provided by law whereby the owner may be admonished that his property
is the subject of judicial proceedings and that it is incumbent upon him to take
such steps as he sees fit to protect it. In speaking of notice of this character a
distinguish master of constitutional law has used the following language:
. . . if the owners are named in the proceedings, and personal notice is
provided for, it is rather from tenderness to their interests, and in order
to make sure that the opportunity for a hearing shall not be lost to
them, than from any necessity that the case shall assume that form.
(Cooley on Taxation [2d. ed.], 527, quoted in Leigh vs. Green, 193 U. S.,
79, 80.)
It will be observed that this mode of notification does not involve any absolute
assurance that the absent owner shall thereby receive actual notice. The periodical
containing the publication may never in fact come to his hands, and the chances
that he should discover the notice may often be very slight. Even where notice is
sent by mail the probability of his receiving it, though much increased, is
dependent upon the correctness of the address to which it is forwarded as well as
upon the regularity and security of the mail service. It will be noted, furthermore,
that the provision of our law relative to the mailing of notice does not absolutely
require the mailing of notice unconditionally and in every event, but only in the
case where the defendant's residence is known. In the light of all these facts, it is
evident that actual notice to the defendant in cases of this kind is not, under the
law, to be considered absolutely necessary.
The idea upon which the law proceeds in recognizing the efficacy of a means of
notification which may fall short of actual notice is apparently this: Property is
always assumed to be in the possession of its owner, in person or by agent; and he
may be safely held, under certain conditions, to be affected with knowledge that
proceedings have been instituted for its condemnation and sale.
It is the duty of the owner of real estate, who is a nonresident, to take
measures that in some way he shall be represented when his property
is called into requisition, and if he fails to do this, and fails to get notice
by the ordinary publications which have usually been required in such
cases, it is his misfortune, and he must abide the consequences. (6 R. C.
L., sec. 445 [p. 450]).
It has been well said by an American court:
If property of a nonresident cannot be reached by legal process upon
the constructive notice, then our statutes were passed in vain, and are
mere empty legislative declarations, without either force, or meaning;
for if the person is not within the jurisdiction of the court, no personal
judgment can be rendered, and if the judgment cannot operate upon

the property, then no effective judgment at all can be rendered, so that
the result would be that the courts would be powerless to assist a
citizen against a nonresident. Such a result would be a deplorable one.
(Quarl vs. Abbett, 102 Ind., 233; 52 Am. Rep., 662, 667.)
It is, of course universally recognized that the statutory provisions relative to
publication or other form of notice against a nonresident owner should be
complied with; and in respect to the publication of notice in the newspaper it may
be stated that strict compliance with the requirements of the law has been held to
be essential. In Guaranty Trust etc. Co. vs. Green Cove etc., Railroad Co. (139 U. S.,
137, 138), it was held that where newspaper publication was made for 19 weeks,
when the statute required 20, the publication was insufficient.
With respect to the provisions of our own statute, relative to the sending of notice
by mail, the requirement is that the judge shall direct that the notice be deposited
in the mail by the clerk of the court, and it is not in terms declared that the notice
must be deposited in the mail. We consider this to be of some significance; and it
seems to us that, having due regard to the principles upon which the giving of such
notice is required, the absent owner of the mortgaged property must, so far as the
due process of law is concerned, take the risk incident to the possible failure of the
clerk to perform his duty, somewhat as he takes the risk that the mail clerk or the
mail carrier might possibly lose or destroy the parcel or envelope containing the
notice before it should reach its destination and be delivered to him. This idea
seems to be strengthened by the consideration that placing upon the clerk the
duty of sending notice by mail, the performance of that act is put effectually
beyond the control of the plaintiff in the litigation. At any rate it is obvious that so
much of section 399 of the Code of Civil Procedure as relates to the sending of
notice by mail was complied with when the court made the order. The question as
to what may be the consequences of the failure of the record to show the proof of
compliance with that requirement will be discussed by us further on.
The observations which have just been made lead to the conclusion that the failure
of the clerk to mail the notice, if in fact he did so fail in his duty, is not such an
irregularity, as amounts to a denial of due process of law; and hence in our opinion
that irregularity, if proved, would not avoid the judgment in this case. Notice was
given by publication in a newspaper and this is the only form of notice which the
law unconditionally requires. This in our opinion is all that was absolutely
necessary to sustain the proceedings.
It will be observed that in considering the effect of this irregularity, it makes a
difference whether it be viewed as a question involving jurisdiction or as a question
involving due process of law. In the matter of jurisdiction there can be no
distinction between the much and the little. The court either has jurisdiction or it
has not; and if the requirement as to the mailing of notice should be considered as
a step antecedent to the acquiring of jurisdiction, there could be no escape from
the conclusion that the failure to take that step was fatal to the validity of the
judgment. In the application of the idea of due process of law, on the other hand, it
is clearly unnecessary to be so rigorous. The jurisdiction being once established, all
that due process of law thereafter requires is an opportunity for the defendant to
be heard; and as publication was duly made in the newspaper, it would seem
highly unreasonable to hold that failure to mail the notice was fatal. We think that
in applying the requirement of due process of law, it is permissible to reflect upon
the purposes of the provision which is supposed to have been violated and the
principle underlying the exercise of judicial power in these proceedings. Judge in
the light of these conceptions, we think that the provision of Act of Congress
declaring that no person shall be deprived of his property without due process of
law has not been infringed.
In the progress of this discussion we have stated the two conclusions; (1) that the
failure of the clerk to send the notice to the defendant by mail did not destroy the
jurisdiction of the court and (2) that such irregularity did not infringe the
requirement of due process of law. As a consequence of these conclusions the
irregularity in question is in some measure shorn of its potency. It is still necessary,
however, to consider its effect considered as a simple irregularity of procedure;
and it would be idle to pretend that even in this aspect the irregularity is not grave
enough. From this point of view, however, it is obvious that any motion to vacate
the judgment on the ground of the irregularity in question must fail unless it shows
that the defendant was prejudiced by that irregularity. The least, therefore, that
can be required of the proponent of such a motion is to show that he had a good
defense against the action to foreclose the mortgage. Nothing of the kind is,
however, shown either in the motion or in the affidavit which accompanies the
motion.
An application to open or vacate a judgment because of an irregularity or defect in
the proceedings is usually required to be supported by an affidavit showing the
grounds on which the relief is sought, and in addition to this showing also a
meritorious defense to the action. It is held that a general statement that a party
has a good defense to the action is insufficient. The necessary facts must be
averred. Of course if a judgment is void upon its face a showing of the existence of
a meritorious defense is not necessary. (10 R. C. L., 718.)
The lapse of time is also a circumstance deeply affecting this aspect of the case. In
this connection we quote the following passage from the encyclopedic treatise
now in course of publication:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 24
Where, however, the judgment is not void on its face, and may
therefore be enforced if permitted to stand on the record, courts in
many instances refuse to exercise their quasi equitable powers to
vacate a judgement after the lapse of the term ay which it was entered,
except in clear cases, to promote the ends of justice, and where it
appears that the party making the application is himself without fault
and has acted in good faith and with ordinary diligence. Laches on the
part of the applicant, if unexplained, is deemed sufficient ground for
refusing the relief to which he might otherwise be entitled. Something
is due to the finality of judgments, and acquiescence or unnecessary
delay is fatal to motions of this character, since courts are always
reluctant to interfere with judgments, and especially where they have
been executed or satisfied. The moving party has the burden of showing
diligence, and unless it is shown affirmatively the court will not
ordinarily exercise its discretion in his favor. (15 R. C. L., 694, 695.)
It is stated in the affidavit that the defendant, Engracio Palanca Tanquinyeng y
Limquingco, died January 29, 1910. The mortgage under which the property was
sold was executed far back in 1906; and the proceedings in the foreclosure were
closed by the order of court confirming the sale dated August 7, 1908. It passes the
rational bounds of human credulity to suppose that a man who had placed a
mortgage upon property worth nearly P300,000 and had then gone away from the
scene of his life activities to end his days in the city of Amoy, China, should have
long remained in ignorance of the fact that the mortgage had been foreclosed and
the property sold, even supposing that he had no knowledge of those proceedings
while they were being conducted. It is more in keeping with the ordinary course of
things that he should have acquired information as to what was transpiring in his
affairs at Manila; and upon the basis of this rational assumption we are authorized,
in the absence of proof to the contrary, to presume that he did have, or soon
acquired, information as to the sale of his property.
The Code of Civil Procedure, indeed, expressly declares that there is a presumption
that things have happened according to the ordinary habits of life (sec. 334 [26]);
and we cannot conceive of a situation more appropriate than this for applying the
presumption thus defined by the lawgiver. In support of this presumption, as
applied to the present case, it is permissible to consider the probability that the
defendant may have received actual notice of these proceedings from the
unofficial notice addressed to him in Manila which was mailed by an employee of
the bank's attorneys. Adopting almost the exact words used by the Supreme Court
of the United States in Grannis vs. Ordeans (234 U. S., 385; 58 L. ed., 1363), we
may say that in view of the well-known skill of postal officials and employees in
making proper delivery of letters defectively addressed, we think the presumption
is clear and strong that this notice reached the defendant, there being no proof
that it was ever returned by the postal officials as undelivered. And if it was
delivered in Manila, instead of being forwarded to Amoy, China, there is a
probability that the recipient was a person sufficiently interested in his affairs to
send it or communicate its contents to him.
Of course if the jurisdiction of the court or the sufficiency of the process of law
depended upon the mailing of the notice by the clerk, the reflections in which we
are now indulging would be idle and frivolous; but the considerations mentioned
are introduced in order to show the propriety of applying to this situation the legal
presumption to which allusion has been made. Upon that presumption, supported
by the circumstances of this case, ,we do not hesitate to found the conclusion that
the defendant voluntarily abandoned all thought of saving his property from the
obligation which he had placed upon it; that knowledge of the proceedings should
be imputed to him; and that he acquiesced in the consequences of those
proceedings after they had been accomplished. Under these circumstances it is
clear that the merit of this motion is, as we have already stated, adversely affected
in a high degree by the delay in asking for relief. Nor is it an adequate reply to say
that the proponent of this motion is an administrator who only qualified a few
months before this motion was made. No disability on the part of the defendant
himself existed from the time when the foreclosure was effected until his death;
and we believe that the delay in the appointment of the administrator and
institution of this action is a circumstance which is imputable to the parties in
interest whoever they may have been. Of course if the minor heirs had instituted
an action in their own right to recover the property, it would have been different.
It is, however, argued that the defendant has suffered prejudice by reason of the
fact that the bank became the purchaser of the property at the foreclosure sale for
a price greatly below that which had been agreed upon in the mortgage as the
upset price of the property. In this connection, it appears that in article nine of the
mortgage which was the subject of this foreclosure, as amended by the notarial
document of July 19, 1906, the parties to this mortgage made a stipulation to the
effect that the value therein placed upon the mortgaged properties should serve as
a basis of sale in case the debt should remain unpaid and the bank should proceed
to a foreclosure. The upset price stated in that stipulation for all the parcels
involved in this foreclosure was P286,000. It is said in behalf of the appellant that
when the bank bought in the property for the sum of P110,200 it violated that
stipulation.
It has been held by this court that a clause in a mortgage providing for a tipo, or
upset price, does not prevent a foreclosure, nor affect the validity of a sale made in
the foreclosure proceedings. (Yangco vs. Cruz Herrera and Wy Piaco, 11 Phil. Rep.,
402; Banco-Espaol Filipino vs. Donaldson, Sim and Co., 5 Phil. Rep., 418.) In both
the cases here cited the property was purchased at the foreclosure sale, not by the
creditor or mortgagee, but by a third party. Whether the same rule should be

applied in a case where the mortgagee himself becomes the purchaser has
apparently not been decided by this court in any reported decision, and this
question need not here be considered, since it is evident that if any liability was
incurred by the bank by purchasing for a price below that fixed in the stipulation,
its liability was a personal liability derived from the contract of mortgage; and as
we have already demonstrated such a liability could not be the subject of
adjudication in an action where the court had no jurisdiction over the person of
the defendant. If the plaintiff bank became liable to account for the difference
between the upset price and the price at which in bought in the property, that
liability remains unaffected by the disposition which the court made of this case;
and the fact that the bank may have violated such an obligation can in no wise
affect the validity of the judgment entered in the Court of First Instance.
In connection with the entire failure of the motion to show either a meritorious
defense to the action or that the defendant had suffered any prejudice of which
the law can take notice, we may be permitted to add that in our opinion a motion
of this kind, which proposes to unsettle judicial proceedings long ago closed, can
not be considered with favor, unless based upon grounds which appeal to the
conscience of the court. Public policy requires that judicial proceedings be upheld.
The maximum here applicable is non quieta movere. As was once said by Judge
Brewer, afterwards a member of the Supreme Court of the United States:
Public policy requires that judicial proceedings be upheld, and that titles
obtained in those proceedings be safe from the ruthless hand of
collateral attack. If technical defects are adjudged potent to destroy
such titles, a judicial sale will never realize that value of the property,
for no prudent man will risk his money in bidding for and buying that
title which he has reason to fear may years thereafter be swept away
through some occult and not readily discoverable defect. (Martin vs.
Pond, 30 Fed., 15.)
In the case where that language was used an attempt was made to annul certain
foreclosure proceedings on the ground that the affidavit upon which the order of
publication was based erroneously stated that the State of Kansas, when he was in
fact residing in another State. It was held that this mistake did not affect the
validity of the proceedings.
In the preceding discussion we have assumed that the clerk failed to send the
notice by post as required by the order of the court. We now proceed to consider
whether this is a proper assumption; and the proposition which we propose to
establish is that there is a legal presumption that the clerk performed his duty as
the ministerial officer of the court, which presumption is not overcome by any
other facts appearing in the cause.
In subsection 14 of section 334 of the Code of Civil Procedure it is declared that
there is a presumption "that official duty has been regularly performed;" and in
subsection 18 it is declared that there is a presumption "that the ordinary course
of business has been followed." These presumptions are of course in no sense
novelties, as they express ideas which have always been recognized. Omnia
presumuntur rite et solemniter esse acta donec probetur in contrarium. There is
therefore clearly a legal presumption that the clerk performed his duty about
mailing this notice; and we think that strong considerations of policy require that
this presumption should be allowed to operate with full force under the
circumstances of this case. A party to an action has no control over the clerk of the
court; and has no right to meddle unduly with the business of the clerk in the
performance of his duties. Having no control over this officer, the litigant must
depend upon the court to see that the duties imposed on the clerk are performed.
Other considerations no less potent contribute to strengthen the conclusion just
stated. There is no principle of law better settled than that after jurisdiction has
once been required, every act of a court of general jurisdiction shall be presumed
to have been rightly done. This rule is applied to every judgment or decree
rendered in the various stages of the proceedings from their initiation to their
completion (Voorhees vs. United States Bank, 10 Pet., 314; 35 U. S., 449); and if the
record is silent with respect to any fact which must have been established before
the court could have rightly acted, it will be presumed that such fact was properly
brought to its knowledge. (The Lessee of Grignon vs. Astor, 2 How., 319; 11 L. ed.,
283.)
In making the order of sale [of the real state of a decedent] the court
are presumed to have adjudged every question necessary to justify such
order or decree, viz: The death of the owners; that the petitioners were
his administrators; that the personal estate was insufficient to pay the
debts of the deceased; that the private acts of Assembly, as to the
manner of sale, were within the constitutional power of the Legislature,
and that all the provisions of the law as to notices which are directory
to the administrators have been complied with. . . . The court is not
bound to enter upon the record the evidence on which any fact was
decided. (Florentine vs. Barton, 2 Wall., 210; 17 L. ed., 785.) Especially
does all this apply after long lapse of time.
Applegate vs. Lexington and Carter County Mining Co. (117 U. S., 255) contains an
instructive discussion in a case analogous to that which is now before us. It there
appeared that in order to foreclose a mortgage in the State of Kentucky against a
nonresident debtor it was necessary that publication should be made in a
newspaper for a specified period of time, also be posted at the front door of the
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 25
court house and be published on some Sunday, immediately after divine service, in
such church as the court should direct. In a certain action judgment had been
entered against a nonresident, after publication in pursuance of these provisions.
Many years later the validity of the proceedings was called in question in another
action. It was proved from the files of an ancient periodical that publication had
been made in its columns as required by law; but no proof was offered to show the
publication of the order at the church, or the posting of it at the front door of the
court-house. It was insisted by one of the parties that the judgment of the court
was void for lack of jurisdiction. But the Supreme Court of the United States said:
The court which made the decree . . . was a court of general
jurisdiction. Therefore every presumption not inconsistent with the
record is to be indulged in favor of its jurisdiction. . . . It is to be
presumed that the court before making its decree took care of to see
that its order for constructive service, on which its right to make the
decree depended, had been obeyed.
It is true that in this case the former judgment was the subject of collateral , or
indirect attack, while in the case at bar the motion to vacate the judgment is direct
proceeding for relief against it. The same general presumption, however, is
indulged in favor of the judgment of a court of general jurisdiction, whether it is
the subject of direct or indirect attack the only difference being that in case of
indirect attack the judgment is conclusively presumed to be valid unless the record
affirmatively shows it to be void, while in case of direct attack the presumption in
favor of its validity may in certain cases be overcome by proof extrinsic to the
record.
The presumption that the clerk performed his duty and that the court made its
decree with the knowledge that the requirements of law had been complied with
appear to be amply sufficient to support the conclusion that the notice was sent by
the clerk as required by the order. It is true that there ought to be found among
the papers on file in this cause an affidavit, as required by section 400 of the Code
of Civil Procedure, showing that the order was in fact so sent by the clerk; and no
such affidavit appears. The record is therefore silent where it ought to speak. But
the very purpose of the law in recognizing these presumptions is to enable the
court to sustain a prior judgment in the face of such an omission. If we were to
hold that the judgment in this case is void because the proper affidavit is not
present in the file of papers which we call the record, the result would be that in
the future every title in the Islands resting upon a judgment like that now before us
would depend, for its continued security, upon the presence of such affidavit
among the papers and would be liable at any moment to be destroyed by the
disappearance of that piece of paper. We think that no court, with a proper regard
for the security of judicial proceedings and for the interests which have by law
been confided to the courts, would incline to favor such a conclusion. In our
opinion the proper course in a case of this kind is to hold that the legal
presumption that the clerk performed his duty still maintains notwithstanding the
absence from the record of the proper proof of that fact.
In this connection it is important to bear in mind that under the practice prevailing
in the Philippine Islands the word "record" is used in a loose and broad sense, as
indicating the collective mass of papers which contain the history of all the
successive steps taken in a case and which are finally deposited in the archives of
the clerk's office as a memorial of the litigation. It is a matter of general
information that no judgment roll, or book of final record, is commonly kept in our
courts for the purpose of recording the pleadings and principal proceedings in
actions which have been terminated; and in particular, no such record is kept in the
Court of First Instance of the city of Manila. There is, indeed, a section of the Code
of Civil Procedure which directs that such a book of final record shall be kept; but
this provision has, as a matter of common knowledge, been generally ignored. The
result is that in the present case we do not have the assistance of the recitals of
such a record to enable us to pass upon the validity of this judgment and as already
stated the question must be determined by examining the papers contained in the
entire file.
But it is insisted by counsel for this motion that the affidavit of Bernardo Chan y
Garcia showing that upon April 4, 1908, he sent a notification through the mail
addressed to the defendant at Manila, Philippine Islands, should be accepted as
affirmative proof that the clerk of the court failed in his duty and that, instead of
himself sending the requisite notice through the mail, he relied upon Bernardo to
send it for him. We do not think that this is by any means a necessary inference. Of
course if it had affirmatively appeared that the clerk himself had attempted to
comply with this order and had directed the notification to Manila when he should
have directed it to Amoy, this would be conclusive that he had failed to comply
with the exact terms of the order; but such is not this case. That the clerk of the
attorneys for the plaintiff erroneously sent a notification to the defendant at a
mistaken address affords in our opinion very slight basis for supposing that the
clerk may not have sent notice to the right address.
There is undoubtedly good authority to support the position that when the record
states the evidence or makes an averment with reference to a jurisdictional fact, it
will not be presumed that there was other or different evidence respecting the
fact, or that the fact was otherwise than stated. If, to give an illustration, it appears
from the return of the officer that the summons was served at a particular place or
in a particular manner, it will not be presumed that service was also made at
another place or in a different manner; or if it appears that service was made upon
a person other than the defendant, it will not be presumed, in the silence of the

record, that it was made upon the defendant also (Galpin vs. Page, 18 Wall., 350,
366; Settlemier vs. Sullivan, 97 U. S., 444, 449). While we believe that these
propositions are entirely correct as applied to the case where the person making
the return is the officer who is by law required to make the return, we do not think
that it is properly applicable where, as in the present case, the affidavit was made
by a person who, so far as the provisions of law are concerned, was a mere
intermeddler.
The last question of importance which we propose to consider is whether a motion
in the cause is admissible as a proceeding to obtain relief in such a case as this. If
the motion prevails the judgment of July 2, 1908, and all subsequent proceedings
will be set aside, and the litigation will be renewed, proceeding again from the date
mentioned as if the progress of the action had not been interrupted. The
proponent of the motion does not ask the favor of being permitted to interpose a
defense. His purpose is merely to annul the effective judgment of the court, to the
end that the litigation may again resume its regular course.
There is only one section of the Code of Civil Procedure which expressly recognizes
the authority of a Court of First Instance to set aside a final judgment and permit a
renewal of the litigation in the same cause. This is as follows:
SEC. 113. Upon such terms as may be just the court may relieve a party
or legal representative from the judgment, order, or other proceeding
taken against him through his mistake, inadvertence, surprise, or
excusable neglect; Provided, That application thereof be made within a
reasonable time, but in no case exceeding six months after such
judgment, order, or proceeding was taken.
An additional remedy by petition to the Supreme Court is supplied by section 513
of the same Code. The first paragraph of this section, in so far as pertinent to this
discussion, provides as follows:
When a judgment is rendered by a Court of First Instance upon default,
and a party thereto is unjustly deprived of a hearing by fraud, accident,
mistake or excusable negligence, and the Court of First Instance which
rendered the judgment has finally adjourned so that no adequate
remedy exists in that court, the party so deprived of a hearing may
present his petition to the Supreme Court within sixty days after he first
learns of the rendition of such judgment, and not thereafter, setting
forth the facts and praying to have judgment set aside. . . .
It is evident that the proceeding contemplated in this section is intended to
supplement the remedy provided by section 113; and we believe the conclusion
irresistible that there is no other means recognized by law whereby a defeated
party can, by a proceeding in the same cause, procure a judgment to be set aside,
with a view to the renewal of the litigation.
The Code of Civil Procedure purports to be a complete system of practice in civil
causes, and it contains provisions describing with much fullness the various steps
to be taken in the conduct of such proceedings. To this end it defines with
precision the method of beginning, conducting, and concluding the civil action of
whatever species; and by section 795 of the same Code it is declared that the
procedure in all civil action shall be in accordance with the provisions of this Code.
We are therefore of the opinion that the remedies prescribed in sections 113 and
513 are exclusive of all others, so far as relates to the opening and continuation of
a litigation which has been once concluded.
The motion in the present case does not conform to the requirements of either of
these provisions; and the consequence is that in our opinion the action of the
Court of First Instance in dismissing the motion was proper.
If the question were admittedly one relating merely to an irregularity of procedure,
we cannot suppose that this proceeding would have taken the form of a motion in
the cause, since it is clear that, if based on such an error, the came to late for relief
in the Court of First Instance. But as we have already seen, the motion attacks the
judgment of the court as void for want of jurisdiction over the defendant. The idea
underlying the motion therefore is that inasmuch as the judgment is a nullity it can
be attacked in any way and at any time. If the judgment were in fact void upon its
face, that is, if it were shown to be a nullity by virtue of its own recitals, there
might possibly be something in this. Where a judgment or judicial order is void in
this sense it may be said to be a lawless thing, which can be treated as an outlaw
and slain at sight, or ignored wherever and whenever it exhibits its head.
But the judgment in question is not void in any such sense. It is entirely regular in
form, and the alleged defect is one which is not apparent upon its face. It follows
that even if the judgment could be shown to be void for want of jurisdiction, or for
lack of due process of law, the party aggrieved thereby is bound to resort to some
appropriate proceeding to obtain relief. Under accepted principles of law and
practice, long recognized in American courts, a proper remedy in such case, after
the time for appeal or review has passed, is for the aggrieved party to bring an
action to enjoin the judgment, if not already carried into effect; or if the property
has already been disposed of he may institute suit to recover it. In every situation
of this character an appropriate remedy is at hand; and if property has been taken
without due process, the law concedes due process to recover it. We accordingly
old that, assuming the judgment to have been void as alleged by the proponent of
this motion, the proper remedy was by an original proceeding and not by motion
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 26
in the cause. As we have already seen our Code of Civil Procedure defines the
conditions under which relief against a judgment may be productive of conclusion
for this court to recognize such a proceeding as proper under conditions different
from those defined by law. Upon the point of procedure here involved, we refer to
the case of People vs. Harrison (84 Cal., 607) wherein it was held that a motion will
not lie to vacate a judgment after the lapse of the time limited by statute if the
judgment is not void on its face; and in all cases, after the lapse of the time limited
by statute if the judgment is not void on its face; and all cases, after the lapse of
such time, when an attempt is made to vacate the judgment by a proceeding in
court for that purpose an action regularly brought is preferable, and should be
required. It will be noted taken verbatim from the California Code (sec. 473).
The conclusions stated in this opinion indicate that the judgment appealed from is
without error, and the same is accordingly affirmed, with 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, with prayer for the issuance
of a writ of preliminary injunction, filed by private respondent Dante Legaspi,
through his attorney-in-fact Paul Gutierrez, against petitioners Gen. Jose M.
Calimlim, Ciriaco Reyes and Maj. David Diciano before the Regional Trial Court
(RTC) of Quezon City.1
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-in-fact.
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.3Legaspi agreed to give Gutierrez 40% of the treasure that may be
found in the land.
On February 29, 2000, Gutierrez filed a case for damages and injunction against
petitioners for illegally entering Legaspis land. He hired the legal services of Atty.
Homobono Adaza. Their contract provided that as legal fees, Atty. Adaza shall be
entitled to 30% of Legaspis share in whatever treasure may be found in the land.
In addition, Gutierrez agreed to pay Atty. Adaza P5,000.00 as appearance fee per
court hearing and defray all expenses for the cost of the litigation. 4 Upon the filing
of the complaint, then Executive Judge Perlita J. Tria Tirona issued a 72-hour
temporary restraining order (TRO) against petitioners.
The case5 was subsequently raffled to the RTC of Quezon City, Branch 223, then
presided by public respondent Judge Victorino P. Evangelista. On March 2, 2000,
respondent judge issued another 72-hour TRO and a summary hearing for its
extension was set on March 7, 2000.
On March 14, 2000, petitioners filed a Motion to Dismiss 6 contending: first, there is
no real party-in-interest as the SPA of Gutierrez to bring the suit was already
revoked by Legaspi on March 7, 2000, as evidenced by a Deed of Revocation, 7 and,
second, Gutierrez failed to establish that the alleged armed men guarding the area
were acting on orders of petitioners. On March 17, 2000, petitioners also filed a
Motion for Inhibition8 of the respondent judge on the ground of alleged partiality
in favor of private respondent.
On March 23, 2000, the trial court granted private respondents application for a
writ of preliminary injunction on the following grounds: (1) the diggings and
blastings appear to have been made on the land of Legaspi, hence, there is an
urgent need to maintain the status quo to prevent serious damage to Legaspis
land; and, (2) the SPA granted to Gutierrez continues to be valid. 9 The trial court
ordered thus:

WHEREFORE, in view of all the foregoing, the Court hereby resolves to GRANT
plaintiffs application for a writ of preliminary injunction. Upon plaintiffs filing of
an injunction bond in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00), let a Writ of Preliminary Injunction issue enjoining the defendants
as well as their associates, agents or representatives from continuing to occupy
and encamp on the land of the plaintiff LEGASPI as well as the vicinity thereof;
from digging, tunneling and blasting the said land of plaintiff LEGASPI; from
removing whatever treasure may be found on the said land; from preventing and
threatening the plaintiffs and their representatives from entering the said land and
performing acts of ownership; from threatening the plaintiffs and their
representatives as well as plaintiffs lawyer.
On even date, the trial court issued another Order 10 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 limited period or perpetually;
WHETHER THE CONTRACT OF AGENCY BETWEEN LEGASPI AND PRIVATE
RESPONDENT GUTIERREZ HAS BEEN EFFECTIVELY REVOKED BY LEGASPI.
II
WHETHER THE COMPLAINT AGAINST PETITIONERS SHOULD BE DISMISSED.
III
WHETHER RESPONDENT JUDGE OUGHT TO HAVE INHIBITED HIMSELF FROM
FURTHER PROCEEDING WITH THE CASE.
We find no merit in the petition.
On the first issue, petitioners claim that the special power of attorney of Gutierrez
to represent Legaspi has already been revoked by the latter. Private respondent
Gutierrez, however, contends that the unilateral revocation is invalid as his agency
is coupled with interest.
We agree with private respondent.
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
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 27
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
(b) 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
(c) that a party, court, agency or a person is doing, threatening, or is attempting to
do, or is procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or proceeding, and
tending to render the judgment ineffectual.
It is crystal clear that at the hearing for the issuance of a writ of preliminary
injunction, mere prima facie evidence is needed to establish the applicants rights
or interests in the subject matter of the main action. 21 It is not required that the
applicant should conclusively show that there was a violation of his rights as this
issue will still be fully litigated in the main case. 22 Thus, an applicant for a writ is
required only to show that he has an ostensible right to the final relief prayed for
in his complaint. 23
In the case at bar, we find that respondent judge had sufficient basis to issue the
writ of preliminary injunction. It was established, prima facie, that Legaspi has a
right to peaceful possession of his land, pendente lite.Legaspi had title to the
subject land. It was likewise established that the diggings were conducted by
petitioners in the enclosed area of Legaspis land. Whether the land fenced by
Gutierrez and claimed to be included in the land of Legaspi covered an area
beyond that which is included in the title of Legaspi is a factual issue still subject
to litigation and proof by the parties in the main case for damages . It was
necessary for the trial court to issue the writ of preliminary injunction during the
pendency of the main case in order to preserve the rights and interests of private
respondents Legaspi and Gutierrez.
On the third issue, petitioners charge that the respondent judge lacked the
neutrality of an impartial judge. They fault the respondent judge for not giving
credence to the testimony of their surveyor that the diggings were conducted
outside the land of Legaspi. They also claim that respondent judges rulings on
objections raised by the parties were biased against them.
We have carefully examined the records and we find no sufficient basis to hold that
respondent judge should have recused himself from hearing the case. There is no
discernible pattern of bias on the rulings of the respondent judge. Bias and
partiality can never be presumed. Bare allegations of partiality will not suffice in an
absence of a clear showing that will overcome the presumption that the judge
dispensed justice without fear or favor. 24 It bears to stress again that a judges
appreciation or misappreciation of the sufficiency of evidence adduced by the
parties, or the correctness of a judges orders or rulings on the objections of
counsels during the hearing, without proof of malice on the part of respondent
judge, is not sufficient to show bias or partiality. As we held in the case ofWebb vs.
People,25 the adverse and erroneous rulings of a judge on the various motions of a
party do not sufficiently prove bias and prejudice to disqualify him. To be
disqualifying, it must be shown that the bias and prejudice stemmed from an
extrajudicial source and result in an opinion on the merits on some basis other
than what the judge learned from his participation in the case. Opinions formed in
the course of judicial proceedings, although erroneous, as long as based on the
evidence adduced, do not prove bias or prejudice. We also emphasized that
repeated rulings against a litigant, no matter how erroneously, vigorously and
consistently expressed, do not amount to bias and prejudice which can be a bases
for the disqualification of a judge.
Finally, the inhibition of respondent judge in hearing the case for damages has
become moot and academic in view of the latters death during the pendency of
the case. The main case for damages shall now be heard and tried before another
judge.
IN VIEW WHEREOF, the impugned Orders of the trial court in Civil Case No. Q-00-
40115, dated March 23 and April 4, 2000, are AFFIRMED. The presiding judge of

the Regional Trial Court of Quezon City to whom Civil Case No. Q-00-40115 was
assigned is directed to proceed with dispatch in hearing the main case for
damages. No pronouncement as to costs.
SO ORDERED.
G.R. No. 173179 October 11, 2010
MANUEL D. RECTO, CESAR A. DIGNOS, and FRANCISCO S.
AONUEVO, Petitioners,
vs.
BISHOP FEDERICO O. ESCALER, S.J., JOAQUINA De ARANAZ, FILOMENA
BAGAMASBAD, ELADIA BANGUILAN, TEODONIA BANZON, TERESITA BELEN,
REMEDIOS CALO, MANSUETA CO, ZENAIDA CRUZ, LINA DATU, AURORA
ELORIAGA, MAGDALENA FAJATIN, * LEONARDA FALLARME, CHI GANA, LUTGARDA
GARCIA, UBALDO ISAAC, CATHERINE LIM, CORAZON LORENZO, ENRIQUETA
MANABAT, GUADALUPE MATADOS, DOMINGA MENOR, EFREN MONJE, PILAR
MONJE, POMPEYA NAVAL, WILTECK ONG, ELEODORO PARENTELA, ANTONIA
PARENTELA, OLIVIA PEREZ, ALICIA QUIMSON, ELSIE RODRIGUEZ, RAFAELA
SANTOS, MELENCIA SESE, VIRGINIA SUGCANG, DIONISIA TRINIDAD, JOSELITO B.
FLORO, LOURDES FLORO, ANDREA GUTIERREZ, FENNY ESPINORIO, AND OTHERS
SIMILARLY SITUATED,Respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court. Petitioners Manuel D. Recto (Recto), Cesar A. Dignos, and Francisco S.
Aonuevo assail the Decision 1 dated February 21, 2006 of the Court of Appeals
(CA) in CA-G.R. CV No. 78227 and its Resolution 2 dated June 9, 2006, denying their
Motion for Reconsideration. The CA set aside the Judgment 3 of the Regional Trial
Court (RTC) of Quezon City, Branch 93, in Civil Case No. Q-01-43011.
The factual antecedents are as follows:
Buklod ng Pag-ibig Foundation, Inc. (Foundation) is a non-stock, non-profit
foundation, duly registered with the Securities and Exchange Commission (SEC). On
June 24, 1997, its principal co-founder and Spiritual Director, Fr. Pascual Adorable,
S.J., passed away. Fr. Nicasio Cruz, S.J. (Fr. Nic) succeeded him as the Foundations
Spiritual Director.4
However, on September 15, 1999, petitioners, as the Foundations Council of Elders
(Elders), wrote to Rev. Fr. Romeo Intengan, Jesuit Provincial of the Society of Jesus
(Jesuit Order), informing him that they were "returning" Fr. Nic to the Jesuit Order
effective September 15, 1999 since the latters vision and mission differed from
those of the Foundation. Petitioners also sent Fr. Nic a letter terminating him as the
Foundations Spiritual Director. Some members of the Foundation requested that
Fr. Nic be retained, but petitioners did not heed the request.5
Consequently, Bishop Teodoro Bacani (Bishop Bacani), as representative of then
Manila Archbishop Jaime Cardinal Sin, intervened. He reinstated Fr. Nic until the
latter could turn over the position to Bishop Federico Escaler, S.J. (Bishop Escaler),
either 30 days after March 6, 2000 or on April 15, 2000. Petitioners agreed with
Bishop Bacanis proposal.6
On May 10, 2000, acting as the Foundations Spiritual Director, Bishop Escaler
informed the Foundations "Apostles"7 that, pursuant to its By-laws, the term of the
present Elders should have ended on March 17, 2000. He then set May 19, 2000 as
the date for the selection of a new set of Elders. Bishop Escaler also sent petitioner
Recto, the Foundations Executive Director, a letter requesting for the Foundations
latest annual financial report and list of personnel. 8
Instead of complying with the letter, petitioners issued Buklod ng Pag-ibig Bulletin
Number 6, informing their members that Bishop Escaler was not their Spiritual
Director; and that the Foundation had no Spiritual Director at that moment. Bishop
Escaler reset the intended selection of Elders to May 24, 2000.9
Subsequently, petitioners submitted to the SEC the Foundations Amended By-laws,
supposedly ratified by 2/3 votes of the members who were qualified to vote in a
special meeting held on May 14, 2000. The SEC approved the same on May 16,
2000. Petitioners also issued a notice to the Foundations members, naming Fr.
Dominador Guzman as their Spiritual Director, and inviting qualified members to
attend the selection of Elders on May 24, 2000.10
On May 23, 2000, respondents filed before the SEC a Petition to Declare the Nullity
of the Amended By-laws with Prayer for the Issuance of a Temporary Restraining
Order (TRO) and/or Writ of Preliminary Injunction. Respondents alleged that the
subject Amended By-laws was void because Bishop Escaler, the Foundations
Spiritual Director, did not preside over the supposed meeting where the
amendments were approved, and the majority of qualified members was not even
notified or given the opportunity to participate in the voting. Respondents also
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 28
prayed that petitioners be restrained from conducting their scheduled selection of
Elders on May 24, 2000.11
On the same day, the SEC issued a 72-hour TRO barring petitioners from holding
the scheduled selection of Elders. On May 29, 2000, the SEC extended the TRO for
another 20 days. The SEC also directed petitioners to submit the Foundations
financial reports, and scheduled the examination of the same on June 5, 2000.12
At the hearing on the issuance of a Writ of Preliminary Injunction on May 30, 2000,
the parties agreed to respect the May 29, 2000 Order, pending determination of
the injunction case. However, on June 9, 2000, Bishop Escaler set the special
assembly for the election of the new set of Elders on June 17, 2000.13
Petitioners, in their Answer with Special Affirmative Defenses, Counterclaim and
prayer for Preliminary Injunction and Urgent Motion for the Issuance of a TRO filed
on June 13, 2000, asked that Bishop Escaler be enjoined from proceeding with the
June 17, 2000 assembly. They also asserted that the number of members qualified
to vote was 27 not 59 as claimed by respondents and that the Amended By-
laws was approved by 2/3 of said members, as required by the previous By-laws.
Petitioners specifically denied having accepted Bishop Escaler as the Foundations
Spiritual Director.14
On June 15, 2000, petitioners filed an Urgent Ex-parte Motion for the Issuance of a
Temporary Retraining Order, praying for a TRO effective only for 72 hours to
prevent respondents from conducting an election on June 17, 2000. The following
day, a hearing on petitioners motion was held. After the parties respective
counsels oral arguments, the SEC Hearing Officer ordered petitioners Urgent
Motion to be submitted for resolution.15
On June 22, 2000, a hearing on respondents application for Preliminary Injunction
was held, while hearings on petitioners own application for Preliminary Injunction
were held on June 28, and July 3 and 4, 2000.
In the meantime, Republic Act (R.A.) No. 8799 16 took effect in August 2000.
Pursuant to Section 5.2 of that law, the case was transferred to the RTC of Quezon
City, Branch 93.17
Consequently, during the August 1, 2000 hearing, the SEC Hearing Officer
submitted the issue on the issuance of Preliminary Injunction for resolution. On the
other hand, the trial court issued an Order on February 5, 2001, setting a status
hearing on May 15, 2001.18
On May 15, 2001, the RTC issued an Order 19 resolving to focus on the issues of (1)
whether or not the court should proceed to hear the case on the principal prayer
for the nullification of the Amended By-laws of the concerned corporation; and (2)
whether or not the court should proceed to resolve the injunction incident, which
appears to have been submitted for final resolution before the SEC even before the
effectivity of R.A. No. 8799. The RTC directed the parties to submit their
simultaneous memoranda on these two issues and, upon receipt thereof, to
consider these incidents submitted for resolution. The RTC also ordered
respondents to file their Comments and/or Opposition to Defendants (herein
petitioners) Motion to Expunge, and petitioners to file their Comment and/or
Opposition to respondents Motion to Admit Amended Petition, setting the hearing
for these motions on July 5, 2001.20
On July 5, 2001, the trial court submitted for resolution petitioners Motion to
Expunge from the Records Audit Report, and respondents Motion to Admit
Amended Petition.
Subsequently, on November 21, 2001, the trial court issued an order 21 denying
petitioners Motion to Expunge and respondents Motion to Admit, and resolving
to proceed to hear the case on the principal prayer for the nullification of the
second Amended By-laws, and to consider the resolution of the parties respective
applications for injunction.
On July 29, 2002, the RTC issued the assailed Judgment, 22 the dispositive portion of
which reads:
WHEREFORE, the foregoing premises considered, the court finds in part, for the
plaintiffs. The acts of the council of elders and of the general assembly held on May
3 and May 14, 2000, respectively, insofar as the amendment of the by-laws is
concerned, are considered irregular and consequently, the alleged Amended By-
laws of May 14, 2000 is declared null and void.
This is not to say that Buklod or the elders may not initiate the amendment of their
by-laws. They may do so but only in keeping with the requirements as explained
above.
The counterclaim is consequently dismissed.
No award of damages. No costs.23

The trial court noted that the only question raised in the case was the validity of
the 2000 Amended By-laws as allegedly approved in the special meeting called for
that purpose.24
Both parties appealed the Judgment to the CA.
In its assailed February 21, 2006 Decision, the CA disposed of the case in this wise:
WHEREFORE, Plaintiffs-Appellants Appeal is GRANTED. Defendants-Appellants
Appeal is accordingly DISMISSED. The assailed Judgment, dated July 29, 2002, of
the Regional Trial Court of Quezon City, Branch 93, in Civil Case No. Q[-]01-43011,
is hereby VACATED and SET ASIDE.
In view of this, the case is REMANDED to the court a quo for the required pre-trial
conference and for further proceedings.
SO ORDERED. 25
The CA held that the RTC failed to comply with Rule 4, Section 1 of the Interim
Rules of Procedure for Intra-Corporate Controversies, which provides that a pre-
trial conference is mandatory.
The CA found that, at the time of the promulgation of the Interim Rules of
Procedure for Intra-Corporate Controversies, the SEC Hearing Officer submitted for
resolution the prayer for injunction but chose not to proceed with the hearing of
the merits of the case to enable the judge to hear the case in court. Upon transfer,
the RTC did not issue an order, as required by the Rules. Instead, the RTC issued a
Judgment, wholly deciding the merits of the complaint. 26
Thus, the CA ruled that, at the time of the issuance of the RTCs Judgment, the case
was not yet ripe for decision. It also noted that there was nothing in the records to
suggest that the parties had agreed to waive their right to a pre-trial conference or
to a hearing on the merits to allow the RTC to resolve the case without complying
with the mandatory rule. The issuance of the Judgment was premature, the CA
concluded.
In this petition, petitioners seek the reversal of the CAs February 21, 2006
Decision. They pray that this Court modify the trial courts Judgment and declare
that Bishop Escaler is not and has never been the Foundations Spiritual Director;
thus, dismissing the complaint and declaring that the Foundations Amended By-
laws was duly ratified by 2/3 votes of its qualified apostles in an assembly duly
called for the purpose, and therefore, valid and effective.27
The petition has no merit.
Even a cursory examination of the issues raised immediately leads this Court to
conclude that these are questions of fact that are not within the province of this
Court to decide. More importantly, these are questions of fact that have never
been ventilated in the proper proceedings before the trial court because the case
did not even reach the pre-trial stage.
Prior to rendering the assailed Judgment, the RTC issued an Order, to wit:
This resolves the following incidents:
1. whether or not the court should proceed to hear the case on the
principal prayer for the nullification of the by-laws of BNP Foundation;
2. whether or not the court should proceed to resolve the injunction
incident which appears to have been submitted for resolution before
the Securities and Exchange Commission (SEC);
3. motion to expunge from the records the audit report that was
prepared by the petitioners and the opposition thereto;
4. motion to admit amended complaint.28
The RTC then ordered:
The case now being with the court pursuant to Republic Act No. 8799, and the
parties being both in agreement that the incidents then pending with the SEC may
now be resolved by this court, the first two issues above-listed are therefore
resolved in the affirmative.
The court therefore shall proceed to hear the case on the principal prayer for the
nullification of the second amended by-laws and shall also consider the resolution
of the incidents then pending with the SEC which involve the parties respective
applications for injunction.29
Clearly, even the RTC itself recognized the need to hear the case in order to resolve
the principal issue of the validity of the Foundations Amended By-laws. Yet, after
issuing the Order, and without any further proceedings, the RTC promulgated its
Judgment, resolving the main issues of the case.
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 29
Further, the conduct of a pre-trial is mandatory under the Interim Rules of
Procedure for Intra-Corporate Controversies. Rule 4, Section 1 of the Interim Rules
provides:
Section 1. Pre-trial conference; mandatory nature. Within five (5) days in Rule 3
hereof, whichever comes later, the court shall issue and serve an order
immediately setting the case for pre-trial conference and directing the after the
period for availment of, and compliance with, the modes of discovery prescribed
parties to submit their respective pre-trial briefs. The parties shall file with the
court and furnish each other copies of their respective pre-trial brief in such
manner as to ensure its receipt by the court and the other party at least five (5)
days before the date set for pre-trial.
Rule 4, Section 4 further states:
Sec. 4. Judgment before pre-trial. If, after submission of the pre-trial briefs, the
court determines that, upon consideration of the pleadings, the affidavits and
other evidence submitted by the parties, a judgment may be rendered, the court
may order the parties to file simultaneously their respective memoranda within a
non-extendible period of twenty (20) days from receipt of the order. Thereafter,
the court shall render judgment, either full or otherwise, not later than ninety (90)
days from the expiration of the period to file the memoranda.
However, the RTC never ordered the submission of the parties pre-trial briefs.
Neither were they made to submit their memoranda. Earlier in the proceedings,
both parties were ordered to submit their memoranda on the issue of whether the
RTC should proceed with the hearing of the case on the merits. Both parties
agreed that it should. They believed that the case was not yet ripe for final
disposition and that the RTC should proceed to hear the case on the principal
prayer for the nullification of the Amended By-laws of the Foundation.
Thus, petitioners said:
Therefore, in so far as the Petitioners [herein respondents] are concerned, there
appears to be three remaining matters that needs (sic) to be resolved: the
nullification of the by-laws, the proscription from the enforcement of the recently
amended by-laws by the respondents and the matter of the attorneys fees.
Petitioners [herein respondents] may have presented evidence on the first two but
the third cause of action does not appear to have been ventilated as yet. There is
also the matter of the compulsory counterclaim of the Respondents [herein
petitioners], which was not yet likewise heard. This would verily take this case out
of that classification of being ready for final resolution or disposition of the intra-
corporate dispute.30
On the other hand, respondents said:
However, the SEC has not ruled yet on the parties respective formal offer of
Exhibits relative to the injunction issue; and was yet to hear the main case where
one of the main reliefs prayed for was the declaration of the nullity of the assailed
amended By-laws.31
Likewise, the Judgment of the RTC is bereft of any justification for dispensing with
the pre-trial and trial. There was no discussion of any agreement by the parties to
dispense with the trial and submit the case for resolution based on the pleadings
filed. In fact, because there was no pre-trial, it remains unclear exactly what issues
are to be resolved by the trial court.
It must also be pointed out that there was a preliminary issue that of the parties
respective petitions for injunction that had to be determined before the
resolution of the main case. When the case was transferred from the SEC to the
RTC, only the matter of the petitions for preliminary injunctions had been heard
and submitted for resolution. The hearings to resolve the petition to nullify the
Foundations Amended By-laws were yet to be held.
An injunctive writ is not a judgment on the merits of the case. 32 A writ of
preliminary injunction is generally based solely on initial and incomplete evidence.
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.33lawp++il
An order granting a preliminary injunction is not a final resolution or decision
disposing of the case. It is based on a preliminary determination of the status quo
and on petitioners entitlement to the Writ.34
Thus, 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. There may be vital facts to be presented at
trial which may not be obtained or presented during the hearing on the application
for the injunctive writ.35 The trial court needs to conduct substantial proceedings in
order to put the main controversy to rest.36
As such, even as respondents claim that the RTC correctly ruled that the Amended
By-laws are not valid, they are still contesting the latters finding on the number of

qualified apostles.37 This only further underscores the need for trial to determine
which of the parties claims are true and relevant.
There are other questions raised that cannot be answered in the present petition,
and nothing less than a full-blown trial is needed in order to test the conflicting
claims of the parties.
WHEREFORE, the foregoing premises considered, the Petition for Review is
DENIED. The Decision of the Court of Appeals dated February 21, 2006 in CA-G.R.
CV. No. 78227 is hereby AFFIRMED. The Regional Trial Court of Quezon City is
directed to conduct a pre-trial in Civil Case No. Q-01-43011, and thereafter to hear
and decide the same with dispatch.
SO ORDERED.
. I
G.R. No. 181643 November 17, 2010
MICHELLE I. PINEDA, Petitioner,
vs.
COURT OF APPEALS (Former Ninth Division) and the DEPARTMENT OF
EDUCATION, represented by Assistant Secretary CAMILO MIGUEL M.
MONTESA, Respondents.
DECISION
MENDOZA, J.:
This is a petition for certiorari under Rule 65 filed by petitioner Michelle I.
Pineda (Pineda) seeking to annul and set aside the June 15, 2007 Decision of the
Court of Appeals1 (CA), which reversed the March 14, 2005 Order of the Regional
Trial Court, Branch 153, Pasig City (RTC) directing the issuance of a Writ of
Preliminary Mandatory Injunction enjoining respondent Department of
Education (DepEd) from enforcing its decision to cancel a 5-year lease of the school
canteen.
It appears from the records that on May 14, 2004, Pineda entered into a
Memorandum of Agreement (May-MOA)2with Lakandula High
School (LHS) represented by its principal, Dr. Alice B. Blas (Dr. Blas), for a five-year
lease of the school canteen with a monthly rental of P20,000.00 and an
additional P4,000.00 monthly for the schools feeding program as well as medicines
for the school clinic. Thereafter, Pineda renovated the canteen and equipped it
with new utensils, tables, chairs, and electric fans.3
On August 5, 2004, the faculty and personnel of LHS sent a letter to the Division
School Superintendent, Dr. Ma. Luisa Quiones (Dr. Quiones), questioning the
validity of the May-MOA. 4 Dr. Blas sent a letter-reply on September 17, 2004 and
an exchange of correspondence followed. 5 Meanwhile, on August 14, 2004, Pineda
and Dr. Blas executed another MOA (August-MOA)6superseding the May-MOA. This
time, the August-MOA followed the standard form under Department Order No.
95, Series of 19987 or the "Revised Implementing Guidelines for the Turnover of
School Canteens to Teachers Cooperatives."
In this regard, on October 20, 2004, Assistant Schools Division Superintendent
Isabelita M. Santos (Ms. Santos)and Administrative Officer Vicente N.
Macarubbo (Mr. Macarubbo) wrote a letter to Dr. Quiones relaying their
observations on the controversy and recommending that their findings "be
submitted to the DepEd - Central Office for its final word on the matter." 8 Ms.
Santos and Mr. Macarubbo were of the view that Dr. Blas did not violate any rule in
executing the August-MOA. They even found the lease to Pineda beneficial to the
school. Thus, Dr. Quiones wrote the DepEd seeking its decision on the matter.
On February 11, 2005, respondent DepEd, through Undersecretary Jose Luis
Martin C. Gascon (Usec. Gascon),declared the August-MOA "null and void ab initio"
and ordered it "cancelled." Pineda was also ordered to "cease and desist" from
further managing and operating the canteen. DepEd made clear that the
management and operation of the canteen should revert to the Home Economics
Department of the School. 9 This prompted Pineda to file a petition for certiorari
with prayer for temporary restraining order (TRO) and/or writ of preliminary
injunction before the RTC.
On March 14, 2005, the RTC ordered the issuance of a Writ of Preliminary
Mandatory Injunction enjoining the enforcement of Usec. Gascons
decision.10 DepEd, represented by Usec. Gascon, Dr. Quiones and Ms. Olympiada
Camilo (Ms. Camilo), who succeeded Dr. Blas as School Principal, sought the
dismissal of Pinedas petition before the RTC on the ground that the latter failed to
state a cause of action. On June 7, 2005, the trial court denied its motion. 11 For said
reason, DepEd, this time represented by Assistant Secretary Camilo Miguel M.
Montesa (Asec. Montesa), filed a petition for certiorari before the CA seeking to set
aside the March 14, 2005 and June 7, 2005 orders of the RTC.
The CA affirmed the June 7, 2005 order of the RTC denying DepEds motion to
dismiss but reversed its March 14, 2005 order granting the issuance of the Writ of
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 30
Preliminary Mandatory Injunction. According to the CA, DepEds order cancelling
the August-MOA had already been partially implemented as Pineda herself
recognized such fact in her amended petition before the RTC. In effect, this was the
status quo. In addition, the CA held that Pineda appeared to have no clear or
unmistakable right to be protected since the MOA that granted her the right to
operate the school canteen was, in fact, invalidated by the DepEd for not being
sanctioned by its existing rules and regulations. Finally, the CA also held that there
was no pressing necessity to avoid injurious consequences which would warrant
the issuance of the injunctive writ as the purported damage to Pineda, if she would
not able to operate the canteen, was readily quantifiable.12
Hence, Pineda filed this petition for certiorari relying on the following
GROUNDS:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION
WHEN INSTEAD OF DISMISSING THE PETITION FILED BY RESPONDENT
DEPARTMENT OF EDUCATION THROUGH ASSISTANT SECRETARY
CAMILO MIGUEL M. MONTESA, IT GAVE DUE COURSE TO IT,
NOTWITHSTANDING THE GLARING FACT THAT IT WAS NOT A PARTY AT
ALL IN SCA NO. 2797, HENCE, WITH NO LOCUS STANDI.
II
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION
WHEN IT DID NOT DISMISS OUTRIGHT THE PETITION SINCE NO
MOTION FOR RECONSIDERATION WAS FILED FROM THE ORDERS
DATED MARCH 14, 2005, GRANTING THE WRIT OF INJUNCTION IN
FAVOR OF HEREIN PETITIONER AND THE ORDER DATED JUNE 7, 2005,
DENYING RESPONDENTS (USEC JOSE LUIS MARTIN C. GASCON, SUPT.
MA. LUISA QUINONES AND OLYMPIADA CAMILO) MOTION TO
DISMISS, IN MANIFEST VIOLATION OF SECTION 4, RULE 65 OF THE
1997 RULES OF CIVIL PROCEDURE.
III
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION
WHEN IT DISSOLVED THE WRIT OF INJUNCTION ISSUED BY THE
REGIONAL TRIAL COURT BRANCH 153, PASIG CITY, IN SCA NO. 2797,
THEREBY UNJUSTIFIABLY INTERFERING WITH THE LOWER COURTS
DISCRETION IN ISSUING THE WRIT OF INJUNCTION IN FAVOR OF
HEREIN PETITIONER WHO HAS A CLEAR AND UNMISTAKABLE LEGAL
RIGHT TO BE AFFORDED THIS REMEDY AND CONSIDERING THAT
RESPONDENTS DID NOT FILE A MOTION TO DISSOLVE BOND WITH THE
TRIAL COURT OR AT LEAST FILED AFFIDAVITS IN SUPPORT OF THEIR
OPPOSITION.13
On November 18, 2009, after the parties had filed their respective pleadings, the
Court gave due course to the petition and ordered the parties to submit their
respective memoranda. 14
On the first ground, Pineda argues that the CA gravely abused its discretion in
entertaining the petition for certiorari of DepEd considering that Asec. Montesa
was not the proper party to file the petition. She adds that, even assuming that
DepEd had the locus standi to file said petition before the CA, Asec. Montesa was
not duly authorized to do so.
The Court cannot accommodate the view of Pineda.
In her petition for certiorari before the RTC, Pineda impleaded Usec. Gascon, Dr.
Quiones and Ms. Camilo in their official capacities as Undersecretary of DepEd,
Division Superintendent and Principal of Lakandula High School, respectively.
Although the petition mentioned that Usec. Gascon was merely a nominal party, it
stated therein that Dr. Quiones and Ms. Camilo were being sued for "having been
tasked to immediately carry out" his order of February 11, 2005. The Court is of the
view that DepEd was the proper party and Usec. Gascon, Dr. Quiones and Ms.
Camilo were just its representatives. Thus, they were sued in their official
capacities.
A review of Usec. Gascons order discloses that the cancellation of Pinedas August-
MOA was pursuant to DepEds existing guidelines on the turn over of school
canteens to teachers cooperatives, laid out in Department Order No. 95, series of
1998. He was simply applying a DepEd policy when he ordered the August-MOA
cancelled. So, what was actually being assailed by Pineda in her petition before the
RTC was the implementation of DepEds existing guidelines with the nullification of
the August-MOA entered into by Dr. Blas, then principal of LHS. 15 As Asec. Montesa
merely took over the functions of Usec. Gascon, he is certainly authorized to
institute the petition before the CA in order to advance and pursue the policies of
his office DepEd. Applying Rule 3, Section 2 of the Revised Rules of Court, DepEd

is the real party in interest for it will surely be affected, favorably or unfavorably, by
the final resolution of the case before the RTC.
Thus, it would be absurd not to recognize the legal standing of Asec. Montesa, as
representative of DepEd, but consider Dr. Quiones and Ms. Camilo as the proper
parties when they were merely tasked to implement a directive emanating from a
superior official (Asec. Montesa) of the DepEd.
On the second ground, Pineda questions DepEds failure to move for
reconsideration before going to the CA on certiorari.
The general rule is that a motion for reconsideration is a condition sine qua non
before a petition for certiorari may lie, its purpose being to grant an opportunity
for the court a quo to correct any error attributed to it by a re-examination of the
legal and factual circumstances of the case.16 There are, however, recognized
exceptions permitting a resort to the special civil action for certiorari without first
filing a motion for reconsideration. In the case of Domdom v. Sandiganbayan,17 it
was written:
The rule is, however, circumscribed by well-defined exceptions, such as where the
order is a patent nullity because the court a quo had no jurisdiction; where the
questions raised in the certiorari proceeding have been duly raised and passed
upon by the lower court, or are the same as those raised and passed upon in the
lower court; where there is an urgent necessity for the resolution of the question,
and any further delay would prejudice the interests of the Government or of the
petitioner, or the subject matter of the action is perishable; where, under the
circumstances, a motion for reconsideration would be useless; where the
petitioner was deprived of due process and there is extreme urgency for relief;
where, in a criminal case, relief from an order of arrest is urgent and the grant of
such relief by the trial court is improbable; where the proceedings in the lower
court are a nullity for lack of due process; where the proceedings were ex parte or
in which the petitioner had no opportunity to object; and where the issue raised is
one purely of law or where public interest is involved.18 (underscoring supplied)
As previously discussed, the present case concerns the implementation or
application of a DepEd policy which had been enjoined by the RTC. Certainly, there
is an urgent necessity for the resolution of the question and any further delay
would prejudice the interest of the government. Moreover, the subject matter of
the case involves the operation of the canteen of a public secondary school. This is
of public interest for it affects the welfare of the students, thus, justifying the
relaxation of the settled rule.
Still on the second ground, Pineda points out that the March 14, 2005 Order of the
RTC was received by the DepEd on March 16, 2005 and the latter filed its petition
before the CA on June 28, 2005, which was beyond the sixty (60)-day reglementary
period. Going over DepEds petition before the CA, it appears that DepEd reckoned
the 60-day period from June 28, 2005, the date of its receipt of the June 7, 2005
Order of the RTC. Pinedas Comment and Memorandum, however, did not raise
this procedural lapse as an issue. Instead, Pineda put forth her own arguments in
support of the two RTC orders.
The rule in pleadings and practice is that that no new issue in a case can be raised
in a pleading which by due diligence could have been raised in previous
pleadings.19 Thus, it is too late in the day for Pineda to question the procedural
lapse.
At any rate, the Court finds no cogent reason for the reversal and setting aside by
the CA of the writ of preliminary mandatory injunction issued by the RTC. The very
writ of preliminary injunction set aside by the CA could no longer lie for the acts
sought to be enjoined had already been accomplished or consummated. 20 The
DepEd already prohibited Pineda from operating the school canteen. As correctly
ruled by the CA in its questioned decision, since Pineda had ceased the operation
of the school canteen since 2005, the RTCs preliminary writ should be set aside as
there was nothing more to enjoin. The Court agrees with the CA when it explained:
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. Its sole objective is to preserve the status quo until the merits of the case
can be heard fully.
Status quo is defined as the last actual, peaceful, and uncontested status that
precedes the actual controversy, that which is existing at the time of the filing of
the case. Indubitably, the trial court must not make use of its injunctive relief to
alter such status.
In the case at bench, the Decision of Undersecretary Gascon dated February 11,
2005, ordering Pineda to cease and desist from operating and managing the school
canteen and to revert the management thereof to the Home Economics
Department and to the Principal, has already been partially implemented. This is
evident from the allegations of Pineda in her amended petition, to wit:
"Earlier, in the dawn of same date, 22 February 2004 (should be 2005), the guards
of Lakandula High School, taking strict orders from respondents Mrs. Camilo and
Dr. Quiones who immediately executed the assailed illegal decision from the
respondent undersecretary, prevented the canteen workers from entering the
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 31
school and the delivery of softdrinks such as Pop Cola to the petitioner. On the
same date, more canteens sprouted, in addition to those found in the H.E. and
dressmaking rooms, operated by the teachers, under the guise that they were
doing service to the students in the meantime that the canteen was closed. x x x."21
Finally, while the grant or denial of a preliminary injunction is discretionary on the
part of the trial court, grave abuse of discretion is committed when it does not
maintain the status quo which is the last actual, peaceable and uncontested status
which preceded the actual controversy. If there is such a commission, it is
correctible through a writ of certiorari.22 In this case, the status quo ante litem or
the state of affairs existing at the time of the filing of the case was that Pineda was
already prohibited from operating the school canteen. For said reason, the trial
court cannot make use of its injunctive power to change said status.23
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 167434 February 19, 2007
SPOUSES RAMON M. NISCE and A. NATIVIDAD PARAS-NISCE, Petitioners,
vs.
EQUITABLE PCI BANK, INC., Respondent.
DECISION
CALLEJO, SR., J.:
On November 26, 2002, Equitable PCI Bank 1 (Bank) as creditor-mortgagee filed a
petition for extrajudicial foreclosure before the Office of the Clerk of Court as Ex-
Officio Sheriff of the Regional Trial Court (RTC) of Makati City. It sought to foreclose
the following real estate mortgage contracts executed by the spouses Ramon and
Natividad Nisce over two parcels of land covered by Transfer Certificate of Title
(TCT) Nos. S-83466 and S-83467 of the Registry of Deeds of Rizal: one dated
February 26, 1974; two (2) sets of "Additional Real Estate Mortgage" dated
September 27, 1978 and June 3, 1996; and an "Amendment to Real Estate
Mortgage" dated February 28, 2000. The mortgage contracts were executed by the
spouses Nisce to secure their obligation under Promissory Note Nos. 1042793 and
BD-150369, including a Suretyship Agreement executed by Natividad. The
obligation of the Nisce spouses totaled P34,087,725.76 broken down as follows:
Spouses Ramon & Natividad Nisce - - - - - P17,422,285.99
Natividad P. Nisce (surety) - - - - - - - - - - US$57,306.59
and - - - - - - - - - - - - P16,665,439.772
On December 2, 2002, the Ex-Officio Sheriff set the sale at public auction at 10:00
a.m. on January 14, 2003,3 or on January 30, 2003 in the event the public auction
would not take place on the earlier setting.
On January 28, 2003, the Nisce spouses filed before the RTC of Makati City a
complaint for "nullity of the Suretyship Agreement, damages and legal
compensation" with prayer for injunctive relief against the Bank and the Ex-Officio
Sheriff. They alleged the following: in a letter4 dated December 7, 2000 they had
requested the bank (through their lawyer-son Atty. Rosanno P. Nisce) to setoff the
peso equivalent of their obligation against their US dollar account with PCI Capital
Asia Limited (Hong Kong), a subsidiary of the Bank, under Certificate Deposit No.
016125 and Account No. 090-0104 (Passbook No. 83-3041);6 the Bank accepted
their offer and requested for an estimate of the balance of their account; they
complied with the Banks request and in a letter dated February 11, 2002, informed
it that the estimated balance of their account as of December 1991 (including the
11.875% per annum interest) was US$51,000.42, 7 and that as of December 2002,
Natividads US dollar deposit with it amounted to at least P9,000,000.00; they were
surprised when they received a letter from the Bank demanding payment of their
loan account, and later a petition for extrajudicial foreclosure.
The spouses Nisce also pointed out that the petition for foreclosure filed by the
Bank included the alleged obligation of Natividad as surety for the loan of Vista
Norte Trading Corporation, a company owned and managed by their son Dino
Giovanni P. Nisce (P16,665,439.77 and US$57,306.59). They insisted, however, that
the suretyship agreement was null and void for the following reasons:
(a) x x x [I]t was executed without the knowledge and consent of
plaintiff Ramon M. Nisce, who is by law the administrator of the
conjugal partnership;
(b) The suretyship agreement did not redound to the benefit of the
conjugal partnership and therefore did not bind the same;

(c) Assuming, arguendo, that the suretyship contract was valid and
binding, any obligation arising therefrom is not covered by plaintiffs
real estate mortgages which were constituted to secure the payment of
certain specific obligations only.8
The spouses Nisce likewise alleged that since they and the Bank were creditors and
debtors with respect to each other, their obligations should have been offset by
legal compensation to the extent of their account with the Bank.
To support their plea for a writ of preliminary and prohibitory injunction, the
spouses Nisce alleged that the amount for which their property was being sold at
public auction (P34,087,725.76) was grossly excessive; the US dollar deposit of
Natividad with PCI Capital Asia Ltd. (Hong Kong), and the obligation covered by the
suretyship agreement had not been deducted. They insisted that their property
rights would be violated if the sale at public auction would push through. Thus, the
spouses Nisce prayed that they be granted the following reliefs:
(1) that upon the filing of this Complaint and/or after due notice and
summary hearing, the Honorable Court immediately issue a temporary
restraining order (TRO) restraining defendants, their representatives
and/or deputies, and other persons acting for and on their behalf from
proceeding with the extrajudicial foreclosure sale of plaintiffs
mortgaged properties on 30 January 2003 or on any other dates
subsequent thereto;
(2) that after due notice and hearing and posting of the appropriate
bond, the Honorable Court convert the TRO to a writ of preliminary
prohibitory injunction;
(3) that after trial on the merits, the Honorable Court render judgment
(a) making the preliminary injunction final and permanent;
(b) ordering defendant Bank to set off the present peso
value of Mrs. Nisces US dollar time deposit, inclusive of
stipulated interest, against plaintiffs loan obligations with
defendant Bank;
(c) declaring the Deed of Suretyship dated 25 May 1998 null
and valid and without any binding effect as to plaintiff
spouses, and ordering defendant Bank to exclude the
amounts covered by said suretyship contract from plaintiffs
obligations with defendant Bank;
(d) ordering defendant Bank to pay plaintiffs the following
sums:
(i) at least P3,000,000.00 as moral damages;
(ii) at least P1,500,000.00 as exemplary damages;
and
(iii) at least P500,000.00 as attorneys fees and for
other expenses of litigation.
Plaintiffs further pray for costs of suit and such other reliefs as may be deemed just
and equitable.9
On same day, the Bank filed an "Amended Petition" with the Office of the
Executive Judge for extrajudicial foreclosure of the Real Estate Mortgage to satisfy
the spouses loan account of P30,533,552.24, exclusive of interests, penalties and
other charges; and the amounts of P16,665,439.77 and US$57,306.59 covered by
the suretyship agreement executed by Natividad Nisce.10
In the meantime, the parties agreed to have the sale at public auction reset to
January 30, 2003.
In its Answer to the complaint, the Bank alleged that the spouses had no cause of
action for legal compensation since PCI Capital was a different corporation with a
separate and distinct personality; if at all, offsetting may occur only with respect to
the spouses US$500.00 deposit account in its Paseo de Roxas branch.
In the meantime, the Ex-Officio Sheriff set the sale at public auction at 10:00 a.m.
on March 5 and 27, 2003.11 The spouses Nisce then filed a Supplemental Complaint
with plea for a temporary restraining order to enjoin the sale at public
auction.12 Thereafter, the RTC conducted hearings on the plaintiffs plea for a
temporary restraining order, and the parties adduced testimonial and documentary
evidence on their respective arguments.
The Case for the Spouses Nisce
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 32
Natividad frequently traveled abroad and needed a facility with easy access to
foreign exchange. She inquired from E.P. Nery, the Bank Manager for PCI Bank
Paseo de Roxas Branch, about opening an account. He assured her that she would
be able to access it from anywhere in the world. She and Nery also agreed that any
balance of account remaining at maturity date would be rolled over until further
instructions, or until she terminated the facility. 13 Convinced, Natividad deposited
US$20,500.00 on July 19, 1984, and was issued Passbook No. 83-3041. 14 Upon her
request, the bank transferred the US$20,000.00 to PCI Capital Asia Ltd. in Hong
Kong via cable order.15
On July 11, 1996, the spouses Nisce secured a P20,000,000.00 loan from the Bank
under Promissory Note No. BD-150369.16 The maturity date of the loan was July
11, 2001, payable in monthly installments at 16.731% interest per annum. To
secure the payment of the loan account, they executed an Amendment to the Real
Estate Mortgage over the properties 17 located in Makati City covered by TCT Nos. S-
83466 and S-83467.18 They later secured another loan of P13,089,936.90 on March
1, 2000 (to mature on March 1, 2005) payable quarterly at 13.9869% interest per
annum; this loan agreement is evidenced by Promissory Note (PN) No.
104279319 and covered by a Real Estate Mortgage 20 executed on February 28, 2000.
They made a partial payment ofP13,866,666.50 on the principal of their loan
account covered by PN No. BD-150369, and P5,348,239.82 on the
interests.21 These payments are evidenced by receipts and checks. 22 However, there
were payments totalingP4,600,000.00 received by the Bank but were not covered
by checks or receipts. 23 As of September 2000, the balance of their loan account
under PN No. BD-150369 was only P4,333,333.46.24 They also made partial
payment on their loan account under PN No. 1042793 which, as of May 30, 2001,
amounted to P2,218,793.61.25
On July 20, 1984, PCI Capital issued Certificate of Deposit No. CD-01612; 26 proof of
receipt of the US$20,000.00 transferred to it by PCI Bank Paseo de Roxas Branch as
requested by Natividad. The deposit account was to earn interest at the rate of
11.875% per annum, and would mature on October 22, 1984, thereafter to be
payable at the office of the depositary in Hong Kong upon presentation of the
Certificate of Deposit.
In June 1991, two sons of the Nisce spouses were stranded in Hong Kong.
Natividad called the Bank and requested for a partial release of her dollar deposit
to her sons. However, she was informed that according to its computer records, no
such dollar account existed. Sometime in November 1991, she submitted her US
dollar passbook with a xerox copy of the Certificate of Deposit for the PCIB to
determine the whereabouts of the account.27 She reiterated her request to the
Bank on January 27, 199228 and September 11, 2000.29
In the meantime, in 1994, the Equitable Banking Corporation and the PCIB were
merged under the corporate name Equitable PCI Bank.
In a letter dated December 7, 2000, Natividad confirmed to the Bank, through Ms.
Shellane R. Casaysayan, her offer to settle their loan account by offsetting the peso
equivalent of her dollar account with PCI Capital under Account No. 090-
0104.30 Their son, Atty. Rosanno Nisce, later wrote the Bank, declaring that the
estimated balance of the US dollar account with PCI Capital as of December 1991
was US$51,000.42.31 Atty. Nisce corroborated this in his testimony, and stated that
Ms. Casaysayan had declared that she would refer the matter to her superiors. 32 A
certain Rene Esteven also told him that another offer to setoff his parents account
had been accepted, and he was assured that its implementation was being
processed.33 On cross examination, Atty. Nisce declared that there was no response
to his request for setoff,34 and that Esteven assured him that the Bank would look
for the records of his mothers US dollar savings deposit. 35 He was later told that
the Bank had accepted the offer to setoff the account.36
The Case for the Bank
The Bank adduced evidence that, as of January 31, 2003, the balance of the
spouses account under the two promissory notes, including interest and penalties,
was P30,533,552.24.37 It had agreed to restructure their loans on March 31, 1998,
but they nevertheless failed to pay despite repeated demands. 38 The spouses had
also been furnished with a statement of their account as of June 2001. Thus, under
the terms of the Real Estate Mortgage and Promissory Notes, it had the right to the
remedy of foreclosure. It insisted that there is no showing in its records that the
spouses had delivered checks amounting to P4,600,000.00.39
According to the Bank, Natividads US$20,000.00 deposit with the PCIB Paseo de
Roxas branch was transferred to PCI Capital via cable order, 40 and that it later
issued Certificate of Deposit No. 01612 (Non-transferrable). 41 In a letter dated May
9, 2001, it informed Natividad that it had acted merely as a conduit in facilitating
the transfer of the funds, and that her deposit was made with PCI Capital and not
with PCIB. PCI Capital had a separate and distinct personality from the PCIB, and a
claim against the former cannot be made against the latter. It was later advised
that PCI Capital had already ceased operations.42
The spouses Nisce presented rebuttal documentary evidence to show that PCI
Capital was registered in Hong Kong as a corporation under Registration No. 84555
on February 27, 198943 with an authorized capital stock of 50,000,000 (with par
value of HKD1.00); the PCIB subscribed to 29,039,993 issued shares at the par
value of HKD1.00 per share; 44 on October 25, 2004, the corporate name of PCI

