Aquino vs. Luntok

A writ of preliminary injunction issued beyond the 20-day period of effectivity of a temporary restraining order is not an absolute nullity, provided that, aside from the existence of any of the grounds for its issuance, the other requirements prescribed by the rules — hearing and posting of a bond — are present. The mandatory tenor of Section 5, Rule 58 of the Rules of Court, as amended by Batas Pambansa Blg. 224, operates as a directive for the judge to act with dispatch on the application within the 20-day period, with a proscription against an ex parte proceeding, rather than as a rule of nullity.

Petitioners Santiago Aquino, Terencio Yumang, Jr., and Fulgencio Icaro served as Provincial Auditor of Camarines Sur, State Auditor I of the Provincial Auditor's Office, and State Examiner of the Provincial Auditor's Office, respectively, while private respondent Ludovico B. Peralta was the Municipal Treasurer of Libmanan, Camarines Sur, whose accounts fell within the audit jurisdiction of the petitioners. Section 157 of Batas Pambansa Blg. 337 governed the seizure of a local official's cash, books, papers, and accounts upon a finding of shortage in his accountability. Section 5, Rule 58 of the Rules of Court, as amended by Batas Pambansa Blg. 224 effective April 16, 1982, fixed the juridical life span of a temporary restraining order at twenty days and required the judge to determine within that period whether a preliminary injunction should be granted.

Petitioners Santiago Aquino, Terencio Yumang, Jr., and Fulgencio Icaro held the positions of Provincial Auditor of Camarines Sur, State Auditor I of the Provincial Auditor's Office, and State Examiner of the Provincial Auditor's Office, respectively. Private respondent Ludovico B. Peralta was the Municipal Treasurer of Libmanan, Camarines Sur, whose accounts fell within the audit jurisdiction of the petitioners.

An audit of Peralta's accounts as Municipal Treasurer disclosed a cash shortage of P274,011.17 under his accountability. Allegedly pursuant to Section 157 of Batas Pambansa Blg. 337, the petitioners seized Peralta's cash, books, papers, and accounts, and he was suspended from office. Peralta thereupon requested a reinvestigation by the Commission on Audit.

While that request for reinvestigation remained pending, Peralta filed with the Regional Trial Court of Camarines Sur, Branch XXIX, Libmanan, a petition dated August 26, 1987 for prohibition with injunction, praying for a restraining order and damages. The following day, August 27, 1987, the respondent judge issued a temporary restraining order effective for twenty days, enjoining all the respondents therein, their agents and representatives, to desist from proceeding or taking action against Peralta based on petitioner Yumang's report and from exercising such derivative powers and functions. On September 16, 1987, the last day of the TRO's effectivity, the respondent judge, upon Peralta's motion, extended the efficacy of the TRO for another twenty days, or until October 6, 1987.

On September 24, 1987, again upon Peralta's motion, the respondent judge ordered the petitioners to return to Peralta the cash, books, and other papers they had seized. Petitioner Aquino moved for reconsideration of that order, to which Peralta filed an opposition, and on October 5, 1987 the petitioners filed their answer to the petition with an opposition to the application for preliminary injunction. On October 6, 1987, the last day of the extended TRO, Peralta filed another motion for extension of the restraining order's efficacy; on the same date, the respondent judge issued an order directing the petitioners to refrain from taking any action against Peralta until the motion was resolved.

On October 27, 1987, the petitioners instituted in the Court of Appeals an original action for certiorari, docketed as CA-G.R. SP No. 13186, assailing the validity of the restraining orders of August 27, September 16, and October 6, 1987. While that petition was pending, the respondent judge issued an order dated November 4, 1987 granting Peralta's application for a writ of preliminary injunction; a day later, on November 5, 1987, he approved the bond filed by Peralta; and on November 11, 1987, he issued the corresponding writ of preliminary injunction. On May 11, 1988, the Court of Appeals rendered judgment dismissing the petition in CA-G.R. SP No. 13186 on the ground of mootness, since the respondent judge had already granted the writ of preliminary injunction.

The trial court's records showed that the petitioners and Peralta were given an opportunity to be heard and that a hearing was in fact conducted before the issuance of the writ of preliminary injunction to determine the existence of a valid ground therefor. The protection of a bond was likewise required.

• Nullity of the Writ: Petitioners asseverated that the questioned writ of preliminary injunction is null and void, it being in reality a fourth restraining order issued beyond the 20-day effectivity of the preceding TRO.
• Exhaustion of Administrative Remedies: Petitioners claimed that the injunction was issued in utter disregard of the doctrine of exhaustion of administrative remedies, private respondent having brought the action below pending his request for reinvestigation with the Commission on Audit.

