Bureau of Customs vs. Reta

A writ of preliminary injunction will not issue where the applicant cannot establish a clear and unmistakable right in esse that is not vitiated by substantial challenge or contradiction, and where the alleged injury is quantifiable and compensable by damages rather than irreparable. The requisites for injunctive relief require: (a) a clear and unmistakable right to be protected; (b) a material and substantial invasion of such right; (c) an urgent need to prevent irreparable injury; and (d) the absence of any other adequate remedy.

Rodolfo C. Reta owned and operated Acquarius Container Yard (ACY), which the Bureau of Customs had approved in 2006 as a container yard outside the customs territory. On January 9, 2009, Reta and the BOC executed a Memorandum of Agreement designating ACY as the examination area for container vans at the Port of Davao for a period of 25 years, with a stipulation allowing either party to revoke the agreement for cause at any time. On February 26, 2010, the BOC claimed that Reta closed the container yard and barred customs examiners from entering. On the same date, Atty. Anju Nereo C. Castigador, as OIC-District Collector, informed Reta of the BOC's intent to conduct examinations at the Philippine Ports Authority premises in Sasa, Davao City, and to reexamine the MOA. Reta denied closing the yard and alleged that it was the BOC who directed the stoppage of hauling and scanning operations. On March 5, 2010, the BOC formally revoked the MOA, citing strained relations and the availability of examination space at the PPA premises.

• Nature of the Agreement: On January 9, 2009, Rodolfo C. Reta entered into a Memorandum of Agreement with the Bureau of Customs for the free use of his Acquarius Container Yard as the designated examination area for container vans in the Port of Davao for a period of 25 years. The MOA contained a provision allowing either party to revoke the agreement for cause at any time.

• Alleged Closure and Revocation: On February 26, 2010, the BOC claimed that Reta closed the container yard and barred customs examiners from entering. On the same date, Atty. Anju Nereo C. Castigador, as OIC-District Collector, informed Reta of the BOC's intent to conduct examinations at the Philippine Ports Authority premises in Sasa, Davao City, and to reexamine the MOA. Reta denied closing the yard and alleged that it was the BOC who directed the stoppage of hauling and scanning operations.

• Judicial Proceedings: On March 1, 2010, Reta filed a Complaint with Application for Preliminary Injunction before the RTC Davao City. The Executive Judge issued a temporary restraining order, which Judge Emmanuel C. Carpio of Branch 14 later extended. On March 5, 2010, the BOC formally revoked the MOA citing strained relations and the availability of examination space at the PPA premises, simultaneously filing a petition for judicial confirmation of just cause before the RTC Manila.

• Denial and Reconsideration of Injunction: On March 19, 2010, Judge Carpio denied Reta's application for preliminary injunction. Reta moved for Judge Carpio's inhibition, which was granted; the case was re-raffled to Judge George E. Omelio of the same branch. On April 19, 2010, Judge Omelio issued an Order setting aside the March 19, 2010 Order and granting the writ of preliminary injunction, directing the BOC to resume operations in ACY and prohibiting the revocation of the MOA.

• Contempt Proceedings: Atty. Castigador moved for Judge Omelio's inhibition and refused to comply with the April 19, 2010 Order. Reta filed petitions for indirect contempt. On September 16, 2010, Judge Omelio issued an Omnibus Order denying the motion for inhibition, granting the contempt petitions, and issuing a warrant for Atty. Castigador's arrest. On October 15, 2010, Judge Omelio voluntarily inhibited himself and recalled the warrant.

• Appellate Proceedings: The BOC filed a Petition for Certiorari with the Court of Appeals assailing the April 19, 2010 Order. The CA denied the BOC's application for injunctive relief on July 22, 2010, and subsequently dismissed the main petition on January 17, 2012, finding no grave abuse of discretion in the RTC's issuance of the writ.

• Lack of Clear Legal Right: Petitioner Bureau of Customs argued that Reta had no clear and unmistakable right to the continuation of customs operations in his container yard because the MOA explicitly allowed either party to revoke it for cause at any time, which the BOC validly exercised on March 5, 2010.