Capital was changed to PCI Express Padala (HK) Ltd.; 45 and the stockholdings of
PCIB remained at 29,039,999 shares.46
On March 24, 2003, the RTC issued an Order 47 granting the spouses Nisces plea for
a writ of preliminary injunction on a bond of P10,000,000.00. The dispositive
portion of the Order reads:
WHEREFORE, in order not to render the judgment ineffectual, upon filing by the
plaintiffs and the approval thereof by the court of a bond in the amount of
Php10,000,000.00, which shall answer for any damage should the court finally
decide that plaintiffs are not entitled thereto, let a writ of preliminary injunction
issue enjoining defendants Equitable-PCI Bank, Atty. Engracio M. Escasinas, Jr., and
any person or entity acting for and in their behalf from proceeding with the
extrajudicial foreclosure sale of TCT Nos. 437678 and 437679 registered in the
names of the plaintiffs.48
After weighing the parties arguments along with their documentary evidence, the
RTC declared that justice would be best served if a writ of preliminary injunction
would be issued to preserve the status quo. It had yet to resolve the issue of setoff
since only Natividad dealt with the Bank regarding her dollar account. It also had to
resolve the issue of whether the Bank had failed to credit the amount
of P4,600,000.00 to the spouses Nisces account under PN No. BD-150369, and
their claim that the Bank had effectively accelerated the respective maturity dates
of their loan.49 The spouses Nisce posted the requisite bond which was approved
by the RTC.1awphi1.net
The Bank opted not to file a motion for reconsideration of the order, and instead
assailed the trial courts order before the CA via petition for certiorari under Rule
65 of the Rules of Court. The Bank alleged that the RTC had acted without or in
excess of its jurisdiction, or with grave abuse of its discretion amounting to lack or
excess of jurisdiction when it issued the assailed order; 50 the spouses Nisce had
failed to prove the requisites for the issuance of a writ of preliminary injunction;
respondents claim that their account with petitioner had been extinguished by
legal compensation has no factual and legal basis. It further asserted that
according to the evidence, Natividad made the US$20,000.00 deposit with PCI
Capital before it merged with Equitable Bank hence, the Bank was not the debtor
of Natividad relative to the dollar account. The Bank cited the ruling of this Court in
Escao v. Heirs of Escao and Navarro 51 to support its arguments. It insisted that
the spouses Nisce had failed to establish "irreparable injury" in case of denial of
their plea for injunctive relief.
The spouses, for their part, pointed out that the Bank failed to file a motion for
reconsideration of the trial courts order, a condition sine qua non to the filing of a
petition for certiorari under Rule 65 of the Rules of Court. Moreover, the error
committed by the trial court is a mere error of judgment not correctible by
certiorari; hence, the petition should have been dismissed outright by the CA. They
reiterated their claim that they had made a partial payment of P4,600,000.00 on
their loan account which petitioner failed to credit in their favor. The Bank had
agreed to debit their US dollar savings deposit in the PCI Capital as payment of
their loan account. They insisted that they had never deposited their US dollar
account with PCI Capital but with the Bank, and that they had never defaulted on
their loan account. Contrary to the Banks claim, they would have suffered
irreparable injury had the trial court not enjoined the extrajudicial foreclosure of
the real estate mortgage.
On December 22, 2004, the CA rendered judgment granting the petition and
nullifying the assailed Order of the RTC. 52 The appellate court declared that a
petition for certiorari under Rule 65 of the Rules of Court may be filed despite the
failure to file a motion for reconsideration, particularly in instances where the issue
raised is one of law; where the error is patent; the assailed order is void, or the
questions raised are the same as those already ruled upon by the lower court.
According to the appellate court, the issue raised before it was purely one of law:
whether the loan account of the spouses was extinguished by legal compensation.
Thus, a motion for the reconsideration of the assailed order was not a prerequisite
to a petition for certiorari under Rule 65.
The appellate court further declared that the trial court committed grave abuse of
its discretion in issuing the assailed order, since no plausible reason was given by
the spouses Nisce to justify the injunction of the extrajudicial foreclosure of the
real estate mortgage. Given their admission that they had not settled the
obligations secured by the mortgage, the Bank had a clear right to seek the remedy
of foreclosure.
The CA further declared as devoid of factual basis the spouses Nisces argument
that the Bank should have applied, by way of legal compensation, the peso
equivalent of their time deposit with PCI Capital as partial settlement of their
obligations. It held that for compensation to take place, the requirements set forth
in Articles 1278 and 1279 of the Civil Code of the Philippines must be present; in
this case, the parties are not mutually creditors and debtors of each other. It
pointed out that the time deposit which the spouses Nisce sought to offset against
their obligations to the Bank is maintained with PCI Capital. Even if PCI Capital is a
subsidiary of the Bank, compensation cannot validly take place because the Bank
and PCI Capital are two separate and distinct corporations. It pointed out the
settled principle "that a corporation has a personality separate and distinct from its
stockholders and from other corporations to which it may be connected."
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 33
The CA further declared that the alleged P4,600,000.00 payment on PN No. BD-
150369 was not pleaded in the spouses complaint and supplemental complaint
before the court a quo. What they alleged, aside from legal compensation, was
that the mortgage is not liable for the obligation of Natividad Nisce as surety for
the loans obtained by a trading firm owned and managed by their son. The CA
further pointed out that the Bank precisely amended the petition for foreclosure
sale by deleting the claim for Natividads obligation as surety. The appellate court
concluded that the injunctive writ was issued by the RTC without factual and legal
basis.53
The spouses Nisce moved to have the decision reconsidered, but the appellate
court denied the motion. They thus filed the instant petition for review on the
following grounds:
5.1. THE HONORABLE COURT OF APPEALS ERRED IN TAKING
COGNIZANCE OF THE PETITION FOR CERTIORARI DESPITE THE BANKS
FAILURE TO FILE A MOTION FOR RECONSIDERATION WITH THE TRIAL
COURT.
5.2. THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR WHEN IT PREMATURELY RULED ON THE MERITS OF THE MAIN
CASE.
5.3. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
RESPONDENT JUDGE HAD COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING A
TEMPORARY RESTRAINING ORDER AND A WRIT OF PRELIMINARY
INJUNCTION IN FAVOR OF THE SPOUSES NISCE.54
Petitioners aver that the CA erred in not dismissing respondent Banks petition for
certiorari outright because of the absence of a condition precedent: the filing of a
motion for reconsideration of the assailed Order of the RTC before filing the
petition for certiorari in the CA. They insist that respondent banks failure to file a
motion for reconsideration of the assailed Order deprived the RTC of its option to
resolve the issue of whether it erred in issuing the writ of preliminary injunction in
their favor.
Petitioners insist that in resolving whether a petition for a writ of preliminary
injunction should be granted, the trial court and the appellate court are not to
resolve the merits of the main case. In this case, however, the CA resolved the
bone of contention of the parties in the trial court: whether the loan account of
petitioners with respondent bank had been extinguished by legal compensation
against petitioner Natividad Nisces US dollar savings account with PCI Capital in
Hong Kong. The CA reversed the assailed order of the trial court by resolving the
main issue in the trial court on its merits, and declaring that the US dollar savings
deposit of the petitioner Natividad Nisce with the PCI Capital cannot be used to
offset the loan account of petitioners with respondent bank. In fine, according to
petitioners, the CA preempted the ruling of the RTC on the main issue even before
the parties could be given an opportunity to complete the presentation of their
respective evidences. Petitioners point out that in the assailed Order, the RTC
declared that to determine whether respondent had credited petitioners for the
amount ofP4,600,000.00 under PN No. BD-150369 and whether respondent as
mortgagee-creditor accelerated the maturities of the two (2) promissory notes
executed by petitioner, there was a need for a full-blown trial and an exhaustive
consideration of the evidence of the parties.
Petitioners further insist that a petition for a writ of certiorari is designed solely to
correct errors of jurisdiction and not errors of judgment, such as errors in the
findings and conclusions of the trial court. Petitioners maintain that the trial courts
erroneous findings and conclusions (according to respondent bank) are not the
proper subjects for a petition for certiorari. Contrary to the findings of the CA, they
did not admit in the trial court that they were in default in the payment of their
loan obligations. They had always maintained that they had no outstanding
obligation to respondent bank precisely because their loan account had been
offset by the US dollar deposit of petitioner Natividad Nisce, and that they had
made check payments of P4,600,000.00 which respondent bank had not credited
in their favor. Likewise erroneous is the CA ruling that they would not suffer
irreparable damage or injury if their properties would be sold at public auction
following the extrajudicial foreclosure of the mortgage. Petitioners point out that
their conjugal home stands on the subject properties and would be lost if sold at
public auction. Besides, petitioners aver, the injury to respondent bank resulting
from the issuance of a writ of preliminary injunction is amply secured by
the P10,000,000.00 injunction bond which they had posted.
For its part, respondent avers that, as held by the CA, the requirement of the filing
of a motion for reconsideration of the assailed Order admits of exceptions, such as
where the issue presented in the appellate court is the same issue presented and
resolved by the trial court. It insists that petitioners failed to prove a clear legal
right to injunctive relief; hence, the trial court committed grave abuse of discretion
in issuing a writ of preliminary injunction.
Respondent maintains that the sole issue involved in the petition for certiorari of
respondent in the CA was whether or not the trial court committed grave abuse of
its discretion in issuing the writ of preliminary injunction. Necessarily, the CA would
have to delve into the circumstances behind such issuance. In so doing, the CA had
to consider and calibrate the testimonial and documentary evidence adduced by

the parties. However, the RTC and the CA did not resolve with finality the threshold
factual and legal issue of whether the loan account of petitioners had been paid in
full before it filed its petition for extrajudicial foreclosure of the real estate
mortgage.
The Ruling of the Court
The Petition in the
Court of Appeals
Not Premature
The general rule is that before filing a petition for certiorari under Rule 65 of the
Rules of Court, the petitioner is mandated to comply with a condition precedent:
the filing of a motion for reconsideration of the assailed order, and the subsequent
denial of the court a quo. 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 public respondent an
opportunity to correct any actual error attributed to it by way of re-examination of
the legal and factual issues.55 However, the rule is subject to the following
recognized exceptions:
(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;
(b) where the questions raised in the certiorari proceeding have been duly raised
and passed upon by the lower court, or are the same as those raised and passed
upon in the lower court; (c) where there is an urgent necessity for the resolution of
the question and any further delay would prejudice the interests of the
Government or of the petitioner or the subject matter of the action is perishable;
(d) where, under the circumstances, a motion for reconsideration would be
useless; (e) where petitioner was deprived of due process and there is extreme
urgency for relief; (f) where, in a criminal case, relief from an order of arrest is
urgent and the granting of such relief by the trial court is improbable; (g) where the
proceedings in the lower court are a nullity for lack of due process; (h) where the
proceedings was ex parte or in which the petitioner had no opportunity to object;
and (i) where the issue raised is one purely of law or public interest is involved. 56
As will be shown later, the March 24, 2003 Order of the trial court granting
petitioners plea for a writ of preliminary injunction was issued with grave abuse of
discretion amounting to excess or lack of jurisdiction and thus a nullity. If the trial
court issues a writ of preliminary injunction despite the absence of proof of a legal
right and the injury sustained by the plaintiff, the writ is a nullity. 57
Petitioners Are Not
Entitled to a Writ of
Preliminary Prohibitory
Injunction
Section 3, Rule 58 of the Rules of Court provides that a preliminary injunction may
be granted when the following have been 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) That the commission, continuance or nonperformance of the act or
acts complained of during the litigation would probably work injustice
to the applicant; or
(c) 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 tendering to render the
judgment ineffectual.
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. The exercise of
sound judicial discretion by the lower court should not be interfered with except in
cases of manifest abuse. Injunction is a preservative remedy for the protection of
the parties substantive rights and interests. The sole aim of a preliminary
injunction is to preserve the status quo within the last actual status that preceded
the pending controversy until the merits of the case can be heard fully. Moreover, a
petition for a preliminary injunction is an equitable remedy, and one who comes to
claim for equity must do so with clean hands. It is to be resorted to by a litigant to
prevent or preserve a right or interest where there is a pressing necessity to avoid
injurious consequences which cannot be remedied under any standard of
compensation. A petition for a writ of preliminary injunction rests upon an alleged
existence of an emergency or of a special reason for such a writ before the case
can be regularly tried. By issuing a writ of preliminary injunction, the court can
thereby prevent a threatened or continued irreparable injury to the plaintiff before
a judgment can be rendered on the claim.58
The plaintiff praying for a writ of preliminary injunction must further establish that
he or she has a present and unmistakable right to be protected; that the facts
against which injunction is directed violate such right; 59 and there is a special and
paramount necessity for the writ to prevent serious damages. In the absence of
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 34
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. Thus, where the
plaintiffs right is doubtful or disputed, a preliminary injunction is not proper. The
possibility of irreparable damage without proof of an actual existing right is not a
ground for a preliminary injunction.60
However, to establish the essential requisites for a preliminary injunction, the
evidence to be submitted by the plaintiff need not be conclusive and
complete.61 The plaintiffs are only required to show that they have an ostensible
right to the final relief prayed for in their complaint. 62 A writ of preliminary
injunction is generally based solely on initial or incomplete evidence. 63 Such
evidence need only be a sampling intended merely to give the court an evidence of
justification for a preliminary injunction pending the decision on the merits of the
case, and is not conclusive of the principal action which has yet to be decided. 64
It bears stressing that findings of the trial court granting or denying a petition for a
writ of preliminary injunction based on the evidence on record are merely
provisional until after the trial on the merits of the case shall have been
concluded.65
The trial court, in granting or dismissing an application for a writ of preliminary
injunction based on the pleadings of the parties and their respective evidence
must state in its order the findings and conclusions based on the evidence and the
law. This is to enable the appellate court to determine whether the trial court
committed grave abuse of its discretion amounting to excess or lack of jurisdiction
in resolving, one way or the other, the plea for injunctive relief. The trial courts
exercise of its judicial discretion whether to grant or deny an application for a writ
of preliminary injunction involves the assessment and evaluation of the evidence,
and its findings of facts are ordinarily binding and conclusive on the appellate court
and this Court.66
We agree with respondents contention that as creditor-mortgagee, it has the right
under the real estate mortgage contract and the amendment thereto to foreclose
extrajudicially, the real estate mortgage and sell the property at public auction,
considering that petitioners had failed to pay their loans, plus interests and other
incremental amounts as provided for in the deeds. Petitioners contend, however,
that if respondent bank extrajudicially forecloses the real estate mortgage and has
petitioners property sold at public auction for an amount in excess of the balance
of their loan account, petitioners contractual and substantive rights under the real
estate mortgage would be violated; in such a case, the extrajudicial foreclosure
sale may be enjoined by a writ of preliminary injunction.
Respondent bank sought the extrajudicial foreclosure of the real estate mortgage
and was to sell the property at public auction for P30,533,552.24. The amount is
based on Promissory Notes No. 1042793 and BD-150369, interests, penalty
charges, and attorneys fees, as of January 31, 2003, exclusive of all interests,
penalties, other charges, and foreclosure costs accruing thereafter. 67 Petitioners
asserted before the trial court that respondents sought the extrajudicial
foreclosure of the mortgaged deed for an amount far in excess of what they owed,
because the latter failed to credit P4,600,000.00 paid in checks but without any
receipts having been issued therefor; and the P9,000,000.00 peso equivalent of the
US$20,000.00 deposit of petitioner Natividad Nisce with PCIB under Passbook No.
83-3041 and Certificate of Deposit No. CD-01612 issued by PCI Capital on July 23,
1984. Petitioners maintain that the US$20,000.00 dollar deposit should be setoff
against their account with respondent against their loan account, on their claim
that respondent is their debtor insofar as said deposit is concerned.
It was the burden of petitioners, as plaintiffs below, to adduce preponderant
evidence to prove their claim that respondent bank was the debtor of petitioner
Natividad Nisce relative to her dollar deposit with PCIB, and later transferred to PCI
Capital in Hong Kong, a subsidiary of respondent Bank. Petitioners, however, failed
to discharge their burden.
Under Article 1278 of the New Civil Code, compensation shall take place when two
persons, in their own right, are creditors and debtors of each other. In order that
compensation may be proper, petitioners were burdened to establish the
following:
(1) That each one of the obligors be bound principally, and that he be at
the same time a principal creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same quality if
the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy,
commenced by third persons and communicated in due time to the
debtor.68
Compensation takes effect by operation of law when all the requisites mentioned
in Article 1279 of the New Civil Code are present and extinguishes both debts to

the concurrent amount even though the creditors and debtors are not aware of
the compensation. Legal compensation operates even against the will of the
interested parties and even without their consent. 69 Such compensation takes
place ipso jure; its effects arise on the very day on which all requisites concur. 70
As its minimum, compensation presupposes two persons who, in their own right
and as principals, are mutually indebted to each other respecting equally
demandable and liquidated obligations over any of which no retention or
controversy commenced and communicated in due time to the debtor exists.
Compensation, be it legal or conventional, requires confluence in the parties of the
characters of mutual debtors and creditors, although their rights as such creditors
or their obligations as such debtors need not spring from one and the same
contract or transaction.71
Article 1980 of the New Civil Code provides that fixed, savings and current deposits
of money in banks and similar institutions shall be governed by the provisions
concerning simple loans. Under Article 1953, of the same Code, a person who
secures a loan of money or any other fungible thing acquires the ownership
thereof, and is bound to pay the creditor an equal amount of the same kind and
quality. The relationship of the depositors and the Bank or similar institution is that
of creditor-debtor. Such deposit may be setoff against the obligation of the
depositor with the bank or similar institution.
When petitioner Natividad Nisce deposited her US$20,500.00 with the PCIB on July
19, 1984, PCIB became the debtor of petitioner. However, when upon petitioners
request, the amount of US$20,000.00 was transferred to PCI Capital (which
forthwith issued Certificate of Deposit No. 01612), PCI Capital, in turn, became the
debtor of Natividad Nisce. Indeed, a certificate of deposit is a written
acknowledgment by a bank or borrower of the receipt of a sum of money or
deposit which the Bank or borrower promises to pay to the depositor, to the order
of the depositor; or to some other person; or to his order whereby the relation of
debtor and creditor between the bank and the depositor is created. 72 The issuance
of a certificate of deposit in exchange for currency creates a debtor-creditor
relationship.73
Admittedly, PCI Capital is a subsidiary of respondent Bank. Even then, PCI Capital
[PCI Express Padala (HK) Ltd.] has an independent and separate juridical
personality from that of the respondent Bank, its parent company; hence, any
claim against the subsidiary is not a claim against the parent company and vice
versa.74 The evidence on record shows that PCIB, which had been merged with
Equitable Bank, owns almost all of the stocks of PCI Capital. However, the fact that
a corporation owns all of the stocks of another corporation, taken alone, is not
sufficient to justify their being treated as one entity. If used to perform legitimate
functions, a subsidiarys separate existence shall be respected, and the liability of
the parent corporation, as well as the subsidiary shall be confined to those arising
in their respective business.75 A corporation has a separate personality distinct
from its stockholders and from other corporations to which it may be conducted.
This separate and distinct personality of a corporation is a fiction created by law for
convenience and to prevent injustice.
This Court, in Martinez v. Court of Appeals 76 held that, being a mere fiction of law,
peculiar situations or valid grounds can exist to warrant, albeit sparingly, the
disregard of its independent being and the piercing of the corporate veil. The veil
of separate corporate personality may be lifted when, inter alia, the corporation is
merely an adjunct, a business conduit or an alter ego of another corporation or
where the corporation is so organized and controlled and its affairs are so
conducted as to make it merely an instrumentality, agency, conduit or adjunct of
another corporation; or when the corporation is used as a cloak or cover for fraud
or illegality; or to work injustice; or where necessary to achieve equity or for the
protection of the creditors. In those cases where valid grounds exist for piercing
the veil of corporate entity, the corporation will be considered as a mere
association of persons. The liability will directly attach to them.77
The Court likewise declared in the same case that the test in determining the
application of the instrumentality or alter ego doctrine is as follows:
1. Control, not mere majority or complete stock control, but complete
dominion, not only of finances but of policy and business practice in
respect to the transaction attacked so that the corporate entity as to
this transaction had at the time no separate mind, will or existence of
its own;
2. Such control must have been used by the defendant to commit fraud
or wrong, to perpetuate the violation of a statutory or other positive
legal duty, or dishonest and unjust act in contravention of plaintiffs
legal rights; and
3. The aforesaid control and breach of duty must proximately cause the
injury or unjust loss complaint of.
The Court emphasized that the absence of any one of these elements prevents
"piercing the corporate veil." In applying the "instrumentality" or "alter ego"
doctrine, the courts are concerned with reality and not form, with how the
corporation operated and the individual defendants relationship to that
operation.78
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 35
Petitioners failed to adduce sufficient evidence to justify the piercing of the veil of
corporate entity and render respondent Bank liable for the US$20,000.00 deposit
of petitioner Natividad Nisce as debtor.
On hindsight, petitioners could have spared themselves the expenses and
tribulation of a litigation had they just withdrawn their deposit from the PCI Capital
and remitted the same to respondent. However, petitioner insisted on their
contention of setoff.
On the P4,600,000.00 paid in checks allegedly remitted by petitioners to
respondent in partial payment of their loan account, petitioners failed to adduce in
evidence the checks to show that, indeed, the checks were drawn by petitioners
and delivered to respondent, and that respondent was able to cash the checks. The
only evidence adduced by petitioners is a piece of paper listing the serial numbers
of the checks and the amount of each check:
PAYMENTS MADE & RECEIVED BY EBC BUT W/O RECEIPTS
1. Dec. 29, 1997 - EBC-0000039462 - P2,000,000.00
2. Jan. 22, 1998 - EBC-213016118C - 1,000,000.00
3. Feb. 24, 1998 - UB -0000074619 - 800,000.00
4. Mar. 23, 1998 - EBC-213016121C - 800,000.00
79
P4,600,000.00
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The
Decision of the Court of Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED.
GR. No. 197472
REPUBLIC OF THE PHILIPPINES, represented by Commander Raymond Alpuerto of
the Naval Base Camillo Osias, Port San Vicente, Sta. Ana, Cagayan, Petitioner,
vs.
REV. CLAUDIO R. CORTEZ, SR., Respondent.
DECISION
DEL CASTILLO, J.:
An inalienable public land cannot be appropriated and thus may not be the proper
object of possession. Hence, injunction cannot be issued in order to protect ones
alleged right of possession over the same.
This Petition for Review on Certiorari1 assails the June 29, 2011 Decision2 of the
Court of Appeals (CA) in CA-GR. CV No. 89968, which dismissed the appeal
therewith and affirmed the July 3, 2007 Decision 3 of the Regional Trial Court (RTC)
of Aparri, Cagayan, Branch 8 in Spl. Civil Action Case No. II-2403.
Factual Antecedents
Respondent Rev. Claudio R. Cortez, Sr. (Rev. Cortez), a missionary by vocation
engaged in humanitarian and charitable activities, established an orphanage and
school in Punta Verde, Palaui Island, San Vicente, Sta. Ana, Cagayan. He claimed
that since 1962, he has been in peaceful possession of about 50 hectares of land
located in the western portion of Palaui Island in Sitio Siwangag, Sta. Ana, Cagayan
which he, with the help of Aetas and other people under his care, cleared and
developed for agricultural purposes in order to support his charitable,
humanitarian and missionary works. 4
On May 22, 1967, President Ferdinand E. Marcos issued Proclamation No. 201
reserving for military purposes a parcel of the public domain situated in Palaui
Island. Pursuant thereto, 2,000 hectares of the southern half portion of the Palaui
Island were withdrawn from sale or settlement and reserved for the use of the
Philippine Navy, subject, however, to private rights if there be any.
More than two decades later or on August 16, 1994, President Fidel V. Ramos
issued Proclamation No. 447 declaring Palaui Island and the surrounding waters
situated in the Municipality of Sta. Ana, Cagayan as marine reserve. Again subject
to any private rights, the entire Palaui Island consisting of an aggregate area of
7,415.48 hectares was accordingly reserved as a marine protected area.

On June 13, 2000, Rev. Cortez filed a Petition for Injunction with Prayer for the
Issuance of a Writ of Preliminary Mandatory Injunction 5 against Rogelio C. Bias
(Bias) in his capacity as Commanding Officer of the Philippine Naval Command in
Port San Vicente, Sta. Ana, Cagayan.1wphi1 According to him, some members of
the Philippine Navy, upon orders of Bias, disturbed his peaceful and lawful
possession of the said 50-hectare portion of Palaui Island when on March 15, 2000,
they commanded him and his men, through the use of force and intimidation, to
vacate the area. When he sought assistance from the Office of the Philippine Naval
Command, he was met with sarcastic remarks and threatened with drastic military
action if they do not vacate. Thus, Rev. Cortez and his men were constrained to
leave the area. In view of these, Rev. Cortez filed the said Petition with the RTC
seeking preliminary mandatory injunction ordering Bias to restore to him
possession and to not disturb the same, and further, for the said preliminary writ,
if issued, to be made permanent.
Proceedings before the Regional Trial Court
After the conduct of hearing on the application for preliminary mandatory
injunction6 and the parties submission of their respective memoranda, 7 the RTC
issued an Order8 dated February 21, 2002 granting the application for a writ of
preliminary mandatory injunction. However, the same pertained to five hectares
(subject area) only, not to the whole 50 hectares claimed to have been occupied by
Rev. Cortez, viz.:
It should be noted that the claim of [Rev. Cortez] covers an area of 50 hectares
more or less located at the western portion of Palaui Island which is within the
Naval reservation. [Rev. Cortez] presented what he called as a survey map (Exh.
"H") indicating the location of the area claimed by the Church of the Living God
and/or Rev. Claudio Cortez with an approximate area of 50 hectares identified as
Exh. "H-4". However, the Survey Map allegedly prepared by [a] DENR personnel is
only a sketch map[,] not a survey map as claimed by [Rev. Cortez]. Likewise, the
exact boundaries of the area [are] not specifically indicated. The sketch only shows
some lines without indicating the exact boundaries of the 50 hectares claimed by
[Rev. Cortez]. As such, the identification of the area and its exact boundaries have
not been clearly defined and delineated in the sketch map. Therefore, the area of
50 hectares that [Rev. Cortez] claimed to have peacefully and lawfully possessed
for the last 38 years cannot reasonably be determined or accurately identified.
For this reason, there is merit to the contention of [Bias] that [Rev. Cortez] claim
to the 50 hectares of land identified as Exh. ["]H-4" is unclear and ambiguous. It is
a settled jurisprudence that mandatory injunction is the strong arm of equity that
never ought to be extended unless to cases of great injury, where courts of law
cannot afford an adequate and commensurate remedy in damages. The right must
be clear, the injury impending or threatened, so as to be averted only by the
protecting preventive process of injunction. The reason for this doctrine is that
before the issue of ownership is determined in the light of the evidence presented,
justice and equity demand that the [status quo be maintained] so that no
advantage may be given to one to the prejudice of the other. And so it was ruled
that unless there is a clear pronouncement regarding ownership and possession of
the land, or unless the land is covered by the torrens title pointing to one of the
parties as the undisputed owner, a writ of preliminary injunction should not issue
to take the property out of possession of one party to place it in the hands of
another x x x.
Admittedly, the documentary exhibits of [Rev. Cortez] tended only to show that
[he] has a pending application of patent with the DENR. Even so, [Rev. Cortez]
failed to present in evidence the application for patent allegedly filed by [him]
showing that he applied for patent on the entire 50 hectares of land which he
possessed or occupied for a long period of time. Under the circumstances,
therefore, the title of petitioner to the 50 hectares of land in Palaui Island remains
unclear and doubtful, and [is] seriously disputed by the government.
More significantly, at the time that Proc. No. 201 was issued on May 22, 1967, [Rev.
Cortez] has not perfected his right over the 50 hectares of land nor acquired any
vested right thereto considering that he only occupied the land as alleged by him in
1962 or barely five (5) years before the issuance of the Presidential Proclamation.
Proclamation No. 201 had the effect of removing Palaui Island from the alienable
or disposable portion of the public domain and therefore the island, as of the date
of [the] issuance [of the proclamation], has ceased to be disposable public land.
However, the court is not unmindful that [Rev. Cortez] has lawfully possessed and
occupied at least five (5) hectares of land situated at the western portion of the
Palaui Island identified as Exh "H-4". During the hearing, Cmdr.
Rogelio Bias admitted that when he was assigned as Commanding Officer in
December 1999, he went to Palaui Island and [saw only] two (2) baluga families
tilling the land consisting of five (5) hectares. Therefore, it cannot be seriously
disputed that [Rev. Cortez] and his baluga tribesmen cleared five (5) hectares of
land for planting and cultivation since 1962 on the western portion identified as
Exhibit "H-4". The Philippine Navy also admitted that they have no objection to
settlers of the land prior to the Presidential Proclamation and [Rev. Cortez] had
been identified as one of the early settlers of the area before the Presidential
Proclamation. The DENR also acknowledged that [Rev. Cortez] has filed an
application for patent on the western area and that he must be allowed to pursue
his claim.
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 36
Although the court is not persuaded by the argument of [Rev. Cortez] that he has
already acquired vested rights over the area claimed by him, the court must
recognize that [Rev. Cortez] may have acquired some propriety rights over the area
considering the directive of the DENR to allow [Rev. Cortez] to pursue his
application for patent. However, the court wants to make clear that the application
for patent by [Rev. Cortez] should be limited to an area not to exceed five (5)
hectares situated at the western portion of x x x Palaui Island identified in the
sketch map as Exh. "H-4." This area appears to be the portion where [Rev. Cortez]
has clearly established his right or title by reason of his long possession and
occupation of the land.9
In his Answer, 10 Bias countered that: (1) Rev. Cortez has not proven that he has
been in exclusive, open, continuous and adverse possession of the disputed land in
the concept of an owner; (2) Rev. Cortez has not shown the exact boundaries and
identification of the entire lot claimed by him; (3) Rev. Cortez has not substantiated
his claim of exemption from Proclamation No. 201; (4) under Proclamation No.
447, the entire Palaui Island, which includes the land allegedly possessed and
occupied by Rev. Cortez, was reserved as a marine protected area; and, (4)
injunction is not a mode to wrest possession of a property from one person by
another.
Pre-trial and trial thereafter ensued.
On July 3, 2007, the RTC rendered its Decision11 making the injunction final and
permanent. In so ruling, the said court made reference to the Indigenous Peoples
[Right] Act (IPRA) as follows:
The Indigenous [Peoples Right] Act should be given effect in this case. The affected
community belongs to the group of indigenous people which are protected by the
State of their rights to continue in their possession of the lands they have been
tilling since time immemorial. No subsequent passage of law or presidential
decrees can alienate them from the land they are tilling.12
Ultimately, the RTC held, thus:
WHEREFORE, finding the petition to be meritorious, the same is hereby GRANTED.
xxxx
SO DECIDED.13
Representing Bias, the Office of the Solicitor General (OSG) filed a Notice of
Appeal14 which was given due course by the RTC in an Order 15 dated August 6,
2007.
Ruling of the Court of Appeals
In its brief,16 the OSG pointed out that Rev. Cortez admitted during trial that he filed
the Petition for injunction on behalf of the indigenous cultural communities in
Palaui Island and not in his capacity as pastor or missionary of the Church of the
Living God. He also claimed that he has no interest over the land. Based on these
admissions, the OSG argued that the Petition should have been dismissed outright
on the grounds that it did not include the name of the indigenous cultural
communities that Rev. Cortez is supposedly representing and that the latter is not
the real party-in-interest. In any case, the OSG averred that Rev. Cortez failed to
show that he is entitled to the issuance of the writ of injunction. Moreover, the
OSG questioned the RTCs reference to the IPRA and argued that it is not applicable
to the present case since Rev. Cortez neither alleged in his Petition that he is
claiming rights under the said act nor was there any showing that he is a member
of the Indigenous Cultural Communities and/or the Indigenous Peoples as defined
under the IPRA.
In its Decision17 dated June 29, 2011, the CA upheld the RTCs issuance of a final
injunction based on the following ratiocination:
The requisites necesary for the issuance of a writ of preliminary injunction are: (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. Here,
[Rev. Cortez] has shown the existence of a clear and unmistakable right that must
be protected and an urgent and paramount necessity for the writ to prevent
serious damage. Records reveal that [Rev. Cortez] has been in peaceful possession
and occupation of the western portion of Palaui Island, Sitio Siwangag, San Vicente,
Sta. Ana[,] Cagayan since 1962 or prior to the issuance of Proclamation Nos. 201
and 447 in 1967 and 1994, respectively. There he built an orphanage and a school
for the benefit of the members of the Dumagat Tribe, in furtherance of his
missionary and charitable works. There exists a clear and unmistakable right in
favor [of Rev. Cortez] since he has been in open, continuous and notorious
possession of a portion of Palaui island. To deny the issuance of a writ of injunction
would cause grave and irreparable injury to [Rev. Cortez] since he will be displaced
from the said area which he has occupied since 1962. It must be emphasized that
Proclamation Nos. 201 and 447 stated that the same are subject to private rights, if
there be [any]. Though Palaui Island has been declared to be part of the naval
reservation and the whole [i]sland as a marine protected area, both recognized the
existence of private rights prior to the issuance of the same.

From the foregoing, we rule that the trial court did not err when it made
permanent the writ of preliminary mandatory injunction. Section 9, Rule 58 of the
Rules of Court provides that if after the trial of the action it appears that the
applicant is entitled to have the act or acts complained of permanently enjoined,
the court shall grant a final injunction perpetually restraining the party or person
enjoined from the commission or continuance of the act or acts or confirming the
preliminary mandatory injunction.18
Anent the issue of Rev. Cortez not being a real party-in-interest, the CA noted that
this was not raised before the RTC and therefore cannot be considered by it.
Finally, with respect to the RTCs mention of the IPRA, the CA found the same to be
a mere obiter dictum.
The dispositive portion of the CA Decision reads:
WHEREFORE, premise[s] considered, the instant Appeal is hereby DENIED. The
assailed 3 July 2007 Decision of the Regional Trial Court of Aparri, Cagayan, Branch
8 in Civil Case No. II-2403 is AFFIRMED.
SO ORDERED.19
Hence, this Petition brought by the OSG on behalf of the Republic of the
Philippines (the Republic).
The Issue
The ultimate issue to be resolved in this case is whether Rev. Cortez is entitled to a
final writ of mandatory injunction.
The Parties Arguments
The bone of contention as the OSG sees it is the injunctive writ since Rev. Cortez
failed to prove his clear and positive right over the 5-hectare portion of Palaui
Island covered by the same. This is considering that by his own admission, Rev.
Cortez started to occupy the said area only in 1962. Hence, when the property was
declared as a military reserve in 1967, he had been in possession of the 5-hectare
area only for five years or short of the 30-year possession requirement for a bona
fide claim of ownership under the law. The OSG thus argues that the phrase
"subject to private rights" as contained in Proclamation No. 201 and Proclamation
No. 447 cannot apply to him since it only pertains to those who have already
complied with the requirements for perfection of title over the land prior to the
issuance of the said proclamations.
Rev. Cortez, for his part, asserts that the arguments of the OSG pertaining to
ownership are all immaterial as his Petition for injunction does not involve the
right to possess based on ownership but on the right of possession which is a right
independent from ownership. Rev. Cortez avers that since he has been in peaceful
and continuous possession of the subject portion of Palaui Island, he has the right
of possession over the same which is protected by law. He asserts that based on
this right, the writ of injunction was correctly issued by the RTC in his favor and
aptly affirmed by the CA. On the technical side, Rev. Cortez avers that the Republic
has no legal personality to assail the CA Decision through the present Petition since
it was not a party in the appeal before the CA.
The Courts Ruling
We grant the Petition.
For starters, the Court shall distinguish a preliminary injunction from a final
injunction.
"Injunction is a judicial writ, process or proceeding whereby a party is directed
either to do a particular act, in which case it is called a mandatory injunction, [as in
this case,] or to refrain from doing a particular act, in which case it is called a
prohibitory injunction."20 "It may be the main action or merely a provisional
remedy for and as an incident in the main action."21
"The main action for injunction is distinct from the provisional or ancillary remedy
of preliminary injunction."22 A preliminary injunction does not determine the
merits of a case or decide controverted facts. 23 Since it is a mere preventive
remedy, it only seeks to prevent threatened wrong, further injury and irreparable
harm or injustice until the rights of the parties are settled. 24 "It is usually granted
when it is made to appear that there is a substantial controversy between the
parties and one of them is committing an act or threatening the immediate
commission of an act that will cause irreparable injury or destroy the status quo of
the controversy before a full hearing can be had on the merits of the case." 25 A
preliminary injunction is granted at any stage of an action or proceeding prior to
judgment or final order.26 For its issuance, the applicant is required to show, at least
tentatively, that he has a right which is not vitiated by any substantial challenge or
contradiction.27 Simply stated, the applicant needs only to show that he has the
ostensible right to the final relief prayed for in his complaint. 28 On the other hand,
the main action for injunction seeks a judgment that embodies a final
injunction.29 A final injunction is one which perpetually restrains the party or
person enjoined from the commission or continuance of an act, or in case of
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 37
mandatory injunctive writ, one which confirms the preliminary mandatory
injuction.30 It is issued when the court, after trial on the merits, is convinced that
the applicant is entitled to have the act or acts complained of permanently
enjoined.31Otherwise stated, it is only after the court has come up with a definite
pronouncement respecting an applicants right and of the act violative of such
right, based on its appreciation of the evidence presented, that a final injunction is
issued. To be a basis for a final and permanant injunction, the right and the act
violative thereof must be established by the applicant with absolute certainty. 32
What was before the trial court at the time of the issuance of its July 3, 2007
Decision is whether a final injunction should issue. While the RTC seemed to realize
this as it in fact made the injunction permanent, the Court, however, finds the
same to be wanting in basis.
Indeed, the RTC endeavored to provide a narrow distinction between a preliminary
injunction and a final injunction. Despite this, the RTC apparently confused itself.
For one, what it cited in its Decision were jurisprudence relating to preliminary
injunction and/or mandatory injunction as an ancillary writ and not as a final
injunction. At that point, the duty of the RTC was to determine, based on the
evidence presented during trial, if Rev. Cortez has conclusivelyestablished his
claimed right (as opposed to preliminary injunction where an applicant only needs
to at leasttentatively show that he has a right) over the subject area. This is
considering that the existence of such right plays an important part in determining
whether the preliminary writ of mandatory injunction should be confirmed.
Surprisingly, however, the said Decision is bereft of the trial courts factual findings
on the matter as well as of its analysis of the same vis-a-vis applicable
jurisprudence. As it is, the said Decision merely contains a restatement of the
parties respective allegations in the Complaint and the Answer, followed by a
narration of the ensuing proceedings, an enumeration of the evidence submitted
by Rev. Cortez, a recitation of jurisprudence relating to preliminary injunction
and/or specifically, to mandatory injunction as an ancillary writ, a short reference
to the IPRA which the Court finds to be irrelevant and finally, a conclusion that a
final and permanent injunction should issue. No discussion whatsoever was made
with respect to whether Rev. Cortez was able to establish with absolute certainty
hisclaimed right over the subject area.
Section 14, Article VIII of the Constitution, as well as Section 1 of Rule 36 and
Section 1, Rule 120 of the Rules on Civil Procedure, similarly state that a decision,
judgment or final order determining the merits of the case shall state, clearly and
distinctly, the facts and the law on which it is based. Pertinently, the Court issued
on January 28, 1988 Administrative Circular No. 1, which requires judges to make
complete findings of facts in their decision, and scrutinize closely the legal aspects
of the case in the light of the evidence presented, and avoid the tendency to
generalize and to form conclusion without detailing the facts from which such
conclusions are deduced.33
Clearly, the Decision of the RTC in this case failed to comply with the aforestated
guidelines.
In cases such as this, the Court would normally remand the case to the court a
quo for compliance with the form and substance of a Decision as required by the
Constitution. In order, however, to avoid further delay, the Court deems it proper
to resolve the case based on the merits.34
"Two requisites must concur for injunction to issue: (1) there must be a right to be
protected and (2) the acts against which the injunction is to be directed are
violative of said right."35 Thus, it is necessary that the Court initially determine
whether the right asserted by Rev. Cortez indeed exists. As earlier stressed, it is
necessary that such right must have been established by him with absolute
certainty.
Rev. Cortez argues that he is entitled to the injunctive writ based on the
right of possession (jus possesionis) by reason of his peaceful and continuous
possession of the subject area since 1962. He avers that as this right is protected
by law, he cannot be peremptorily dispossessed therefrom, or if already
dispossessed, is entitled to be restored in possession. Hence, the mandatory
injunctive writ was correctly issued in his favor.
Jus possessionis or possession in the concept of an owner 36 is one of the two
concepts of possession provided under Article 525 37 of the Civil Code. Also referred
to as adverse possession,38 this kind of possesion is one which can ripen into
ownership by prescription. 39 As correctly asserted by Rev. Cortez, a possessor in the
concept of an owner has in his favor the legal presumption that he possesses with
a just title and he cannot be obliged to show or prove it. 40 In the same manner, the
law endows every possessor with the right to be respected in his possession. 41
It must be emphasized, however, that only things and rights which are susceptible
of being appropriated may be the object of possession. 42 The following cannot be
appropriated and hence, cannot be possessed: property of the public dominion,
common things (res communes) such as sunlight and air, and things specifically
prohibited by law.43
Here, the Court notes that while Rev. Cortez relies heavily on his asserted right of
possession, he, nevertheless, failed to show that the subject area over which he

has a claim is not part of the public domain and therefore can be the proper object
of possession.
Pursuant to the Regalian Doctrine, all lands of the public domain belong to the
State.44 Hence, "[a]ll lands not appearing to be clearly under private ownership are
presumed to belong to the State. Also, public lands remain part of the inalienable
land of the public domain unless the State is shown to have reclassified or
alienated them to private persons." 45 To prove that a land is alienable, the
existence of a positive act of the government, such as presidential proclamation or
an executive order; an administrative action; investigation reports of Bureau of
Lands investigators; and a legislative act or a statute declaring the land as alienable
and disposable must be established.46
In this case, there is no such proof showing that the subject portion of Palaui Island
has been declared alienable and disposable when Rev. Cortez started to occupy the
same. Hence, it must be considered as still inalienable public domain. Being such, it
cannot be appropriated and therefore not a proper subject of possession under
Article 530 of the Civil Code. Viewed in this light, Rev. Cortez claimed right of
possession has no leg to stand on. His possession of the subject area, even if the
same be in the concept of an owner or no matter how long, cannot produce any
legal effect in his favor since the property cannot be lawfully possessed in the first
place.
The same goes true even if Proclamation No. 201 and Proclamation No. 447 were
made subject to private rights. The Court stated in Republic v. Bacas,47 viz.:
Regarding the subject lots, there was a reservation respecting private rights.
In Republic v. Estonilo, where the Court earlier declared that Lot No. 4319 was part
of the Camp Evangelista Military Reservation and, therefore, not registrable, it
noted the proviso in Presidential Proclamation No. 265 requiring the reservation to
be subject to private rights as meaning that persons claiming rights over the
reserved land were not precluded from proving their claims. Stated differently, the
said proviso did not preclude the LRC from determining whether x x x the
respondents indeed had registrable rights over the property.
As there has been no showing that the subject parcels of land had been
segregated from the military reservation, the respondents had to prove that the
subject properties were alienable or disposable land of the public
domain prior to its withdrawal from sale and settlement and reservation for
military purposes under Presidential Proclamation No. 265. The question is
primordial importance because it is determinative if the land can in fact be subject
to acquisitive prescription and, thus, registrable under the Torrens system. Without
first determining the nature and character of the land, all other requirements
such as length and nature of possession and occupation over such land do not
come into play. The required length of possession does not operate when the
land is part of the public domain.
In this case, however, the respondents miserably failed to prove that, before the
proclamation, the subject lands were already private lands. They merely relied on
such recognition of possible private rights. In their application, they alleged that
at the time of their application, they had been in open, continuous, exclusive and
notorious possession of the subject parcels of land for at least thirty (30) years and
became its owners by prescription. There was, however, no allegation or showing
that the government had earlier declared it open for sale or settlement, or that it
was already pronounced as inalienable and disposable.48
In view of the foregoing, the Court finds that Rev. Cortez failed to conclusively
establish his claimed right over the subject portion of Palaui Island as would entitle
him to the issuance of a final injunction.
Anent the technical issue raised by Rev. Cortez, i. e, that the Republic has no
personality to bring this Petition since it was not a party before the CA, the Court
deems it prudent to set aside this procedural barrier. After all, "a party's standing
before [the] Court is a [mere] procedural technicality which may, in the exercise of
[its] discretion, be set aside in view of the importance of the issue raised." 49
We note that Rev. Cortez alleged that he sought the injunction so that he could
continue his humanitarian works. However, considering that inalienable public land
was involved, this Court is constrained to rule in accordance with the
aforementioned.
WHEREFORE, the Petition is GRANTED. The June 29, 2011 Decision of the Court of
Appeals in CA-GR. CV No. 89968 denying the appeal and affirming the July 3, 2007
Decision of the Regional Trial Court of Aparri, Cagayan-Branch 08 in Spl. Civil Action
Case No. II-2403, is REVERSED and SET ASIDE. Accordingly, the final injunction
issued in this case is ordered DISSOLVED and the Petition for Injunction in Spl. Civil
Action Case No. II-2403,DISMISSED.
SO ORDERED.
G.R. No. 199324 January 7, 2013
EXECUTIVE SECRETARY, SECRETARY OF FINANCE, COMMISSIONER OF CUSTOMS,
DISTRICT COLLECTOR OF CUSTOMS, Port of Aparri, Cagayan, DISTRICT COLLECTOR
OF CUSTOMS, Port of San Fernando, La Union, and HEAD OF THE LAND
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 38
TRANSFORTATION OFFICE, Petitioners,
vs.
FORERUNNER MULTI RESOURCES, INC., Respondent.
DECISION
CARPIO, J.:
The Case
We review1 a ruling2 of the Court of Appeals enjoining the government from
enforcing, litis pendentia, a ban on the importation of used motor vehicles.
The Facts
Executive Order No. 156 (EO 156)3, issued by President Gloria Macapagal-Arroyo
(President Arroyo) on 12 December 2002, imposes a partial ban on the importation
of used motor vehicles.4 The ban is part of several measures EO 156 adopts to
"accelerate the sound development of the motor vehicle industry in the
Philippines."5In Executive Secretary v. Southwing Heavy Industries, Inc. and two
related petitions6 (collectively, Southwing), we found EO 156 a valid executive
issuance enforceable throughout the Philippine customs territory, except in the
Subic Special Economic and Freeport Zone in Zambales (Subic Freeport) by virtue
of its status as a "separate customs territory" under Republic Act No. 7227.7
Respondent Forerunner Multi Resources, Inc. (respondent), a corporation engaged
in the importation of used motor vehicles via the ports of Aparri, Cagayan and San
Fernando, La Union, sued the government in the Regional Trial Court of Aparri,
Cagayan (trial court) to declare invalid EO 156, impleading petitioner public officials
as respondents.8 Respondent attacked EO 156 for (1) having been issued by
President Arroyo ultra vires; (2) trenching the Due Process and Equal Protection
Clauses of the Constitution; and (3) having been superseded by Executive Order
No. 418 (EO 418),9 issued by President Arroyo on 4 April 2005, modifying the tariff
rates of imported used motor vehicles. Respondent sought a preliminary injunctive
writ to enjoin, litis pendentia, the enforcement of EO 156.
The Ruling of the Trial Court
Acting on respondents application for preliminary injunctive remedy, the trial
court granted relief, initially by issuing a temporary restraining order followed by a
writ of preliminary injunction granted in its Order of 27 November 2008. 10 On
petitioners motion, however, the trial court reconsidered its Order and lifted the
injunctive writ on 7 July 2010. The trial court grounded its ruling on Southwing
which it considered as negating any "clear and unmistakable legal right" on the
part of respondent to receive the "protection of a writ of preliminary injunction."11
Respondent elevated the case to the Court of Appeals in a certiorari petition.
The Ruling of the Court of Appeals
The Court of Appeals granted certiorari, set aside the trial courts Order of 7 July
2010 and reinstated its Order of 27 November 2008. In the appellate courts
estimation, the trial court committed grave abuse of discretion in lifting the
preliminary injunctive writ it earlier issued. The appellate court held that the
implementation of EO 156 "would put petitioner in a financial crisis." 12 As
authority, the appellate court invoked by analogy this Courts ruling in Filipino
Metals Corporation v. Secretary of the Department of Trade and Industry. 13
Petitioners are now before this Court charging the Court of Appeals with having
committed an error of law in reinstating the preliminary injunctive writ for
respondent. They argue that Southwing controls the case, precluding the Court of
Appeals from recognizing a clear legal right of respondent to import used motor
vehicles.
Respondent counters that the doctrinal import of Southwing was weakened by the
subsequent issuance of EO 418, allegedly repealing EO 156. Respondent invokes
our minute Resolution of 15 November 2010 denying the petition in G.R. No.
187475 (Executive Secretary v. Feniz [CEZA] International, Inc.) as judicial
confirmation of the supposed repeal.
As prayed for by petitioners, we issued a temporary restraining order on 16
January 2012 against the Court of Appeals ruling.
The Issue
The question is whether the Court of Appeals erred in granting preliminary
injunctive relief to respondent to enjoin enforcement of EO 156.
The Courts Ruling
We hold that it was error for the Court of Appeals to grant preliminary injunctive
relief to respondent. We set aside the Court of Appeals ruling and reinstate the
trial courts Order of 7 July 2010.
 P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 39

Respondent Without Clear Legal Right to
Import Used Motor Vehicles
It is a deeply ingrained doctrine in Philippine remedial law that a preliminary
injunctive writ under Rule 5814 issues only upon a showing of the applicants "clear
legal right"15 being violated or under threat of violation by the defendant. 16 "Clear
legal right," within the meaning of Rule 58, contemplates a right "clearly founded
in or granted by law." 17 Any hint of doubt or dispute on the asserted legal right
precludes the grant of preliminary injunctive relief. 18 For suits attacking the validity
of laws or issuances with the force and effect of law, as here, the applicant for
preliminary injunctive relief bears the added burden of overcoming the
presumption of validity inhering in such laws or issuances. 19 These procedural
barriers to the issuance of a preliminary injunctive writ are rooted on the equitable
nature of such relief, preserving the status quo while, at the same time, restricting
the course of action of the defendants even before adverse judgment is rendered
against them.
reversing our holding in Southwing. The petition in Feniz sought a review of the
ruling of the trial court striking down Section 2 of EO 418. The trial court found
such provision, which imposed additional specific duty of P500,000 on each
imported used motor vehicle, void for having been issued by President Arroyo ultra
vires. Neither the validity of EO 156 nor the alleged repeal by EO 418 of EO 156
was the lis mota in Feniz.
WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 27 June
2011 and the Resolution dated 14 November 2011 of the Court of Appeals. The
Order dated 7 July 201 0 of the Regional Trial Court of Aparri, Cagayan, Branch 10,
is REINSTATED. The temporary restraining order issued on 16 January 2012 is made
PERMANENT.
SO ORDERED.
G.R. No. 182758

Respondent sought preliminary injunctive relief as ancillary to its principal cause of

LAND BANK OF THE PHILIPPINES,
action to invalidate EO 156. Respondents attack on EO 156, however, comes on
the heels of Southwing where we passed upon and found EO 156 legally sound,
albeit overextended in application. We found EO 156 a valid police power measure Petitioner,
addressing an "urgent national concern":
HEIRS OF SEVERINO LISTANA,
There is no doubt that the issuance of the ban to protect the domestic industry is a
reasonable exercise of police power. The deterioration of the local motor Respondents.
manufacturing firms due to the influx of imported used motor vehicles is an urgent
national concern that needs to be swiftly addressed by the President. In the May 30, 2011
exercise of delegated police power, the executive can therefore validly proscribe
the importation of these vehicles. x x x20
DECISION
The narrow ambit of this review precludes us from passing upon the merits of the
constitutional and administrative issues respondent raised to attack EO 156.
Nevertheless, we have no hesitation in holding that whatever legal right
respondent may possess vis vis the operation of EO 156, we find such legal right CARPIO, J.:
to be doubtful by force of the Southwing precedent. Until reversed or modified by
this Court, Southwing makes conclusive the presumption of EO 156s validity. Our
holding is bolstered by respondents failure to remove its case from the confines of
such ruling. The Case

In arriving at a contrary conclusion, the Court of Appeals dwelt on the "grave and
irremediable" financial losses respondent was poised to sustain as a result of EO
156s enforcement, finding such prejudice "inequitable." 21 No doubt, by importing
This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The
used motor vehicles in contravention of the ban under EO 156, respondent risked
petition challenges the 30 January 2008 Decision2and 6 May 2008 Resolution3 of
sustaining losses. Such risk, however, was self-imposed. Having miscalculated its
the Court of Appeals in CA-G.R. SP No. 92701. The Court of Appeals
chances, respondent cannot look to courts for injunctive relief against self-inflicted
affirmed in toto the 4 August4 and 18 October5 2005 Orders of the Regional Trial
losses which are in the nature of damnum absque injuria. Injunction will not issue
Court, Judicial Region 5, Branch 51, Sorsogon City (RTC), in Civil Case No. 2001-
on the mere possibility that a litigant will sustain damage, without proof of a clear
6803.
legal right entitling the litigant to protection.22

The Facts
Nor does our ruling in Filipino Metals furnish doctrinal support for
respondent.1wphi1 We sustained the trial courts issuance of a preliminary
injunctive writ in that case to enjoin the enforcement of Republic Act No. 8800 (RA
8800) delegating to a cabinet member the power to adopt measures to address
prejudicial importations in contravention of relevant international agreements. We Severino Listana (Listana) owned a 246.0561-hectare parcel of land
grounded our ruling on the fact that the petitioners, which principally argued that in Inlagadian, Casiguran, Sorsogon, covered by Transfer Certificate of Title No. T-
RA 8800 violates Article VI, Section 28(2) of the Constitution (limiting Congress 20193. Listana voluntarily sold the property to the government, through the
delegation of the power to fix trade quotas to the President), "have established a Department of Agrarian Reform, under Republic Act (RA) No. 6657, otherwise
strong case for the unconstitutionality of RA 8800." 23 In short, the petitioners in known as the Comprehensive Agrarian Reform Law of 1988.
Filipino Metals discharged the burden of overcoming the presumption of validity
accorded to RA 8800, warranting the issuance of a preliminary injunctive writ in
their favor. Southwing forecloses a similar finding for respondent.
The Department of Agrarian Reform Adjudication Board (DARAB)
Lastly, we find no merit in respondents submission that EO 418 repealed EO 156, of Sorsogon commenced summary administrative proceedings to determine the
removing the legal bar to its importation of used motor vehicles. The question of amount of just compensation for the property. In its 14 October 1998 Decision, the
whether EO 418 repealed EO 156 was already settled in our Resolution dated 22 DARAB set the amount at P10,956,963.25 and ordered petitioner Land Bank of the
August 2006 denying reconsideration of our ruling in Southwing. The respondents Philippines (LBP) to pay Listana the same.
in those cases, importers of used motor vehicles via the Subic Freeport, had
espoused the theory presently advanced by respondent. We rejected the proffered
construction of the two issuances:

On 18 June 1999, the Provincial Agrarian Reform Adjudicator (PARAD) issued a writ
The subsequent issuance of E.O. No. 418 increasing the import duties on used
of execution ordering Land Bank Manager and Agrarian Operations Center Head
motor vehicles did not alter the policy of the executive department to prohibit the
Alex A. Lorayes (Lorayes) to pay Listana P10,956,963.25. Lorayes refused. Thus, on
importation of said vehicle. x x x There is nothing in the text of E.O. No. 418 which
2 September 1999, Listana filed with the PARAD a motion for contempt
expressly repeals E.O. No. 156. The Congress, or the Office of the President in this
against Lorayes.
case, is presumed to know the existing laws, such that whenever it intends to
repeal a particular or specific provision of law, it does so expressly. The failure to
add a specific repealing clause indicates that the intent was not to repeal previous
administrative issuances. x x x
On 6 September 1999, LBP filed with the Regional Trial Court, Judicial Region 5,
E.O. No. 156 is very explicit in its prohibition on the importation of used motor Branch 52, Sorsogon City, acting as special agrarian court (SAC), a petition for
vehicles. On the other hand, E.O. No. 418 merely modifies the tariff and judicial determination of the amount of just compensation for the property. LBP
nomenclature rates of import duty on used motor vehicles. Nothing therein challenged the amount set by the DARAB and prayed that the amount be fixed
expressly revokes the importation ban. (Italicization supplied) at P5,871,689.03.

Contrary to respondent's claim, our minute Resolution dated 15 November 2010

denying the petition in Feniz did not have the effect of modifying much less
 P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 40

The PARAD granted Listanas motion for contempt. In its 20 August 2000 Order, the
PARAD cited Lorayes for indirect contempt and ordered his imprisonment until he
complied with the DARABs 14 October 1998 Decision.
In its 25 October 2000 Order, the SAC dismissed LBPs petition for judicial
determination of the amount of just compensation for the property. LBP appealed
the 25 October 2000 Order.
is REVERSED and SET ASIDE. The Order of the Regional Trial
Court of Sorsogon, Sorsogon, Branch 51, dated January 29,
2001, which enjoined the Provincial Adjudicator of the
DARAB or anyone acting in its stead from enforcing its order
of arrest against Mr. Alex A. Lorayes pending the final
termination of the case before Regional Trial Court
of Sorsogon, Sorsogon, Branch 52, is REINSTATED.

SO ORDERED.8

In its 27 November 2000 Resolution, the PARAD ordered the issuance of an alias
writ of execution, ordering LBP to pay ListanaP10,956,963.25. On 3 January 2001,
the PARAD issued a warrant of arrest against Lorayes. On 26 May 2004, LBP filed with the RTC a motion9 to withdraw the P5,644,773.02
cash bond. LBP stated that:

LBP filed with the RTC a petition for injunction with application for the issuance of
a writ of preliminary injunction enjoining PARAD from implementing the warrant of
arrest against Lorayes. In its 29 January 2001 Order, the RTC enjoined the PARAD
from implementing the warrant of arrest pending final determination of the LAND BANK OF THE PHILIPPINES, through counsel unto
amount of just compensation for the property. LBP posted a P5,644,773.02 cash this Honorable Court, respectfully avers:
bond. The dispositive portion of the 29 January 2001 Order stated:

1. That last February 1, 2001, LANDBANK

WHEREFORE, premises considered, the respondent posted cash bond covered by Official
Provincial Adjudicator of the DARAB or anyone acting in its Receipt No. 7135588 dated January
stead is enjoined as it is hereby enjoined from enforcing its 31, 2001 in the amount
order of arrest against Mr. Alex A. Lorayes pending the final of P5,644,773.02. [C]opy of the Order,
termination of the case before RTC Branch Official Receipt and deposit slip are
52, Sorsogon upon the posting of a cash bond by the Land hereto attached as Annexes A, B, and
Bank. C;

2. That on August 5, 2003, the Supreme

Court issued a Decision in G.R[.] No.
SO ORDERED.6 152611 entitled Land Bank of the
Philippines versus Severino Listana,
the dispositive portion is quoted as
follows:
Listana filed with the RTC a motion for reconsideration. In its 2 April 2001 Order,
the RTC denied the motion. Listana filed with the Court of Appeals a petition for WHER
certiorari under Rule 65 of the Rules of Court. In its 11 December 2001 Decision, forego
the Court of Appeals set aside the 29 January and 2 April 2001 Orders of the RTC. review
Decisio
Appea
65276
2001,
LBP filed with the Court a petition for review on certiorari under Rule 45 of the SET AS
Rules of Court. In Land Bank of the Philippines v. Listana, Sr.,7 the Court set aside Region
the 11 December 2001 Decision of the Court of Appeals and reinstated the 29 of Sors
January and 2 April 2001 Orders of the RTC enjoining the PARAD from Branch
implementing the warrant of arrest pending final determination of the amount of 29, 20
just compensation for the property. the Pr
the DA
in its s
its ord
The Court declared void all proceedings that stemmed from Listanas motion for agains
contempt. The Court held that: A. Lora
termin
before
of Sors
Branch
Hence, the contempt proceedings initiated through an
unverified Motion for Contempt filed by the respondent with
the PARAD were invalid for the following reasons: First, the S
Rules of Court clearly require the filing of a verified petition O
with the Regional Trial Court, which was not complied with
in this case. The charge was not initiated by the O
PARAD motu proprio, rather, it was by a motion filed by R
respondent. Second, neither the PARAD nor the DARAB have D
jurisdiction to decide the contempt charge filed by the E
respondent. The issuance of a warrant of arrest was beyond R
the power of the PARAD and the DARAB. Consequently, all E
the proceedings that stemmed from respondents Motion for D
Contempt, specifically the Orders of the PARAD dated August .
20, 2000 and January 3, 2001 for the arrest of Alex
A. Lorayes, are null and void. 1. That on February 26, 200 [sic], an
Entry of Judgment was issued by the
Supreme Court making the Decision in
G.R. No. 152611 final and executory.
Copy of the Entry of Judgment is
WHEREFORE, in view of the foregoing, the petition for hereto attached as Annex D.
review is GRANTED. The Decision of the Court of Appeals in
CA-G.R. SP No. 65276, dated December 11, 2001,

WHE
REFO
RE,
premi
ses
consi
dered
it is
most
respe
ctfully
praye
d that
the
cash
bond
put
up by
Land
Bank
of the
Philip
pines
be
releas
ed[.]10
The RTCs Ruling
In its 4 August 2005 Order, the RTC denied LBPs motion to withdraw the
P5,644,773.02 cash bond. The RTC held that:
The Court finds the Land Banks Motion without merit
inasmuch as the arguments raised therein are specious.
Contrary to Land Banks conclusion, this Court holds
otherwise that the cash bond did not become moot and
academic upon the finality of the Supreme Courts decision
dated August 5, 2003. This is so because the underlying
reason for the posting of the cash bond still remains despite
the decision of the Supreme Court upholding the
unconstitutionality of the order of arrest issued by PARAD.
And that reason is the distinctive fact that the cash bond was
put up in order to secure any damages that the private
respondent Listana may incur by reason of the issuance of
the injunction order. The damages being referred to, that is
the legal right of Mr. Listana to be justly and promptly paid
of his expropriated property was not effectively extinguished
by the mere decision of the Supreme Court declaring the
illegality of the order of arrest issued by the PARAD against
Mr. Alex Lorayes. In fact, the Courts ruling did not in any way,
expressly or impliedly, ordered [sic] the release of the cash
bond in Land Banks favor despite that the latters petition
was upheld with finality by the Supreme Court.
Indeed, the cash bond did not become moot and academic
as clearly intentioned in the Supreme Courts decision dated
August 5, 2003. A simple reading of its dispositive portion
would crystallize to anyones mind that the final resolution of
the case, including all the issues interwoven therein, is
conditioned on the final determination of the
just compenstaion case filed before Branch 52, RTC-
Sorsogon and now pending before the Supreme Court. It
clearly means therefore that the release of the cash bond to
either party being one of the issues necessarily included in
this case, would depend on the final termination of the main
action the just compensation case. To this date, the Supreme
Court has not rendered a resolution pertaining thereto.
In adopting this line of reasoning, this Court is merely
upholding with consistency the tenor and intent of its Order
dated January 29, 2001. In issuing the injunction order
against the PARAD, the Court did not only recognize the right
of Mr. Alex Lorayes against illegal arrest but at the same time
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 41
protected the inherent right of Mr. Severino Listana to be
justly and promptly paid of his expropriated property, hence
it ordered the petitioner to post a cash bond in the amount
of P5,644,773.02, the almost exact amount Mr. Listana could
have collected as payment from Land Bank had it not for the
injunction order. At this juncture also, the Court would not
be persuaded with Land Banks contention that the cash
bond be released it [sic] its favor for the reason that the
same was drawn not from the agrarian fund but advanced
from its capital fund as part of litigation expenses. The
internal operations of Land Bank is of no moment under the
instant case. When the injunctive order was issued; it was
clear to Land Bank that the cash bond posted was precisely
meant to secure the unpaid balance due to Mr. Listana. To
adhere to Land Banks contention would effectively defeat
the purpose of the injunction bond and to subject again the
landowner to another circuitous mode of collecting
compensation for his property in case the just compensation
case be resolved in his favor. Therefore, in the interest of
social justice, the Court deems it wise to preserve the status
quo with regards [sic] to the cash bond. It shall not be
dissolved at the moment and shall stay pending the final
termination of the just compensation case.11
LBP filed a motion for reconsideration. In its 18 October 2005 Order, the RTC
denied the motion. LBP filed with the Court of Appeals a petition12 for certiorari
under Rule 65 of the Rules of Court.
The Court of Appeals Ruling
In its 30 January 2008 Decision, the Court of Appeals dismissed LBPs petition and
affirmed in toto the RTCs 4 August and 18 October 2005 Orders. The Court of
Appeals held that:
It is plain to see from the Supreme Courts decision that only
the Orders of the PARAD dated 20 August 2000 and 3
January 2001 for the arrest of Lorayes were nullified.
A reading of the Supreme Courts decision will show that the
nullification of the orders of the PARAD stemmed not from
the correctness of Lorayes refusal to execute the DARABs
decision nor from the entitlement of Land Bank to enjoin
such execution. Rather, it is grounded on the adoption of the
improper mode of initiating the contempt proceedings, and
on PARADs lack of jurisdiction to decide the contempt
charge. Hence, the absence of any pronouncement in the
Supreme Courts decision finally deciding the issue of
whether or not Land Bank is permanently entitled to enjoin
the payment of P10,956,963.25 to the Heirs of Listana. In
fact, the dispositive portion unequivocally upholds and
reinstates only the court a quos grant of the writ
of preliminary injunction.
It must be stressed that it is the dispositive part of the
judgment that actually settles and declares the rights and
obligations of the parties, finally, definitively, and
authoritatively, notwithstanding the existence of statements
in the body that may tend to confuse.
Thus, notwithstanding its pronouncement that neither the
PARAD nor the DARAB had any authority to cite Lorayes in
contempt and order his arrest, the Supreme Courts decision
cannot be used as basis to release the injunction bond
posted by Land Bank, inasmuch as the decision upheld and
reinstated the court a quos issuance of the writ of
preliminary injunction. Without the injunction bond, the writ
of preliminary injunction would be invalid.

A preliminary injunction or temporary restraining order may
be granted only when, among others, the applicant, unless
exempted by the court, 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.
xxxx
In the case at bar, the writ of preliminary injunction is
directed at the PARADs orders to arrest Lorayes for refusing
to comply with the DARABs decision ordering Land Bank to
pay the amount of P10,956,963.25 as just compensation for
the subject property.
As subsequently explained by the court a quo in its assailed
Order, the underlying reason behind its grant of the writ of
preliminary injunction is the pendency of Land Banks action
for judicial determination of just compensation. As long as
the issue of just compensation is not settled, it would be
precipitate to rule one way or the other on the propriety of
executing the DARABs decision.
Indeed, if the courts eventually uphold the DARABs valuation
of the subject property, the injunction against the execution
of the DARABs Decision would give rise to the Heirs right to
collect damages, which the injunction bond would answer
for. It is only when the courts finally strike down the DARABs
computation of just compensation that the injunction bond
may finally be released.
Clearly, the court a quo soundly exercised its discretion in
refusing to release the injunction bond posted by Land
Bank.13
LBP filed a motion for reconsideration. In its 6 May 2008 Resolution, the Court of
Appeals denied the motion. Hence, the present petition.
Issue
LBP raises as issue that the Court of Appeals erred in not allowing the withdrawal
of the P5,644,773.02 cash bond.
The Courts Ruling
The petition is unmeritorious.
In Land Bank of the Philippines v. Listana, Sr., the Court reinstated the 29 January
2001 Order of the RTC. The dispositive portion of the case states:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 42
WHEREFORE, in view of the foregoing, the petition for
review is GRANTED. The Decision of the Court of Appeals in
CA-G.R. SP No. 65276, dated December 11, 2001,
is REVERSED and SET ASIDE. The Order of the Regional Trial
Court of Sorsogon, Sorsogon, Branch 51, dated January 29,
2001, which enjoined the Provincial Adjudicator of the
DARAB or anyone acting in its stead from enforcing its
order of arrest against Mr. Alex A. Lorayes pending the final
termination of the case before Regional Trial Court
of Sorsogon, Sorsogon, Branch 52, is REINSTATED.
SO ORDERED.14 (Emphasis supplied)
The dispositive portion of the 29 January 2001 Order of the RTC states:
WHEREFORE, premises considered, the respondent
Provincial Adjudicator of the DARAB or anyone acting in its
stead is enjoined as it is hereby enjoined from enforcing its
order of arrest against Mr. Alex A. Lorayes pending the final
termination of the case before RTC Branch
52, Sorsogon upon the posting of a cash bond by the Land
Bank.
SO ORDERED.15
The dispositive portion of the 29 January 2001 Order of the RTC clearly states that
the respondent Provincial Adjudicator of the DARAB x x x is enjoined x x x from
enforcing its order of arrest against Mr. Alex A. Lorayes pending the final
termination of the case before RTC Branch 52, Sorsogon upon the posting of a
cash bond by Land Bank. Thus, LBP cannot withdraw the bond pending final
determination of the amount of just compensation for the property.
In its 14 October 1998 Decision, the DARAB set the amount of just compensation
for the property at P10,956,963.25 and ordered LBP to pay Listana the amount. On
18 June 1999, the PARAD issued a writ of execution ordering Lorayes to
pay Listana the amount. Lorayesrefused and, later, LBP filed with the RTC a petition
for injunction with application for the issuance of a writ of preliminary injunction.
An applicant for preliminary injunction is required to file a bond executed to the
party or person enjoined, to the effect that the applicant will pay to such party or
person all damages which he may sustain by reason of the injunction. Section 4(b),
Rule 58 of the Rules of Court states:
SEC. 4. Verified application and bond for preliminary
injunction or temporary restraining order. A preliminary
injunction or temporary restraining order may be granted
only when:
xxxx
(b) 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.
 P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 43

As correctly ruled by the lower courts, the P5,644,773.02 bond shall answer for the
damages Listana may sustain if the courts finally uphold the P10,956,963.25 just
compensation set by the DARAB. In Republic v. Caguioa,16 the Court held that, The
purpose of the injunction bond is to protect the defendant against loss or damage
by reason of the injunction in case the court finally decides that the plaintiff was
not entitled to it, and the bond is usually conditioned accordingly.17
DIVISION, CAGAYAN DE ORO CITY, MINDANAO STATION; SHERIFF ARCHIBALD C.
VERGA, AND HIS DEPUTIES, REGIONAL TRIAL COURT, BRANCH 33, HALL OF
JUSTICE, LIBERTAD, BUTUAN CITY; AND FIRST CONSOLIDATED BANK, Respondents.
DECISION
PERALTA, J.:

The SAC has original and exclusive jurisdiction over petitions for determination of
the amount of just compensation of properties acquired under RA No. 6657.
Administrative agencies have no jurisdiction over just compensation cases. Section
57 of RA No. 6657 states that, The Special Agrarian Courts shall have original and
exclusive jurisdiction over all petitions for the determination of just compensation
to landowners. In Land Bank of the Philippines v. Wycoco,18 citing Republic v. Court
of Appeals,19 the Court held that:
Before us is a Petition for Certiorari, Prohibition and Mandamus with Prayer for a
Temporary Restraining Order and/or Writ of Preliminary
Injunction under Rule 65 of the Rules of Court which seeks to annul and set aside
the Resolutions dated" July 2, 20091 and September 30, 20092 of the Court of
Appeals (CA) in CA-G.R. CV No. 01822-MIN.
The facts follow:ChanRoblesVirtualawlibrary

Between the periods March 25, 1996 to July 13, 2000, petitioners executed several
real estate mortgages and chattel mortgage in favor of respondent First
In Republic v. Court of Appeals, it was held that Special Consolidated Bank (hereafter private respondent bank), through its branch
Agrarian Courts are given original and exclusive jurisdiction
over two categories of cases, to wit: (1) all petitions for the
in Butuan City.
determination of just compensation; and (2) the
prosecution of all criminal offenses under R.A. No. 6657. The loans obtained by petitioners were released on different
x x x The DAR, as an administrative agency, cannot be
granted jurisdiction over cases of eminent domain and over dates and are summarized as
criminal cases. The valuation of property in eminent follows:chanRoblesvirtualLawlibrary
domain is essentially a judicial function which is vested
with the Special Agrarian Courts and cannot be lodged with
administrative agencies.20 (Emphasis supplied) Date the Loan Principal Amount
was Granted

March 19, 1996 Agusan Institute of Technology (owned

Thus, as a rule, the DARABs decision setting the amount of just compensation is by petitioners) was granted an Interim
merely preliminary and not executory if challenged before the SAC. Execution Financjng Loan. P 8,000,000.00
pending appeal of the DARAB decision is allowed only on meritorious
grounds.21 Even then, it is the SAC, not the DARAB, that can grant execution
March 25, 1996 Agusan Institute of Technology was
pending appeal because the SAC has original and exclusive jurisdiction over just
granted a second Interim Financing Loan. 2,000.000.00
compensation cases. The determination of the amount of just compensation is a
judicial function that cannot be usurped by administrative agencies. In Apo Fruits
Corporation v. Court of Appeals,22 the Court held that: March 2,7, 1996 Agusan Institute of Technology was
granted a third Interim Financing Loan. 1,500,000.00

July 17, 1996 Rogelio Lim was granted a commercial

It is now settled that the valuation of property in eminent
loan. 300,000.00
domain is essentially a judicial function which is vested with
the RTC acting as Special Agrarian Court. The same cannot
be lodged with administrative agencies and may not be October 20, 1996 Rogelio Lim was granted a second 1,300,000.00
usurped by any other branch or official of the government.23 commercial loan.

