G.R. No.
157163 June 25, 2014 Also on June 6, 2001 the petitioner filed a motion to dismiss
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
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.
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 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.
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.46But 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.
NERWIN INDUSTRIES G.R. No. 167057
CORPORATION,
Petitioner, Present:
CORONA,C.J., Chairperson,
- versus - LEONARDO-DE CASTRO,
* BRION,
BERSAMIN, and
PNOC-ENERGY VILLARAMA, JR., JJ.
DEVELOPMENT
CORPORATION, and Promulgated:
ESTER R. GUERZON,
Chairman, Bids and Awards
Committee, April 11, 2012
Respondents.
x--------------------------------------------------------------------
---------------------x
DECISION
BERSAMIN, J.:
Republic Act No. 8975[1] expressly prohibits any court,
except the Supreme Court, from issuing any temporary
restraining order (TRO), preliminary injunction, or
preliminary mandatory injunction to restrain, prohibit or
compel the Government, or any of its subdivisions or officials,
or any person or entity, whether public or private, acting under
the Governments direction, from: (a) acquiring, clearing, and
developing the right-of-way, site or location of any National
Government project; (b) bidding or awarding of a contract or
project of the National Government; (c) commencing,
prosecuting, executing, implementing, or operating any such
contract or project; (d) terminating or rescinding any such
contract or project; and (e) undertaking or authorizing any
other lawful activity necessary for such contract or project.
Accordingly, a Regional Trial Court (RTC) that ignores
the statutory prohibition and issues a TRO or a writ of
preliminary injunction or preliminary mandatory injunction
against a government contract or project acts contrary to law.
Antecedents
The following antecedents are culled from the assailed
decision of the Court of Appeals (CA) promulgated on October
22, 2004,[2] viz:
In 1999, the National Electrification
Administration (NEA) published an invitation
to pre-qualify and to bid for a contract,
otherwise known as IPB No. 80, for the
supply and delivery of about sixty thousand
(60,000) pieces of woodpoles and twenty
thousand (20,000) pieces of crossarms
needed in the countrys Rural Electrification
Project. The said contract consisted of four
(4) components, namely: PIA, PIB and PIC or
woodpoles and P3 or crossarms, necessary
for NEAs projected allocation for Luzon,
Visayas and Mindanao. In response to the
said invitation, bidders, such as private
respondent [Nerwin], were required to
submit their application for eligibility
together with their technical proposals. At
the same time, they were informed that only
those who would pass the standard pre-
qualification would be invited to submit their
financial bids.
Following a thorough review of the
bidders qualifications and eligibility, only
four (4) bidders, including private respondent
[Nerwin], qualified to participate in the
bidding for the IPB-80 contract. Thereafter,
the qualified bidders submitted their
financial bids where private respondent
[Nerwin] emerged as the lowest bidder for all
schedules/components of the contract. NEA
then conducted a pre-award inspection of
private respondents [Nerwins] manufacturing
plants and facilities, including its identified
supplier in Malaysia, to determine its
capability to supply and deliver NEAs
requirements.
In the Recommendation of Award for
Schedules PIA, PIB, PIC and P3 - IBP No.
80 [for the] Supply and Delivery of Woodpoles
and Crossarms dated October 4, 2000, NEA
administrator Conrado M. Estrella III
recommended to NEAs Board of Directors
the approval of award to private respondent
[Nerwin] of all schedules for IBP No. 80 on
account of the following:
a. Nerwin is the lowest complying
and responsive bidder;
b. The price difference for the
four (4) schedules between the
bid of Nerwin Industries (lowest
responsive and complying bidder)
and the second lowest bidder in
the amount of $1.47 million for
the poles and $0.475 million for
the crossarms, is deemed
substantial and extremely
advantageous to the
government. The price difference
is equivalent to 7,948 pcs. of
poles and 20.967 pcs. of
crossarms;
c. The price difference for the
three (3) schedules between the
bids of Nerwin and the Tri-State
Pole and Piling, Inc.
approximately in the amount of
$2.36 million for the poles and
$0.475 million for the crossarms
are equivalent to additional
12.872 pcs. of poles and 20.967
pcs. of crossarms; and
d. The bidder and manufacturer
are capable of supplying the
woodpoles and specified in the
bid documents and as based on
the pre-award inspection
conducted.
However, on December 19, 2000, NEAs
Board of Directors passed Resolution No.
32 reducing by 50% the material
requirements for IBP No. 80 given the time
limitations for the delivery of the materials,
xxx, and with the loan closing date of October
2001 fast approaching. In turn, it resolved to
award the four (4) schedules of IBP No. 80 at
a reduced number to private respondent
[Nerwin]. Private respondent [Nerwin]
protested the said 50% reduction, alleging
that the same was a ploy to accommodate a
losing bidder.
