PHILIPPINE CHARITY SWEEPSTAKES OFFICE, JOSE FERDINAND M. ROJAS II, AND PCSO CHIEF OFFICER FOR SORSOGON, PETITIONERS, VS. HON. JUDGE ADOLFO G. FAJARDO, IN HIS CAPACITY AS PRESIDI…
ANTONIO-VALENZUELA, J.:
The facts are as follows: Oceania Sur Gaming Corporation (“respondent Oceania”) filed the Complaint[4] before the RTC against petitioners.
The Complaint alleged: on 28 December 2005, PCSO promulgated the “Rules and Regulations Governing the Conduct of the Actual Test Runs for the PCSO Small Town Lottery (STL) Project” (“2005 Rules”), for the regulation of the conduct of the actual test runs of various numbers games of the PCSO Small Town Lottery (“STL”) Project; pursuant to the 2005 Rules, respondent Oceania applied for and was granted the Authority to Conduct an Actual Test Run for Small Town Lottery Project dated 29 March 2010 (“Authority”), effective for a period of one year from actual operations; respondent Oceania posted the Cash Bond Agreement in the amount of P10,000,000.00 in favor of PCSO, to ensure respondent Oceania’s true and faithful compliance with the duties and responsibilities under the Authority; respondent Oceania religiously and faithfully complied with the duties and responsibilities under the Authority and the 2005 Rules; PCSO issued PCSO Board Of Directors (“BOD”) Resolution 0093, Series of 2011, which renewed respondent Oceania’s authority for a period of six months from 16 March 2011; on 03 February 2011, the PCSO BOD promulgated the “Implementing Rules and Regulations for the Philippine Charity Sweepstakes Office Loterya ng Bayan” (“2011 Rules”), for the regulation of the operations of STL previously authorized and referred to as the PCSO Loterya ng Bayan (“PLB”); pursuant to the 2011 Rules, respondent Oceania submitted the letter of intent dated 09 February 2011, signifying respondent Oceania’s intention to convert the operations and comply with the mandatory requirements for PLB; on 12 July 2011, PCSO-BOD Resolution No. 227, Series of 2011, suspended the 2011 Rules pending the finalization of important details of the PLB and its IRR, and extended the authorities of the present STL operators until the full implementation of the PLB and the appointment of a regular PLB operator; thus, respondent Oceania’s authority was extended until the full implementation of the PLB and the appointment of a regular PLB operator; in the letter dated 22 February 2012, GM Rojas informed respondent Oceania that the PCSO will no longer extend respondent Oceania’s authority, which expired on 16 September 2011; respondent Oceania sought reconsideration of GM Rojas’s directive in the letter dated 27 February 2012, but there was no action on the plea for reconsideration; GM Rojas must be enjoined from implementing or enforcing the directive (because it was unlawful and illegal, or at least highly irregular, considering the extension granted to all STL operators in PCSO-BOD Resolution No. 227, Series of 2011; being singled out among all STL operators was a violation of respondent Oceania’s right to equal protection; the unilateral, arbitrary, capricious and whimsical revocation and nullification of respondent Oceania’s authority was without legal or valid cause, was a violation of respondent Oceania’s right to due process, and will cause grave and irreparable damage and injury through the loss of substantial income and substantial investments; the national government, local governments, and government agencies and instrumentalities will be gravely and irreparably deprived of their share and income in respondent Oceania’s operations; respondent Oceania’s employees and officers will suffer loss of employment and income, in violation of the 1987 Constitution); GM Rojas’s directive took effect on 29 February 2012, and there was an urgent need to immediately enjoin and prohibit petitioners from enforcing or implementing the directive; respondent Oceania, its employees and officers, will suffer great and irreparable damage and injury from the enforcement or implementation of GM Rojas’s directive; respondent Oceania had no other plain, speedy, or adequate remedy in the ordinary course of law.
