FIRST DIVISION
[ G.R. No. 167057, April 11, 2012 ]NERWIN INDUSTRIES CORPORATION v. PNOC-ENERGY DEVELOPMENT CORPORATION +
NERWIN INDUSTRIES CORPORATION, PETITIONER, VS. PNOC-ENERGY DEVELOPMENT CORPORATION, AND ESTER R. GUERZON, CHAIRMAN, BIDS AND AWARDS COMMITTEE, RESPONDENTS.
D E C I S I O N
NERWIN INDUSTRIES CORPORATION v. PNOC-ENERGY DEVELOPMENT CORPORATION +
NERWIN INDUSTRIES CORPORATION, PETITIONER, VS. PNOC-ENERGY DEVELOPMENT CORPORATION, AND ESTER R. GUERZON, CHAIRMAN, BIDS AND AWARDS COMMITTEE, RESPONDENTS.
D E C I S I O N
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 Government's 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:
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:
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:
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:
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:
The CA's decision was absolutely correct. The RTC gravely abused its discretion, firstly, when it entertained the complaint of Nerwin against respondents notwithstanding that Nerwin was thereby contravening the express provisions of Section 3 and Section 4 of Republic Act No. 8975 for its seeking to enjoin the bidding out by respondents of the O-ILAW Project; and, secondly, when it issued the TRO and the writ of preliminary prohibitory injunction.
Section 3 and Section 4 of Republic Act No. 8975 provide:
The text and tenor of the provisions being clear and unambiguous, nothing was left for the RTC to do except to enforce them and to exact upon Nerwin obedience to them. The RTC could not have been unaware of the prohibition under Republic Act No. 8975 considering that the Court had itself instructed all judges and justices of the lower courts, through Administrative Circular No. 11-2000, to comply with and respect the prohibition against the issuance of TROs or writs of preliminary prohibitory or mandatory injunction involving contracts and projects of the Government.
It is of great relevance to mention at this juncture that Judge Vicente A. Hidalgo, the Presiding Judge of Branch 37 of the RTC, the branch to which Civil Case No. 03106921 had been raffled, was in fact already found administratively liable for gross misconduct and gross ignorance of the law as the result of his issuance of the assailed TRO and writ of preliminary prohibitory injunction. The Court could only fine him in the amount of P40,000.00 last August 6, 2008 in view of his intervening retirement from the service. That sanction was meted on him in A.M. No. RTJ-08-2133 entitled Sinsuat v. Hidalgo,[11] where this Court stated:
Even as the foregoing outcome has rendered any further treatment and discussion of Nerwin's other submissions superfluous and unnecessary, the Court notes that the RTC did not properly appreciate the real nature and true purpose of the injunctive remedy. This failing of the RTC presses the Court to use this decision to reiterate the norms and parameters long standing jurisprudence has set to control the issuance of TROs and writs of injunction, and to now insist on conformity to them by all litigants and lower courts. Only thereby may the grave misconduct committed in Civil Case No. 03106921 be 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:
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:
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:
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 dispose of 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.
Corona, C.J., (Chairperson), Leonardo-De Castro, *Brion, and Villarama, Jr., JJ., concur.
* Vice Associate Justice Mariano C. Del Castillo who concurred with the decision of the Court of Appeals, pursuant to the raffle of April 11, 2012.
[1] An Act to Ensure the Expeditious Implementation and Completion of Government Infrastructure Projects by Prohibiting Lower Courts from issuing Temporary Restraining Orders, Preliminary Injunctions or Preliminary Mandatory Injunctions, Providing Penalties for Violations thereof, and for Other Purposes.
[2] Rollo, pp. 11-21; penned by Associate Justice Magdangal M. De Leon, and concurred in by Associate Justices Romeo A. Brawner (later Presiding Justice) and Associate Justice Mariano C. Del Castillo (now a Member of this Court).
[3] Id., p. 14.
[4] Id., pp. 14-15.
[5] Id., p. 15.
[6] Id., p. 16.
[7] Id., p. 60.
[8] Supra, note 2.
[9] Rollo pp. 67-69; penned by Associate Justice Magdangal De Leon, and concurred in by Associate Justice Brawner and Associate Justice Del Castillo.
[10] Bold underscoring is part of original text.
[11] 561 SCRA 38.
[12] Sinsuat v. Hidalgo, A.M. No. RTJ-08-2133, August 6, 2008, 561 SCRA 38, 48-50.
[13] Sec. 1, Rule 58, 1997 Rules of Civil Procedure.