October 31, 1996 Rogelio Lim was granted a fourth 60,000.00

commercial loan.
In the present case, LBP filed with the SAC a petition for determination of the
amount of just compensation on 6 September 1999. The PARAD issued the alias
writ of execution and warrant of arrest on 27 November 2000 and 3 January 2001, February 5, 1997 Agusan Institute of Technology was
respectively. The writ of execution and warrant of arrest were invalid because the granted a loan the entire proceeds of
14 October 1998 Decision of the DARAB setting the amount at P10,956,963.25 was which was used to pay off the three
merely preliminary and not executory. Interim Financing Loans. 9,512,400.00

February 5, 1997 Agusan Institute of Technology was 1,987,600.00

granted a loan.
In any event, the Court has reinstated the 29 January 2001 Order of the RTC
enjoining the PARAD from implementing the warrant of arrest pending final
determination of the amount of just compensation for the property. Land Bank of July 20, ,1997 Agusan Institute of Technology was 3,400,000.00
the Philippines v. Listana, Sr. has long become final and executory and can no granted another loan.
longer be disturbed. Consequently, LBP cannot withdraw the P5,644,773.02 cash
bond which is a condition for the issuance of the writ of preliminary injunction.
April 19, 1999 Agusan Institute of Technology was 45,000.00
granted a loan.

WHEREFORE, the Court DENIES the petition. The Court AFFIRMS the 30 January
2008 Decision and 6 May 2008 Resolution of the Court of Appeals in CA-G.R. SP
No. 92701.
SO ORDERED.
G.R. No. 190134, July 08, 2015
SPOUSES ROGELIO AND SHIRLEY T. LIM, AGUSAN INSTITUTE OF TECHNOLOGY,
REPRESENTED BY DR. SHIRLEY T. LIM, PRESIDENT AND AS ATTORNEY-IN-FACT OF
FELIX A. CUENCA, MARY ANN M. MALOLOT, AND REY ADONIS M.
MEJORADA, Petitioners, v. HONORABLE COURT OF APPELAS, TWENTY-SECOND
June 30, 1999 Agusan Institute of Technology was 10,100,000.00
granted a loan.
Private respondent bank admitted that the aforementioned loans were paid by
Agusan Institute of Technology except for the 7th, 8th and 11th loans. Petitioners
failed to religiously pay said loans as they became due and demandable, hence,
private respondent bank was forced to file for an application for Extra-judicial
Foreclosure of Real Estate Mortgage and Chattel Mortgage on December 28, 2000.
In response, petitioners filed an action for-revocation and annulment of real estate
mortgage and chattel mortgage with plea for the issuance of. a temporary
restraining order and preliminary injunction with the Regional Trial Court (RTC) of
Butuan City. In its complaint, petitioners alleged that the contracts of mortgage
cannot be foreclosed because Agusan Institute of Technology had already fully paid

its obligation with private respondent Bank if the latter did not charge exorbitant
and excessive interests and penalties in the computation-of all payments made by
the former. Petitioners assert that the total payments they tendered to private
respondent bank constituted overpayments to the loan., They allege that there is
no legal and factual basis or necessity for private respondent bank to effect the
foreclosure of the real and personal properties mortgaged to secure the loan.
To prove their cause of action, petitioners presented one witness, petitioner Shirley
Lim, who testified that, due to private respondent bank's illegal application for the
extrajudicial foreclosure of its mortgages, she suffered social humiliation, wounded
feelings, sleepless nights and mental anxieties. Interesting to note, however, that
despite petitioners' claims regarding overpayments of their loan obligations, no
documentary evidence was ever attached to the complaint proving that indeed
there were overpayments made and when it were actually made.
After proper hearing on petitioners' application for issuance of a writ of
preliminary injunction, the RTC issued the writ ordering private respondent Bank to
desist from foreclosing the said contracts of mortgage.
Trial on the merits then ensued.
On December 28, 2007, the RTC rendered a Decision 3 lifting the writ of preliminary
injunction and ruling in favor of private respondent Bank. The fallo of said
judgment reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
defendant Bank and against the plaintiff Agusan Institute of Technology, declaring,
directing and ordering the following:ChanRoblesVirtualawlibrary
a) The dismissal of the instant complaint.
b) The plaintiff Agusan Institute of Technology (AIT) as represented by Dr. Shirley T.
Lim to pay defendant Bank the following:
1. The outstanding balance of the 7th loan (P9,512,400.00) which as of
May 23, 2005 amounts to P20,213,240.55 until fully paid.
2. The outstanding balance of the 8th loan (P1,987,600.00) which amounts
to P3,742,841.63 as of May 23, 2005 until fully paid.
3. The outstanding balance of the 11th loan (P10,100,000.00) which
amounts to P46,569,275.26 as of May 23, 2005 until fully paid.
c) Attorney's fees in the amount of 10% of the outstanding obligations.
d) Litigation expenses in the amount of P30,000.00.
e) Exemplary damages in the amount'of P50,000.00.
f) The writ of preliminary injunction is hereby ordered lifted and of no force and
effect.
SO ORDERED.4
Dissatisfied, petitioners appealed to the CA.
In a Resolution dated July 2, 2009, the CA denied petitioners' appeal with prayer
for the issuance "of a Temporary Restraining Order (TRO) and/or Writ of
Preliminary Injunction.
The CA held that injunction is an extraordinary remedy to be resorted to when
there is a pressing necessity to avoid injurious consequences that cannot be
remedied under any standard compensation. To be entitled to an injunctive writ,
the applicants must show, inter alia, the existence of a clear and unmistakable right
and an urgent and paramount necessity for the writ to prevent serious damages.
The CA held that it neither appears from the facts shown by the TRO application
that great or irreparable injury would result to petitioners before the matter can be
heard, nor did petitioners show any clear and positive right to be entitled to the
protection of the ancillary relief of TRO.5chanrobleslaw
Petitioners filed a motion for reconsideration, however, the same was denied in a
Resolution dated.September 30, 2009.
Hence, the present petition.
Petitionersraise the following grounds to support their
petition:chanRoblesvirtualLawlibrary
I
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE
JULY 2, 2009 RESOLUTION WHICH DENIED PETITIONERS' APPLCIATION FOR THE
ISSUANCE OF TEMPORARY RESTRAINING ORDER, DESPITE THE FACT THAT
PETITIONERS HAVE SHOWN TLIEIR CLEAR ENTITLEMENT TO THE ISSUANCE OF
INJUNCTIVE RELIEF.
II
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 44
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING TFIE
SEPTEMBER 30, 2009 RESOLUTION WHICH DENIED PETITIONERS' MOTION FOR
RECONSIDERATION OF THE RESOLUTION DATED JULY 2, 2009 DENYING
PETITIONERS' APPLICATION FOR THE ISSUANCE OF INJUNCTIVE RELIEF, AND IN NOT
ACTING ON TFIE MERITS ON PETITIONERS' SUPPLEMENTAL TO TFIE MOTION FOR
RECONSIDERATION, DESPITE THE FACT THAT PETITIONERS FIAVE CLEARLY SHOWN
THAT GREAT AND IRREPARABLE INJURY WOULD BE COMMITTED AGAINST THEM IF
THEIR PLEA FOR INJUNCTIVE RELIEF WOULD NOT BE ISSUED IN THEIR FAVOR AND
THAT PETITIONERS RAISED COGENT GROUNDS IN THEIR SUPPLEMENTAL MOTION. 6
In essence, at issue is whether or not the CA, in denying petitioners' application for
a writ of preliminary injunction, committed grave abuse of discretion amounting to
lack of jurisdiction.
We rule in the negative.
Section 5, Rule 58 of the Rules of Court provides that a temporary restraining order
may be issued only if it appears from the facts shown by affidavits or by verified
application that great or irreparable injury would be inflicted on the applicant be-
fore the writ of preliminary injunction could be heard.
Thus:chanRoblesvirtualLawlibrary
Section 5. Preliminary injunction not granted without notice; exception. - No
preliminary injunction shall be granted without hearing and prior notice to the
party or person sought to be enjoined. If it shall appear from facts shown by
affidavits or by verified application that great or irreparable injury would result to
the applicant before the matter can be heard on notice, the court to which the
application for preliminary injunction was made, may issue a temporary restraining
order to be effective only for a period of twenty (20) days from service on the party
or person sought to be enjoined, except as herein provided. Within the said
twenty-day period, the court must order said party or person to show cause, at a
specified time and place, why the injunction should not be granted, determine
within the same period whether or not the preliminary injunction shall be granted,
and accordingly issue the corresponding order.
However, and subject to the provisions of the preceding sections, if the matter is of
extreme urgency and the applicant will suffer grave injustice and irreparable injury,
the executive judge of a multiple-sala court or the presiding judge of a single sala
court may issue ex parte a temporary restraining order effective for only seventy-
two (72) hours from issuance but he shall immediately comply with the provisions
of the next preceding section as to service of summons and the documents to be
served therewith. Thereafter, within the aforesaid seventy-two (72) hours, the
judge before whom the case is pending shall conduct a summary hearing to
determine whether the temporary restraining order shall be extended until the
application for preliminary injunction can be heard. In no case shall the total period
of effectivity of the temporary restraining order exceed twenty (20) days, including
the original seventy-two hours provide herein.
In the event that the application for preliminary injunction is denied or not
resolved within the said period, the temporary restraining order is deemed,
automatically vacated. The effectivity of a temporary restraining order is not
extendible without need of any judicial declaration to that effect and no court shall
have authority to extend or renew the same on the same ground for which it was
issued.
However, if issued by the Court of Appeals or a member thereof, the temporary
restraining order shall be effective for sixty (60) days from service on the party or
person sought to be enjoined. A restraining order issued by the Supreme Court or a
member thereof shall be effective until further orders.
From the foregoing, it is clear that to be entitled to an injunctive writ, the applicant
must show that there exists a right to be protected which is directly threatened by
an act sought to be enjoined. Furthermore, there must be a showing that the
invasion of the right is material and substantial, and that there is an urgent and
paramount necessity for the writ to prevent serious damage.7chanrobleslaw
In Australian Professional Realty, Inc. v. Municipality of Padre Garcia, Batangas
Province8 this Court held that a writ of preliminary injunction and a TRO are
injunctive reliefs and preservative remedies for the protection of substantive rights
and interests. Essential to granting the injunctive relief is the existence of an urgent
necessity for the writ in order to prevent serious damage. A TRO issues only if the
matter is of such extreme urgency that grave injustice and irreparable injury would
arise unless it is issued immediately. 9chanrobleslaw
Also, the Court, in the case of Pahila-Garrido v. Tortogo, 10emphasized that -
[I]njunctive relief is resorted to only when there is a pressing necessity to avoid
injurious consequences that cannot be redressed under any standard of
compensation. The controlling reason for the existence of the judicial power to
issue the writ of injuction i's that the court may thereby prevent a threatened or
continuous injury to some of the parties before their claims can be thoroughly
investigated and advisedly adjudicated. A writ of preliminary injunction is an
extraordinary event and is the strong arm of equity, or a transcendent remedy. It is
granted only to protect actual and existing substantial rights. Without actual and
existing rights on the part of the applicant, and in the absence of facts bringing the
matter within the conditions for its issuance, the ancillary writ must be struck

down for being issued in grave abuse of discretion. Thus, injunction will not issue
to protect a right not in esse, which is merely contingent, and which may never
arise, or to restrain an act which does not give rise to a cause of action.11
Worth noting also is the fact that the grant or denial of a writ of preliminary
injunction in a pending case rests on the sound discretion of the court taking
cognizance of the case, since the assessment and evaluation of evidence towards
that end involves findings of fact left to the said court for its conclusive
determination. 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.12chanrobleslaw
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.13chanrobleslaw
In the present Case, we find that the CA did not commit grave abuse of discretion
in denying petitioners' application for preliminary injunction and TRO. As aptly held
by the CA, it neither appears from the facts shown by the TRO application that'
great or irreparable injury would result to petitioners before the matter can be
heard, nor did they show any clear and positive right to be entitled to the
protection of the ancillary relief of TRO as they only claim that their debts would
have been paid had respondent bank not impose astronomical interests on its
loans.
Nevertheless, it appears that the acts sought to be enjoined by petitioners, that is,
for respondents to cease and desist from conducting the extrajudicial foreclosure
of its properties, are already fait accompli. As early as July 31, 2009, Sheriff
Archibald Varga executed in favor of respondent bank the Sheriffs Certificate of
Sale on said properties after petitioners failed to exercise the right of redemption
within the period required of them under the law. Since the very evil that
petitioners want to avoid no longer exists, there is nothing more to be restrained.
WHEREFORE, premises considered, the instant petition is DENIED. The Court of
Appeals Resolutions dated July 2, 2009 and September 30, 2009 are AFFIRMED.
SO ORDERED.
EN BANC
G.R. No. 162716 September 27, 2006
Honorable Secretary EMILIA T. BONCODIN of the Department of Budget and
Management (DBM), petitioner,
vs.
NATIONAL POWER CORPORATION EMPLOYEES CONSOLIDATED UNION
(NECU), respondent.
DECISION
PANGANIBAN, C.J.:
Injunction is an extraordinary peremptory remedy available only when the
claimant can show a clear and positiveright that must be protected. When the
alleged right is unclear or dubious, the injunctive writ cannot be granted. As the
present respondent has not proved a clear legal right to the salary step increments
in question, the lower court is deemed to have gravely abused its discretion when
it issued the Writ of Preliminary Injunction.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, assailing the
November 25, 2003 Decision2and the March 4, 2004 Resolution, 3 both rendered by
the Court of Appeals (CA) in CA-GR SP No. 74694.
The assailed Decision upheld the Writ of Preliminary Injunction issued by the
Regional Trial Court of Quezon City, Branch 78, in its Resolutions 4 dated September
25, 2002, and October 29, 2002, in Civil Case No. Q-02-47615. The questioned writ
enjoined the implementation of National Power Corporation's Board Resolution
No. 2002-81 passed on July 24, 2002, and confirmed on August 14, 2002; Secretary
Emilia T. Boncodin's Letter Memorandum dated May 8, 2002; and Corporate
Auditor Norberto Cabibihan's Memorandum Circular dated June 5, 2002.
The assailed Resolution denied reconsideration.
The Facts
The CA summarized the undisputed facts as follows:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 45
"On [October 8, 2001], the Board of Directors of NAPOCOR issued Board
Resolution No. 2001-113 amending Board Resolution No. 99-35 which
granted the Seniority in Position Pay. Board Resolution No. 99-35
granted a step increment to all qualified NAPOCOR officials and
employees who have been in their position for ten (10) years effective
calendar year 1999. On the other hand, Board Resolution No. 2001-113
reduced the ten (10) year requirement to three (3) years.
"On [November 12, 2001], then President of NAPOCOR, Jesus Alcordo,
issued Circular No. 2001-51 providing for the implementing rules and
regulations of Board Resolution No. 2001-113. On May 6, 2002, the
NAPOCOR Officer-in-Charge, President and Chief Executive Officer,
Roland Quilala, issued Circular No. 2002-22 providing for additional
guidelines relative to the implementation of the step increment based
on length of service in the position to qualified NAPOCOR officials and
employees.
"On [November 26, 2001], petitioner furnished a letter addressed to Mr.
Alcordo informing the latter that NAPOCOR's request for clearance to
implement Joint CSC-DBM Circular No. 1, s. 1990 which is the basis of
Board Resolution No. 2001-113 cannot be given due course for lack of
legal basis. In essence, petitioner holds that the grant of step increment
based on length of service is an additional benefit under a different
name since NAPOCOR has already been granting seniority pay based on
the length of service as embodied in the Collective Negotiation
Agreement (CNA). In addition, petitioner said that the grant of step
increment is not applicable to the salary plan of NAPOCOR considering
its higher salary rates [compared with that of the existing government
pay plan]. Lastly, petitioner told Mr. Alcordo of the budget implication of
the grant of said proposal which she estimated to cost as high as Eighty
Four Million Pesos (P84,000,000.00).
"Based on the petitioner's foregoing letter, the Corporate Auditor of
NAPOCOR, Norberto Cabibihan, issued a Memorandum [dated June 5,
2002] to Roland Quilala, NAPOCOR Officer-in-Charge, enjoining him to
suspend/stop payment of the step increment as embodied in NPC
Circular No. 2001-51 dated [November 12, 2001], [effective July 2002].
He also requested the suspension of the implementation of NPC
Circular No. 2002-22 dated [May 6, 2002]. He warned that succeeding
payments of the step increment shall be automatically disallowed.
"On [June 21, 2002], Mr. Quilala issued a Memorandum enjoining
concerned officials to suspend the processing of the succeeding step
increment based on length of service resulting from the application of
Sections 2.2 (c) and 2.2 (d) of Circular No. 2002-22.
"On [July 24, 2002], the NAPOCOR Board of Directors issued Board
Resolution No. 2002-81 revising the implementation of the Step
Increment, the pertinent portion of which reads:
'NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY
RESOLVED, That the recommendations of the Department of
Budget and Management (DBM), as explained by the
Honorable Secretary and Director of NP Board, Emilia T.
Boncodin, relative to the submitted Revised Implementation
of the Step Increment due to Length of Service in the
position of the NPC employees, to cover the following:
'1) Pure seniority benefits counted as one (1) step increment
for every three (3) years of service in the present position,
covering from years 1994 up to 2001 or two (2) steps
increment only;
'2) Rollback of basic monthly salary for NPC personnel who
have been recipients of the step increase due to length of
service in their present position in excess of the two steps
increment granted in the above paragraph to qualified
employees and officials, and Corrective Salary Adjustment
(CSA) effective September 1, 2002; and
'3) No payback by the NPC officials and employees who were
granted salary differentials covering the period October 2001
up to August 2002. Approval of all this and the above
benefits will be sought from the Office of the President,
Malacaang, upon assurance by the Secretary of the
Department of Budget and Management (DBM) that a
favorable endorsement in support thereof will be made, x x x
and are hereby approved; x x x'
"Believing that NPC Circular Nos. 2001-51 and 2002-22 are within the
bounds of law and that they have already acquired a vested right in it,
[respondent National Power Corporation Employees Consolidated
Union (NECU) filed a Petition for Prohibition with Application for
TRO/Preliminary Injunction before the Regional Trial Court in Quezon
City on [August 27, 2002].

"On [August 30, 2002], public respondent [Judge Percival Mandap
Lopez, of Branch 78, Regional Trial Court of Quezon City] issued an
Order granting private respondent's prayer for the issuance of a
Temporary Restraining Order and setting the hearing of the application
for the issuance of a writ of preliminary injunction on [September 9,
2002]. However, it appears that in lieu of oral arguments, the parties
opted to file their respective position papers and memoranda on the
matter.
"Hence, on [September 25, 2002], public respondent issued the first
assailed Resolution granting private respondent's prayer for the
issuance of the writ of preliminary injunction. Public respondent held
that at that stage of the proceedings, respondents therein have not
shown that Circular No. 2001-51 and Board Resolution No. 2001-113,
which were implemented effective [July 1, 2001], are in contravention
of [any] law. He further held that a 'roll back' of the salaries of all the
NAPOCOR employees, while the merits of the case is yet to be heard,
would result to a grave and irreparable damage to them. Thus, public
respondent granted [NECU's] prayer for the issuance of the writ of
preliminary injunction subject to its filing of the Injunction Bond in the
amount of Eighty Four Million Pesos (P84,000,000.00) which is the
budget implication of the step increment as manifested by petitioner.
"Both parties moved for the reconsideration of the Resolution.
Petitioner prayed for the reversal thereof while [respondent NECU]
prayed for the deletion of the Injunction Bond. Public respondent
denied both motions in the second assailed Resolution dated [October
29, 2002]."5
Through a Petition for Certiorari under Rule 65 of the Rules of Court, petitioner
sought relief from the CA. She argued that the RTC had "failed to consider the
principle of non-exhaustion of administrative remedies and allowed the grant of
seniority pay to NAPOCOR employees [without any legal basis]."6
Ruling of the Court of Appeals
The CA found no cogent reason to disturb the conclusions reached by the lower
court. The appellate court ruled that the doctrine of exhaustion of administrative
remedies was not a hard and fast rule. It held that the determination of whether
the arguments raised by respondent fell within the exceptions to the rule was
within the sound discretion of the trial court.
Adopting the RTC's ratiocinations that grave and irreparable damage would be
inflicted on the employees if the writ was not granted, the Court of Appeals said:
"It is the humble view of this Court that matters of compensation, being
sacrosanct and held dearly as life itself, cannot easily be trifled with,
trampled upon and recalled at whim. The grim prospect of uncertainty
facing the [respondents] owing to their inevitable separation from the
service further compels this Court to act decisively and with dispatch
while the main case is being heard."7
The CA, however, refused to rule on the issue of whether there was legal basis for
the step increments. It believed that to do so would mean prejudging the main
case pending before the trial court.
Hence, this Petition.8
Issues
In her Memorandum, petitioner raises the following issues for our consideration:
"I. Whether Rule 16 of the 1997 Rules of Civil Procedure authorized the
Regional Trial Court to acquire jurisdiction over matters pending with
the COA by issuing a writ of preliminary injunction, which amounts to
an encroachment on the independence of the same constitutional
body.
"II. Whether Section 16 of Republic Act No. (RA) 6758 (The Salary
Standardization Law enacted on August 21, 1989) amended RA No.
6375 (NAPOCOR Charter), which authorized the Board of Directors to fix
the compensation, allowance and benefits of its employees.
"III. Whether Sections 14 and 15 of RA 6758 mandated the DBM to
review and approve NAPOCOR Board Resolution No. 2001-113 and its
implementing Circular No. 2001-51 before it may be legally
implemented.
"IV. Whether NAPOCOR has the power to issue Board Resolution No.
2002-81 amending its Resolution No. 2001-113 and Circular No. 2001-
51 in order to correct its previous erroneous act of implementing the
latter Resolution /Circular without the requisite review and approval by
the DBM.
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 46
"V. Whether Rule 58 of the 1997 Rules of Civil Procedure authorized the
issuance of a writ of preliminary injunction even if the relief/protection
applied for is the subject of controversy in the main action.
"VI. Whether Section 1, Rule 36 of the 1997 Rules of Civil Procedure
required that an Order for the issuance of a writ of preliminary
injunction should state clearly and distinctly the facts and the law on
which it is based."9
Briefly, the issues brought for resolution by this Court are (1) the propriety of the
Writ of Preliminary Injunction; and (2) the legality of the step increments that were
issued without the DBM's prior approval.
Considering that the second issue concerns the merits of the case pending before
the trial court, the Court will limit its discussion only to the first question.
The Court's Ruling
The Petition is partly meritorious.
Sole Issue:
Propriety of the Preliminary Injunction
Exhaustion of Administrative Remedies
Initially, petitioner assails the trial court's jurisdiction to issue the Writ of
Preliminary Injunction. She contends that the Petition for Prohibition filed by
respondent is premature, because COA has yet to rule on whether or not to lift the
suspension of the step increments granted in Napocor Board Resolution No. 2001-
113 and Circular No. 2001-51. She adds that there is a need to follow the
procedural requirements and processes mandated in COA's 1997 Revised Rules
(COA Rules) as a condition precedent for a resort to the courts by respondent. She
says further that it is not exempt from the doctrine of exhaustion of administrative
remedies on the basis merely of its general assertions of irreparable injury.
We disagree.
It should be noted that shortly after Corporate Auditor Cabibihan issued the
suspension Order dated June 5, 2002, the Napocor board passed Resolution No.
2002-81 on July 24, 2002, to rectify its Resolution No. 2001-113 and Circular No.
2001-51, which were issued earlier without authority from the DBM. This time,
Resolution No. 2002-81, which was confirmed on August 14, 2002, bore the DBM's
approval.
Under the new resolution, the step increments mentioned in the previous
Resolution No. 2001-113 were limited to a maximum of two steps, and the "roll
back" of salaries of all the Napocor employees who received more than the two-
step increments was set to be implemented on September 1, 2002. With the
circumstances then obtaining, it would have been impractical, if not illogical, for
respondent to "exhaust" administrative remedies before taking court action.
Besides, the COA Rules do not clearly and explicitly prescribe the procedure for
addressing respondent's Complaint against the implementation. Indeed, while
Corporate Auditor Cabibihan has yet to rule on whether or not to lift the
suspension order, as petitioner contends, the fact remains that Board Resolution
No. 2002-81 has already modified the previous resolution, precisely to conform to
COA Rules.
Even assuming arguendo that the provision exists, the appeal mechanics under the
COA Rules would not constitute a speedy and adequate remedy. A remedy is
considered plain, speedy and adequate if it will promptly relieve the petitioner
from the injurious effects of the judgment or rule, order or resolution of the lower
court or agency.10
A petition for prohibition is a preventive remedy and, as a rule, does not lie to
restrain an act that is already fait accompli.11 The Petition for Prohibition instituted
by respondent before the trial court assailed the validity not only of petitioner's
May 8, 2002 Letter Memorandum and Corporate Auditor Cabibihan's
Memorandum Circular (suspension order) but, more important, it assailed Napocor
Board Resolution No. 2002-81, which was to be implemented in September 2002.
Given the impending "roll back" of the salaries of the affected employees, there
was an urgent need for judicial intervention. 12
Moreover, respondent's immediate resort to judicial action is justified because only
legal issues are to be resolved, which are the validity of the step increments and
the authority of the DBM vis--vis the questioned Napocor Circular and
Resolution.13
All in all, the principle of non-exhaustion of administrative remedies is not an
inflexible rule.14 It may be dispensed with in the present case, because its
application would not constitute a plain, speedy and adequate remedy. The issues
here are purely legal, and judicial intervention has been shown to be urgent.
 P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 47

Injunctive Order We disagree.

Not Properly Issued
Section 3, Rule 58 of the Revised Rules of Court, provides 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) 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
'(c) 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.'"
From the foregoing conflicting claims of the parties, it is obvious that the right
claimed by respondent as its basis for asking for injunctive relief is far from clear.
The validity of the circulars and board resolution has been put into serious
question; more so, in the light of Napocor Board Resolution No. 2002-81, which
was issued precisely to rectify the previously issued resolution and circular. While
respondent's claimed right is not required to be conclusively established at this
stage, it is nevertheless necessary to show -- at least tentatively -- that it exists and
is not vitiated by any substantial challenge or contradiction as that raised by
petitioner.31 In our view, respondent has failed to comply with this requirement.
The enforcement of the suspension order and Resolution No. 2002-81 would effect
the rollback of the salaries of Napocor employees receiving more than the two-
step increments. True, their enforcement would be prejudicial to respondent
members' interest, but merely showing this fact is not sufficient. It must also be
established that the party applying for the writ has a clear legal right that must be
protected. Thus, a finding that the applicant for preliminary injunction may suffer
damage not capable of pecuniary estimation does not suffice to support an
injunction, when it appears that the right to be protected is unclear or is seriously
disputed.32
No Vested Right to the
Suspended Step Increments

Respondent contends that its members have already acquired a vested right to the
To be entitled to a writ of injunction, a party must establish the following
suspended step increments, which they have been enjoying after the issuance of
requisites: (a) the right of the complainant isclear and unmistakable; (b) the
Circular No. 2001-51 in October 2001. It alleges that the suspension or revision of
invasion of the right sought to be protected is material and substantial; and (c)
the circular (by virtue of Board Resolution No. 2002-81 issued on July 24, 2002, and
there is an urgent and paramount necessity for the writ to prevent serious
confirmed on August 14, 2002) constitutes a salary diminution, which is clearly
damage.15
prejudicial to them.

The question of whether a writ of preliminary injunction should be issued is

A vested right is one that is absolute, complete and unconditional; to its exercise,
addressed to the sound discretion of the issuing court.16 The grant of the writ is
no obstacle exists; and it is immediate and perfect in itself and not dependent
conditioned on the existence of the movant's clear and positive right, which should
upon any contingency.33 To be vested, a right must have become a title -- legal or
be protected.17 It is an extraordinary peremptory remedy available only on the
equitable -- to the present or future enjoyment of property.34
grounds expressly provided by law, specifically Section 3 of Rule 58.

As has been held, there is no vested right to salary increases. 35 There must be a
A clear legal right means one clearly founded in or granted by law or is
lawful decree or order supporting an employee's claim.
"enforceable as a matter of law." 18

In the present case, because the validity of their implementation was

Absent any clear and unquestioned legal right, the issuance of an injunctive writ
fundamentally assailed, the step increments enjoyed by the Napocor employees
would constitute grave abuse of discretion. 19 Injunction is not designed to protect
could not have ripened into vested rights. In brief, it is seriously contended that,
contingent, abstract or future rights whose existence is doubtful or disputed. 20 It
because they were granted without the required DBM approval, no vested rights to
cannot be grounded on the possibility of irreparable damage without proof of an
the step increments could have been acquired.
actual existing right.21 Sans that proof, equity will not take cognizance of suits to
establish title or lend its preventive aid by injunction.22
The terms and conditions of employment of government employees are governed
by law.36 It is the legislature and -- when properly given delegated power -- the
Relevantly, Olalia v. Hizon held as follows:
23
administrative heads of government that fix the terms and conditions of
employment through statutes or administrative circulars, rules, and regulations. 37
"It has been consistently held that there is no power the exercise of
which is more delicate, which requires greater caution, deliberation and
While government instrumentalities and agencies are trying their best to alleviate
sound discretion, or more dangerous in a doubtful case, than the
the financial difficulties of their employees, they can do so only within the limits of
issuance of an injunction. It is the strong arm of equity that should
budgetary appropriations. The exercise of management prerogative by government
never be extended unless to cases of great injury, where courts of law
corporations are limited by the provisions of the laws applicable to them. 38 Subject
cannot afford an adequate or commensurate remedy in damages.
to state regulation in particular is a public utility like Napocor, its income, and the
amount of money available for its operating expenses including labor costs.
"Every court should remember that an injunction is a limitation upon
the freedom of action of the defendant and should not be granted
Moreover, Article 100 of the Labor Code on "non-diminution of benefits" does not
lightly or precipitately. It should be granted only when the court is fully
contemplate the continuous grant of unauthorized or irregular compensation. The
satisfied that the law permits it and the emergency demands it." 24
application of the principle presupposes that a company practice, policy and
tradition favorable to the employees has been clearly established; and that the
In the present case, respondent anchors its entitlement to the injunctive writ on its payments made by the company pursuant to it have ripened into benefits enjoyed
alleged legal right to the step increments. It contends that under Republic Act No. by them.39
6395 (Revised Charter of the National Power Corporation), 25the Napocor board was
empowered to fix the compensation and benefits of its employees; and to grant
In Baybay Water District v. COA,40 a substantially similar contention was resolved in
step increments, based on Memorandum Order No. 198 issued by then President
this wise:
Fidel Ramos and on Republic Act (RA) No. 7648 (otherwise known as the "Electric
Power Crisis Act of 1993").26
"x x x. The erroneous application and enforcement of the law by public
officers does not estop the Government from making a subsequent
On the other hand, petitioner contends that the pertinent provision of the
correction of such errors. More specifically, where there is an express
Napocor Charter,27 upon which respondent bases its claimed authority from the
provision of law prohibiting the grant of certain benefits, the law must
board, has already been superseded or modified by Section 16 28of Republic Act No.
be enforced even if it prejudices certain parties due to an error
6758.29 This provision mandates the DBM's review and approval of Napocor Board
committed by public officials in granting the benefit. x x x Practice,
Resolution No. 2001-113 and Circular No. 2001-51 prior to their implementation.
without more, no matter how long continued, cannot give rise to any
Hence, because these issuances were implemented without the DBM's mandatory
vested right if it is contrary to law." 41
review and approval, they cannot be made the source of any right whatsoever.

An Injunctive Writ, a Virtual

In its Resolution dated September 25, 2002, the trial court noted that at that stage
of the proceedings, petitioner had not shown that Circular No. 2001-51 and
Resolution No. 2001-113, which were already being implemented by Napocor,
were in contravention of any law. What the RTC perceived to be clear was that a
rollback of the salaries of all the Napocor employees, while the merits of the case
were yet to be heard, would result in grave and irreparable damage to them.
Hence, the trial court concluded, its issuance of the injunctive writ was justified. 30
Disposition of the Main Case
While the grant of a writ of preliminary injunction generally rests on the sound
discretion of the court taking cognizance of the case, extreme caution must be
observed in the exercise of that discretion.42 A court should, as much as possible,
avoid issuing the writ, which would effectively dispose of the main case without
trial and/or due process.43

In the present case, it is evident that the only ground relied upon for injunctive
relief is the alleged nullity of petitioner's May 8, 2002 Memorandum and Auditor
Cabibihan's June 5, 2002 suspension order. Respondent contends that petitioner
and Cabibihan exceeded the limitations of their authority.
By issuing a writ premised on that sole justification, the trial court in effect
sustained respondent's claim that petitioner and Auditor Cabibihan had exceeded
their authority in ordering the suspension of the implementation of the step
increments; and that the suspension was patently invalid or, at the very least, that
the memorandum and circular were of doubtful validity. Thus, the lower court
prejudged the main case and reversed the rule on the burden of proof, because it
assumed to be true the very proposition that respondent-complainant in the RTC
was duty-bound to prove in the first place.
Furthermore, the RTC's action ran counter to the well-settled rule that acts of
public officers are presumed to be regular and valid, unless sufficiently shown to be
otherwise.44 A court may issue a writ or preliminary injunction only when the
respondent has made out a case of invalidity or irregularity. That case must be
strong enough to overcome, in the mind of the judge, the presumption of validity;
and it must show a clear legal right to the remedy sought.45
Petitioner has gone to great lengths in arguing her position on the merits of the
prohibition case, but this is neither the time nor the opportunity for that kind of
debate. The validity of respondent's Complaint is a matter that must be addressed
initially by the trial court; that issue cannot be resolved at this time by this Court.
In fine, we hold that respondent has not justified the issuance of the Writ of
Preliminary Injunction by proving its clear and positive legal right to the step
increments. The Court of Appeals thus erred in affirming the Resolutions of the
trial court dated September 25, 2002 and October 29, 2002.
WHEREFORE, the Petition is GRANTED, and the assailed Decision and
Resolution REVERSED AND SET ASIDE.The Regional Trial Court of Quezon City is
directed to proceed speedily with the trial on the merits of Civil Case No. Q-02-
47615 and to decide it with all deliberate dispatch. No costs.
SO ORDERED.
G.R. No. 159124 January 17, 2005
MARCELA GONZALES ALMEIDA, petitioner,
vs.
COURT OF APPEALS and ROBERT P. SY, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court of the Decision1 of the Court of Appeals in CA-G.R. SP No. 75020, finding
grave abuse of discretion on the part of the Regional Trial Court (RTC) of Caloocan
City, Branch 130,2 when it granted the applications of the herein petitioner for the
issuance of writs of preliminary prohibitory and mandatory injunction.
The antecedents, as culled from the records of the case, are as follows:
Marcelina Sarangaya was the registered owner of a parcel of land, identified as Lot
896, located in the then municipality of Caloocan, province of Rizal, covered by
Transfer Certificate of Title (TCT) No. 87075,3 with an area of 4,738 square meters.
The property forms part of the Tala Estate (Friar Land) covered by Original
Certificate of Title (OCT) No. 543 issued on December 27, 1910.4
Sometime in September 1993, respondent Robert P. Sy purchased the above parcel
of land from Sarangaya. TCT No. 87075 was cancelled and, in lieu thereof, TCT No.
270862 was issued on September 16, 1993 under the name of Sy.5
Forthwith, the respondent caused the construction of a factory for kitchenware on
the property.6 A little over than five years later, or on January 20, 1998, petitioner
Marcela Gonzales Almeida filed a complaint against the respondent and forty (40)
others for quieting of title and the declaration, as void ab initio, of the assignment
of sale certificates and damages, with a prayer for temporary restraining order and
writ of preliminary injunction in the RTC of Caloocan City, Branch 124. The case was
docketed as Civil Case No. C-537.7
In her complaint, the petitioner alleged, inter alia, that she was the only child of
the Spouses Severino Gonzales and Juana Libertad. A certain Nicanor Jacinto was
issued a Certificate of Sale dated July 11, 1910 over friar land, a parcel of land
known as the Tala Estate, with an area of 25.375 hectares. Jacinto, thereafter,
executed an Assignment of Sale Certificate dated November 4, 1926 in favor of the
petitioners father Severino Gonzales, which was duly approved by the Bureau of
Lands. The petitioner further narrated that prior to the Second World War, her
parents occupied the property continuously, openly and in the concept of owner.
After the death of her father and mother in 1940 and 1942, respectively, she
occupied the said property through her overseers, openly and in the concept of
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 48
owner being the sole heir thereof. However, she was not able to secure
a torrens title over the property based on the said certificates because of limited
instruction. The petitioner further alleged that Oscar L. Uy, in connivance with the
other defendants, caused the falsification of the Deed of Assignment dated
November 21, 1936 over the said parcel of land purportedly executed by Severino
Gonzales in favor of Pedro and Aleja Gonzales; on the basis thereof, TCT No. 42126
was issued to the latter on January 9, 1941; this was later cancelled on June 7,
1947 when TCT No. 4477 was issued to and in the names of Paula Bernardo Vda.
de Gonzales, et al.; and which, in turn, was cancelled by TCT No. 4495 issued in the
name of Oscar Uy on June 7, 1947. TCT No. 10533(9498) was, thereafter, issued on
July 1, 1948 in the names of Remedios Mercado, et al. The petitioner further
alleged that a portion of the property identified as Lot 896 was sold to Marcelina
Sarangaya on May 23, 1961,8 who was issued TCT No. 87075 therefor. She claimed
that the said deed of assignment executed in favor of Pedro and Aleja Gonzales,
and the titles issued on the basis thereof were null and void. The petitioner also
alleged in her complaint that she was already 73 years old.
To support her application for a writ of preliminary injunction, the petitioner
alleged the following:
a. Plaintiff, as shown in the preceding paragraphs and indubitably by the
Assignment of Sale Certificate No. 722 dated November 4, 1926 (Annex
"A" hereof), is the absolute owner of the subject parcel of land, Lot 896
Tala Estate, and, as such, she has the right to be protected from further
acts of land grabbing and acts of dispositions by the defendants-
developers;
b. Defendants-developers having already subdivided and sold
substantial portions are bent to continue to further subdivide and sell
the other portions of the subject properties of the plaintiff if not
ordered to desist by at least a temporary restraining order and,
thereafter, by writ of preliminary injunction;
c. Plaintiff has already suffered and will inevitably continue to suffer
grave and irreparable damages and injuries if defendants-developers
and/or their privies or transferees-in-interest, the herein other
defendants, are not prevented from further subdividing and selling
subdivided lots of the subject parcel of land and from building
structures and introducing other improvements thereon;
d. Plaintiff is ready to put up the bond in such amount reasonably fixed
to answer for any damage in the event that plaintiff is finally adjudged
as not to be entitled to relief of injunction.9
In his answer 10 to the complaint, the respondent asserted, among others, that he
bought Lot 896 in good faith and for valuable consideration. Contrary to the
petitioners claim that the property was in her possession, 11 it was he who had
been in continuous possession thereof. Moreover, as against the Deed of
Assignment of Sale Certificate No. 722, the title issued under his name, TCT No.
270862, should prevail.12
Upon motion of the petitioner, the trial court ordered the consolidation of Civil
Case No. C-537 with another case relating to Lot 896, Civil Case No. C-17659,
earlier filed and pending with the RTC, Branch 130, 13 presided by Judge Jaime T.
Hamoy.14
During the August 20, 1999 hearing of the petitioners plea for a writ of preliminary
injunction, Santos Alberca was presented as witness. Alberca testified that he was
somehow related to the petitioner 15 and had been the overseer of the latters
property, Lots 896, 897 and 899, since 1994. 16 He narrated that when squatters
occupied a portion of the property, he confronted them and demanded proof of
their title; the latter failed to do so. Alberca admitted, however, that the petitioner
had no proof that the subject properties were in her name, 17 and that he was not
aware whether there was a proceeding, testate or intestate, concerning the estate
of the late Severino Gonzales, the petitioners alleged father. The respondent did
not adduce any evidence.
On June 4, 2002, the trial court issued an Order18 granting the application for a writ
of preliminary prohibitory injunction, enjoining the defendants therein from
further subdividing the disputed parcel of land known as Lot 896 of the Tala Estate
located in Camarin, Caloocan City, and from selling or encumbering, or otherwise,
negotiating any portion thereof and from building or constructing any structures or
improvements thereon, as well as from bulldozing, leveling or scrapping or
excavating any portion thereof or from the entry of any illegal occupants or any
portion thereof and from committing further acts of dispossession thereon, upon
posting, by the petitioner as the plaintiff therein, of an injunctive bond in the
amount of One Million Pesos (P1,000,000.00). The trial court ruled that, based on
the Assignment of Sale Certificate dated November 4, 1926 and being the lone heir
of the Spouses Gonzales, the petitioner became the owner of Lots 896, 897 and
899. Thus, the trial court concluded that the title over Lot 896 issued to the
respondent was spurious and falsified.19
After the petitioner posted a bond of P1,000,000.00, the trial court issued a writ of
preliminary prohibitory injunction20 on July 1, 2002, enjoining the respondent and
the other defendants and all their attorneys, representatives, agents and other
persons assisting them, or acting in their behalf or who derived their rights and

occupancy from them, from developing, moving, leveling or hauling earth; from
further subdividing any portion of Lot 896 of the Tala Estate, situated in Caloocan
City; from constructing/building any structure thereon of any kind or enclosing any
portion thereof with fence; from selling or offering to sell, leasing or, otherwise,
occupying any portion thereof; and from further introducing or allowing any entry
of other persons in any portion of the said lot.21
The Sheriffs Partial Report22 dated August 19, 2002 stated that the defendants
refused to comply with the said writ of injunction issued by the court. Thus, on
August 23, 2002, the petitioner filed a motion for the issuance of a writ of
preliminary mandatory injunction, serving a copy thereof on the respondent on
August 22, 2002.23
For his part, the respondent filed a motion for the dissolution 24 of the writ of
preliminary injunction which the trial court issued on July 1, 2002, alleging that the
petitioner had no torrens title over Lot 896. He further alleged that as it appears
from the face of TCT No. 87075 issued in the name of Angelina Sarangaya and TCT
No. 270862, the title issued in his name, the subject property was free from any
liens, claims or encumbrances of whatever nature. He, likewise, alleged that the
petitioner could amply protect whatever right she had over the property via an
annotation of a notice of lis pendens. Finally, the respondent claimed that he was
never notified of the hearing for the issuance of a writ of preliminary injunction
nor furnished with a copy of the trial courts June 4, 2002 Order.
On December 12, 2002, the trial court issued an Order 25 denying the motion to
dissolve the writ of preliminary injunction. On even date, the trial court issued
another order26 granting the petitioners application for a writ of preliminary
mandatory injunction on a bond of P2,000,000.00.27 On January 16, 2003, the trial
court issued a writ of preliminary mandatory injunction28 ordering Sheriff
Perseverando C. Pangan to place the petitioner in the possession of Lot 896 of the
Tala Estate.
The respondent received a copy of the writ of preliminary mandatory injunction on
December 26, 2002, with an accompanying notice from the sheriff ordering him to
vacate the property. On January 21, 2003, the respondent filed a petition for
certiorari29 under Rule 65 of the Revised Rules of Court with the Court of Appeals
(CA) for the nullification of the June 4, 2002 and December 12, 2002 Orders of the
trial court. The case was docketed as CA-G.R. SP No. 75020.
Based on the Sheriffs Partial Report 30 dated January 24, 2003, stating that there
were structures erected in the subject property, the petitioner forthwith filed a
motion in the trial court for their removal therefrom on February 4, 2003.31
In his petition before the CA, the respondent alleged that aside from the Deed of
Assignment of Sale Certificate No. 722, the petitioner had no other documentary
or testimonial evidence to prove her ownership over the property. He averred that
the petitioner failed to secure a torrens title over the property over a span of 70
years. The respondent, likewise, pointed out that even if Assignment of Sale
Certificate No. 722 was, indeed, forged, the petitioner nevertheless failed to
adduce evidence of his participation therein. He also alleged that the assailed
orders and writs of the trial court, in effect, disposed of the main case, and
maintained that he could not be deprived of his possession of the property via a
writ of preliminary mandatory injunction. He reiterated that he purchased the
subject property in good faith and for valuable consideration.
On April 30, 2003, the CA rendered judgment giving due course and granting the
petition. The appellate court held that in issuing the assailed orders and writs
against the respondent, the trial court committed a grave abuse of its discretion.
The petitioner filed a motion for reconsideration of the decision, which was denied
by the appellate court.l^vvphi1.net She then filed the instant petition for review
on certiorari, alleging that the CA erred in not dismissing the respondents petition
for certiorari for having been filed out of time, and that the appellate court,
likewise, erred in nullifying the assailed orders and writs issued by the trial court.
The petitioner avers that the respondent filed his petition for certiorari with the CA
only on January 21, 2003, well beyond the sixty (60)-day period therefor, counted
from his receipt of the trial courts June 4, 2002 Order, granting her plea for a writ
of preliminary prohibitory injunction. She asserts that the CA should have
dismissed the same on such ground.
In his comment on the petition, the respondent avers that he was never officially
served with a copy of the June 4, 2002 Order of the trial court.
We have meticulously reviewed the records and find that, indeed, the respondent
was not served with a copy of the trial courts June 4, 2002 Order. The records
show that while the respondent was represented by the Kapunan Imperial
Panaguiton & Bongolan Law Firm, such counsel was not among those who were
furnished copies of the said order by registered mail. 32 Even in the Sheriffs Partial
Return dated August 19, 2002, there is no showing that a copy of the writ of
preliminary injunction issued by the trial court on July 1, 2002 was served on the
respondent and/or through his counsel.
The Court also notes that the respondents counsel was not even served with a
copy of the petitioners application for a writ of preliminary mandatory injunction
filed on August 23, 2002. The respondent was personally served with a copy
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 49
thereof on August 22, 2002, in which it was merely alleged that the trial court
issued an Order on June 4, 2002, granting the petitioners plea for a writ of
preliminary injunction, and that a writ of preliminary prohibitory injunction was,
likewise, issued on July 1, 2002. The respondent then filed his motion for the
dissolution of the July 1, 2002 Writ of Preliminary Injunction on August 29, 2002
and filed his Opposition dated September 5, 2002 to the petitioners application for
a writ of preliminary mandatory injunction. Upon his receipt on December 26,
2002 of the trial courts December 12, 2002 Order granting the petitioners
application for a writ of preliminary mandatory injunction and denying his motion
for the dissolution of the July 1, 2002 Writ of Preliminary Injunction, the
respondent filed his petition for certiorari with the CA on January 21, 2003. Under
Section 4, Rule 65 of the Rules of Court, the sixty (60)-day period shall be counted
from receipt of the notice of the resolution denying the motion for reconsideration
of the assailed order of the tribunal:
Sec. 4. When and where petition filed. The petition shall be filed not later than
sixty (60) days from notice of the judgment, order or resolution. In case a motion
for reconsideration or new trial is timely filed, whether such motion is required or
not, the sixty (60) day period shall be counted from notice of the denial of said
motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or
omissions of a lower court or of a corporation, board, officer or person, in the
Regional Trial Court exercising jurisdiction over the territorial area as defined by
the Supreme Court. It may also be filed in the Court of Appeals whether or not the
same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of
its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial
agency, unless otherwise provided by law or these rules, the petition shall be filed
in and cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except for compelling
reason and in no case exceeding fifteen (15) days.
Thus, the respondents petition for certiorari before the CA filed on December 26,
2002 assailing the December 12, 2002 Order of the RTC denying his motion to
dissolve the July 1, 2002 Writ of Preliminary Injunction issued by the trial court and
granting the petitioners application for a writ of preliminary mandatory injunction
was filed well within the sixty (60)-day reglementary period therefor.1awphi1.nt
The petitioner asserts that the CA focused on the probative weight of the evidence
adduced before the trial court instead of on the issue of whether the said court
committed grave abuse of its discretion amounting to excess or lack of jurisdiction
in issuing the assailed orders and writs of preliminary prohibitory and mandatory
injunction. Worse, the petitioner argues, the findings of the trial court which were
based on the evidence adduced by her and as pointed out in her Memorandum
were reversed by the CA. She insists that she has a clear legal right over Lot 896
which justified the issuance of the writs of preliminary injunction (prohibitory and
mandatory). The petitioner maintains that in granting the respondents petition
for certiorari, the appellate court relied solely on unproven facts and failed to
differentiate a writ of prohibitory injunction from a writ of preliminary mandatory
injunction.
The petitioners contentions have no factual and legal basis.
The RTC Committed Grave Abuse of Its Discretion Amounting to Excess of
Jurisdiction in Issuing the June 4, 2002 and December 12, 2002 Orders, as well as
the July 1, 2002 Writ of Preliminary Prohibitory Injunction.
Prefatorily, the findings and conclusions of the trial court on the propriety of the
issuance of injunctive writs are premised solely on initial evidence and should be
considered merely as provisional. 33 Section 3, Rule 58 of the Rules of Court
provides that a preliminary injunction may be granted when the following are
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) 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
(c) That the 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.
An injunctive writ may be issued when the following requisites are established:
1. The invasion of the right is material and substantial;
2. The right of complainant is clear and unmistakable;

3. There is an urgent and permanent necessity for the writ to prevent
serious damage.34
Thus, the petitioner, as plaintiff, was burdened to adduce testimonial and/or
documentary evidence to establish her right to the injunctive writs. It must be
stressed that injunction is not designed to protect contingent or future rights, and,
as such, the possibility of irreparable damage without proof of actual existing right
is no ground for an injunction.35 A clear and positive right especially calling for
judicial protection must be established. 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. There must be an existence of an actual right. 36 Hence, where
the plaintiffs right or title is doubtful or disputed, injunction is not proper.
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.37 The possibility of irreparable damage without proof of an actual
existing right would not justify injunctive relief in his favor.38
In deciding whether to grant an injunction, a court must consider established
principles of equity and all the circumstances of the case. The test for issuing an
injunction is whether the facts show a necessity for the intervention of equity in
order to protect rights cognizable in equity. 39
In general, a trial courts decision to grant or to deny injunctive relief will not be set
aside on appeal unless the court abused its discretion. In granting or denying
injunctive relief, a court abuses its discretion when it lacks jurisdiction, fails to
consider and make a record of the factors relevant to its determination, relies on
clearly erroneous factual findings, considers clearly irrelevant or improper factors,
clearly gives too much weight to one factor, relies on erroneous conclusions of law
or equity, or misapplies its factual or legal conclusions. 40 In the absence of a clear
legal right, the issuance of the injunctive writ constitutes grave abuse of discretion.
As the Court had the occasion to state in Olalia v. Hizon:41
It has been consistently held that there is no power the exercise of which is more
delicate, which requires greater caution, deliberation and sound discretion, or
more dangerous in a doubtful case, than the issuance of an injunction. It is the
strong arm of equity that should never be extended unless to cases of great injury,
where courts of law cannot afford an adequate or commensurate remedy in
damages.
Every court should remember that an injunction is a limitation upon the freedom
of action of the defendant and should not be granted lightly or precipitately. It
should be granted only when the court is fully satisfied that the law permits it and
the emergency demands it.42
The trial court granted the petitioners plea for the issuance of a writ of preliminary
prohibitory injunction anchored on the following findings it made in light of the
evidence presented: (a) Severino Gonzales acquired equitable title over Lot 896
based on the deed of assignment executed by Nicanor Jacinto of his rights as
vendee under Certificate of Sale No. 722; (b) the petitioner inherited the property,
being the daughter and sole heir of Severino Gonzales; (c) considering that
Certificate of Sale No. 722 and TCT No. 4477 were issued on the same date and
time as appearing on pages 127 and 145 of the Registry Book, TCT No. 4477 was
clearly spurious; and (d) the writs issued were needed to prevent the influence of
squatters, the sale or lease of portions of the property to innocent third parties,
and the construction of illegal structures thereon.43
On the other hand, the CA ruled that the RTC committed a grave abuse of its
discretion amounting to excess of jurisdiction in granting the petitioners plea for a
writ of preliminary injunction, thus:
For a petition for a writ of preliminary injunction to prosper, it must be shown that
the invasion of the right sought to be protected is material and substantial, that
the right of complainant is clear and unmistakable, and that there is an urgent and
paramount necessity for the writ to prevent serious damage. The requisites for an
injunctive writ to be issued are: (1) that the petitioner/applicant must have a clear
and unmistakable right; (2) that there is a material and substantial invasion of such
right; and (3) that there is an urgent and permanent necessity for the writ to
prevent serious damage.
In the case at bar, private respondent failed to show, at least for now, that she has
a clear legal right over the subject property. She has not presented any valid title
nor has she ever been in effective control and possession of the property she
claims to be her own. Private respondent did not and failed to present specific acts
of ownership to substantiate her claim of ownership and should not have just
offered mere allegations of facts and conclusions of law, but factual evidence of
possession and/or ownership of the property. Private respondents reliance on her
claim that she inherited the subject property from her alleged father, Severino
Gonzales, who was purportedly an assignee in an Assignment of Sale executed
sometime on November 4, 1926, is not substantial enough to establish her clear
and unmistakable right over the subject property. On the contrary, it is the
petitioner who has title to the property, as evidenced by Transfer Certificate of Title
No. 270862, issued in his name, on September 16, 1993, by the Register of Deeds
of Caloocan City. Although title does not vest ownership, a torrenscertificate is
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 50
evidence of an indefeasible title to property in favor of the person whose name
appears thereon.
Finally, private respondent also failed to show the existence of extreme urgency
necessitating the issuance of the assailed writ to prevent serious damage to her. As
pointed out earlier, she possesses no clear title to the property nor is she in
effective control and possession of the same, such that, there is no urgent and
paramount necessity for the writ to issue for the purpose of preventing serious
damage to the private respondent. On the contrary, it is the petitioner who stands
to suffer great damage and injury, as he stands to lose in the meantime, his factory
situated on the subject property, if and when the writ issued by the respondent
judge is implemented.
As a final point, this court finds it disturbing, the premature if not unsupported
conclusion of the respondent judge as regards the title of the petitioner and that of
the other co-defendants, holding that the latter have no right whatsoever over the
property in litigation, on the basis only of the allegation contained in the complaint
and the attachments thereto, and the bare testimony of a supposed overseer of
the private respondent over the property. It would appear to us that the
respondent judge had already arrived at a conclusive finding of ownership of the
subject property, which finding of ownership in favor of the private respondent is
still improper at that stage of the proceeding. While in general, courts should avoid
issuing a writ of preliminary injunction which, in effect, disposes of the main case
without trial, this is precisely the effect of the writ of preliminary mandatory
injunction issued by the respondent judge.44
We have reviewed the records and find that the decision of the CA is in accord with
law. Contrary to the petitioners assertion, the appellate court, in fact, resolved the
issue of whether the trial court committed a grave abuse of its discretion in issuing
the assailed orders, and, in so doing, based its decision on the records and the
evidence adduced by the petitioner.
First. The petitioner failed to prove, by any of the means provided by
law,45 that she is the daughter and only heir of Severino Gonzales.
Filiation and paternity must be judicially established. It cannot be left to
the will or agreement of the parties.46 The Court notes that the
petitioner opted not to testify. She relied solely on the testimony of
Santos Alberca, who testified on direct examination that the petitioner
was his aunt, and, being the only child and heir of Severino Gonzales,
was the owner of the property. 47 However, on cross-examination,
Alberca could not explain how he became the petitioners nephew, and
could not describe the nature of his filiation with her:
Q: You said that the plaintiff is your aunt. Can you explain
how she became your aunt?
A: The Almeda family is the cousin of family. I cannot explain
very well because it is very long time ago, but I am
recognized by Almeda Gonzales as a nephew and I recognize
her as my aunt.
Q: Is that the best way you can explain your answer?
A: I cannot remember exactly the family tree of Almeda
Gonzales and my family.48
Second. Even assuming, gratia arguendi, that she is really the daughter
of the Spouses Gonzales, the petitioner still failed to adduce a morsel of
evidence to prove that she inherited Lot 896 upon their death in 1940
and 1942. As gleaned from the appendages of the complaint, Lot 896
was deeded to Nicanor Jacinto by the government on July 10, 1910
under Certificate of Sale No. 722 executed by the Director of the Bureau
of Lands. On November 4, 1926, Jacinto executed a Deed of Assignment
of Certificate of Sale No. 722, approved by the Director of the Bureau of
Lands, in favor of Severino Gonzales and Juana Libertad. The said deed
became legally effective upon its filing with the Bureau of Public Lands
and the approval thereof by the Director of Lands. 49 Hence, Severino
Gonzales became the equitable owner of the property under the deed
of assignment,50 and upon his execution of the Deed of Assignment in
favor of Pedro Gonzales and Aleja Gonzales, the latter, likewise, became
the equitable owners of the property. When the Spouses Gonzales died
in 1940 and 1942, they were no longer the owners/assignees of Lot
896. Hence, the petitioner could not have inherited the said property
from her parents. As the Latin adage goes: NEMO DAT QUOD NON
HABET.
Third. The petitioner failed to adduce a scintilla of evidence to prove her
claim that the Deed of Assignment of Certificate of Sale executed by
Severino Gonzales in favor of Pedro and Aleja Gonzales is a forgery or a
falsification. Case law has it that forgery or falsification cannot be
presumed. He who alleges forgery has the burden of proving the same
by clear and convincing evidence. 51 Thus, forgery cannot be proved by
mere conjectures, surmises or speculations. The bare fact that TCT Nos.

4477 and 4495 were issued on the same day but were recorded on the
book of registry on pages 127 and 145 thereof does not constitute clear
proof that the said titles are spurious. There is no showing that Book
No. T-284 in which page 127 appears is the same registry book where
TCT No. 4495 appears. The Court further notes that the petitioner failed
to present the Register of Deeds to explain the discrepancy alluded to
by her.
Fourth. The petitioner herself alleged in her complaint that based on
the said deed of assignment in favor of Pedro and Aleja Gonzales, TCT
No. 42126 was issued by the Register of Deeds on January 9, 1941 in
favor of the said assignees. TCT No. 270862 was issued to Marcelina
Sarangaya over Lot 896 based on a Deed of Sale executed in her favor
on May 23, 1961. However, the Spouses Gonzales failed to file any
action to nullify the said deed of assignment before their death in 1940
and 1942. Neither did the petitioner file any action to nullify the said
deed of assignment and the said titles until January 23, 1998, when she
finally filed her complaint against the respondent and the other
defendants in the RTC. Considering her allegation in the complaint that
she was already 73 years old, she must have been born sometime in
1925. Prescinding therefrom, the petitioner must have already been
more than 20 years old shortly after the Second World War, yet, she
failed to file any action, either for the nullification of the said deed of
assignment, or to request the Bureau of Lands for an investigation
relating to Severino Gonzales execution of the Deed of Assignment in
favor of Pedro and Aleja Gonzales and the approval thereof by the
Bureau of Lands for more than forty (40) years. The petitioners
unexplained and resounding silence and inaction for such a
considerable length of time enfeebles her plea for injunctive reliefs. If
one maintains silence, when in conscience he ought to speak, equity
will debar him from speaking, when in conscience he ought to remain
silent. He who remains silent when he ought to speak cannot be heard
to speak when he should be silent.52
Fifth. The respondent is the registered owner of Lot 896 under TCT No.
270862 issued on September 16, 1993. A perusal of the said title shows
that the property is free from any liens and/or encumbrances.
Moreover, there is no evidence on record that the respondent is a buyer
in bad faith. It is settled doctrine that one who deals with property
registered under the Torrens system need not go beyond the same, but
only has to rely on the title. He is charged with notice only of such
burdens and claims as are annotated on the title.53 It is, likewise, settled
that a fraudulent or forged document of sale may give rise to a valid
title if the certificate of title has already been transferred from the
name of the true owner to the name indicated by the forger and while
it remained as such, the land was subsequently sold to an innocent
purchaser. The vendee, in such case, has the right to rely upon the
certificate of title.541a\^/phi1.net
Moreover, the respondent constructed his factory on the said property
in 1994 sans any plaint from the petitioner or Alberca. Thus, being the
registered owner of the property in question, he is entitled to the
possession thereof.55
Sixth. The petitioner failed to prove that she would suffer irreparable
injury which cannot be adequately compensated unless the trial court
issued a writ of preliminary prohibitory injunction. To repeat, the
petitioner failed to testify. She even failed to prove her claim that,
through her overseer, she had been in actual physical possession of the
property since her parents death before the Second World War up to
the time she filed her complaint. Alberca testified that he became the
petitioners overseer only five years before he testified on August 20,
1999, or sometime in 1994, and that he was unaware of any overseer of
the petitioner over the property:
Q: Since when have you been the overseer of the plaintiff
with regards to Lot 896?
A: Five years ago, Sir.
Q: Prior to five years before you came in, do you know if
there was any overseer employed by the plaintiff with
regards to Lot 896?
A: No, Sir.56
It is worthy to note that the petitioner failed to present any other caretaker or
overseer over the property.
The RTC Committed Grave Abuse of Discretion Equivalent to Excess of Jurisdiction
When It Granted Petitioners Plea for a Writ of Preliminary Mandatory Injunction
The CA nullified the trial courts December 12, 2002 Order granting the petitioners
motion for a writ of preliminary mandatory injunction, ratiocinating as follows:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 51
Likewise, it is also the petitioner who has been in possession of the property from
the time he purchased the same from Marcelina Sarangaya on September 9, 1993.
A possessor of real estate property is presumed to have title thereto unless the
adverse claimant establishes a better right. To summarily oust petitioner of his
possession of the property which he has title to and possession of, is simply
contrary to existing and settled jurisprudence. A court should not by means of a
preliminary injunction transfer the property in litigation from the possession of one
party to another where the legal title is in dispute and the party having possession
asserts ownership thereto.
Finally, private respondent also failed to show the existence of extreme urgency
necessitating the issuance of the assailed writ to prevent serious damage to her. As
pointed out earlier, she possesses no clear title to the property nor is she in
effective control and possession of the same, such that there is no urgent and
paramount necessity for the writ to issue for the purpose of preventing serious
damage to the private respondent. On the contrary, it is the petitioner who stands
to suffer great damage and injury, as he stands to lose in the meantime, his factory
situated on the subject property, if and when the writ issued by the respondent
judge is implemented.57
We agree with the CA. As we ruled in Subic Bay Metropolitan Authority v. Universal
International Group of Taiwan:58
A writ of mandatory injunction requires the performance of a particular act and is
granted only upon a showing of the following requisites:
1. The invasion of the right is material and substantial;
2. The right of a complainant is clear and unmistakable;
3. There is an urgent and permanent necessity for the writ to prevent serious
damage.59
It bears stressing that the respondent is the registered owner of the property;
hence, he is entitled to the possession thereof. As a rule, a writ of preliminary
mandatory injunction is not granted to take property out of the possession or
control of one party to be placed into that of another whose title has not been
clearly established by law.60 In this case, the petitioner failed to establish a clear
and unmistakable right to the possession of the property and to a writ of
preliminary mandatory injunction. The trial court principally relied on mere
allegations in the complaint, the appendages thereof, and the meager evidence on
record. Moreover, the respondent would suffer serious damage if he would be
ousted of his possession of the property and his factory demolished.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The
assailed Decision of the Court of Appeals is AFFIRMED. Costs against the petitioner.
SO ORDERED.
EN BANC
G.R. No. L-11130 October 8, 1917
BENITO GOLDING, plaintiff-appellee,
vs.
HIPOLITO BALATBAT, SERAPIA BALATBAR and ESTEFANIA BALATBAT, defendants.
HIPOLITO BALATBAT, appellant.
Marcelino Lontok for appellant.
No appearance for appellee.
JOHNSON, J.:
This action was commenced in the Court of First Instance of the Province of
Pampanga on the 10th day of October, 1910. The petitioner alleged that he was
the owner of a piece or parcel of land which is particularly described in paragraph
2 of the complaint; that the defendants, without right of jurisdiction, were illegally
and maliciously interfering with the petitioner's possession of said land and would
undoubtedly continue to molest him and interfere with his peaceful enjoyment of
said property unless they were enjoined from so doing. The petitioner prayed for
both a preliminary and perpetual injunction. A bond was given by the plaintiff in
the sum of P1,500 and a preliminary injunction was issued. Each of the defendants
were served with a copy of the complaint on the 27th day of October, 1910,
together with a copy of the preliminary injunction issued.
On the 10th day of November, 1910, the defendant Hipolito Balatbat entered an
appearance in said case. For the reason that none of the said defendants answered
the petition within the time fixed by law, the petitioner presented a motion for a
judgment by default, which was granted by the Hon. Julio Llorente upon the 26th
day of November, 1910. The case was finally set down for hearing and was heard
upon the 4th day of January, 1911. After hearing the proof adduced by the plaintiff,
a judgment was rendered on the same day ordering and enjoining the defendants,

their agents and representatives, and all other persons acting in their behalf, to
desist in their acts of whatever character which molested or tended to molest the
plaintiff in the peaceful enjoyment of the possession of his property. A copy of said
final injunction was served upon the defendants.
Later, on the 15th day of June, 1914, the plaintiff presented an affidavit in the court
below, alleging that the defendant Hipolito Balatbat, his agents and representatives
had maliciously and illegally and by means of violence committed acts in violation
of the terms of said injunction, and prayed that said defendant and his
representatives should be cited to appear to show why they should not be
punished for a violation of the injunction theretofore granted. In accordance with
said citation or order the defendant Hipolito Balatbat and others appeared.
Hipolito Balatbat confessed that he was guilty of a violation of said injunction, but
attempted to excuse his acts upon the theory that he was the owner of the parcel
of land in question. The same confession and the same defense were presented by
the other persons who had been cited to appear and explain why they had violated
said injunction. After hearing the confession of the defendant Hipolito Balatbat,
the Hon. Julio Llorente found that he was guilty of a violation of said final
injunction and imposed a fine upon him in the sum of P50, with subsidiary
imprisonment in case of insolvency. From that sentence he appealed to this Court.
The other persons cited to show why they should not be punished for contempt
were not punished.
In his first assignment of error, the appellant alleges that the lower court
committed an error in sentencing him to a fine without having first presented a
complaint in due form in accordance with the provisions of General Orders No. 58,
and in declaring that he had not been duly notified of the injunction therefor
rendered. The appellant, in his argument in support of said error, makes no
reference to the provisions of General Orders No. 58, but alleges that the
procedure followed in the lower court was not in accordance with the provisions of
articles Nos. 231 and 232 of Act No. 190. The record shows that the appellant had
been ordered not to do certain particular acts described in the injunction, and that
he had notice of said injunction; that after the lapse of more than three years, after
being cited to show cause why he had violated said injunction, and after due
hearing was given him, he confessed that he had violated said order but attempted
to justify his acts. The record shows that a complaint had been presented in writing
and filed with the clerk, and that he had been given an opportunity to be heard in
accordance with the provisions of article 233 of Act No. 190. The procedure in the
court below was entirely regular and in accordance with the provisions of the law.
In his second assignment of error he alleges that the lower court committed an
error in hearing the case and condemning the appellant. The only argument in
support of said error is that, inasmuch as the lower court had issued the injunction,
it is not just for it to consider the questions presented for a violation of the same.
In reply to that argument it may be noted first that no objection was presented of
challenge made to the hearing of the question relating to the violation of said
injunction by the lower court; and second the record does not show any reason
why the Hon. Julio Llorente was not fully competent to inquire into the question
whether or not his order of injunction had been violated. The judge who grants an
injunction may punish those who violate its mandates.
In his third assignment of error the appellant alleges that the lower court
committed an error in condemning the defendant or "desacato;" and in support of
that assignment alleges that there was no proof showing that the defendant had
violated the terms of said injunction. In reply to that argument it is sufficient to say
that the defendant and appellant himself admitted that he had violated the terms
of said injunction; and the only excuse offered therefor was the fact that he
claimed to be the owner of the lands in question.
While we find nothing in the record which would justify a reversal of the penalty
imposed by the lower court for the violation of the terms of the injunction, yet,
considering the apparent ignorance of the defendant and appellant, we are of the
opinion that every purpose of the plaintiff in justice and equity may be conserved
by a modification of said fine. Therefore, the judgment of the lower court is hereby
modified; and it is hereby ordered and decreed that a fine of P5 only be imposed
upon the defendant, and the costs. So ordered.
Moreover, in view of the constant practice which we have observed in certain of
the judicial districts of the Courts of First Instance in granting injunctions for the
purpose of obtaining possession of land, we deem it proper to make the following
observations:
1. That injunction should not be granted to take property out of the
possession and control of one party and to place it in the hands of
another whose title has not been clearly established by law. Another
adequate, summary and speedy remedy exists for almost every case.
(Devesa vs. Arbes. 13 Phil. Rep., 273; Palafoxvs. Madamba, 19 Phil. Rep.,
444; Evangelista vs. Pedrenos, 27 Phil. Rep., 648; Gilchrist vs. Cuddy, 29
Phil. Rep., 542.)
2. The writ of injunction is one of the special remedies provided by the
Code of Civil Procedure (Act No. 190). It should not be issued except
upon condition that no other ordinary, speedy and adequate remedy is
available to avoid or repair the damage done, or which may be done by
a new violation of the plaintiff's rights. (Palafox vs. Madamba, 19 Phil.
Rep., 444; Gilchrist vs. Cuddy, 29 Phil. Rep., 542.)
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 52
3. That an injunction for the issuance of which provisions is made in the
Code of Civil Procedure, while it resemble the interdictal actions of the
Spanish procedural law in some respect, is wholly distinct therefrom
and, as a rule, the circumstances under which, in accordance with the
Spanish law, "interdictos de adquirir, de retener, de recobrar, o de
despojo" were property issued would not justify nor sustain the
issuance of an injunction as defined in said Code. (Devesa vs. Arbes, 13
Phil. Rep., 273.)
4. While the writ of injunction may be issued to restrain acts of trespass
and the illegal interference with the possession of land, the cases are
very few when said writ should issue ex parte and before the defendant
is given a hearing; and it should never issue when an action for damages
would adequately compensate the injuries caused. The very foundation
of the jurisdiction to issue the writ rests in the probability of irreparable
injury, the inadequacy of pecuniary compensation, and the prevention
of the multiplicity of suits, and where facts are not shown to bring the
case within these conditions, the relief of injunction should be refused.
(Western Union Telegraph Co., vs. Judkins, 75 Ala., 428; HIgh on
Injunctions, section 697; Clark vs.Jeffersonville R. R. Co., 44 Ind., 248;
Poughkeepsie Gas Co. vs. Citizens' Gas Co., 89 N. Y. 493.) 1awphil.net
5. Injunctions to prevent trespass and the illegal interference with the
possession of land should not be granted, when the plaintiff's title is in
dispute and has not been established at law, until the question of title is
settled in a proper proceeding brought for that purpose.
(Maloon vs. White, 57 N. H., 152; Greasap vs.Kemble, 26 W. Va., 603.)
6. There are cases, however, where an injunction may be granted in
order to preserve the statu quo of property until the title can be
determined in a proper action. (Clayton vs. Shoemaker and Newcomenr,
67 Mid., 216.) But even then it should not be granted ex parte. The
defendant should be given an opportunity to be heard.
7. The remedy by injunction is never the proper remedy to deprive a
person of the possession of property. If the person in possession is in
possession illegally there exist other adequate, speedy and summary
remedies forcible entry and detainer and ejectment. These remedies
are adequate. (Devesa vs. Arbes. 13 Phil. Rep., 273;
Palafox vs. Madamba, 19 Phil. Rep., 444.)
In the present action had the defendants appeared when they were cited so to do
and alleged and showed that they were in possession of the land in question as
owners thereof, the action would have resolved itself into one ofdesahucio or
ejectment, and a motion properly presented and properly supported to dissolve
the temporary injunction would have been denied. Of course, upon the theory of
the plaintiff, as presented in the record, that he was the owner of the land in
question and in possession thereof and that fact not having been denied and
that the defendants were mere trespassers thereon and were illegally and
maliciously interfering and molesting the plaintiff in his quiet and peaceable
enjoyment of the possession of his property, then injunction was the proper
remedy for the purpose of preventing a repetition of said illegal acts.
(Maloon vs. White, 57 N. H., 152.)
The remedy by injunction is the proper remedy to prevent repeated trespass upon
real property. (Merced Mining Co., vs. Fremont, 7 Cal., 130; Anderson vs. Harvey's
Heirs, 10 Grattan [Va.], 386; Jerome vs. Ross, 7 Johnson's Ch. Rep., 315.) But the
trespass which will be enjoined must be of such a nature that an action for
damages will not adequately compensate the loss occasioned thereby.
(Smith vs. Pettingill, 15 Vt. 82; Norton vs. Snyder, 4 Thomp. & C., 330.) So ordered.
EN BANC
G.R. No. L-10572 December 21, 1915
FRANCIS A. CHURCHILL and STEWART TAIT, plaintiffs-appellees,
vs.
JAMES J. RAFFERTY, Collector of Internal Revenue, defendant-appellant.
Attorney-General Avancea for appellant.
Aitken and DeSelms for appellees.
TRENT, J.:
The judgment appealed from in this case perpetually restrains and prohibits the
defendant and his deputies from collecting and enforcing against the plaintiffs and
their property the annual tax mentioned and described in subsection (b) of section
100 of Act No. 2339, effective July 1, 1914, and from destroying or removing any
sign, signboard, or billboard, the property of the plaintiffs, for the sole reason that
such sign, signboard, or billboard is, or may be, offensive to the sight; and decrees
the cancellation of the bond given by the plaintiffs to secure the issuance of the
preliminary injunction granted soon after the commencement of this action.