• Non-Existence of Irreparable Injury: Petitioner maintained that Reta failed to establish irreparable injury as the alleged damages consisting of lost earnings were quantifiable at P100,000.00 per day, making them compensable by ordinary damages rather than irreparable.

• Grave Abuse of Discretion: Petitioner contended that the RTC acted with grave abuse of discretion in issuing the writ of preliminary injunction because it effectively disposed of the main case without trial, interfered with the BOC's purely administrative function of managing designated examination areas, and was issued by Judge Omelio in violation of judicial courtesy by reversing Judge Carpio's prior order without sufficient justification.

• Mootness of Companion Cases: With respect to G.R. Nos. 193588 and 193590-91, petitioners noted that the assailed Omnibus Order and warrant of arrest had been superseded by Judge Omelio's subsequent order of inhibition and recall of the warrant.

• Existence of Clear Right: Respondent Reta countered that he had a clear and unmistakable right under the MOA which was breached by the BOC's unilateral revocation without just cause, arguing that the revocation was merely a pretext to cover up smuggling activities he had reported.

• Irreparable Injury: Respondent argued that the closure of the container yard and revocation of the MOA caused irreparable injury to his business reputation and operations, and that the investment he made in machinery and equipment for the examination area would be rendered nugatory.

• Propriety of Injunctive Relief: Respondent maintained that the RTC correctly issued the writ to preserve the status quo ante litem motam pending final determination of the case on the merits, and that the CA correctly found no grave abuse of discretion in the trial court's exercise of discretion.

• Procedural Defenses: With respect to the petitions filed before the Supreme Court, respondent argued that the petitions were defective and premature for failure to file motions for reconsideration in the lower courts, and that the filing of multiple petitions constituted forum shopping.

• Requisites for Preliminary Injunction: Whether the Court of Appeals erred in not finding that the Regional Trial Court committed grave abuse of discretion in issuing a writ of preliminary injunction despite the failure of respondent Reta to establish the requisites for injunctive relief, specifically: (a) the existence of a clear and unmistakable right; (b) a material and substantial invasion of that right; and (c) irreparable injury.

• Revocability of Contractual Right: Whether Reta possessed a clear and unmistakable right to the continuation of the MOA notwithstanding the BOC's revocation pursuant to the contract's termination clause.

• Quantifiability of Damages: Whether the alleged injury suffered by Reta was irreparable where the complaint specifically alleged quantifiable daily losses of P100,000.00.

• Grave Abuse of Discretion in Issuing Injunction: The issuance of the writ of preliminary injunction by the Regional Trial Court constituted grave abuse of discretion because Reta failed to establish the existence of a clear and unmistakable right. The MOA explicitly provided that either party could revoke it for cause at any time; the BOC's revocation on March 5, 2010, predated the assailed April 19, 2010 Order and was a valid exercise of contractual rights. Because the right to continue the agreement was vitiated by the BOC's substantial challenge in the form of its revocation, Reta could not claim a right in esse entitled to protection by injunction.

• Absence of Material Invasion: No material and substantial invasion of right occurred because the right itself did not exist at the time of the alleged invasion, the BOC having validly revoked the MOA prior to the issuance of the injunctive writ.

• Lack of Irreparable Injury: The requisite of irreparable injury was not satisfied because Reta specifically alleged in his complaint daily losses of P100,000.00, demonstrating that the damages were quantifiable and compensable by ordinary monetary damages. Injury is irreparable only where there exists no standard by which its amount can be measured with reasonable accuracy.

• Mootness of G.R. Nos. 192809 and 193588-91: G.R. No. 192809 was rendered moot by the promulgation of the January 17, 2012 CA Decision in the main case which was elevated as G.R. No. 201650. G.R. Nos. 193588 and 193590-91 were mooted by Judge Omelio's October 15, 2010 Order voluntarily inhibiting himself and recalling the warrant of arrest, effectively granting the relief sought in those petitions.