On the other hand, the losing
bidders Tri State and Pacific Synnergy
appeared to have filed a complaint, citing
alleged false or falsified documents
submitted during the pre-qualification stage
which led to the award of the IBP-80 project
to private respondent [Nerwin].
Thus, finding a way to nullify the result of the
previous bidding, NEA officials sought the
opinion of the Government Corporate
Counsel who, among others, upheld the
eligibility and qualification of private
respondent [Nerwin]. Dissatisfied, the said
officials attempted to seek a revision of the
earlier opinion but the Government
Corporate Counsel declared anew that there
was no legal impediment to prevent the
award of IPB-80 contract to private
respondent [Nerwin]. Notwithstanding, NEA
allegedly held negotiations with other
bidders relative to the IPB-80 contract,
prompting private respondent [Nerwin] to
file a complaint for specific performance with
prayer for the issuance of an injunction,
which injunctive application was granted by
Branch 36 of RTC-Manila in Civil Case No.
01102000.
In the interim, PNOC-Energy Development
Corporation purporting to be under the
Department of Energy, issued Requisition
No. FGJ 30904R1 or an invitation to pre-
qualify and to bid for wooden poles needed
for its Samar Rural Electrification Project (O-
ILAW project).
Upon learning of the issuance of Requisition No. FGJ
30904R1 for the O-ILAW Project, Nerwin filed a civil action in
the RTC in Manila, docketed as Civil Case No. 03106921
entitled Nerwin Industries Corporation v. PNOC-Energy
Development Corporation and Ester R. Guerzon, as Chairman,
Bids and Awards Committee, alleging that Requisition No. FGJ
30904R1 was an attempt to subject a portion of the items
covered by IPB No. 80 to another bidding; and praying that a
TRO issue to enjoin respondents proposed bidding for the
wooden poles.
Respondents sought the dismissal of Civil Case No.
03106921, stating that the complaint averred no cause of
action, violated the rule that government infrastructure projects
were not to be subjected to TROs, contravened the mandatory
prohibition against non-forum shopping, and the corporate
president had no authority to sign and file the complaint.[3]
On June 27, 2003, after Nerwin had filed its rejoinder
to respondents reply, the RTC granted a TRO in Civil Case No.
03106921.[4]
On July 30, 2003, the RTC issued an order,[5] as
follows:
WHEREFORE, for the foregoing
considerations, an order is hereby issued by
this Court:
1. DENYING the motion to
consolidate;
2. DENYING the urgent motion for
reconsideration;
3. DISQUALIFYING Attys. Michael
A. Medado, Datu Omar S. Sinsuat
and Mariano H. Paps from
appearing as counsel for the
defendants;
4. DECLARING defendants in
default;
5. GRANTING the motion for
issuance of writ of preliminary
injunction.
Accordingly, let a writ of preliminary
injunction issue enjoining the defendant
PNOC-EDC and its Chairman of Bids and
Awards Committee Esther R. Guerzon from
 continuing the holding of the subject
bidding upon the plaintiffs filing of a bond in
the amount of P200,000.00 to answer for any
damage or damages which the defendants
may suffer should it be finally adjudged that
petitioner is not entitled thereto, until final
determination of the issue in this case by this
Court.
This order shall become effective only
upon the posting of a bond by the plaintiffs
in the amount of P200,000.00.
Let a copy of this order be
immediately served on the defendants and
strict compliance herein is enjoined. Furnish
the Office of the Government Corporate
Counsel copy of this order.
SO ORDERED.
Respondents moved for the reconsideration of the
order of July 30, 2003, and also to set aside the order of default
and to admit their answer to the complaint.
On January 13, 2004, the RTC denied respondents
motions for reconsideration, to set aside order of default, and
to admit answer.[6]
Thence, respondents commenced in the Court of
Appeals (CA) a special civil action for certiorari (CA-GR SP No.
83144), alleging that the RTC had thereby committed grave
abuse of discretion amounting to lack or excess of jurisdiction
in holding that Nerwin had been entitled to the issuance of the
writ of preliminary injunction despite the express prohibition
from the law and from the Supreme Court; in issuing the TRO
in blatant violation of the Rules of Court and established
jurisprudence; in declaring respondents in default; and in
disqualifying respondents counsel from representing them.[7]
On October 22, 2004, the CA promulgated its
decision,[8] to wit:
WHEREFORE, the petition is GRANTED. The
assailed Orders dated July 30 and December
29, 2003 are hereby ANNULED and SET
ASIDE. Accordingly, Civil Case No. 03106921,
private respondents complaint for issuance
of temporary restraining order/writ of
preliminary injunction before Branch 37 of
the Regional Trial Court of Manila, is
DISMISSED for lack of merit.