[14] Sec. 3, Rule 58, 1997 Rules of Civil Procedure.
[15] G.R. No. 157315, December 1, 2010, 636 SCRA 320.
[16] City Government of Butuan v. Consolidated Broadcasting System (BS), Inc., G.R. No. 157315, December 1, 2010, 636 SCRA 320, 336-337 (Bold emphasis supplied).
[17] Saulog v. Court of Appeals, G.R. No. 119769, September 18, 1996, 262 SCRA 51.
[18] Id., p. 60 (Bold emphasis supplied).
[19] Urbanes, Jr. v. Court of Appeals, G.R. No. 117964, March 28, 2001,355 SCRA 537, 548.
[20] Republic Telecommunications Holdings, Inc. v. Court of Appeals, G.R. No. 135074, January 29, 1999, 302 SCRA 403, 409.
[21] Searth Commodities Corp. v. Court of Appeals, G.R. No. 64220, March 31, 1992, 207 SCRA 622, 628; S & A Gaisano, Inc. v. Judge Hidalgo; G.R. No. 80397, December 10, 1990, 192 SCRA 224, 229; Genoblazo v. Court of Appeals, G.R. No. 79303, June 20, 1989, 174 SCRA 124, 133.
[22] Searth Commodities Corporation v. Court of Appeals, G.R. No. 64220, March 31, 1992, 207 SCRA 622, 629-630; Rivas v. Securities and Exchange Commission, G.R. No. 53772, October 4, 1990,190 SCRA 295, 305; Government Service Insurance System v. Florendo, G.R. No. 48603, September 29, 1989, 178 SCRA 76, 88-89; Ortigas v. Co. Ltd. Partnership v. Court of Appeals, No. L-79128, June 16, 1988, 162 SCRA 165, 169.
[23] 43 CJS Injunctions § 5, citing B. W. Photo Utilities v. Republic Molding Corporation, C. A. Cal., 280 F. 2d 806; Duckworth v. James, C. A. Va. 267 F. 2d 224; Westinghouse Electric Corporation v. Free Sewing Machine Co., C. A. Ill, 256 F. 2d 806.
[24] 43 CJS Injunctions § 5, citing Lonergan v. Crucible Steel Co. of America, 229 N. E. 2d 536, 37 Ill. 2d 599; Compton v. Paul K. Harding Realty Co., 285 N.E. 2d 574, 580.
[25] Doeskin Products, Inc. v. United Paper Co., C. A. Ill., 195 F. 2d 356; Benson Hotel Corp. v. Woods, C. C. A. Minn., 168 F. 2d 694; Spickerman v. Sproul, 328 P. 2d 87, 138 Colo. 13; United States v. National Plastikwear Fashions, 368 F. 2d 845.
[26] Career Placement of White Plains, Inc. v. Vaus, 354 N. Y. S. 2d 764, 77 Misc. 2d 788;Toushin v. City of Chicago, 320 N. E. 2d 202, 23 Ill. App. 3d 797; H. K. H. Development Corporation v. Metropolitan Sanitary District of Greater Chicago, 196 N. E., 2d 494, 47 Ill. App. 46.
[27] Exhibitors Poster Exchange, Inc. v. National Screen Service Corp., C. A. La., 441 F. 2d 560; Marine Cooks & Stewards, AFL v. Panama S. S. Co., C. A. Wash., 362 U.S. 365.
[28] City of Cleveland v. Division 268 of Amalgamated Association of St. Elec. Ry. & Motor Coach Emp. Of America, 81. N. E. 2d 310, 84 Ohio App. 43; Slott v. Plastic Fabricators, Inc., 167 A. 2d 306, 402 Pa. 433.
[29] Meis v. Sanitas Service Corporation, C. A. Tex., 511 F. 2d 655; Gobel v. Laing, 12 Ohio App. 2d 93.
[30] United States v. Adler's Creamery, C. C. A. N. Y., 107 F. 2d 987; American Mercury v. Kiely, C. C. A. N. Y., 19 F. 2d 295.
[31] Republic v. Silerio, G.R. No. 108869, May 6, 1997, 272 SCRA 280, 287.
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.
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 country's Rural Electrification Project. The said contract consisted of four (4) components, namely: PIA, PIB and PIC or woodpoles and P3 or crossarms, necessary for NEA's 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 respondent's [Nerwin's] manufacturing plants and facilities, including its identified supplier in Malaysia, to determine its capability to supply and deliver NEA's 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 NEA's 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, NEA's 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:
- DENYING the motion to consolidate;
- DENYING the urgent motion for reconsideration;
- DISQUALIFYING Attys. Michael A. Medado, Datu Omar S. Sinsuat and Mariano H. Paps from appearing as counsel for the defendants;
- DECLARING defendants in default;
- 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 respondent's 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]
Hence, Nerwin appeals, raising the following issues:
- 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.