• Effect of Status Quo Ante Order: The Supreme Court's October 6, 2010 Status Quo Ante Order did not prevent the Court of Appeals from resolving the case on the merits, as the order merely pertained to the conduct of customs operations at the PPA premises and did not restrain the appellate court from exercising its adjudicative functions.

• Requisites for Preliminary Injunction — The issuance of a writ of preliminary injunction requires the concurrence of four requisites: (a) the applicant must have a clear and unmistakable right to be protected, that is, a right in esse; (b) there is a material and substantial invasion of such right; (c) there is an urgent need for the writ to prevent irreparable injury to the applicant; and (d) no other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury. Mere prima facie evidence is sufficient to establish these requisites; complete and conclusive proof is not required at the preliminary stage.

• Clear and Unmistakable Right — A right to be protected by injunction must be clearly founded on or granted by law, or enforceable as a matter of law. An injunction will not issue to protect contingent, abstract, or future rights, nor to restrain an act which does not give rise to a cause of action. Where the complainant's right is doubtful or disputed, or is vitiated by substantial challenge or contradiction, the remedy of injunction is improper.

• Irreparable Injury — Injury is deemed irreparable where there is no standard by which its amount can be measured with reasonable accuracy. The writ should never issue when an action for damages would adequately compensate the injuries caused. Where the applicant can state a specific amount of daily losses, the injury is quantifiable and not irreparable.

• Grave Abuse of Discretion — Grave abuse of discretion in the issuance of writs of preliminary injunction implies a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, or where power is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal aversion amounting to an evasion of positive duty or virtual refusal to perform the duty enjoined.

• "A writ of preliminary injunction, being an extraordinary event, one deemed as a strong arm of equity or a transcendent remedy, must be granted only in the face of injury to actual and existing substantial rights. An injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it will not issue to protect a right not in esse, and which may never arise, or to restrain an act which does not give rise to a cause of action."

• "Injunction should therefore not be issued 'if there is no clear legal right materially and substantially breached from a prima facie evaluation of the evidence of the complainant.'"

• "The very foundation of the jurisdiction to issue the writ rests in the probability of irreparable injury, the inadequacy of pecuniary compensation, and the prevention of the multiplicity of suits, and where facts are not shown to bring the case within these conditions, the relief of injunction should be refused."

• "Grave abuse of discretion in the issuance of writs of preliminary injunction implies 'a capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal aversion amounting to an evasion of [a] positive duty or to a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law.'"

• Sumifru (Philippines) Corp. v. Spouses Cereño, 825 Phil. 743 (2018) — Controlling precedent defining the concept of a "clear and unmistakable right" that may be protected by injunction; followed for the proposition that the right must not be vitiated by substantial challenge or contradiction.

• Philippine Charity Sweepstakes Office v. TMA Group of Companies Pty Ltd., G.R. Nos. 212143, 225457, & 236888, August 28, 2019 — Cited for the definition of irreparable injury and the principle that injunction should not issue when damages would adequately compensate the injury.

• Shuley Mine, Inc. v. Department of Environment and Natural Resources, G.R. No. 214923, August 28, 2019 — Cited for enumerating the four requisites for the issuance of a writ of preliminary injunction.

• Golding v. Balatbat, 36 Phil. 941 (1917) — Historical precedent cited for the foundational principle that the writ of injunction should never issue when an action for damages would adequately compensate the injuries caused.

• Heirs of Yu v. Court of Appeals, 717 Phil. 284 (2013) — Cited for the proposition regarding the inadequacy of pecuniary compensation as a basis for injunctive relief.

• Rule 58, Sections 1, 2, and 3, Rules of Court — Governs the grounds and requirements for the issuance of preliminary injunctions. Section 1 defines the nature and scope of the remedy; Section 2 specifies the courts that may grant the writ; Section 3 enumerates the grounds for issuance, including the entitlement to relief and the probability of injustice during litigation.

• Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — Mentioned by respondent Reta regarding the administrative case against Atty. Castigador, but deemed by the Court as irrelevant to the issues of the case.

Leonen, J. (Chairperson), Inting, J., Delos Santos, J., and Lopez, J.