DOH v. Phil.

Pharmawealth
March 13, 2007
RULE 58, Section 1
FACTS:
Phil. Pharmawealth, Inc. (respondent) is a
domestic corporation engaged in the
business of manufacturing and supplying
pharmaceutical products to government
hospitals in the Philippines.
Sometime in September 2000, petitioner
DOH, through petitioner Antonio M. Lopez,
chairperson of the pre-qualifications, bids
and awards committee, issued an Invitation
for Bids for the procurement of 1.2 million
units vials of Penicillin G Benzathine
(Penicillin G Benzathine contract).
Despite the lack of response from petitioner
DOH regarding respondents request for
inclusion of additional items in its list of
accredited products, respondent submitted
its bid for the Penicillin G Benzathine
contract.
When the bids were opened on October 11,
2000, only two companies participated, with
respondent submitting the lower bid at
P82.24 per unit, compared to Cathay/YSS
Laboratories (YSS) bid of P95.00 per unit. In
view, however, of the non-accreditation of
respondents Penicillin G Benzathine product,
the contract was awarded to YSS.

and severally to plaintiff, for [the therein

specified damages.
Petitioners subsequently filed a Manifestation
and Motion (motion to dismiss) praying for
the outright dismissal of the complaint based
on the doctrine of state immunity.
Additionally, they alleged that respondents
representative was not duly authorized by its
board of directors to file the complaint.
DEFENSE:
To petitioners motion to dismiss, respondent
filed its comment/opposition contending, in
the main, that the doctrine of state
immunity is not applicable considering that
individual petitioners are being sued both in
their official and personal capacities, hence,
they, not the state, would be liable for
damages.
RTC:
Motion to Dismiss, DENIED
MR, Denied
CA:
Petition for Certiorari: DENIED
ISSUE:
Whether or not a writ of preliminary
injunction will lie against DOH, in this case
RULING:

ACTION FILED:

YES.

Respondent thus filed a complaint for

injunction, mandamus and damages with
prayer for the issuance of a writ of
preliminary injunction and/or temporary
restraining order with the Regional Trial
Court of Pasig City praying, inter alia, that
the trial court nullify the award of the
Penicillin G Benzathine contract (IFB No.
2000-10-11 [14]) to YSS Laboratories, Inc.
and direct defendant DOH, defendant
Romualdez, defendant Galon and defendant
Lopez to declare plaintiff Pharmawealth as
the lowest complying responsible bidder for
the Benzathine contract, and that they
accordingly award the same to plaintiff
company
and
adjudge
defendants
Romualdez, Galon and Lopez liable, jointly

As regards petitioner DOH, the defense of

immunity from suit will not avail despite its
being an unincorporated agency of the
government, for the only causes of action
directed against it are preliminary injunction
and mandamus.
Under Section 1, Rule 58 of the Rules of
Court, preliminary injunction may be
directed against a party or a court, agency
or a person. Moreover, the defense of state
immunity from suit does not apply in causes
of action which do not seek to impose a
charge or financial liability against the State.
Note: The individual defendants (Romualdez
and Galon) are also not covered by state
immunity.

For an officer who exceeds the power

conferred on him by law cannot hide behind
the plea of sovereign immunity and must
bear the liability personally.

MIAA v. CA
February 14, 2003
Rule 58, Section 3

Services to wind up its operations as

Management has decided to take over the
aforecited
services
at
the
Domestic
Passenger Terminals I and II.
ACTION FILED:
K Services opposed the takeover. It filed on
December 18, 1992 a Petition for
Prohibition with Preliminary Injunction
and Prayer for a Temporary Restraining
Order with the Regional Trial Court of Pasay
City.
The trial court issued on December 28, 1992
a temporary restraining order against MIAA.

FACTS:
K Services began providing porters for the
domestic passenger terminal of the Manila
International Airport (now the Ninoy Aquino
International Airport) under a provisional
permit for the period from January 1, 1976 to
April 30, 1976. MIAA and K Services
subsequently executed a contract effective
from May 1976 to April 30, 1977 that was
renewed yearly until December 1984.
Although the parties did not renew their
contract for the succeeding year, K Services
continued as porterage contractor from
January 1985 until February 1987. Sometime
in February 1987, however, MIAA gave notice
that the services of K Services would be
terminated on February 20, 1987.
Shortly after, K Services received a from then
MIAA General Manager Eduardo Carrascoso,
the relevant portion of which stated:
Due
to
certain
administrative
problems that are preventing us from
taking over, please continue operating
said service until further notice from
us.