This case divides itself into two parts and gives rise to two main questions; (1) that
relating to the power of the court to restrain by injunction the collection of the tax
complained of, and (2) that relating to the validity of those provisions of subsection
(b) of section 100 of Act No. 2339, conferring power upon the Collector of Internal
Revenue to remove any sign, signboard, or billboard upon the ground that the
same is offensive to the sight or is otherwise a nuisance.
The first question is one of the jurisdiction and is of vital importance to the
Government. The sections of Act No. 2339, which bear directly upon the subject,
are 139 and 140. The first expressly forbids the use of an injunction to stay the
collection of any internal revenue tax; the second provides a remedy for any wrong
in connection with such taxes, and this remedy was intended to be exclusive,
thereby precluding the remedy by injunction, which remedy is claimed to be
constitutional. The two sections, then, involve the right of a dissatisfied taxpayers
to use an exceptional remedy to test the validity of any tax or to determine any
other question connected therewith, and the question whether the remedy by
injunction is exceptional.
Preventive remedies of the courts are extraordinary and are not the usual
remedies. The origin and history of the writ of injunction show that it has always
been regarded as an extraordinary, preventive remedy, as distinguished from the
common course of the law to redress evils after they have been consummated. No
injunction issues as of course, but is granted only upon the oath of a party and
when there is no adequate remedy at law. The Government does, by section 139
and 140, take away the preventive remedy of injunction, if it ever existed, and
leaves the taxpayer, in a contest with it, the same ordinary remedial actions which
prevail between citizen and citizen. The Attorney-General, on behalf of the
defendant, contends that there is no provisions of the paramount law which
prohibits such a course. While, on the other hand, counsel for plaintiffs urge that
the two sections are unconstitutional because (a) they attempt to deprive
aggrieved taxpayers of all substantial remedy for the protection of their property,
thereby, in effect, depriving them of their property without due process of law, and
(b) they attempt to diminish the jurisdiction of the courts, as conferred upon them
by Acts Nos. 136 and 190, which jurisdiction was ratified and confirmed by the Act
of Congress of July 1, 1902.
In the first place, it has been suggested that section 139 does not apply to the tax
in question because the section, in speaking of a "tax," means only legal taxes; and
that an illegal tax (the one complained of) is not a tax, and, therefore, does not fall
within the inhibition of the section, and may be restrained by injunction. There is
no force in this suggestion. The inhibition applies to all internal revenue taxes
imposes, or authorized to be imposed, by Act No. 2339. (Snyder vs. Marks, 109
U.S., 189.) And, furthermore, the mere fact that a tax is illegal, or that the law, by
virtue of which it is imposed, is unconstitutional, does not authorize a court of
equity to restrain its collection by injunction. There must be a further showing that
there are special circumstances which bring the case under some well recognized
head of equity jurisprudence, such as that irreparable injury, multiplicity of suits, or
a cloud upon title to real estate will result, and also that there is, as we have
indicated, no adequate remedy at law. This is the settled law in the United States,
even in the absence of statutory enactments such as sections 139 and 140.
(Hannewinkle vs. Mayor, etc., of Georgetown, 82 U.S., 547; Indiana Mfg.
Co. vs. Koehne, 188 U.S., 681; Ohio Tax cases, 232 U. S., 576, 587; Pittsburgh C. C. &
St. L. R. Co. vs. Board of Public Works, 172 U. S., 32; Shelton vs.Plat, 139 U.S., 591;
State Railroad Tax Cases, 92 U. S., 575.) Therefore, this branch of the case must be
controlled by sections 139 and 140, unless the same be held unconstitutional, and
consequently, null and void.
The right and power of judicial tribunals to declare whether enactments
of the legislature exceed the constitutional limitations and are invalid
has always been considered a grave responsibility, as well as a solemn
duty. The courts invariably give the most careful consideration to
questions involving the interpretation and application of the
Constitution, and approach constitutional questions with great
deliberation, exercising their power in this respect with the greatest
possible caution and even reluctance; and they should never declare a
statute void, unless its invalidity is, in their judgment, beyond
reasonable doubt. To justify a court in pronouncing a legislative act
unconstitutional, or a provision of a state constitution to be in
contravention of the Constitution of the United States, the case must be
so clear to be free from doubt, and the conflict of the statute with the
constitution must be irreconcilable, because it is but a decent respect to
the wisdom, the integrity, and the patriotism of the legislative body by
which any law is passed to presume in favor of its validity until the
contrary is shown beyond reasonable doubt. Therefore, in no doubtful
case will the judiciary pronounce a legislative act to be contrary to the
constitution. To doubt the constitutionality of a law is to resolve the
doubt in favor of its validity. (6 Ruling Case Law, secs. 71, 72, and 73,
and cases cited therein.)
It is also the settled law in the United States that "due process of law" does not
always require, in respect to the Government, the same process that is required
between citizens, though it generally implies and includes regular allegations,
opportunity to answer, and a trial according to some well settled course of judicial
proceedings. The case with which we are dealing is in point. A citizen's property,
both real and personal, may be taken, and usually is taken, by the government in
payment of its taxes without any judicial proceedings whatever. In this country, as
well as in the United States, the officer charged with the collection of taxes is
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 53
authorized to seize and sell the property of delinquent taxpayers without applying
to the courts for assistance, and the constitutionality of the law authorizing this
procedure never has been seriously questioned. (City of Philadelphia vs. [Diehl]
The Collector, 5 Wall., 720; Nicholl vs. U.S., 7 Wall., 122, and cases cited.) This must
necessarily be the course, because it is upon taxation that the Government chiefly
relies to obtain the means to carry on its operations, and it is of the utmost
importance that the modes adopted to enforce the collection of the taxes levied
should be summary and interfered with as little as possible. No government could
exist if every litigious man were permitted to delay the collection of its taxes. This
principle of public policy must be constantly borne in mind in determining cases
such as the one under consideration.
With these principles to guide us, we will proceed to inquire whether there is any
merit in the two propositions insisted upon by counsel for the plaintiffs. Section 5
of the Philippine Bill provides: "That no law shall be enacted in said Islands which
shall deprive any person of life, liberty, or property without due process of law, or
deny to any person therein the equal protection of the law."
The origin and history of these provisions are well-known. They are found in
substance in the Constitution of the United States and in that of ever state in the
Union.
Section 3224 of the Revised Statutes of the United States, effective since 1867,
provides that: "No suit for the purpose of restraining the assessment or collection
of any tax shall be maintained in any court."
Section 139, with which we have been dealing, reads: "No court shall have
authority to grant an injunction to restrain the collection of any internal-revenue
tax."
A comparison of these two sections show that they are essentially the same. Both
expressly prohibit the restraining of taxes by injunction. If the Supreme Court of
the United States has clearly and definitely held that the provisions of section 3224
do not violate the "due process of law" and "equal protection of the law" clauses in
the Constitution, we would be going too far to hold that section 139 violates those
same provisions in the Philippine Bill. That the Supreme Court of the United States
has so held, cannot be doubted.
In Cheatham vs. United States (92 U.S., 85,89) which involved the validity of an
income tax levied by an act of Congress prior to the one in issue in the case of
Pollock vs. Farmers' Loan & Trust Co. (157 U.S., 429) the court, through Mr. Justice
Miller, said: "If there existed in the courts, state or National, any general power of
impeding or controlling the collection of taxes, or relieving the hardship incident to
taxation, the very existence of the government might be placed in the power of a
hostile judiciary. (Dows vs. The City of Chicago, 11 Wall., 108.) While a free course
of remonstrance and appeal is allowed within the departments before the money
is finally exacted, the General Government has wisely made the payment of the tax
claimed, whether of customs or of internal revenue, a condition precedent to a
resort to the courts by the party against whom the tax is assessed. In the internal
revenue branch it has further prescribed that no such suit shall be brought until
the remedy by appeal has been tried; and, if brought after this, it must be within
six months after the decision on the appeal. We regard this as a condition on which
alone the government consents to litigate the lawfulness of the original tax. It is
not a hard condition. Few governments have conceded such a right on any
condition. If the compliance with this condition requires the party aggrieved to pay
the money, he must do it."
Again, in State Railroad Tax Cases (92 U.S., 575, 613), the court said: "That there
might be no misunderstanding of the universality of this principle, it was expressly
enacted, in 1867, that "no suit for the purpose of restraining the assessment or
collection of any tax shall be maintained in any court." (Rev, Stat., sec. 3224.) And
though this was intended to apply alone to taxes levied by the United States, it
shows the sense of Congress of the evils to be feared if courts of justice could, in
any case, interfere with the process of collecting taxes on which the government
depends for its continued existence. It is a wise policy. It is founded in the simple
philosophy derived from the experience of ages, that the payment of taxes has to
be enforced by summary and stringent means against a reluctant and often
adverse sentiment; and to do this successfully, other instrumentalities and other
modes of procedure are necessary, than those which belong to courts of justice."
And again, in Snyder vs. Marks (109 U.S., 189), the court said: "The remedy of a suit
to recover back the tax after it is paid is provided by statute, and a suit to restrain
its collection is forbidden. The remedy so given is exclusive, and no other remedy
can be substituted for it. Such has been the current of decisions in the Circuit
Courts of the United States, and we are satisfied it is a correct view of the law."itc-
a1f
In the consideration of the plaintiffs' second proposition, we will attempt to show
(1) that the Philippine courts never have had, since the American occupation, the
power to restrain by injunction the collection of any tax imposed by the Insular
Government for its own purpose and benefit, and (2) that assuming that our courts
had or have such power, this power has not been diminished or curtailed by
sections 139 and 140.
We will first review briefly the former and present systems of taxation. Upon the
American occupation of the Philippine, there was found a fairly complete system of

taxation. This system was continued in force by the military authorities, with but
few changes, until the Civil Government assumed charge of the subject. The
principal sources of revenue under the Spanish regime were derived from customs
receipts, the so-called industrial taxes, the urbana taxes, the stamp tax, the
personal cedula tax, and the sale of the public domain. The industrial and urbana
taxes constituted practically an income tax of some 5 per cent on the net income of
persons engaged in industrial and commercial pursuits and on the income of
owners of improved city property. The sale of stamped paper and adhesive stamp
tax. The cedula tax was a graduated tax, ranging from nothing up to P37.50. The
revenue derived from the sale of the public domain was not considered a tax. The
American authorities at once abolished the cedula tax, but later restored it in a
modified form, charging for each cedula twenty centavos, an amount which was
supposed to be just sufficient to cover the cost of issuance. The urbana tax was
abolished by Act No. 223, effective September 6, 1901.
The "Municipal Code" (Act No. 82) and the Provincial Government Act (No. 83),
both enacted in 1901, authorize municipal councils and provincial boards to
impose an ad valorem tax on real estate. The Municipal Code did not apply to the
city of Manila. This city was given a special charter (Act No. 183), effective August
30, 1901; Under this charter the Municipal Board of Manila is authorized and
empowered to impose taxes upon real estate and, like municipal councils, to
license and regulate certain occupations. Customs matters were completely
reorganized by Act No. 355, effective at the port of Manila on February 7, 1902,
and at other ports in the Philippine Islands the day after the receipt of a certified
copy of the Act. The Internal Revenue Law of 1904 (Act No. 1189), repealed all
existing laws, ordinances, etc., imposing taxes upon the persons, objects, or
occupations taxed under that act, and all industrial taxes and stamp taxes imposed
under the Spanish regime were eliminated, but the industrial tax was continued in
force until January 1, 1905. This Internal Revenue Law did not take away from
municipal councils, provincial boards, and the Municipal Board of the city of Manila
the power to impose taxes upon real estate. This Act (No. 1189), with its
amendments, was repealed by Act No. 2339, an act "revising and consolidating the
laws relative to internal revenue."
Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing
the validity of a tax assessed under this act until the taxpayer shall have paid,
under protest, the taxes assessed against him, . . . ."
This inhibition was inserted in section 17 of Act No. 83 and applies to taxes
imposed by provincial boards. The inhibition was not inserted in the Manila
Charter until the passage of Act No. 1793, effective October 12, 1907. Act No. 355
expressly makes the payment of the exactions claimed a condition precedent to a
resort to the courts by dissatisfied importers. Section 52 of Act No. 1189 provides
"That no courts shall have authority to grant an injunction restraining the collection
of any taxes imposed by virtue of the provisions of this Act, but the remedy of the
taxpayer who claims that he is unjustly assessed or taxed shall be by payment
under protest of the sum claimed from him by the Collector of Internal Revenue
and by action to recover back the sum claimed to have been illegally collected."
Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the same
prohibition and remedy. The result is that the courts have been expressly
forbidden, in every act creating or imposing taxes or imposts enacted by the
legislative body of the Philippines since the American occupation, to entertain any
suit assailing the validity of any tax or impost thus imposed until the tax shall have
been paid under protest. The only taxes which have not been brought within the
express inhibition were those included in that part of the old Spanish system which
completely disappeared on or before January 1, 1905, and possibly the old
customs duties which disappeared in February, 1902.
Section 56 of the Organic Act (No. 136), effective June 16, 1901, provides that
"Courts of First Instance shall have original jurisdiction:
xxx xxx xxx
2. In all civil actions which involve the ... legality of any tax, impost, or
assessment, . . . .
xxx xxx xxx
7. Said courts and their judges, or any of them, shall have power to
issue writs of injunction, mandamus,certiorari, prohibition, quo
warranto, and habeas corpus in their respective provinces and districts,
in the manner provided in the Code of Civil Procedure.
The provisions of the Code of Civil Procedure (Act No. 190), effective October 1,
1901, which deals with the subject of injunctions, are sections 162 to 172,
inclusive. Injunctions, as here defined, are of two kinds; preliminary and final. The
former may be granted at any time after the commencement of the action and
before final judgment, and the latter at the termination of the trial as the relief or
part of the relief prayed for (sec. 162). Any judge of the Supreme Court may grant a
preliminary injunction in any action pending in that court or in any Court of First
Instance. A preliminary injunction may also be granted by a judge of the Court of
First Instance in actions pending in his district in which he has original jurisdiction
(sec. 163). But such injunctions may be granted only when the complaint shows
facts entitling the plaintiff to the relief demanded (sec. 166), and before a final or
permanent injunction can be granted, it must appear upon the trial of the action
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 54
that the plaintiff is entitled to have commission or continuance of the acts
complained of perpetually restrained (sec. 171). These provisions authorize the
institution in Courts of First Instance of what are known as "injunction suits," the
sole object of which is to obtain the issuance of a final injunction. They also
authorize the granting of injunctions as aiders in ordinary civil actions. We have
defined in Davesa vs. Arbes (13 Phil. Rep., 273), an injunction to be "A "special
remedy" adopted in that code (Act 190) 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 those cases where there is no "plain, adequate, and
complete remedy at law,"which will not be granted while the rights between the
parties are undetermined, except in extraordinary cases where material and
irreparable injury will be done,"which cannot be compensated in damages . . .
By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of the
various subsequent Acts heretofore mentioned, the Insular Government has
consented to litigate with aggrieved persons the validity of any original tax or
impost imposed by it on condition that this be done in ordinary civil actions after
the taxes or exactions shall have been paid. But it is said that paragraph 2 confers
original jurisdiction upon Courts of First Instance to hear and determine "all civil
actions" which involve the validity of any tax, impost or assessment, and that if the
all-inclusive words "all" and "any" be given their natural and unrestricted meaning,
no action wherein that question is involved can arise over which such courts do not
have jurisdiction. (Barrameda vs. Moir, 25 Phil. Rep., 44.) This is true. But the term
"civil actions" had its well defined meaning at the time the paragraph was enacted.
The same legislative body which enacted paragraph 2 on June 16, 1901, had, just a
few months prior to that time, defined the only kind of action in which the legality
of any tax imposed by it might be assailed. (Sec. 84, Act 82, enacted January 31,
1901, and sec. 17, Act No. 83, enacted February 6, 1901.) That kind of action being
payment of the tax under protest and an ordinary suit to recover and no other,
there can be no doubt that Courts of First Instance have jurisdiction over all such
actions. The subsequent legislation on the same subject shows clearly that the
Commission, in enacting paragraph 2, supra, did not intend to change or modify in
any way section 84 of Act No. 82 and section 17 of Act No. 83, but, on the contrary,
it was intended that "civil actions," mentioned in said paragraph, should be
understood to mean, in so far as testing the legality of taxes were concerned, only
those of the kind and character provided for in the two sections above mentioned.
It is also urged that the power to restrain by injunction the collection of taxes or
imposts is conferred upon Courts of First Instance by paragraph 7 of section
56, supra. This paragraph does empower those courts to grant injunctions, both
preliminary and final, in any civil action pending in their districts, provided always,
that the complaint shows facts entitling the plaintiff to the relief demanded.
Injunction suits, such as the one at bar, are "civil actions," but of a special or
extraordinary character. It cannot be said that the Commission intended to give a
broader or different meaning to the word "action," used in Chapter 9 of the Code
of Civil Procedure in connection with injunctions, than it gave to the same word
found in paragraph 2 of section 56 of the Organic Act. The Insular Government, in
exercising the power conferred upon it by the Congress of the United States, has
declared that the citizens and residents of this country shall pay certain specified
taxes and imposts. The power to tax necessarily carries with it the power to collect
the taxes. This being true, the weight of authority supports the proposition that
the Government may fix the conditions upon which it will consent to litigate the
validity of its original taxes. (Tennessee vs. Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraph 2 and 7 of section 56 of Act No. 136,
construed in the light of the prior and subsequent legislation to which we have
referred, and the legislative and judicial history of the same subject in the United
States with which the Commission was familiar, do not empower Courts of firs
Instance to interfere by injunction with the collection of the taxes in question in
this case.1awphil.net
If we are in error as to the scope of paragraph 2 and 7, supra, and the Commission
did intend to confer the power upon the courts to restrain the collection of taxes, it
does not necessarily follow that this power or jurisdiction has been taken away by
section 139 of Act No. 2339, for the reason that all agree that an injunction will not
issue in any case if there is an adequate remedy at law. The very nature of the writ
itself prevents its issuance under such circumstances. Legislation forbidding the
issuing of injunctions in such cases is unnecessary. So the only question to be here
determined is whether the remedy provided for in section 140 of Act No. 2339 is
adequate. If it is, the writs which form the basis of this appeal should not have
been issued. If this is the correct view, the authority to issue injunctions will not
have been taken away by section 139, but rendered inoperative only by reason of
an adequate remedy having been made available.
The legislative body of the Philippine Islands has declared from the beginning (Act
No. 82) that payment under protest and suit to recover is an adequate remedy to
test the legality of any tax or impost, and that this remedy is exclusive. Can we say
that the remedy is not adequate or that it is not exclusive, or both? The plaintiffs in
the case at bar are the first, in so far as we are aware, to question either the
adequacy or exclusiveness of this remedy. We will refer to a few cases in the
United States where statutes similar to sections 139 and 140 have been construed
and applied.
In May, 1874, one Bloomstein presented a petition to the circuit court sitting in
Nashville, Tennessee, stating that his real and personal property had been assessed
for state taxes in the year 1872 to the amount of $132.60; that he tendered to the
collector this amount in "funds receivable by law for such purposes;" and that the

collector refused to receive the same. He prayed for an alternative writ
of mandamus to compel the collector to receive the bills in payment for such taxes,
or to show cause to the contrary. To this petition the collector, in his answer, set up
the defense that the petitioner's suit was expressly prohibited by the Act of the
General Assembly of the State of Tennessee, passed in 1873. The petition was
dismissed and the relief prayed for refused. An appeal to the supreme court of the
State resulted in the affirmance of the judgment of the lower court. The case was
then carried to the Supreme Court of the United States (Tennessee vs. Sneed, 96 U.
S., 69), where the judgment was again affirmed.
The two sections of the Act of [March 21,] 1873, drawn in question in that cases,
read as follows:
1. That in all cases in which an officer, charged by law with the
collection of revenue due the State, shall institute any proceeding, or
take any steps for the collection of the same, alleged or claimed to be
due by said officer from any citizen, the party against whom the
proceeding or step is taken shall, if he conceives the same to be unjust
or illegal, or against any statute or clause of the Constitution of the
State, pay the same under protest; and, upon his making said payment,
the officer or collector shall pay such revenue into the State Treasury,
giving notice at the time of payment to the Comptroller that the same
was paid under protest; and the party paying said revenue may, at any
time within thirty days after making said payment, and not longer
thereafter, sue the said officer having collected said sum, for the
recovery thereof. And the same may be tried in any court having the
jurisdiction of the amount and parties; and, if it be determined that the
same was wrongfully collected, as not being due from said party to the
State, for any reason going to the merits of the same, then the court
trying the case may certify of record that the same was wrongfully paid
and ought to be refunded; and thereupon the Comptroller shall issue
his warrant for the same, which shall be paid in preference to other
claims on the Treasury.
2. That there shall be no other remedy, in any case of the collection of
revenue, or attempt to collect revenue illegally, or attempt to collect
revenue in funds only receivable by said officer under the law, the same
being other or different funds than such as the tax payer may tender, or
claim the right to pay, than that above provided; and no writ for the
prevention of the collection of any revenue claimed, or to hinder or
delay the collection of the same, shall in anywise issue, either
injunction, supersedeas, prohibition, or any other writ or process
whatever; but in all cases in which, for any reason, any person shall
claim that the tax so collected was wrongfully or illegally collected, the
remedy for said party shall be as above provided, and in no other
manner."
In discussing the adequacy of the remedy provided by the Tennessee Legislature,
as above set forth, the Supreme Court of the United States, in the case just cited,
said: "This remedy is simple and effective. A suit at law to recover money
unlawfully exacted is as speedy, as easily tried, and less complicated than a
proceeding bymandamus. ... In revenue cases, whether arising upon its (United
States) Internal Revenue Laws or those providing for the collection of duties upon
foreign imports, it (United States) adopts the rule prescribed by the State of
Tennessee. It requires the contestant to pay the amount as fixed by the
Government, and gives him power to sue the collector, and in such suit to test the
legality of the tax. There is nothing illegal or even harsh in this. It is a wise and
reasonable precaution for the security of the Government."
Thomas C. Platt commenced an action in the Circuit Court of the United States for
the Eastern District of Tennessee to restrain the collection of a license tax from the
company which he represented. The defense was that sections 1 and 2 of the Act
of 1873, supra, prohibited the bringing of that suit. This case also reached the
Supreme Court of the United States. (Shelton vs. Platt, 139 U. 591.) In speaking of
the inhibitory provisions of sections 1 and 2 of the Act of 1873, the court said:
"This Act has been sanctioned and applied by the Courts of Tennessee.
(Nashville vs. Smith, 86 Tenn., 213; Louisville & N. R. Co. vs. State, 8 Heisk., 663,
804.) It is, as counsel observe, similar to the Act of Congress forbidding suit for the
purpose of restraining the assessment or collection of taxes under the Internal
Revenue Laws, in respect to which this court held that the remedy by suit to
recover back the tax after payment, provided for by the Statute, was exclusive.
(Snyder vs. Marks, of this character has been called for by the embarrassments
resulting from the improvident employment of the writ of injunction in arresting
the collection of the public revenue; and, even in its absence, the strong arm of the
court of chancery ought not to be interposed in that direction except where resort
to that court is grounded upon the settled principles which govern its jurisdiction."
In Louisville & N.R. Co. vs. State (8 Heisk. [64 Tenn.], 663, 804), cited by the
Supreme Court of the United States in Shelton vs. Platt, supra, the court said: "It
was urged that this statute (sections 1 and 2 of the Act of 1873, supra) is
unconstitutional and void, as it deprives the citizen of the remedy by certiorari,
guaranteed by the organic law."
By the 10th section of the sixth article of the Constitution, [Tennessee] it is
provided that: "The judges or justices of inferior courts of law and equity shall have
power in all civil cases to issue writs of certiorari, to remove any cause, or the
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 55
transcript of the record thereof, from any inferior jurisdiction into such court of
law, on sufficient cause, supported by oath or affirmation."
The court held the act valid as not being in conflict with these provisions of the
State constitution.
In Eddy vs. The Township of Lee (73 Mich., 123), the complainants sought to enjoin
the collection of certain taxes for the year 1886. The defendants, in support of
their demurrer, insisted that the remedy by injunction had been taken away by
section 107 of the Act of 1885, which section reads as follows: "No injunction shall
issue to stay proceedings for the assessment or collection of taxes under this Act."
It was claimed by the complainants that the above quoted provisions of the Act of
1885 were unconstitutional and void as being in conflict with article 6, sec. 8, of
the Constitution, which provides that: "The circuit courts shall have original
jurisdiction in all matters, civil and criminal, not excepted in this Constitution, and
not prohibited by law. ... They shall also have power to issue writs of habeas
corpus, mandamus, injunction, quo warranto, certiorari, and other writs necessary
to carry into effect their orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court, said: "I have no doubt that the
Legislature has the constitutional authority, where it has provided a plain,
adequate, and complete remedy at law to recover back taxes illegally assessed and
collected, to take away the remedy by injunction to restrain their collection."
Section 9 of the Philippine Bill reads in part as follows: "That the Supreme Court
and the Courts of First Instance of the Philippine Islands shall possess and exercise
jurisdiction as heretofore provided and such additional jurisdiction as shall
hereafter be prescribed by the Government of said Islands, subject to the power of
said Government to change the practice and method of procedure."
It will be seen that this section has not taken away from the Philippine Government
the power to change the practice and method of procedure. If sections 139 and
140, considered together, and this must always be done, are nothing more than a
mode of procedure, then it would seem that the Legislature did not exceed its
constitutional authority in enacting them. Conceding for the moment that the duly
authorized procedure for the determination of the validity of any tax, impost, or
assessment was by injunction suits and that this method was available to aggrieved
taxpayers prior to the passage of Act No. 2339, may the Legislature change this
method of procedure? That the Legislature has the power to do this, there can be
no doubt, provided some other adequate remedy is substituted in lieu thereof. In
speaking of the modes of enforcing rights created by contracts, the Supreme Court
of the United States, in Tennessee vs. Sneed, supra, said: "The rule seems to be
that in modes of proceedings and of forms to enforce the contract the Legislature
has the control, and may enlarge, limit or alter them, provided that it does not
deny a remedy, or so embarrass it with conditions and restrictions as seriously to
impair the value of the right."
In that case the petitioner urged that the Acts of 1873 were laws impairing the
obligation of the contract contained in the charter of the Bank of Tennessee, which
contract was entered into with the State in 1838. It was claimed that this was done
by placing such impediments and obstructions in the way of its enforcement,
thereby so impairing the remedies as practically to render the obligation of no
value. In disposing of this contention, the court said: "If we assume that prior to
1873 the relator had authority to prosecute his claim against the State
by mandamus, and that by the statutes of that year the further use of that form
was prohibited to him, the question remains. whether an effectual remedy was left
to him or provided for him. We think the regulation of the statute gave him an
abundant means of enforcing such right as he possessed. It provided that he might
pay his claim to the collector under protest, giving notice thereof to the
Comptroller of the Treasury; that at any time within thirty days thereafter he might
sue the officer making the collection; that the case should be tried by any court
having jurisdiction and, if found in favor of the plaintiff on the merits, the court
should certify that the same was wrongfully paid and ought to be refunded and the
Comptroller should thereupon issue his warrant therefor, which should be paid in
preference to other claim on the Treasury."
But great stress is laid upon the fact that the plaintiffs in the case under
consideration are unable to pay the taxes assessed against them and that if the law
is enforced, they will be compelled to suspend business. This point may be best
answered by quoting from the case of Youngblood vs. Sexton (32 Mich., 406),
wherein Judge Cooley, speaking for the court, said: "But if this consideration is
sufficient to justify the transfer of a controversy from a court of law to a court of
equity, then every controversy where money is demanded may be made the
subject of equitable cognizance. To enforce against a dealer a promissory note may
in some cases as effectually break up his business as to collect from him a tax of
equal amount. This is not what is known to the law as irreparable injury. The courts
have never recognized the consequences of the mere enforcement of a money
demand as falling within that category."
Certain specified sections of Act No. 2339 were amended by Act No. 2432, enacted
December 23, 1914, effective January 1, 1915, by imposing increased and
additional taxes. Act No. 2432 was amended, were ratified by the Congress of the
United States on March 4, 1915. The opposition manifested against the taxes
imposed by Acts Nos. 2339 and 2432 is a matter of local history. A great many
business men thought the taxes thus imposed were too high. If the collection of

the new taxes on signs, signboards, and billboards may be restrained, we see no
well-founded reason why injunctions cannot be granted restraining the collection
of all or at least a number of the other increased taxes. The fact that this may be
done, shows the wisdom of the Legislature in denying the use of the writ of
injunction to restrain the collection of any tax imposed by the Acts. When this was
done, an equitable remedy was made available to all dissatisfied taxpayers.
The question now arises whether, the case being one of which the court below had
no jurisdiction, this court, on appeal, shall proceed to express an opinion upon the
validity of provisions of subsection (b) of section 100 of Act No. 2339, imposing the
taxes complained of. As a general rule, an opinion on the merits of a controversy
ought to be declined when the court is powerless to give the relief demanded. But
it is claimed that this case is, in many particulars, exceptional. It is true that it has
been argued on the merits, and there is no reason for any suggestion or suspicion
that it is not a bona fide controversy. The legal points involved in the merits have
been presented with force, clearness, and great ability by the learned counsel of
both sides. If the law assailed were still in force, we would feel that an opinion on
its validity would be justifiable, but, as the amendment became effective on
January 1, 1915, we think it advisable to proceed no further with this branch of the
case.
The next question arises in connection with the supplementary complaint, the
object of which is to enjoin the Collector of Internal Revenue from removing
certain billboards, the property of the plaintiffs located upon private lands in the
Province of Rizal. The plaintiffs allege that the billboards here in question "in no
sense constitute a nuisance and are not deleterious to the health, morals, or
general welfare of the community, or of any persons." The defendant denies these
allegations in his answer and claims that after due investigation made upon the
complaints of the British and German Consuls, he "decided that the billboard
complained of was and still is offensive to the sight, and is otherwise a nuisance."
The plaintiffs proved by Mr. Churchill that the "billboards were quite a distance
from the road and that they were strongly built, not dangerous to the safety of the
people, and contained no advertising matter which is filthy, indecent, or
deleterious to the morals of the community." The defendant presented no
testimony upon this point. In the agreed statement of facts submitted by the
parties, the plaintiffs "admit that the billboards mentioned were and still are
offensive to the sight."
The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If
after due investigation the Collector of Internal Revenue shall decide that any sign,
signboard, or billboard displayed or exposed to public view is offensive to the sight
or is otherwise a nuisance, he may by summary order direct the removal of such
sign, signboard, or billboard, and if same is not removed within ten days after he
has issued such order he my himself cause its removal, and the sign, signboard, or
billboard shall thereupon be forfeited to the Government, and the owner thereof
charged with the expenses of the removal so effected. When the sign, signboard,
or billboard ordered to be removed as herein provided shall not comply with the
provisions of the general regulations of the Collector of Internal Revenue, no
rebate or refund shall be allowed for any portion of a year for which the tax may
have been paid. Otherwise, the Collector of Internal Revenue may in his discretion
make a proportionate refund of the tax for the portion of the year remaining for
which the taxes were paid. An appeal may be had from the order of the Collector
of Internal Revenue to the Secretary of Finance and Justice whose decision thereon
shall be final."
The Attorney-General, on behalf of the defendant, says: "The question which the
case presents under this head for determination, resolves itself into this inquiry: Is
the suppression of advertising signs displayed or exposed to public view, which are
admittedly offensive to the sight, conducive to the public interest?"
And cunsel for the plaintiffs states the question thus: "We contend that that
portion of section 100 of Act No. 2339, empowering the Collector of Internal
Revenue to remove billboards as nuisances, if objectionable to the sight, is
unconstitutional, as constituting a deprivation of property without due process of
law."
From the position taken by counsel for both sides, it is clear that our inquiry is
limited to the question whether the enactment assailed by the plaintiffs was a
legitimate exercise of the police power of the Government; for all property is held
subject to that power.
As a consequence of the foregoing, all discussion and authorities cited, which go to
the power of the state to authorize administrative officers to find, as a fact, that
legitimate trades, callings, and businesses are, under certain circumstances,
statutory nuisances, and whether the procedure prescribed for this purpose is due
process of law, are foreign to the issue here presented.
There can be no doubt that the exercise of the police power of the Philippine
Government belongs to the Legislature and that this power is limited only by the
Acts of Congress and those fundamentals principles which lie at the foundation of
all republican forms of government. An Act of the Legislature which is obviously
and undoubtedly foreign to any of the purposes of the police power and interferes
with the ordinary enjoyment of property would, without doubt, be held to be
invalid. But where the Act is reasonably within a proper consideration of and care
for the public health, safety, or comfort, it should not be disturbed by the courts.
The courts cannot substitute their own views for what is proper in the premises for
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those of the Legislature. In Munn vs. Illinois (94 U.S., 113), the United States
Supreme Court states the rule thus: "If no state of circumstances could exist to
justify such statute, then we may declare this one void because in excess of the
legislative power of this state; but if it could, we must presume it did. Of the
propriety of legislative interference, within the scope of the legislative power, a
legislature is the exclusive judge."
This rule very fully discussed and declared in Powell vs. Pennsylvania (127 U.S.,
678) "oleo-margarine" case. (See also Crowley vs. Christensen, 137 U.S., 86, 87;
Camfield vs. U.S., 167 U.S., 518.) While the state may interfere wherever the public
interests demand it, and in this particular a large discretion is necessarily vested in
the legislature to determine, not only what the interest of the public require, but
what measures are necessary for the protection of such interests; yet, its
determination in these matters is not final or conclusive, but is subject to the
supervision of the courts. (Lawton vs. Steele, 152 U.S., 133.) Can it be said judicially
that signs, signboards, and billboards, which are admittedly offensive to the sight,
are not with the category of things which interfere with the public safety, welfare,
and comfort, and therefore beyond the reach of the police power of the Philippine
Government?
The numerous attempts which have been made to limit by definition the scope of
the police power are only interesting as illustrating its rapid extension within
comparatively recent years to points heretofore deemed entirely within the field of
private liberty and property rights. Blackstone's definition of the police power was
as follows: "The due regulation and domestic order of the kingdom, whereby the
individuals of the state, like members of a well governed family, are bound to
conform their general behavior to the rules of propriety, good neigborhood, and
good manners, to be decent, industrious, and inoffensive in their respective
stations." (Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the authority of the state "to regulate
unwholesome trades, slaughter houses, operations offensive to the senses." Chief
Justice Shaw of Massachusetts defined it as follows: "The power vested in the
legislature by the constitution to make, ordain, and establish all manner of
wholesome and reasonable laws, statutes, and ordinances, either with penalties or
without, not repugnant to the constitution, as they shall judge to be for the good
and welfare of the commonwealth, and of the subjects of the same."
(Com. vs.Alger, 7 Cush., 53.)
In the case of Butchers' Union Slaughter-house, etc. Co. vs. Crescent City Live Stock
Landing, etc. Co. (111 U.S., 746), it was suggested that the public health and public
morals are matters of legislative concern of which the legislature cannot divest
itself. (See State vs. Mountain Timber Co. [1913], 75 Wash., 581, where these
definitions are collated.)
In Champer vs. Greencastle (138 Ind., 339), it was said: "The police power of the
State, so far, has not received a full and complete definition. It may be said,
however, to be the right of the State, or state functionary, to prescribe regulations
for the good order, peace, health, protection, comfort, convenience and morals of
the community, which do not ... violate any of the provisions of the organic law."
(Quoted with approval in Hopkins vs. Richmond [Va., 1915], 86 S.E., 139.)
In Com. vs. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The police power
of the state is difficult of definition, but it has been held by the courts to be the
right to prescribe regulations for the good order, peace, health, protection,
comfort, convenience and morals of the community, which does not encroach on a
like power vested in congress or state legislatures by the federal constitution, or
does not violate the provisions of the organic law; and it has been expressly held
that the fourteenth amendment to the federal constitution was not designed to
interfere with the exercise of that power by the state."
In People vs. Brazee ([Mich., 1914], 149 N.W., 1053), it was said: "It [the police
power] has for its object the improvement of social and economic conditioned
affecting the community at large and collectively with a view to bring about "he
greatest good of the greatest number."Courts have consistently and wisely
declined to set any fixed limitations upon subjects calling for the exercise of this
power. It is elastic and is exercised from time to time as varying social conditions
demand correction."
In 8 Cyc., 863, it is said: "Police power is the name given to that inherent
sovereignty which it is the right and duty of the government or its agents to
exercise whenever public policy, in a broad sense, demands, for the benefit of
society at large, regulations to guard its morals, safety, health, order or to insure in
any respect such economic conditions as an advancing civilization of a high
complex character requires." (As quoted with approval in Stettlervs. O'Hara [1914],
69 Ore, 519.)
Finally, the Supreme Court of the United States has said in Noble State
Bank vs. Haskell (219 U.S. [1911], 575: "It may be said in a general way that the
police power extends to all the great public needs. It may be put forth in aid of
what is sanctioned by usage, or held by the prevailing morality or strong and
preponderant opinion to be greatly and immediately necessary to the public
welfare."
This statement, recent as it is, has been quoted with approval by several courts.
(Cunningham vs. Northwestern Imp. Co. [1911], 44 Mont., 180; State vs. Mountain

Timber Co. [1913], 75 Wash., 581; McDavid vs. Bank of Bay Minette [Ala., 1915], 69
Sou., 452; Hopkins vs. City of Richmond [Va., 1915], 86 S.E., 139; State vs. Philipps
[Miss. 1915], 67 Sou., 651.)
It was said in Com. vs. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is much easier
to perceive and realize the existence and sources of this police power than to mark
its boundaries, or to prescribe limits to its exercise." In Stone vs. Mississippi (101
U.S., 814), it was said: "Many attempts have been made in this court and
elsewhere to define the police power, but never with entire success. It is always
easier to determine whether a particular case comes within the general scope of
the power, than to give an abstract definition of the power itself, which will be in
all respects accurate."
Other courts have held the same vow of efforts to evolve a satisfactory definition
of the police power. Manifestly, definitions which fail to anticipate cases properly
within the scope of the police power are deficient. It is necessary, therefore, to
confine our discussion to the principle involved and determine whether the cases
as they come up are within that principle. The basic idea of civil polity in the United
States is that government should interfere with individual effort only to the extent
necessary to preserve a healthy social and economic condition of the country.
State interference with the use of private property may be exercised in three ways.
First, through the power of taxation, second, through the power of eminent
domain, and third, through the police power. Buy the first method it is assumed
that the individual receives the equivalent of the tax in the form of protection and
benefit he receives from the government as such. By the second method he
receives the market value of the property taken from him. But under the third
method the benefits he derived are only such as may arise from the maintenance
of a healthy economic standard of society and is often referred to as damnum
absque injuria. (Com. vs. Plymouth Coal Co. 232 Pa., 141; Bemis vs. Guirl Drainage
Co., 182 Ind., 36.) There was a time when state interference with the use of private
property under the guise of the police power was practically confined to the
suppression of common nuisances. At the present day, however, industry is
organized along lines which make it possible for large combinations of capital to
profit at the expense of the socio-economic progress of the nation by controlling
prices and dictating to industrial workers wages and conditions of labor. Not only
this but the universal use of mechanical contrivances by producers and common
carriers has enormously increased the toll of human life and limb in the production
and distribution of consumption goods. To the extent that these businesses affect
not only the public health, safety, and morals, but also the general social and
economic life of the nation, it has been and will continue to be necessary for the
state to interfere by regulation. By so doing, it is true that the enjoyment of private
property is interfered with in no small degree and in ways that would have been
considered entirely unnecessary in years gone by. The regulation of rates charged
by common carriers, for instance, or the limitation of hours of work in industrial
establishments have only a very indirect bearing upon the public health, safety,
and morals, but do bear directly upon social and economic conditions. To permit
each individual unit of society to feel that his industry will bring a fair return; to see
that his work shall be done under conditions that will not either immediately or
eventually ruin his health; to prevent the artificial inflation of prices of the things
which are necessary for his physical well being are matters which the individual is
no longer capable of attending to himself. It is within the province of the police
power to render assistance to the people to the extent that may be necessary to
safeguard these rights. Hence, laws providing for the regulation of wages and
hours of labor of coal miners (Rail & River Coal Co. vs.Taylor, 234 U.S., 224);
requiring payment of employees of railroads and other industrial concerns in legal
tender and requiring salaries to be paid semimonthly (Erie R.R. Co. vs. Williams,
233 U.S., 685); providing a maximum number of hours of labor for women
(Miller vs. Wilson, U.S. Sup. Ct. [Feb. 23, 1915], Adv. Opns., p. 342); prohibiting
child labor (Sturges & Burn vs. Beauchamp, 231 U.S., 320); restricting the hours of
labor in public laundries (In re Wong Wing, 167 Cal., 109); limiting hours of labor in
industrial establishment generally (State vs.Bunting, 71 Ore., 259); Sunday Closing
Laws (State vs. Nicholls [Ore., 1915], 151 Pac., 473; People vs. C. Klinck Packing Co.
[N.Y., 1915], 108 N. E., 278; Hiller vs. State [Md., 1914], 92 Atl., 842; State vs. Penny,
42 Mont., 118; City of Springfield vs. Richter, 257 Ill., 578, 580; State vs. Hondros
[S.C., 1915], 84 S.E., 781); have all been upheld as a valid exercise of the police
power. Again, workmen's compensation laws have been quite generally upheld.
These statutes discard the common law theory that employers are not liable for
industrial accidents and make them responsible for all accidents resulting from
trade risks, it being considered that such accidents are a legitimate charge against
production and that the employer by controlling the prices of his product may shift
the burden to the community. Laws requiring state banks to join in establishing a
depositors' guarantee fund have also been upheld by the Federal Supreme Court in
Noble State Bank vs. Haskell (219 U. S., 104), and Assaria State Bank vs. Dolley (219
U.S., 121).
Offensive noises and smells have been for a long time considered susceptible of
suppression in thickly populated districts. Barring livery stables from such locations
was approved of in Reinman vs. Little Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S. Adv.
Opns., p. 511). And a municipal ordinance was recently upheld (People vs. Ericsson,
263 Ill., 368), which prohibited the location of garages within two hundred feet of
any hospital, church, or school, or in any block used exclusively for residential
purposes, unless the consent of the majority of the property owners be obtained.
Such statutes as these are usually upheld on the theory of safeguarding the public
health. But we apprehend that in point of fact they have little bearing upon the
health of the normal person, but a great deal to do with his physical comfort and
convenience and not a little to do with his peace of mind. Without entering into
the realm of psychology, we think it quite demonstrable that sight is as valuable to
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a human being as any of his other senses, and that the proper ministration to this
sense conduces as much to his contentment as the care bestowed upon the senses
of hearing or smell, and probably as much as both together. Objects may be
offensive to the eye as well as to the nose or ear. Man's esthetic feelings are
constantly being appealed to through his sense of sight. Large investments have
been made in theaters and other forms of amusement, in paintings and
spectacular displays, the success of which depends in great part upon the appeal
made through the sense of sight. Moving picture shows could not possible without
the sense of sight. Governments have spent millions on parks and boulevards and
other forms of civic beauty, the first aim of which is to appeal to the sense of sight.
Why, then, should the Government not interpose to protect from annoyance this
most valuable of man's senses as readily as to protect him from offensive noises
and smells?
The advertising industry is a legitimate one. It is at the same time a cause and an
effect of the great industrial age through which the world is now passing. Millions
are spent each year in this manner to guide the consumer to the articles which he
needs. The sense of sight is the primary essential to advertising success. Billboard
advertising, as it is now conducted, is a comparatively recent form of advertising. It
is conducted out of doors and along the arteries of travel, and compels attention
by the strategic locations of the boards, which obstruct the range of vision at
points where travelers are most likely to direct their eyes. Beautiful landscapes are
marred or may not be seen at all by the traveler because of the gaudy array of
posters announcing a particular kind of breakfast food, or underwear, the coming
of a circus, an incomparable soap, nostrums or medicines for the curing of all the
ills to which the flesh is heir, etc. It is quite natural for people to protest against this
indiscriminate and wholesale use of the landscape by advertisers and the intrusion
of tradesmen upon their hours of leisure and relaxation from work. Outdoor life
must lose much of its charm and pleasure if this form of advertising is permitted to
continue unhampered until it converts the streets and highways into veritable
canyons through which the world must travel in going to work or in search of
outdoor pleasure.
The success of billboard advertising depends not so much upon the use of private
property as it does upon the use of the channels of travel used by the general
public. Suppose that the owner of private property, who so vigorously objects to
the restriction of this form of advertising, should require the advertiser to paste his
posters upon the billboards so that they would face the interior of the property
instead of the exterior. Billboard advertising would die a natural death if this were
done, and its real dependency not upon the unrestricted use of private property
but upon the unrestricted use of the public highways is at once apparent.
Ostensibly located on private property, the real and sole value of the billboard is its
proximity to the public thoroughfares. Hence, we conceive that the regulation of
billboards and their restriction is not so much a regulation of private property as it
is a regulation of the use of the streets and other public thoroughfares.
We would not be understood as saying that billboard advertising is not a legitimate
business any more than we would say that a livery stable or an automobile garage
is not. Even a billboard is more sightly than piles of rubbish or an open sewer. But
all these businesses are offensive to the senses under certain conditions.
It has been urged against ministering to the sense of sight that tastes are so
diversified that there is no safe standard of legislation in this direction. We answer
in the language of the Supreme Court in Noble State Bank vs.Haskell (219 U.S.,
104), and which has already been adopted by several state courts (see supra), that
"the prevailing morality or strong and preponderating opinion" demands such
legislation. The agitation against the unrestrained development of the billboard
business has produced results in nearly all the countries of Europe. (Ency.
Britannica, vol. 1, pp. 237-240.) Many drastic ordinances and state laws have been
passed in the United States seeking to make the business amenable to regulation.
But their regulation in the United states is hampered by what we conceive an
unwarranted restriction upon the scope of the police power by the courts. If the
police power may be exercised to encourage a healthy social and economic
condition in the country, and if the comfort and convenience of the people are
included within those subjects, everything which encroaches upon such territory is
amenable to the police power. A source of annoyance and irritation to the public
does not minister to the comfort and convenience of the public. And we are of the
opinion that the prevailing sentiment is manifestly against the erection of
billboards which are offensive to the sight.
We do not consider that we are in conflict with the decision in
Eubank vs. Richmond (226 U.S., 137), where a municipal ordinance establishing a
building line to which property owners must conform was held unconstitutional. As
we have pointed out, billboard advertising is not so much a use of private property
as it is a use of the public thoroughfares. It derives its value to the power solely
because the posters are exposed to the public gaze. It may well be that the state
may not require private property owners to conform to a building line, but may
prescribe the conditions under which they shall make use of the adjoining streets
and highways. Nor is the law in question to be held invalid as denying equal
protection of the laws. In Keokee Coke Co. vs. Taylor (234 U.S., 224), it was said: "It
is more pressed that the act discriminates unconstitutionally against certain
classes. But while there are differences of opinion as to the degree and kind of
discrimination permitted by the Fourteenth Amendment, it is established by
repeated decisions that a statute aimed at what is deemed an evil, and hitting it
presumably where experience shows it to be most felt, is not to be upset by
thinking up and enumerating other instances to which it might have been applied

equally well, so far as the court can see. That is for the legislature to judge unless
the case is very clear."
But we have not overlooked the fact that we are not in harmony with the highest
courts of a number of the states in the American Union upon this point. Those
courts being of the opinion that statutes which are prompted and inspired by
esthetic considerations merely, having for their sole purpose the promotion and
gratification of the esthetic sense, and not the promotion or protection of the
public safety, the public peace and good order of society, must be held invalid and
contrary to constitutional provisions holding inviolate the rights of private
property. Or, in other words, the police power cannot interfere with private
property rights for purely esthetic purposes. The courts, taking this view, rest their
decisions upon the proposition that the esthetic sense is disassociated entirely
from any relation to the public health, morals, comfort, or general welfare and is,
therefore, beyond the police power of the state. But we are of the opinion, as
above indicated, that unsightly advertisements or signs, signboards, or billboards
which are offensive to the sight, are not disassociated from the general welfare of
the public. This is not establishing a new principle, but carrying a well recognized
principle to further application. (Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment appealed from is hereby reversed and the
action dismissed upon the merits, with costs. So ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.
TRENT, J.:
Counsel for the plaintiffs call our attention to the case of Ex parte Young (209 U.S.,
123); and say that they are of the opinion that this case "is the absolutely
determinative of the question of jurisdiction in injunctions of this kind." We did not
refer to this case in our former opinion because we were satisfied that the
reasoning of the case is not applicable to section 100 (b), 139 and 140 of Act No.
2339. The principles announced in the Young case are stated as follows: "It may
therefore be said that when the penalties for disobedience are by fines so
enormous and imprisonment so severe as to intimidate the company and its
officers from resorting to the courts to test the validity of the legislation, the result
is the same as if the law in terms prohibited the company from seeking judicial
construction of laws which deeply affect its rights.
It is urged that there is no principle upon which to base the claim that a
person is entitled to disobey a statute at least once, for the purpose of
testing its validity without subjecting himself to the penalties for
disobedience provided by the statute in case it is valid. This is not an
accurate statement of the case. Ordinarily a law creating offenses in the
nature of misdemeanors or felonies relates to a subject over which the
jurisdiction of the legislature is complete in any event. In these case,
however, of the establishment of certain rates without any hearing, the
validity of such rates necessarily depends upon whether they are high
enough to permit at least some return upon the investment (how much
it is not now necessary to state), and an inquiry as to that fact is a
proper subject of judicial investigation. If it turns out that the rates are
too low for that purpose, then they are illegal. Now, to impose upon a
party interested the burden of obtaining a judicial decision of such a
question (no prior hearing having ever been given) only upon the
condition that, if unsuccessful, he must suffer imprisonment and pay
fines as provided in these acts, is, in effect, to close up all approaches to
the courts, and thus prevent any hearing upon the question whether
the rates as provided by the acts are not too low, and therefore invalid.
The distinction is obvious between a case where the validity of the acts
depends upon the existence of a fact which can be determined only
after investigation of a very complicated and technical character, and
the ordinary case of a statute upon a subject requiring no such
investigation and over which the jurisdiction of the legislature is
complete in any event.
An examination of the sections of our Internal Revenue Law and of the
circumstances under which and the purposes for which they were enacted, will
show that, unlike the statutes under consideration in the above cited case, their
enactment involved no attempt on the part of the Legislature to prevent
dissatisfied taxpayers "from resorting to the courts to test the validity of the
legislation;" no effort to prevent any inquiry as to their validity. While section 139
does prevent the testing of the validity of subsection (b) of section 100 in
injunction suits instituted for the purpose of restraining the collection of internal
revenue taxes, section 140 provides a complete remedy for that purpose. And
furthermore, the validity of subsection (b) does not depend upon "the existence of
a fact which can be determined only after investigation of a very complicated and
technical character," but the jurisdiction of the Legislature over the subject with
which the subsection deals "is complete in any event." The judgment of the court
in the Young case rests upon the proposition that the aggrieved parties had no
adequate remedy at law.
Neither did we overlook the case of General Oil Co. vs. Crain (209 U.S.,
211), decided the same day and citing Ex parte Young, supra. In that
case the plaintiff was a Tennessee corporation, with its principal place
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 58
of business in Memphis, Tennessee. It was engaged in the manufacture
and sale of coal oil, etc. Its wells and plant were located in Pennsylvania
and Ohio. Memphis was not only its place of business, at which place it
sold oil to the residents of Tennessee, but also a distributing point to
which oils were shipped from Pennsylvania and Ohio and unloaded into
various tanks for the purpose of being forwarded to the Arkansas,
Louisiana, and Mississippi customers. Notwithstanding the fact that the
company separated its oils, which were designated to meet the
requirements of the orders from those States, from the oils for sale in
Tennessee, the defendant insisted that he had a right, under the Act of
the Tennessee Legislature, approved April 21, 1899, to inspect all the
oils unlocated in Memphis, whether for sale in that State or not, and
charge and collect for such inspection a regular fee of twenty-five cents
per barrel. The company, being advised that the defendant had no such
right, instituted this action in the inferior States court for the purpose of
enjoining the defendant, upon the grounds stated in the bill, from
inspecting or attempting to inspect its oils. Upon trial, the preliminary
injunction which had been granted at the commencement of the action,
was continued in force. Upon appeal, the supreme court of the State of
Tennessee decided that the suit was one against the State and reversed
the judgment of the Chancellor. In the Supreme Court of the United
States, where the case was reviewed upon a writ of error, the
contentions of the parties were stated by the court as follows: "It is
contended by defendant in error that this court is without jurisdiction
because no matter sought to be litigated by plaintiff in error was
determined by the Supreme Court of Tennessee. The court simply held,
it is paid, that, under the laws of the State, it had no jurisdiction to
entertain the suit for any purpose. And it is insisted "hat this holding
involved no Federal question, but only the powers and jurisdiction of
the courts of the State of Tennessee, in respect to which the Supreme
Court of Tennessee is the final arbiter."
Opposing these contentions, plaintiff in error urges that whether a suit
is one against a State cannot depend upon the declaration of a statute,
but depends upon the essential nature ofthe suit, and that the Supreme
Court recognized that the statute "aded nothing to the axiomatic
principle that the State, as a sovereign, is not subject to suit save by its
own consent."And it is hence insisted that the court by dismissing the
bill gave effect to the law which was attacked. It is further insisted that
the bill undoubtedly present rights under the Constitution of the United
States and conditions which entitle plaintiff in error to an injunction for
the protection of such rights, and that a statute of the State which
operates to deny such rights, or such relief, `is itself in conflict with the
Constitution of the United States."
That statute of Tennessee, which the supreme court of that State construed and
held to be prohibitory of the suit, was an act passed February 28, 1873, which
provides: "That no court in the State of Tennessee has, nor shall hereafter have,
any power, jurisdiction, or authority to entertain any suit against the State, or any
officer acting by the authority of the State, with a view to reach the State, its
treasury, funds or property; and all such suits now pending, or hereafter brought,
shall be dismissed as to the State, or such officer, on motion, plea or demurrer of
the law officer of the State, or counsel employed by the State."
The Supreme Court of the United States, after reviewing many cases, said:
"Necessarily, to give adequate protection to constitutional rights a distinction must
be made between valid and invalid state laws, as determining the character of the
suit against state officers. And the suit at bar illustrates the necessity. If a suit
against state officer is precluded in the national courts by the Eleventh
Amendment to the Constitution, and may be forbidden by a State to its courts, as it
is contended in the case at bar that it may be, without power of review by this
court, it must be evident that an easy way is open to prevent the enforcement of
many provisions of the Constitution; and the Fourteenth Amendment, which is
directed at state action, could be nullified as to much of its operation. ... It being
then the right of a party to be protected against a law which violates a
constitutional right, whether by its terms or the manner of its enforcement, it is
manifest that a decision which denies such protection gives effect to the law, and
the decision is reviewable by this court."
The court then proceeded to consider whether the law of 1899 would, if
administered against the oils in question, violate any constitutional right of the
plaintiff and after finding and adjudging that the oils were not in movement
through the States, that they had reached the destination of their first shipment,
and were held there, not in necessary delay at means of transportation but for the
business purposes and profit of the company, and resting its judgment upon the
taxing power of the State, affirmed the decree of the supreme court of the State of
Tennessee.
From the foregoing it will be seen that the Supreme Court of Tennessee dismissed
the case for want of jurisdiction because the suit was one against the State, which
was prohibited by the Tennessee Legislature. The Supreme Court of the United
States took jurisdiction of the controversy for the reasons above quoted and
sustained the Act of 1899 as a revenue law.
The case of Tennessee vs. Sneed (96 U.S., 69), and Shelton vs. Platt (139 U.S., 591),
relied upon in our former opinion, were not cited in General Oil

Co. vs. Crain, supra, because the questions presented and the statutes under
consideration were entirely different. The Act approved March 31, 1873, expressly
prohibits the courts from restraining the collection of any tax, leaving the
dissatisfied taxpayer to his exclusive remedy payment under protest and suit to
recover while the Act approved February 28, 1873, prohibits suits against the
State.
In upholding the statute which authorizes the removal of signboards or billboards
upon the sole ground that they are offensive to the sight, we recognized the fact
that we are not in harmony with various state courts in the American Union. We
have just examined the decision of the Supreme Court of the State of Illinois in the
recent case (October [December], 1914) of Thomas Cusack Co. vs. City of Chicago
(267 Ill., 344), wherein the court upheld the validity of a municipal ordinances,
which reads as follows: "707. Frontage consents required. It shall be unlawful for
any person, firm or corporation to erect or construct any bill-board or sign-board in
any block on any public street in which one-half of the buildings on both sides of
the street are used exclusively for residence purposes, without first obtaining the
consent, in writing, of the owners or duly authorized agents of said owners owning
a majority of the frontage of the property, on both sides of the street, in the block
in which such bill-board or sign-board is to be erected, constructed or located.
Such written consent shall be filed with the commissioner of buildings before a
permit shall be issued for the erection, construction or location of such bill-board
or sign-board."
The evidence which the Illinois court relied upon was the danger of fires, the fact
that billboards promote the commission of various immoral and filthy acts by
disorderly persons, and the inadequate police protection furnished to residential
districts. The last objection has no virtue unless one or the other of the other
objections are valid. If the billboard industry does, in fact, promote such municipal
evils to noticeable extent, it seems a curious inconsistency that a majority of the
property owners on a given block may legalize the business. However, the decision
is undoubtedly a considerable advance over the views taken by other high courts in
the United States and distinguishes several Illinois decisions. It is an advance
because it permits the suppression of billboards where they are undesirable. The
ordinance which the court approved will no doubt cause the virtual suppression of
the business in the residential districts. Hence, it is recognized that under certain
circumstances billboards may be suppressed as an unlawful use of private
property. Logically, it would seem that the premise of fact relied upon is not very
solid. Objections to the billboard upon police, sanitary, and moral grounds have
been, as pointed out by counsel for Churchill and Tait, duly considered by
numerous high courts in the United States, and, with one exception, have been
rejected as without foundation. The exception is the Supreme Court of Missouri,
which advances practically the same line of reasoning as has the Illinois court in
this recent case. (St. Louis Gunning Advt. Co. vs. City of St. Louis, 137 S. W., 929.) In
fact, the Illinois court, in Haller Sign Works vs. Physical Culture Training School (249
Ill., 436), "distinguished" in the recent case, said: "There is nothing inherently
dangerous to the health or safety of the public in structures that are properly
erected for advertising purposes."
If a billboard is so constructed as to offer no room for objections on sanitary or
moral grounds, it would seem that the ordinance above quoted would have to be
sustained upon the very grounds which we have advanced in sustaining our own
statute.
It might be well to note that billboard legislation in the United States is attempting
to eradicate a business which has already been firmly established. This business
was allowed to expand unchecked until its very extent called attention to its
objectionable features. In the Philippine Islands such legislation has almost
anticipated the business, which is not yet of such proportions that it can be said to
be fairly established. It may be that the courts in the United States have committed
themselves to a course of decisions with respect to billboard advertising, the full
consequences of which were not perceived for the reason that the development of
the business has been so recent that the objectionable features of it did not
present themselves clearly to the courts nor to the people. We, in this country,
have the benefit of the experience of the people of the United States and may
make our legislation preventive rather than corrective. There are in this country,
moreover, on every hand in those districts where Spanish civilization has held sway
for so many centuries, examples of architecture now belonging to a past age, and
which are attractive not only to the residents of the country but to visitors. If the
billboard industry is permitted without constraint or control to hide these historic
sites from the passerby, the country will be less attractive to the tourist and the
people will suffer a district economic loss.
The motion for a rehearing is therefore denied.
G.R. No. 147861 November 18, 2005
PHILIPPINE PORTS AUTHORITY, Petitioner,
vs.
PIER 8 ARRASTRE & STEVE-DORING SERVICES, INC., Respondents.
x-------------------------------------------------------------------x
G.R. No. 155252
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 59
PHILIPPINE PORTS AUTHORITY, Petitioner,
vs.
THE COURT OF APPEALS (FORMER Ninth Division) and PIER 8 ARRASTRE &
STEVEDORING SERVICES, INC., Respondents.
DECISION
Tinga, J.:
These consolidated cases stem from the purported exercise of police power by the
Philippine Ports Authority ("PPA") in ousting operators of several arrastre and
stevedoring services from their respective piers in the Manila North Harbor.
Matters were complicated on account of procedural fiascos that occurred at the
Court of Appeals level in both cases.
After distilling peripheral procedural infirmities, two issues remain for resolution.
G.R. No. 147861, brought to this Court via a Petition for Review under Rule 45 of
the Revised Rules on Civil Procedure, necessitates a determination of the legality of
the issuance of a writ of preliminary injunction against PPAs takeover of port
services. On the other hand, at issue in the Petition for Certiorari under Rule 65 of
the Revised Rules on Civil Procedure docketed as G.R. No 155252 is the correctness
of the Court of Appeals taking cognizance in contempt proceedings of a matter
pertaining to the parties possessory rights already subject of the aforementioned
appeal under Rule 45.
The following facts are culled from the records.
In the late 1990s, then President Joseph E. Estrada issued a directive for the
modernization of the North Harbor towards unification and rationalization of all
facility operators and service providers.1 As the government agency vested with the
authority "to coordinate, streamline, improve, and optimize the planning,
development, financing, construction, maintenance and operation of ports, port
facilities, port physical plants, all equipment used in connection with the operation
of a port"2 and "[t]o supervise, control, regulate, construct, maintain, operate, and
provide such facilities or services as are necessary in the ports vested in, or
belonging to the Authority,"3 it fell upon the PPA to implement the presidential
edict. However, the plan for modernization, which required the North Harbor to be
run by a single entity, encountered strong opposition including resistance from
North Harbor port workers.
On 13 April 2000, PPA received information from a press release by the Asosasyon
ng mga Mangagawa sa Pantalan, comprising 95% of the North Harbor work force,
that it would stage a strike starting 19 April 2000 which would sufficiently paralyze
the whole of the North Harbor. 4 PPA recounts that several days prior to this
announcement, port workers carried out a publicized strike plan by performing a
protest march towards Malacaan Palace.5
According to PPA, these circumstances prompted it to issue on 14 April 2000
Memorandum Order No. 07-2000 creating the PPA North Harbor Services ("PPA-
NHPS") to take over cargo handling operations and obviate an interruption of port
operations.
On the eve of the planned strike, PPA, aided by a team of SWAT members of the
Western Police District, began forcibly occupying several ports in the North Harbor.
By around 1:00 a.m. on 16 April 2000, PPA had taken over operations at Piers 6, 8,
12, 14, Terminal 16 and Marine Slipway, and later that morning, Isla Puting Bato.
On 19 April 2000, respondent Pier 8 Arrastre and Stevedoring Services, Inc.,
("PASSI")the service provider dispossessed of Pier 8filed a complaint
for Injunction with Damages with prayer for temporary restraining order (TRO) and
writ of preliminary injunction docketed as Civil Case No. 00-97157 and raffled to
the sala of Judge Zenaida R. Daguna, Regional Trial Court ("RTC") of Manila, Branch
19.
For its part, PASSI had been rendering arrastre and stevedoring services at Pier 8
since 1974. Its latest contract expired on 14 April 1997, 6 three years before PPA
took over Pier 8. PASSI filed a request for the renewal of its contract which was
never formally acted upon by PPA. Thus, PASSI was operating at Pier 8 in a
holdover capacity up until PPAs takeover.
On 24 April 2000, the RTC granted PASSIs application for a TRO. However, in a
subsequent order7 dated 3 May 2000, the lower court set aside the TRO and
denied the preliminary injunction prayed for by PASSI. The RTC applied Section 1,
Presidential Decree (P.D.) No. 1818, which provides that "[n]o court shall have
jurisdiction to issue any restraining order, preliminary injunction, or preliminary
mandatory injunction in any case, dispute, or controversy involvingany public
utility operated by the government, including among others public utilities for the
transport of the goods or commodities, stevedoring and arrastre contracts.
"8 A Motion for Reconsideration was denied for lack of merit in an Order9 dated
20 June 2000.
This prompted PASSI to file on 5 July 2000 with the Court of Appeals a Petition for
Certiorari under Rule 65 of the Revised Rules of Civil Procedure asking that a
TRO/temporary mandatory order be issued against PPA and its representatives and

that the RTCs interlocutory orders dated 3 May 2000 and 20 June 2000 annulled
and set aside.10 The case was docketed as CA-G.R. SP No. 59548.
On 6 September 2000, the Court of Appeals issued the TRO prayed for by PASSI. It
directed PPA "to cease and desist from continuing its takeover of the operations of
[PASSI] at Pier 8 and, from molesting, disturbing and/or interfering PASSIs
operations thereof."11
On 11 September 2000, PASSI filed before the Court of Appeals a Petition to Cite in
Contempt certain PPA officials. The petition, docketed as CA-G.R. SP No.
60670,12 alleged that named PPA officials had committed and were continuing to
commit acts to molest, disturb and interfere with the operation of PASSI at Pier 8
despite their receipt of the TRO dated 6 September 2000.
Returning to the certiorari petition assailing the RTCs interlocutory order, on 7
November 2000, the Court of Appeals granted PASSIs application for the issuance
of a writ of preliminary injunction.13
On 9 January 2001, the Court of Appeals rendered a Decision14 in CA-G.R. SP No.
59548 which not only set aside the orders of the RTC in Civil Case No. 00-97157 but
further made permanent its own writ of preliminary injunction issued on 7
November 2000. PPA filed a Motion for Reconsideration15 on 30 January 2001.
The Court of Appeals motu proprio consolidated CA G.R. SP No. 60670 with CA-G.R.
SP No. 59548 through aResolution dated 16 January 2001.16 It denied PPAs Motion
for Reconsideration via a Resolution on 6 April 2001.17
On 4 June 2001, PPA filed with this Court a Petition for Review under Rule 45 of the
Revised Rules on Civil Procedure, assailing the Court of Appeals Decision dated 9
January 2001 and its Resolution dated 6 April 2001. The petition contained an
urgent plea for the issuance of a TRO and/or preliminary mandatory injunction to
restrain the Court of Appeals from implementing the questioned decision. The case
was docketed as G.R. No. 147861.
Meanwhile, the proceedings in the contempt case continued before the Court of
Appeals. PASSI filed therein anUrgent Motion18 dated 22 August 2002 informing the
appellate court that Solid Shipping Lines Corporation, which normally docked its
vessels at Pier 8, had written to PPA requesting permission to berth four of its
vessels at Pier 6. Portraying the request as a concoction of PPA and its officers in
cooperation with Solid Shipping Lines Corporation to molest, interfere or disturb
PASSIs operations at Pier 8, PASSI urged the Court of Appeals to require PPA and its
respondent officers in the contempt case to strictly abide with the TRO and writ of
injunction and to maintain thestatus
quo by denying the request of Solid Shipping Lines Corporation to berth four of its
vessels at Pier 6. The Court of Appeals granted PASSIs motion in
a Resolution19 dated 4 September 2002.
On 2 October 2002, PPA filed with this Court a Petition for Certiorari and
Prohibition with Urgent Plea for Temporary Restraining Order and/or Writ of
Preliminary Injunction assailing the Court of Appeals Resolution in the contempt
case. The case was docketed as G.R. No. 155252.
This Court did not act on the prayer for TRO/preliminary injunction. On 31 August
2004, we motu proprioconsolidated G.R. No 155252 with G.R. No. 147861.
Before moving on to the main issues of the consolidated cases, it is important that
we first tackle the procedural mishap that occurred at the Court of Appeals level.
G.R. No. 147861 originated from PASSIs petition for certiorari before the Court of
Appeals under Rule 65 of the Revised Rules on Civil Procedure. Said petition
assailed the validity of the RTCs Order dated 3 May 2000 denying petitioners
prayer for preliminary injunction20based on the courts application of P.D. No. 1818.
The Petition for Certiorari before the Court of Appeals sought the following reliefs:
a. This petition be given due course and a Temporary Restraining Order/Temporary
Mandatory Order be issued forthwith by this honorable Court ordering respondent
PPA, its representatives and agents to cease and desist from continuing its takeover
of the operations of petitioner PASSI at Pier 8 and ordering PPA to immediately
surrender the operations of the same to PASSI.
b. After proceedings, judgment be rendered ANNULLING and SETTING ASIDE the
Orders of respondent judge dated May 3, 2000 and June 20, 2000.
Petitioner likewise prays for such other reliefs just and equitable under the
premises.21 (Emphasis supplied.)
In its Decision, the Court of Appeals explained the parameters of the original action
before it in this wise, viz.:
Assailed before Us is the Order dated 3 May 2000 of the RTC of Manila in Civil Case
No. 00-97157, denying petitioners prayer for a writ of preliminary injunction, as
well as the order dated 20 June 2000 denying petitioners motion for
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 60
reconsideration. Citing grave abuse of discretion as the main ground of their
petition, Pier 8 Arrastre & Stevedoring Services, Inc., comes and prays for the
setting aside and the annulment of the said orders. 22
However, after setting aside the RTCs orders, the Court of Appeals proceeded to
rule on the issue of which party has the better possessory right over Pier 8a
matter which is beyond its jurisdiction to resolve given the nature of the action
before it and the issues raised therein. The Decision is void to that extent.
Moreover, we cannot sustain the grant of preliminary injunction as ordered by the
Court of Appeals. As a rule, an application for preliminary injunction entails a
determination of whether the requisites provided in Rule 58 of the Revised Rules
on Civil Procedure for the issuance of the provisional remedy are extant. In the
instant case, however, the impact of P.D. No. 1818the law which proscribes court
injunctions on government projectsmust also be taken into account as said law
specifically excludes arrastre and stevedoring contracts along with other activities
from the sphere of the injunctive power of the courts. 23 Consequently, both issues
are determinants of the sustainability of the Court of Appeals decision and the
parameters of its jurisdiction in the original action on certiorari.
The requisites to justify an injunctive relief are: (a) the existence of a right
in esse or the existence of a right to be protected; and (b) the act against which
injunction is to be directed as a violation of such right. 24 A preliminary injunction is
proper only when the plaintiff appears to be entitled to the relief demanded in his
complaint.25
PASSI admits that its contract has expired and that it is merely occupying and
operating at Pier 8 in a holdover capacity. 26 Thus, PASSIs rights over Pier 8 arise not
from contractual relations with the PPA, or a statutory grant of authority, but
merely by the tolerance of the PPA. Tolerance is not the surest footing on which a
right in esse can be established.
In fact, we have already held in Pernito Arrastre Services v. Mendoza 27 that PPA may
legally oust arrastre and stevedoring operators even when the latter had been
conferred with "holdover permits" should the exigencies of public interest so
require. Taking off from the earlier ruling in Anglo-Fil Trading Corporation v.
Lazaro,28 the Court elucidated, thus:
In the case of Anglo-Fil Trading Corporation v. Lazaro (124 SCRA 494, 512, 513 and
519), we have already underscored the fact that the arrastre operations in the
various ports in the Philippines are affected with public interest. We ruled:
....
"The Manila South Harbor is public property owned by the State. The operations of
the premiere port of the country, including stevedoring work, are affected with
public interest. Stevedoring services are subject to regulation and control for the
public good and in the interest of general welfare."
Undoubtedly, therefore, the State in the exercise of its police power through its
agency, the PPA, has the power to revoke the temporary permits of petitioners,
assuming the existence of valid temporary permits, and take over the operations of
the port of Tacloban whenever the need to promote the public interest and
welfare both of the stevedoring industry and the workers therein justifies such take
over. This Court has already ruled that the statute which gives PPA the authority to
implement the take over cannot be assailed on the constitutional grounds raised
by the petitioners. Thus, whatever right, if any, that the petitioners may have
acquired on the basis of the temporary permits earlier given them must yield to
the State's valid exercise of police power.
....
Furthermore, the records will bear out the fact that only petitioner LIPSI has a
temporary permit issued by PPA. The rest of the petitioners were either merely
allowed or tolerated to operate in the port of Tacloban. However, even on the
assumption that all of them were able to secure temporary permits from PPA,
still, this does not vest any property right on them and hence, petitioners cannot
allege a violation of their right to non-deprivation of property without due
process of law.
In the case of Anglo-Fil Trading Corporation v. Lazaro, (supra, pp. 502-521), we
ruled:
....
In the first place, the petitioners were operating merely on `hold-over' permits . . .
Clearly, all hold-over permits were by nature temporary and subject to
subsequent policy guidelines as may be implemented by PPA. Such should have
served as sufficient notice to petitioners that, at any time, their authorities may
be terminated.