The Complaint prayed that the RTC: issue a temporary restraining order (“TRO”) enjoining petitioners from revoking and canceling respondent Oceania’s Authority, or from implementing or enforcing GM Rojas’s directive in the letter dated 22 February 2012, and directing any person acting under petitioners’ order or under petitioners’ employ or direction, to observe the status quo ante on the matter of STL operations; extend the TRO to 20 days after due notice and hearing; issue a writ of preliminary injunction ordering petitioners to cease and desist from committing the acts mentioned; after trial on the merits, issue a permanent injunction, or make the preliminary injunction permanent; declare as void, ultra vires, and unconstitutional, GM Rojas’s letter dated 22 February 2012; order petitioners to pay respondent Oceania P1,000,00.00 as attorney’s fees, costs of litigation, and other amounts proven in the course of the proceedings.
The RTC conducted a hearing on the TRO, granted the TRO, and issued the Order dated 07 March 2012[5] (which extended the TRO).
Petitioners filed the Answer.[6] The Answer alleged: the RTC did not have jurisdiction to issue the writ of preliminary injunction, because the acts sought to be enjoined or restrained were outside the RTC’s territorial jurisdiction (i.e., PCSO’s head office was in Pasay City); respondent Oceania did not have a cause of action against PCSO, because after the expiration of respondent Oceania’s Deed of Authority, respondent Oceania no longer had any legal right that required the RTC’s protection; respondent Oceania failed to allege any right that the PCSO violated, that would justify the issuance of the injunctive relief asked for; respondent Oceania admitted that the Deed of Authority expired, and with the expiration of respondent Oceania’s Deed of Authority, respondent Oceania lost any right to operate STL in the province of Sorsogon; respondent Oceania sought to enjoin a consummated act.
By way of counterclaim, petitioners prayed that the RTC: dismiss the Complaint; order respondent Oceania to pay petitioners P2,000,000.00 as attorney’s fees and litigation expenses.
On 28 June 2012, the RTC issued the assailed Order. The dispositive portion of the assailed Order read:
WHEREFORE, premises considered, let a Writ of Preliminary Injunction issue enjoining PCSO’s GM Jose Ferdinand M. Rojas, II and his cohorts to cease and desist from implementing the directive contained in his letter of 22 February 2012 revoking plaintiff’s authority to operate, and to observe the status quo ante pending the final disposition of the main action for INJUNCTION. Set the pre-trial conference of this case to JULY 27, 2012 as previously agreed by both parties. Parties’ pre-trial briefs must be filed with and received by the court a week before the scheduled pre-trial conference.
SO ORDERED.[7]
Petitioners moved for the reconsideration of the assailed Order. The RTC denied the Motion in the assailed Resolution.
Hence, this Petition for Prohibition and Certiorari, with the following assignment of errors:
A. WHETHER OR NOT JUDGE FAJARDO GRAVELY ABUSED HIS DISCRETION WHEN HE ISSUED THE WPI DESPITE THE REVOCATION OF OCEANIA’S PRIVILEGE TO CONDUCT ACTUAL TEST RUS FOR THE STL; B. WHETHER OR NOT THE SORSOGON CITY RTC HAS JURISDICTION TO RESTRAIN OR PROHIBIT PCSO FROM CARRYING OUT BOD RESOLUTION 309, SERIES OF 2011, ALLOWING THE EXPIRATION OF OCEANI’A AUTHORITY OR BOD RESOLUTION 412, SERIES OF 2011, REVOKING AND ENDING ALL AUTHORITIES TO OPERATE; C. WHETHER OR NOT COURTS CAN COMPEL PCSO TO GRANT OR EXTEND THE AUTHORITY TO CONDUCT ACTUAL STL DRAWS. [sic] D. WHETHER OR NOT THE GRANT OR EXTENSION OF AUTHORITY TO CONDUCT ACTUAL STL DRAWS IS A RIGHT.[8]
The issue is whether the RTC committed grave abuse of discretion in issuing the assailed Order, and the assailed Resolution.
The Petition for Prohibition and Certiorari[9] answers in the affirmative. The RTC committed grave abuse of discretion in issuing the assailed Order, and the assailed Resolution.