On January 20, 1993, the trial court granted

the writ of preliminary injunction prayed for
by K Services.
On February 11, 1993, the OSG filed a
motion to dismiss the complaint filed by K
Services on the grounds that: (1) the
complaint failed to state a cause of action; or
(2) assuming the existence of a cause of
action, a prior judgment barred the same. At
the time MIAA filed the instant petition
before the Court, this motion to dismiss,
opposed by K Services, was pending
consideration by the trial court.
On July 23, 1993, the OSG filed an Omnibus
Motion which mainly alleged that:
(1) the injunctive writ lacked legal and
factual basis; and (2) K Services was using
the injunction as a shield to violate the terms
of the porterage agreement by charging fees
in excess of the amount authorized by the
contract.
The
Omnibus
Motion
prayed
for
reconsideration of the order of January 20,
1993 and for the lifting of the injunction,
then it was DENIED.

K Services alleged that it was initially

hesitant to accept MIAAs offer. However, it
continued to provide porters for Domestic
Terminal I and expanded its operations to
cover Domestic Terminal II upon the alleged
verbal assurance of MIAAs officers that
MIAAs policy was to relinquish porterage
operations to the private sector.

CA: Reversed RTCs decision and decided in

favor of MIAA

However, on December 1, 1992, General

Manager Cunanan gave written notice to K

RULING:

ISSUE:
Whether K Services was entitled to the writ
of preliminary injunction granted by the trial
court.

NO.
MIAA asserts that K Services has not shown
any clear and unmistakable right to the
protection of a writ of preliminary injunction.
MIAA calls attention to the trial courts order
of January 20, 1993, which failed to state in
particular the basis for the issuance of the
writ of preliminary injunction in favor of K
Services. MIAA argues that the effect of the
injunction is to force MIAA to extend the life
of a contract that already expired by
operation of its own provisions. For these
reasons, MIAA contends that the trial court,
in granting the injunctive writ, acted with
grave abuse of discretion amounting to lack
of jurisdiction.
On the other hand, K Services maintains that
it has the right to continue as the porterage
contractor of MIAA under the extension
conferred on it by MIAA through General
Manager Carrascoso. K Services further
alleges that MIAA officers verbally assured K
Services that MIAAs policy was to privatize
the porterage and other services, and in any
case, K Services would not be replaced
without a public bidding.
Section 3, Rule 58, of the old Rules of Court,
which was applicable at the time, prescribed
that a preliminary injunction could be
granted provided:
(a) That the plaintiff is entitled to the relief
demanded, and the whole or part of such
relief consists in restraining the commission
or continuance of the acts complained of, or
in the performance of an act or acts, either
for a limited period or perpetually;
(b) That the commission or continuance of
some act complained of during the litigation
or the non-performance thereof would
probably work injustice to the plaintiff; or
(c) That the defendant is doing, threatens, or
is about to do, or is procuring or suffering to
be done, some act probably in violation of
the plaintiffs rights respecting the subject of
the action, and tending to render the
judgment ineffectual.
The requisites necessary for the issuance of
a writ of preliminary injunction are: (1) the
existence of a clear and unmistakable right

that must be protected; and (2) an urgent

and paramount necessity for the writ to
prevent serious damage.[21] The duty of the
court taking cognizance of a prayer for a writ
of preliminary injunction is to determine
whether the requisites necessary for the
grant of an injunction are present in the case
before it.
In the instant case, however, the trial courts
order of January 20, 1993 was, on its face,
bereft of basis for the issuance of a writ of
preliminary injunction. There were no
findings of fact or law in the assailed order
indicating that any of the elements essential
for the grant of a preliminary injunction
existed. The trial court alluded to hearings
during which the parties marked their
respective exhibits and the trial court heard
the oral arguments of opposing counsels.
However, it cannot be ascertained what
evidence was formally offered and presented
by the parties and given weight and
credence by the trial court. The basis for the
trial courts conclusion that K Services was
entitled to a writ of preliminary injunction is
unclear.
In its order of August 5, 1993, the trial court
stated that it issued the injunction to prevent
irreparable loss that might be caused to K
Services. Once more, however, the trial court
neglected to mention what right in esse of K
Services, if any, was in danger of being
violated and required the protection of a
preliminary injunction. The trial court stated
merely that K Services was servicing MIAA as
a porterage contractor and that a notice of
termination was sent to K Services. Absent a
preliminary finding by the trial court that K
Services possessed the right to continue as
MIAAs concessionaire, MIAAs termination of
K Services was not sufficient in itself to
establish that there was an invasion of K
Services right.
Considering the far-reaching effects of a writ
of preliminary injunction, the trial court
should have exercised more prudence and
judiciousness in its issuance of the injunction
order. We remind trial courts that while
generally the grant of a writ of preliminary
injunction rests on the sound discretion of
the court taking cognizance of the case,
extreme caution must be observed in the
exercise of such discretion. The discretion of

the court a quo to grant an injunctive writ

must be exercised based on the grounds and
in the manner provided by law.
Every court should remember that an
injunction is a limitation upon the freedom of
action of the defendant and should not be
granted lightly or precipitately. It should be
granted only when the court is fully satisfied
that the law permits it and the emergency
demands it.