- 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.
- Whether or not the CA erred in dismissing the case considering that it is also one for damages.
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 Judge's 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 government's 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 to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. xxx
The said proscription is not entirely new. RA 8975 merely supersedes PD 1818 which earlier underscored the prohibition to courts from issuing restraining orders or preliminary injunctions in cases involving infrastructure or National Resources Development projects of, and public utilities operated by, the government. This law was, in fact, earlier upheld to have such a mandatory nature by the Supreme Court in an administrative case against a Judge.
Moreover, to bolster the significance of the said prohibition, the Supreme Court had the same embodied in its Administrative Circular No. 11-2000 which reiterates the ban on issuance of TRO or writs of Preliminary Prohibitory or Mandatory Injunction in cases involving Government Infrastructure Projects. Pertinent is the ruling in National Housing Authority vs. Allarde "As regards the definition of infrastructure projects, the Court stressed in Republic of the Phil. vs. Salvador Silverio and Big Bertha Construction: The term 'infrastructure projects' means 'construction, improvement and rehabilitation of roads, and bridges, railways, airports, seaports, communication facilities, irrigation, flood control and drainage, water supply and sewerage systems, shore protection, power facilities, national buildings, school buildings, hospital buildings and other related construction projects that form part of the government capital investment."
Thus, there is nothing from the law or jurisprudence, or even from the facts of the case, that would justify respondent Judge's blatant disregard of a "simple, comprehensible and unequivocal mandate (of PD 1818) prohibiting the issuance of injunctive writs relative to government infrastructure projects." Respondent Judge did not even endeavor, although expectedly, to show that the instant case falls under the single exception where the said proscription may not apply, i.e., when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise.
Respondent Judge could not have legally declared petitioner in default because, in the first place, he should not have given due course to private respondent's complaint for injunction. Indubitably, the assailed orders were issued with grave abuse of discretion amounting to lack or excess of jurisdiction.
Perforce, this Court no longer sees the need to resolve the other grounds proffered by petitioners.[10]
The CA's decision was absolutely correct. The RTC gravely abused its discretion, firstly, when it entertained the complaint of Nerwin against respondents notwithstanding that Nerwin was thereby contravening the express provisions of Section 3 and Section 4 of Republic Act No. 8975 for its seeking to enjoin the bidding out by respondents of the O-ILAW Project; and, secondly, when it issued the TRO and the writ of preliminary prohibitory injunction.
Section 3 and Section 4 of Republic Act No. 8975 provide:
Section 3. Prohibition on the Issuance of Temporary Restraining Orders, 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 government's direction, to restrain, prohibit or compel the following acts:
(a) Acquisition, clearance and development of the right-of-way and/or site or location of any national government project;
(b) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof;
(c) Commencement, prosecution, execution, implementation, operation of any such contract or project;
(d) Termination or rescission of any such contract/project; and
(e) The undertaking or authorization of any other lawful activity necessary for such contract/project.
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 to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. The applicant shall file a bond, in an amount to be fixed by the court, which bond shall accrue in favor of the government if the court should finally decide that the applicant was not entitled to the relief sought.
If after due hearing the court finds that the award of the contract is null and void, the court may, if appropriate under the circumstances, award the contract to the qualified and winning bidder or order a rebidding of the same, without prejudice to any liability that the guilty party may incur under existing laws.
Section 4. Nullity of Writs and Orders. - Any temporary restraining order, preliminary injunction or preliminary mandatory injunction issued in violation of Section 3 hereof is void and of no force and effect.
The text and tenor of the provisions being clear and unambiguous, nothing was left for the RTC to do except to enforce them and to exact upon Nerwin obedience to them. The RTC could not have been unaware of the prohibition under Republic Act No. 8975 considering that the Court had itself instructed all judges and justices of the lower courts, through Administrative Circular No. 11-2000, to comply with and respect the prohibition against the issuance of TROs or writs of preliminary prohibitory or mandatory injunction involving contracts and projects of the Government.
