JUAN PONCE ENRILE, PETITIONER, VS. HON. IGNACIO CAPULONG AND AYER PRODUCTIONS PTY. LTD., RESPONDENTS.

Enrile versus Capulong

The Case

This is a petition for certiorari and prohibition filed by Juan Ponce Enrile against Judge Ignacio Capulong and Ayer Productions Pty. Ltd. Enrile asks the Supreme Court to stop the trial court from entertaining Ayer's claim for damages against the injunction bond, damages said to have arisen from a writ of preliminary injunction that the Supreme Court had earlier nullified in the case of Ayer Productions versus Capulong. The case matters because it fixes the deadline for claiming damages on an injunction bond: the claim must be filed before the judgment denying the injunction attains finality, and once that judgment is final, everything done below afterward is void.

Procedural History

Enrile filed a complaint for injunction with the Regional Trial Court of Makati, Branch 134, against Ayer Productions and Hal McElroy, to stop the filming of the mini-series "The Four Day Revolution." The trial court issued a temporary restraining order, and later a writ of preliminary injunction upon a bond of 2,000,000 pesos. Ayer and McElroy went to the Supreme Court on separate petitions for certiorari. The Supreme Court consolidated them, set aside the writ of preliminary injunction, and made its restraining order permanent. That decision became final when it was entered in the Book of Entries on June 20, 1988.

Later, the trial court granted Ayer's motion to dismiss the main case. Ayer then filed a motion for reconsideration and an application to hold Enrile and his surety liable on the bond for damages. The trial court denied Enrile's motion to suppress Ayer's notice to take depositions, and denied his motion for reconsideration, holding that the fifteen-day period should be counted from the order dismissing the case, not from the Supreme Court's decision. Enrile then filed this petition for certiorari and prohibition. The Supreme Court issued a temporary restraining order, gave due course to the petition, and directed the parties to file their memoranda.

Facts

On February 23, 1988, Ayer Productions filed a complaint with the Regional Trial Court of Makati, Branch 134, seeking to stop Enrile from producing the movie "The Four Day Revolution," alleging a violation of his right of privacy. The trial court issued a temporary restraining order, and on March 16, 1988, issued a writ of preliminary injunction upon a bond of 2,000,000 pesos, ordering the defendants to cease and desist from producing and filming the mini-series.

Ayer and McElroy elevated the matter to the Supreme Court. On April 29, 1988, the Supreme Court set aside the order granting the writ of preliminary injunction, made its temporary restraining order permanent, and held that the production and filming did not constitute an unlawful intrusion upon Enrile's right of privacy, and that the injunction was a prior restraint on free expression. The decision became final on June 20, 1988.

On January 19, 1989, the trial court granted Ayer's motion to dismiss the main case. On February 10, 1989, Ayer filed a motion for reconsideration and an application to hold Enrile and his surety liable on the bond, claiming losses of four hundred thirty-eight thousand seventy-three Australian dollars. The trial court admitted the claim, ruling that the fifteen-day period ran from its order of dismissal. Enrile brought the matter to the Supreme Court.

Issues

• Whether or not Ayer's claim for damages on the injunction bond was filed before the judgment attained finality.
• Whether or not the Supreme Court's decision in Ayer Productions versus Capulong was a disposition of the main case on the merits, such that the reckoning point is the finality of that decision.
• Whether or not the trial court's orders admitting the claim for damages and allowing the taking of depositions are void.

Applicable Provisions

Section 9 of Rule 58 of the Rules of Court provides:

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 may be, 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.

This provision governs the procedure for claiming damages on an injunction bond, and the Court holds that this procedure is mandatory.

Ruling

On the first issue, the Court holds that the claim for damages must be filed before the judgment attains finality; otherwise it is barred. The Court finds that Ayer's claim was filed only on February 10, 1989, long after the Supreme Court's decision had become final on June 20, 1988, and so it was filed out of time.

On the second issue, the Court holds that the decision in Ayer Productions versus Capulong was a disposition of the main case on the merits. When the Court made its temporary restraining order permanent, it declared that no injunctive writ may be issued, because the production did not constitute an unlawful intrusion upon the right of privacy and the injunction was a prior restraint on free speech. The Court said:

The limited Temporary Restraining Order granted by this Court on 24 March 1988 is hereby MODIFIED by enjoining unqualifiedly the implementation of respondent Judge's Order of 16 March 1988 and made PERMANENT.

Since the complaint was in essence one for injunction, and demands for damages customarily shadow actions for injunction, the dismissal of the complaint left nothing for the trial court to hear and decide. The reckoning point is therefore the finality of the Supreme Court's decision, not the trial court's order of dismissal.

On the third issue, the Court holds that because the case had achieved finality, all proceedings below after June 20, 1988, including the request for deposition, are void and of no effect, and the challenged orders are null and inexistent.

Doctrine

A claim for damages arising from a wrongful injunction must be filed in the main case, with notice to the surety, before the judgment attains finality; otherwise it is barred. If the denial of the injunction is appealed and affirmed, the application may be commenced in the appellate court, which may remand the case for reception of evidence or hear the claim itself. The procedure under Section 9 of Rule 58, in relation to Section 20 of Rule 57, is mandatory, and failure to observe it deprives the aggrieved party of the right to proceed against the surety bond. Once the judgment denying the injunction becomes final, all subsequent proceedings below are void.

Disposition

The petition is granted; the orders of May 2, 1989 and June 1, 1989 are declared null and void, with costs against the private respondents.

Remember This

The single line to memorize: a claim for damages on an injunction bond must be filed before the judgment attains finality, or it is barred forever. Examiners use this case to test the mandatory procedure under Section 9 of Rule 58 and the reckoning point of finality.