SO ORDERED.
Nerwin filed a motion for reconsideration, but the CA
denied the motion on February 9, 2005.[9]
Issues
Hence, Nerwin appeals, raising the following issues:
I. Whether or not the CA erred in
dismissing the case on the basis of Rep.
Act 8975 prohibiting the issuance of
temporary restraining orders and
preliminary injunctions, except if issued
by the Supreme Court, on government
projects.
II. Whether or not the CA erred in ordering
the dismissal of the entire case on the
basis of Rep. Act 8975 which prohibits
the issuance only of a preliminary
injunction but not injunction as a final
remedy.
III. Whether or not the CA erred in dismissing
the case considering that it is also one
for damages.
Ruling
The petition fails.
In its decision of October 22, 2004, the CA explained
why it annulled and set aside the assailed orders of the RTC
issued on July 20, 2003 and December 29, 2003, and why it
altogether dismissed Civil Case No. 03106921, as follows:
It is beyond dispute that the crux of the
instant case is the propriety of respondent
Judges issuance of a preliminary injunction,
or the earlier TRO, for that matter.
Respondent Judge gravely abused his
discretion in entertaining an application for
TRO/preliminary injunction, and worse, in
issuing a preliminary injunction through the
assailed order enjoining petitioners sought
bidding for its O-ILAW Project. The same is a
palpable violation of RA 8975 which was
approved on November 7, 2000, thus,
already existing at the time respondent
Judge issued the assailed Orders dated July
20 and December 29, 2003.
Section 3 of RA 8975 states in no uncertain
terms, thus:
Prohibition on the Issuance of
temporary Restraining Order,
Preliminary Injunctions and
Preliminary Mandatory
Injunctions. No court, except the
Supreme Court, shall issue any
temporary restraining order,
preliminary injunction or
preliminary mandatory injunction
against the government, or any of
its subdivisions, officials, or any
person or entity, whether public
or private, acting under the
governments direction, to
restrain, prohibit or compel the
following acts:
xxx
(b) Bidding or awarding of
contract/project of the national
government as defined under
Section 2 hereof;
xxx
This prohibition shall apply in all
cases, disputes or controversies
instituted by a private party,
including but not limited to cases
 filed by bidders or those claiming Perforce, this Court no longer sees the need
to have rights through such to resolve the other grounds proffered by
bidders involving such petitioners.[10]
contract/project. This prohibition
shall not apply when the matter is
The CAs decision was absolutely correct. The RTC
of extreme urgency involving a
gravely abused its discretion, firstly, when it entertained the
constitutional issue, such that
complaint of Nerwin against respondents notwithstanding that
unless a temporary restraining
Nerwin was thereby contravening the express provisions of
order is issued, grave injustice
Section 3 and Section 4 of Republic Act No. 8975 for its
and irreparable injury will arise.
seeking to enjoin the bidding out by respondents of the O-
xxx
ILAW Project; and, secondly, when it issued the TRO and the
writ of preliminary prohibitory injunction.
The said proscription is not entirely new. RA
8975 merely supersedes PD 1818 which
Section 3 and Section 4 of Republic Act No. 8975
earlier underscored the prohibition to courts
provide:
from issuing restraining orders or preliminary
injunctions in cases involving infrastructure
Section 3. Prohibition on the Issuance
or National Resources Development projects
of Temporary Restraining Orders, Preliminary
of, and public utilities operated by, the
Injunctions and Preliminary Mandatory
government. This law was, in fact, earlier
Injunctions. No court, except the Supreme
upheld to have such a mandatory nature by
Court, shall issue any temporary restraining
the Supreme Court in an administrative case
order, preliminary injunction or preliminary
against a Judge.
