Sumifru v. Cereño
REITERATIONFacts
The Antecedents: Sumifru (Philippines) Corporation (Sumifru), a domestic corporation engaged in banana production and export, entered into several growership agreements (Production and Purchase Agreement and Growers Exclusive Production and Sales Agreements) with respondents spouses Danilo and Cerina Cereño (spouses Cereño). Under these agreements, the spouses Cereño undertook to exclusively sell and deliver bananas produced from their lands to Sumifru. Sumifru alleged that in February 2007, the spouses Cereño violated these agreements by harvesting bananas without Sumifru's consent, packing them in non-Sumifru boxes, and selling them to other buyers, despite Sumifru's demands to comply with their contractual obligations. Procedural History: Sumifru filed a Complaint for Injunction and Specific Performance with Application for Writ of Preliminary Injunction and Temporary Restraining Order against the spouses Cereño. The Regional Trial Court (RTC) denied Sumifru's application for injunctive relief, finding no urgency and that the injunction sought would effectively decide the main case. The RTC denied Sumifru's motion for reconsideration. The Court of Appeals (CA) affirmed the RTC's denial, holding that Sumifru failed to satisfy the requisites for an injunction, as its rights were disputed, the alleged injury was compensable by damages, and the injunction would dispose of the main case. The CA denied Sumifru's motion for reconsideration. The Petition: Sumifru filed a petition for review before the Supreme Court, assailing the CA's decision and resolution, arguing that the CA erred in holding that Sumifru's right was doubtful, that the grant of injunction would dispose of the main case, and that the damages were not irreparable.
Issue(s)
Whether the Court of Appeals erred in holding that petitioner's right to the issuance of a writ of preliminary injunction was put in serious doubt by respondents' claim that they had already terminated the growership contracts extra-judicially. Whether the Court of Appeals gravely erred when it held that the grant of the application for a writ of preliminary injunction would have the effect of disposing of the main case. Whether the continuing violation by respondents of their exclusive contract with petitioner will cause grave and irreparable damage to petitioner. Whether the grave and irreparable damage caused by respondents cannot be compensated under any standard compensation.
Ruling
The petition is denied. The Decision dated 20 May 2014 and the Resolution dated 5 May 2015 of the Court of Appeals in CA-G.R. SP No. 04008-MIN are affirmed.
Ratio Decidendi
On the issue of whether petitioner's right was in doubt: The Court held that the CA did not err in ruling that Sumifru failed to establish a clear and unmistakable right. The spouses Cereño consistently disputed Sumifru's rights by claiming the agreements were terminated. The Court reiterated that when a complainant's right is doubtful or disputed, an injunction is not proper because the applicant must show, at least tentatively, that the right exists and is not vitiated by any substantial challenge or contradiction. The claim of termination by the respondents created such a dispute. On the issue of whether the injunction would dispose of the main case: The Court affirmed the CA's finding that the issuance of the injunctive writ would have the effect of disposing of the main case. A preliminary injunction is a provisional remedy meant to preserve the status quo until the merits of the case are fully heard. Granting the injunction sought by Sumifru, which would compel the spouses Cereño to comply with the agreements, would essentially grant the primary relief sought in the main case, leaving only the determination of damages. This is contrary to the nature of a preliminary injunction. On the issue of irreparable injury: The Court found no error in the CA's conclusion that there was no irreparable injury to be suffered by Sumifru. The alleged injury, including cash advances and farm inputs, was capable of pecuniary estimation. The Court stated that injury is irreparable where there is no standard by which its amount can be measured with reasonable accuracy. Sumifru's claims of potential suits and damage to reputation were deemed speculative without proof. Therefore, any loss, if proven, is compensable by damages. On the issue of the expiration of the agreements: The Court noted that Sumifru itself admitted in its motion for reconsideration before the RTC that the GEPASAs would expire in 2015. Since the agreements on which Sumifru anchored its right had expired, there was even more reason not to issue the writ of preliminary injunction. The Court cited that a contract can be renewed, revived, or extended only by mutual consent, and no court can compel a party to agree to a continuation of an expired contract through an injunction. This resolution, however, is without prejudice to Sumifru's action for breach of contract and damages, which are to be determined after trial on the merits.
Main Doctrine
A writ of preliminary injunction requires the applicant to establish a clear and unmistakable right, a material and substantial invasion of that right, an urgent need to prevent irreparable injury, and the absence of any other adequate remedy. When the applicant's right is doubtful or disputed, or when the alleged injury is capable of pecuniary estimation, an injunction is generally not proper.