It is of great relevance to mention at this juncture that Judge Vicente A. Hidalgo, the Presiding Judge of Branch 37 of the RTC, the branch to which Civil Case No. 03106921 had been raffled, was in fact already found administratively liable for gross misconduct and gross ignorance of the law as the result of his issuance of the assailed TRO and writ of preliminary prohibitory injunction. The Court could only fine him in the amount of P40,000.00 last August 6, 2008 in view of his intervening retirement from the service. That sanction was meted on him in A.M. No. RTJ-08-2133 entitled Sinsuat v. Hidalgo,[11] where this Court stated:
The Court finds that, indeed, respondent is liable for gross misconduct. As the CA explained in its above-stated Decision in the petition for certiorari, respondent failed to heed the mandatory ban imposed by P.D. No. 1818 and R.A. No. 8975 against a government infrastructure project, which the rural electrification project certainly was. He thereby likewise obstinately disregarded this Court's various circulars enjoining courts from issuing TROs and injunctions against government infrastructure projects in line with the proscription under R.A. No. 8975. Apropos are Gov. Garcia v. Hon. Burgos and National Housing Authority v. Hon. Allarde wherein this Court stressed that P.D. No. 1818 expressly deprives courts of jurisdiction to issue injunctive writs against the implementation or execution of a government infrastructure project.
Reiterating the prohibitory mandate of P.D. No. 1818, the Court in Atty. Caguioa v. Judge Laviña faulted a judge for grave misconduct for issuing a TRO against a government infrastructure project thus:
xxx It appears that respondent is either feigning a misunderstanding of the law or openly manifesting a contumacious indifference thereto. In any case, his disregard of the clear mandate of PD 1818, as well as of the Supreme Court Circulars enjoining strict compliance therewith, constitutes grave misconduct and conduct prejudicial to the proper administration of justice. His claim that the said statute is inapplicable to his January 21, 1997 Order extending the dubious TRO is but a contrived subterfuge to evade administrative liability.
In resolving matters in litigation, judges should endeavor assiduously to ascertain the facts and the applicable laws. Moreover, they should exhibit more than just a cursory acquaintance with statutes and procedural rules. Also, they are expected to keep abreast of and be conversant with the rules and the circulars which the Supreme Court has adopted and which affect the disposition of cases before them.
Although judges have in their favor the presumption of regularity and good faith in the performance of their judicial functions, a blatant disregard of the clear and unmistakable terms of the law obviates this presumption and renders them susceptible to administrative sanctions. (Emphasis and underscoring supplied)
The pronouncements in Caguioa apply as well to respondent.
The questioned acts of respondent also constitute gross ignorance of the law for being patently in disregard of simple, elementary and well-known rules which judges are expected to know and apply properly.
IN FINE, respondent is guilty of gross misconduct and gross ignorance of the law, which are serious charges under Section 8 of Rule 140 of the Rules of Court. He having retired from the service, a fine in the amount of P40,000 is imposed upon him, the maximum amount fixed under Section 11 of Rule 140 as an alternative sanction to dismissal or suspension.[12]
Even as the foregoing outcome has rendered any further treatment and discussion of Nerwin's other submissions superfluous and unnecessary, the Court notes that the RTC did not properly appreciate the real nature and true purpose of the injunctive remedy. This failing of the RTC presses the Court to use this decision to reiterate the norms and parameters long standing jurisprudence has set to control the issuance of TROs and writs of injunction, and to now insist on conformity to them by all litigants and lower courts. Only thereby may the grave misconduct committed in Civil Case No. 03106921 be 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:
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 dispose of 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.
Corona, C.J., (Chairperson), Leonardo-De Castro, *Brion, and Villarama, Jr., JJ., concur.
* Vice Associate Justice Mariano C. Del Castillo who concurred with the decision of the Court of Appeals, pursuant to the raffle of April 11, 2012.
[1] An Act to Ensure the Expeditious Implementation and Completion of Government Infrastructure Projects by Prohibiting Lower Courts from issuing Temporary Restraining Orders, Preliminary Injunctions or Preliminary Mandatory Injunctions, Providing Penalties for Violations thereof, and for Other Purposes.
[2] Rollo, pp. 11-21; penned by Associate Justice Magdangal M. De Leon, and concurred in by Associate Justices Romeo A. Brawner (later Presiding Justice) and Associate Justice Mariano C. Del Castillo (now a Member of this Court).
[3] Id., p. 14.
[4] Id., pp. 14-15.
[5] Id., p. 15.
[6] Id., p. 16.
[7] Id., p. 60.
[8] Supra, note 2.
[9] Rollo pp. 67-69; penned by Associate Justice Magdangal De Leon, and concurred in by Associate Justice Brawner and Associate Justice Del Castillo.