The Petition for Prohibition and Certiorari thrusts: Oceania did not have a clear and unmistakable right that a writ of preliminary injunction is supposed to protect; the PCSO BOD issued PCSO-BOD Resolution 412, Series of 2011, which cancelled STL operations, and terminated the authorities of all operators; PCSO-BOD Resolution 412, Series of 2011 revoked PCSO-BOD Resolution 227, Series of 2011; PCSO revoked respondent Oceania’s authority in PCSO-BOD Resolution 309, Series of 2011 by specifying the date when respondent Oceania’s authority would expire; PCSO-BOD Resolution 309, Series of 2011, amended PCSO-BOD Resolution 227, Series 2011, by approving respondent Oceania’s authority extension for one month, or until 15 October 2011; the immediate issuance of the WPI, without opportunity to oppose the application, violated petitioners’ right to due process; the RTC did not have jurisdiction to issue injunctive reliefs to prohibit acts committed or to be committed by persons or entities outside the RTC’s territorial jurisdiction; PCSO and GM Rojas were outside the RTC’s territorial jurisdiction; the Chief Officer derived his authority from PCSO, and merely implemented PCSO’s decision; respondent Oceania’s cited cases did not apply, because the cases were promulgated prior to the effectivity of Batas Pambansa 129 and the Revised Rules of Court; there was no law, rule, or jurisprudence that stated that compliance with the summons could estop a party from raising lack of jurisdiction as a defense; petitioners did not participate in all the proceedings before the RTC, but simply complied with the summons to file the Answer; petitioners raised lack of jurisdiction at the earliest opportunity in the Answer; the RTC had no power to impose upon the PCSO the extension of respondent Oceania’s authority, or the grant of a new authority; any authority to conduct draws for the PCSO cannot give rise to a right in respondent Oceania’s favor; the authority given was in the nature of a privilege which may be validly amended or revoked at any time; since the conduct of STL would be illegal without PCSO’s grant of authority, there was no right independent of the PCSO’s grant of authority.
The Comment/Opposition [On/To the Petition and Prayer for TRO][10] answers in the negative. The RTC did not commit grave abuse of discretion in issuing the assailed Order, and the assailed Resolution.
The Comment/Opposition [On/To the Petition and Prayer for TRO] parries: even after 16 October 2011, PCSO continued issuing instructions to, and collecting payments from, respondent Oceania relative to STL operations; petitioners continued to recognize PCSO-BOD Resolution 227, series of 2011, which extended the authority to operate STL until the implementation of the PCSO Loterya ng Bayan, and the appointment of a regular PLB operator in paritcular areas of operation; the conditions were not yet fulfilled, therefore, respondent Oceania’s authority remained in force; PCSO-BOD 412, Series of 2011 had no bearing in this case, and it was not mentioned in the questioned letter dated 22 February 2012; to single out respondent Oceania would be a gross violation of the right to equal protection, and would constitute grave abuse of right and authority; the RTC did not commit grave abuse of discretion in issuing the WPI because the issuance was to prevent grave and irreparable damage and injury to respondent Oceania and its employees; on 06 June 2012, PCSO issued PCSO-BOD Resolution 122, Series of 2013, which extended the authorities of all existing operators from 01 July 2013 to 31 October 2013; petitioners were estopped from questioning the RTC’s jurisdiction, because petitioners voluntarily submitted to the RTC, and admitted that they asked for affirmative reliefs from the RTC; the RTC had jurisdiction and validly exercised its jurisdiction; the Chief Officer cannot be separated from PCSO and GM Rojas, because the Chief Officer will ultimately implement the letter dated 22 February 2012; respondent Oceania sought the declaration of the subject of the letter dated 22 February 2012 as void, ultra vires, and sought to enjoin the implementation of the letter; respondent Oceania properly pleaded for an award of damages in the amount of P1,000,00.00, which was within the RTC’s jurisdiction; the RTC neither compelled PCSO to grant, or to extend respondent Oceania’s authority, to conduct STL draws, but the RTC merely made a preliminary finding whether it should issue a writ of preliminary injunction pending determination of the merits of the case; petitioners did not show that they have and will suffer grave and irreparable injury through the issuance of the WPI, and that they will suffer if the RTC will not issue a TRO or a WPI; there was no denying that petitioners continuously collected payment and benefited from respondent Oceania’s continued STL operations; respondent Oceania posted the Cash Bond Agreement in the amount of P10,000,000.00 in favor of PCSO to ensure true and faithful compliance of its duties and responsibilities under the authority, and an additional cash bond to answer for damages petitioners may suffer by reason of the WPI.