• Urgency of Judicial Intervention: Private respondent invoked the urgency of judicial intervention as an admitted exception to the doctrine of exhaustion of administrative remedies, warranting immediate resort to the trial court notwithstanding the pendency of his request for reinvestigation with the Commission on Audit.

• Validity of the Writ of Preliminary Injunction: Whether a writ of preliminary injunction issued beyond the 20-day period of effectivity of a temporary restraining order, and during the extended efficacy of such order, is null and void.
• Exhaustion of Administrative Remedies: Whether the action filed in the trial court was barred by the doctrine of exhaustion of administrative remedies, private respondent having sought judicial relief while his request for reinvestigation with the Commission on Audit remained pending.

• Validity of the Writ of Preliminary Injunction: No. A writ of preliminary injunction issued beyond the 20-day effectivity of a TRO is not an absolute nullity, provided the grounds for its issuance exist and the other requirements prescribed by the rules — hearing and posting of a bond — are present.
• Exhaustion of Administrative Remedies: No. The doctrine of exhaustion of administrative remedies is not a hard and fast rule; the urgency of judicial intervention is an admitted exception, and the court of original jurisdiction exercises broad discretion in granting injunctions.

• Validity of the Writ of Preliminary Injunction: A temporary restraining order, while a species of injunction, is in some respects to be distinguished therefrom. It is an interlocutory order or writ issued by the court as a restraint on the defendant until the propriety of granting a preliminary injunction can be determined, going no further in its operation than to preserve the status quo until that determination. When such determination is made, the whole force of the order ceases by its own limitations and it becomes functus officio, having by then served its purpose. On this basis rests the mootness of the issue on the propriety of the issuance of successive restraining orders upon the approval of the application for a writ of preliminary injunction, as ruled by the Court of Appeals; with the grant of the writ, hearing the petition which sought the annulment of the three antecedent TROs would be inutile, as the writ had been substituted for and subserved the purpose of the prior restraining orders. Section 5, Rule 58 of the Rules of Court, as amended by Batas Pambansa Blg. 224 effective April 16, 1982, sets a specific period for the juridical life span of a TRO: the 20-day period of effectivity is non-extendible, and the restraining order automatically terminates at the end of such period without need of any judicial declaration to that effect. Any extension would therefore ordinarily be disallowed. But when an injunction is subsequently granted, as in this case, any defect in the order brought about by the extension of its enforceability is deemed cured. The status or validity of the writ of preliminary injunction itself nonetheless remains in question. From a reading of the provision, it may appear that the order granting the injunction must issue within the same 20-day period; be that as it may, since the contrary is not expressed or otherwise indicated therein, the mandatory tenor of the provision should not be taken to mean that a writ issued beyond the time frame is an absolute nullity, provided that, aside from the existence of any of the grounds for its issuance — the determination of which is largely addressed to the trial court — the other requirements prescribed by the rules are present, namely, hearing and posting of a bond. Instead, the obligatory import of the rule should be considered as a directive for the judge to act with corresponding dispatch on the application for preliminary injunction within the 20-day period if a TRO has been issued, with a proscription against an ex parte proceeding on such application since it would deprive the affected parties of the opportunity to be heard. The history of the provision confirms this reading: Batas Pambansa Blg. 224 was adopted precisely as a reaction against the indiscriminate issuance of writs of preliminary injunction which, not infrequently, converted the writ from an instrument in furtherance of justice to a shield for injustice — made possible not only by unscrupulous lawyers and adventurous litigants but also by idle and corrupt judges who tolerated the improvident and ex parte issuance thereof and, in the case of TROs, were apparently oblivious of or insensitive to the fact that these were not conditioned on the posting of bonds to indemnify the parties against whom they were issued. In the instant case, the protection of such bond was required; petitioners and private respondent were given an opportunity to be heard; and a hearing was in fact conducted by the trial court before the issuance of the writ of preliminary injunction to determine the existence of a valid ground therefor. Except for the delay in the resolution of the application for and the subsequent issuance of the writ, the other requisites provided by the rules for the grant thereof were observed, and no other sufficient ground existed to dissolve the injunction. The grant of the writ was therefore upheld, but without prejudice to the consequences of the conduct of the respondent judge. The circumstances under which the writ was granted after a protracted delay, punctuated by dubious orders issued in the interim, cannot be countenanced lest such conduct be replicated in circumvention of the rules. Specifically, the respondent judge failed to observe Rule 3.01 of Canon 3 of the Code of Judicial Conduct, which calls for a judge to be faithful to the law and maintain professional competence, and Rule 3.05, which admonishes all judges to dispose of the court's business promptly and decide cases within the required periods.
• Exhaustion of Administrative Remedies: Although it is well-settled that, unless otherwise provided by law or required by public interest, before bringing an action in or resorting to the courts of justice all remedies of administrative character affecting or determinative of the controversy at that level should first be exhausted by the aggrieved party, this doctrine is not a hard and fast rule. The Court subscribed to private respondent's invocation of the urgency of judicial intervention, as one of the admitted exceptions to the rule, which likewise would be in keeping with the court's broad discretion in granting injunctions. Whatever circumstances warranted the grant of injunction in the court below would be no different from the circumstances which created the urgency, and there can ordinarily be no better judge to determine the existence thereof than the trial court itself. Thus, the court which is to exercise the discretion of granting an injunction is the court of original jurisdiction and not the appellate court; and a preliminary injunction will usually be granted when it is made to appear that there is a substantial controversy between the parties and one of them is committing an act or threatening the immediate commission of an act that will cause irreparable injury or destroy the status quo of the controversy before a full hearing can be had on the merits of the case. The only limitations to such discretion are that it must have been exercised upon the grounds and in the manner provided by law.