Whether or not the petitioner would be issued a PTO depended on the sound
discretion of PPA and on the policies, rules and regulations that the latter may
implement in accordance with the statutory grant of power. Petitioners, therefore,
cannot be said to have been deprived of property without due process of law
because, in this respect, what was given them was not a property right but a
mere privilege and they should have taken cognizance of the fact that since they
have no vested right to operate in the South Harbor, their permits can be
withdrawn anytime the public welfare deems it best to do so. 29 (Emphases
supplied.)
The diminished nature of any right of possession PASSI may have by reason of its
"holdover capacity" is mandated by precedent. The right of the PPA to take over
port facilities from operators whose contracts have expired is indubitable.
Moreover, PASSI cannot invoke any vested property rights that may translate into a
right inesse.
It is argued that PASSIs contract to operate at Pier 8 is equivalent to a grant of a
license and that such license is continuous in nature pursuant to Section 18,
Chapter 3, Book VII of the Administrative Code, which provides that "where the
licensee has made timely and sufficient application for the renewal of a license
with reference to any activity of a continuing nature, the existing license shall not
expire until the application shall have been finally determined by the
agency."30 However, this argument is of some consequence only in the adjudication
of the main case still pending before the lower court, if not downright
unconvincing for the present nonce.
PASSI notes that the strike was directed at PPA, not PASSI, and that PPA knew that
the strike had been called off but still pushed through with the takeover anyway. It
observes further that since its workforce were not members of the Asosasyon ng
mga Mangagawa sa Pantalan it would not have been affected and operations at
Pier 8 would have proceeded without interruption had the strike pushed through.
PASSI also banks on the fact that other piers were not taken over by PPA in a bid to
cast doubts on the underlying reason for the takeover. Finally, it points out that
PPA had no workforce of its own and was thus compelled to utilize the same
workforce that had threatened to stage the strike. From the foregoing ruminations,
PASSI concludes that the "supposed impending strike was merely used by PPA as a
convenient excuse for its forcible takeover" 31 and that "the measures taken by PPA
have no reasonable nexus or connection with the problem it allegedly sought to
solve."32 PASSI also employed the same approach before the Court of Appeals and
the latter fell for it.33
The least that could be said of PASSIs claims comprising its approach is that they
are purely speculative and cannot be the basis for declaring the official acts of PPA
invalid. PASSI cannot be allowed to
second guess PPAs strategy to obviate disruptions in the port if the strike had
pushed through. The fact remains that after the PPA takeover was effected, the
feared strike did not materialize.
As a basic matter, however, PPA does not even need to stage a complicated ruse
merely to effect a valid takeover. Pursuant to its charter, PPA has the necessary
police power to regulate the countrys ports which are vital to the free-flow of
goods in and out of the country. This, coupled with the fact that PASSI did not even
have the benefit of a "holdover permit" but was merely operating Pier 8 in a
"holdover capacity" and thus may be ejected by PPA at any time after notice.
In the light of the foregoing, it cannot be said with a degree of conviction that
PASSI has presented a right in essethat can served as basis for the issuance of a
preliminary injunction in its favor.
More importantly, even if PASSI had been able to establish a basis upon which a
preliminary injunction could be issued under Rule 58 of the Revised Rules on Civil
Procedure, the application of P.D. No. 1818 would override the right to an
injunctive remedy. P.D. No. 1818 deprives the courts of jurisdiction to issue any
preliminary injunction or temporary retraining order on essential government
projects, including arrastre and stevedoring operations.34
On the other hand, the Court of Appeals was of the view that P.D. No. 1818 does
not apply in this instance because, as it explained, PPAs takeover, "anchored on a
bogus strike is the very reason why the operations in Pier 8 would be disrupted and
hampered. By and far, even if [PASSI] were operating under a holdover capacity,
elementary notions of due process and fair play would dictate a contrary action
from [PPA]." 35
Unfortunately, the Court of Appeals paid no heed to established jurisprudence that
there are only two exceptional circumstances which warrant the non-observance
of P.D. No. 1818, namely: (1) where there is clear grave abuse of discretion on the
part of the government authority or private person being enjoined, and (2) where
the effect of the non-issuance of an injunction or a restraining order would be to
"stave off implementation of a government project." 36
Obviously, the subject situation does not present itself as an instance where the
non-issuance of an injunctive writ would itself inhibit the implementation of a
government project. In fact, the non-issuance of an injunctive writ would allow PPA
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 61
to run Pier 8 in the manner it deems fit instead of having a court-imposed
extension of "holdover" operations by PASSI.
Was there grave abuse of discretion by the PPA which would have excluded the
application of P.D. No. 1818? As earlier observed, the Court of Appeals has no
factual basis to conclude that the strike was bogus. It engaged in speculation when
it concluded that the takeover would be the reason for disruption in the operations
in Pier 8. The imputed due process violation by the PPA, based on the foregoing
hollow allegations, cannot be affirmed. There is, thus, no basis for any
pronouncement of grave abuse of discretion by the PPA.
The appellate courts intimation of disregard of due process on PPAs part, if
proven, may be the basis for an award for damages but not for the issuance of an
injunctive writ. Factual and legal determinations are essential for the adjudication
of the matter. As such, it must be dealt with in the main case, if not in a separate
action. In the case at bar, this unsubstantiated claim of
non-observance of due process cannot be equated to a right in esse nor warrant
the non-observance of the proscription injunction against government contracts or
projects under P.D. No. 1818.
The prevailing rule is that the courts should avoid issuing a writ of preliminary
injunction that would in effect dispose of the main case without trial. 37 Otherwise,
there would be a prejudgment of the main case and a reversal of the rule on the
burden of proof since it would assume the proposition which petitioners are
inceptively bound to prove.38 Indeed, a complaint for injunctive relief must be
construed strictly against the pleader,39 especially when the factual grounds relied
upon are mere suppositions which definitely cannot militate against the exercise of
police power by the regulatory body charged with the duty "to supervise, control,
regulate, construct, maintain, operate, and provide such facilities or services as are
necessary in the ports...."40
Moreover, the grant or denial of a preliminary injunction is discretionary on the
part of the trial court. In the resolution of the Rule 65 petition assailing the RTCs
orders, the Court of Appeals should have determined if the assailed issuances were
issued with grave abuse of discretion amounting to a lack or excess of
jurisdiction.41 It did not. All that it ascribed to the RTC is "error." 42
We have repeatedly held that there is grave abuse of discretion justifying the
issuance of the writ of certiorari when there is a capricious and whimsical exercise
of judgment as is equivalent to lack of jurisdiction, as where the power is exercised
in an arbitrary or despotic manner by reason of passion, prejudice, or personal
hostility 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. 43 It is clear from the
foregoing discussions that the Order issued by the Manila RTC, Branch 12, was
nothing of the sort. On the contrary, its ruling on the application of P.D. No. 1818
exhibited the exercise of its sound discretion. Injunction is the strong arm of equity
which must be issued with great caution and deliberation, and only in cases of
great injury where there is no commensurate remedy in damages. 44
Note, however, that the foregoing only pertains to the question of the propriety of
issuing a provisional remedy of injunction against PPAs takeover. The ultimate
substantive possessory rights between the parties is a matter still to be determined
in a full-blown trial where relevant matters may be discovered by a finder of facts
and all issues raised by parties fully threshed out.
Thus, in resolving G.R. No. 147861, we hold the preliminary injunction against
PPAs takeover must be lifted. Moreover, the Court of Appeals Decision and its
affirmatory Resolution are held void ab initio insofar as the appellate court acted in
excess of its jurisdiction in ruling on the principal case on the merits. The
determination of which party ultimately has the better right to possession and
operation of Pier 8 is still pending adjudication before the Manila RTC, Branch 12,
in the main caseCivil Case No. 00-97157.
We turn now to G.R. No. 155252 in which PPA assails the Court of
Appeals Resolution directing PPA to deny the request of Solid Shipping Lines
Corporation for permission to berth in Pier 6.
Even here, procedural infirmities hound the Court of Appeals actions. It confounds
us why despite the Court of Appeals motu proprio consolidation of CA-G.R. SP No.
5958 with CA G.R. SP No. 60670, it did not resolve the consolidated cases in one
decision or even elevate the consolidated cases in their entirety to this Court when
PPA appealed the Decision dated 9 January 2001. The consolidation of the cases
was rendered ineffectual by this lapse. Worse, an anomalous situation ensued
wherein the appealed part of the consolidated cases went up to this Court while
the contempt part remained under the cognizance of the Court of Appeals. Which
leads us back to the questionwas the Resolution of the Court of Appeals in the
contempt proceedings valid?
As a contempt court, the Court of Appeals had jurisdiction only over the parties to
the contempt case, i.e., the petitioner PASSI, and the respondents several PPA
officials charged with having received the Court of Appeals TRO dated 6
September 2000 and yet continued to commit acts to molest, disturb, and interfere
with PASSIs operation of Pier 8. PPA was never impleaded. The Court of Appeals
had no jurisdiction over the person of PPA as the latter was never impleaded as a

party to the case. It, thus, could not effectively command PPA to deny the request
of Solid Shipping Lines Corporation.
Moreover, the Court of Appeals Resolution was issued on 4 September 2002, a
year after this Court had given due course to PPAs appeal of
the Decision pertaining to the parties preliminary possessory rights. Acting as a
contempt court in a situation where the contempt case was merely an offshoot of
a matter already pending with this Court, the Court of Appeals jurisdiction was
limited to its mandate to determine whether respondents therein committed acts
in defiance of the subject TRO. This is especially true since the petition for review
before this Court includes a prayer for the issuance of a TRO/preliminary injunction
to restrain the Court of Appeals from implementing its Decision affirming PASSIs
right to possess and operate at Pier 8. But the issues alleged on possessory rights
had been elevated to this Court. By ruling on matters pertaining to preliminary
possessory rights, the Court of Appeals exceeded its own jurisdiction and
encroached on this Courts as well.
Thus, we hold that the Resolution issued by the Court of Appeals dated 4
September 2002 was rendered beyond its jurisdiction as a contempt court.
PASSI submits that PPA has no personality to question the Resolution dated 4
September 2002. This is obviously not the case since the issuance not only
restricted but also encroached on PPAs discretion in regulating Philippine ports
and port activities. An original action for certiorari may be filed by a person
aggrieved45 by the assailed issuance.
PASSIs objection to PPAs resort to a petition for certiorari without the prior
submission of a motion for reconsideration of the Court of
Appeals Resolution need not be belabored. The present petition falls under several
exceptions to the rule requiring the prior filing of a motion for the reconsideration
of the assailed ruling. Where theResolution complained of was issued in excess of
or without jurisdiction46 on a matter of public interest 47 and in an apparent case of
urgency,48 a previous motion for reconsideration is unnecessary.
WHEREFORE, the Petition for Review in G.R. No. 147861 is GRANTED. The assailed
Court of Appeals Decisiondated 9 January 2001 and its Resolution dated 6 April
2001 are ANNULLED and SET ASIDE insofar as they purport to rule on the parties
ultimate possessory rights. The writ of preliminary injunction issued by the Court
of Appeals is DISSOLVED. The Petition for Certiorari in G.R. No. 155252 is GRANTED.
The Court of AppealsResolution dated 4 September 2002 directing the Philippine
Ports Authority to deny the request of Solid Shipping Lines to berth in Pier 6 is
ANNULLED and SET ASIDE. The Regional Trial Court of Manila, Branch 12, is
directed to hear and decide Civil Case No. 00-97157 on the merits with utmost
dispatch.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 157494 December 10, 2004
BACOLOD CITY WATER DISTRICT, petitioner,
vs.
THE HON. EMMA C. LABAYEN, Presiding Judge, RTC of Bacolod City, Br. 46 and the
City of Bacolod,respondents.
DECISION
PUNO, J.:
First, the chronology of facts. Petitioner Bacolod City Water District (BACIWA) is a
water district established pursuant to Presidential Decree No. 198 as a
government-owned and controlled corporation with original charter. It is in the
business of providing safe and potable water to Bacolod City.
Public respondent City of Bacolod is a municipal corporation created by
Commonwealth Act No. 326, otherwise known as the Charter of Bacolod.
On March 26, 1999, respondent City filed a case for Injunction With a Prayer for
Temporary Restraining Order And/Or Preliminary Mandatory Injunction against
petitioner in the sala of public respondent judge. The petition stated that on
January 15, 1999, BACIWA published in the Visayan Daily Star, 1 a local paper of
general circulation, a Schedule of Automatic Water Rates Adjustments for the years
1999, 2000 and 2001. The rates were supposed to take effect seven (7) days after
its posting in the local papers or on January 22, 1999. The increase was aborted
after petitioner unilaterally suspended the January 22, 1999 scheduled
implementation. On March 15, 1999, however, petitioner announced that the rate
hike will be implemented on April 1, 1999. 2
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 62
Respondent City opposed. It alleged that the proposed water rates would violate
due process as they were to be imposed without the public hearing required under
Letter of Instructions No. 700 3 and Presidential Decree No. 1479.4 Hence, it prayed
that before the hearing of the main case, a temporary restraining order or a
preliminary injunction be issued.5
On March 30, 1999, the court a quo issued an Order6 summoning the parties with
their counsels to attend the preliminary hearing for the issuance of a temporary
restraining order or preliminary mandatory injunction. On April 8, 1999, it required
the parties to simultaneously submit their respective memoranda on whether it
had jurisdiction over the case and whether a public hearing was conducted re the
proposed increase in water rates.7
Petitioner filed its Position Paper dated April 15, 1999. It attached documents
evidencing the conduct of extensive and lengthy public hearings in fifty-eight (58)
of the sixty-one (61) barangays of Bacolod City. It opined that original jurisdiction
over cases on rate review is vested in the Local Water Utilities Administration
(LWUA); appellate jurisdiction is vested in the National Water Resources [Board]
(NWRB) whose decisions shall be appealable to the Office of the President. 8
On May 5, 1999, petitioner also filed a Motion to Dismiss. In an Order 9 dated May
7, 1999, the court directed respondent City to file its Opposition to petitioners
Motion to Dismiss within fifteen (15) days.
On June 17, 1999, respondent City filed a Motion to Set [for] Hearing 10 its
application for a temporary restraining order or preliminary mandatory injunction.
It alleged that the parties had already submitted their respective memoranda and
it has already submitted its Opposition to petitioners Motion to Dismiss. It also
alleged that petitioner had already effected the water rates increase and collection,
hence, causing irreparable injury to the public.
Petitioner opposed the Motion. On July 20, 1999, respondent City filed its Reply to
Opposition and reiterated that the application for the issuance of a temporary
restraining order or preliminary mandatory injunction be heard since petitioner
continued to violate the right of the public to due process and it might take time
before the case would be finally resolved. 11 On the same date, petitioner filed a
Manifestation and Motion12 stating that the hearing may no longer be necessary as
the respective positions of both parties have already been presented and amplified
in their pleadings and memoranda.
On July 22, 1999, respondent trial court issued an Order 13 stating that there was no
more need to hear the caseon the merits14 as both parties have already submitted
their position papers and documents to prove their respective allegations.
On July 23, 1999, petitioner filed its Reply 15 to respondent Citys Opposition to the
Motion to Dismiss reiterating that petitioner failed to exhaust administrative
remedies provided by law hence the petition be dismissed for utter lack of merit.
After a hiatus of nearly seven (7) months, or on February 18, 2000, respondent City
filed an Urgent Motion for the Issuance of Temporary Restraining Order And[/]Or
Writ of Preliminary Injunction16 praying that the case be set for hearing on
February 24, 2000. On the same date requested, respondent court heard
respondents application for temporary restraining order and issued an
Order17 commanding petitioner to stop, desist and refrain from implementing the
proposed water rates for the year 2000 which were then supposed to take effect
on March 1, 2000.
On March 7, 2000, petitioner filed an Urgent Motion for Reconsideration and
Dissolution of the Temporary Restraining Order. 18 Respondent court a quo issued
on March 10, 2000 an Order19 directing respondent City to file an Opposition to the
Urgent Motion. In its Opposition, respondent City 20 contended that the temporary
restraining order issued was not infirmed with procedural and substantive defects.
It also averred that respondent court has jurisdiction over the case since the sole
question of the lack of public hearing does not require the special knowledge or
expertise of an administrative agency and may be resolved by respondent court,
hence the doctrine of primary jurisdiction does not apply.
Respondent court continued with the proceedings by receiving the evidence of
petitioner in support of its Motion for Reconsideration and Dissolution of
Temporary Restraining Order. It further issued Orders dated March 17, 2000 21 and
March 20, 2000.22
On April 6, 2000, respondent court issued an Order 23 finding petitioners Urgent
Motion for Reconsideration and Dissolution of Temporary Restraining Order moot
and academic considering petitioners compliance of said temporary restraining
order.
Four (4) days after, in an Order 24 dated April 10, 2000, it denied petitioners Motion
to Dismiss for lack of merit.
On April 19, 2000, respondent City filed a Manifestation praying that respondent
trial court issue a writ of preliminary injunction against petitioner, stating thus:
 P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 63

A Temporary Restraining Order was issued against the respondents
which, however, expired before the parties were able to finish the
presentation of their respective witnesses and evidences;
The instant case was submitted for resolution and decision of this
Honorable Court during the last week of March but while awaiting the
decision of this Honorable Court, several complaints had reached the
petitioner that the respondents had already reflected in the water
billings for the month of April the new water rates for the year 2000;
x x x 25
Petitioner, for its part, filed a Motion for Reconsideration 26 of respondent trial
courts Order denying its Motion to Dismiss. Respondent City filed an Opposition to
[the] Motion for Reconsideration27 on June 1, 2000.
Respondent court did not act upon petitioners Motion for Reconsideration until
respondent City filed an [Ex Parte] Motion for Speedy Resolution 28 of the case on
October 6, 2000 praying that the case be resolved before the year 2000 ends in
order to prevent the implementation of the water rates increase for the year 2001
which was to be imposed allegedly without the benefit of a public hearing.
On December 21, 2000, respondent court issued the assailed Decision 29 granting
the final injunction which allegedly confirmed the previous preliminary injunction.
Petitioner filed its Motion for Reconsideration 30 of the assailed Decision on January
11, 2001 asserting, among others, that the case was not yet ripe for decision when
the court granted the final injunction, the petitioner having had no opportunity to
file its answer, avail of the mandatory pre-trial conference and have the case tried
on the merits.
F. THERE WAS NO TRIAL ON THE MERITS FOR THE MAIN
CASE.
II
THE COURT OF APPEALS GRAVELY ERRED WHEN IT INSISTED THAT THE
24 FEBRUARY 2000 ORDER (ANNEX R) ISSUED BY THE TRIAL COURT WAS
A PRELIMINARY INJUNCTION WHEN THE RECORDS CLEARLY AND
INDUBITABLY SHOW THAT IT WAS A TEMPORARY RESTRAINING ORDER
(TRO).
III
BY DISMISSING THE PETITION FOR CERTIORARI, THE COURT OF APPEALS
GRAVELY ERRED WHEN IT EFFECTIVELY PREVENTED PETITIONER FROM
FULLY VENTILATING ITS CASE IN THE MAIN ACTION DUE TO THE
IRREGULAR AND CONFUSED PROCEEDINGS CONDUCTED BY THE
RESPONDENT COURT.34
We rule in favor of petitioner.
The initial issue is the proper characterization of the Order dated February 24,
2000.
The sequence of events and the proceedings that transpired in the trial court make
a clear conclusion that the Order issued was a temporary restraining order and not
a preliminary injunction.
First. We quote the pertinent parts of the questioned Order:

xxx
Respondent court denied the Motion for Reconsideration for lack of merit in an
Order31 dated January 24, 2001. Petitioner then filed a special civil action for
certiorari under Rule 65 in the Court of Appeals. It alleged that public respondent When this motion was called for hearing wherein both parties have
judge acted without or in excess of jurisdiction and/or with grave and patent abuse argued exhaustedly their respective sides, this court denied the ten (10)
of discretion amounting to lack or excess of jurisdiction when she issued the final days extension for further amplification of the arguments of the
injunction in disregard of petitioners basic right to due process.32 respondent to oppose the said motion for issuance of a temporary
restraining order.
The Court of Appeals dismissed the petition for review on certiorari, ratiocinating
thus: It appearing therefore, that the acts of the defendant will actually affect
the plaintiff before the decision of this court can be rendered and in
order to afford the court to pass on the issues without the same
In the case at bar, the [O]rder of public respondent dated 24 February
becoming moot and academic and considering the urgency of the
2000, though termed by BACIWA as a temporary restraining order, is in
matter that immediate action should be taken, and pursuant to
fact a preliminary injunction. The period of the restraint was not
Administrative Circular No. 6, Paragraph 4 and sub-paragraph 15 and
limited. By its wordings, it can be safely inferred that the increased
The Interim Rules and Guidelines [set forth] by the Rules of Court, this
water rates must not be effected until final disposition of the main case.
court hereby orders the respondent[,] its agents, representatives or
This note of semi-permanence simply cannot issue from a mere
any person acting in his behalf to stop, desist and refrain from
temporary restraining order. It must be further noted that the
implementing in their billings the new water rate increase which will
temporary restraining order has been elevated to the same level as the
start on March 1, 2000. The Deputy Provincial Sheriff of this court is
preliminary injunction in the procedure, grounds and requirements of
hereby ordered to furnish copy of this order to the respondent Bacolod
its obtention by S[ection] 4, Rule 58. Thus, to set [a] distinction, the
City Water District as well as to its agents or representatives acting [o]n
present practice is to categorically refer to it as a temporary restraining
his behalf.
order. In which case, the omission by the public respondent in referring
to the 24 February 2000 order as a temporary restraining order could
not have been a mere oversight but deliberate.33 x x x 35 (emphases supplied)

Resorting to this Court, petitioner raises the following issues: It can be gleaned from the afore-quoted Order that what the trial court issued was
a temporary restraining order and not a preliminary injunction. The trial court has
always referred to it as a temporary restraining order in the succeeding Orders it
I
issued on March 10, 200036 and April 6, 2000.37

THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED AND

The parties, in their succeeding pleadings, 38 also referred to the assailed Order as a
REFUSED TO RULE THAT RESPONDENT COURT HAD ACTED WITHOUT OR
temporary restraining order. The petitioner filed an Urgent Motion for
IN EXCESS OF JURISDICTION AND/OR WITH GRAVE ABUSE OF
Reconsideration and Dissolution of Temporary Restraining Order (TRO)39 on March
DISCRETION FOR ARBITRARILY AND CAPRICIOUSLY RENDERING A
1, 2000. This was opposed by respondent City itself in its Opposition to Motion for
DECISION PURPORTING TO ISSUE A FINAL INJUNCTION AND
Reconsideration and Dissolution of Temporary Restraining Order (TRO)40 dated
CONFIRMING ITS ALLEGED PRELIMINARY INJUNCTION, DESPITE THE
March 14, 2000. Further, respondent City, in its Manifestation dated April 19, 2000
FACT THAT:
stated, viz:

A. NO PRELIMINARY INJUNCTION HAD BEEN ISSUED;

xxx

B. THE RESPONDENT LOWER COURT DID NOT RESOLVE

A Temporary Restraining Order was issued against the respondents
HEREIN PETITIONERS MOTION FOR RECONSIDERATION OF
which, however, expired before the parties were able to finish the
THE ORDER DENYING PETITIONERS MOTION TO DISMISS;
presentation of their respective witnesses and evidences;

C. THE HEREIN PETITIONER HAD NOT YET FILED ITS ANSWER

xxx
TO THE PETITION;

WHEREFORE, it is most respectfully prayed that while waiting for the

D. THERE WAS STILL NO JOINDER OF THE ISSUES SINCE NO
decision and order of the Honorable Court, a preliminary injunction as
ANSWER HAD YET BEEN FILED;
prayed for in the petition be issued against the respondents.

E. THE MANDATORY PRE-TRIAL CONFERENCE WAS NOT YET

x x x41 (emphases supplied)
CONDUCTED;

It can be gleaned from the foregoing that both parties and respondent trial court
have consistently referred to the directive as a temporary restraining order. It was
only in the respondent courts assailed Decision that the Order was referred to as a
preliminary injunction, viz:
xxx
This Court therefore grants the final injunction prayed for restraining
the respondent from the commission of the act complained of for the
year 2001 and hereby confirming the preliminary injunction previously
ordered.
x x x 42 (emphasis supplied)
Again, it was only when petitioner expressed its vehement objection on the ruling
that the final injunction confirmed the preliminary injunction previously issued,
when the respondent City and the respondent trial court started to insist that the
questioned Order was a preliminary injunction. Given the previous undeviating
references to it as a temporary restraining order, respondents cannot now consider
it as a preliminary injunction to justify the validity of the assailed Decision. The
attendant facts and circumstances clearly show that the respondent trial court
issued a temporary restraining order.
Second. Injunction is a judicial writ, process or proceeding whereby a party is
ordered to do or refrain from doing a certain act. It may be the main action or
merely a provisional remedy for and as an incident in the main action.43
The main action for injunction is distinct from the provisional or ancillary remedy
of preliminary injunction which cannot exist except only as part or an incident of
an independent action or proceeding. As a matter of course, in an action for
injunction, the auxiliary remedy of preliminary injunction, whether prohibitory or
mandatory, may issue. Under the law, the main action for injunction seeks a
judgment embodying a final injunction which is distinct from, and should not be
confused with, the provisional remedy of preliminary injunction, the sole object of
which is to preserve the status quo until the merits can be heard. 44 A preliminary
injunction is granted at any stage of an action or proceeding prior to the judgment
or final order. It persists until it is dissolved or until the termination of the action
without the court issuing a final injunction.45
A restraining order, on the other hand, is issued to preserve the status quo until
the hearing of the application for preliminary injunction which cannot be
issued ex parte. Under Rule 5846 of the Rules of Court, a judge may issue a
temporary restraining order with a limited life of twenty (20) days from date of
issue. If before the expiration of the twenty (20)-day period the application for
preliminary injunction is denied, the temporary restraining order would be
deemed automatically vacated. If no action is taken by the judge on the
application for preliminary injunction within the said twenty (20) days, the
temporary restraining order would automatically expire on the 20th day by the
sheer force of law, no judicial declaration to that effect being necessary. 47
Hence, in the case at bar, since no preliminary injunction was issued, the
temporary restraining order granted automatically expired after twenty (20) days
under the Rules. The fact that respondent court merely ordered "the respondent[,]
its agents, representatives or any person acting in his behalf to stop, desist and
refrain from implementing in their billings the new water rate increase which will
start on March 1, 2000" 48 without stating the period for the restraint does not
convert the temporary restraining order to a preliminary injunction.
The rule against the non-extendibility of the twenty (20)-day limited period of
effectivity of a temporary restraining order is absolute if issued by a regional trial
court. The failure of respondent court to fix a period for the ordered restraint did
not lend the temporary restraining order a breath of semi-permanence which can
only be characteristic of a preliminary injunction. The twenty (20)-day period
provided by the Rules of Court should be deemed incorporated in the Order where
there is an omission to do so. It is because of this rule on non-extendibility that
respondent City was prompted to move that hearings be set for its application of a
preliminary injunction. Respondent City cannot take advantage of this omission by
respondent trial court.
Third. Even if we assume that the issued Order was a preliminary injunction,
petitioner is correct in contending that the assailed Decision is premature.
The records reveal that respondent court did not resolve petitioners Motion for
Reconsideration of the Order denying its Motion to Dismiss before it issued the
assailed Decision. Consequently, there was no answer filed by petitioner, no
joinder of issues, no mandatory pre-trial conference, and no trial on the merits,
yet, a Decision was handed down by the respondent trial court.
The short circuiting of the procedural process denied the petitioner due process of
law. It was not able to allege its defenses in an answer and prove them in a
hearing. The convoluted procedure allowed by the respondent trial court and the
pleadings filed by the parties which are not models of clarity certainly created
confusion. But this confusion should not be seized as a reason to deny a party the
constitutional right to due process. Over and above every desideratum in litigation
is fairness. All doubts should be resolved in favor of fairness.
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 64
IN VIEW WHEREOF, the petition is GRANTED. The Decision and Resolution of the
Court of Appeals dated November 27, 2002 and February 28, 2003, respectively,
are REVERSED and SET ASIDE. The case is remanded to the court a quo for further
proceedings.
SO ORDERED.
EN BANC
A.M. No. 06-6-8-CA March 20, 2007
RE: COMPLAINT AGAINST JUSTICE ELVI JOHN S. ASUNCION OF THE COURT OF
APPEALS
x----------------------------x
A.M. No. 06-44-CA-J March 20, 2007
ATTY. ROBERTO C. PADILLA, Complainant,
vs.
ASSOCIATE JUSTICE ELVI JOHN S. ASUNCION, COURT OF APPEALS, Respondent.
DECISION
PER CURIAM:
The Cases
Before Us are two (2) administrative cases against Justice Elvi John S. Asuncion of
the Court of Appeals [CA].
The first, docketed as A.M. No. 06-6-8-CA, stems from an unsigned letter dated
February 17, 2006, addressed to Chief Justice Artemio V. Panganiban, complaining
that Justice Elvi John S. Asuncion "has been sitting on motions for reconsideration
for six months to more than a year unless the parties come across." 1 On July 18,
2006, the Court resolved to refer the complaint to retired Supreme Court Justice
Bernardo P. Pardo for investigation, report and recommendation within 90 days
from receipt thereof.
Subsequently, on August 29, 2006, the Court also referred to Investigator-designate
Justice Pardo an unsigned letter dated August 17, 2006, allegedly from an
Associate Justice of the Court of Appeals, fully supporting the investigation of
Justice Elvi John S. Asuncion, and citing "one particular case pending in his division
that will show how he operates." 2 The case mentioned in the letter is Bank of
Commerce v. Hon. Evelyn Corpus-Cabochan, et al., CA-G.R. No. 91258, allegedly
involving an irregularly issued temporary restraining order [TRO].
The second administrative case, A.M. No. 06-44-CA-J, is based on a verified
complaint dated August 22, 20063filed by Atty. Roberto C. Padilla with the Office of
the Court Administrator, charging Justice Elvi John S. Asuncion with "culpable
dereliction of duty, malicious delay in the administration of justice and gross
ignorance of the law" in connection with CA-G.R. SP No. 60573, entitled "Philippine
National Bank v. NLRC and Erlinda Archinas." The Court likewise referred this
complaint to Justice Bernardo P. Pardo for investigation, report and
recommendation.
On March 1, 2007, Justice Pardo submitted to this Court his Report and
Recommendation [Report] dated February 28, 2007.
Justice Pardo reports that he conducted an investigation of the cases on August 10
and 30, September 14 and 27, October 4, 16 and 26, December 8, all in 2006, and
on January 18, 2007. On each of these dates, the respondent was present, and in
connection with A. M. No. 06-44-CA-J, respondent Justice Asuncion was
represented by counsel.
Justice Asuncions Antecedents
From the record, it appears that respondent Justice Elvi John S. Asuncion was
appointed Associate Justice of the Court of Appeals on May 24, 1999, and assumed
office on May 25, 1999. On July 5, 2004, he was assigned as Chairman, 18th
Division of the CA, stationed in Cebu City. In an order dated July 7, 2004, CA
Presiding Justice Cancio C. Garcia directed that all "Manila cases left by Justice
Asuncion shall automatically be assigned to Justice [Monina Arevalo]
Zenarosa."4 On November 3, 2004, Justice Asuncion was re-assigned to Manila, as
Chairman, 17th Division, CA. From August 4, 2006 to date, he has been Chairman,
11th Division, CA, Manila.
The Investigation
A.M. No. 06-6-8-CA
The unsigned letter complaint, that gave rise to the instant case, reads:

"February 17, 2006
"Hon. Artemio V. Panganiban
Chief Justice, Supreme Court
Padre Faura, Manila
"Sir:
"Please direct an immediate judicial audit on Court of Appeals Justice Elvi
Asuncion.
"This magistrate has been sitting on motions for reconsideration for six months to
more than a year unless the parties come across.
"This CA Justice is an unmitigated disgrace to the judiciary. How he ever reached
his lofty position is truly disconcerting. He is a thoroughly CORRUPT person who
has no shame using his office to extort money from litigants. He is equally, if not
more, deprave than Demetrio Demetria who was dismissed by the Supreme Court.
Asuncion deserves not only dismissal but DISBARMENT as well. Because the law
profession should also be purged of CROOKS like him.
"I hope you can terminate his service in the judiciary ASAP to save the institution.
Thank you.
"Very truly yours,
"AN AGGRIEVED PARTY"
To the foregoing complaint, respondent Justice Asuncion filed his Comment dated
August 30, 20065 in which he strongly denied the charge of deliberate inaction on
pending motions for reconsideration in cases assigned to him unless the parties
came across. He adverted to the unsigned letter as the work of the same group
"that previously instigated false accusations which also resulted in my being
investigated by the Supreme Court through the Hon. Justice Carolina C. Grino-
Aquino." He admitted, however, to "some delays in the resolution of some motions
for reconsideration", and cited the following "justifiable reasons": (1) The heavy
caseload initially assigned to CA justices, coupled with the newly assigned cases
raffled daily and the re-raffled cases originally handled by promoted or retired
justices; (2) The reorganization of the CA and his assignment as Chairman of the
18th Division based in Cebu City, which "created some confusion" in the status of
cases assigned to him; (3) The physical transfer of his office, "aggravated by a lapse
in the monitoring system of my office"; and (4) The various administrative
assignments, especially in helping organize special events, given to him by the CA
Presiding Justice, which demanded time and attention.
On September 11, 2006, respondent filed his Comment6 on the unsigned letter
dated August 17, 2006 of an alleged CA Associate Justice. He denied that there was
any irregularity in the issuance of the temporary restraining order and of the
subsequent writ of preliminary injunction, stating that the same was done in the
"sound exercise of the Courts discretion." The respondent stressed that the cited
case, CA-G.R. SP No. 91258, was still pending in his division and not germane to the
on-going investigation against him for supposed deliberate inaction on pending
motions for reconsideration.
In this connection, the Investigating Justice reports that after making inquiries, he
found that the Court of Appeals had not acted on the approval of the injunction
bond in this case, thus, no writ of preliminary injunction has been issued to date.7
Meanwhile, in the August 31, 2006 investigation, Atty. Tessie L. Gatmaitan, Clerk of
Court, CA en banc, submitted to the designated Investigator the list of cases raffled
to respondent since his assumption of office in 1999, as follows:
"a) Master List of Criminal Cases Raffled to J. Asuncion from 11 June
1999 to 25 May 2006, consisting of 112 cases;
"b) Master List of Heinous Crimes Raffled to J. Asuncion from 20 Nov.
2004 to 22 June 2006, consisting of 33 cases;
"c) Master List of Civil Cases Raffled to J. Asuncion from 14 June 1999 to
16 August 2006, consisting of 625 cases; and
"d) Master List of Special Cases Raffled to J. Asuncion from 14 June 1999
to 31 July 2006, consisting of 651 cases."
The Investigating Justice also required the respondent to submit a report on the
status of the cases contained in the handwritten list given to the respondent on
September 14, 2006. In his written compliance, 8 the respondent reiterated his plea
that justifiable reasons attended the delay in the resolution of some cases.
Subsequently, on October 4, 2006, the respondent submitted a report on the
status of the cases in a new list given to him after the September 27, 2006
investigation9
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 65
This, and earlier reports on the status of cases assigned to respondent Justice
Asuncion, would be the basis of the findings of the Investigating Justice.
A.M. No. 06-44-CA-J
As mentioned above, this second case is based on a verified complaint filed by Atty.
Roberto C. Padilla, charging Justice Elvi John S. Asuncion with "culpable dereliction
of duty, malicious delay in the administration of justice and gross ignorance of the
law", in connection with CA-G.R. SP No. 60573, entitled "Philippine National Bank
vs. NLRC and Erlinda Archinas".
The facts, as culled from the Investigating Justices Report 10, are as follows:
"On June 27, 2000, the National Labor Relations Commission (NLRC) decided in her
favor the claim of Ms. Erlinda Archinas for reinstatement and payment of back
wages against the Philippine National Bank (PNB), affirming in toto the ruling of
Labor Arbiter Celestino Daing ordering her reinstatement without loss of seniority
rights and payment of back wages.
"On August 25, 2000, PNB filed with the Court of Appeals a petition for Certiorari
under Rule 65 of the Rules of Court assailing the decision of the NLRC (CA-G.R. SP
No. 60573).
"Meantime, the NLRC issued an Entry of Judgment making final and executory the
decision of the labor arbiter as of July 17, 2000, pursuant to Sec. 2[c], Rule VIII of
the NLRC Rules. Ms. Archinas filed a motion for a writ of execution for the
uncontested amount of P1,096,233.97. PNB opposed the motion. In view of the
pending petition with the CA, the labor arbiter deferred action on the motion for
execution.
"On May 28, 2001, the Court of Appeals, through respondent Justice Asuncion,
dismissed the petition of PNB and affirmed in toto the decision of NLRC in favor of
Ms. Archinas.
"On June 13, 2001, PNB filed with the Court of Appeals a motion for
reconsideration of the decision, to which Ms. Archinas filed, on June 25, 2001, an
opposition. On June 25, 2001, PNBs motion for reconsideration was deemed
submitted for resolution.
"In the interim, on June 18, 2001, the labor arbiter granted Ms. Archinas motion
for execution of the uncontested amount of P1,096,233.97, for which the Sheriff of
the NLRC levied upon personal property of the PNB and scheduled an auction sale
on July 25, 2001. Upon motion of PNB, on July 24, 2001, respondent Asuncion
issued the questioned resolution, which granted a temporary restraining order to
stop the auction sale by directing the labor arbiter to "temporarily enjoin"
implementation of the writ of execution. It likewise ordered the parties to maintain
the status quo pending resolution of PNBs motion for reconsideration.
"On October 30, 2001, respondent Justice Asuncion issued another resolution
which reiterated the July 24, 2001 resolution "ordering the parties to maintain the
status quo in this case pending resolution" of PNBs motion for reconsideration.
"On November 5, 2001, Ms. Archinas filed with the Court of Appeals a motion for
reconsideration of the October 30, 2001 resolution.
"Despite Ms. Archinas filing with the Court of Appeals of numerous motions for
early resolution of the motion for reconsideration dated November 5, 2001,
respondent Justice Asuncion failed to act and resolve the motion.
"Finally, on August 7, 2006, respondent Justice issued a resolution denying PNBs
motion for reconsideration dated June 13, 2001. It, however, failed to directly
address and resolve Archinas November 5, 2001 motion for reconsideration. At
any rate, it is noted that the denial of PNBs motion would render moot Mrs.
Archinas motion for reconsideration."
Respondent Justice Asuncion filed his Comment dated November 15, 2006 on the
Padilla complaint, raising the following arguments: [1] That the July 24, 2001 and
October 30, 2001 resolutions in CA-G.R. SP No. 60573 were collegial acts of the
First Division, CA, duly concurred in by the two other CA justices of the division; [2]
That the July 24, 2001 resolution did not grant PNBs motion for issuance of a
temporary restraining order, and the October 30, 2001 resolution is not
tantamount to a preliminary injunction issued ex parte; and [3] The delay in
resolving the motion for reconsideration was not deliberate or maliciously
motivated. The respondent restated therein the reasons he proffered in his
Comment in A.M. No. 06-8-08-CA.
The Findings of the Investigating Justice
In the first administrative case, A.M. No. 06-6-8-CA, the Investigating Justice
submits the following findings:
"After meticulous analysis of the record and the evidence submitted, the
investigation would show that, as related in the unsigned letter of February 17,
2006, there were indeed several cases assigned to respondent Justice Asuncion

with motions for reconsideration still remaining unresolved way beyond the ninety
day period prescribed in Rule 52, Section 3 of the Rules of Court. Moreover, there
were also numerous motions for reconsideration which respondent Justice
resolved beyond the reglementary period.
"The master lists of cases submitted by the Clerk of Court, CA, en banc, disclose
that, as of September 30, 2006, there were seventy one motions for
reconsideration still pending resolution; further, there were one hundred seventy
nine motions for reconsideration which were resolved beyond the ninety-day
period11
xxxxxxxxx
"What is more, there are several cases assigned to respondent Justice Asuncion
which are still undecided, and those that were decided beyond the one (1) year
period prescribed in the 1987 Constitution.
xxxxxxxxx
"As of September 30, 2006, the following eighty-two cases remain undecided12:
xxxxxxxxx
"Further, there were four hundred nine cases which had been decided beyond the
twelve month period prescribed in the 1987 Constitution (Article VIII, Section
15[1]), to wit13:
xxxxxxxxx
"In his comments dated August 30, 2006, and November 15, 2006, respondent
Justice Asuncion admitted delay in the resolution of some motions for
reconsideration of cases assigned to him albeit with obvious pride in his massive
record of disposition of cases x x x In fact, respondent Justice Asuncion listed only
nine cases that were still unresolved and pending as of his reassignment to the CA-
Cebu Station.
"However, the record would show that there were motions for reconsideration
filed as far back as 2000 that were still pending resolution, as of the (sic) July 18,
2006, when the Supreme Court took cognizance of the complaint. One was
resolved on August 7, 2006, the PNB vs. NLRC and Ms. Erlinda Archinas docketed as
CA-G.R. SP No. 60573, which is the subject of the verified complaint of Atty.
Roberto C. Padilla (A. M. No. 06-44-CA-J). Such inaction in resolving motions for
reconsideration for years in contrast to the ninety day prescribed period in the
Rules of Court constitutes gross inefficiency and serious dereliction of duty that
undermines the peoples faith in the judiciary. x x x
"There are also cases that were raffled to respondent Justice Asuncion before July
7, 2004, that remained undecided. More so, there were several cases that were
ordered transferred to Justice Monina Arevalo-Zenarosa but remained with, and
unexplainedly decided by respondent Justice Asuncion, albeit beyond the
reglementary period. How such cases supposedly transferred to Justice Zenarosa
remained or returned to Justice Asuncion is not explained, obviously in
contravention of Office Order No. 212-04-CG of the Presiding Justice, CA (Annex
E"). Indeed, respondent Justice Asuncion should have acted in such a manner as
to avoid suspicion in order to preserve faith in the administration of justice14
xxxxxxxxx
"As excuses or justification, respondent Justice stated that the delay in resolving
cases is partly due to the heavy initial caseloads of CA justices, the continuous
raffling of new cases and the re-raffling of old cases handled by promoted and
retired CA justices. We find this position unacceptable. It is necessary for newly-
appointed justices to be assigned initial caseloads. No one is exempted. Further, in
the raffling and re-raffling of subsequent cases, these are more or less equally
distributed to all justices. Hence, not only respondent Justice, but all CA Justices
are swamped with cases. This, however, is not a reason to violate the clear
mandate in the Constitution and the Rules of Court to decide cases promptly and
resolve motions for reconsideration within their reglementary period. x x x
"Again, respondent Justice attributes his admitted delay in resolving pending
motions for reconsideration to various administrative functions assigned to him by
the Court or Presiding Justice that took much of his time and attention. x x x
"We are not impressed or swayed that these administrative functions greatly
burdened respondent Justice to the extent that he failed to discharge the basic
duty of a justice with diligence and efficiency. It is evident that such additional
tasks are seasonal in nature, hence, need not consume too much of his time to the
detriment of pending cases. x x x
"Consequently, respondent Justice Asuncion must be reminded that decision-
making is the primordial duty of a member of the bench. All other tasks must give
way thereto. What is alarming is that respondent Justice seemed to have reveled in
his extra-curricular activities of spearheading various celebrations and events that
are not judicial functions. These cannot take precedence over decision-making." 15
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 66
In the second case, A.M. No. 06-44-CA-J, the findings of the Investigating Justice
are, as follows:
"Complainant Padilla contends that respondent Justice Asuncion committed gross
ignorance of the law in issuing the October 30, 2001 resolution which extended
indefinitely the duration of the TRO issued on July 24, 2001, by ordering the parties
to maintain the status quo, pending resolution of the PNBs motion for
reconsideration, in violation of Rule 58, Section 5 of the Rules of Court. Atty. Padilla
further contends that respondents failure to speedily resolve PNBs motion for
reconsideration dated June 13, 2001, Archinas motion for reconsideration dated
November 5, 2001 and her numerous motions for early resolution thereof
constitute culpable dereliction of duty. Atty. Padilla stressed that respondent
Justices reliance on Eternal Gardens Memorial Park Corporation v. Court of
Appeals,16 decided in 1988, to justify the issuance of the two resolutions
constitutes gross ignorance of the law, considering that the ruling thereon was set
aside by the Supreme Court in 1993 in the case of Santiago v. Vasquez 17. Further, he
averred that the Eternal Gardens ruling was superseded by Rule 65, Section 7 of
the Rules of Court (1997 Rules of Civil Procedure) which states that "the petition
[in the Supreme Court or in the Court of Appeals] shall not interrupt the course of
the principal case unless a temporary restraining order or a writ of preliminary
injunction has been issued against the public respondent from further proceeding
in the case."
"Respondent Justice Asuncion stressed that the July 24, 2001 and October 30, 2001
resolutions were the collegial acts of the First Division of the Court of Appeals,
composed of three justices, unanimously approved by them after due deliberation,
and not the acts of respondent justice alone. He denied that the July 24, 2001
resolution was, in fact, a TRO and maintained that the purpose thereof was merely
to remind the parties to observe the status quo while PNBs motion for
reconsideration was pending resolution. He also claimed that complainant Padilla
mistook the October 30, 2001 resolution as extending the TRO, whereas there was
no indication in the July 24, 2001 resolution that a TRO was ever granted.
Respondent Justice stressed that the admonition to the parties to maintain the
status quo was merely directory in view of the pending motion in the CA, following
the principle of hierarchy of courts. Respondent justice cited Eternal Gardens
Memorial Park Corporation v. CA, Ibid., as basis for his action in issuing the July 24,
2001 and October 30, 2001 resolutions, which directed the parties to maintain the
status quo pending resolution of PNBs motion for reconsideration.
"We are not convinced. The July 24, 2001 resolution was in fact and in reality
essentially a TRO and the October 30, 2001 resolution effectively extended the
same indefinitely. This dispositive portion of the July 24, 2001 resolution clearly
states:
WHEREFORE, to prevent irreparable injury, the public respondent is temporarily
enjoined from implementing the assailed Writ of Execution dated June 19, 2001.
The parties are ordered to maintain the status quo in this case pending the
resolution of the petitioners motion for reconsideration.
"Technically, status quo is "defined as the last actual, peaceful and uncontested
status that precedes the actual controversy, that which is existing at the time of the
filing of the case"18 However, the Supreme Court has ruled that a status quo ante
order has "the nature of a temporary restraining order"19. Thus, the decretal
portion of the resolution of July 24, 2001, specifically ordered that the public
respondent is temporarily enjoined from implementing the assailed writ of
execution. Respondent justice must be playing with words. When a judge or justice
uses technical or legal terms with a well-defined meaning, such as a temporary
restraining order or a status quo order, he must have intended those meaning; he
cannot impute a "directory" meaning to confuse the parties. x x x On the other
hand, he ought to know that a temporary restraining order cannot exist
indefinitely; it has a lifetime of a non-extendible period of sixty days and
automatically expired on the sixtieth day 20. No judicial declaration that it has
expired is necessary21, and, the lower courts, including the Court of Appeals, have
no discretion to extend the same 22. A second TRO by the Court of Appeals after the
expiration of the sixty day period is a patent nullity. 23
"Respondent Justice cannot seek refuge behind the Eternal Garden case to justify
the October 30, 2001 resolution. The Eternal Garden case involves a petition for
certiorari filed before the Supreme Court, which could issue a temporary
restraining order or a status quo order effective indefinitely or until further orders
(Rule 58, Section 5, par. 4, Rules of Court. On the other hand, a temporary
restraining order issued by the Court of Appeals is effective only for sixty days.
(Ibid.) Hence, when respondent Justice Asuncion issued the October 30, 2001
resolution ordering the parties to maintain the status quo pending the resolution
of PNBs motion for reconsideration, he extended the restraining order
until respondent could act on the PNB motion for reconsideration which he did
only as late as August 7, 2006, a glaring five years from submission. His "interest" in
the case is "manifest" in that, despite his assignment to Cebu City on July 7, 2004,
he did not unload the case to Justice Zenarosa. (Office Order No. 212-04-CG, dated
July 7, 2004). Worse, he recalled the case upon his return to the CA Manila station.
(Underscoring supplied.)
"We agree with complainant Padilla that the deliberate act of respondent Justice
Asuncion in extending indefinitely the temporary restraining order or the status
quo order pending resolution of PNBs motion for reconsideration, relying on the

Eternal Gardens Memorial Park case, betrays his culpable gross ignorance of the
law. x x x
"x x x Judges are expected to exhibit more than just cursory acquaintance with
statutes and procedural laws. They must know the laws and apply them properly in
all good faith. Judicial competence requires no less. Unfamiliarity with the rules is a
sign of incompetence. Basic rules must be at the palm of his hand. x x x When a
judge displays utter lack of familiarity with the rules, he erodes the confidence of
the public in the courts. Ignorance of the law is the mainspring of
injustice.24 Worse, respondent justices ignorance of procedural law is exacerbated
by his sloth in resolving PNBs motion for reconsideration (See Garchitorena case,
422 Phil. 246 [2001], on reconsideration, 426 Phil. 01 [2002]) To compound
matters, Ms. Archinas motion for reconsideration date November 5, 2001, was not
resolved at all." 25
THE COURTS RULING
We adopt the findings of the Investigating Justice.
The Constitution mandates lower collegiate courts to decide or resolve cases or
matters within twelve months from date of submission. 26 Section 3, Rule 52 of the
Revised Rules of Court requires motions for reconsideration to be resolved within
ninety days. Section 5, Canon 6 of the New Code of Judicial Conduct provides that
"(J)udges shall perform all judicial duties, including the delivery of reserved
decisions, efficiently, fairly and with reasonable promptness."
Indeed, the essence of the judicial function, as expressed in Section 1, Rule 135 of
the Revised Rules of Court is that "justice shall be impartially administered without
unnecessary delay."
In Arap v. Judge Amir Mustafa, 27 We held that:
The Court has constantly impressed upon judges the need to decide cases
promptly and expeditiously, for it cannot be gainsaid that justice delayed is justice
denied. Delay in the disposition of cases undermines the peoples faith and
confidence in the judiciary. Hence, judges are enjoined to decide cases with
dispatch. Their failure to do so constitutes gross inefficiency and warrants the
imposition of administrative sanction against them.
The record shows that, as of September 30, 2006, the respondent had not resolved
seventy-one (71) motions for reconsideration within the prescribed ninety-day
period, and he had resolved one hundred seventy-nine (179) motions for
reconsideration beyond the reglementary period. As of the same date, eighty-two
(82) cases submitted for decision were still undecided, even after the lapse of the
twelve-month period prescribed by the Constitution. He had also decided four
hundred nine (409) cases beyond the one-year period.
Notably, of the seventy-one (71) motions for reconsideration pending resolution,
forty-six were filed in 2004 or earlier, with one dating all the way back to 2000. Five
were filed in 2001, sixteen in 2002, ten in 2003, and thirteen in 2004. Respondents
proffered justification is that the delay was caused by the reorganization of the CA,
his assignment to the CA Cebu Station and his transfer back to Manila which,
allegedly, caused "some confusion" in the assignment of cases and "a lapse in the
monitoring system." The explanation miserably fails to persuade because the CA
reorganization took place only in 2004, and at that time, there were at least thirty-
two (32) motions for reconsideration crying out for resolution..
This intolerable inaction is aggravated by misrepresentation. Upon his assignment
to the CA Cebu Station, respondent listed only nine (9) cases allegedly unresolved
by and pending with him. The findings of the Investigator belie this assertion.
The excuse that respondent was burdened by a heavy caseload, owing to the cases
initially assigned to him, those raffled daily and those re-raffled from among the
cases originally handled by promoted or retired justices, must also fall flat. As aptly
stated by the Investigating Justice, other CA justices are likewise subjected to such
a heavy caseload, and yet, have not incurred such inexcusable delay. As to
respondents other administrative assignments, including organizing special events,
the respondent should only be reminded that decision-making is the primordial
and most important duty of a member of the judiciary.28
The delay incurred by respondent Justice Asuncion in deciding or resolving the
numerous cases and matters mentioned above is, therefore, unjustified. Even in
the case of PNB v. NLRC and Archinas alone, the respondents failure to resolve
PNBs June 13, 2001 motion for reconsideration until after the lapse of more than
five (5) years, despite Archinas four (4) motions urging immediate resolution of
the same, truly smacks of gross inefficiency and serious dereliction of duty. Worse,
it invites suspicion of malice, and casts doubt on the justices fairness and integrity.
We have already ruled that the failure of a judge to decide a case within the
required period constitutes gross inefficiency 29 which, if the case remains
undecided for years, would become serious misconduct that would justify
dismissal from the service.30
In the case of respondent Justice Asuncion, the prolonged delay in deciding or
resolving such a staggering number of cases/matters assigned to him, borders on
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 67
serious misconduct which could subject the respondent to the maximum
administrative sanction.
In A. M. No. 06-44-CA-J, We agree with the Investigating Justice that respondents
"deliberate act of extending indefinitely the temporary restraining order or the
status quo order pending resolution of PNBs motion for reconsideration, relying on
the Eternal Gardens Memorial Park case, betrays his culpable gross ignorance of
the law."
As correctly put by Investigating Justice Pardo, Eternal Gardens is totally
inapplicable. The July 24, 2001 resolution, which "temporarily enjoined" the public
respondent from implementing the assailed writ of execution, was a temporary
restraining order, regardless of the nomenclature Justice Asuncion used to
characterize it. As such, its full life span can only be sixty (60) days. Section 5, par.
4, Rule 58 of the Rules of Court is explicit: the Court of Appeals may issue a
temporary restraining order only for a limited period of sixty days which cannot be
renewed or extended. After sixty days, the restraining order immediately ceases,
without need of any judicial order terminating it.
The October 30, 2001 resolution, which ordered the maintenance of the status
quo, effectively extended the temporary restraining order, in complete defiance of
the aforesaid Rule. It was not a writ of preliminary injunction, because respondent
Justice Asuncion himself disclaims that it was such. Besides, in the event of an
injunctive writ, an injunction bond is required, unless exempted by the Court
(Section 4, Rule 58, Rules of Court). Furthermore, there would have been no cause
to issue such a writ, because earlier, on May 28, 2001, respondent Justice Asuncion
had already dismissed the principal action for certiorari with prayer for the
issuance of a writ of preliminary injunction.
Yet, the purpose was clear; the October 30, 2001 resolution was intended to
extend the effectivity of the July 24, 2001 restraining order. It was, as the
Investigating Justice would characterize it, "a renewed or second temporary
restraining order proscribed by the rule and extant jurisprudence."
Such failure to follow basic legal commands embodied in the law and the Rules
constitutes gross ignorance of the law, from which no one is excused, and surely
not a judge.31 In Genil v. Rivera,32 We declared that judges owe it to the public to be
knowledgeable, hence they are expected to have more than just a modicum of
acquaintance with the statutes and procedural rules.
While a judge is presumed to act with regularity and good faith in the performance
of judicial functions, a blatant disregard of the clear and unmistakable provisions of
a statute, as well as Supreme Court circulars enjoining strict compliance therewith,
upends this presumption and subjects the magistrate to administrative sanctions.33
Citing Castanos v. Escano, Jr., 34 this Court, in Macalintal v. Teh, 35 had occasion to
state:
"When the inefficiency springs from a failure to consider so basic and elemental a
rule, a law or a principle in the discharge of his functions, a judge is either too
incompetent and undeserving of the position and title he holds or he is too vicious
that the oversight or omission was deliberately done in bad faith and in grave
abuse of judicial authority. In both cases, the judges dismissal is in order."
The respondent Justice would seek to extricate himself from any liability by
invoking the convenient excuse that the resolutions of July 24, 2001 and October
30, 2001 were the collegial acts of the First Division of the Court of Appeals,
composed of three justices, and not the acts of respondent justice alone. This, in
fact, was the only significant subject dwelt on by respondents lawyer in the cross-
examination of the complainant Atty. Padilla. What respondent Justice Asuncion, in
effect, is saying is that if he, as ponente in PNB v. NLRC and Archinas, were to be
adjudged guilty of gross ignorance of the law, then the two other justices in the
Division should be held equally culpable. Perhaps, under ordinary circumstances,
such logic would be impeccable.
However, what We said in Guerrero v. Villamor 36 is instructive:
"For liability to attach for ignorance of the law, the assailed order, decision or
actuation of the judge in the performance of official duties must not only be found
erroneous but, most importantly, it must also be established that he was moved by
bad faith, dishonesty, hatred, or some other like motive.37 x x x
"Conversely, a charge for either ignorance of the law or rendering an unjust
judgment will not prosper against a judge acting in good faith. Absent the element
of bad faith, an erroneous judgment cannot be the basis of a charge for any said
offenses, mere error of judgment not being a ground for disciplinary
proceedings."38
Using this pronouncement as the norm, We now must consider the totality of the
charges against the respondent, as well as the convergence of attendant and
subsequent events. On May 28, 2001, with respondent Justice as ponente, the First
Division of the Court of Appeals dismissed the PNB petition for certiorari with
prayer for the issuance of a writ of preliminary injunction, affirming in its entirety
the decision of the National Labor Relations Commission. On June 13, 2001, PNB
filed a motion for reconsideration. On June 25, 2001, Archinas (private respondent

in the petition for certiorari) filed her opposition to PNBs motion for
reconsideration. On July 24, 2001, acting upon PNBs urgent motion for issuance of
a TRO, respondent issued the resolution enjoining the public respondent from
implementing the Writ of Execution. On October 30, 2001, the resolution ordering
the maintenance of the status quo was issued. On November 5, 2001, Archinas
filed her motion seeking reconsideration of the October 30, 2001 resolution.
Archinas filed four (4) urgent motions for early resolution of the pending motion/s
for reconsideration, on December 28, 2001, June 13, 2002, September 24, 2002,
and August 23, 2005, Meantime, on July 5, 2004, respondent Justice Asuncion was
assigned to CA Cebu Station. With this transfer, respondents caseload was
assigned to Justice Zenarosa. On November 3, 2004, respondent was reassigned
back to Manila. It was only on August 7, 2006 that respondent finally resolved the
PNB motion for reconsideration.
From this sequence of events, a number of questions arise. If the respondent could
issue the resolutions of July 24, 2001 and October 30, 2001 why did respondent
not simply resolve the PNB motion for reconsideration of June 13, 2001? After all,
he finally did so on August 7, 2006, with a mere three-page resolution. Why did it
take more than five years to resolve this PNB motion? Why were the four motions
for early resolution never addressed? If the Manila cases of respondent Justice
Asuncion were "automatically assigned to Justice Zenarosa," how did Justice
Asuncion continue to hold on to this case upon his reassignment in Manila?
The Investigating Justice supplies the answer in his Report thus: "His (respondents)
interest in the case is manifest in that, despite his assignment in Cebu City on
July 7, 2004, he did not unload the case to Justice Zenarosa (Office Order No. 212-
04-CG). Worse, he recalled the case upon his return to the CA Manila station."
To the Court, these are badges of bad faith and manifest undue interest
attributable only to the respondent, and not to the other two justices of the CA
Division. Accordingly, only the respondent must be made to suffer the
consequences.
Besides, the five-year delay in the resolution of the PNB motion for reconsideration
would already constitute serious misconduct that would justify dismissal from the
service39
Administrative Penalties
In A. M. No. 06-6-08-CA, respondent is charged with undue delay in rendering a
decision or order. Under Rule 140 of the Rules of Court, 40 undue delay in rendering
a decision or order is classified as a less serious charge which may be penalized by
(1) suspension from office without salary and other benefits for not less than one
nor more than three months; or (2) a fine of more than P10,000 but not exceeding
P20,000.
On the other hand, gross ignorance of the law, for which respondent is being
faulted in A. M. No. 06-44-CA-J, is considered a serious charge, and carries the
penalty of (1) dismissal from the service, forfeiture of all or part of the benefits as
the Court may determine, and disqualification from reinstatement or appointment
to any public office, including government-owned or controlled corporations:
provided, however, that the forfeiture of benefits shall in no case include accrued
leave credits; (2) suspension from office without salary and other benefits for more
than three but not exceeding six months; or (3) a fine of more than P20,000 but
not exceeding P40,000.
The Investigating Justice recommends the maximum penalty for each of the two
offenses.
WHEREFORE, in A. M. No. 06-6-08, for having incurred undue delay in the disposal
of pending motions for reconsideration in several cases, as recommended by the
Investigating Justice, Associate Justice Elvi John S. Asuncion of the Court of Appeals
is SUSPENDED from office without pay, allowances and other monetary benefits for
a period of THREE MONTHS.
In A. M. No. 06-44-CA-J, for gross ignorance of the law and manifest undue
interest, Associate Justice Elvi John S. Asuncion of the Court of Appeals is hereby
ordered DISMISSED FROM THE SERVICE with forfeiture of retirement benefits,
except leave credits.
This Decision is final and immediately executory.
SO ORDERED.
G.R. No. 173616 June 25, 2014
AIR TRANSPORTATION OFFICE (ATO), Petitioner,
vs.
HON. COURT OF APPEALS (NINETEENTH DIVISION) and BERNIE G.
MIAQUE, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 68
This petition for certiorari and prohibition of the Air Transportation Office (ATO)
seeks the nullification of the Court of Appeals' Resolution 1 dated March 29, 2006
and Resolution2 dated May 30, 2006 in CA-G.R. CEB-SP No. 01603. The Resolution
dated March 29, 2006 granted the application for temporary restraining order
(TRO) of Bernie G. Miaque, while the Resolution dated May 30, 2006 issued a writ
of preliminary injunction enjoining the implementation of the writ of execution
issued by the Regional Trial Court (RTC) of Iloilo despite Miaque's alleged
continued failure and refusal to make current the supersedeas bond and to pay to
the A TO the rental and concession privilege fees.
The proceedings on the main case of ejectment
MTCC of Iloilo City: Civil Case No. 01 (38)
In May 2001, the ATO filed a complaint for unlawful detainer against Miaque in the
Municipal Trial Court in Cities (MTCC) of Iloilo City, Branch 3. It was docketed as
Civil Case No. 01 (38). The ATO sought the following, among others:
(1) That Miaque be ordered to permanently vacate and peacefully
return to the ATO possession of:
(a) the 800-square meter Refreshment Parlor fronting the
New Terminal Building-Iloilo Airport;
(b) the 310-square meter Restaurant/Gift Shop inside the
Iloilo Airport Terminal; and
(c) all areas occupied or otherwise utilized by Miaque
incident to his operation of the Porterage Service within the
Iloilo Airport; and
(2) That Miaque be ordered to immediately pay the ATO the amount of
not less than P1,296,103.10, representing unpaid space rental and
concessionaire privilege fees as of October 15, 2000 plus interest and
additional rental and fees which may be proven during the trial.3
The MTCC subsequently rendered a Decision 4 dated May 27, 2002 the dispositive
part of which reads:
WHEREFORE, judgment is rendered finding [Miaque] to be unlawfully detaining the
following premises and orders [him], his men and privies to:
a. vacate the 800[-]square meter Refreshment Parlor fronting the New
Terminal Building-Iloilo Airport. [Miaque] is further ordered to pay [the
ATO] the rental and concessionaire privilege fee[s] accruing from
November 1986 to October 2000, totaling P460,060.70, plus differential
billings from January 1990 to July 1993 for P4,652.60 and interest
charges from January 2000 to October 2000 for P2,678.38 or a total
amount of P467,397.68 as of October 2000, less the payments made by
[Miaque] under Official Receipt No. 4317842 dated December 1998,
and the monthly current lease/concession privilege fee from November
2000 until [Miaque] shall have vacated the premises;
(b) vacate the 310[-]square meter Restaurant/Gift Shop inside the Iloilo
Terminal Building which was reduced to a total of 183 square meters in
1998 (51.56 square meters inside the pre-departure area and 126.72
square meters outside the pre-departure area). [Miaque] is also
ordered to pay [the ATO] rentals/concessionaires privilege fee[s] from
January 16, 1992 to October 15, 2000 in the total amount
ofP719,708.43 and from October 16, 2000, to pay the current monthly
lease/concessionaire privilege fees until [Miaque] shall have vacated the
premises; and
(c) vacate the area occupied or used by [Miaque] incident to his
operation of the Porterage Service within the Iloilo Airport. [Miaque] is
further ordered to pay Tender Offer Fee due from March 1992 to
October 2000 in the total amount of P108,997.07. [Miaque] is further
ordered to pay the current monthly concession privilege fee from
October 2000 until such time that [Miaque] shall have vacated the
premises.
Costs against [Miaque].5
RTC of Iloilo City: Civil Case No. 02-27292
Miaque appealed the MTCC Decision to the RTC of Iloilo City, Branch 24. It was
docketed as Civil Case No. 02-27292. The RTC, in its Decision 6 dated June 7, 2003,
affirmed the MTCC Decision in its entirety. Miaques motion for reconsideration
was denied.7 Court of Appeals: CA-G.R. SP No. 79439 Miaque questioned the RTC
Decision in the Court of Appeals by filing a petition for review, docketed as CA-G.R.
SP No. 79439, on September 25, 2003. In a Decision 8 dated April 29, 2005, the
Court of Appeals dismissed the petition and affirmed the RTC Decision. Miaque
moved for reconsideration but it was denied in a Resolution dated January 5,
2006.9

Supreme Court: G.R. No. 171099
Miaque brought the case to this Court in a petition for review, docketed as G.R. No.
171099. In a Resolution 10dated February 22, 2006, the petition was denied as no
reversible error in the Court of Appeals Decision was sufficiently shown. The
motion for reconsideration of Miaque was denied with finality.11
The proceedings on execution
As an incident of CA-G.R. SP No. 79439, the Court of Appeals issued on February
27, 2004 a temporary restraining order (TRO) effective for a period of 60 days and
required Miaque to post a bond in the amount ofP100,000.00.12 After the lapse of
the TRO, the ATO filed an urgent motion for the execution of the RTC Decision
pursuant to Section 21, Rule 70 of the Rules of Court. This was opposed by
Miaque.13
In an Order14 dated August 2, 2004, the RTC granted the ATOs motion:
Wherefore, in view of the above consideration, the court finds merit [i]n the
reasons given in the motion of [the ATO] and hereby Grants the issuance of a Writ
of Execution.
Pursuant to Section 21, Rule 70 of the 1997 Rules of Civil Procedure, which
mandates that the judgment of this Court being immediately executory in cases of
this nature, let a writ of execution shall issue, ordering the sheriff of this Court to
effect its Decision dated June 7, 2003, affirming the Decision of the MTCC, Branch
3, Iloilo City.
Furnish copies of this order to the Asst. Solicitor Almira Tomampos of the Office of
the Solicitor General and Atty. Rex Rico, counsel for [Miaque].15
Miaque sought reconsideration of the above Order but the RTC denied the motion
in an Order16 dated August 13, 2004. Thereafter, the RTC issued a Writ of Execution
dated August 16, 2004.17
However, the Court of Appeals issued a Resolution 18 dated August 18, 2004
ordering the issuance of a writ of preliminary injunction and enjoining the ATO and
all persons acting in its behalf from enforcing the respective Decisions of the MTCC
and the RTC while CA-G.R. SP No. 79439 is pending. Thus, after the dismissal of
Miaques petition for review in CA-G.R. SP No. 79439, the ATO filed another urgent
motion for execution of the RTC Decision. In its motion, the ATO pointed out that
the supersedeas bond filed by Miaque had lapsed and was not renewed and that
the rental and concessionaire privilege fees have not been paid at all in violation of
Section 8, Rule 70 of the Rules of Court. 19 Miaque again opposed the ATOs urgent
motion for execution,20 while the ATO filed a supplemental urgent motion for
execution stating that Miaques appeal in the Court of Appeals had been
dismissed.21
In an Order22 dated June 1, 2005, the RTC granted the ATOs urgent motion for
execution and issued a Writ of Execution 23 dated June 2, 2005. On the basis of the
said writ, a notice to vacate was given to Miaque. 24 On June 3, 2005, Miaque filed a
motion for reconsideration of the Order dated June 1, 2005, with prayer to set
aside the writ of execution and notice to vacate. 25 At the same time, he filed a
motion in CA-G.R. SP No. 79439 praying that the Court of Appeals order the RTC
judge and the concerned sheriffs to desist from implementing the writ of
execution.26 Thereafter, the Court of Appeals issued a Resolution 27 dated June 14,
2005 ordering the sheriffs to desist from executing the Decisions of the MTCC and
the RTC while CA-G.R. SP No. 79439 is still pending. However, on June 15, 2005,
before the concerned sheriffs received a copy of the Resolution dated June 14,
2005, the said sheriffs implemented the writ of execution and delivered the
possession of the following premises to the ATO:
(a) the Restaurant/Gift Shop inside the Iloilo Terminal Building in the
reduced area of 183 square meters; and
(b) the area which Miaque occupied or used incident to his operation of
the Porterage Service within the Iloilo Airport.
The sheriffs who implemented the writ then filed a return of service 28 and issued
reports of partial delivery of possession. 29 However, Miaque subsequently regained
possession of the said premises on the strength of the Court of Appeals Resolution
dated June 14, 2005.30
On February 9, 2006, after the Court of Appeals issued its Resolution dated January
5, 2006 denying Miaques motion for reconsideration of the Decision dated April
29, 2005 in CA-G.R. SP No. 79439, the ATO filed with the RTC a motion for the
revival of the writs of execution dated August 16, 2004 and June 2, 2005. 31 This was
opposed by Miaque.32 After the RTC heard the parties, it issued an Order 33 dated
March 20, 2006 granting the ATOs motion and revived the writs of execution dated
August 16, 2004 and June 2, 2005. Miaque filed a motion for reconsideration but
the RTC denied it.34
A new case in the Court of Appeals: CA-G.R. CEB-SP No. 01603
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 69
On March 28, 2006, Miaque filed a petition 35 for certiorari (with prayer for issuance
of TRO and/or writ of preliminary injunction) in the Court of Appeals, docketed as
CA-G.R. CEB-SP No. 01603, where he assailed the RTCs Order dated March 20,
2006. He prayed, among others, that the implementation of the writs of execution
be enjoined. It is here where the Court of Appeals issued the Resolutions being
challenged in this case, namely, the Resolution dated March 29, 2006 issuing a TRO
effective for 60 days, and Resolution dated May 30, 2006 issuing a writ of
preliminary injunction enjoining the implementation of the writs of execution
dated August 16, 2004 and June2, 2005. In particular, the Resolution dated May 30,
2006 reads: Before us for resolution is [Miaque]s application for the issuance of a
writ of preliminary injunction that would restrain the respondent judge, Sheriffs
Marcial B. Lambuso, Winston T. Eguia, Camilo I. Divinagracia, Jr. and Eric George S.
Luntao and all other persons acting for and in their behalves, from enforcing the
orders issued by the respondent judge on March 20, 2006 and March 24, 2006,
including the writ[s] of execution issued pursuant thereto, while the petition in the
case at bench is still pending with us.
After examining judiciously the record in this case, together with the submissions
and contentions of the parties, we have come up with a finding and so hold that
there is a sufficient showing by [Miaque] that the grounds for the issuance of a writ
of preliminary injunction enumerated in Section 3 of Rule 58 of the 1997 Revised
Rules of Court exist. We find that [Miaque] has a right in esse to be protected and
the acts against which the injunction is sought to be directed are violative of said
right. To our mind, [Miaque] appears to have a clear legal right to hold on to the
premises leased by him from ATO at least until such time when he shall have been
duly ejected therefrom by a writ of execution of judgment caused to be issued by
the MTCC in Iloilo City, which is the court of origin of the decision promulgated by
this Court in CA-G.R. SP No. 79439 on April 29, 2005. Under the attendant
circumstances, it appears that the respondent judge orthe RTC in Iloilo City has no
jurisdiction to order the issuance of such writ of execution because we gave due
course to the petition for review filed with us in CA-G.R. SP No. 79439 and, in fact,
rendered a decision on the merit in said case, thereby divesting the RTC in Iloilo
City of jurisdiction over the case as provided for in the third paragraph of Section
8(a) of Rule 42of the 1997 Revised Rules of Court. In City of Manila vs. Court of
Appeals, 204 SCRA 362, as cited in Mocles vs. Maravilla, 239 SCRA 188, the
Supreme Court held as follows:
"The rule is that, if the judgment of the metropolitan trial court is appealed to the
RTC and the decision of the latter itself is elevated to the CA whose decision
thereafter became final, the case should be remanded through the RTC to the
metropolitan trial court for execution."
WHEREFORE, in view of the foregoing premises, a WRIT OF PRELIMINARY
INJUNCTION is hereby ordered or caused to be issued by us enjoining the
respondent judge, Sheriffs Marcial B. Lambuso, Winston T. Eguia, Camilo I.
Divinagracia, Jr. and Eric George S. Luntao and all other persons acting for and in
their behalves, from enforcing the orders issued by the respondent judge on March
20, 2006 and March 24, 2006, including the writ[s] of execution issued pursuant
thereto, while the petition in the case at bench is still pending with us.
This is subject to the petitioners putting up of a bond in the sum of ONE HUNDRED
THOUSAND PESOS(P100,000.00) to the effect that he will pay to the respondent
ATO all damages which said office may sustain by reason of the injunctive writ if we
should finally decide that [Miaque] is not entitled thereto. 36
The present petition
The ATO claims that the Court of Appeals acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the TRO and the subsequent
writ of preliminary injunction through the Order dated March 29, 2006 and the
Resolution dated May 30,2006, respectively. According to the ATO, the Court of
Appeals ignored the governments right under the law, Rules of Court,
jurisprudence and equity to the possession as well as to the payment of rental and
concession privilege fees which, at the time of the filing of this petition, already
amounted toP2 Million. Such right had already been decided with finality by this
Court, which affirmed the Decision dated April 29, 2005 of the Court of Appeals in
CA-G.R. SP No. 79439, but the Court of Appeals has repeatedly thwarted it. The
RTC acted properly and pursuant to Section 21, Rule 70 of the Rules of Court when
it issued the writs of execution. 37 Moreover, the ATO asserts that a TRO cannot
restrain an accomplished fact, as the RTCs writ of execution dated June 1, 2005
had already been partially implemented.38
The ATO also argues that, by his admission that the issues in CAG.R. SP No. 79439
and CA-G.R. CEB-SP No. 01603 are exactly the same, Miaque has committed forum
shopping. In this connection, the ATO points out that, in his opposition to the ATOs
motion for additional period of time to file its comment on Miaques petition in CA-
G.R. CEB-SP No. 01603, Miaque pointed out the similarity of the core issues in CA-
G.R. SP No. 79439 and CA-G.R. CEB-SP No. 01603, to wit:
b) The legal issues raised by the petition [in CA-G.R. CEBSP No. 01603]
are very simple and not complicated. In fact, the threshold issue, i.e.,
whether or not respondent court (RTC) has jurisdiction to issue the writ
of execution after the appeal over its decision had been perfected and
the petition for review [in CA-G.R. SP No. 79439] given due course, is
exactly the same one earlier raised by [the ATO itself in its] "Motion for
Reconsideration" of the Resolution dated June 14, 2005, in CA G.R. No.

