Central Bank v. Vasquez
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the Central Bank of the Philippines' (petitioner) demand for the Bank of Asia (respondent bank) to surrender its net foreign exchange holdings as of February 21, 1970. The Central Bank sought to enforce this demand by threatening to suspend the respondent bank's foreign exchange operations. 2. Procedural History: Respondent Bank of Asia filed a complaint against the Central Bank in the Court of First Instance of Manila, seeking a restraining order and preliminary injunction against the threatened suspension of its foreign exchange operations. The respondent court issued a writ of preliminary injunction upon the filing of a bond. The Central Bank then filed a petition for certiorari and prohibition with preliminary injunction with the Supreme Court, which issued a temporary restraining order against the respondent court's order. Subsequently, the Central Bank lifted its suspension of the respondent bank's operations after the respondent bank deposited cash and pledged securities equivalent to the disputed revaluation profits, as directed by a Supreme Court resolution. 3. The Petition: The Central Bank filed a petition for certiorari and prohibition, arguing that the lower court's writ of preliminary injunction had become functus officio and should be set aside because the issue of suspending foreign exchange operations was moot. The Central Bank prayed for the writ to be set aside without prejudice to further proceedings on the merits of the case below, specifically regarding the Bank of Asia's liability for revaluation profits.
Issue(s)
Whether the present case for annulment of the lower court's order and writ of preliminary injunction has become moot. Whether the lower court's writ of preliminary injunction dated May 26, 1971, has become functus officio.
Ruling
The Supreme Court ordered the dismissal of the case. The Court held that the questioned writ of preliminary injunction has become functus officio because there is no longer any threatened suspension of the respondent bank's foreign exchange operations to enjoin. Consequently, the case for annulment of the order and writ of preliminary injunction has become moot. The Court also noted that the Monetary Board had lifted the suspension of the respondent bank's foreign exchange operations, rendering the issue of its validity moot. The Court reiterated the principle that courts do not pass on abstract propositions or moot cases.
Ratio Decidendi
On Issue 1: The Supreme Court held that the present case for annulment of the lower court's order and writ of preliminary injunction had become moot. This determination was based on the fact that the petitioner Central Bank had already lifted its suspension of respondent Bank of Asia's foreign exchange operations. This action by the Central Bank rendered the central issue of the 'threatened suspension', which was the subject of the preliminary injunction, non-existent. The Court emphasized that it is a well-established principle in jurisprudence that courts exist to decide actual controversies and will not give opinions on abstract propositions or moot cases. Therefore, with the removal of the actual controversy concerning the injunction, the Supreme Court was no longer called upon to rule on the validity of the Central Bank's power to suspend operations or the injunction itself, as there was no practical relief that could be granted. On Issue 2: The Supreme Court ruled that the lower court's writ of preliminary injunction dated May 26, 1971, had become functus officio. A writ of preliminary injunction is a provisional remedy intended to prevent a threatened act. Once the act it seeks to prevent ceases to be a threat, or is resolved by other means, the purpose of the injunction is fulfilled or rendered unnecessary. In this instance, the Central Bank's lifting of its suspension of Bank of Asia's foreign exchange operations, facilitated by the Bank's deposit and pledge of securities covering the disputed revaluation profits, eliminated the 'threatened suspension'. Consequently, there was no longer any threatened act for the preliminary injunction to enjoin, thereby exhausting its legal effect and making it functus officio. The main issue of liability for revaluation profits remained for the lower court to determine on the merits, but the specific relief provided by the preliminary injunction was no longer required.
Main Doctrine
A case becomes moot and the Court will not pass on abstract propositions or abstract questions when the issues raised have been rendered moot by subsequent events, such as the lifting of the suspension order that was the subject of the injunction.