THE COURT’S RULING
The Court rules in the affirmative. The RTC committed grave abuse of discretion in issuing the assailed Order, and the assailed Resolution.
Rule 58, Section 3 of the Rules of Court is applicable. It reads:
Section 3. Grounds for issuance of preliminary injunction.
A preliminary injunction may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.
A writ of preliminary injunction is a provisional remedy which is adjunct to a main suit, as well as a preservative remedy issued to maintain the status quo of the things subject of the action or the relations between the parties during the pendency of the suit.[11] The purpose of injunction is to prevent threatened or continuous irremediable injury to the parties before their claims can be thoroughly studied and educated. Its sole aim is to preserve the status quo until the merits of the case are fully heard.[12]
Under Rule 58, Section 3 of the Rules of Court, a writ of preliminary injunction may be issued upon the concurrence of the following essential requisites: (a) the invasion of right sought to be protected is material and substantial; (b) the right of the complainant is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious damage.[13]
The first requisite was present. The invasion of the right to conduct STL operations was material and substantial, as it pertained to the property right of respondent Oceania.
The second requisite was absent. The right of respondent Oceania to conduct STL operations was not clear and unmistakable. Respondent Oceania alleged right to conduct STL operations was sanctioned by the effectivity of the Authority that PCSO granted. In this case, it was not denied that respondent Oceania Authority to conduct STL operations was already expired. Hence, respondent Oceania had no clear and unmistakable right to be protected.
The third requisite was absent. Even assuming that there was an urgent and paramount necessity for the issuance of the injunctive writ, the writ will no longer serve to prevent serious damage. Per the records, respondent Oceania was directed to wind-up its operations by 29 February 2012. Notably, the GM Rojas’s directive already took effect at the time of the filing of the Complaint on 01 March 2012. Any serious damage from the effectivity of the directive could no longer be prevented by an injunctive writ issued subsequently.
In sum, the RTC committed grave abuse of discretion in issuing the assailed Order, and the assailed Resolution.
Anent the prayer that we enjoin the RTC from taking further action on the case, on the ground that it was without jurisdiction to issue a writ of prohibition to prohibit acts outside its territorial jurisdiction: we find that the jurisdiction of the RTC over the subject matter may be determined in an appeal. Thus, the remedy of prohibition cannot be availed of.
We rule as follows: 1) SET ASIDE the Order dated 28 June 2012, and the Resolution dated 03 January 2013, of the Regional Trial Court, Branch 65, Sorsogon City in Civil Case Number 12-463; 2) DENY the prayer that we permanently prohibit the RTC from taking cognizance of Civil Case No. 12-463.
IT IS SO ORDERED.
Lampas Peralta, F.,Chairperson and Cruz, S.C., JJ., concur.
[1] C.A. Rollo, p. 03.
[2] Annex “A,” C.A. Rollo, p. 26.
[3] Annex “B,” C.A. Rollo, p. 35.
[4] Annex “C,” C.A. Rollo, p. 40.
[5] Annex “E,” C.A. Rollo, p. 125.
[6] Annex “F,” C.A. Rollo, p. 126.
[7] Supra, at note 02.
[8] Supra, at note 01.
[9] Id..
[10] C.A. Rollo, p. 244.
[11] Lukang v. Pagbilao Development Corporation, G.R. No. 195374, 10 March 2014, citing: Orocio v. Angulan, G.R. Nos. 179892-93, 30 January 2009.
[12] Id., citing: Bank of the Philippine Islands v. Santiago, 548 Phil. 314, 329 (2007).
[13] Id., citing: Almeida v. Court of Appeals, 489 Phil. 648, 662-663 (2005).