79439, entitled "Bernie G. Miaque vs. Hon. Danilo P. Galvez and Air
Transportation Office (ATO)", (same parties in this proceeding), then
pending before the 20th Division, Court of Appeals, Cebu City.
Hence, all that [the ATO has] to do is simply to reiterate [its] said arguments, the
law and jurisprudence [it has] earlier invoked and, if [it wishes], add some more
arguments, laws or jurisprudence thereto. Such an exercise would definitely not
require a sixty (60) day period. A ten (10) day period is more than sufficient. 39
The ATO further contends that the subject premises form part of a public utility
infrastructure and, pursuant to Presidential Decree No. 1818, the issuance of a TRO
against a public utility infrastructure is prohibited.40
The ATO adds that Miaques petition for certiorari in CA-G.R. CEBSP No. 01603
introduces a new matter which is the alleged novation of the MTCC Decision when
he deposited the amount of P319,900.00 to the Land Bank of the Philippines
account of the ATO in February 2006. At any rate, the ATO asserts that its tenacity
in pursuing the execution of the judgment against Miaque belies its consent to the
alleged novation.41
For his part, Miaque argues that this Court has no jurisdiction to dismiss a petition
still pending with the Court of Appeals. Thus, the ATO cannot properly pray that
this Court dismiss CA-G.R. CEB-SP No. 01603. According to Miaque, the jurisdiction
of this Court is limited only to the determination of whether or not the Court of
Appeals gravely abused its discretion in issuing a TRO and, subsequently, a
preliminary injunction in CA-G.R. CEB-SP No. 01603. In this connection, Miaque
insists that the Court of Appeals acted well within its jurisdiction in the issuance of
both the Order dated March 29, 2006 granting a TRO and the Resolution dated
May 30, 2006 issuing a writ of preliminary injunction in CA-G.R. CEB-SP No. 01603.
As this Court has effectively affirmed the MTCC Decision, then it is the MTCC and
not the RTC which should have directed the execution of the MTCC Decision.
Moreover, the RTC had no jurisdiction to issue the writs of execution dated August
16, 2004 and June 1, 2005 because the said court already lost its jurisdiction when
Miaque filed an appeal to the Court of Appeals on September 25, 2003, which
appeal was given due course.42
Miaque also asserts that the ATOs claim that the RTCs writ of execution had been
partially implemented is not true and that he is in possession of the entire subject
premises when the Court of Appeals issued the TRO and writ of preliminary
injunction being challenged in this case.
Finally, Miaque alleges that no writ may be issued to enforce the MTCC Decision as
the said decision had already been novated by his deposit of P319,000.00 to the
ATOs account with the Land Bank of the Philippines in February 2006.43
This Court, in a Resolution 44 dated August 14, 2006, issued a TRO enjoining the
Court of Appeals, Miaque, and his agents and representatives from implementing
the Resolution dated March 29, 2006 and the Resolution dated May 30, 2006 in
CA-G.R. CEB-SP No. 01603.
The Courts ruling
The petition is meritorious.
Preliminarily, the Court notes that the challenge to the Order dated March 29,
2006 granting a TRO, effective for 60 days, is moot as its effectivity had already
lapsed.
Cutting through the tangled web of issues presented by the contending parties, the
basic question in this petition is whether or not the Court of Appeals committed
grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the
Resolution dated May 30, 2006 which granted petitioners application for the
issuance of a writ of preliminary injunction in CA-G.R. CEB-SP No. 01603.
Section 21, Rule 70 of the Rules of Court provides the key to that question: Sec. 21.
Immediate execution on appeal to Court of Appeals or Supreme Court. The
judgment of the Regional Trial Court against the defendant shall be immediately
executory, without prejudice to a further appeal that may be taken therefrom.
(Emphasis supplied.)
This reflects Section 21 of the Revised Rule on Summary Procedure:
Sec. 21. Appeal. - The judgment or final order shall be appealable to the
appropriate Regional Trial Court which shall decide the same in accordance with
Section 22 of Batas Pambansa Blg. 129. The decision of the Regional Trial Court in
civil cases governed by this Rule, including forcible entry and unlawful detainer,
shall be immediately executory, without prejudice to a further appeal that may be
taken therefrom. Section 10 of Rule 70 shall be deemed repealed. (Emphasis and
underscoring supplied.)
The above provisions are supplemented and reinforced by Section 4, Rule 39 and
Section 8(b), Rule 42 of the Rules of Court which respectively provide:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 70
Sec. 4. Judgments not stayed by appeal. Judgments in actions for injunction,
receivership, accounting and support, and such other judgments as are now or may
hereafter be declared to be immediately executory, shall be enforceable after their
rendition and shall not be stayed by an appeal taken therefrom, unless otherwise
ordered by the trial court. On appeal therefrom, the appellate court in its
discretion may make an order suspending, modifying, restoring or granting the
injunction, receivership, accounting, or award of support.
The stay of execution shall be upon such terms as to bond or otherwise as may be
considered proper for the security or protection of the rights of the adverse party.
xxxx
Sec. 8. Perfection of appeal; effect thereof.
(a) Upon the timely filing of a petition for review and the payment of the
corresponding docket and other lawful fees, the appeal is deemed perfected as to
the petitioner.
The Regional Trial Court loses jurisdiction over the case upon the perfection of the
appeals filed in due time and the expiration of the time to appeal of the other
parties.
However, before the Court of Appeals gives due course to the petition, the
Regional Trial Court may issue orders for the protection and preservation of the
rights of the parties which do not involve any matter litigated by the appeal,
approve compromises, permit appeals of indigent litigants, order execution
pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal of
the appeal.
(b) Except in civil cases decided under the Rules on Summary Procedure, the
appeal shall stay the judgment or final order unless the Court of Appeals, the law,
or these Rules shall provide otherwise. (Emphases supplied.)
The totality of all the provisions above shows the following significant
characteristics of the RTC judgment in an ejectment case appealed to it:
(1) The judgment of the RTC against the defendant-appellant is
immediately executory, without prejudice to a further appeal that may
be taken therefrom; and
(2) Such judgment of the RTC is not stayed by an appeal taken
therefrom, unless otherwise ordered by the RTC or, in the appellate
courts discretion, suspended or modified.
The first characteristic -- the judgment of the RTC is immediately executory -- is
emphasized by the fact that no resolutory condition has been imposed that will
prevent or stay the execution of the RTCs judgment. 45 The significance of this may
be better appreciated by comparing Section 21 of Rule 70 with its precursor,
Section 10, Rule 70 of the 1964 Rules of Court which provided:
Sec. 10. Stay of execution on appeal to Court of Appeals or Supreme Court.
Where defendant appeals from a judgment of the Court of First Instance, execution
of said judgment, with respect to the restoration of possession, shall not be stayed
unless the appellant deposits the same amounts and within the periods referred to
in section 8 of this rule to be disposed of in the same manner as therein provided.
Under the old provision, the procedure on appeal from the RTCs judgment to the
Court of Appeals was, with the exception of the need for a supersedeas bond
which was not applicable, virtually the same as the procedure on appeal of the
MTCs judgment to the RTC. Thus, in the contemplated recourse to the Court of
Appeals, the defendant, after perfecting his appeal, could also prevent the
immediate execution of the judgment by making the periodic deposit of rentals
during the pendency of the appeal and thereby correspondingly prevent restitution
of the premises to the plaintiff who had already twice vindicated his claim to the
property in the two lower courts. On the other hand, under the amendatory
procedure introduced by the present Section 21 of Rule 70, the judgment of the
RTC shall be immediately executory and can accordingly be enforced forthwith. It
shall not be stayed by the mere continuing deposit of monthly rentals by the
dispossess or during the pendency of the case in the Court of Appeals or this
Court, although such execution of the judgment shall be without prejudice to that
appeal taking its due course. This reiterates Section 21 of the Revised Rule on
Summary Procedure which replaced the appellate procedure in, and repealed, the
former Section 10, Rule 70 of the 1964 Rules of Court. 46 Teresa T. Gonzales LaO &
Co., Inc. v. Sheriff Hatab47 states:
Unlike Rule 70 of the 1964 Revised Rules of Court where the defendant, after
perfecting his appeal, could prevent the immediate execution of the judgment by
taking an appeal and making a periodic deposit of monthly rentals during the
pendency of the appeal thereby preventing the plaintiff from taking possession of
the premises in the meantime, the present wording of Section 21, Rule 70 explicitly
provides that the judgment of the regional trial court in ejectment cases appealed
to it shall be immediately executory and can be enforced despite the perfection of
an appeal to a higher court.48 (Emphasis supplied.)

The RTCs duty to issue a writ of execution under Section 21 of Rule 70 is
ministerial and may be compelled by mandamus. 49 Section 21 of Rule 70
presupposes that the defendant in a forcible entry or unlawful detainer case is
unsatisfied with the RTCs judgment and appeals to a higher court. It authorizes the
RTC to immediately issue a writ of execution without prejudice to the appeal taking
its due course.50 The rationale of immediate execution of judgment in an ejectment
case is to avoid injustice to a lawful possessor. 51 Nevertheless, it should be stressed
that the appellate court may stay the writ of execution should circumstances so
require.52
The second characteristic -- the judgment of the RTC is not stayed by an appeal
taken therefrom reinforces the first.1wphi1 The judgment of the RTC in an
ejectment case is enforceable upon its rendition and, upon motion, immediately
executory notwithstanding an appeal taken therefrom. The execution of the RTCs
judgment is not discretionary execution under Section 2, Rule 39 of the Rules of
Court which provides:
Section 2. Discretionary execution.
(a) Execution of a judgment or a final order pending appeal. On motion of the
prevailing party with notice to the adverse party filed in the trial court while it has
jurisdiction over the case and is in possession of either the original record or the
record on appeal, as the case may be, at the time of the filing of such motion, said
court may, in its discretion, order execution of a judgment or final order even
before the expiration of the period to appeal.
After the trial court has lost jurisdiction, the motion for execution pending appeal
may be filed in the appellate court.
Discretionary execution may only issue upon good reasons to be stated in a special
order after due hearing.
(b) Execution of several, separate or partial judgments. A several, separate or
partial judgment may be executed under the same terms and conditions as
execution of a judgment or final order pending appeal.
Discretionary execution is authorized while the trial court, which rendered the
judgment sought to be executed, still has jurisdiction over the case as the period to
appeal has not yet lapsed and is in possession of either the original record or the
record on appeal, as the case may be, at the time of the filing of the motion for
execution. It is part of the trial courts residual powers, or those powers which it
retains after losing jurisdiction over the case as a result of the perfection of the
appeal.53 As a rule, the judgment of the RTC, rendered in the exercise of its
appellate jurisdiction, being sought to be executed in a discretionary execution is
stayed by the appeal to the Court of Appeals pursuant to Section 8(b), Rule 42 of
the Rules of Court. On the other hand, execution of the RTCs judgment under
Section 21, Rule 70 is not discretionary execution but a ministerial duty of the
RTC.54 It is not governed by Section 2, Rule 39 of the Rules of Court but by Section
4, Rule 39 of the Rules of Court on judgments not stayed by appeal. In this
connection, it is not covered by the general rule, that the judgment of the RTC is
stayed by appeal to the Court of Appeals under Section 8(b), Rule 42 of the Rules
of Court, but constitutes an exception to the said rule. In connection with the
second characteristic of the RTC judgment in an ejectment case appealed to it, the
consequence of the above distinctions between discretionary execution and the
execution of the RTCs judgment in an ejectment case on appeal to the Court of
Appeals is that the former may be availed of in the RTC only before the Court of
Appeals gives due course to the appeal while the latter may be availed of in the
RTC at any stage of the appeal to the Court of Appeals. But then again, in the latter
case, the Court of Appeals may stay the writ of execution issued by the RTC should
circumstances so require. 55 City of Naga v. Hon. Asuncion56 explains:
This is not to say that the losing defendant in an ejectment case is without
recourse to avoid immediate execution of the RTC decision. The defendant may x x
x appeal said judgment to the Court of Appeals and therein apply for a writ of
preliminary injunction. Thus, as held in Benedicto v. Court of Appeals, even if RTC
judgments in unlawful detainer cases are immediately executory, preliminary
injunction may still be granted. (Citation omitted.)
To reiterate, despite the immediately executory nature of the judgment of the RTC
in ejectment cases, which judgment is not stayed by an appeal taken therefrom,
the Court of Appeals may issue a writ of preliminary injunction that will restrain or
enjoin the execution of the RTCs judgment. In the exercise of such authority, the
Court of Appeals should constantly be aware that 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.57
A writ of preliminary injunction is an extraordinary event which must be granted
only in the face of actual and existing substantial rights. 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. 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
ancillarywrit must be struck down for having been rendered in grave abuse of
discretion.58
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 71
In this case, the decisions of the MTCC in Civil Case No. 01 (38), of the RTC in Civil
Case No. 02-27292, and of the Court of Appeals in CAG.R. SP No. 79439
unanimously recognized the right of the ATO to possession of the property and the
corresponding obligation of Miaque to immediately vacate the subject premises.
This means that the MTCC, the RTC, and the Court of Appeals all ruled that Miaque
does not have any right to continue in possession of the said premises. It is
therefore puzzling how the Court of Appeals justified its issuance of the writ of
preliminary injunction with the sweeping statement that Miaque "appears to have
a clear legal right to hold on to the premises leased by him from ATO at least until
such time when he shall have been duly ejected therefrom by a writ of execution
of judgment caused to be issued by the MTCC in Iloilo City, which is the court of
origin of the decision promulgated by this Court in CA-G.R. SP No. 79439."
Unfortunately, in its Resolution dated May 30, 2006 granting a writ of preliminary
injunction in Miaques favor, the Court of Appeals did not state the source or basis
of Miaques "clear legal right to hold on to the [said] premises." This is fatal.
In Nisce v. Equitable PCI Bank, Inc.,59 this Court stated that, in granting or dismissing
an application for a writ of preliminary injunction, the court must state in its order
the findings and conclusions based on the evidence and the law. This is to enable
the appellate court to determine whether the trial court committed grave abuse of
its discretion amounting to excess or lack of jurisdiction in resolving, one way or
the other, the plea for injunctive relief. In the absence of proof of a legal right and
the injury sustained by one who seeks an injunctive writ, an order for the issuance
of a writ of preliminary injunction will be nullified. Thus, where the right of one
who seeks an in junctive writ is doubtful or disputed, a preliminary injunction is not
proper. The possibility of irreparable damage without proof of an actual existing
right is not a ground for a preliminary injunction.
The sole basis of the Court of Appeals in issuing its Resolution dated May 30, 2006
is its view that the RTC "has no jurisdiction to order the issuance of [the] writ of
execution" because, when it gave due course to the petition for review in CA-G.R.
SP No. 79439, the RTC was already divested of jurisdiction over the case pursuant
to the third paragraph of Section 8(a), Rule 42 of the Rules of Court. The Court of
Appeals is mistaken. It disregards both (1) the immediately executory nature of the
judgment of the RTC in ejectment cases, and (2) the rule that such judgment of the
RTC is not stayed by an appeal taken there from. It ignores the nature of the RTCs
function to issue a writ of execution of its judgment in an ejectment case as
ministerial and not discretionary.
The RTC was validly exercising its jurisdiction pursuant to Section 21, Rule 70 of the
Rules of Court when it issued the writs of execution dated August 16, 2004 and
June 2,2005. While the Court of Appeals in CA-G.R. SP No. 79439 enjoined the
execution of the RTCs judgment during the pendency of CA-G.R. SP No. 79439, the
RTC revived the writs of execution dated August 16, 2004 and June 1, 2005 in its
Order dated March 20, 2006, after the Court of Appeals denied Miaques motion
for reconsideration of the dismissal of the petition in CA-G.R. SP No. 79439.
Indeed, the said writs of execution need not even be revived because they
continue in effect during the period within which the judgment may be enforced by
motion, that is within five years from entry of judgment, pursuant to Section
14,60 Rule 39 of the Rules of Court in relation to Section 661 of the same Rule.
There is grave abuse of discretion when an act is (1) done contrary to the
Constitution, the law or jurisprudence, or (2) executed whimsically, capriciously or
arbitrarily out of malice, ill will or personal bias.62 In this case, the Court of Appeals
issued the Resolution dated May 30, 2006 granting Miaques prayer for a writ of
preliminary injunction contrary to Section 21, Rule 70 and other relevant provisions
of the Rules of Court, as well as this Courts pronouncements in Teresa T. Gonzales
LaO & Co., Inc.63 and Nisce.64 Thus, the Court of Appeals committed grave abuse of
discretion when it issued the Resolution dated May 30, 2006 in CA-G.R. CEB-SP No.
01603.
This Court notes that the controversy between the parties in this case has been
unduly protracted, considering that the decisions of the MTCC, the RTC, the Court
of Appeals, and this Court in favor of the ATO and against Miaque on the ejectment
case are already final and executory. The Court of Appeals should therefore
proceed expeditiously in resolving CA-G.R. CEBSP No. 01603.
WHEREFORE, the petition is hereby GRANTED. The Resolution dated May 30, 2006
of the Court of Appeals in CA-G.R. CEB-SP No. 01603 is ANNULLED for having been
rendered with grave abuse of discretion. The Court of Appeals is directed to
conduct its proceedings in CA-G.R. CEB-SP No. 01603 expeditiously and without
delay.
SO ORDERED.
G.R. No. 207412 August 7, 2013
FLORD NICSON CALAWAG, PETITIONER,
vs.
UNIVERSITY OF THE PHILIPPINES VISAYAS AND DEAN CARLOS C.
BAYLON, RESPONDENTS.
x-----------------------x
G.R. No. 207542

MICAH P. ESPIA, JOSE MARIE F. NASALGA AND CHE CHE B.
SALCEPUEDES, PETITIONERS,
vs.
DR. CARLOS C. BA YLON, DR. MINDA J. FORMACI ON AND DR. EMERLINDA
ROMAN (TO BE SUBSTITUTED BY ALFREDO E. PASCUAL, BEING THE NEW UP
PRESIDENT), UNIVERSITY OF THE PHILIPPINES BOARD OF
REGENTS, RESPONDENTS.
RESOLUTION
BRION, J.:
This case involves the consolidated petitions of petitioner Flord Nicson Calawag in
G.R. No. 207412 and petitioners Micah P. Espia, Jose Marie F. Nasalga and Che Che
B. Salcepuedes in G.R. No. 207542 (hereinafter collectively known as petitioners),
both assailing the decision1 dated August 9, 2012 of the Court of Appeals (CA) in
CA-G.R. CEB-SP No. 05079. The CA annulled the Order 2 of the Regional Trial Court
(RTC) of Guimbal, Iloilo, Branch 67, granting a writ of preliminary mandatory
injunction against respondent Dean Carlos Baylon of the University of the
Philippines Visayas (UP Visayas).
The petitioners enrolled in the Master of Science in Fisheries Biology at UP Visayas
under a scholarship from the Department of Science and Technology-Philippine
Council for Aquatic and Marine Research and Development. They finished their
first year of study with good grades, and thus were eligible to start their thesis in
the first semester of their second year. The petitioners then enrolled in the thesis
program, drafted their tentative thesis titles, and obtained the consent of Dr. Rex
Balea to be their thesis adviser, as well as the other faculty members consent to
constitute their respective thesis committees. These details were enclosed in the
letters the petitioners sent to Dean Baylon, asking him to approve the composition
of their thesis committees. The letter contained the thesis committee members
and the thesis advisers approval of their titles, as well as the approval of Professor
Roman Sanares, the director of the Institute of Marine Fisheries and Oceanology.
Upon receipt of the petitioners letters, Dean Baylon wrote a series of memos
addressed to Professor Sanares, questioning the propriety of the thesis topics with
the colleges graduate degree program. He subsequently disapproved the
composition of the petitioners thesis committees and their tentative thesis topics.
According to Dean Baylon, the petitioners thesis titles connote a historical and
social dimension study which is not appropriate for the petitioners chosen
masters degrees. Dean Baylon thereafter ordered the petitioners to submit a two-
page proposal containing an outline of their tentative thesis titles, and informed
them that he is forming an ad hoc committee that would take over the role of the
adviser and of the thesis committees.
The petitioners thus filed a petition for certiorari and mandamus before the RTC,
asking it to order Dean Baylon to approve and constitute the petitioners thesis
committees and approve their thesis titles. They also asked that the RTC issue a
writ of preliminary mandatory injunction against Dean Baylon, and order him to
perform such acts while the suit was pending.
The RTC granted a writ of preliminary mandatory injunction, which Dean Baylon
allegedly refused to follow. UP Visayas eventually assailed this order before the CA
through a Rule 65 petition for certiorari, with prayer for a temporary restraining
order (TRO).
The CAs Ruling
The CA issued a TRO against the implementation of the RTCs order, holding that
the petitioners had no clear right to compel Dean Baylon to approve the
composition of their thesis committees as a matter of course. As the college dean,
Dean Baylon exercises supervisory authority in all academic matters affecting the
college. According to the CA, the petitioners reliance on Article 51 of the Graduate
Program Manual of UP Visayas is misplaced. Article 51 provides:
Art. 51. The composition of the thesis committee shall be approved by the dean of
the college/school upon the recommendation of the chairperson of the major
department/division/institute. The GPO shall be informed of the composition of
the thesis committee and/or any change thereof. 3
Despite the mandatory language provided for composing the thesis committee
under Article 51 of the Graduate Program Manual of UP Visayas, the CA construed
it to mean that the Deans approval is necessary prior to the composition of a
thesis committee.
Lastly, the CA held that the case presents issues that are purely academic in
character, which are outside the courts jurisdiction. It also noted that Dean Baylon
has been accommodating of the petitioners, and that the requirements he
imposed were meant to assist them to formulate a proper thesis title and graduate
on time.
The Petitions for Review on Certiorari
In G.R. No. 207412, Calawag argues that the CAs decision should be set aside for
the following reasons:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 72
First, Calawag was entitled to the injunction prayed for, as he has clear rights under
the law which were violated by Dean Baylons actions. These are the right to
education, the right to due process, and the right to equal protection under the
law. According to Calawag, Dean Baylon violated his right to due process when he
added to and changed the requirements for the constitution of his thesis
committee, without prior publication of the change in rules. Calawags right to
equal protection of the law, on the other hand, was allegedly violated because only
students like him, who chose Dr. Balea for their thesis adviser, were subjected to
the additional requirements imposed by the dean, while the other students thesis
committees were formed without these impositions. Hence, Calawag and the three
other petitioners in G.R. No. 207542 were unduly discriminated against.
Second, a reading of Executive Order No. 628, s. 1980,4 and Republic Act No.
95005 shows that the college deans functions are merely administrative, and,
hence, the CA erred in its construction of Article 51 of the Graduate Program
Manual of UP Visayas, as well as its proclamation that the college dean has
supervisory authority over academic matters in the college.
On the other hand, in G.R. No. 207542, petitioners Espia, Nasalga and Salcepuedes
argue that the CAs decision should be set aside for the following reasons:
First, the Graduate Program Manual of UP Visayas and the Guidelines for the
Master of Science in Fisheries Program are clear in providing that Dean Baylon has
a formal duty to approve the composition of the petitioners thesis committees
upon the latters compliance with several requirements. Thus, when the
petitioners complied with these requirements and Dean Baylon still refused to
approve the composition of their thesis committees, the petitioners had a right to
have him compelled to perform his duty.
Second, Dean Baylon cannot arbitrarily change and alter the manual and the
guidelines, and cannot use academic freedom as subterfuge for not performing his
duties.
Third, the thesis adviser and the thesis committees, in consultations with the
students, have the right to choose the thesis topics, and not the dean.
The Courts Ruling
Having reviewed the arguments presented by the petitioners and the records they
have attached to the petitions, we find that the CA did not commit an error in
judgment in setting aside the preliminary mandatory injunction that the RTC issued
against Dean Baylon. Thus, there could be no basis for the Courts exercise of its
discretionary power to review the CAs decision.
"To be entitled to a writ of preliminary injunction, x x x 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. 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. Accordingly, the issuance of
a writ of preliminary mandatory injunction [presents a fourth requirement: it] is
justified only in a clear case, free from doubt or dispute. 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." 6
The CA did not err in ruling that the petitioners failed to show a clear and
unmistakable right that needs the protection of a preliminary mandatory
injunction. We support the CAs conclusion that the dean has the discretion to
approve or disapprove the composition of a thesis committee, and, hence, the
petitioners had no right for an automatic approval and composition of their thesis
committees.
Calawags citation of Executive Order No. 628, s. 1980 and Republic Act No. 9500
to show that the dean of a college exercises only administrative functions and,
hence, has no ascendancy over the colleges academic matters, has no legal ground
to stand on. Neither law provides or supports such conclusion, as neither specifies
the role and responsibilities of a college dean. The functions and duties of a college
dean are outlined in the universitys Faculty Manual, which details the rules and
regulations governing the universitys administration. Section 11.8.2, paragraph b
of the Faculty Manual enumerates the powers and responsibilities of a college
dean, which include the power to approve the composition of a thesis committee,
to wit:
11.8.2 Administration
xxxx
b. Dean/Director of UP System or UP Diliman-based Programs * The Dean/Director
shall be responsible for the planning and
implementation of the graduate programs. In particular, the Dean/Director shall
exercise the following powers and responsibilities based on the recommendations
forwarded to him/her, through channels:

xxxx
Approve the composition of the Thesis, Dissertation or Special Project**
Committees and Masters or doctoral examination/oral defense panel for each
student[.]7 (emphases and italics ours)
By necessary implication, 8 the deans power to approve includes the power to
disapprove the composition of a thesis committee. Thus, under the UP Systems
faculty manual, the dean has complete discretion in approving or disapproving the
composition of a thesis committee. Harmonizing this provision with the Graduate
Program Manual of UP Visayas, and the Guidelines for the Master of Science in
Fisheries Program, we agree with the CAs interpretation that the thesis
committees composition needs the approval of the dean after the students have
complied with the requisites provided in Article 51 of the Graduate Program
Manual and Section IX of the Guidelines for the Master of Science in Fisheries
Program.9
Anent the petitioners argument that Dean Baylon acted arbitrarily in imposing
additional requirements for the composition of the thesis committee, which
according to Calawag violated their right to due process, we hold that the deans
authority to approve or disapprove the composition of a thesis committee includes
this discretion. We also note the CAs finding that these additional requirements
were meant to assist the petitioners in formulating a thesis title that is in line with
the colleges master of fisheries program. Absent any finding of grave abuse of
discretion, we cannot interfere with the exercise of the deans prerogative without
encroaching on the colleges academic freedom.
Verily, the academic freedom accorded to institutions of higher learning gives them
the right to decide for themselves their aims and objectives and how best to attain
them.10 They are given the exclusive discretion to determine who can and cannot
study in them, as well as to whom they can confer the honor and distinction of
being their graduates.11
This necessarily includes the prerogative to establish requirements for graduation,
such as the completion of a thesis, and the manner by which this shall be
accomplished by their students. The courts may not interfere with their exercise of
discretion unless there is a clear showing that they have arbitrarily and capriciously
exercised their judgment.12
Lastly, the right to education invoked by Calawag cannot be made the basis for
issuing a writ of preliminary mandatory injunction. In Department of Education,
Culture and Sports v. San Diego, 13 we held that the right to education is not
absolute. Section 5(e), Article XIV of the Constitution provides that "[e]very citizen
has a right to select a profession or course of study, subject to fair, reasonable, and
equitable admission and academic requirements." The thesis requirement and the
compliance with the procedures leading to it, are part of the reasonable academic
requirements a person desiring to complete a course of study would have to
comply with.
WHEREFORE, the Court resolves to DENY giving due course to the petitions in G.R.
No. 207412 and G.R. No. 207542.
SO ORDERED.
EN BANC
I.P.I. No. 16-241-CA-J, November 29, 2016
CLEMENTE F. ATOC, Complainant, v. EDGARDO A. CAMELLO, OSCAR V. BADELLES
AND PERPETUA T. ATAL-PAO, ASSOCIATE JUSTICES, COURT OF APPEALS,
CAGAYAN DE ORO CITY. Respondents.
DECISION
PEREZ, J.:
This refers to the verified complaint1 dated 12 January 2016 filed by Clemente F.
Atoc (complainant) charging Edgardo A. Camello (Justice Camello), Oscar V.
Badelles (Justice Badelles) and Perpetua T. Atal-Pao (Justice Atal-Pao), all
Associate Justices of the Court of Appeals (CA), Cagayan de Oro City, with gross
ignorance of the law, gross violation of Attorney's oath, gross violation of Code of
Professional Responsibility (Canon 1, Rules 7.03, 10.01, 10.03), gross violation of
Code of Judicial Conduct (Canon 1, Rules 1.01 and 1.02; Canon 3, Rules 3.01 and
3.02), gross violation of Professional Ethics (22), gross violation of Code of Judicial
Ethics (2, 5, 8, 22 and 31), grave abuse of authority, gross misconduct, manifest
partiality, gross violation of Sections 4(a), 4(b) and 4(c) of Republic Act (R.A.) No.
6713, and gross violation of Section 3(e) of R.A. No. 3019.
The complaint stemmed from the resolutions 2 the respondent justices issued in
CA-G.R. SP Nos. 07072-MIN and 07073-MIN entitled "Oscar S. Moreno and Glenn
C. Baez v. Han. Conchita Carpio Morales in her capacity as the Ombudsman;
Department of the Interior and Local Government represented by Hon. Mel Senen
Sarmiento in his capacity as Secretary and William G. Guilani."
Culled from the records are the following antecedent facts:cralawlawlibrary
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 73
On 13 March 2015,3 William G. Guillani filed a complaint for grave abuse of
authority, grave misconduct and violation of Republic Act No. 6713 against Oscar S.
Moreno (Moreno) and Glenn C. Baez (Baez), in their capacity as City Mayor and
Officer-in-charge Treasurer, respectively, of the Local Government Unit of Cagayan
de Oro City, before the Office of the Ombudsman-Mindanao (OMB).
In a Decision dated 14 August 2015; the OMB found Moreno and Baez
administratively guilty of grave misconduct. The dispositive portion of the decision
reads:chanRoblesvirtualLawlibrary
WHEREFORE, the Office finds respondents Oscar S. Moreno and Glenn C. Baez
GUILTY of Grave Misconduct and are meted out the penalty of Dismissal from
service, including the accessory penalties of cancellation of eligibility, forfeiture of
retirement benefits, and the perpetual disqualification for re-employment in the
government service. Further, the charges of Grave Abuse of Authority and violation
of R.A. No. 6713 are dismissed.4 (Underlining omitted)
On 3 November 2015, the OMB furnished the Department of Interior and Local
Government (DILG) copy of the decision for implementation of the order of
dismissal against Moreno and Baez.5
In order to stay the implementation of the OMB decision, Moreno and Baez filed
their respective Petitions for Certiorari with Extremely Urgent Prayer for Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction (WPI) on 11
November 2015.
On 12 November 2015, the DILG served a copy of the decision on Moreno. 6
On even date, incumbent Vice Mayor Caesar Ian Acenas and Councilor Candy
Darimbang were sworn in office and assumed the positions of City Mayor and Vice
Mayor of Cagayan de Oro City, respectively.
On 13 November 2015, the CA issued a resolution granting Moreno and Baez's
prayer for issuance of a TRO. The TRO which is effective for a period of 60 days,
unless sooner revoked, enjoined the DILG, its officers and agents and all persons
acting under them, from enforcing, implementing and effecting the OMB decision
which dismissed Moreno and Baez from the service.7
On 17 November 2015, the DILG filed a Manifestation informing the CA that as of
6:12 in the evening of 12 November 2015, it has already implemented the OMB
decision dismissing Moreno and Baez from the service. The DILG averred that it
was only on 13 November 2015 at around 7:32 in the evening that it received a
copy of the CA resolution granting the TRO.8
On the same date, the DILG filed a second pleading denominated as Manifestation
with Urgent Motion for Clarification. The motion seeks to clarify as to who should
be recognized as Mayor of Cagayan de Oro City considering that the department
received the' CA Resolution on the granting of the TRO a day after the OMB
decision was served and implemented against Moreno. 9
On 18 November 2015, the CA issued a resolution clarifying the validity and
enforceability of the TRO it earlier issued. The CA ratiocinated
that:chanRoblesvirtualLawlibrary
In the instant case, the last actual, peaceable and uncontested condition before
the DILG the assailed Ombudsman Decision is petitioner Oscar Moreno sitting as
the elected Cagayan de Oro City Mayor and Glenn Baez as the Officer-in-Charge of
the City Treasurer's Office. Therefore, that is the situation sought to be upheld by
the TRO pending the resolution of the injunction. The status existing at the time
the present petition was filed before this [c]ourt was that the mayor and the
officer-in-charge of the City Treasurer's office were herein [Moreno and Baez].
That precisely is the status referred to in a TRO taking into account the litany of
decisions defining how a TRO operates. To construe otherwise would counter
settled jurisprudence. In fact, the DILG has correctly understood and captured the
concept and essence of a restraining order. x x x10
The dispositive portion of the resolution thus reads:chanRoblesvirtualLawlibrary
In view thereof, there is nothing further to elucidate. The DILG appropriately
acknowledged [Moreno and Baez'] powers and authority by virtue of the TRO
issued by this [c]ourt. That declaration of the DILG, a party to this case, is
conclusive as to the status quo sought to be preserved by [o]ur TRO which binds all
parties, agencies or persons concerned to refrain from doing any act or acts
disruptive of the status quo.11
The aforesaid resolution was penned by Associate Justice Henri Jean Paul B. Inting
with Associate Justices Camello and Pablito A. Perez concurring.
On 11 January 2016,12 the CA, through Associate Justice Camello as ponente with
the concurrence of Associate Justices Badelles and Atal-Pao, issued a Writ of
Preliminary Injunction to be effective throughout the pendency of the action
unless elsewhere revoked or modified, enjoining and preventing the respondent
DILG, its officers, agents, and/or any person assisting it or acting for and in its
behalf, from enforcing and implementing the 14 August 2015 decision of the OMB.

Claiming that he was aggrieved by the resolutions issued by the CA in the subject
cases, complainant, a resident of Cagayan de Oro City, filed a verified complaint
against the respondent associate justices of the CA who issued the latest resolution
praying that they be disbarred and their names be deleted as members of the
Integrated Bar of the Philippines (IBP).
On 26 July 2016, this Court required the respondent associate justices to comment
on the complaint.
In compliance with the Court's directive, the respondent associate justices
submitted their Joint Comment13 on 11 October 2016.
They reported that not so long after the CA issued the TRO dated 13 November
2015 on the subject case, complainant charged the members of the Special
22nd Division of the CA, which was then composed of Justices Camello, Henri Jean
Paul B. Inting (Justice-in-charge), and Pablito A. Perez, with gross ignorance of the
law, gross violation of attorney's oath, gross violation of the Code of Professional
Responsibility, gross violation of the Code of Judicial Conduct, gross violation of
professional ethics, gross violation of the Code of Judicial Ethics, grave abuse of
authority, gross misconduct, manifest partiality, and violation of R.A. No. 3019. The
complaint was docketed as I.P.I. No. 16-238-CA-J (Re: Verified Complaint of
Clemente F. Atoc).
They further reported that when the CA upgraded the provisional remedy of TRO
to a Writ of Preliminary Injunction on 11 January 2016, complainant hastily
recycled his previous complaint against Justices Camello, Henri Jean Paul B. Inting
and Pablito A. Perez and accused this time the members of the Special
22nd Division, now composed of herein respondent Justices Camello, Badelles and
Atal-Pao, of the exact violations, based on the exact same circumstances, and
raising the exact same issues. They noted that complainant even recycled in the
subsequent complaint his original Verification and Certification of Non-Forum
Shopping. Complainant certified that he' has not filed any complaint involving the
same issue/issues before the Supreme Court, Court of Appeals, any tribunal or
agency, when he knows for a fact that I.P.I. No. 16-238-CA-J is still pending.
The respondent associate justices thus iterate the same plea for the dismissal of
the utterly baseless complaint and adopts in regard to the instant suit of
complainant, the very same comment on complainant's complaint in I.P.I. No. 16-
238-CA-J.
The respondent justices submit that case law has been consistent in its caveat that
where judicial relief is still available, whether it be ordinary or extra-ordinary
remedy, resort to administrative complaint is not allowed. 14 They maintain that the
preclusive principle that bars parties to a pending suit from by-passing judicial
remedies by resorting to administrative suits against judges applies even more to
complainant who is not even a party or privy, but a total stranger to the pending
petitions before the CA.15
We find the charges against respondent Associate Justices bereft of merit.
At the outset, it is clear that the assailed resolutions were issued by respondent
Associate Justices in the proper exercise of their judicial functions. As such, these
are not subject to administrative disciplinary action. Other than complainant's bare
allegations, there were no evidence presented to show any wrong-doings or bad
faith on the part of respondent associate justices. We have settled the rule that a
judge may not be administratively sanctioned from mere errors of judgment in the
absence of showing of any bad faith, fraud, malice, gross ignorance, corrupt
purpose, or a deliberate intent to do an injustice on his or her part.16 Judicial
officers cannot be subjected to administrative disciplinary actions for their
performance of duty in good faith.17
To be held liable for gross ignorance of the law, it must be shown that in the
issuance of the assailed resolutions, the justices have committed an error that was
gross or patent, deliberate or malicious. 18In the instant case, it was shown that the
justices based their findings on existing facts and jurisprudence. There was no
proof presented to show that they were moved by ill-will or malicious intention to
violate the law and extend favor to a party. In fact, their findings were thoroughly
discussed in the ratio decidendi of the resolution.
In assailing the resolutions issued by the CA, complainant failed to realize that
unfavorable rulings are not necessarily erroneous. If a party disagrees with a ruling
of the court, assuming these were incorrect, there are judicial remedies available
to them under the Rules of Court. As a matter of public policy, a judge cannot be
subjected to liability for any of his official acts, no matter how erroneous, as long as
he acts in good faith. To hold otherwise would be to render judicial office
untenable, for no one called upon to try the facts or interpret the law in the
process of administering justice can be infallible in his judgment.19
Moreover, we have explained that administrative complaints against magistrates
cannot be pursued simultaneously with the judicial remedies accorded to parties
aggrieved by the erroneous orders or judgments of the former. Administrative
remedies are neither alternative to judicial review nor do they cumulate thereto,
where such review is still available to the aggrieved parties and the cases not yet
been resolved with finality.20 Here, it is evident that the parties aggrieved by the
resolution can avail or may have already availed of other judicial remedies. Quite
significant is the fact that the instant administrative complaint was filed by
someone who is not a party or privy to the case. As correctly noted by the
respondent justices in their Joint-Comment, Atoc did not even disclose the capacity
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 74
in which he brings the present administrative complaint.
Anent the determination on whether the respondent Associate Justices made an
error in enjoining the decision of the OMB, the same would be squarely addressed
by this Court the moment the issue is raised before it in a proper judicial
proceeding. We cannot make a ruling in this administrative case on the correctness
of the issuance of the injunction.21
We stated in the case of Morales I v. CA Justices Real-Dimagiba, Lopez and
Garcia:22chanroblesvirtuallawlibrary
To press the point, the present Resolution should not be read as an
allowance carte blanche for the issuance of TROs against the OMB's decision in
criminal and administrative complaints against officials and employees of the
government. Foremost, we did not rule on the validity of the issuance of the TRO
by the respondent associate justices. What we said is that there is a relevant ruling
in the Binay, Jr. case which removes the issuance by respondent associate justices
from the ambit of gross ignorance of the law. Just as important, the validity of the
issuance of a TRO, owing to the fact that a TRO is merely a provisional remedy
which is an adjunct to a main suit, which in this case is the main petition of Mayor
Gatchalian pending before the CA, is a judicial issue that cannot be categorically
resolved in the instant administrative matter.
xxxx
The remedy against the issuance of the TRO is unarguably and by its very nature,
resolvable only thru judicial procedures which are, a motion for reconsideration
and, if such motion is denied, a special civil action of certiorari under Rule 65. It is
the ruling granting the prayer for the writ of certiorari that a basis for an
administrative action against the judge issuing the TRO may arise. Such happens
when, from the decision on the validity of the issuance, there is a pronouncement
that indicates gross ignorance of the law of the issuing judge. The instant
administrative complaint cannot be a substitute for the aforesaid judicial remedies.
WHEREFORE, in view of the foregoing, the instant administrative complaint filed by
Clemente F. Atoc against Associate Justices Edgardo A. Camello, Oscar V. Badelles
and Perpetua T. Atal-Pao, all of the Court of Appeals, Cagayan de Oro City, is
hereby DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 189026, November 09, 2016
PHILIPPINE TELEGRAPH TELEPHONE CORP., Petitioner, v. SMART
COMMUNICATIONS, INC., Respondent.
DECISION
JARDELEZA, J.:
Since 1979, the National Telecommunications Commission (NTC) has been the lead
government agency in charge of regulating the telecommunications industry. The
Public Telecommunications Policy Act of the Philippines1 (RA 7925) gave the NTC
the authority to approve or adopt access charge arrangements between two public
telecommunication entities. The issues here are whether the NTC has primary
jurisdiction over questions involving access charge stipulations in a bilateral
interconnection agreement, and whether regular courts can restrain the NTC from
reviewing the negotiated access charges.chanroblesvirtuallawlibrary
I
Petitioner Philippine Telegraph & Telephone Corporation (PT&T) and respondent
Smart Communications, Inc. (Smart) entered into an Agreement 2 dated June 23,
1997 for the interconnection of their telecommunication facilities. The Agreement
provided for the interconnection of Smart's Cellular Mobile Telephone System
(CMTS), Local Exchange Carrier (LEC) and Paging services with PT&T's LEC service.
Starting 1999, however, PT&T had difficulty meeting its financial obligations to
Smart.3 Thus, on November 28, 2003, the parties amended the Agreement, which
extended the payment period and allowed PT&T to settle its obligations on
installment basis. The amended Agreement also specified, among others, that
Smart's access charge to PT&T would increase from P1.00 to P2.00 once PT&T's
unpaid balance reaches P4 Million and that PT&T's access charge to Smart would
be reduced from P8.69 to P6.50. Upon full payment, PT&T's access charge would
be further reduced to P4.50.4
On April 4, 2005, Smart sent a letter informing PT&T that it increased the access
charge from P1.00 to P2.00 starting April 1, 2005 in accordance with the amended
Agreement. However, on September 2, 2005, PT&T sent a letter to Smart claiming
that the latter overcharged PT&T on outbound calls to Smart's CMTS.5 PT&T cited
the NTC resolution in a separate dispute between Smart and Digitel, where the
NTC ultimately disallowed the access charges imposed by Smart for being
discriminatory and less favorable than terms offered to other public
telecommunication entities (PTEs). Accordingly, PT&T demanded a refund of

P12,681,795.13 from Smart.6
Thereafter, on September 15, 2005, PT&T filed a letter-complaint with the NTC
raising the issue that the access charges imposed by Smart were allegedly
"discriminatory and not in conformity with those of other carriers." 7 On January
20, 2006, the NTC ordered Smart and PT&T to attend mediation conferences in
order to thresh out the issues.8 After the mediation efforts failed, the NTC directed
the parties to file their respective pleadings, after which it would consider the case
submitted for resolution. But before the parties were able to submit the pleadings,
Smart filed a complaint with the Regional Trial Court of Makati City (RTC) against
PT&T on April 7, 2006.9 Smart alleged that PT&T was in breach of its contractual
obligation when it failed to pay its outstanding debt and denied its liability to
Smart. Accordingly, Smart prayed that PT&T be ordered to pay the sum of
P1,387,742.33 representing its unpaid obligation and to comply with the amended
Agreement.10 Smart also asked the RTC to issue a temporary restraining order
against the NTC and PT&T, which the RTC granted on April 25, 2006.11
In its answer to the complaint, 12 PT&T sought for the dismissal of the civil case on
the grounds of lack of jurisdiction, non-observance of the doctrine of primary
jurisdiction, exhaustion of administrative remedies, litis pendentia and res judicata.
It also prayed that the restraining order be immediately set aside. After several
hearings, the RTC issued a writ of preliminary injunction in favor of Smart.13 The
RTC reasoned that allowing the NTC to proceed and adjudicate access charges
would violate Smart's contractual rights. The RTC also denied PT&T's motion to
dismiss, finding that the nature of the civil case was incapable of pecuniary
estimation which squarely falls within its jurisdiction.14 It added that the NTC has
no jurisdiction to adjudicate breaches of contract and award damages.
PT&T elevated the case to the Court of Appeals through a petition for certiorari.
The Court of Appeals held that the RTC did not commit grave abuse of discretion
and, consequently, denied the petition.15It found that the RTC had jurisdiction over
the case because it involved an action for specific performance, i.e., PT&T's
compliance with the Agreement, and is therefore incapable of pecuniary
estimation. And insofar as the dispute involved an alleged breach of contract, there
was no need to refer the matter to the NTC because it had no jurisdiction over
breach of contract cases.16
After its motion for reconsideration was denied by the Court of Appeals, PT&T filed
this petition for review17 seeking to overturn the RTC's order of injunction and non-
dismissal of Smart's complaint. PT&T principally argues that the NTC has primary
jurisdiction over the determination of access charges. PT&T characterizes the NTC
case as one involving the validity of interconnection rates, as opposed to one
involving purely a breach of contract and claim for damages cognizable by the RTC.
PT&T adds that the writ of preliminary injunction issued by the RTC against NTC
constitutes interference with a co-equal body. Smart counters by claiming that the
dispute was purely contractual; hence, it properly falls within the jurisdiction of the
RTC. Although the Agreement contained technical terms, Smart's position is that
the NTC has no jurisdiction over bilateral interconnection agreements voluntarily
negotiated and entered into by PTEs.chanroblesvirtuallawlibrary
II
Like the Court of Appeals below, Smart relies on the argument that its complaint
before the RTC is one which is incapable of pecuniary estimation and, accordingly,
falls within the RTC's jurisdiction. Smart's theory is that, because it is seeking to
enforce the Agreement, the action falls within the ruling of Boiser v. Court of
Appeals18 that the regular courts, not the NTC, have jurisdiction over cases
involving breach of contract and damages. Invoking the freedom to contract and
non-impairment clause, Smart posits that "[t]he specialized knowledge and
expertise of the NTC is not indispensable or even necessary in this case since x x x
[Smart] simply seeks to enforce and implement the contractual agreement
between the parties and their rights and obligations in relation
thereto."19 Responding to PT&T's claim that it is seeking the NTC intervention only
to resolve the issue on validity of the rates of charges between the two PTEs, Smart
downplays this by stating that there is no dispute on the applicable rates since
these were already stated in the Agreement.20
We cannot agree with Smart's position. While it is true that regional trial courts, as
courts of general jurisdiction, can take cognizance of cases that are incapable of
pecuniary estimation-including actions for breach of contract and damages-the fact
that the interconnection agreement between Smart and PT&T involved access
charges warrants a more nuanced analysis.
RA 7925 recognizes and encourages bilateral negotiations between PTEs, but it
does not strictly adopt a laissez-faire policy. It imposes strictures that restrain
within reason how PTEs conduct their business.21 The law aims to foster a healthy
competitive environment by striking a balance between the freedom of PTEs to
make business decisions and to interact with one another on the one hand and the
affordability of rates on the other.22 However, one can speak of healthy competition
only between equals. Thus, consistent with Section 19,23 Article XII of the
Constitution, RA 7925 seeks to break up the monopoly in the telecommunications
industry by gradually dismantling the barriers to entry and granting new industry
entrants protection against dominant carriers through equitable access charges
and equal access clauses in interconnection agreements and through the strict
policing of predatory pricing by dominant carriers.24
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 75
Specifically, Section 18 of RA 7925 regulates access charge arrangements between
two PTEs:chanRoblesvirtualLawlibrary
Access Charge/Revenue Sharing. - The access charge/revenue sharing
arrangements between all interconnecting carriers shall be negotiated between
the parties and the agreement between the parties shall be submitted to the
Commission. In the event the parties fail to agree thereon within a reasonable
period of time, the dispute shall be submitted to the Commission for resolution.
In adopting or approving an access charge formula or revenue sharing agreement
between two or more carriers, particularly, but not limited to a local exchange,
interconnecting with a mobile radio, interexchange long distance carrier, or
international carrier, the Commission shall ensure equity, reciprocity and fairness
among the parties concerned. In so approving the rates for interconnection
between the telecommunications carriers, the Commission shall take into
consideration the costs of the facilities needed to complete the interconnection,
the need to provide the cross-subsidy to local exchange carriers to enable them
to fulfill the primary national objective of increasing telephone density in the
country and assure a rate of return on the local exchange network investment
that is at parity with those earned by other segments of the telecommunications
industry: Provided, That international carriers and mobile radio operators which
are mandated to provide local exchange services, shall not be exempt from the
requirement to provide the cross-subsidy when they interconnect with the local
exchanges of other carriers: Provided, further, That the local exchanges which they
will additionally operate, shall equally be entitled to the cross-subsidy from other
international carriers, mobile radio operators, or inter-exchange carriers
interconnecting with them. (Emphasis supplied.)
The first paragraph mandates that any agreement pertaining to access charges
must be submitted to the NTC for approval; in case the parties fail to agree, the
matter shall be resolved by the NTC. Smart contends that the NTC's authority
under the second paragraph of Section 18 is limited to instances where the parties
fail to agree on the rates. This interpretation is incorrect. There is no indication
that-and Smart has not pointed to any significant reason why-the second
paragraph of Section 18 should be construed as limited to the latter instances. On
the contrary, We observe that Congress deliberately used the word "approve," in
conjunction with "adopt," in describing the action that the NTC may take. The plain
dictionary meaning of approve is "to express often formally agreement with and
support of or commendation of as meeting a standard." 25 This presupposes that
something has been submitted to the NTC, as the approving authority, contrasted
with the NTC adopting its own formula. Under Section 18, it is either the access
charge formula or revenue-sharing arrangement that is submitted to the NTC for
approval. Smart and PT&T's Agreement, insofar as it specifies the access charge
rates for the interconnection of their networks, falls within the coverage of the
provision. Therefore, the Agreement should have been submitted to the NTC for its
review and approval in accordance with the second paragraph of Section 18.
Conspicuously, however, neither Smart nor PT&T claims that the access charges in
the Agreement have been submitted to, much less approved, by the NTC. This
further justifies the intervention of the NTC.
It is clear that the law did not intend the approval to simply be a ministerial
function. The second paragraph of Section 18 enumerates the guidelines to be
considered by the NTC before it approves the access charges. Thus, the NTC must
be satisfied that the access charge formula is fair and reasonable based on factors
such as cost, public necessity and industry returns; otherwise, it has the discretion
to disapprove the rates in the event that it finds that they fall short of the statutory
standards.26 Evidently, the proceeding under Section 18 is quasi-judicial in nature.
Any action by the NTC would particularly and immediately affect the rights of the
interconnecting PTEs-in this case, Smart and PT&T-rather than being applicable to
all PTEs throughout the Philippines. 27 The NTC, therefore, correctly treated the
dispute as adversarial and gave both Smart and PT&T the opportunity to be heard.
The mere fact that Smart and PT&T negotiated and executed a bilateral
interconnection agreement does not take their stipulations on access charges out
of the NTC's regulatory reach. This has to be so in order to further one of the
declared policies of RA 7925 of expanding the telecommunications network by
improving and extending basic services in unserved and underserved areas at
affordable rates.28 A contrary ruling would severely limit the NTC's ability to
discharge its twin mandates of protecting consumers and promoting consumer
welfare,29 and would go against the trend towards greater delegation of judicial
authority to administrative agencies in matters requiring technical
knowledge.30 Smart cannot rely on the non-impairment clause because it is a limit
on the exercise of legislative power and not of judicial or quasi-judicial power. 31 As
discussed in the preceding paragraph, the approval of the access charge formula
under Section 18 is a quasi-judicial function.
The foregoing interpretation is equally supported by the structure of RA 7925.
Congress gave the NTC broad powers over interconnection matters in order to
achieve the goal of universal accessibility. Apart from the authority to approve or
adopt interconnection rates, the NTC can even "[m]andate a fair and reasonable
interconnection of facilities of authorized public network operators and other
providers of telecommunications services through appropriate modalities of
interconnection and at a reasonable and fair level of charges, which make provision
for the cross subsidy to unprofitable local exchange service areas so as to promote
telephone density and provide the most extensive access to basic
telecommunications services available at affordable rates to the public." 32 Such
extensive powers may generally be traced to the Constitution, which recognizes

the vital role of communication and information in nationbuilding.33 In Philippine
Long Distance Telephone Co. (PLDT) v. National Telecommunications
Commission,34 we explained why the NTC may regulate-in that case, mandate-
interconnection between PTEs:chanRoblesvirtualLawlibrary
The interconnection which has been required of PLDT is a form of "intervention"
with property rights [recognized by Article XII, Section 6 of the Constitution]
dictated by "the objective of government to promote the rapid expansion of
telecommunications services in all areas of the Philippines, x x x to maximize the
use of telecommunications facilities available, x x x in recognition of the vital role
of communications in nation building x x x and to ensure that all users of the public
telecommunications service have access to all other users of the service wherever
they may be within the Philippines at an acceptable standard of service and at
reasonable cost" (DOTC Circular No. 90-248). Undoubtedly, the encompassing
objective is the common good. The NTC, as the regulatory agency of the State,
merely exercised its delegated authority to regulate the use of telecommunications
networks when it decreed interconnection.
xxx
The decisive considerations are public need, public interest, and the common
good. x x x Article II, Section 24 of the 1987 Constitution, recognizes the vital role
of communication and information in nation building. It is likewise a State policy to
provide the environment for the emergence of communications structures suitable
to the balanced flow of information into, out of, and across the country (Article
XVI, Section 10, x x x). A modem and dependable communications network
rendering efficient and reasonably priced services is also indispensable for
accelerated economic recovery and development. To these public and national
interests, public utility companies must bow and yield.35 (Emphasis omitted.)
The same reasoning obtains here. Access charges directly affect the State's goal of
making basic telecommunications services accessible to everyone at affordable
rates. If the access charges are too high, the cost to end-users may well be
prohibitive. Smart cannot simply invoke the freedom of contract to shield it from
the intervention of the NTC, especially when the law itself sanctions the agency's
intervention. As correctly pointed out by PT&T, "[b]ecause petitioner and
respondent are public utility PTEs subject to regulation by the NTC, their freedom
to enter into contracts is not absolute but subject to the police power of the State,
especially when it comes to matters affecting public interest and convenience." 36
The case relied upon by Smart, Boiser, finds no application here for the simple
reason that the dispute in that case did not involve access charges. Boiser arose
from PLDT's alleged failure to observe the 30-day predisconnection notice
requirement stated in the parties' Interconnecting Agreement. In holding that
regular courts had jurisdiction, we said that "[t]here is nothing in the Commission's
powers which authorizes it to adjudicate breach of contract cases, much less to
award moral and exemplary damages."37 In stark contrast, jurisdiction over
negotiated access charge formulas, such as Smart and PT&T's Agreement, has been
allocated to the NTC by express provision of law.
In fine, Section 18 of RA 7925 authorizes the NTC to determine the equity,
reciprocity and fairness of the access charges stipulated in Smart and PT&T's
Agreement. This does not, however, completely deprive the RTC of its jurisdiction
over the complaint filed by Smart. The Agreement has other stipulations which do
not require the NTC's expertise. But insofar as Smart's complaint involved the
enforcement of, as well as the collection of sums based on the rates subject of the
NTC proceedings, the RTC cannot proceed with the civil case until the NTC has
finally determined if the access charges are fair and reasonable. Hence, the more
prudent course of action for the RTC would have been to hold the civil action in
abeyance until after a determination of the NTC case. Indeed, logic and the
doctrine of primary jurisdiction dictate such move. In San Miguel Properties, Inc. v.
Perez,38 we held that:chanRoblesvirtualLawlibrary
The doctrine of primary jurisdiction has been increasingly called into play on
matters demanding the special competence of administrative agencies even if such
matters are at the same time within the jurisdiction of the courts. A case that
requires for its determination the expertise, specialized skills, and knowledge of
some administrative board or commission because it involves technical matters or
intricate questions of fact, relief must first be obtained in an appropriate
administrative proceeding before a remedy will be supplied by the courts although
the matter comes within the jurisdiction of the courts. The application of the
doctrine does not call for the dismissal of the case in the court but only for its
suspension until after the matters within the competence of the administrative
body are threshed out and determined.
To accord with the doctrine of primary jurisdiction, the courts cannot and will not
determine a controversy involving a question within the competence of an
administrative tribunal, the controversy having been so placed within the special
competence of the administrative tribunal under a regulatory scheme. In that
instance, the judicial process is suspended pending referral to the administrative
body for its view on the matter in dispute. Consequently, if the courts cannot
resolve a question that is within the legal competence of an administrative body
prior to the resolution of that question by the latter, especially where the question
demands the exercise of sound administrative discretion requiring the special
knowledge, experience, and services of the administrative agency to ascertain
technical and intricate matters of fact, and a uniformity of ruling is essential to
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 76
comply with the purposes of the regulatory statute administered, suspension or
dismissal of the action is proper.39 (Emphasis supplied; citations omitted.)
Here, it would be more proper for the RTC to yield its jurisdiction in favor of the
NTC since the determination of a central issue, i.e., the matter of access charges,
requires the special competence and expertise of the latter. "In this era of clogged
court dockets, administrative boards or commissions with special knowledge,
experience and capability to promptly hear and determine disputes on technical
matters or intricate questions of facts, subject to judicial review in case of grave
abuse of discretion, are well-nigh indispensable. Between the power lodged in an
administrative body and a court, therefore, the unmistakable trend is to refer it to
the former."40
III
Under Rule 58, Section 2 of the 1997 Rules of Civil Procedure, the court where the
action is pending may grant the provisional remedy of preliminary injunction.
Generally, trial courts have the ancillary jurisdiction to issue writs of preliminary
injunction in cases falling within its jurisdiction, including civil actions that are
incapable of pecuniary estimation41 and claims for sum of money exceeding
P400,000.00,42 among others. There are, however, exceptions to this rule, such as
when Congress, in the exercise of its power to apportion jurisdiction, 43 restricts the
authority of regular courts to issue injunctive reliefs. For example, the Labor Code
prohibits any court from issuing injunctions in cases involving or arising from labor
disputes.44 Similarly, Republic Act No. 897545 (RA 8975) provides that no court,
other than the Supreme Court, may issue provisional injunctive reliefs which would
adversely affect the expeditious implementation and completion of government
infrastructure projects.46 Another well-recognized exception is that courts could
not interfere with the judgments, orders, or decrees of a court of concurrent or
coordinate jurisdiction.47 This rule of non-interference applies not only to courts of
law having equal rank but also to quasi-judicial agencies statutorily at par with such
courts.48
The NTC was created pursuant to Executive Order No. 54649 (EO 546), promulgated
on July 23, 1979. It assumed the functions formerly assigned to the Board of
Communications and the Telecommunications Control Bureau and was placed
under the administrative supervision of the Ministry of Public Works. Meanwhile,
the Board of Communications previously exercised the authority which originally
pertained to the Public Service Commission (PSC).50 Under Executive Order No.
125,51 issued in January 1987, the NTC became an attached agency of the
Department of Transportation and Communications.
Section 16 of EO 546 provides that, with respect to the NTC's quasi-judicial
functions, its decisions shall be appealable in the same manner as the decisions of
the Board of Communications had been appealed. The rulings and decisions of the
Board were, in turn, appealable in the same manner as the rulings and decisions of
the PSC.52 Under Section 35 of the Public Service Act, the Supreme Court had
jurisdiction to review any order, ruling, or decision of the PSC.53 In Iloilo
Commercial and Ice Company v. Public Service Commission, 54 we categorically held
that courts of first instance have no power to issue a restraining order directed to
the PSC.55 In that case, the PSC instructed the city fiscal to file a criminal action
against the owner and manager of Iloilo Commercial and Ice Company for allegedly
operating a public utility without the required certificate of public convenience.
The company brought a complaint in the Court of First Instance of Iloilo for an
injunction to restrain the PSC from proceeding against the company and its
officers. The Court, speaking through Justice Malcolm,
said:chanRoblesvirtualLawlibrary
The Public Service Law, Act No. 3108, as amended, creates a Public Service
Commission which is vested with the powers and duties therein specified. The
Public Service Commissioners are given the rank, prerogatives, and privileges of
Judges of First Instance. Any order made by the commission may be reviewed on
the application of any person or public service affected thereby, by certiorari, in
appropriate cases or by petition, to the Supreme Court, and the Supreme Court is
given jurisdiction to review any order of the Commission and to modify or set it
aside (sec. 35).
x x x In the absence of a specific delegation of jurisdiction to Courts of First
Instance to grant injunctive relief against orders of the Public Service
Commission, it would appear that no court, other than the Supreme Court,
possesses such jurisdiction. To hold otherwise would amount to a presumption of
power in favor of one branch of the judiciary, as against another branch of equal
rank. If every Court of First Instance had the right to interfere with the Public
Service Commission in the due performance of its functions, unutterable confusion
would result. The remedy at law is adequate, and consists either in making the
proper defense in the criminal action or in the Ice Company following the
procedure provided in the Public Service Law. An injunction is not the proper
remedy, since other and exclusive remedies are prescribed by law. 56 (Emphasis
supplied.)
The above ruling is deemed to have been modified by Batas Pambansa Blg. 129,
which granted the Court of Appeals exclusive appellate jurisdiction over "all final
judgments, resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commission" except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution
and the Labor Code.57 In this regard, Rule 43 of the Rules of Court provides that an

appeal from any award, judgment or resolution of or authorized by a quasi-judicial
agency in the exercise of its quasi-judicial functions, including the NTC, shall be
through a petition for review with the Court of Appeals.58
In view of the legislative history of the NTC, it is clear that Congress intended NTC,
in respect of its quasi-judicial or adjudicatory functions, to be co-equal with
regional trial courts. Hence, the RTC cannot interfere with the NTC's exercise of its
quasi-judicial powers without breaching the rule of non-interference with tribunals
of concurrent or coordinate jurisdiction. In this case, the NTC was already in the
process of resolving the issue of whether the access charges stipulated in the
Agreement were fair and equitable pursuant to its mandate under RA 7925 when
the RTC issued the assailed writ of preliminary injunction. Mediation conferences
had been conducted and, failing to arrive at a settlement, the NTC had ordered the
parties to submit their respective pleadings. Simply put, the NTC had already
assumed jurisdiction over the issue involving access charges. Undeniably, the RTC
exceeded its jurisdiction when it restrained the NTC from exercising its statutory
authority over the dispute.
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated February 18,
2009, as well as the Resolution dated July 23, 2009, of the Court of Appeals in CA-
G.R. SP No. 97737 are SET ASIDE. The writ of preliminary injunction issued by the
Regional Trial Court, Branch 146, Makati City is DISSOLVED. The Regional Trial
Court, Branch 146, Makati City is further directed to SUSPEND its proceedings until
the National Telecommunications Commission makes a final determination on the
issue involving access charges.
SO ORDERED.C
G.R. No. 201073, February 10, 2016
PHILIPPINE AIRLINES, INC. Petitioner, v. PAL EMPLOYEES SAVINGS & LOAN
ASSOCIATION, INC., Respondent.
DECISION
PEREZ, J.:
Assailed in the present Petition for Review on Certiorari is the Decision dated
September 13, 20111and the Resolution dated March 13, 20122 of the Court of
Appeals (CA) in CA-G.R. CV No. 82098, CA-G.R. CR No. 28341, and CA-G.R. CR No.
28655, which affirmed with modification the Consolidated Decision dated
November 6, 20023 of the Regional Trial Court (RTC), Branch 118, Pasay City in Civil
Case Nos. 97-1026 and 00-0016.chanRoblesvirtualLawlibrary
Factual Background
Respondent Philippine Airlines (PAL) Employees Savings and Loan Association, Inc.
(PESALA) is a private non-stock corporation, the principal purposes of which are
"(t)o promote and cultivate the habit of thrift and saving among its members; and
to that end, to receive moneys on deposits from said members; (t)o loan said
deposits to members when in need."4chanroblesvirtuallawlibrary
With the enactment of Republic Act (R.A.) No. 3779 (Savings and Loan Association
Law), PESALA submitted the necessary requirements to the Bangko Sentral ng
Pilipinas (BSP) so that PESALA will be authorized to operate as a savings and loan
association. Among the documents required by and submitted to the BSP was a
Certification dated June 20, 1969 issued by Mr. Claro C. Gloria, then Vice President
for Industrial Relations of PAL, to the effect that PAL sanctions and supports the
systems and operations of the PESALA; and that it allows and implements an
arrangement whereby the PESALA collects-loan repayments, capital contributions,
and deposits from its members by payroll deduction through the facilities of PAL.
The said Certification reads:5chanroblesvirtuallawlibrary
This is to certify that the Philippine Air Lines, Inc.:
1. Sanctions and supports the systems and operations of the PAL
Employees Savings and Loan Association, Inc. (PESALA);
2. Allows and implements an arrangement whereby the PAL Employees
Savings and Loan Association collects loan repayments, capital
contributions, and deposits from its members by payroll deduction
through the facilities of PAL;
3. Has loaned to the PESALA specific office space to enable it to carry on
its normal business until such time as it will have already acquired its
own office; and
4. Authorizes the Association to conduct business within the PAL office
space loaned to the Association, Monday through Friday, from 8:00
A.M. to 1:00 P.M., and 2:00 P.M. to 4:30 P.M.
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 77
On January 28, 1972, the BSP issued to PESALA Certificate of Authority No. C-
062.6 Since then and until the filing of the present case before the trial court, PAL
religiously complied with its arrangement with PESALA to carry-out the payroll
deductions of the loan repayments, capital contributions, and deposits of PESALA
members.7chanroblesvirtuallawlibrary
The controversy began on July 11, 1997, when PESALA received from Atty. Jose C.
Blanco (Blanco), then PAL Labor Affairs Officer-in-Charge, a Letter8 informing it that
PAL shall implement a maximum 40% salary deduction on all its Philippine-based
employees effective August 1, 1997. The Letter stated that, as all present
Philippine-based collective bargaining agreements (CBAs) contain this maximum
40% salary deduction provision and to prevent "zero net pay" situations, PAL was
going to strictly enforce said provision.
Foreseeing difficulties, PESALA estimated that if the 40% ceiling will be
implemented, "then only around 8% (P19,200,000.00) of the total monthly payroll
of P240,000,000.00 due to PESALA will be collected by PAL. The balance of around
P48,000,000.00 will have to be collected directly by plaintiff PESALA from its
members who number around 13,000 and who have different offices
nationwide."9PESALA claimed that this scenario is highly possible as PESALA was
only ninth in the priority order of payroll deductions.10 In the obtaining
circumstances, PESALA's computation showed that "(t)here will remain an
uncollected amount of P38,400,000.00 monthly for which plaintiff will suffer loss of
interest income of around P3,840,000.00 monthly."11chanRoblesvirtualLawlibrary
Antecedent Proceedings
On August 6, 1997, PESALA filed a Complaint12 for Specific Performance, Damages
or Declaratory Relief with a Prayer for Temporary Restraining Order and Injunction
before the RTC of Pasay City, and which was docketed as Civil Case No. 97-1026.
The Complaint prayed for the following: 13chanroblesvirtuallawlibrary
WHEREFORE, premises considered, plaintiff most respectfully prays that:
1. Upon the filing of this Complaint, a temporary restraining order be issued
prohibiting defendants or any of their representatives from implementing the 40%
limitation on the salary deductions as stated in the Jose C. Blanco's letter dated
July 11, 1997 on the deductions pertaining to the loan repayments, capital
contributions and deposits authorized by the PESALA members which will be
remitted to PESALA and to order defendants to maintain status quo ante litem and
to strictly enforce the aforesaid payroll deductions in favor of PESALA;
2. After notice and hearing, a writ of preliminary injunction be issued against the
defendants preventing the latter from committing the aforesaid acts under the
preceding paragraph upon such bond as this Honorable Court may equitably and
reasonably fix and to strictly enforce the payroll deductions in favor of PESALA
during the pendency of the case;
3. After trial and hearing, judgment be rendered as follows:
a. Making the preliminary injunction permanent with respect to the acts
stated in paragraph 1 of the prayer; and
b. Ordering defendants to pay to PESALA the amount of P3,840,000.00
monthly as damages reckoned from the time PAL starts applying the
40% maximum deductions on the PESALA deductions; and
c. Ordering the defendants jointly and severally to pay plaintiff the sum of
P250,000.00 as attorney's fees and P5,000.00 as appearance fee per
appearance as well as the costs of litigation.
Other reliefs just and equitable in the premises are likewise prayed.
In the Order dated August 11, 1997, the RTC issued a Temporary Restraining Order
(TRO) prohibiting PAL and its representatives from implementing the maximum
40% salary deduction, to wit:14chanroblesvirtuallawlibrary
In order to preserve the status quo between the parties pending resolution on the
prayer for the issuance of a writ of preliminary injunction included in the
complaint, a Temporary Restraining Order is hereby issued enjoining/prohibiting
defendants or any of their representatives from enforcing/implementing the
maximum 40% salary deduction on the Philippine based PAL employees as stated
in the letter of defendant Jose C. Blanco dated July 11, 1997, on the deductions
pertaining to the loan repayments, capital contributions and deposits authorized
by the PESALA members which will be remitted to PESALA.
PAL, however, was not able to comply with the TRO for the August 1-15, 1997
payroll as it allegedly received a copy of the said TRO after the corresponding
payroll was already prepared. As the TRO was not complied with, only
P3,672,051.52 was remitted by PAL to PESALA instead of the usual
P28,500,000.00.15chanroblesvirtuallawlibrary
After a finding that the alleged CBA provision on the maximum 40% deduction was
applicable only to union dues, and as the PESALA deductions were duly authorized
by the member-employees, the RTC granted the injunctive writ prayed for by

