PANTALEON PACIS, PETITIONER, VS. THE COMMISSION ON ELEC­TIONS, ATANACIO NEGRE AND MUNICIPAL BOARD OF CANVASSERS OF SANCHEZ MIRA, CAGAYAN, RESPONDENTS.

After promulgation of the September 28, 1968 main decision of
this Court in the above-entitled case confirming the May 11, 1968 resolution of
the Commission on Elections, dissolving the writ of preliminary injunction
issued by this Court on June 11, 1968 and declaring valid and subsisting the
canvass of votes and the procla­mation of private respondent Atanacio Negre as Mayor-elect of
the Municipality of Sanchez Mira, Province of Cagayan,
the latter, through counsel, moved for assessment and award of damages
sustained by him as a result of the preliminary injunction issued in favor of
petitioner Pantaleon Pacis,
upon the P1,000 cash bond deposited with this Court by said petitioner,
pursuant to Section 9, Rule 58, in connection with Section 20, Rule 57, of the
Rules of Court.

Petitioner opposed, pleaded good faith. A hearing was con­ducted
by an officer of this Court to ascertain the amount of damages.

The unrebutted evidence is that private
respondent was enjoined from performing his duties as Mayor of Sanchez Mira
from June 19, 1968, after receipt of the injunctive writ on June 18, 1968,
until October 17, 1968 when judgment in the above-entitled case became final
and executory, thus depriving him of four months’
salaries at P500 per month totalling a little less than P2,000.

1.  It may be well to state at this point that
the present is a motion of private respondent for assessment and award of
damages upon the P1,000 cash bond. The reglementary
period within which to file the appropriate motion is before the main judgment
becomes executory.

The judgment dissolving
the preliminary injunction issued in favor of petitioner and dismissing the
main cause became final and executory on October
17, 1968. The motion
herein was filed on October 16. It can be seen from the procedure laid out in
the Rules of Court for proceeding against an injunction bond that the motion of
private respondent barely missed the statutory period. Section 9 of Rule 58 on
preliminary injunctions directs that the procedure in Section 20 of Rule 57 on
attachment be followed, viz:

“SEC. 20. Claim for damages on account
of illegal attachment. -If the judgment on the action be
in favor of the party against whom attachment was issued, he may recover, upon
the bond given or deposit made by the attaching creditor, any damages resulting
from the attachment. Such damages may be awarded only upon application and
after proper hearing, and shall be included in the final judgment. The
application must be filed before the trial or before appeal is perfected or
before the judgment becomes executory, with due
notice to the attaching creditor and his surety or sureties, setting forth the
facts showing his right to damages and the amount thereof.

If the judgment of the
appellate court be favorable to the party against whom the attachment was
issued, he must claim damages sustained during
the pendency of the appeal by filing an
application with notice to the party in whose favor the attachment was issued
or his surety or sureties, before the judgment of the appellate court becomes executory. The appellate court may allow the application to
be heard and decided by the trial court.”

The foregoing remedy has
been said to be exclusive such that no claim for recovery of damages may be
filed after the judgment has become final and executory.^[1]

2.  Good faith on his part
in obtaining the injunction because the main cause was then undecided by this
Court, petitioner posits, is fatal to any claim for damages.

The foregoing question
entails an expansive discussion on the principles governing recovery of damages
sustained as a result of a wrongfully obtained injunction.

The practice of issuing restraining orders (used here in its
generic term as referring to all types of “status quo” orders)
started as a common-law equitable relief in the English courts to preserve the
status quo of a case pending the final determination of the relative rights of
the parties. Since these orders cause damages to the restrained party if his
rights were later affirmed -more than what would be occasioned him as an
ordinary party litigant if no restraining order were issued – a system by which
he was recompensed evolved. An account of this is recited in the case of Harless vs. Consumers’ Gas Trust
Co., 43 N,E.456, 457, thus:

“In the early history of equity jurisprudence temporary
restraining orders were issued without requiring any bond or other
security.  If upon final hearing the
injunction was dissolved, the party en­joined might recover his costs.  x x x As the party enjoined suffered great damages for which he
had no adequate remedy, the custom grew up in the equity courts that the
chancellor, in the exercise of his discretion, might require of the plaintiff a
pledge or bond to indemnify the defendant against loss in the event the
injunctive order should be wrongfully issued. Upon the dissolution of the
injunction the court might, in the same proceed­ing, determine whether or not
the defendant was entitled to damages, and assess the same, or cause them to be
assessed by reference to a master. This is still the practice in the courts of
chancery in England
and on the equity side of circuit courts of the United
States, and this method is adopted by
statute in some of the states.”^[2]

Damages sustained as a
result of a wrongfully obtained injunc­tion may be recovered upon the
injunction bond required to be filed with the court. This principle of recovery
of damages has been recognized in our jurisdiction in the early case of Molina
vs. Somes  (1913), 24 Phil. 49, 61-62.

The filing of a bond before the issuance of an injunction has
been made a reglementary requisite under the same
rule which permits the issuance of an injunction. It is this same rule there­fore
which must first be examined in determining whether good faith is a proper
defense against a claim for damages.

The statutory undertaking of the bond is that it shall answer for
all damages which the party to be restrained may sustain by reason of the
injunction “if the court should finally
decide that the plaintiff was not entitled
thereto.”^[3]
Malice or lack of good faith is not an element of recovery on the bond. This
must be so, because to require malice as a prerequisite would make the filing
of a bond a useless formality. Too, it is axiomatic that probable cause is
necessary before an injunction may be ordered, and if good faith were tenable
as a defense, it would rule out practically all relief from actual damages
sustained as a result of an injunction.

