Clarke v. Philippine Ready Mix Concrete Co.
REITERATIONFacts
The Antecedents: Petitioner Chester R. Clarke subscribed to 475,000 shares of stock of Philippine Ready Mix Concrete Co., Inc. (PRMCI) with a par value of P1 per share, paying P124,000 of the total P475,000. PRMCI's Board of Directors declared all unpaid subscriptions due by June 30, 1950, and declared shares not fully paid as delinquent, to be sold at public auction on August 15, 1950. Procedural History: Petitioner filed a complaint in Civil Case No. 11814 against PRMCI and Judge Agustin P. Montesa, seeking to protect his rights, stop the sale of his shares, and have them declared fully paid. He alleged that PRMCI owed Clarke Halawa Rock Co., Ltd. (Hawaii corporation) P346,632.98 for machinery and shipping, a claim assigned to him. He claimed compensation had taken place, but PRMCI acted in bad faith by advertising the sale of his delinquent shares. A writ of preliminary injunction was issued in Civil Case No. 11814 after a hearing, upon petitioner's P10,000 bond. However, shortly after, the writ was dissolved by respondent Judge upon an ex parte motion of PRMCI and its P10,000 counter-bond. Petitioner's motion for reconsideration was denied. The Petition: Petitioner filed a petition for certiorari with preliminary injunction, alleging that the respondent Judge acted in excess of jurisdiction or with grave abuse of discretion in dissolving the writ of preliminary injunction after hearing, without giving him an opportunity to be heard. He contended he had no plain, speedy, and adequate remedy at law. Immediately after the dissolution, PRMCI sold petitioner's shares to itself for P392,181.02, with no other bidders.
Issue(s)
Whether a writ of preliminary injunction granted after a hearing can be dissolved upon an ex parte application by the defendant. Whether a writ of preliminary injunction, when it constitutes the principal relief demanded, can be dissolved ex parte without a trial on the merits. Whether the respondent Judge acted in excess of jurisdiction or with grave abuse of discretion in dissolving the writ of preliminary injunction without giving the petitioner an opportunity to be heard.
Ruling
The petition for certiorari is denied.
Ratio Decidendi
On the issue of dissolving a writ of preliminary injunction granted after hearing upon an ex parte application: The Supreme Court reiterated that a writ of preliminary injunction is an interlocutory order always under the control of the court before final judgment. Citing Caluya vs. Ramos, the Court clarified that Section 6 of Rule 60 does not preclude the dissolution of an injunction granted after a hearing, as it only prescribes grounds for objecting to or moving for dissolution prior to issuance or after an ex parte grant. Furthermore, the Court referenced Ong Su Han vs. Gutierrez David and Cine Ligaya vs. The Court of First Instance of Laguna, stating that a court is not even required to hear parties if the record convinces it that the writ should be dissolved. The dissolution of an injunction, even without prior notice or hearing, does not constitute acting without or in excess of jurisdiction, as such failure is merely an irregularity that does not go to the jurisdiction of the court, citing Jaramillo vs. Jacinto and Su Chu and Limpangco vs. Nepomucemo and Neis. Therefore, the dissolution of the writ, even if done without notice or hearing, was within the court's power. On the issue of dissolving a writ of preliminary injunction that constitutes the principal relief demanded: The Court acknowledged that in such cases, the relief should be granted only after establishing the existence of the right sought to be protected and that the acts against which the injunction is directed are violative of that right. The existence of a right violated is a prerequisite for granting an injunction, and a permanent injunction should not be awarded except in clear cases to prevent irreparable injury, as stated in 32 C.J. 34-36, cited in North Negros Sugar Co. vs. Hidalgo. While the Court could not ascertain the trial court's specific reasons for dissolution, it speculated that the judge might not have been convinced of the debt's certainty, due date, or assignment to the petitioner. The Court noted the lack of a deed of assignment, with the only evidence being a cablegram instructing demand for payment and institution of legal action, which was deemed insufficient to establish the assignment and entitle the petitioner to continued injunction pending trial on the merits. On whether the respondent Judge acted in excess of jurisdiction or with grave abuse of discretion: The Supreme Court concluded that the respondent Judge's action in dissolving the writ of preliminary injunction, even if done without giving the petitioner an opportunity to be heard, did not constitute a lack or excess of jurisdiction or grave abuse of discretion. The Court found that any irregularity committed by the trial court in this regard was an error that could be remedied by appeal, not by certiorari. Therefore, the petition for certiorari was denied.
Main Doctrine
A writ of preliminary injunction, even if granted after hearing, may be dissolved upon an ex parte application by the defendant, and the court's action in dissolving such a writ, even if erroneous, does not constitute a lack of jurisdiction or grave abuse of discretion that can be remedied by certiorari, but rather an error correctible by appeal.