PESALA, enjoining PAL, Blanco, and all other persons or officials acting under them
from implementing the maximum 40% limitation on salary deductions, and
ordering PAL to strictly enforce the payroll deductions in favor of PESALA until
further orders from the court. The Order dated September 3, 1997
states:16chanroblesvirtuallawlibrary
In view of all the foregoing, finding merit in the herein injunctive prayer, the same
is GRANTED. Let therefore, a Writ of Preliminary Injunction be issued, enjoining the
defendants Philippine Airlines and Jose Blanco, and all other persons or officials
acting under them from implementing the 40% limitation on the salary deductions
as stated in the letter of defendant Jose C. Blanco dated July 11, 1997, pertaining to
the loan repayments, capital contributions and deposits authorized by the PESALA
members which will be remitted to PESALA and to maintain the status quo ante
litem and to strictly enforce the payroll deductions in favor of plaintiff PESALA until
further order from this Court, upon plaintiffs posting of a credible injunction bond
in the amount of One Million (P1,000,000.00) Pesos.
SO ORDERED.
PAL failed to comply with the terms of the Order dated September 3, 1997. For the
pay period of September 1-15, 1997, the deduction advice given by PESALA was for
P31,870,194.45 but only P27,209,088.24 was deducted, leaving a balance of
P4,661,106.21. For the pay period of September 16-30, 1997, the deduction advice
was for P31,678,265.85 but only P27,755,336.75 was deducted, leaving a balance
of P3,922,929.10. For the pay period of October 1-15, 1997, the deduction advice
was for P31,366,866.24 but only P27,668,179.53 was deducted, leaving a balance
of P3,698,686.71. For the pay period of October 16-31, 1997, the deduction advice
was for P31,074,983.79 but only P27,887,935.13 was deducted, leaving a balance
of P3,187,048.66. For the pay period of November 1-15, 1997, the deduction
advice was for P31,062,541.02 but only P27,897,703.61 was deducted, leaving a
balance of P3,164,837.41. For the pay period of November 16-30, 1997, the
deduction advice was for P31,306,925.06 but only P28,476,282.37 was deducted,
leaving a balance of P2,830,642.69. For the pay period of December 1-15, 1997,
the deduction advice was for P31,468,236.78 but only P28,363,695.00 was
deducted, leaving a balance of P3,104,541.78. For the pay period of December 16-
31, 1997, the deduction advice was for P31,258,380.50 but only P27,387,361.59
was deducted, leaving a balance of P3,871,018.91. For the pay period of January 1-
15, 1998, the deduction advice was for P31,304,373.14 but only P25,382,534.85
was deducted, leaving a balance of P5,921,838.29. For the pay period of January
16-30, 1998, the deduction advice was for P31,687,242.52 but only P27,190,730.72
was deducted, leaving a balance of P4,496,511.80. For the pay period of February
1-15, 1998, the deduction advice was for P31,919,262.26 but only P26,269,660.41
was deducted, leaving a balance of P5,649,601.85.17 Thus, from September 1, 1997
to February 15, 1998, a balance of P44,488,760.4118 was
incurred.19chanroblesvirtuallawlibrary
In an Order dated March 11, 1998, the RTC ordered PAL to remit to PESALA the
amount of P44,488,716.41, to wit:20chanroblesvirtuallawlibrary
WHEREFORE, and based on the foregoing considerations, finding the motion of the
plaintiff to be meritorious, the same is hereby GRANTED. Defendants are hereby
ordered to remit to the plaintiff PESALA the total undeducted amount of
P44,488,716.41 which corresponds to pay periods from September 1997 to
February 15, 1998, and to cause the deductions in full in the succeeding pay
periods in accordance with the deduction advice of the plaintiff.
SO ORDERED.
In the meantime, PAL was placed under receivership on June 23, 1998. Thus, in the
Order dated July 1, 1998, the Securities and Exchange Commission (SEC) prohibited
PAL from paying any amounts in respect of any liabilities incurred prior to June 23,
1998 and declared all claims for payment against PAL
suspended.21chanroblesvirtuallawlibrary
In defense, PAL claimed that PESALA never filed any claims with the Rehabilitation
Receiver of PAL nor with the SEC that is why it was unable to comply with the RTC's
Order dated March 11, 1998.22chanroblesvirtuallawlibrary
During the hearing held on December 4, 1998, however, then PAL's counsel, Atty.
Emmanuel Pena, and Blanco assured the Court that: (1) PAL will regularly remit to
PESALA the full amount per pay period that is due to the latter, and (2) PAL will pay
PESALA the balance of P44,488.716.41 by January 1999. These assurances were
embodied in the Order dated December 4, 1998.23chanroblesvirtuallawlibrary
Despite said assurances, PAL still failed to make good its word. On January 17,
2000, PESALA filed a Petition for Indirect Contempt against Blanco, Mr. Avelino L.
Zapanta (then PAL President), and Mr. Andrew L. Huang (then PAL Senior Vice
President-Finance and Chief Financial Officer) before the Regional Trial Court of
Pasay City, docketed as Civil Case No. 00-0016, and consolidated with Civil Case No.
97-1026.
In the Decision dated November 6, 2002, the RTC made the writ of preliminary
injunction earlier issued as permanent, thus ordering PAL and its officials to strictly
comply with and implement the arrangement between the parties whereby PAL
deducts from the salaries of PESALA members through payroll deductions the loan
repayments, capital contributions and deposits of said members, and to remit the
same to PESALA. The RTC also declared Blanco, Zapanta, and Huang guilty of
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 78
indirect contempt and ordered them to remit or turn-over to PESALA the amount
of P44,488,716.41 within three days from receipt of the Decision, otherwise their
arrest and detention shall be ordered immediately. The dispositive of the said
Decision reads:24chanroblesvirtuallawlibrary
WHEREFORE, the foregoing premises considered, judgment is hereby rendered in
favor of the plaintiff/petitioner and against defendants/respondents:
a. Ordering the defendants and all other officials, persons or agents acting
under them to strictly comply with and implement the arrangement
between the parties whereby defendants deduct from the salaries of
the members of PESALA through payroll deductions the loan
repayments, capital contributions and deposits of said members and to
remit the same to plaintiff immediately giving full priority to plaintiffs
deduction as contained in the Clarificatory Order dated May 19, 2000;
b. Making the writ of preliminary injunction earlier issued as permanent;
c. Ordering the defendants to pay the plaintiff attorney's fees of
P250,000.00;
d. Declaring the herein respondents Jose C. Blanco, Avelino L. Zapanta in
his capacity as President of the Philippine Airlines and Andrew L. Huang,
in his capacity as Senior Vice President-Finance and Chief Financial
Officer of the Philippine Airlines, Inc., as guilty of indirect contempt for
their contemptuous refusal and failure to comply with the lawful Orders
dated March 11, 1998 and December 4, 1998 which have already
become final and executory as the Petition for Certiorari of defendants
on the Order of this Court dated March 11, 1998 had been denied by
the Court of Appeals per its Entry of Judgment in CA-G.R. SP 48654
dated May 14, 1999. Hence, respondents are hereby ordered to
remit/turn over to plaintiff/petitioner the amount of P44,480,716.41
within three (3) days from receipt hereof otherwise, their arrest and
detention shall be ordered immediately.
e. Ordering the defendants/respondents to pay the cost of this suit.
SO ORDERED.
On November 11, 2002, PAL, Blanco, Zapanta, and Huang appealed the RTC
Decision. The appeal of Civil Case No. 97-1026 was docketed as CA-G.R. CV No.
82098, while the appeal of Criminal Case No. 00-0016 was docketed as CA-G.R. CR
No. 28341 and CA-G.R. CR No. 28655. These appeals were consolidated.
While the appeals were pending before the Court of Appeals, PESALA moved for
the execution of the RTC Order dated March 11, 1998. The RTC issued a Writ of
Execution pending appeal and the consequent Notices of Garnishment. Upon
appeal, the Court of the Appeals, as sustained by the Supreme Court, nullified the
Writ of Execution and Notices of Garnishment. 25cralawred
Going back to the case at bar, in the Decision dated September 13, 2011, the Court
of Appeals dismissed the appeal in CA-G.R. CV No. 82098, but granted the appeals
in CA-G.R. CR Nos. 28341 and 28655. It affirmed with modification the RTC
Decision in that it upheld the agreement between the parties whereby PAL deducts
from the salaries of PESALA members through payroll deductions the loan
repayments, capital contributions and deposits of said members, as well as the RTC
Order directing the remittance of P44,488,716.4126 to PESALA, but it declared
Blanco, Zapanta, and Huang not guilty of indirect contempt. Thus, the Court of
Appeals ruled:27chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the appeal in CA-G.R. CV No. 82098
is DISMISSED while the appeal in CA-G.R. CR. Nos. 28341 and 28655 is GRANTED.
The Decision of the Regional Trial Court dated November 6, 2002 is AFFIRMED
with MODIFICATION that respondents-appellants Jose C. Blanco, Avelino L.
Zapanta and Andrew L. Huang are held not guilty of indirect contempt. The order
for them "to remit/turn over to plaintiff/petitioner the amount of P44,480,716.41
within three (3) days from receipt" of the November 6, 2002 Decision "otherwise,
their arrest and detention shall be ordered immediately" is REVERSED.
Costs against the Defendants-Appellants.
SO ORDERED.
Issues
In the present petition, petitioner raises the following
issues:28chanroblesvirtuallawlibrary
I.
The Court of Appeals ruled in a manner contrary to law and the Honorable
Court's rulings in De Ysasi v Arceo and Lazo vs. Republic Surety & Insurance

Co. when it sustained the lower court's adjudication of matters that are beyond
the issues presented in Civil Case No. 97-1026.chanRoblesvirtualLawlibrary
II.
The Court of Appeals ruled in a manner contrary to Article 2055 of the Civil Code
and the Honorable Court's rulings when it effectively declared a contract of
guaranty between PAL and the members-debtors of
PESALA.chanRoblesvirtualLawlibrary
III.
The Court of Appeals ruled in a manner contrary to law when it sustained the
imposition of terms, conditions and standards not provided for by Republic Act
No. 8367.
In raising these issues, PAL is essentially contesting the order directing it to pay
PESALA the amount of P44,488,716.41, representing the balance between the
deduction advice and the actual deducted amount.chanRoblesvirtualLawlibrary
Our Ruling
We deny the petition.
PAL contends that its right to due process was violated when the Court of Appeals
sustained the RTC ruling for it to remit to PESALA the amount of P44, 488,716.41,
which amount was not specifically prayed for in the Complaint. 29 PAL claims that
(t)he only amount prayed for by PESALA in its complaint was the alleged damages
of P3,840,000.00 monthly xxx reckoned from the time PAL starts applying the 40%
maximum deductions on the PESALA deductions, which is totally different from the
amount of P44,480,716.4130 that the lower court was ordering PAL to pay PESALA.
The said amount asked for by PESALA in its complaint was supposedly for
"damages," and not the undeducted amount insisted upon by both the lower court
and the Court of Appeals."31chanroblesvirtuallawlibrary
Indeed, a perusal of the prayer in the Complaint shows that PESALA did not
specifically pray for the amount of P44,488,716.41 or for any undeducted amount.
But this is understandable because, at the time the Complaint was filed, PAL had
yet to effect the maximum 40% deduction policy and as such, there were yet no
undeducted amounts.
The records of the case show, on the other hand, that the undeducted amount of
P44,488,716.41 came about because PAL failed to comply with the TRO and the
injunctive writ issued by the RTC. As discussed earlier, the Complaint was filed on
August 7, 1997 and as early as August 11, 1997, the RTC already issued a TRO
enjoining PAL from implementing the maximum 40% deduction policy. PAL,
however, failed to comply with the TRO. On September 3, 1997, the RTC issued a
Writ of Preliminary Injunction (WPI) further enjoining PAL from implementing the
maximum 40% deduction policy. Yet again, PAL failed to comply with the RTC's
directive.
PAL cannot hope to gain anything beneficial from its deliberate refusal to comply
with the orders and directives of the court. PAL's obstinate disobedience to the
RTC's TRO and WPI led to the disruption of the status quo and to the exposure of
PESALA to deficits and losses, for which it should be liable.
In United Coconut Planters Bank v. United Alloy Phils. Corp.,32 the Court,
quoting Capitol Medical Center v. Court of Appeals, explained that "(t)he sole
object of a preliminary injunction, whether prohibitory or mandatory, is to preserve
the status quo until the merits of the case can be heard." In Buyco v. Baraquia,33 we
further clarified that a preliminary injunction "is usually granted when it is made to
appear that there is a substantial controversy between the parties and one of them
is committing an act or threatening the immediate commission of an act that will
cause irreparable injury or destroy the status quo of the controversy before a full
hearing can be had on the merits of the case."
Indeed, an injunction is granted by a court in order to prevent an injury or to stop
the furtherance of an injury until the merits of the case can be fully adjudged. In
the case at bar, PAL's defiance of the TRO and the WPI caused PESALA to incur a
shortfall in the amount of P44,488,716.41. This shortfall could have been
precluded if only PAL complied with the TRO and the WPI and preserved the status
quo. Since such loss was brought about by PAL's non-compliance with the
directives of the RTC, then fair play dictates that PAL should be held liable for its
insolence.
In directing PAL to remit to PESALA the amount of P44,488,716.41, PAL additionally
argues that the Court of Appeals unilaterally appointed PAL as a guarantor of the
debts of PESALA's members34because the amount of P44,488,716.41 had not yet
been deducted from the salaries of the PESALA
members.35chanroblesvirtuallawlibrary
Contrary to PAL's erroneous argument, however, it is liable, not because it is being
made a guarantor of the debts of PESALA's members, but because of its failure to
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 79
comply with the RTC's directives. Indeed the amount of P44,488,716.41 has not yet
been deducted from the salaries of the PESALA members and, precisely, the reason
why such amount has not been deducted is because PAL contravened the RTC's
TRO and WPI. PAL is therefore liable, not because it is being made a guarantor of
the debts of PESALA's members, but because its own actions brought forth the loss
in the case at bar.
PAL also claims that the RTC erred in granting PESALA a relief not prayed for in the
Complaint. It maintains that PESALA cannot be awarded the amount of
P44,488,716.41 as it is not in the nature of damages, which is the only fiscal relief
specifically prayed for in the Complaint.
Verily, it is a settled rule that a court cannot grant a relief not prayed for in the
pleadings or in excess of that being sought. In Bucal v. Bucal,36 the Court,
reiterating the ruling in DBP v. Teston, explained:ChanRoblesVirtualawlibrary
Due process considerations justify this requirement. It is improper to enter an
order which exceeds the scope of relief sought by the pleadings, absent notice
which affords the opposing party an opportunity to be heard with respect to the
proposed relief. The fundamental purpose of the requirement that allegations of a
complaint must provide the measure of recovery is to prevent surprise to the
defendant. (Emphasis supplied.)
In the case at bar, the records show that PAL was afforded due notice and an
opportunity to be heard with regard to PESALA's claim of P44,488,716.41. In fact,
in explaining the foregoing balance, PAL adverted to the "zero net pay" status of
their employees' respective accounts, thus concluding that there is simply no legal
or equitable basis in PESALA's demand for the remittance of the amount claimed to
be undeducted.37chanroblesvirtuallawlibrary
Moreover, the prayer in the Complaint did state that "(o)ther reliefs just and
equitable in the premises are likewise prayed."38 In Sps. Gutierrez v. Sps. Valiente,
et al.,39 the Court, echoing the ruling in BPI Family Bank v. Buenaventura, held
that:ChanRoblesVirtualawlibrary
(T)he general prayer is broad enough to "justify extension of a remedy different
from or together with the specific remedy sought." Even without the prayer for a
specific remedy, proper relief may be granted by the court if the facts alleged in the
complaint and the evidence introduced so warrant. The court shall grant relief
warranted by the allegations and the proof even if no such relief is prayed
for. The prayer in the complaint for other reliefs equitable and just in the premises
justifies the grant of a relief not otherwise specifically prayed for. (Emphasis
supplied.)
Undeniably, PESALA's claim of P44,488,716.41 is a necessary consequence of the
action it filed against PAL. As said claim was duly heard and proven during trial,
with PAL being afforded the opportunity to contest it, the RTC and the Court of
Appeals did not err in granting such claim.
It is also worth mentioning that PAL, through its then counsel Atty. Emmanuel Pena
and then Labor Affairs OIC Atty. Jose C. Blanco, acknowledged its liability to PESALA
in the amount of P44,488,716.41. In open court, during the hearing held on
December 4, 1998, Atty. Pena and Atty. Blanco assured that: (1) PAL will regularly
remit to PESALA the full amount per pay period that is due to the latter; and (2)
PAL will likewise pay PESALA the balance of the previously undeducted amount of
P44,488,716.41 by January 1999. These assurances are transcribed in the Order
dated December 4, 1998 of the RTC.40chanroblesvirtuallawlibrary
Even if viewed as an offer of compromise, which is generally inadmissible in
evidence against the offeror in civil cases, PAL's acknowledgment of its liability to
PESALA in the amount of P44,488,716.41 falls under one of the exceptions to the
rule of exclusion of compromise negotiations.
In Tan v. Rodil,41 the Court, citing the case of Varadero de Manila v. Insular Lumber
Co., held that if there is neither an expressed nor implied denial of liability, but
during the course of negotiations the defendant expressed a willingness to pay the
plaintiff, then such offer of the defendant can be taken in evidence against him.
In the case at bar, PAL admitted the amount of P44,488,716.41 without an
expressed nor implied denial of liability. This admission, coupled with an assurance
of payment, binds PAL.
In addition, the Court finds that an award of interest is in order. In Nacar v. Gallery
Frames,42 the Court clarified that:ChanRoblesVirtualawlibrary
When an obligation, not constituting a loan or forbearance of money, is breached,
an interest on the amount of damages awarded may be imposed at the discretion
of the court at the rate of 6% per annum. No interest, however, shall be adjudged
on unliquidated claims or damages, except when or until the demand can be
established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time
the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such
certainty cannot be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the computation of legal interest shall,
in any case, be on the amount finally adjudged.

As further elucidated by the Court in Nacar, when the judgment of the court
awarding a sum of money becomes final and executory, a legal interest at the rate
of 6% per annum shall be imposed, counted from the time of finality until full
satisfaction of the judgment, as this interim period is deemed an equivalent to a
forbearance of credit.
On a last note, we herein clarify that the Court's directive for PAL to remit to
PESALA the amount of P44,488,716.41 does not preclude PAL from seeking due
reimbursement from the members of PESALA whose accounts were not
accordingly deducted. As explained earlier, the Court is not holding PAL as a
guarantor of the debts of these PESALA members; thus, PAL can rightfully claim the
principal amount of P44,488,716.41 from these concerned PESALA members.
This clarification is in consonance with the principle against unjust enrichment.
In Grandteq Industrial Steel Products, Inc., et al. v. Margallo,43 we defined unjust
enrichment as follows:ChanRoblesVirtualawlibrary
As can be gleaned from the foregoing, there is unjust enrichment when (1) a
person is unjustly benefitted, and (2) such benefit is derived at the expense of or
with damages to another. The main objective of the principle of unjust
enrichment is to prevent one from enriching oneself at the expense of another. It
is commonly accepted that this doctrine simply means that a person shall not be
allowed to profit or enrich himself inequitably at another's expense. One condition
for invoking this principle is that the aggrieved party has no other action based on
a contract, quasi-contract, crime, quasi-delict, or any other provision of law.
(Emphasis supplied.)
As the amount of P44,488,716.41 is actually comprised of loans of certain PESALA
members which were not duly deducted from their respective salaries, then fair
play dictates that these PESALA members should pay the remaining balances of
their loans and reimburse PAL. The interests herein adjudged by the Court,
however, are for the account of PAL, as it was PAL's disobedience of the RTC's
directives that brought forth the said principal amount.
WHEREFORE, premises considered, the present petition is hereby DENIED.
Petitioner Philippine Airlines, Inc. (PAL) is ordered to REMIT to PAL Employees
Savings and Loan Association, Inc. (PESALA) the principal amount of
P44,488,716.41, with interest at the rate of 6% per annum computed from March
11, 1998 until fully remitted, without prejudice to the right of PAL to be reimbursed
the principal amount by the concerned PESALA members.
SO ORDERED.
G.R. Nos. 217126-27, November 10, 2015
CONCHITA CARPIO MORALES, IN HER CAPACITY AS THE
OMBUDSMAN, Petitioner, v. COURT OF APPEALS (SIXTH DIVISION) AND JEJOMAR
ERWIN S. BINAY, JR., Respondents.
DECISION
PERLAS-BERNABE, J.:
"All government is a trust, every branch of government is a trust, and
immemorially acknowledged so to be[.]"1ChanRoblesVirtualawlibrary
The Case
Before the Court is a petition for certiorari and prohibition2 filed on March 25, 2015
by petitioner Conchita Carpio Morales, in her capacity as the Ombudsman
(Ombudsman), through the Office of the Solicitor General (OSG), assailing: (a) the
Resolution3 dated March 16, 2015 of public respondent the Court of Appeals (CA)
in CA-G.R. SP No. 139453, which granted private respondent Jejomar Erwin S.
Binay, Jr.'s (Binay, Jr.) prayer for the issuance of a temporary restraining order (TRO)
against the implementation of the Joint Order4 dated March 10, 20,15 of the
Ombudsman in OMB-C-A-15-0058 to 0063 (preventive suspension order)
preventively suspending him and several other public officers and employees of
the City Government of Makati, for six (6) months without pay; and (b) the
Resolution5 dated March 20, 2015 of the CA, ordering the Ombudsman to
comment on Binay, Jr.'s petition for contempt 6 in CA-G.R. SP No. 139504.
Pursuant to the Resolution7 dated April 6, 2015, the CA issued a writ of preliminary
injunction8 (WPI) in CA-G.R. SP No. 139453 which further enjoined the
implementation of the preventive suspension order, prompting the Ombudsman to
file a supplemental petition9 on April 13, 2015.
The Facts
On July 22, 2014, a complaint/affidavit10 was filed by Atty. Renato L. Bondal and
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 80
Nicolas "Ching" Enciso VI before the Office of the Ombudsman against Binay, Jr.
and other public officers and employees of the City Government of Makati (Binay,
Jr., et al), accusing them of Plunder11 and violation of Republic Act No. (RA)
3019,12 otherwise known as "The Anti-Graft and Corrupt Practices Act," in
connection with the five (5) phases of the procurement and construction of the
Makati City Hall Parking Building (Makati Parking Building).13
On September 9, 2014, the Ombudsman constituted a Special Panel of
Investigators14 to conduct a fact-finding investigation, submit an investigation
report, and file the necessary complaint, if warranted (1st Special
Panel).15 Pursuant to the Ombudsman's directive, on March 5, 2015, the 1st Special
Panel filed a complaint 16 (OMB Complaint) against Binay, Jr., et al, charging them
with six (6) administrative cases17 for Grave Misconduct, Serious Dishonesty, and
Conduct Prejudicial to the Best Interest of the Service, and six (6) criminal
cases18 for violation of Section 3 (e) of RA 3019, Malversation of Public Funds, and
Falsification of Public Documents (OMB Cases).19
As to Binay, Jr., the OMB Complaint alleged that he was involved in anomalous
activities attending the following procurement and construction phases of the
Makati Parking Building project, committed during his previous and present terms
as City Mayor of Makati:
Binay, Jr.'s First Term (2010 to 2013)20
(a) On September 21, 2010, Binay, Jr. issued the Notice of Award 21 for Phase III of
the Makati Parking Building project to Hilmarc's Construction Corporation
(Hilmarc's), and consequently, executed the corresponding
contract22 on September 28, 2010,23without the required publication and the lack
of architectural design,24 and approved the release of funds therefor in the
following amounts as follows: (1) P130,518,394.80 on December 15, 2010;25 (2)
P134,470,659.64 on January 19, 2011;26 (3) P92,775,202.27 on February 25,
2011;27 (4) P57,148,625.51 on March 28, 2011;28(5) P40,908,750.61 on May 3,
2011;29 and (6) P106,672,761.90 on July 7, 2011;30
(b) On August 11, 2011, Binay, Jr. issued the Notice of Award31 for Phase IV of the
Makati Parking Building project to Hilmarc's, and consequently, executed the
corresponding contract32 on August 18, 2011,33 without the required publication
and the lack of architectural design,34 and approved the release of funds therefor in
the following amounts as follows: (1) P182,325,538.97 on October 4, 2O11; 35 (2)
P173,132,606.91 on October 28,2011;36 (3) P80,408,735.20 on December 12,
2011;37(4) P62,878,291.81 on February 10, 2012;38 and (5) P59,639,167.90 on
October 1, 2012;39
(c) On September 6, 2012, Binay, Jr. issued the Notice of Award 40 for Phase V of the
Makati Parking Building project to Hilmarc's, and consequently, executed the
corresponding contract41 on September 13, 2012,42 without the required
publication and the lack of architectural design,43 and approved the release of the
funds therefor in the amounts of P32,398,220.0544 and P30,582,629.3045 on
December 20, 2012; and
Binay, Jr.'s Second Term (2013 to 2016)46
(d) On July 3, 2013 and July 4, 2013, Binay, Jr. approved the release of funds for the
remaining balance of the September 13, 2012 contract with Hilmarc's for Phase V
of the Makati Parking Building project in the amount of P27,443,629.97;47 and
(e) On July 24, 2013, Binay, Jr. approved the release of funds for the remaining
balance of the contract48 with MANA Architecture & Interior Design Co. (MANA) for
the design and architectural services covering the Makati Parking Building project
in the amount of P429,011.48.49
On March 6, 2015, the Ombudsman created another Special Panel of Investigators
to conduct a preliminary investigation and administrative adjudication on the OMB
Cases (2nd Special Panel).50Thereafter, on March 9, 2015, the 2nd Special Panel
issued separate orders51 for each of the OMB Cases, requiring Binay, Jr., et al. to file
their respective counter-affidavits.52
Before Binay, Jr., et al.'s filing of their counter-affidavits, the Ombudsman, upon the
recommendation of the 2nd Special Panel, issued on March 10, 2015, the subject
preventive suspension order, placing Binay, Jr., et al. under preventive suspension
for not more than six (6) months without pay, during the pendency of the OMB
Cases.53 The Ombudsman ruled that the requisites for the preventive suspension of
a public officer are present,54 finding that: (a) the evidence of Binay, Jr., et al.'s guilt
was strong given that (1) the losing bidders and members of the Bids and Awards
Committee of Makati City had attested to the irregularities attending the Makati
Parking Building project; (2) the documents on record negated the publication of
bids; and (3) the disbursement vouchers, checks, and official receipts showed the
release of funds; and (b) (1) Binay, Jr., et al. were administratively charged with
Grave Misconduct, Serious Dishonesty, and Conduct Prejudicial to the Best Interest
of the Service; (2) said charges, if proven to be true, warrant removal from public
service under the Revised Rules on Administrative Cases in the Civil Service
(RRACCS), and (3) Binay, Jr., et al.'s respective positions give them access to public
records and allow them to influence possible witnesses; hence, their continued
stay in office may prejudice the investigation relative to the OMB Cases filed
against them.55 Consequently, the Ombudsman directed the Department of
 P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 81

Interior and Local Government (DILG), through Secretary Manuel A. Roxas II proceedings.84
(Secretary Roxas), to immediately implement the preventive suspension order
against Binay, Jr., et al., upon receipt of the same.56 In his comment85 filed on April 6, 2015, Binay, Jr. argues that Section 1, Article VIII
of the 1987 Constitution specifically grants the CA judicial power to review acts of
On March 11, 2015, a copy of the preventive suspension order was sent to the any branch or instrumentality of government, including the Office of the
Office of the City Mayor, and received by Maricon Ausan, a member of Binay, Jr.'s Ombudsman, in case of grave abuse of discretion amounting to lack or excess of
staff.57 jurisdiction, which he asserts was committed in this case when said office issued
the preventive suspension order against him.86 Binay, Jr. posits that it was
The Proceedings Before the CA incumbent upon the Ombudsman to1 have been apprised of the condonation
doctrine as this would have weighed heavily in determining whether there was
strong evidence to warrant the issuance of the preventive suspension order. 87 In
this relation, Binay, Jr. maintains that the CA correctly enjoined the implementation
On even date,58 Binay, Jr. filed a petition for certiorari59 before the CA, docketed
of the preventive suspension order given his clear and unmistakable right to public
as CA-G.R. SP No. 139453, seeking the nullification of the preventive suspension
office, and that it is clear that he could not be held administratively liable for any of
order, and praying for the issuance of a TRO and/or WPI to enjoin its
the charges against him since his subsequent re-election in 2013 operated as a
implementation.60Primarily, Binay, Jr. argued that he could not be held
condonation of any administrative offenses he may have committed during his
administratively liable for any anomalous activity attending any of the five (5)
previous term.88 As regards the CA's order for the Ombudsman to comment on his
phases of the Makati Parking Building project since: (a) Phases I and II were
petition for contempt, Binay, Jr. submits that while the Ombudsman is indeed an
undertaken before he was elected Mayor of Makati in 2010; and (b) Phases III to V
impeachable officer and, hence, cannot be removed from office except by way of
transpired during his first term and that his re-election as City Mayor of Makati for
impeachment, an action for contempt imposes the penalty of fine and
a second term effectively condoned his administrative liability therefor, if any,
imprisonment, without necessarily resulting in removal from office. Thus, the fact
thus rendering the administrative cases against him moot and academic. 61In any
that the Ombudsman is an impeachable officer should not deprive the CA of its
event, Binay, Jr. claimed that the Ombudsman's preventive suspension order
inherent power to punish contempt.89
failed to show that the evidence of guilt presented against him is strong,
maintaining that he did not participate in any of the purported irregularities. 62 In
Meanwhile, the CA issued a Resolution90 dated April 6, 2015, after the oral
support of his prayer for injunctive relief, Binay, Jr. argued that he has a clear and
arguments before it were held,91 granting Binay, Jr.'s prayer for a WPI, which
unmistakable right to hold public office, having won by landslide vote in the 2010
further enjoined the implementation of the preventive suspension order. In so
and 2013 elections, and that, in view of the condonation doctrine, as well as the
ruling, the CA found that Binay, Jr. has an ostensible right to the final relief prayed
lack of evidence to sustain the charges against him, his suspension from office
for, namely, the nullification of the preventive suspension order, in view of the
would undeservedly deprive the electorate of the services of the person they have
condonation doctrine, citing Aguinaldo v. Santos.92 Particularly, it found that the
conscientiously chosen and voted into office.63
Ombudsman can hardly impose preventive suspension against Binay, Jr. given that
his re-election in 2013 as City Mayor of Makati condoned any administrative
On March 16, 2015, at around 8:24 a.m., Secretary Roxas caused the
liability arising from anomalous activities relative to the Makati Parking Building
implementation of the preventive suspension order through the DILG National
project from 2007 to 2013.93 In this regard, the CA added that, although there were
Capital Region - Regional Director, Renato L. Brion, CESO III (Director Brion), who
acts which were apparently committed by Binay, Jr. beyond his first term
posted a copy thereof on the wall of the Makati City Hall after failing to personally
namely, the alleged payments on July 3, July 4, and July 24, 2013,94 corresponding
serve the same on Binay, Jr. as the points of entry to the Makati City Hall were
to the services of Hillmarc's and MANA - still, Binay, Jr. cannot be held
closed. At around 9:47 a.m., Assistant City Prosecutor of Makati Billy C. Evangelista
administratively liable therefor based on the cases of Salalima v. Guingona,
administered the oath of office on Makati City Vice Mayor Romulo V. Pea, Jr.
Jr.,95 and Mayor Garcia v. Mojica96 wherein the condonation doctrine was still
(Pea, Jr.) who thereupon assumed office as Acting Mayor.64
applied by the Court although the payments were made after the official's re-
election, reasoning that the payments were merely effected pursuant to contracts
At noon of the same day, the CA issued a Resolution65 (dated March 16, 2015),
executed before said re-election.97 To this, the CA added that there was no
granting Binay, Jr.'s prayer for a TRO,66 notwithstanding Pena, Jr.'s assumption of
concrete evidence of Binay, Jr.'s participation for the alleged payments made on
duties as Acting Mayor earlier that day. 67 Citing the case of Governor Garcia, Jr. v.
July 3, 4, and 24, 2013.98
CA,68 the CA found that it was more prudent on its part to issue a TRO in view of
the extreme urgency of the matter and seriousness of the issues raised,
In view of the CA's supervening issuance of a WPI pursuant to its April 6, 2015
considering that if it were established that the acts subject of the administrative
Resolution, the Ombudsman filed a supplemental petition99 before this Court,
cases against Binay, Jr. were all committed during his prior term, then, applying the
arguing that the condonation doctrine is irrelevant to the determination of
condonation doctrine, Binay, Jr.'s re-election meant that he can no longer be
whether the evidence of guilt is strong for purposes of issuing preventive
administratively charged. 69 The CA then directed the Ombudsman to comment on
suspension orders. The Ombudsman also maintained that a reliance on the
Binay, Jr.'s petition for certiorari .70
condonation doctrine is a matter of defense, which should have been raised by
Binay, Jr. before it during the administrative proceedings, and that, at any rate,
On March 17, 2015, the Ombudsman manifested71 that the TRO did not state what
there is no condonation because Binay, Jr. committed acts subject of the OMB
act was being restrained and that since the preventive suspension order had
Complaint after his re-election in 2013.100
already been served and implemented, there was no longer any act to restrain. 72
On April 14 and 21, 2015,101 the Court conducted hearings for the oral arguments
On the same day, Binay, Jr. filed a petition for contempt, 73 docketed as CA-G.R. SP
of the parties. Thereafter, they were required to file their respective
No. 139504, accusing Secretary Roxas, Director Brion, the officials of the Philippine
memoranda.102 In compliance thereto, the Ombudsman filed her
National Police, and Pena, Jr. of deliberately refusing to obey the CA, thereby
Memorandum103 on May 20, 2015, while Binay, Jr. submitted his Memorandum the
allegedly impeding, obstructing, or degrading the administration of justice.74 The
following day.104
Ombudsman and Department of Justice Secretary Leila M. De Lima were
subsequently impleaded as additional respondents upon Binay, Jr.'s filing of the
Pursuant to a Resolution105 dated June 16, 2015, the Court directed the parties to
amended and supplemental petition for contempt75 (petition for contempt) on
comment on each other's memoranda, and the OSG to comment on the
March 19, 2015.76 Among others, Binay, Jr. accused the Ombudsman and other
Ombudsman's Memorandum, all within ten (10) days from receipt of the notice.
respondents therein for willfully and maliciously ignoring the TRO issued by the CA
against the preventive suspension order. 77
On July 15, 2015, both parties filed their respective comments to each other's
78 memoranda.106Meanwhile, on July 16, 2015, the OSG filed its Manifestation In Lieu
In a Resolution dated March 20, 2015, the CA ordered the consolidation of CA-
of Comment,107 simply stating that it was mutually agreed upon that the Office of
G.R. SP No. 139453 and CA-G.R. SP No. 139504, and, without necessarily giving
the Ombudsman would file its Memorandum, consistent with its desire to state its
due course to Binay, Jr.'s petition for contempt, directed the Ombudsman to file
"institutional position."108 In her Memorandum and Comment to Binay, Jr.'s
her comment thereto.79 The cases were set for hearing of oral arguments on March
Memorandum, the Ombudsman pleaded, among others, that this Court abandon
30 and 31, 2015.80
the condonation doctrine.109 In view of the foregoing, the case was deemed
submitted for resolution.chanrobleslaw
The Proceedings Before the Court
The Issues Before the Court

Prior to the hearing of the oral arguments before the CA, or on March 25, 2015,
the Ombudsman filed the present petition before this Court, assailing the CA's
Based on the parties' respective pleadings, and as raised during the oral arguments
March 16, 2015 Resolution, which granted Binay, Jr.'s prayer for TRO in CA-G.R. SP
conducted before this Court, the main issues to be resolved in seriatim are as
No. 139453, and the March 20, 2015 Resolution directing her to file a comment on
follows:
Binay, Jr.'s petition for contempt in CA-G.R. SP No. 139504.81 The Ombudsman
claims that: (a) the CA had no jurisdiction to grant Binay, Jr.'s prayer for a TRO,
citing Section 14 of RA 6770,82 or "The Ombudsman Act of 1989," which states that I. Whether or not the present petition, and not motions for
no injunctive writ could be issued to delay the Ombudsman's investigation unless reconsideration of the assailed CA issuances in CA-G.R. SP No. 139453
there is prima facie evidence that the subject matter thereof is outside the latter's and CA-G.R. SP No. 139504, is the Ombudsman's plain, speedy, and
jurisdiction;83 and (b) the CA's directive for the Ombudsman to comment on Binay, adequate remedy;cralawlawlibrary
Jr.'s petition for contempt is illegal and improper, considering that the Ombudsman
is an impeachable officer, and therefore, cannot be subjected to contempt

II. Whether or not the CA has subject matter jurisdiction over the main
petition for certiorari in CA-G.R. SP No. 139453;cralawlawlibrary
III. Whether or not the CA has subject matter jurisdiction to issue a TRO
and/or WPI enjoining the implementation of a preventive suspension
order issued by the Ombudsman;cralawlawlibrary
IV. Whether or not the CA gravely abused its discretion in issuing the TRO
and eventually, the WPI in CA-G.R. SP No. 139453 enjoining the
implementation of the preventive suspension order against Binay, Jr.
based on the condonation doctrine; and
V. Whether or not the CA's directive for the Ombudsman to ' comment on
Binay, Jr.'s petition for contempt in CA- G.R. SP No. 139504 is improper
and illegal.
The Ruling of the Court
The petition is partly meritorious.chanrobleslaw
I.
A common requirement to both a petition for certiorari and a petition for
prohibition taken under Rule 65 of the 1997 Rules of Civil Procedure is that the
petitioner has no other plain, speedy, and adequate remedy in the ordinary course
of law. Sections 1 and 2 thereof provide:
Section 1. Petition for certiorari. - When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy
in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal,
board or officer, and granting such incidental reliefs as law and justice may require.
xxxx
Section 2. Petition for prohibition. - When the proceedings of any tribunal,
corporation, board, officer or person, whether exercising judicial, quasi-judicial or
ministerial functions, are without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no
appeal, or any other plain, speedy, and adequate remedy in the ordinary course
of law, a person aggrieved thereby may file a verified petition in the proper court,
alleging the facts r with certainty and praying that judgment be rendered
commanding the respondent to desist from further proceedings in the action or
matter specified therein, or otherwise granting such incidental reliefs as law and
justice may require.
x x x x (Emphases supplied)
Hence, as a general rule, a motion for reconsideration must first be filed with the
lower court prior to resorting to the extraordinary remedy of certiorari or
prohibition since a motion for reconsideration may still be considered as a plain,
speedy, and adequate remedy in the ordinary course of law. The rationale for the
pre-requisite is to grant an opportunity for the lower court or agency to correct any
actual or perceived error attributed to it by the re-examination of the legal and
factual circumstances of the case.110
Jurisprudence states that "[i]t is [the] inadequacy, [and] not the mere absence of
all other legal remedies and the danger of failure of justice without the writ, that
must usually determine the propriety of certiorari [or prohibition]. A remedy is
plain, speedy[,] and adequate if it will promptly relieve the petitioner from the
injurious effects of the judgment, order, or resolution of the lower court or agency,
x x x."111
In this light, certain exceptions were crafted to the general rule requiring a prior
motion for reconsideration before the filing of a petition for certiorari, which
exceptions also apply to a petition for prohibition. 112 These are: (a) where the order
is a patent nullity, as where the court a quo has no jurisdiction; (b) where the
questions raised in the certiorari proceedings have been duly raised and passed
upon by the lower court, or are the same as those raised and passed upon in the
lower court; (c) where there is an urgent necessity for the resolution of the
question and any further delay would prejudice the interests of the Government or
of the petitioner or the subject matter of the action is perishable; (d) where, under
the circumstances, a motion for reconsideration would be useless; (e) where
petitioner was deprived of due process and there is extreme urgency for relief; (f)
where, in a criminal case, relief from an order of arrest is urgent and the granting
of such relief by the trial court is improbable; (g) where the proceedings in the
lower court are a nullity for lack of due process; (h) where the proceedings were ex
parte or in which the petitioner had no opportunity to object; and (i) where the
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 82
issue raised is one purely of law or where public interest is involved.113
In this case, it is ineluctably clear that the above-highlighted exceptions attend
since, for the first time, the question on the authority of the CA - and of this Court,
for that matter - to enjoin the implementation of a preventive suspension order
issued by the Office of the Ombudsman is put to the fore. This case tests the
constitutional and statutory limits of the fundamental powers of key government
institutions - namely, the Office of the Ombudsman, the Legislature, and the
Judiciary - and hence, involves an issue of transcendental public importance that
demands no less than a careful but expeditious resolution. Also raised is the
equally important issue on the propriety of the continuous application of the
condonation doctrine as invoked by a public officer who desires exculpation from
administrative liability. As such, the Ombudsman's direct resort to certiorari and
prohibition before this Court, notwithstanding her failure to move for the prior
reconsideration of the assailed issuances in CA-G.R. SP No. 139453 and CA-G.R. SP
No. 139504 before the CA, is justified.chanrobleslaw
II.
Albeit raised for the first time by the Ombudsman in her Memorandum,114 it is
nonetheless proper to resolve the issue on the CA's lack of subject matter
jurisdiction over the main petition for certiorari in CA-G.R. SP No. 139453, in view
of the well-established rule that a court's jurisdiction over the subject matter may
be raised at any stage of the proceedings. The rationale is that subject matter
jurisdiction is conferred by law, and the lack of it affects the very authority of the
court to take cognizance of and to render judgment on the action.115 Hence, it
should be preliminarily determined if the CA indeed had subject matter jurisdiction
over the main CA-G.R. SP No. 139453 petition, as the same determines the validity
of all subsequent proceedings relative thereto. It is noteworthy to point out that
Binay, Jr. was given the opportunity by this Court to be heard on this issue,116 as he,
in fact, duly submitted his opposition through his comment to the Ombudsman's
Memorandum.117 That being said, the Court perceives no reasonable objection
against ruling on this issue.
The Ombudsman's argument against the CA's lack of subject matter jurisdiction
over the main petition, and her corollary prayer for its dismissal, is based on her
interpretation of Section 14, RA 6770, or the Ombudsman Act,118 which reads in
full:
Section 14. Restrictions. - No writ of injunction shall be issued by any court to delay
an investigation being conducted by the Ombudsman under this Act, unless there
is a prima facie evidence that the subject matter of the investigation is outside the
jurisdiction of the Office of the Ombudsman.
No court shall hear any appeal or application for remedy against the decision or
findings of the Ombudsman, except the Supreme Court, on pure question of law.
The subject provision may be dissected into two (2) parts.
The first paragraph of Section 14, RA 6770 is a prohibition against any court
(except the Supreme Court119) from issuing a writ of injunction to delay an
investigation being conducted by the Office of the Ombudsman. Generally
speaking, "[injunction is a judicial writ, process or proceeding whereby a party is
ordered to do or refrain from doing a certain act. It may be the main action or
merely a provisional remedy for and as an incident in the main
action."120 Considering the textual qualifier "to delay," which connotes a
suspension of an action while the main case remains pending, the "writ of
injunction" mentioned in this paragraph could only refer to injunctions of the
provisional kind, consistent with the nature of a provisional injunctive relief.
The exception to the no injunction policy is when there is prima facie evidence that
the subject matter of the investigation is outside the office's jurisdiction. The Office
of the Ombudsman has disciplinary authority over all elective and appointive
officials of the government and its subdivisions, instrumentalities, and agencies,
with the exception only of impeachable officers, Members of Congress, and the
Judiciary.121 Nonetheless, the Ombudsman retains the power to investigate any
serious misconduct in office allegedly committed by officials removable by
impeachment, for the purpose of filing a verified complaint for impeachment, if
warranted.122 Note that the Ombudsman has concurrent jurisdiction over certain
administrative cases which are within the jurisdiction of the regular courts or
administrative agencies, but has primary jurisdiction to investigate any act or
omission of a public officer or employee who is under the jurisdiction of the
Sandiganbayan.123
On the other hand, the second paragraph of Section 14, RA 6770 provides that no
appeal or application for remedy may be heard against the decision or findings of
the Ombudsman, with the exception of the Supreme Court on pure questions of
law. This paragraph, which the Ombudsman particularly relies on in arguing that
the CA had no jurisdiction over the main CA-G.R. SP No. 139453 petition, as it is
supposedly this Court which has the sole jurisdiction to conduct a judicial review of
its decisions or findings, is vague for two (2) reasons: (1) it is unclear what the
phrase "application for remedy" or the word "findings" refers to; and (2) it does
not specify what procedural remedy is solely allowable to this Court, save that the
same be taken only against a pure question of law. The task then, is to apply the
relevant principles of statutory construction to resolve the ambiguity.

"The underlying principle of all construction is that the intent of the legislature
should be sought in the words employed to express it, and that when found[,] it
should be made to govern, x x x. If the words of the law seem to be of doubtful
import, it may then perhaps become necessary to look beyond them in order to
ascertain what was in the legislative mind at the time the law was enacted; what
the circumstances were, under which the action was taken; what evil, if any, was
meant to be redressed; x x x [a]nd where the law has contemporaneously been put
into operation, and in doing so a construction has necessarily been put upon it, this
construction, especially if followed for some considerable period, is entitled to
great respect, as being very probably a true expression of the legislative purpose,
and is not lightly to be overruled, although it is not conclusive." 124
As an aid to construction, courts may avail themselves of the actual proceedings of
the legislative body in interpreting a statute of doubtful meaning. In case of doubt
as to what a provision of a statute means, the meaning put to the provision during
the legislative deliberations may be adopted,125 albeit not controlling in the
interpretation of the law.126
A. The Senate deliberations cited by the
Ombudsman do not pertain to the second
paragraph of Section 14, RA 6770.
The Ombudsman submits that the legislative intent behind Section 14, RA 6770,
particularly on the matter of judicial review of her office's decisions or findings, is
supposedly clear from the following Senate deliberations: 127
Senator [Edgardo J.] Angara, x x x. On page 15, Mr. President, line 14, after the
phrase "petition for" delete the word "review" and in lieu thereof, insert the
word CERTIORARI. So that, review or appeal from the decision of the Ombudsman
would only be taken not on a petition for review, but on certiorari.
The President [Jovito R. Salonga]. What is the practical effect of that? Will it be
more difficult to reverse the decision under review?
Senator Angara. It has two practical effect ways, Mr. President. First is that the
findings of facts of the Ombudsman would be almost conclusive if supported by
substantial evidence. Second, we would not unnecessarily clog the docket of the
Supreme Court. So, it in effect will be a very strict appeal procedure.
xxxx
Senator [Teofisto T.] Guingona, [Jr.]. Does this mean that, for example, if there are
exhaustive remedies available to a respondent, the respondent himself has the
right to exhaust the administrative remedies available to him?
Senator Angara. Yes, Mr. President, that is correct.
Senator Guingona. And he himself may cut the proceeding short by appealing to
the Supreme Court only on certiorari ?
Senator Angara. On question of law, yes.
Senator Guingona. And no other remedy is available to him?
Senator Angara. Going to the Supreme Court, Mr. President?
Senator Guingona. Yes. What I mean to say is, at what stage, for example, if he is a
presidential appointee who is the respondent, if there is f no certiorari available, is
the respondent given the right to exhaust his administrative remedies first before
the Ombudsman can take the appropriate action?
Senator Angara. Yes, Mr. President, because we do not intend to change the
administrative law principle that before one can go to court, he must exhaust all
administrative remedies xxx available to him before he goes and seeks judicial
review.
xxxx
Senator [Neptali A.] Gonzales. What is the purpose of the Committee in changing
the method of appeal from one of a petition for review to a petition
for certiorari ?
Senator Angara. To make it consistent, Mr. President, with the provision here in
the bill to the effect that the finding of facts of the Ombudsman is conclusive if
supported by substantial evidence.
Senator Gonzales. A statement has been made by the Honorable Presiding Officer
to which I concur, that in an appeal by certiorari , the appeal is more difficult.
Because in certiorari it is a matter of discretion on the part of the court, whether
to give due course to the petition or dismiss it outright. Is that not correct, Mr.
President?
Senator Angara. That is absolutely correct, Mr. President
Senator Gonzales. And in a petition for certiorari , the issue is limited to whether
or not the Ombudsman here has acted without jurisdiction and has committed a
grave abuse of discretion amounting to lack of jurisdiction. Is that not the
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 83
consequence, Mr. President.
Senator Angara. That is correct, Mr. President.
Senator Gonzales. And it is, therefore, in this sense that the intention of the
Committee is to make it harder to have a judicial review, but should be limited
only to cases that I have enumerated.
Senator Angara. Yes, Mr. President.
Senator Gonzales. I think, Mr. President, our Supreme Court has made a distinction
between a petition for review and a petition for certiorari ; because before, under
the 1935 Constitution appeal from any order, ruling or decision of the COMELEC
shall be by means of review. But under the Constitution it is now by certiorari and
the Supreme Court said that by this change, the court exercising judicial review will
not inquire into the facts, into the evidence, because we will not go deeply by way
of review into the evidence on record but its authority will be limited to a
determination of whether the administrative agency acted without, or in excess of,
jurisdiction, or committed a grave abuse of discretion. So, I assume that that is the
purpose of this amendment, Mr. President.
Senator Angara. The distinguished Gentleman has stated it so well.
Senator Gonzales. I just want to put that in the Record. Senator Angara. It is very
well stated, Mr. President.
xxxx
The President. It is evident that there must be some final authority to render
decisions. Should it be the Ombudsman or should it be the Supreme Court?
Senator Angara. As I understand it, under our scheme of government, Mr.
President, it is and has to be the Supreme Court to make the final determination.
The President. Then if that is so, we have to modify Section 17.
Senator Angara. That is why, Mr. President, some of our Colleagues have made a
reservation to introduce an appropriate change during the period of Individual
Amendments.
xxxx
The President. All right. Is there any objection to the amendment inserting the
word CERTIORARI instead of "review"? [Silence] Hearing none, the same is
approved.128
Upon an assiduous scrutiny of these deliberations, the Court is, however,
unconvinced that the provision debated on was Section 14, RA 6770, as the
Ombudsman invokes. Note that the exchange begins with the suggestion of
Senator Angara to delete the word "review" that comes after the phrase "petition
for review" and, in its stead, insert the word "certiorari" so that the "review or
appeal from the decision of the Ombudsman would not only be taken on a petition
for review, but on certiorari" The ensuing exchange between Senators Gonzales
and Angara then dwells on the purpose of changing the method of review from
one of a petition for review to a petition for certiorari - that is, to make "the appeal
x x x more difficult." Ultimately, the amendment to the change in wording, from
"petition for review" to "petition for certiorari" was approved.
Noticeably, these references to a "petition for review" and the proposed "petition
for certiorari" are nowhere to be found in the text of Section 14, RA 6770. In fact, it
was earlier mentioned that this provision, particularly its second paragraph, does
not indicate what specific procedural remedy one should take in assailing a
decision or finding of the Ombudsman; it only reveals that the remedy be taken to
this Court based on pure questions of law. More so, it was even commented upon
during the oral arguments of this case129 that there was no debate or clarification
made on the current formulation of the second paragraph of Section 14, RA 6770
per the available excerpts of the Senate deliberations. In any case, at least for the
above-cited deliberations, the Court finds no adequate support to sustain the
Ombudsman's entreaty that the CA had no subject matter jurisdiction over the
main CA-G.R. SP No. 139453 petition.
On the contrary, it actually makes greater sense to posit that these deliberations
refer to another Ombudsman Act provision, namely Section 27, RA 6770. This is
because the latter textually reflects the approval of Senator Angara's suggested
amendment, i.e., that the Ombudsman's decision or finding may be assailed in a
petition for certiorari to this Court (fourth paragraph), and further, his comment on
the conclusive nature of the factual findings of the Ombudsman, if supported by
substantial evidence (third paragraph):
Section 27. Effectivity and Finality of Decisions. (1) All provisionary orders of the
Office of the Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the
Ombudsman must be filed within five (5) days after receipt of written notice and
shall be entertained only on any of the following
grounds:chanRoblesvirtualLawlibrary

(1) New evidence has been discovered which materially affects the order, directive
or decision;cralawlawlibrary
(2) Errors of law or irregularities have been committed prejudicial to the interest of
the movant. The motion for reconsideration shall be resolved within three (3) days
from filing: Provided, That only one motion for reconsideration shall be
entertained.ChanRoblesVirtualawlibrary
Findings of fact by the Office of the Ombudsman when supported by substantial
evidence are conclusive. Any order, directive or decision imposing the penalty of
public censure or reprimand, suspension of not more than one (1) month's salary
shall be final and unappealable.
In all administrative disciplinary cases, orders, directives, or decisions of the
Office of the Ombudsman may be appealed to the Supreme Court by filing
a petition for certiorari within ten (10) days from receipt of the written notice of
the order, directive or decision or denial of the motion for reconsideration in
accordance with Rule 45 of the Rules of Court.
The above rules may be amended or modified by the Office of the ' Ombudsman as
the interest of justice may require. (Emphasis and underscoring supplied)
At first blush, it appears that Section 27, RA 6770 is equally ambiguous in stating
that a "petition for certiorari" should be taken in accordance with Rule 45 of the
Rules of Court, as it is well-known that under the present 1997 Rules of Civil
Procedure, petitions for certiorari are governed by Rule 65 of the said Rules.
However, it should be discerned that the Ombudsman Act was passed way back in
1989130 and, hence, before the advent of the 1997 Rules of Civil Procedure. 131 At
that time, the governing 1964 Rules of Court,132 consistent with Section 27, RA
6770, referred to the appeal taken thereunder as a petition for certiorari , thus
possibly explaining the remedy's textual denomination, at least in the provision's
final approved version:
RULE 45
Appeal from Court of Appeals to Supreme Court
SECTION 1. Filing of Petition with Supreme Court. - A party may appeal
by certiorari , from a judgment of the Court of Appeals, by filing with the Supreme
Court a petition for certiorari , within fifteen (15) days from notice of judgment or
of the denial of his motion for reconsideration filed in due time, and paying at the
same time, to the clerk of said court the corresponding docketing fee. The petition
shall not be acted upon without proof of service of a copy thereof to the Court of
Appeals. (Emphasis supplied)
B. Construing the second paragraph of
Section 14, RA 6770.
The Senate deliberations' lack of discussion on the second paragraph of Section 14,
RA 6770 notwithstanding, the other principles of statutory construction can apply
to ascertain the meaning of the provision.
To recount, the second paragraph of Section 14, RA 6770 states that "[n]o court
shall hear any appeal or application for remedy against the decision or findings of
the Ombudsman, except the Supreme Court, on pure question of law."
;cralawlawlibrary
As a general rule, the second paragraph of Section 14, RA 6770 bans the whole
range of remedies against issuances of the Ombudsman, by prohibiting: (a) an
appeal against any decision or finding of the Ombudsman, and (b) "any application
of remedy" (subject to the exception below) against the same. To clarify, the
phrase "application for remedy," being a generally worded provision, and being
separated from the term "appeal" by the disjunctive "or",133 refers to any remedy
(whether taken mainly or provisionally), except an appeal, following the
maxim generalia verba sunt generaliter intelligenda: general words are to be
understood in a general sense.134 By the same principle, the word "findings," which
is also separated from the word "decision" by the disjunctive "or", would therefore
refer to any finding made by the Ombudsman (whether final or provisional), except
a decision.
The subject provision, however, crafts an exception to the foregoing general rule.
While the specific procedural vehicle is not explicit from its text, it is fairly
deducible that the second paragraph of Section 14, RA 6770 excepts, as the only
allowable remedy against "the decision or findings of the Ombudsman," a Rule 45
appeal, for the reason that it is the only remedy taken to the Supreme Court on
"pure questions of law," whether under the 1964 Rules of Court or the 1997 Rules
of Civil Procedure:
Rule 45, 1964 Rules of Court
RULE 45
Appeal from Court of Appeals to Supreme Court
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 84
xxxx
Section 2. Contents of Petition. The petition shall contain a concise statement of
the matters involved, the assignment of errors made in the court below, and the
reasons relied on for the allowance of the petition, and it should be accompanied
with a true copy of the judgment sought to be reviewed, together with twelve (12)
copies of the record on appeal, if any, and of the petitioner's brief as filed in the
Court of Appeals. A verified statement of the date when notice of judgment and
denial of the motion for reconsideration, if any, were received shall accompany the
petition.
Only questions of law may be raised in the petition and must be distinctly set
forth. If no record on appeal has been filed in the Court of Appeals, the clerk of the
Supreme Court, upon admission of the petition, shall demand from the Court of
Appeals the elevation of the whole record of the case. (Emphasis and underscoring
supplied)
Rule 45, 1997 Rules of Civil Procedure
RULE 45
Appeal by Certiorari to the Supreme Court
Section 1. Filing of petition with Supreme Court. - A party desiring to appeal
by certiorari from a judgment, final order or resolution of the Court of Appeals, the
Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts,
whenever authorized by law, may file with the Supreme Court a verified petition
for review on certiorari. The petition may include an application for a writ of
preliminary injunction or other provisional remedies and shall raise only questions
of law, which must be distinctly set forth. The petitioner may seek the same
provisional remedies by verified motion filed in the same action or proceeding at
any time during its pendency. (Emphasis and underscoring supplied)
That the remedy excepted in the second paragraph of Section 14, RA 6770 could be
a petition for certiorari under Rule 65 of the 1964 Rules of Court or the 1997 Rules
of Procedure is a suggestion that defies traditional norms of procedure. It is basic
procedural law that a Rule 65 petition is based on errors of jurisdiction, and not
errors of judgment to which the classifications of (a) questions of fact, (b)
questions of law, or (c) questions of mixed fact and law, relate to. In fact, there is
no procedural rule, whether in the old or new Rules, which grounds a Rule 65
petition on pure questions of law. Indeed, it is also a statutory construction
principle that the lawmaking body cannot be said to have intended the
establishment of conflicting and hostile systems on the same subject. Such a result
would render legislation a useless and idle ceremony, and subject the laws to
uncertainty and unintelligibility.135 There should then be no confusion that the
second paragraph of Section 14, RA 6770 refers to a Rule 45 appeal to this Court,
and no other. In sum, the appropriate construction of this Ombudsman Act
provision is that all remedies against issuances of the Office of the Ombudsman are
prohibited, except the above-stated Rule 45 remedy to the Court on pure
questions of law.
C. Validity of the second paragraph of
Section 14, RA 6770.
Of course, the second paragraph of Section 14, RA 6770's extremely limited
restriction on remedies is inappropriate since a Rule 45 appeal -which is within the
sphere of the rules of procedure promulgated by this Court - can only be taken
against final decisions or orders of lower courts,136and not against "findings" of
quasi-judicial agencies. As will be later elaborated upon, Congress cannot interfere
with matters of procedure; hence, it cannot alter the scope of a Rule 45 appeal so
as to apply to interlocutory "findings" issued by the Ombudsman. More
significantly, by confining the remedy to a Rule 45 appeal, the provision takes
away the remedy of certiorari, grounded on errors of jurisdiction, in denigration of
the judicial power constitutionally vested in courts. In this light, the second
paragraph of Section 14, RA 6770 also increased this Court's appellate jurisdiction,
without a showing, however, that it gave its consent to the same. The provision is,
in fact, very similar to the fourth paragraph of Section 27, RA 6770 (as above-
cited), which was invalidated in the case of Fabian v. Desiertoni137 (Fabian).138
In Fabian, the Court struck down the fourth paragraph of Section 27, RA 6770 as
unconstitutional since it had the effect of increasing the appellate jurisdiction of
the Court without its advice and concurrence in violation of Section 30, Article VI
of the 1987 Constitution.139 Moreover, this provision was found to be inconsistent
with Section 1, Rule 45 of the present 1997 Rules of Procedure which, as above-
intimated, applies only to a review of "judgments or final orders of the Court of
Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court, or
other courts authorized by law;" and not of quasi-judicial agencies, such as the
Office of the Ombudsman, the remedy now being a Rule 43 appeal to the Court of
Appeals. In Ruivivar v. Office of the Ombudsman,140 the Court's ratiocinations and
ruling in Fabian were recounted:

The case of Fabian v. Desierto arose from the doubt created in the application of
Section 27 of R.A. No. 6770 (The Ombudsman's Act) and Section 7, Rule III of A.O.
No. 7 (Rules of Procedure of the Office of the Ombudsman) on the availability of
appeal before the Supreme Court to assail a decision or order of the Ombudsman
in administrative cases. In Fabian, we invalidated Section 27 of R.A. No. 6770 (and
Section 7, Rule III of A.O. No. 7 and the other rules implementing the Act) insofar
as it provided for appeal by certiorari under Rule 45 from the decisions or orders
of the Ombudsman in administrative cases. We held that Section 27 of R.A. No.
6770 had the effect, not only of increasing the appellate jurisdiction of this Court
without its advice and concurrence in violation of Section 30, Article VI of the
Constitution; it was also inconsistent with Section 1, Rule 45 of the Rules of Court
which provides that a petition for review on certiorari shall apply only to a
review of "judgments or final orders of the Court of Appeals, the Sandiganbayan,
the Court of Tax Appeals, the Regional Trial Court, or other courts authorized by
law." We pointedly said:chanRoblesvirtualLawlibrary
As a consequence of our ratiocination that Section 27 of Republic Act No. 6770
should be struck down as unconstitutional, and in line with the regulatory
philosophy adopted in appeals from quasi-judicial agencies in the 1997 Revised
Rules of Civil Procedure, appeals from decisions of the Office of the Ombudsman in
administrative disciplinary cases should be taken to the CA under the provisions of
Rule 43.141 (Emphasis supplied)
Since the second paragraph of Section 14, RA 6770 limits the remedy against
"decision or findings" of the Ombudsman to a Rule 45 appeal and thus - similar to
the fourth paragraph of Section 27, RA 6770142 - attempts to effectively increase
the Supreme Court's appellate jurisdiction without its advice and concurrence,143 it
is therefore concluded that the former provision is also unconstitutional and
perforce, invalid. Contrary to the Ombudsman's posturing, 144Fabian should
squarely apply since the above-stated Ombudsman Act provisions are in part
materia in that they "cover the same specific or particular subject matter," 145 that
is, the manner of judicial review over issuances of the Ombudsman.
Note that since the second paragraph of Section 14, RA 6770 is clearly
determinative of the existence of the CA's subject matter jurisdiction over the main
CA-G.R. SP No. 139453 petition, including all subsequent proceedings relative
thereto, as the Ombudsman herself has developed, the Court deems it proper to
resolve this issue ex mero motu (on its own motion146). This procedure, as was
similarly adopted in Fabian, finds its bearings in settled case law:
The conventional rule, however, is that a challenge on constitutional grounds must
be raised by a party to the case, neither of whom did so in this case, but that is not
an inflexible rule, as we shall explain.
Since the constitution is intended for the observance of the judiciary and other
departments of the government and the judges are sworn to support its
provisions, the courts are not at liberty to overlook or disregard its commands or
countenance evasions thereof. When it is clear , that a statute transgresses the
authority vested in a legislative body, it is the duty of the courts to declare that the
constitution, and not the statute, governs in a case before them for judgment.
Thus, while courts will not ordinarily pass upon constitutional questions which are
not raised in the pleadings, the rule has been recognized to admit of certain
exceptions. It does not preclude a court from inquiring into its own jurisdiction or
compel it to enter a judgment that it lacks jurisdiction to enter. If a statute on
which a court's jurisdiction in a proceeding depends is unconstitutional, the court
has no jurisdiction in the proceeding, and since it may determine whether or not it
has jurisdiction, it necessarily follows that it may inquire into the constitutionality
of the statute.
Constitutional questions, not raised in the regular and orderly procedure in the
trial are ordinarily rejected unless the jurisdiction of the court below or that of
the appellate court is involved in which case it may be raised at any time or on
the court's own motion. The Court ex mero motu may take cognizance of lack of
jurisdiction at any point in the case where that fact is developed. The court has a
clearly recognized right to determine its own jurisdiction in any
proceeding.147(Emphasis supplied)
D. Consequence of invalidity.
In this case, the Rule 65 petition for certiorari in CA-G.R. SP No. 139453 was filed
by Binay, Jr. before the CA in order to nullify the preventive suspension order
issued by the Ombudsman, an interlocutory order,148 hence, unappealable.149
In several cases decided after Fabian, the Court has ruled that Rule 65 petitions
for certiorari against unappelable issuances150 of the Ombudsman should be filed
before the CA, and not directly before this Court:
In Office of the Ombudsman v. Capulong151 (March 12, 2014), wherein a preventive
suspension order issued by the Office of the Ombudsman was - similar to this case
- assailed through a Rule 65 petition for certiorari filed by the public officer before
the CA, the Court held that "[t]here being a finding of grave abuse of discretion on
the part of the Ombudsman, it was certainly imperative for the CA to grant
incidental reliefs, as sanctioned by Section 1 of Rule 65."152
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 85
In Dagan v. Office of the Ombudsman 153 (November 19, 2013), involving a Rule 65
petition for certiorari assailing a final and unappealable order of the Office of the
Ombudsman in an administrative case, the Court remarked that "petitioner
employed the correct mode of review in this case, i.e., a special civil action
for certiorari before the Court of Appeals."154 In this relation, it stated that while "a
special civil action for Certiorari is within the concurrent original jurisdiction of the
Supreme Court and the Court of Appeals, such petition should be initially filed with
the Court of Appeals in observance of the doctrine of hierarchy of courts." Further,
the Court upheld Barata v. Abalos, Jr.155 (June 6, 2001), wherein it was ruled that
the remedy against final and unappealable orders of the Office of the Ombudsman
in an administrative case was a Rule 65 petition to the CA. The same verdict was
reached in Ruivivar156 (September 16, 2008).
Thus, with the unconstitutionality of the second paragraph of Section 14, RA 6770,
the Court, consistent with existing jurisprudence, concludes that the CA has
subject matter jurisdiction over the main CA-G.R. SP No. 139453 petition. That
being said, the Court now examines the objections of the Ombudsman, this time
against the CA's authority to issue the assailed TRO and WPI against the
implementation of the preventive suspension order, incidental to that main case.
III.
From the inception of these proceedings, the Ombudsman has been adamant that
the CA has no jurisdiction to issue any provisional injunctive writ against her office
to enjoin its preventive suspension orders. As basis, she invokes the first paragraph
of Section 14, RA 6770 in conjunction with her office's independence under the
1987 Constitution. She advances the idea that "[i]n order to further ensure [her
office's] independence, [RA 6770] likewise insulated it from judicial
intervention,"157 particularly, "from injunctive reliefs traditionally obtainable from
the courts,"158claiming that said writs may work "just as effectively as direct
harassment or political pressure would."159
A. The concept of Ombudsman independence.
Section 5, Article XI of the 1987 Constitution guarantees the independence of the
Office of the Ombudsman:
Section 5. There is hereby created the independent Office of the Ombudsman,
composed of the Ombudsman to be known as Tanodbayan, one overall Deputy and
at least one Deputy each for Luzon, Visayas[,] and Mindanao. A separate Deputy
for the military establishment may likewise be appointed. (Emphasis supplied)
In Gonzales III v. Office of the President160 (Gonzales III), the Court traced the
historical underpinnings of the Office of the Ombudsman:
Prior to the 1973 Constitution, past presidents established several Ombudsman-
like agencies to serve as the people's medium for airing grievances and for direct
redress against abuses and misconduct in the government. Ultimately, however,
these agencies failed to fully realize their objective for lack of the political
independence necessary for the effective performance of their function as
government critic.
It was under the 1973 Constitution that the Office of the Ombudsman became a
constitutionally-mandated office to give it political independence and adequate
powers to enforce its mandate. Pursuant to the ( 1973 Constitution, President
Ferdinand Marcos enacted Presidential Decree (PD) No. 1487, as amended by PD
No. 1607 and PD No. 1630, creating the Office of the Ombudsman to be known as
Tanodbayan. It was tasked principally to investigate, on complaint or motu proprio,
any administrative act of any administrative agency, including any government-
owned or controlled corporation. When the Office of the Tanodbayan was
reorganized in 1979, the powers previously vested in the Special Prosecutor were
transferred to the Tanodbayan himself. He was given the exclusive authority to
conduct preliminary investigation of all cases cognizable by the Sandiganbayan, file
the corresponding information, and control the prosecution of these cases.
With the advent of the 1987 Constitution, a new Office of the Ombudsman was
created by constitutional fiat. Unlike in the 1973 Constitution, its independence
was expressly and constitutionally guaranteed. Its objectives are to enforce the
state policy in Section 27, Article II and the standard of accountability in public
service under Section 1, Article XI of the 1987 Constitution. These provisions
read:chanRoblesvirtualLawlibrary
Section 27. The State shall maintain honesty and integrity in the public service and
take positive and effective measures against graft and corruption.
Section 1. Public office is a public trust. Public officers and employees must, at all
times, be accountable to the people, serve them with utmost responsibility,
integrity, loyalty, and efficiency; act with patriotism and justice, and lead modest
lives.161 (Emphasis supplied)
More significantly, Gonzales III explained the broad scope of the office's mandate,
and in correlation, the impetus behind its independence:

Under Section 12, Article XI of the 1987 Constitution, the Office of the
Ombudsman is envisioned to be the "protector of the people" against the inept,
abusive, and corrupt in the Government, to function essentially as a complaints
and action bureau. This constitutional vision of a Philippine Ombudsman practically
intends to make the Ombudsman an authority to directly check and guard against
the ills, abuses and excesses , of the bureaucracy. Pursuant to Section 13 (8),
Article XI of the 1987 Constitution, Congress enacted RA No. 6770 to enable it to
further realize the vision of the Constitution. Section 21 of RA No. 6770
provides:chanRoblesvirtualLawlibrary
Section 21. Official Subject to Disciplinary Authority; Exceptions. - The Office of the
Ombudsman shall have disciplinary authority over all elective and appointive
officials of the Government and its subdivisions, instrumentalities, and agencies,
including Members of the Cabinet, local government, government-owned or
controlled corporations and their subsidiaries, except over officials who may be
removed only by impeachment or over Members of Congress, and the
Judiciary.ChanRoblesVirtualawlibrary
As the Ombudsman is expected to be an "activist watchman," the < Court has
upheld its actions, although not squarely falling under the broad powers granted
[to] it by the Constitution and by RA No. 6770, if these actions are reasonably in
line with its official function and consistent with the law and the Constitution.
The Ombudsman's broad investigative and disciplinary powers include all acts of
malfeasance, misfeasance, and nonfeasance of all public officials, including
Members of the Cabinet and key Executive officers, during their tenure. To support
these broad powers, the Constitution saw it fit to insulate the Office of the
Ombudsman from the pressures and influence of officialdom and partisan
politics and from fear of external reprisal by making it an "independent" office, x
x x.
xxxx
Given the scope of its disciplinary authority, the Office of the Ombudsman is a very
powerful government constitutional agency that is considered "a notch above
other grievance-handling investigative bodies." It has powers, both constitutional
and statutory, that are commensurate , with its daunting task of enforcing
accountability of public officers.162 (Emphasis and underscoring supplied)
Gonzales III is the first case which grappled with the meaning of the Ombudsman's
independence vis-a-vis the independence of the other constitutional bodies.
Pertinently, the Court observed:
(1) "[T]he independence enjoyed by the Office of the Ombudsman and by the
Constitutional Commissions shares certain characteristics - they do not owe their
existence to any act of Congress, but are created by the Constitution itself;
additionally, they all enjoy fiscal autonomy. In general terms, the framers of the
Constitution intended that these 'independent' bodies be insulated from political
pressure to the extent that the absence of 'independence' would result in the
impairment of their core functions"163;cralawlawlibrary
(2) "[T]he Judiciary, the Constitutional Commissions, and the Ombudsman must
have the independence and flexibility needed in the discharge of their
constitutional duties. The imposition of restrictions and constraints on the manner
the independent constitutional offices allocate and utilize the funds appropriated
for their operations is anathema to fiscal autonomy and violative not only [of] the
express mandate of the Constitution, but especially as regards the Supreme Court,
of the independence and separation of powers upon which the entire fabric of our
constitutional system is based";164 and
(3) "[T]he constitutional deliberations explain the Constitutional Commissions'
need for independence. In the deliberations of the 1973 Constitution, the
delegates amended the 1935 Constitution by providing for a constitutionally-
created Civil Service Commission, instead of one created by law, on the premise
that the effectivity of this body is dependent on its freedom from the tentacles of
politics. In a similar manner, the deliberations of the 1987 Constitution on the
Commission on Audit highlighted the developments in the past
Constitutions geared towards insulating the Commission on Audit from political
pressure."165
At bottom, the decisive ruling in Gonzales III, however, was that the independence
of the Office of the Ombudsman, as well as that of the foregoing independent
bodies, meant freedom from control or supervision of the Executive Department:
[T]he independent constitutional commissions have been consistently intended by
the framers to be independent from executive control or supervision or any form
of political influence. At least insofar as these bodies are concerned, jurisprudence
is not scarce on how the "independence" granted to these bodies prevents
presidential interference.
In Brillantes, Jr. v. Yorac (G.R. No. 93867, December 18, 1990, 192 SCRA 358), we
emphasized that the Constitutional Commissions, which have been characterized
under the Constitution as "independent," are not under the control of the
President, even if they discharge functions that are executive in nature. The Court
declared as unconstitutional the President's act of temporarily appointing the
respondent in that case as Acting Chairman of the [Commission on Elections]
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 86
"however well-meaning" it might have been.
In Bautista v. Senator Salonga (254 Phil. 156, 179 [1989]), the Court categorically
stated that the tenure of the commissioners of the independent Commission on
Human Rights could not be placed under the discretionary power of the
President.
xxxx
The kind of independence enjoyed by the Office of the Ombudsman certainly
cannot be inferior - but is similar in degree and kind - to the independence
similarly guaranteed by the Constitution to the Constitutional Commissions since
all these offices fill the political interstices of a republican democracy that are
crucial to its existence and proper functioning.166 (Emphases and underscoring
supplied)
Thus, in Gonzales III, the Court declared Section 8 (2), RA 6770, which provides that
"[a] Deputy or the Special Prosecutor, may be removed from office by the
President for any of the grounds provided for the removal of the Ombudsman, and
after due process," partially unconstitutional insofar as it subjected the Deputy
Ombudsman to the disciplinary authority of the President for violating the
principle of independence. Meanwhile, the validity of Section 8 (2), RA 6770 was
maintained insofar as the Office of the Special Prosecutor was concerned since said
office was not considered to be constitutionally within the Office of the
Ombudsman and is, hence, not entitled to the independence the latter enjoys
under the Constitution.167
As may be deduced from the various discourses in Gonzales III, the concept of
Ombudsman's independence covers three (3) things:
First: creation by the Constitution, which means that the office cannot be
abolished, nor its constitutionally specified functions and privileges, be removed,
altered, or modified by law, unless the Constitution itself allows, or an amendment
thereto is made;cralawlawlibrary
Second: fiscal autonomy, which means that the office "may not be obstructed
from [its] freedom to use or dispose of [its] funds for purposes germane to [its]
functions;168hence, its budget cannot be strategically decreased by officials of the
political branches of government so as to impair said functions; and
Third: insulation from executive supervision and control, which means that those
within the ranks of the office can only be disciplined by an internal authority.
Evidently, all three aspects of independence intend to protect the Office of the
Ombudsman from political harassment and pressure, so as to free it from the
"insidious tentacles of politics."169
That being the case, the concept of Ombudsman independence cannot be invoked
as basis to insulate the Ombudsman from judicial power constitutionally vested
unto the courts. Courts are apolitical bodies, which are ordained to act as impartial
tribunals and apply even justice to all. Hence, the Ombudsman's notion that it can
be exempt from an incident of judicial power - that is, a provisional writ of
injunction against a preventive suspension order - clearly strays from the concept's
rationale of insulating the office from political harassment or pressure.
B. The first paragraph of Section 14, RA
6770 in light of the powers of Congress and the
Court under the 1987 Constitution.
The Ombudsman's erroneous abstraction of her office's independence
notwithstanding, it remains that the first paragraph of Section 14, RA 6770
textually prohibits courts from extending provisional injunctive relief to delay any
investigation conducted by her office. Despite the usage of the general phrase
"[n]o writ of injunction shall be issued by any court," the Ombudsman herself
concedes that the prohibition does not cover the Supreme Court.170 As support,
she cites the following Senate deliberations:
Senator [Ernesto M.] Maceda. Mr. President, I do not know if an amendment is
necessary. I would just like to inquire for the record whether below the Supreme
Court, it is understood that there is no injunction policy against the Ombudsman
by lower courts. Or, is it necessary to have a special paragraph for that?
Senator Angara. Well, there is no provision here, Mr. President, that will prevent
an injunction against the Ombudsman being issued.
Senator Maceda. In which case, I think that the intention, this being one of the
highest constitutional bodies, is to subject this only to certiorari to the Supreme
Court. I think an injunction from the Supreme Court is, of course, in order but no
lower courts should be allowed to interfere. We had a very bad experience with
even, let us say, the Forestry Code where no injunction is supposed to be issued
against the Department of Natural Resources. Injunctions are issued right and left
by RTC judges all over the country.
The President. Why do we not make an express provision to that effect?
Senator Angara. We would welcome that, Mr. President.