mandatory injunction against the
government, or any of its subdivisions,
Moreover, to bolster the significance of the
officials or any person or entity, whether
said prohibition, the Supreme Court had the
public or private, acting under the
same embodied in its Administrative Circular
governments direction, to restrain, prohibit
No. 11-2000 which reiterates the ban on
or compel the following acts:
issuance of TRO or writs of Preliminary
Prohibitory or Mandatory Injunction in cases
(a) Acquisition, clearance and
involving Government Infrastructure
development of the right-of-way and/or site
Projects. Pertinent is the ruling in National
or location of any national government
Housing Authority vs. Allarde As regards the
project;
definition of infrastructure projects, the Court
stressed in Republic of the Phil. vs. Salvador
(b) Bidding or awarding of
Silverio and Big Bertha Construction: The
contract/project of the national
term infrastructure projects means
government as defined under Section 2
construction, improvement and rehabilitation
hereof;
of roads, and bridges, railways, airports,
seaports, communication facilities, irrigation,
(c) Commencement, prosecution,
flood control and drainage, water supply and
execution, implementation, operation of any
sewerage systems, shore protection, power
such contract or project;
facilities, national buildings, school
buildings, hospital buildings and other
(d) Termination or rescission of any
related construction projects that form part
such contract/project; and
of the government capital investment.

(e) The undertaking or authorization

Thus, there is nothing from the law or
of any other lawful activity necessary for such
jurisprudence, or even from the facts of the
contract/project.
case, that would justify respondent Judges
blatant disregard of a simple,
This prohibition shall apply in all
comprehensible and unequivocal mandate
cases, disputes or controversies instituted by
(of PD 1818) prohibiting the issuance of
a private party, including but not limited to
injunctive writs relative to government
cases filed by bidders or those claiming to
infrastructure projects. Respondent Judge
have rights through such bidders involving
did not even endeavor, although expectedly,
such contract/project. This prohibition shall
to show that the instant case falls under the
not apply when the matter is of extreme
single exception where the said proscription
urgency involving a constitutional issue, such
may not apply, i.e., when the matter is of
that unless a temporary restraining order is
extreme urgency involving a constitutional
issued, grave injustice and irreparable injury
issue, such that unless a temporary restraining
will arise. The applicant shall file a bond, in
order is issued, grave injustice and irreparable
an amount to be fixed by the court, which
injury will arise.
bond shall accrue in favor of the government
if the court should finally decide that the
Respondent Judge could not have legally
applicant was not entitled to the relief
declared petitioner in default because, in the
sought.
first place, he should not have given due
course to private respondents complaint for
If after due hearing the court finds
injunction.Indubitably, the assailed orders
that the award of the contract is null and
were issued with grave abuse of discretion
void, the court may, if appropriate under the
amounting to lack or excess of jurisdiction.
circumstances, award the contract to the
 qualified and winning bidder or order a compliance therewith, constitutes
rebidding of the same, without prejudice to grave misconduct and conduct
any liability that the guilty party may incur prejudicial to the proper
under existing laws. administration of justice. His
claim that the said statute is
Section 4. Nullity of Writs and Orders. inapplicable to his January 21,
- Any temporary restraining order, 1997 Order extending the
preliminary injunction or preliminary dubious TRO is but a contrived
mandatory injunction issued in violation subterfuge to evade
of Section 3 hereof is void and of no force administrative liability.
and effect.
In resolving matters in
litigation, judges should
The text and tenor of the provisions being clear and
endeavor assiduously to
unambiguous, nothing was left for the RTC to do except to
ascertain the facts and the
enforce them and to exact upon Nerwin obedience to them.
applicable laws. Moreover, they
The RTC could not have been unaware of the prohibition under
should exhibit more than just a
Republic Act No. 8975 considering that the Court had itself
cursory acquaintance with
instructed all judges and justices of the lower courts, through
statutes and procedural rules.
Administrative Circular No. 11-2000, to comply with and
Also, they are expected to keep
respect the prohibition against the issuance of TROs or writs of
abreast of and be conversant
preliminary prohibitory or mandatory injunction involving
with the rules and the circulars
contracts and projects of the Government.
which the Supreme Court has
adopted and which affect the
It is of great relevance to mention at this juncture that Judge
disposition of cases before
Vicente A. Hidalgo, the Presiding Judge of Branch 37 of the
them.
RTC, the branch to which Civil Case No. 03106921 had been
raffled, was in fact already found administratively liable for
Although judges have in
gross misconduct and gross ignorance of the law as the result
their favor the presumption of
of his issuance of the assailed TRO and writ of preliminary
regularity and good faith in the
prohibitory injunction. The Court could only fine him in the
performance of their judicial
amount of P40,000.00 last August 6, 2008 in view of his
functions, a blatant disregard of
intervening retirement from the service. That sanction was
the clear and unmistakable
meted on him in A.M. No. RTJ-08-2133 entitled Sinsuat v.
terms of the law obviates this
Hidalgo,[11] where this Court stated:
presumption and renders them
susceptible to administrative
The Court finds that, indeed,
sanctions. (Emphasis and
respondent is liable for gross misconduct. As
underscoring supplied)
the CA explained in its above-stated Decision
in the petition for certiorari, respondent
The pronouncements
failed to heed the mandatory ban imposed
in Caguioa apply as well to
by P.D. No. 1818 and R.A. No. 8975 against a
respondent.
government infrastructure project, which the
rural electrification project certainly was. He
The questioned acts of respondent
thereby likewise obstinately disregarded this
also constitute gross ignorance of the law for
Courts various circulars enjoining courts from
being patently in disregard of simple,
issuing TROs and injunctions against
elementary and well-known rules which
government infrastructure projects in line
judges are expected to know and apply
with the proscription under R.A. No.
properly.