• Temporary restraining order distinguished from preliminary injunction — A TRO is an interlocutory order or writ issued by the court as a restraint on the defendant until the propriety of granting a preliminary injunction can be determined, going no further in its operation than to preserve the status quo until that determination. When the determination is made, the whole force of the order ceases by its own limitations and it becomes functus officio, having by then served its purpose. In this case, the grant of the writ of preliminary injunction substituted for and subserved the purpose of the prior restraining orders, rendering the issue on the propriety of the successive TROs moot.
• Non-extendibility of the 20-day TRO period — Under Section 5, Rule 58 of the Rules of Court, as amended by Batas Pambansa Blg. 224 effective April 16, 1982, the 20-day period of effectivity of a TRO is non-extendible, and the restraining order automatically terminates at the end of such period without need of any judicial declaration to that effect. Any extension is ordinarily disallowed. However, when an injunction is subsequently granted, any defect in the order brought about by the extension of its enforceability is deemed cured.
• Validity of a preliminary injunction issued beyond the 20-day TRO period — The mandatory tenor of Section 5, Rule 58 should not be taken to mean that a writ issued beyond the time frame is an absolute nullity, provided that, aside from the existence of any of the grounds for its issuance — the determination of which is largely addressed to the trial court — the other requirements prescribed by the rules are present, namely, hearing and posting of a bond. The obligatory import of the rule is a directive for the judge to act with corresponding dispatch on the application for preliminary injunction within the 20-day period if a TRO has been issued, with a proscription against an ex parte proceeding on such application since it would deprive the affected parties of the opportunity to be heard.
• Exhaustion of administrative remedies — exceptions — The rule that administrative remedies must be exhausted before resort to the courts is not a hard and fast rule. Urgency of judicial intervention is an admitted exception, consistent with the court's broad discretion in granting injunctions. The court which is to exercise the discretion of granting an injunction is the court of original jurisdiction and not the appellate court; a preliminary injunction will usually be granted when it appears that there is a substantial controversy between the parties and one of them is committing or threatening the immediate commission of an act that will cause irreparable injury or destroy the status quo before a full hearing on the merits can be had.
• Judicial diligence and competence — Rule 3.01 of Canon 3 of the Code of Judicial Conduct requires a judge to be faithful to the law and maintain professional competence, while Rule 3.05 admonishes all judges to dispose of the court's business promptly and decide cases within the required periods. The respondent judge was reprimanded for failing to observe these rules when he granted the writ of preliminary injunction after a protracted delay punctuated by dubious interim orders.