The President. No [writs of injunction] from the trial courts other than the
Supreme Court.
Senator Maceda. I so move, Mr. President, for that amendment.
The President. Is there any objection? [Silence] Hearing none, the same is
approved.171
Further, she acknowledges that by virtue of Sections 1 and 5 (1), Article VIII of the
1987 Constitution, acts of the Ombudsman, including interlocutory orders, are
subject to the Supreme Court's power of judicial review As a corollary, the
Supreme Court may issue ancillary mjunctive writs or provisional remedies in the
exercise of its power of judicial review over matters pertaining to ongoing
investigations by the Office of the Ombudsman. Respecting the CA, however, the
Ombudsman begs to differ.172
With these submissions, it is therefore apt to examine the validity of the first
paragraph of Section 14, RA 6770 insofar as it prohibits all courts, except this
Court, from issuing provisional writs of injunction to enjoin an Ombudsman
investigation. That the constitutionality of this provision is the lis mota of this case
has not been seriously disputed. In fact, the issue anent its constitutionality was
properly raised and presented during the course of these proceedings. 173 More
importantly, its resolution is clearly necessary to the complete disposition of this
case.174
In the enduring words of Justice Laurel in Angara v. The Electoral
Commission (Angara),175 the "Constitution has blocked out with deft strokes and in
bold lines, allotment of power to the executive, the legislative[,] and the judicial
departments of the government."176 The constitutional demarcation of the three
fundamental powers of government is more commonly known as the principle of
separation of powers. In the landmark case of Belgica v. Ochoa, Jr. (Belgica),177 the
Court held that "there is a violation of the separation of powers principle when one
branch of government unduly encroaches on the domain of another." 178 In
particular, "there is a violation of the principle when there is impermissible (a)
interference with and/or (b) assumption of another department's functions."179
Under Section 1, Article VIII of the 1987 Constitution, judicial power is allocated to
the Supreme Court and all such lower courts:
Section 1. The judicial power shall be vested in one Supreme Court and in such
lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and
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 the
Government.
This Court is the only court established by the Constitution, while all other lower
courts may be established by laws passed by Congress. Thus, through the
passage of Batas Pambansa Bilang (BP) 129,180 known as "The Judiciary
Reorganization Act of 1980," the Court of Appeals,181 the Regional Trial
Courts,182 and the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts183 were established. Later, through the passage of RA
1125,184 and Presidential Decree No. (PD) 1486,185 the Court of Tax Appeals, and the
Sandiganbayan were respectively established.
In addition to the authority to establish lower courts, Section 2, Article VIII of the
1987 Constitution empowers Congress to define, prescribe, and apportion the
jurisdiction of all courts, except that it may not deprive the Supreme Court of its
jurisdiction over cases enumerated in Section 5186 of the same Article:
Section 2. The Congress shall have the power to define, prescribe, ' and apportion
the jurisdiction of the various courts but may not deprive the Supreme Court of its
jurisdiction over cases enumerated in Section 5 hereof.
x x x xChanRoblesVirtualawlibrary
Jurisdiction, as hereinabove used, more accurately pertains to jurisdiction over the
subject matter of an action. In The Diocese ofBacolod v. Commission on
Elections,187 subject matter jurisdiction was defined as "the authority 'to hear and
determine cases of the general class to which the proceedings in question belong
and is conferred by the sovereign authority which organizes the court and
defines its powers.'"
Among others, Congress defined, prescribed, and apportioned the subject matter
jurisdiction of this Court (subject to the aforementioned constitutional limitations),
the Court of Appeals, and the trial courts, through the passage of BP 129, as
amended.
In this case, the basis for the CA's subject matter jurisdiction over Binay, Jr.'s main
petition for certiorari in CA-G.R. SP No. 139453 is Section 9(1), Chapter I of BP 129,
as amended:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 87
Section 9. Jurisdiction. - The Court of Appeals shall exercise:
1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari,
habeas corpus, and quo warranto, and auxiliary writs or processes,
whether or not in aid of its appellate jurisdiction[.]
Note that the CA's certiorari jurisdiction, as above-stated, is not only original but
also concurrent with the Regional Trial Courts (under Section 21 (1), Chapter II of
BP 129), and the Supreme Court (under Section 5, Article VIII of the 1987
Philippine Constitution). In view of the concurrence of these courts' jurisdiction
over petitions for certiorari, the doctrine of hierarchy of courts should be followed.
In People v. Cuaresma,188 the doctrine was explained as follows:
[T]his concurrence of jurisdiction is not x x x to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court
to which application therefor will be directed. There is after all a hierarchy of
courts. That hierarchy is determinative of the venue of appeals, and should also
serve as a general determinant of the appropriate forum for petitions for the
extraordinary writs. A becoming regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary writs against first level
("inferior") courts should be filed with the Regional Trial Court, and those against
the latter, with the Court of Appeals.189
When a court has subject matter jurisdiction over a particular case, as conferred
unto it by law, said court may then exercise its jurisdiction acquired over that case,
which is called judicial power.
Judicial power, as vested in the Supreme Court and all other courts established by
law, has been defined as the "totality of powers a court exercises when it assumes
jurisdiction and hears and decides a case."190 Under Section 1, Article VIII of the
1987 Constitution, it includes "the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable, and 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 the Government."
In Oposa v. Factoran, Jr.191 the Court explained the expanded scope of judicial
power under the 1987 Constitution:
The first part of the authority represents the traditional concept of judicial power,
involving the settlement of conflicting rights as conferred by law. The second part
of the authority represents a broadening of f judicial power to enable the courts of
justice to review what was before forbidden territory, to wit, the discretion of the
political departments of the government.
As worded, the new provision vests in the judiciary, and particularly the Supreme
Court, the power to rule upon even the wisdom of the decisions of the executive
and the legislature and to declare their acts invalid for lack or excess of jurisdiction
because they are tainted with grave abuse of discretion. The catch, of course, is the
meaning of "grave abuse of discretion," which is a very elastic phrase that can
expand or contract according to the disposition of the judiciary.192
Judicial power is never exercised in a vacuum. A court's exercise of the
jurisdiction it has acquired over a particular case conforms to the limits and
parameters of the rules of procedure duly promulgated by this Court. In other
words, procedure is the framework within which judicial power is exercised.
In Manila Railroad Co. v. Attorney-General,193 the Court elucidated that "[t]he
power or authority of the court over the subject matter existed and was fixed
before procedure in a given cause began. Procedure does not alter or change that
power or authority; it simply directs the manner in which it shall be fully and
justly exercised. To be sure, in certain cases, if that power is not exercised in
conformity with the provisions of the procedural law, purely, the court attempting
to exercise it loses the power to exercise it legally. This does not mean that it loses
jurisdiction of the subject matter." 194
While the power to define, prescribe, and apportion the jurisdiction of the various
courts is, by constitutional design, vested unto Congress, the power to promulgate
rules concerning the protection and enforcement of constitutional rights,
pleading, practice, and procedure in all courts belongs exclusively to this Court.
Section 5 (5), Article VIII of the 1987 Constitution reads:
Section 5. The Supreme Court shall have the following powers:
xxxx
(5) Promulgate rules concerning the protection and enforcement of constitutional
rights, pleading, practice, and procedure in all courts, the admission to the
practice of law, the Integrated Bar, and legal assistance to the underprivileged.
Such rules shall provide a simplified and inexpensive procedure for the speedy
disposition of cases, shall be uniform for all courts of the same grade, and shall not
diminish, increase, or modify substantive rights. Rules of procedure of special
courts and quasi-judicial bodies shall remain effective unless disapproved by the
Supreme Court. (Emphases and underscoring supplied)

In Echegaray v. Secretary of Justice195 (Echegaray), the Court traced the evolution of
its rule-making authority, which, under the 1935196 and 1973 Constitutions,197 had
been priorly subjected to a power-sharing scheme with Congress. 198 As it now
stands, the 1987 Constitution textually altered the old provisions by deleting the
concurrent power of Congress to amend the rules, thus solidifying in one body
the Court's rule-making powers, in line with the Framers' vision of
institutionalizing a "[s]tronger and more independent judiciary."199
The records of the deliberations of the Constitutional Commission would
show200 that the Framers debated on whether or not the Court's rule-making
powers should be shared with Congress. There was an initial suggestion to insert
the sentence "The National Assembly may repeal, alter, or supplement the said
rules with the advice and concurrence of the Supreme Court", right after the
phrase "Promulgate rules concerning the protection and enforcement of
constitutional rights, pleading, practice, and procedure in all courts, the admission
to the practice of law, the integrated bar, and legal assistance to the
underprivileged^" in the enumeration of powers of the Supreme Court. Later,
Commissioner Felicitas S. Aquino proposed to delete the former sentence and,
instead, after the word "[underprivileged," place a comma (,) to be followed by
"the phrase with the concurrence of the National Assembly." Eventually, a
compromise formulation was reached wherein (a) the Committee members agreed
to Commissioner Aquino's proposal to delete the phrase "the National Assembly
may repeal, alter, or supplement the said rules with the advice and concurrence of
the Supreme Court" and (b) in turn, Commissioner Aquino agreed to withdraw his
proposal to add "the phrase with the concurrence of the National Assembly." The
changes were approved, thereby leading to the present lack of textual reference
to any form of Congressional participation in Section 5 (5), Article VIII, supra. The
prevailing consideration was that "both bodies, the Supreme Court and the
Legislature, have their inherent powers."201
Thus, as it now stands, Congress has no authority to repeal, alter, or supplement
rules concerning pleading, practice, and procedure. As pronounced in Echegaray:
The rule making power of this Court was expanded. This Court for the first time
was given the power to promulgate rules concerning the protection and
enforcement of constitutional rights. The Court was also r granted for the first time
the power to disapprove rules of procedure of special courts and quasi-judicial
bodies. But most importantly, the 1987 Constitution took away the power of
Congress to repeal, alter, or supplement rules concerning pleading, practice and
procedure. In fine, the power to promulgate rules of pleading, practice and
procedure is no longer shared by this Court with Congress, more so with the
Executive.202 (Emphasis and underscoring supplied)
Under its rule-making authority, the Court has periodically passed various rules of
procedure, among others, the current 1997 Rules of Civil Procedure. Identifying
the appropriate procedural remedies needed for the reasonable exercise of every
court's judicial power, the provisional remedies of temporary restraining orders
and writs of preliminary injunction were thus provided.
A temporary restraining order and a writ of preliminary injunction both constitute
temporary measures availed of during the pendency of the action. They are, by
nature, ancillary because they are mere incidents in and are dependent upon the
result of the main action. It is well-settled that the sole object of a temporary
restraining order or a writ of preliminary injunction, whether prohibitory or
mandatory, is to preserve the status quo203 until the merits of the case can be
heard. They are usually granted when it is made to appear that there is a
substantial controversy between the parties and one of them is committing an act
or threatening the immediate commission of an act that will cause irreparable
injury or destroy the status quo of the controversy before a full hearing can be had
on the merits of the case. In other words, they are preservative remedies for the
protection of substantive rights or interests, and, hence, not a cause of action in
itself, but merely adjunct to a main suit.204 In a sense, they are regulatory processes
meant to prevent a case from being mooted by the interim acts of the parties.
Rule 58 of the 1997 Rules of Civil Procedure generally governs the provisional
remedies of a TRO and a WPI. A preliminary injunction is defined under Section
1,205 Rule 58, while Section 3206 of the same Rule enumerates the grounds for its
issuance. Meanwhile, under Section 5207 thereof, a TRO may be issued as a
precursor to the issuance of a writ of preliminary injunction under certain
procedural parameters.
The power of a court to issue these provisional injunctive reliefs coincides with
its inherent power to issue all auxiliary writs, processes, and other means
necessary to carry its acquired jurisdiction into effect under Section 6, Rule 135
of the Rules of Court which reads:
Section 6. Means to carry jurisdiction into effect. - When by law jurisdiction is
conferred on a court or judicial officer, all auxiliary writs, f processes and other
means necessary to carry it into effect may be employed by such court or officer;
and if the procedure to be followed in the exercise of such jurisdiction is not
specifically pointed out by law208or by these rules, any suitable process or mode of
proceeding may be adopted which appears comfortable to the spirit of the said law
or rules.ChanRoblesVirtualawlibrary
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 88
In City of Manila v. Grecia-Cuerdo, 209 which is a case involving "[t]he supervisory
power or jurisdiction of the [Court of Tax Appeals] to issue a writ of certiorari in
aid of its appellate jurisdiction"210 over "decisions, orders or resolutions of the RTCs
in local tax cases originally decided or resolved by them in the exercise of their
original or appellate jurisdiction,"211 the Court ruled that said power "should
coexist with, and be a complement to, its appellate jurisdiction to review, by
appeal, the final orders and decisions of the RTC, in order to have complete
supervision over the acts of the latter:"212
A grant of appellate jurisdiction implies that there is included in it the power
necessary to exercise it effectively, to make all orders that ; will preserve the
subject of the action, and to give effect to the final determination of the appeal. It
carries with it the power to protect that jurisdiction and to make the decisions of
the court thereunder effective. The court, in aid of its appellate jurisdiction, has
authority to control all auxiliary and incidental matters necessary to the efficient
and proper exercise of that jurisdiction. For this purpose, it may, when necessary,
prohibit or restrain the performance of any act which might interfere with the
proper exercise of its rightful jurisdiction in cases pending before it.213 (Emphasis
supplied)
In this light, the Court expounded on the inherent powers of a court endowed with
subject matter jurisdiction:
[A] court which is endowed with a particular jurisdiction should have powers which
are necessary to enable it to act effectively within such jurisdiction. These should
be regarded as powers which are inherent in its jurisdiction and the court must
possess them in order to enforce its rules of practice and to suppress any abuses
of its process and to t defeat any attempted thwarting of such process.
x x x x cralawlawlibrary
Indeed, courts possess certain inherent powers which may be said to be implied
from a general grant of jurisdiction, in addition to those expressly conferred on
them. These inherent powers are such powers as are necessary for the ordinary
and efficient exercise of jurisdiction; or are essential to the existence, dignity and
functions of the courts, as well as to the due administration of justice; or are
directly appropriate, convenient and suitable to the execution of their granted
powers; and include the power to maintain the court's jurisdiction and render it
effective in behalf of the litigants.214 (Emphases and underscoring supplied)
Broadly speaking, the inherent powers of the courts resonates the long-
entrenched constitutional principle, articulated way back in the 1936 case
of Angara, that "where a general power is conferred or duty enjoined, every
particular power necessary for the exercise of the one or the performance of the
other is also conferred." 215
In the United States, the "inherent powers doctrine refers to the principle, by
which the courts deal with diverse matters over which they are thought to have
intrinsic authority like procedural [rule-making] and general judicial housekeeping.
To justify the invocation or exercise of inherent powers, a court must show that the
powers are reasonably necessary to achieve the specific purpose for which the
exercise is sought. Inherent powers enable the judiciary to accomplish its
constitutionally mandated functions."216
In Smothers v. Lewis217 (Smothers), a case involving the constitutionality of a statute
which prohibited courts from enjoining the enforcement of a revocation order of
an alcohol beverage license pending appeal,218 the Supreme Court of Kentucky
held:
[T]he Court is x x x vested with certain "inherent" powers to do that which is
reasonably necessary for the administration of justice within the scope of their
jurisdiction. x x x [W]e said while considering the rule making power and the
judicial power to be one and the same that ". . . the grant of judicial power [rule
making power] to the courts by the constitution carries with it, as a necessary
incident, the right to make that power effective in the administration of justice."
(Emphases supplied)
Significantly, Smothers characterized a court's issuance of provisional injunctive
relief as an exercise of the court's inherent power, and to this end, stated that any
attempt on the part of Congress to interfere with the same was constitutionally
impermissible:
It is a result of this foregoing line of thinking that we now adopt the language
framework of 28 Am.Jur.2d, Injunctions, Section 15, and once and for all make
clear that a court, once having obtained jurisdiction of a cause of action, has, as an
incidental to its constitutional grant of power, inherent power to do all things
reasonably necessary to the administration of justice in the case before it. In the
exercise of this power, a court, when necessary in order to protect or preserve
the subject matter of the litigation, to protect its jurisdiction and to make its
judgment effective, may grant or issue a temporary injunction in aid of or
ancillary to the principal action.

The control over this inherent judicial power, in this particular instance the
injunction, is exclusively within the constitutional realm of the courts. As such, it
is not within the purview of the legislature to grant or deny the power nor is it
within the purview of the legislature to shape or fashion circumstances under
which this inherently judicial power may be or may not be granted or denied.
This Court has historically recognized constitutional limitations upon the power of
the legislature to interfere with or to inhibit the performance of constitutionally
granted and inherently provided judicial functions, x x x
xxxx
We reiterate our previously adopted language, ". . . a court, once having obtained
jurisdiction of a cause of action, has, as incidental to its general jurisdiction,
inherent power to do all things reasonably necessary f to the administration of
justice in the case before it. . ." This includes the inherent power to issue
injunctions. (Emphases supplied)
Smothers also pointed out that the legislature's authority to provide a right to
appeal in the statute does not necessarily mean that it could control the appellate
judicial proceeding:
However, the fact that the legislature statutorily provided for this appeal does not
give it the right to encroach upon the constitutionally granted powers of the
judiciary. Once the administrative action has ended and the right to appeal arises
the legislature is void of any right to control a subsequent appellate judicial
proceeding. The judicial rules have come into play and have preempted the
field.219 (Emphasis supplied)
With these considerations in mind, the Court rules that when Congress passed the
first paragraph of Section 14, RA 6770 and, in so doing, took away from the courts
their power to issue a TRO and/or WPI to enjoin an investigation conducted by the
Ombudsman, it encroached upon this Court's constitutional rule-making authority.
Clearly, these issuances, which are, by nature, provisional reliefs and auxiliary writs
created under the provisions of the Rules of Court, are matters of procedure which
belong exclusively within the province of this Court. Rule 58 of the Rules of Court
did not create, define, and regulate a right but merely prescribed the means of
implementing an existing right220 since it only provided for temporary reliefs to
preserve the applicant's right in esse which is threatened to be violated during the
course of a pending litigation. In the case of Fabian,211it was stated that:
If the rule takes away a vested right, it is not procedural. If the rule creates a right
such as the right to appeal, it may be classified as a substantive matter; but if it
operates as a means of implementing an existing right then the rule deals merely
with procedure.ChanRoblesVirtualawlibrary
Notably, there have been similar attempts on the part of Congress, in the exercise
of its legislative power, to amend the Rules of Court, as in the cases of: (a) In Re:
Exemption of The National Power Corporation from Payment of Filing/ Docket
Fees;222 (b) Re: Petition for Recognition of the Exemption of the Government Service
Insurance System (GSIS) from Payment of Legal Fees;223 and (c) Baguio Market
Vendors Multi-Purpose Cooperative (BAMARVEMPCO) v. Cabato-Cortes 224 While
these cases involved legislative enactments exempting government owned and
controlled corporations and cooperatives from paying filing fees, thus, effectively
modifying Rule 141 of the Rules of Court (Rule on Legal Fees), it was, nonetheless,
ruled that the prerogative to amend, repeal or even establish new rules of
procedure225 solely belongs to the Court, to the exclusion of the legislative and
executive branches of government. On this score, the Court described its authority
to promulgate rules on pleading, practice, and procedure as exclusive and "[o]ne of
the safeguards of [its] institutional independence."226
That Congress has been vested with the authority to define, prescribe, and
apportion the jurisdiction of the various courts under Section 2, Article
VIII supra, as well as to create statutory courts under Section 1, Article VIII supra,
does not result in an abnegation of the Court's own power to promulgate rules of
pleading, practice, and procedure under Section 5 (5), Article VIII supra. Albeit
operatively interrelated, these powers are nonetheless institutionally separate and
distinct, each to be preserved under its own sphere of authority. When Congress
creates a court and delimits its jurisdiction, the procedure for which its
jurisdiction is exercised is fixed by the Court through the rules it promulgates.
The first paragraph of Section 14, RA 6770 is not a jurisdiction-vesting provision, as
the Ombudsman misconceives,227 because it does not define, prescribe, and
apportion the subject matter jurisdiction of courts to act on certiorari cases;
the certiorari jurisdiction of courts, particularly the CA, stands under the relevant
sections of BP 129 which were not shown to have been repealed. Instead, through
this provision, Congress interfered with a provisional remedy that was created by
this Court under its duly promulgated rules of procedure, which utility is both
integral and inherent to every court's exercise of judicial power. Without the
Court's consent to the proscription, as may be manifested by an adoption of the
same as part of the rules of procedure through an administrative circular issued
therefor, there thus, stands to be a violation of the separation of powers
principle.
In addition, it should be pointed out that the breach of Congress in prohibiting
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 89
provisional injunctions, such as in the first paragraph of Section 14, RA 6770, does
not only undermine the constitutional allocation of powers; it also practically
dilutes a court's ability to carry out its functions. This is so since a particular case
can easily be mooted by supervening events if no provisional injunctive relief is
extended while the court is hearing the same. Accordingly, the court's acquired
jurisdiction, through which it exercises its judicial power, is rendered nugatory.
Indeed, the force of judicial power, especially under the present Constitution,
cannot be enervated due to a court's inability to regulate what occurs during a
proceeding's course. As earlier intimated, when jurisdiction over the subject
matter is accorded by law and has been acquired by a court, its exercise thereof
should be undipped. To give true meaning to the judicial power contemplated by
the Framers of our Constitution, the Court's duly promulgated rules of procedure
should therefore remain unabridged, this, even by statute. Truth be told, the policy
against provisional injunctive writs in whatever variant should only subsist under
rules of procedure duly promulgated by the Court given its sole prerogative over
the same.
The following exchange between Associate Justice Marvic Mario Victor F. Leonen
(Justice Leonen) and the Acting Solicitor General Florin T. Hilbay (Acting Solicitor
General Hilbay) mirrors the foregoing observations:
JUSTICE LEONEN:
Okay. Now, would you know what rule covers injunction in the Rules of Court?
ACTING SOLICITOR GENERAL HILBAY:
Rule 58, Your Honor.
JUSTICE LEONEN:
58, that is under the general rubric if Justice Bersamin will correct me if I will be
mistaken under the rubric of what is called provisional remedies, our resident
expert because Justice Peralta is not here so Justice Bersamin for a while. So
provisional remedy you have injunction, x x x.
xxxx
JUSTICE LEONEN:
Okay, Now, we go to the Constitution. Section 5, subparagraph 5 of Article VIII of
the Constitution, if you have a copy of the Constitution, can you please read that
provision? Section 5, Article VIII the Judiciary subparagraph 5, would you kindly
read that provision?
ACTING SOLICTOR GENERAL HILBAY.
"Promulgate rules concerning the protection and enforcement of constitutional
rights, pleading, practice and procedure in all courts..."
JUSTICE LEONEN:
Okay, we can stop with that, promulgate rules concerning pleading, practice and
procedure in all courts. This is the power, the competence, the jurisdiction of what
constitutional organ?
ACTING SOLICITOR GENERAL HILBAY:
The Supreme Court, Your Honor.
JUSTICE LEONEN:
The Supreme Court. This is different from Article VIII Sections 1 and 2 which we've
already been discussed with you by my other colleagues, is that not correct?
ACTING SOLICITOR GENERAL HILBAY:
Correct, Your Honor.
JUSTICE LEONEN:
Okay, so in Section 2, [apportion] jurisdiction that is the power of Congress, is that
not correct?
ACTING SOLICITOR GENERAL HILBAY:
Correct, Your Honor.
JUSTICE LEONEN:
On the other hand, the power to promulgate rules is with the Court, is that not
correct?
ACTING SOLICITOR GENERAL HILBAY:
Correct, Your Honor.
JUSTICE LEONEN:
A TRO and a writ of preliminary injunction, would it be a separate case or is it part
of litigation in an ordinary case?
ACTING SOLICITOR GENERAL HILBAY:
It is an ancillary remedy, Your Honor.
JUSTICE LEONEN:
In fact, it originated as an equitable remedy, is that not correct?
ACTING SOLICITOR GENERAL HILBAY:
Correct, Your Honor.
JUSTICE LEONEN:

In order to preserve the power of a court so that at the end of litigation, it will
not be rendered moot and academic, is that not correct?
ACTING SOLICITOR GENERAL HILBAY:
Correct, Your Honor.
JUSTICE LEONEN:
In that view, isn't Section 14, first paragraph, unconstitutional?
ACTING SOLICITOR GENERAL HILBAY:
No, Your Honor.
xxxx
JUSTICE LEONEN.
Can Congress say that a Court cannot prescribe Motions to Dismiss under Rule 16?
ACTING SOLICITOR GENERAL HILBAY:
Your Honor, Congress cannot impair the power of the Court to create remedies, x x
x.
JUSTICE LEONEN.
What about bill [of] particulars, can Congress say, no Court shall have the power to
issue the supplemental pleading called the bill of t particular [s]? It cannot,
because that's part of procedure...
ACTING SOLICITOR GENERAL HILBAY:
That is true.
JUSTICE LEONEN
...or for that matter, no Court shall act on a Motion to Quash, is that not correct?
ACTING SOLICITOR GENERAL HILBAY:
Correct.
JUSTICE LEONEN:
So what's different with the writ of injunction?
ACTING SOLICITOR GENERAL HILBAY:
Writ of injunction, Your Honor, requires the existence of jurisdiction on the part of
a court that was created by Congress. In the absence of jurisdiction... (interrupted)
JUSTICE LEONEN:
No, writ of injunction does not attach to a court. In other words, when they create
a special agrarian court it has all procedures with it but it does not attach
particularly to that particular court, is that not correct?
ACTING SOLICTOR GENERAL HILBAY:
When Congress, Your Honor, creates a special court...
JUSTICE LEONEN:
Again, Counsel, what statute provides for a TRO, created the concept of a TRO? It
was a Rule. A rule of procedure and the Rules of Court, is that not correct?
ACTING SOLICITOR GENERAL HILBAY:
Yes, Your Honor.
JUSTICE LEONEN:
And a TRO and a writ of preliminary injunction does not exist unless it is [an]
ancillary to a particular injunction in a court, is that not correct?
ACTING SOLICITOR GENERAL HILBAY:
Correct, Your Honor.
xxxx228 (Emphasis supplied)
In Biraogo v. The Philippine Truth Commission of 2010,229 the Court instructed that
"[i]t is through the Constitution that the fundamental powers of government are
established, limited and defined, and by which these powers are distributed among
the several departments. The Constitution is the basic and paramount law to which
all other laws must conform and to which all persons, including the highest officials
of the land, must defer." It would then follow that laws that do not conform to the
Constitution shall be stricken down for being unconstitutional.230
However, despite the ostensible breach of the separation of powers principle, the
Court is not oblivious to the policy considerations behind the first paragraph of
Section 14, RA 6770, as well as other statutory provisions of similar import. Thus,
pending deliberation on whether or not to adopt the same, the Court, under its
sole prerogative and authority over all matters of procedure, deems it proper to
declare as ineffective the prohibition against courts other than the Supreme Court
from issuing provisional injunctive writs to enjoin investigations conducted by the
Office of the Ombudsman, until it is adopted as part of the rules of procedure
through an administrative circular duly issued therefor.
Hence, with Congress interfering with matters of procedure (through passing the
first paragraph of Section 14, RA 6770) without the Court's consent thereto, it
remains that the CA had the authority to issue the questioned injunctive writs
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 90
enjoining the implementation of the preventive suspension order against Binay, Jr.
At the risk of belaboring the point, these issuances were merely ancillary to the
exercise of the CA's certiorari jurisdiction conferred to it under Section 9 (1),
Chapter I of BP 129, as amended, and which it had already acquired over the main
CA-G.R. SP No. 139453 case.
IV.
The foregoing notwithstanding, the issue of whether or not the CA gravely abused
its jurisdiction in issuing the TRO and WPI in CA-G.R. SP No. 139453 against the
preventive suspension order is a persisting objection to the validity of said
injunctive writs. For its proper analysis, the Court first provides the context of the
assailed injunctive writs.
A. Subject matter of the CA's iniunctive writs is the preventive suspension order.
By nature, a preventive suspension order is not a penalty but only a preventive
measure. In Quimbo v. Acting Ombudsman Gervacio,231 the Court explained the
distinction, stating that its purpose is to prevent the official to be suspended from
using his position and the powers and prerogatives of his office to influence
potential witnesses or tamper with records which may be vital in the prosecution
of the case against him:
Jurisprudential law establishes a clear-cut distinction between suspension as
preventive measure and suspension as penalty. The distinction, by considering the
purpose aspect of the suspensions, is readily cognizable as they have different ends
sought to be achieved.
Preventive suspension is merely a preventive measure, a preliminary step in an
administrative investigation. The purpose of the suspension order is to prevent
the accused from using his position and the powers and prerogatives of his office
to influence potential witnesses or tamper with records which may be vital in the
prosecution of the case against him. If after such investigation, the charge is
established and the person investigated is found guilty of acts warranting his
suspension or removal, then he is suspended, removed or dismissed. This is the
penalty.
That preventive suspension is not a penalty is in fact explicitly provided by Section
24 of Rule XIV of the Omnibus Rules Implementing Book V of the Administrative
Code of 1987 (Executive Order No. 292) and other Pertinent Civil Service Laws.
Section. 24. Preventive suspension is not a punishment or penalty for misconduct
in office but is considered to be a preventive measure. (Emphasis
supplied)ChanRoblesVirtualawlibrary
Not being a penalty, the period within which one is under preventive suspension is
not considered part of the actual penalty of suspension. So Section 25 of the same
Rule XIV provides:chanRoblesvirtualLawlibrary
Section 25. The period within which a public officer or employee charged is placed
under preventive suspension shall not be considered part of the actual penalty of
suspension imposed upon the employee found guilty.232 (Emphases
supplied)ChanRoblesVirtualawlibrary
The requisites for issuing a preventive suspension order are explicitly stated in
Section 24, RA 6770:
Section 24. Preventive Suspension. - The Ombudsman or his Deputy may
preventively suspend any officer or employee under his authority pending an
investigation, if in his judgment the evidence of guilt is strong, and (a) the charge
against such officer or employee involves dishonesty, oppression or grave
misconduct or neglect in the performance of duty; (b) the charges would warrant
removal from the service; or (c) the respondent's continued stay in office may
prejudice the case filed against him.
The preventive suspension shall continue until the case is terminated by the Office
of the Ombudsman but not more than six (6) months, without pay, except when
the delay in the disposition of the case by the Office of the Ombudsman is due to
the fault, negligence or petition of the respondent, in which case the period of
such delay shall not be counted in computing the period of suspension herein
provided. (Emphasis and underscoring supplied)
In other words, the law sets forth two (2) conditions that must be satisfied to
justify the issuance of an order of preventive suspension pending an investigation,
namely:
(1) The evidence of guilt is strong; and
(2) Either of the following circumstances co-exist with the first
requirement:chanRoblesvirtualLawlibrary

(a) The charge involves dishonesty, oppression or grave misconduct or neglect in
the performance of duty;cralawlawlibrary
(b) The charge would warrant removal from the service; or
(c) The respondent's continued stay in office may prejudice the case filed against
him.233ChanRoblesVirtualawlibrary
B. The basis of the CA's injunctive writs is the condonation doctrine.
Examining the CA's Resolutions in CA-G.R. SP No. 139453 would, however, show
that the Ombudsman's non-compliance with the requisites provided in Section 24,
RA 6770 was not the basis for the issuance of the assailed injunctive writs.
The CA's March 16, 2015 Resolution which directed the issuance of the assailed
TRO was based on the case of Governor Garcia, Jr. v. CA234 (Governor Garcia, Jr.),
wherein the Court emphasized that "if it were established in the CA that the acts
subject of the administrative complaint were indeed committed during petitioner
[Garcia's] prior term, then, following settled jurisprudence, he can no longer be
administratively charged." 235 Thus, the Court, contemplating the application of the
condonation doctrine, among others, cautioned, in the said case, that "it would
have been more prudent for [the appellate court] to have, at the very least, on
account of the extreme urgency of the matter and the seriousness of the issues
raised in the certiorari petition, issued a TRO x x x"236during the pendency of the
proceedings.
Similarly, the CA's April 6, 2015 Resolution which directed the issuance of the
assailed WPI was based on the condonation doctrine, citing the case of Aguinaldo
v. Santos237 The CA held that Binay, Jr. has an ostensible right to the final relief
prayed for, i.e., the nullification of the preventive suspension order, finding that the
Ombudsman can hardly impose preventive suspension against Binay, Jr. given that
his re-election in 2013 as City Mayor of Makati condoned any administrative
liability arising from anomalous activities relative to the Makati Parking Building
project from 2007 to 2013.238 Moreover, the CA observed that although there were
acts which were apparently committed by Binay, Jr. beyond his first term , i.e., the
alleged payments on July 3, 4, and 24, 2013,239corresponding to the services of
Hillmarc's and MANA - still, Binay, Jr. cannot be held administratively liable therefor
based on the cases of Salalima v. Guingona, Jr.,240 and Mayor Garcia v.
Mojica,241wherein the condonation dobtrine was applied by the Court although the
payments were made after the official's election, reasoning that the payments
were merely effected pursuant to contracts executed before said re-election.242
The Ombudsman contends that it was inappropriate for the CA to have considered
the condonation doctrine since it was a matter of defense which should have been
raised and passed upon by her office during the administrative disciplinary
proceedings.243 However, the Court agrees with the CA that it was not precluded
from considering the same given that it was material to the propriety of according
provisional injunctive relief in conformity with the ruling in Governor Garcia, Jr.,
which was the subsisting jurisprudence at that time. Thus, since condonation was
duly raised by Binay, Jr. in his petition in CA-G.R. SP No. 139453,244 the CA did not
err in passing upon the same. Note that although Binay, Jr. secondarily argued that
the evidence of guilt against him was not strong in his petition in CA-G.R. SP No.
139453,245 it appears that the CA found that the application of the condonation
doctrine was already sufficient to enjoin the implementation of the preventive
suspension order. Again, there is nothing aberrant with this since, as remarked in
the same case of Governor Garcia, Jr., if it was established that the acts subject of
the administrative complaint were indeed committed during Binay, Jr.'s prior term,
then, following the condonation doctrine, he can no longer be administratively
charged. In other words, with condonation having been invoked by Binay, Jr. as an
exculpatory affirmative defense at the onset, the CA deemed it unnecessary to
determine if the evidence of guilt against him was strong, at least for the purpose
of issuing the subject injunctive writs.
With the preliminary objection resolved and the basis of the assailed writs herein
laid down, the Court now proceeds to determine if the CA gravely abused its
discretion in applying the condonation doctrine.
C. The origin of the condonation doctrine.
Generally speaking, condonation has been defined as "[a] victim's express or
implied forgiveness of an offense, [especially] by treating the offender as if there
had been no offense."246
The condonation doctrine - which connotes this same sense of complete
extinguishment of liability as will be herein elaborated upon - is not based on
statutory law. It is a jurisprudential creation that originated from the 1959
case of Pascual v. Hon. Provincial Board ofNueva Ecija,247 (Pascual), which was
therefore decided under the 1935 Constitution.
In Pascual, therein petitioner, Arturo Pascual, was elected Mayor of San Jose,
Nueva Ecija, sometime in November 1951, and was later re-elected to the same
position in 1955. During his second term, or on October 6, 1956, the Acting
Provincial Governor filed administrative charges before the Provincial Board of
Nueva Ecija against him for grave abuse of authority and usurpation of judicial
functions for acting on a criminal complaint in Criminal Case No. 3556 on
December 18 and 20, 1954. In defense, Arturo Pascual argued that he cannot be
made liable for the acts charged against him since they were committed during his
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 91
previous term of office, and therefore, invalid grounds for disciplining him during
his second term. The Provincial Board, as well as the Court of First Instance of
Nueva Ecija, later decided against Arturo Pascual, and when the case reached this
Court on appeal, it recognized that the controversy posed a novel issue - that is,
whether or not an elective official may be disciplined for a wrongful act committed
by him during his immediately preceding term of office.
As there was no legal precedent on the issue at that time, the Court,
in Pascual, resorted to American authorities and "found that cases on the matter
are conflicting due in part, probably, to differences in statutes and constitutional
provisions, and also, in part, to a divergence of views with respect to the question
of whether the subsequent election or appointment condones the prior
misconduct."248Without going into the variables of these conflicting views and
cases, it proceeded to state that:
The weight of authorities x x x seems to incline toward the rule denying the right
to remove one from office because of misconduct during a prior term, to which
we fully subscribe.249 (Emphasis and underscoring supplied)
The conclusion is at once problematic since this Court has now uncovered that
there is really no established weight of authority in the United States (US) favoring
the doctrine of condonation, which, in the words of Pascual, theorizes that an
official's re-election denies the right to remove him from office due to a
misconduct during a prior term. In fact, as pointed out during the oral arguments
of this case, at least seventeen (17) states in the US have abandoned the
condonation doctrine.250 The Ombudsman aptly cites several rulings of various US
State courts, as well as literature published on the matter, to demonstrate the fact
that the doctrine is not uniformly applied across all state jurisdictions. Indeed, the
treatment is nuanced:
(1) For one, it has been widely recognized that the propriety of removing a public
officer from his current term or office for misconduct which he allegedly
committed in a prior term of office is governed by the language of the statute or
constitutional provision applicable to the facts of a particular case (see In Re
Removal of Member of Council Coppola).251 As an example, a Texas statute, on the
one hand, expressly allows removal only for an act committed during a present
term: "no officer shall be prosecuted or removed from office for any act he may
have committed prior to his election to office" (see State ex rel. Rowlings v.
Loomis).252 On the other hand, the Supreme Court of Oklahoma allows removal
from office for "acts of commission, omission, or neglect committed, done or
omitted during a previous or preceding term of office" (see State v.
Bailey)253Meanwhile, in some states where the removal statute is silent or unclear,
the case's resolution was contingent upon the interpretation of the phrase "in
office." On one end, the Supreme Court of Ohio strictly construed a removal
statute containing the phrase "misfeasance of malfeasance in office" and thereby
declared that, in the absence of clear legislative language making, the word
"office" must be limited to the single term during which the offense charged
against the public officer occurred (see State ex rel. Stokes v. Probate Court of
Cuyahoga County)254 Similarly, the Common Pleas Court of Allegheny County,
Pennsylvania decided that the phrase "in office" in its state constitution was a time
limitation with regard to the grounds of removal, so that an officer could not be
removed for misbehaviour which occurred; prior to the taking of the office
(see Commonwealth v. Rudman)255The opposite was construed in the Supreme
Court of Louisiana which took the view that an officer's inability to hold an office
resulted from the commission of certain offenses, and at once rendered him unfit
to continue in office, adding the fact that the officer had been re-elected did not
condone or purge the offense (see State ex rel. Billon v. Bourgeois).256 Also, in the
Supreme Court of New York, Apellate Division, Fourth Department, the court
construed the words "in office" to refer not to a particular term of office but to an
entire tenure; it stated that the whole purpose of the legislature in enacting the
statute in question could easily be lost sight of, and the intent of the law-making
body be thwarted, if an unworthy official could not be removed during one term
for misconduct for a previous one (Newman v. Strobel).257
(2) For another, condonation depended on whether or not the public officer was a
successor in the same office for which he has been administratively charged. The
"own-successor theory," which is recognized in numerous States as an exception to
condonation doctrine, is premised on the idea that each term of a re-elected
incumbent is not taken as separate and distinct, but rather, regarded as one
continuous term of office. Thus, infractions committed in a previous term are
grounds for removal because a re-elected incumbent has no prior term to speak
of258 (see Attorney-General v. Tufts;259State v. Welsh;260Hawkins v. Common Council
of Grand Rapids;261Territory v. Sanches;262and Tibbs v. City of Atlanta).263
(3) Furthermore, some State courts took into consideration the continuing nature
of an offense in cases where the condonation doctrine was invoked. In State ex rel.
Douglas v. Megaarden,264 the public officer charged with malversation of public
funds was denied the defense of condonation by the Supreme Court of Minnesota,
observing that "the large sums of money illegally collected during the previous
years are still retained by him." In State ex rel. Beck v. Harvey 265 the Supreme Court
of Kansas ruled that "there is no necessity" of applying the condonation doctrine
since "the misconduct continued in the present term of office[;] [thus] there was a
duty upon defendant to restore this money on demand of the county
commissioners." Moreover, in State ex rel. Londerholm v. Schroeder, 266 the Supreme
Court of Kansas held that "insofar as nondelivery and excessive prices are
concerned, x x x there remains a continuing duty on the part of the defendant to

make restitution to the country x x x, this duty extends into the present term, and
neglect to discharge it constitutes misconduct."
Overall, the foregoing data clearly contravenes the preliminary conclusion
in Pascual that there is a "weight of authority" in the US on the condonation
doctrine. In fact, without any cogent exegesis to show that Pascual had accounted
for the numerous factors relevant to the debate on condonation, an outright
adoption of the doctrine in this jurisdiction would not have been proper.
At any rate, these US cases are only of persuasive value in the process of this
Court's decision-making. "[They] are not relied upon as precedents, but as guides
of interpretation."267 Therefore, the ultimate analysis is on whether or not the
condonation doctrine, as espoused in Pascual, and carried over in numerous cases
after, can be held up against prevailing legal norms. Note that the doctrine of stare
decisis does not preclude this Court from revisiting existing doctrine. As adjudged
in the case of Belgica, the stare decisis rule should not operate when there are
powerful countervailing considerations against its application.268 In other words,
stare decisis becomes an intractable rule only when circumstances exist to
preclude reversal of standing precedent.269 As the Ombudsman correctly points
out, jurisprudence, after all, is not a rigid, atemporal abstraction; it is an organic
creature that develops and devolves along with the society within which it
thrives.270 In the words of a recent US Supreme Court Decision, "[w]hat we can
decide, we can undecide."271
In this case, the Court agrees with the Ombudsman that since the time Pascual was
decided, the legal landscape has radically shifted. Again, Pascual was a 1959 case
decided under the 1935 Constitution, which dated provisions do not reflect the
experience of the Filipino People under the 1973 and 1987 Constitutions.
Therefore, the plain difference in setting, including, of course, the sheer impact of
the condonation doctrine on public accountability, calls for Pascual's judicious re-
examination.
D. Testing the Condonation Doctrine.
Pascual's ratio decidendi may be dissected into three (3) parts:
First, the penalty of removal may not be extended beyond the term in which the
public officer was elected for each term is separate and distinct:
Offenses committed, or acts done, during previous term are generally held not to
furnish cause for removal and this is especially true where the constitution
provides that the penalty in proceedings for removal shall not extend beyond the
removal from office, and disqualification from holding office for the term for
which the officer was elected or appointed. (67 C.J.S. p. 248, citing Rice vs.
State, 161 S.W. 2d. 401; Montgomery vs. Nowell, 40 S.W. 2d. 418; People ex
rel. Bagshaw vs. Thompson, 130 P. 2d. 237; Board of Com'rs of Kingfisher County
vs. Shutter, 281 P. 222; State vs. Blake, 280 P. 388; In re Fudula, 147 A. 67; State vs.
Ward, 43 S.W. 2d. 217).
The underlying theory is that each term is separate from other terms x x x.272
Second, an elective official's re-election serves as a condonation of previous
misconduct, thereby cutting the right to remove him therefor; and
[T]hat the reelection to office operates as a condonation of the officer's previous
misconduct to the extent of cutting off the right to remove him therefor. (43 Am.
Jur. p. 45, citing Atty. Gen. vs. Hasty, 184 Ala. 121, 63 So. 559, 50 L.R.A. (NS)
553.273(emphasis supplied)
Third, courts may not deprive the electorate, who are assumed to have known the
life and character of candidates, of their right to elect officers:
As held in Conant vs. Grogan (1887) 6 N.Y.S.R. 322, cited in 17 A.I.R. 281, 63 So.
559, 50 LRA (NS) 553
The Court should never remove a public officer for acts done prior to his present
term of office. To do otherwise would be to deprive the people of their right to
elect their officers. When the people have elected a man to office, it must be
assumed that they did this with knowledge of his life and character, and that
they disregarded or forgave his faults or misconduct, if he had been guilty of any.
It is not for the court, by reason of such faults or misconduct to practically overrule
the will of the people.274 (Emphases supplied)
The notable cases on condonation following Pascual are as follows:
(1) Lizares v. Hechanova275 (May 17, 1966) - wherein the Court first applied the
condonation doctrine, thereby quoting the above-stated passages from Pascual in
verbatim.
(2) Insco v. Sanchez, et al.276 (December 18, 1967) - wherein the Court clarified that
the condonation doctrine does not apply to a criminal case. It was explained that
a criminal case is different from an administrative case in that the former involves
the People of the Philippines as a community, and is a public wrong to the State at
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 92
large; whereas, in the latter, only the populace of the constituency he serves is
affected. In addition, the Court noted that it is only the President who may pardon
a criminal offense.
(3) Aguinaldo v. Santos277 (Aguinaldo; August 21, 1992) - a case decided under the
1987 Constitution wherein the condonation doctrine was applied in favor of then
Cagayan Governor Rodolfo E. Aguinaldo although his re-election merely
supervened the pendency of, the proceedings.
(4) Salalima v. Guinsona, Jr.278 (Salalima; May 22, 1996) -wherein the
Court reinforced the condonation doctrine by stating that the same is justified by
"sound public policy." According to the Court, condonation prevented the elective
official from being "hounded" by administrative cases filed by his "political
enemies" during a new term, for which he has to defend himself "to the detriment
of public service." Also, the Court mentioned that the administrative liability
condoned by re-election covered the execution of the contract and the incidents
related therewith.279
(5) Mayor Garcia v. Mojica280 (Mayor Garcia; September 10, 1999) - wherein the
benefit of the doctrine was extended to then Cebu City Mayor Alvin B. Garcia who
was administratively charged for his involvement in an anomalous contract for the
supply of asphalt for Cebu City, executed only four (4) days before the upcoming
elections. The Court ruled that notwithstanding the timing of the contract's
execution, the electorate is presumed to have known the petitioner's background
and character, including his past misconduct; hence, his subsequent re-election
was deemed a condonation of his prior transgressions. More importantly, the
Court held that the determinative time element in applying the condonation
doctrine should be the time when the contract was perfected; this meant that as
long as the contract was entered into during a prior term, acts which were done
to implement the same, even if done during a succeeding term, do not negate
the application of the condonation doctrine in favor of the elective official.
(6) Salumbides, Jr. v. Office of the Ombudsman 281 (Salumbides, Jr.; April 23, 2010) -
wherein the Court explained the doctrinal innovations in the Salalima and Mayor
Garcia rulings, to wit:
Salalima v. Guingona, Jr. and Mayor Garcia v. Hon. Mojica reinforced the
doctrine. The condonation rule was applied even if the administrative complaint
was not filed before the reelection of the public official, and even if the alleged
misconduct occurred four days before the elections, respectively. Salalima did
not distinguish as to the date of filing of the administrative complaint, as long as
the alleged misconduct was committed during the prior term, the precise timing or
period of which Garcia did not further distinguish, as long as the wrongdoing that
gave rise to the public official's culpability was committed prior to the date of
reelection.282 (Emphasis supplied)ChanRoblesVirtualawlibrary
The Court, citing Civil Service Commission v. Sojor,283 also clarified that the
condonation doctrine would not apply to appointive officials since, as to them,
there is no sovereign will to disenfranchise.
(7) And finally, the above discussed case of Governor Garcia, Jr. -wherein the Court
remarked that it would have been prudent for the appellate court therein to have
issued a temporary restraining order against the implementation of a preventive
suspension order issued by the Ombudsman in view of the condonation doctrine.
A thorough review of the cases post-1987, among others, Aguinaldo, Salalima,
Mayor Garcia, and Governor Garcia, Jr. - all cited by the CA to justify its March 16,
2015 and April 6, 2015 Resolutions directing the issuance of the assailed injunctive
writs - would show that the basis for condonation under the prevailing
constitutional and statutory framework was never accounted for. What remains
apparent from the text of these cases is that the basis for condonation, as
jurisprudential doctrine, was - and still remains - the above-cited postulates
of Pascual, which was lifted from rulings of US courts where condonation was
amply supported by their own state laws. With respect to its applicability to
administrative cases, the core premise of condonation - that is, an elective official's
re-election cuts qff the right to remove him for an administrative offense
committed during a prior term - was adopted hook, line, and sinker in our
jurisprudence largely because the legality of that doctrine was never tested against
existing legal norms. As in the US, the propriety of condonation is - as it should be
-dependent on the legal foundation of the adjudicating jurisdiction. Hence, the
Court undertakes an examination of our current laws in order to determine if there
is legal basis for the continued application of the doctrine of condonation.
The foundation of our entire legal system is the Constitution. It is the supreme law
of the land;284thus, the unbending rule is that every statute should be read in light
of the Constitution.285 Likewise, the Constitution is a framework of a workable
government; hence, its interpretation must take into account the complexities,
realities, and politics attendant to the operation of the political branches of
government.286
As earlier intimated, Pascual was a decision promulgated in 1959. Therefore, it was
decided within the context of the 1935 Constitution which was silent with respect
to public accountability, or of the nature of public office being a public trust. The
provision in the 1935 Constitution that comes closest in dealing with public office is
Section 2, Article II which states that "[t]he defense of the State is a prime duty of
government, and in the fulfillment of this duty all citizens may be required by law

to render personal military or civil service." 287 Perhaps owing to the 1935
Constitution's silence on public accountability, and considering the dearth of
jurisprudential rulings on the matter, as well as the variance in the policy
considerations, there was no glaring objection confronting the Pascual Court in
adopting the condonation doctrine that originated from select US cases existing at
that time.
With the advent of the 1973 Constitution, the approach in dealing with public
officers underwent a significant change. The new charter introduced an entire
article on accountability of public officers, found in Article XIII. Section 1 thereof
positively recognized, acknowledged, and declared that "[p]ublic office is a public
trust." Accordingly, "[p]ublic officers and employees shall serve with the highest
degree of responsibility, integrity, loyalty and efficiency, and shall remain
accountable to the people."
After the turbulent decades of Martial Law rule, the Filipino People have framed
and adopted the 1987 Constitution, which sets forth in the Declaration of
Principles and State Policies in Article II that "[t]he State shall maintain honesty
and integrity in the public service and take positive and effective measures
against graft and corruption."288 Learning how unbridled power could corrupt
public servants under the regime of a dictator, the Framers put primacy on the
integrity of the public service by declaring it as a constitutional principle and a
State policy. More significantly, the 1987 Constitution strengthened and solidified
what has been first proclaimed in the 1973 Constitution by commanding public
officers to be accountable to the people at all times:
Section 1. Public office is a public trust. Public officers and employees must at all
times be accountable to the people, serve them with utmost responsibility,
integrity, loyalty, and efficiency and act with patriotism and justice, and lead
modest lives.ChanRoblesVirtualawlibrary
In Belgica, it was explained that:
[t]he aphorism forged under Section 1, Article XI of the 1987 Constitution, which
states that "public office is a public trust," is an overarching reminder that every
instrumentality of government should exercise their official functions only in
accordance with the principles of the Constitution which embodies the parameters
of the people's trust. The notion of a public trust connotes accountability x x
x.289 (Emphasis supplied)ChanRoblesVirtualawlibrary
The same mandate is found in the Revised Administrative Code under the section
of the Civil Service Commission,290 and also, in the Code of Conduct and Ethical
Standards for Public Officials and Employees.291
For local elective officials like Binay, Jr., the grounds to discipline, suspend or
remove an elective local official from office are stated in Section 60 of Republic
Act No. 7160,292otherwise known as the "Local Government Code of 1991" (LGC),
which was approved on October 10 1991, and took effect on January 1, 1992:
Section 60. Grounds for Disciplinary Action. - An elective local official may be
disciplined, suspended, or removed from office on any of the r following
grounds:chanRoblesvirtualLawlibrary
(a) Disloyalty to the Republic of the Philippines;cralawlawlibrary
(b) Culpable violation of the Constitution;cralawlawlibrary
(c) Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of
duty;cralawlawlibrary
(d) Commission of any offense involving moral turpitude or an offense punishable
by at least prision mayor;cralawlawlibrary
(e) Abuse of authority;cralawlawlibrary
(f) Unauthorized absence for fifteen (15) consecutive working days, except in the
case of members of the sangguniang panlalawigan, sangguniang panlunsod,
sanggunian bayan, and sangguniang barangay;cralawlawlibrary
(g) Application for, or acquisition of, foreign citizenship or residence or the status of
an immigrant of another country; and
(h) Such other grounds as may be provided in this Code and other laws.
An elective local official may be removed from office on the grounds enumerated
above by order of the proper court.
Related to this provision is Section 40 (b) of the LGC which states that those
removed from office as a result of an administrative case shall be disqualified
from running for any elective local position:
Section 40. Disqualifications. - The following persons are disqualified from running
for any elective local position:
xxxx
(b) Those removed from office as a result of an administrative case;
x x x x (Emphasis supplied)ChanRoblesVirtualawlibrary
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 93
In the same sense, Section 52 (a) of the RRACCS provides that the penalty of
dismissal from service carries the accessory penalty of perpetual disqualification
from holding public office:
Section 52. - Administrative Disabilities Inherent in Certain Penalties. -
a. The penalty of dismissal shall carry with it cancellation of eligibility,
forfeiture of retirement benefits, perpetual disqualification from
holding public office, and bar from taking the civil service examinations.
In contrast, Section 66 (b) of the LGC states that the penalty of suspension shall
not exceed the unexpired term of the elective local official nor constitute a bar to
his candidacy for as long as he meets the qualifications required for the office.
Note, however, that the provision only pertains to the duration of the penalty and
its effect on the official's candidacy. Nothing therein states that the administrative
liability therefor is extinguished by the fact of re-election:
Section 66. Form and Notice of Decision. - x x x.
xxxx
(b) The penalty of suspension shall not exceed the unexpired term of the
respondent or a period of six (6) months for every administrative offense, nor shall
said penalty be a bar to the candidacy of the respondent so suspended as long as
he meets the qualifications required for the office.
Reading the 1987 Constitution together with the above-cited legal provisions now
leads this Court to the conclusion that the doctrine of condonation is actually
bereft of legal bases.
To begin with, the concept of public office is a public trust and the corollary
requirement of accountability to the people at all times, as mandated under the
1987 Constitution, is plainly inconsistent with the idea that an elective local
official's administrative liability for a misconduct committed during a prior term can
be wiped off by the fact that he was elected to a second term of office, or even
another elective post. Election is not a mode of condoning an administrative
offense, and there is simply no constitutional or statutory basis in our jurisdiction
to support the notion that an official elected for a different term is fully absolved of
any administrative liability arising from an offense done during a prior term. In this
jurisdiction, liability arising from administrative offenses may be condoned bv the
President in light of Section 19, Article VII of the 1987 Constitution which was
interpreted in Llamas v. Orbos293 to apply to administrative offenses:
The Constitution does not distinguish between which cases executive clemency
may be exercised by the President, with the sole exclusion of impeachment cases.
By the same token, if executive clemency may be exercised only in criminal cases, it
would indeed be unnecessary to provide for the exclusion of impeachment cases
from the coverage of Article VII, Section 19 of the Constitution. Following
petitioner's proposed interpretation, cases of impeachment are automatically
excluded inasmuch as the same do not necessarily involve criminal offenses.
In the same vein, We do not clearly see any valid and convincing , reason why the
President cannot grant executive clemency in administrative cases. It is Our
considered view that if the President can grant reprieves, commutations and
pardons, and remit fines and forfeitures in criminal cases, with much more reason
can she grant executive clemency in administrative cases, which are clearly less
serious than criminal offenses.
Also, it cannot be inferred from Section 60 of the LGC that the grounds for
discipline enumerated therein cannot anymore be invoked against an elective local
official to hold him administratively liable once he is re-elected to office. In fact,
Section 40 (b) of the LGC precludes condonation since in the first place, an elective
local official who is meted with the penalty of removal could not be re-elected to
an elective local position due to a direct disqualification from running for such
post. In similar regard, Section 52 (a) of the RRACCS imposes a penalty of perpetual
disqualification from holding public office as an accessory to the penalty of
dismissal from service.
To compare, some of the cases adopted in Pascual were decided by US State
jurisdictions wherein the doctrine of condonation of administrative liability was
supported by either a constitutional or statutory provision stating, in effect, that an
officer cannot be removed by a misconduct committed during a previous
term,294 or that the disqualification to hold the office does not extend beyond the
term in which the official's delinquency occurred. 295 In one case,296 the absence of
a provision against the re-election of an officer removed - unlike Section 40 (b) of
the LGC-was the justification behind condonation. In another case,297 it was
deemed that condonation through re-election was a policy under their
constitution - which adoption in this jurisdiction runs counter to our present
Constitution's requirements on public accountability. There was even one case
where the doctrine of condonation was not adjudicated upon but only invoked by
a party as a ground;298 while in another case, which was not reported in full in the
official series, the crux of the disposition was that the evidence of a prior

irregularity in no way pertained to the charge at issue and therefore, was deemed
to be incompetent.299 Hence, owing to either their variance or inapplicability, none
of these cases can be used as basis for the continued adoption of the condonation
doctrine under our existing laws.
At best, Section 66 (b) of the LGC prohibits the enforcement of the penalty of
suspension beyond the unexpired portion of the elective local official's prior term,
and likewise allows said official to still run for re-election This treatment is similar
to People ex rel Bagshaw v. Thompson300 and Montgomery v. Novell301 both cited
in Pascual, wherein it was ruled that an officer cannot be suspended for a
misconduct committed during a prior term. However, as previously stated, nothing
in Section 66 (b) states that the elective local official's administrative liability is
extinguished by the fact of re-election. Thus, at all events, no legal provision
actually supports the theory that the liability is condoned.
Relatedly it should be clarified that there is no truth in Pascual's postulation that
the courts would be depriving the electorate of their right to elect their officers if
condonation were not to be sanctioned. In political law, election pertains to the
process by which a particular constituency chooses an individual to hold a public
office. In this jurisdiction, there is, again, no legal basis to conclude that election
automatically implies condonation. Neither is there any legal basis to say that
every democratic and republican state has an inherent regime of condonation. If
condonation of an elective official's administrative liability would perhaps, be
allowed in this jurisdiction, then the same should have been provided by law under
our governing legal mechanisms. May it be at the time of Pascual or at present, by
no means has it been shown that such a law, whether in a constitutional or
statutory provision, exists. Therefore, inferring from this manifest absence, it
cannot be said that the electorate's will has been abdicated.
Equally infirm is Pascual's proposition that the electorate, when re-electing a local
official, are assumed to have done so with knowledge of his life and character, and
that they disregarded or forgave his faults or misconduct, if he had been guilty of
any. Suffice it to state that no such presumption exists in any statute or
procedural rule.302 Besides, it is contrary to human experience that the electorate
would have full knowledge of a public official's misdeeds. The Ombudsman
correctly points out the reality that most corrupt acts by public officers are
shrouded in secrecy, and concealed from the public. Misconduct committed by an
elective official is easily covered up, and is almost always unknown to the
electorate when they cast their votes.303 At a conceptual level, condonation
presupposes that the condoner has actual knowledge of what is to be
condoned. Thus, there could be no condonation of an act that is unknown. As
observed in Walsh v. City Council of Trenton304 decided by the New Jersey Supreme
Court:
Many of the cases holding that re-election of a public official prevents his removal
for acts done in a preceding term of office are reasoned out on the theory of
condonation. We cannot subscribe to that theory because condonation, implying
as it does forgiveness, connotes knowledge and in the absence of knowledge there
can be no condonation. One cannot forgive something of which one has no
knowledge.
That being said, this Court simply finds no legal authority to sustain the
condonation doctrine in this jurisdiction. As can be seen from this discourse, it was
a doctrine adopted from one class of US rulings way back in 1959 and thus, out of
touch from - and now rendered obsolete by - the current legal regime. In
consequence, it is high time for this Court to abandon the condonation doctrine
that originated from Pascual, and affirmed in the cases following the same, such
as Aguinaldo, Salalima, Mayor Garcia, and Governor Garcia, Jr. which were all
relied upon by the CA.
It should, however, be clarified that this Court's abandonment of the condonation
doctrine should be prospective in application for the reason that judicial decisions
applying or interpreting the laws or the Constitution, until reversed, shall form part
of the legal system of the Philippines.305 Unto this Court devolves the sole authority
to interpret what the Constitution means, and all persons are bound to follow its
interpretation. As explained in De Castro v. Judicial Bar Council.306
Judicial decisions assume the same authority as a statute itself and, until
authoritatively abandoned, necessarily become, to the extent that they are
applicable, the criteria that must control the actuations, not only of those called
upon to abide by them, but also of those duty-bound to enforce obedience to
them.307
Hence, while the future may ultimately uncover a doctrine's error, it should be,
as a general rule, recognized as "good law" prior to its abandonment.
Consequently, the people's reliance thereupon should be respected. The landmark
case on this matter is People v. Jabinal,308 wherein it was ruled:
[W]hen a doctrine of this Court is overruled and a different view is adopted, the
new doctrine should be applied prospectively, and should not apply to parties who
had relied on the old doctrine and acted on the faith thereof.
Later, in Spouses Benzonan v. CA,309 it was further elaborated:
P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 94
[Pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting
the laws or the Constitution shall form a part of the legal system of the
Philippines." But while our decisions form part of the law of the land, they are also
subject to Article 4 of the Civil Code which provides that "laws shall have no
retroactive effect unless the contrary is provided." This is expressed in the familiar
legal maxim lex prospicit, non respicit, the law looks forward not backward. The
rationale against retroactivity is easy to perceive. The retroactive application of a
law usually divests rights that have already become vested or impairs the
obligations of contract and hence, is
unconstitutional.310ChanRoblesVirtualawlibrary
Indeed, the lessons of history teach us that institutions can greatly benefit from
hindsight and rectify its ensuing course. Thus, while it is truly perplexing to think
that a doctrine which is barren of legal anchorage was able to endure in our
jurisprudence for a considerable length of time, this Court, under a new
membership, takes up the cudgels and now abandons the condonation doctrine.
E. Consequence of ruling.
As for this section of the Decision, the issue to be resolved is whether or not
the CA committed grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing the assailed injunctive writs.
It is well-settled that an act of a court or tribunal can only be considered as with
grave abuse of discretion when such act is done in a capricious or whimsical
exercise of judgment as is equivalent to lack of jurisdiction. The abuse of
discretion must be so patent and gross as to amount to an evasion of a positive
duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and despotic
manner by reason of passion and hostility. 311 It has also been held that "grave
abuse of discretion arises when a lower court or tribunal patently violates the
Constitution, the law or existing jurisprudence."312
As earlier established, records disclose that the CA's resolutions directing the
issuance of the assailed injunctive writs were all hinged on cases enunciating the
condonation doctrine. To recount, the March 16, 2015 Resolution directing the
issuance of the subject TRO was based on the case of Governor Garcia, Jr., while
the April 6, 2015 Resolution directing the issuance of the subject WPI was based on
the cases of Aguinaldo, Salalima, Mayor Garcia, and again, Governor Garcia,
Jr. Thus, by merely following settled precedents on the condonation doctrine,
which at that time, unwittingly remained "good law," it cannot be concluded that
the CA committed a grave abuse of discretion based on its legal attribution above.
Accordingly, the WPI against the Ombudsman's preventive suspension order was
correctly issued.
With this, the ensuing course of action should have been for the CA to resolve the
main petition for certiorari in CA-G.R. SP No. 139453 on the merits. However,
considering that the Ombudsman, on October 9, 2015, had already found Binay, Jr.
administratively liable and imposed upon him the penalty of dismissal, which
carries the accessory penalty of perpetual disqualification from holding public
office, for the present administrative charges against him, the said CA petition
appears to have been mooted.313 As initially intimated, the preventive suspension
order is only an ancillary issuance that, at its core, serves the purpose of assisting
the Office of the Ombudsman in its investigation. It therefore has no more purpose
- and perforce, dissolves - upon the termination of the office's process of
investigation in the instant administrative case.
F. Exceptions to the mootness principle.
This notwithstanding, this Court deems it apt to clarify that the mootness of the
issue regarding the validity of the preventive suspension order subject of this case
does not preclude any of its foregoing determinations, particularly, its
abandonment of the condonation doctrine. As explained in Belgica, '"the moot and
academic principle' is not a magical formula that can automatically dissuade the
Court in resolving a case. The Court will decide cases, otherwise moot, if: first,
there is a grave violation of the Constitution; second, the exceptional character of
the situation and the paramount public interest is involved; third, when the
constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public; and fourth, the case is capable of repetition yet
evading review."314 All of these scenarios obtain in this case:
First, it would be a violation of the Court's own duty to uphold and defend the
Constitution if it were not to abandon the condonation doctrine now that its
infirmities have become apparent. As extensively discussed, the continued
application of the condonation doctrine is simply impermissible under the auspices
of the present Constitution which explicitly mandates that public office is a public
trust and that public officials shall be accountable to the people at all times.
Second, the condonation doctrine is a peculiar jurisprudential creation that has
persisted as a defense of elective officials to escape administrative liability. It is the
first time that the legal intricacies of this doctrine have been brought to light; thus,
this is a situation of exceptional character which this Court must ultimately resolve.
Further, since the doctrine has served as a perennial obstacle against exacting
public accountability from the multitude of elective local officials throughout the
years, it is indubitable that paramount public interest is involved.
Third, the issue on the validity of the condonation doctrine clearly requires the
 P r o v i s i o n a l R e m e d i e s R u l e 5 8 C a s e s | 95

formulation of controlling principles to guide the bench, the bar, and the public.
The issue does not only involve an in-depth exegesis of administrative law
principles, but also puts to the forefront of legal discourse the potency of the
accountability provisions of the 1987 Constitution. The Court owes it to the bench,
the bar, and the public to explain how this controversial doctrine came about, and
now, its reasons for abandoning the same in view of its relevance on the
parameters of public office.

And fourth, the defense of condonation has been consistently invoked by elective
local officials against the administrative charges filed against them. To provide a
sample size, the Ombudsman has informed the Court that "for the period of July
2013 to December 2014 alone, 85 cases from the Luzon Office and 24 cases from
the Central Office were dismissed on the ground of condonation. Thus, in just one
and a half years, over a hundred cases of alleged misconduct - involving infractions
such as dishonesty, oppression, gross neglect of duty and grave misconduct - were
placed beyond the reach of the Ombudsman's investigatory and prosecutorial
powers."315 Evidently, this fortifies the finding that the case is capable of repetition
and must therefore, not evade review.

In any event, the abandonment of a doctrine is wholly within the prerogative of

the Court. As mentioned, it is its own jurisprudential creation and may therefore,
pursuant to its mandate to uphold and defend the Constitution, revoke it
notwithstanding supervening events that render the subject of discussion
moot.chanrobleslaw

V.

With all matters pertaining to CA-G.R. SP No. 139453 passed upon, the Court now
rules on the final issue on whether or not the CA's Resolution 316 dated March 20,
2015 directing the Ombudsman to comment on Binay, Jr.'s petition for contempt in
CA-G.R. SP No. 139504 is improper and illegal.

The sole premise of the Ombudsman's contention is that, as an impeachable

officer, she cannot be the subject of a charge for indirect contempt 317 because this
action is criminal in nature and the penalty therefor would result in her effective
removal from office.318 However, a reading of the aforesaid March 20, 2015
Resolution does not show that she has already been subjected to contempt
proceedings. This issuance, in? fact, makes it clear that notwithstanding the
directive for the Ombudsman to comment, the CA has not necessarily given due
course to Binay, Jr.'s contempt petition:

Without necessarily giving due course to the Petition for Contempt respondents
[Hon. Conchita Carpio Morales, in her capacity as the Ombudsman, and the
Department of Interior and Local Government] are hereby DIRECTED to file
Comment on the Petition/Amended and Supplemental Petition for Contempt (CA-
G.R. SP No. 139504) within an inextendible period of three (3) days from receipt
hereof. (Emphasis and underscoring supplied)ChanRoblesVirtualawlibrary

Thus, even if the Ombudsman accedes to the CA's directive by filing a comment,
wherein she may properly raise her objections to the contempt proceedings by
virtue of her being an impeachable officer, the CA, in the exercise of its sound
judicial discretion, may still opt not to give due course to Binay, Jr.'s contempt
petition and accordingly, dismiss the same. Sjmply put, absent any indication that
the contempt petition has been given due course by the CA, it would then be
premature for this Court to rule on the issue. The submission of the Ombudsman
on this score is perforce denied.

WHEREFORE, the petition is PARTLY GRANTED. Under the premises of this

Decision, the Court resolves as follows:

(a) the second paragraph of Section 14 of Republic Act No. 6770 is

declared UNCONSTITUTIONAL, while the policy against the issuance of provisional
injunctive writs by courts other than the Supreme Court to enjoin an investigation
conducted by the Office of the Ombudsman under the first paragraph of the said
provision is DECLARED ineffective until the Court adopts the same as part of the
rules of procedure through an administrative circular duly issued
therefor;cralawlawlibrary

(b) The condonation doctrine is ABANDONED, but the abandonment

is PROSPECTIVE in effect;cralawlawlibrary

(c) The Court of Appeals (CA) is DIRECTED to act on respondent Jejomar Erwin S.
Binay, Jr.'s (Binay, Jr.) petition for certiorari in CA-G.R. SP No. 139453 in light of the
Office of the Ombudsman's supervening issuance of its Joint Decision dated
October 9, 2015 finding Binay, Jr. administratively liable in the six (6) administrative
complamts, docketed as OMB-C-A-15-0058, OMB-C-A-15-0059, OMB-C-A-15-0060,
OMB-C-A-15-0061, OMB-C-A-15-0062, and OMB-C-A-15-0063; and

(d) After the filing of petitioner Ombudsman Conchita Carpio Morales's comment,
the CA is DIRECTED to resolve Binay, Jr.'s petition for contempt in CA-G.R. SP No.
139504 with utmost dispatch.

SO ORDERED.