8975. Apropos are Gov. Garcia v. Hon.
Burgos and National Housing Authority v.
IN FINE, respondent is guilty of gross
Hon. Allarde wherein this Court stressed that
misconduct and gross ignorance of the
P.D. No. 1818 expressly deprives courts of
law, which are serious charges under Section
jurisdiction to issue injunctive writs against
8 of Rule 140 of the Rules of Court. He
the implementation or execution of a
having retired from the service, a fine in the
government infrastructure project.
amount of P40,000 is imposed upon him, the
maximum amount fixed under Section 11 of
Reiterating the prohibitory mandate
Rule 140 as an alternative sanction to
of P.D. No. 1818, the Court in Atty. Caguioa v.
dismissal or suspension.[12]
Judge Lavia faulted a judge for grave
misconduct for issuing a TRO against a
government infrastructure project thus: Even as the foregoing outcome has rendered any
further treatment and discussion of Nerwins other submissions
xxx It appears that superfluous and unnecessary, the Court notes that the RTC did
respondent is either feigning a not properly appreciate the real nature and true purpose of the
misunderstanding of the law or injunctive remedy. This failing of the RTC presses the Court to
openly manifesting a use this decision to reiterate the norms and parameters long
contumacious indifference standing jurisprudence has set to control the issuance of TROs
thereto. In any case, his disregard and writs of injunction, and to now insist on conformity to
of the clear mandate of PD 1818, them by all litigants and lower courts. Only thereby may the
as well as of the Supreme Court grave misconduct committed in Civil Case No. 03106921 be
Circulars enjoining strict avoided.

A 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, agency or person, to refrain
from a particular act or acts.[13] It is an ancillary or preventive
remedy resorted to by a litigant to protect or preserve his
rights or interests during the pendency of the case. As such, it
is issued only when it is established that:
(a) 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; or
(b) 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) 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.[14]
The existence of a right to be protected by the injunctive relief
is indispensable. In City Government of Butuan v. Consolidated
Broadcasting System (CBS), Inc.,[15] the Court elaborated on this
requirement, viz:
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 facie showing 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 by
statute. 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.[16]
Conclusive proof of the existence of the right to be protected is
not demanded, however, for, as the Court has held in Saulog v.
Court of Appeals,[17] it is enough that:
xxx 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 of the 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 of
preliminary injunction, the private respondent
needs only to show that it has the ostensible
right to the final relief prayed for in its
complaint xxx.[18]
In this regard, the Rules of Court grants a broad latitude to the
trial courts considering that conflicting claims in an application
for a provisional writ more often than not involve and require a
factual determination that is not the function of the appellate
courts.[19] 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.[20] When that is done, the exercise of sound discretion by
the issuing court in injunctive matters must not be interfered
with except when there is manifest abuse.[21]
Moreover, judges dealing with applications for the injunctive
relief ought to be wary of improvidently or unwarrantedly
issuing TROs or writs of injunction that tend to disposeof the
merits without or before trial. Granting an application for
the relief in disregard of that tendency is judicially
impermissible,[22] for it is never the function of a TRO or
preliminary injunction to determine the merits of a case,[23] or
to decide controverted facts.[24] It is but a preventive remedy
whose only mission is to prevent threatened wrong,[25] further
injury,[26] and irreparable harm[27] or injustice[28] until the rights
of the parties can be settled. Judges should thus look at such
relief only as a means to protect the ability of their courts to
render a meaningful decision.[29] Foremost in their minds
should be to guard against a change of circumstances that will
hamper or prevent the granting of proper reliefs after a trial on
the merits.[30] It is well worth remembering that the writ of
preliminary injunction should issue only to prevent the
threatened continuous and irremediable injury to the applicant
before the claim can be justly and thoroughly studied and
adjudicated.[31]
WHEREFORE, the Court AFFIRMS the decision of the
Court of Appeals; and ORDERS petitioner to pay the costs of
suit.
The Court Administrator shall disseminate this
decision to the lower courts for their guidance.
SO ORDERED.