• "The 20-day period of effectivity of a TRO is non-extendible; the restraining order automatically terminates at the end of such period without the need of any judicial declaration to that effect." — States the canonical rule on the juridical life span of a temporary restraining order under Section 5, Rule 58, as amended by Batas Pambansa Blg. 224, and supplies the premise from which the Court's curing doctrine proceeds.
• "But, when injunction is subsequently granted, as in the case at bar, any defect in the order brought about by the extension of its enforceability is deemed cured." — Articulates the curing rule applied to validate the extended TRO in this case, distinguishing the defect in the extension from the validity of the writ of preliminary injunction itself.
• "Instead, the obligatory import of the rule should be considered as a directive for the judge to act with corresponding dispatch on the application for preliminary injunction within the 20-day period if a TRO has been issued, with a proscription against an ex parte proceeding on such application since it would deprive the affected parties of the opportunity to be heard." — States the Court's construction of the mandatory tenor of Section 5, Rule 58 as a directive of dispatch rather than a rule of nullity, which is the ratio decidendi of the decision.
• "the mandatory tenor of the aforecited provision should not be taken to mean that a writ issued beyond the time frame is an absolute nullity, provided that, aside from the existence of any of the grounds for its issuance the determination of which is largely addressed to the trial court, the other requirements prescribed by the rules are present, namely, healing [sic] and posting of a bond." — Announces the principal holding of the case, qualified by the twin requisites of hearing and bond posting, and is the formulation most commonly invoked for the validity of a belatedly issued writ of preliminary injunction.

• Pestanas, et al. vs. Dyogi, et al., 81 SCRA 574 (1978) — Cited as authority for the settled rule that, unless otherwise provided by law or required by public interest, all administrative remedies affecting or determinative of the controversy must first be exhausted before resort to the courts.
• Gonzales vs. Hechanova, etc., et al., 9 SCRA 230 (1963) — Cited as one of the cases establishing the exceptions to the doctrine of exhaustion of administrative remedies, relied upon to justify private respondent's immediate resort to the trial court on the ground of urgency.
• Abaya vs. Villegas, et al., 18 SCRA 1034 (1966) — Cited, together with Gonzales vs. Hechanova and Mitra vs. Subido, as authority for the recognized exceptions to the exhaustion doctrine.
• Mitra vs. Subido, etc. et al., 21 SCRA 127 (1967) — Cited as a further exception case to the exhaustion of administrative remedies rule, supporting the Court's disposition of the procedural objection.
• Golden Gate Realty Corporation vs. Intermediate Appellate Court, et al., 152 SCRA 684 (1987) — Cited as controlling authority for the rule that the 20-day period of effectivity of a TRO is non-extendible and that the restraining order automatically terminates at the end of such period without need of judicial declaration.
• Banque De L'Indochine Et De Suez, et al. vs. Torres, et al., G.R. Nos. 82405-06, July 10, 1989 — Cited in a footnote as authority for the curing rule, that any defect in the order brought about by the extension of a TRO's enforceability is deemed cured when an injunction is subsequently granted.

• Section 5, Rule 58, Rules of Court, as amended by Batas Pambansa Blg. 224 (effective April 16, 1982) — Requires notice to the defendant before a preliminary injunction may be granted; authorizes the issuance of a restraining order effective only for twenty days from issuance where affidavits or the verified complaint show that great or irreparable injury would result before the matter can be heard on notice; requires the judge, within the twenty-day period, to cause an order to be served on the defendant to show cause and to determine within the same period whether the preliminary injunction shall be granted; and provides that if the application is denied, the restraining order is deemed automatically vacated. The Court construed the provision's mandatory tenor as a directive of dispatch and a proscription against ex parte proceedings, not as a rule nullifying a writ issued beyond the time frame.
• Section 157, Batas Pambansa Blg. 337 — Cited as the provision allegedly authorizing petitioners, as provincial auditors, to seize private respondent's cash, books, papers, and accounts upon the audit finding of a cash shortage, and which formed the backdrop of the acts sought to be enjoined.
• Rule 3.01, Canon 3, Code of Judicial Conduct — Requires a judge to be faithful to the law and maintain professional competence; the respondent judge failed to observe this rule in granting the writ after protracted delay.
• Rule 3.05, Canon 3, Code of Judicial Conduct — Admonishes all judges to dispose of the court's business promptly and decide cases within the required periods; the respondent judge's delay in resolving the application for preliminary injunction was held to violate this rule.
• Sections 6 and 8, Rule 58, Rules of Court — Cited in footnote as the grounds for dissolution of an injunction: (1) the complaint is insufficient; (2) the defendant is permitted to post a counter-bond upon a showing that he will sustain great damages while the plaintiff can be amply compensated; and/or (3) other grounds, as where the bond posted by the applicant turned out to be insufficient or defective. The Court found no other sufficient ground to dissolve the injunction in controversy.

Melencio-Herrera, Paras, Padilla and Sarmiento, JJ.