[10] Bold underscoring is part of original text.
[11] 561 SCRA 38.
[12] Sinsuat v. Hidalgo, A.M. No. RTJ-08-2133, August 6, 2008, 561 SCRA 38, 48-50.
[13] Sec. 1, Rule 58, 1997 Rules of Civil Procedure.
[14] Sec. 3, Rule 58, 1997 Rules of Civil Procedure.
[15] G.R. No. 157315, December 1, 2010, 636 SCRA 320.
[16] City Government of Butuan v. Consolidated Broadcasting System (BS), Inc., G.R. No. 157315, December 1, 2010, 636 SCRA 320, 336-337 (Bold emphasis supplied).
[17] Saulog v. Court of Appeals, G.R. No. 119769, September 18, 1996, 262 SCRA 51.
[18] Id., p. 60 (Bold emphasis supplied).
[19] Urbanes, Jr. v. Court of Appeals, G.R. No. 117964, March 28, 2001,355 SCRA 537, 548.
[20] Republic Telecommunications Holdings, Inc. v. Court of Appeals, G.R. No. 135074, January 29, 1999, 302 SCRA 403, 409.
[21] Searth Commodities Corp. v. Court of Appeals, G.R. No. 64220, March 31, 1992, 207 SCRA 622, 628; S & A Gaisano, Inc. v. Judge Hidalgo; G.R. No. 80397, December 10, 1990, 192 SCRA 224, 229; Genoblazo v. Court of Appeals, G.R. No. 79303, June 20, 1989, 174 SCRA 124, 133.
[22] Searth Commodities Corporation v. Court of Appeals, G.R. No. 64220, March 31, 1992, 207 SCRA 622, 629-630; Rivas v. Securities and Exchange Commission, G.R. No. 53772, October 4, 1990,190 SCRA 295, 305; Government Service Insurance System v. Florendo, G.R. No. 48603, September 29, 1989, 178 SCRA 76, 88-89; Ortigas v. Co. Ltd. Partnership v. Court of Appeals, No. L-79128, June 16, 1988, 162 SCRA 165, 169.
[23] 43 CJS Injunctions § 5, citing B. W. Photo Utilities v. Republic Molding Corporation, C. A. Cal., 280 F. 2d 806; Duckworth v. James, C. A. Va. 267 F. 2d 224; Westinghouse Electric Corporation v. Free Sewing Machine Co., C. A. Ill, 256 F. 2d 806.
[24] 43 CJS Injunctions § 5, citing Lonergan v. Crucible Steel Co. of America, 229 N. E. 2d 536, 37 Ill. 2d 599; Compton v. Paul K. Harding Realty Co., 285 N.E. 2d 574, 580.
[25] Doeskin Products, Inc. v. United Paper Co., C. A. Ill., 195 F. 2d 356; Benson Hotel Corp. v. Woods, C. C. A. Minn., 168 F. 2d 694; Spickerman v. Sproul, 328 P. 2d 87, 138 Colo. 13; United States v. National Plastikwear Fashions, 368 F. 2d 845.
[26] Career Placement of White Plains, Inc. v. Vaus, 354 N. Y. S. 2d 764, 77 Misc. 2d 788;Toushin v. City of Chicago, 320 N. E. 2d 202, 23 Ill. App. 3d 797; H. K. H. Development Corporation v. Metropolitan Sanitary District of Greater Chicago, 196 N. E., 2d 494, 47 Ill. App. 46.
[27] Exhibitors Poster Exchange, Inc. v. National Screen Service Corp., C. A. La., 441 F. 2d 560; Marine Cooks & Stewards, AFL v. Panama S. S. Co., C. A. Wash., 362 U.S. 365.
[28] City of Cleveland v. Division 268 of Amalgamated Association of St. Elec. Ry. & Motor Coach Emp. Of America, 81. N. E. 2d 310, 84 Ohio App. 43; Slott v. Plastic Fabricators, Inc., 167 A. 2d 306, 402 Pa. 433.
[29] Meis v. Sanitas Service Corporation, C. A. Tex., 511 F. 2d 655; Gobel v. Laing, 12 Ohio App. 2d 93.
[30] United States v. Adler's Creamery, C. C. A. N. Y., 107 F. 2d 987; American Mercury v. Kiely, C. C. A. N. Y., 19 F. 2d 295.
[31] Republic v. Silerio, G.R. No. 108869, May 6, 1997, 272 SCRA 280, 287.