Jurisprudence, evolved from jurisdictions where this equitable
relief originated and expanded, supports the view we just expressed. The
holding is that the dissolution of the injunction, even if the in­junction was
obtained in good faith, “amounts to a determination that the injunction
was wrongfully obtained and a right of action on the injunction bond immediately
accrues to the defendant.”^[4]
The dissolution of the injunction because of the failure of petitioner’s main
cause of action, therefore, is an “actionable wrong”, so to speak,
for the purpose of recovery upon the bond.

3.  The foregoing
background paves the way for a discussion whether private respondent can
recover damages in excess of the amount of the bond.

As stated, this present proceeding is upon a motion for assess­ment
of damages on the bond. There is nothing in the Rules of Court which allows
recovery of damages other than upon the bond pledged by the party suing for an
injunction.  Section 9, Rule 58, limits
recovery only upon the bond, thus:

“SEC. 9. Judgment to include damages
against party and sureties. – Upon the trial the amount
of damages to be awarded to the plaintiff, or to the defendant, as the case
maybe, upon the bond of the other party, shall be claimed,
ascertained, and awarded under the same
procedure as prescribed in Section 20 of Rule 57.”^[5]

It
would be misreading the rule to allow damages beyond the amount of the bond.
The bond, under this rule, is the only protection conceded to the party
restrained. Recovery cannot be made beyond what the law permits.

This principle is
skillfully explained in Molina vs. Somes,
supra, at pp. 64-65, thus:

“The assertion by some text writers and courts that the one
who sues out an injunction without legal cause is liable on the theory that he wrongfully induced or moved the
court to take the action which it did, is, in our judgment, with­out stable
foundation. He who obtains a thing by permission of the law, and by strict
compliance with the law, ought not to be held liable in any manner except that
specified in the law under which he operates. He ought not to be held for a
trespass or other wrong, as they assert he may be in replevin,
etc.  How can it be logically said that
one who, acting in good faith, obtains an injunction or property under a replevin
in precisely the manner required by law has com­mitted a legal wrong
against the person as to whom the law authorizes him to obtain the in­junction?
The law itself, by virtue of the con­ditions which it imposes, fully protects
the defendant against the evil effects of the injunc­tion; and if the party
securing the injunction has performed all that the law requires of him as a
condition precedent to obtaining it, what more can be asked? In return for the
res­trictions of the injunction, the defendant has been given certain legal
rights against the plaintiff by way of an undertaking which, by virtue
of the law itself, fully compensates him for the
change of position. The bond is full compensation for the privileges which the
plaintiff receives and for those which the defendant loses. The law says so.
The statute asserts that the doing of certain things by the plaintiff shall be
a complete compensation to the defendant for that which the law
requires him to give up. If it is not complete compensation, then the law is
unjust, in that it requires the defendant to give up something for which he
receives no compensation. It is not to be presumed or believed that the
legislature intended to do such a thing, and it is not to be presumed or
believed that it did do it.  But,
even if the law be unjust, an injustice of the law cannot be cured by an injustice
to a party. The giving of the under­taking legally equalizes the status of the
two.  To put upon the plaintiff the
additional burden of a trespass or other wrong would destroy the legal
equilibrium and produce an injustice,”

Recovery of private respondent must therefore be limited to the
amount of the bond. Where the bond is insufficient in amount, the law expressly
gives the party affected the recourse of excepting thereto and provides for the
dissolution of the injunction if “a bond sufficient in amount with
sufficient sureties approved after justification is not filed forthwith.”^[6]

Because petitioner’s bond is only for P1,000.00, it will not be
sufficient to satisfy even the actual damages suffered by private respondent.
So it is that there is no imperative need to discuss peti­tioner’s assertion
that only actual damages may be allowed.

This Court is therefore of the view that private respondent Atanacio Negre is entitled to
recover only upon the P1,000 cash deposit of petitioner.

Upon the foregoing premises, judgment is
hereby rendered declaring that the P1,000
cash deposit of petitioner be forfeited in favor of private respondent Atanacio Negre. The Clerk of this
Court is hereby ordered to deliver the amount to private respondent Atanacio Negre. The present
judgment shall form part of the September
28, 1968 judgment of this Court in the above-entitled case.  No costs in this instance.

SO ORDERED.

Concepcion, C.J., Dizon,
Makalintal, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.

Reyes and Zaldivar, JJ., on official
leave.

^[1] Japco vs. City of Manila, 48 Phil. 851, 855, citing
Santos vs. Moir, 36 Phil. 350, Somes vs. Crossfield, 9
Phil. 13, and Macatangay vs. Municipality of
San Juan de Bocboc, 9 Phil. 19; Facundo
vs. Tan, 85 Phil. 249, 253; Visayan Surety and
Insurance Corporation vs. Lacson, 96 Phil.
878, 882-883; Curilan vs. Court of Appeals,
105 Phil. 1160, 1163-1164; Luzon Surety vs. Court of Appeals, G.R. No. L-15339,
May 23, 1960. See: 3
Moran, Comments on the Rules of Court, 1963 ed., p. 79.

^[2] Citing
Russell vs. Farley, 105 U.S. 433.

^[3]
Section 4(b), Rule 58, Rules of Court.

^[4]
Sullivan vs. Winer, 307 S.W. 2d. 704, 707-
708, citing Pierce vs. Camp­bell, 217 Mo. App. 179, 274 S. W. 875, High on Injunctions,
4th ed., vol. 2, sec. 1665, p. 1660; Kelder vs.
Dale, 313 S.W. 2d. 59, 64.  See:
Jones vs. Rountree, 74 S.E. 1096, 1097;
Winslow vs. Mulchey, 35 S.W. 762, 763; People vs.
Eisenberg, 123 N.E. 532, 534.

^[5]
Emphasis supplied.  Section 20, Rule 57,
has been here quoted earlier.

^[6]
Section 8, Rule 58, Rules of Court.