Title
Aquino vs. Luntok
Case
G.R. No. 84324
Decision Date
Apr 5, 1990
Auditors suspended a municipal treasurer for a cash shortage; court issued TROs and injunction, upheld despite procedural flaws, citing urgent judicial intervention.
writ of preliminary injunction
temporary restraining order
functus officio

Case Summary (G.R. No. 84324)

Procedural History and Prior Court of Appeals Ruling

The Court of Appeals had previously decided CA-G.R. SP No. 13186 on May 11, 1988, dismissing petitioners’ certiorari petition as moot because a writ of preliminary injunction had already been granted by the trial judge. The Supreme Court took cognizance of the finality of that judgment and, accordingly, limited its consideration in the present petition primarily to the order dated November 4, 1987, the order dated November 5, 1987, and the writ issued on November 11, 1987.

Factual Background: Audit, Seizure, and Suspension, Followed by Judicial Restraint

Petitioners, acting in their capacities as public auditors, conducted an audit of private respondent’s accounts as Municipal Treasurer of Libmanan, Camarines Sur. They found a cash shortage of P274,011.17. Petitioners alleged that, pursuant to Section 157, Batas Pambansa Blg. 337, they seized private respondent’s cash, books, papers, and accounts. Private respondent was likewise suspended from office.

Private respondent then requested reinvestigation before the Commission on Audit. While that request was pending, he filed a petition dated August 26, 1987 in the trial court for prohibition with injunction, with a prayer for a restraining order and damages.

Trial Court’s Restraining Orders and Extensions

On August 27, 1987, respondent judge issued the TRO restraining all respondents, including their agents and representatives, for twenty (20) days from that date, to desist from proceeding or taking action against private respondent based on petitioners’ report and from exercising derivative powers and functions.

On September 16, 1987, respondent judge extended the TRO for another twenty (20) days, until October 6, 1987. On September 24, 1987, upon motion of private respondent, respondent judge directed petitioners to return to private respondent the cash, books, and other papers they had seized. Petitioners sought reconsideration, to which private respondent opposed; petitioners filed their answer on October 5, 1987, opposing the application for a preliminary injunction.

On October 6, 1987, the last day of the TRO’s extended effectivity, private respondent filed another motion to extend the restraining order. On the same date, respondent judge issued an order directing petitioners to refrain from taking any action against private respondent until the motion was resolved.

The New Petition for Certiorari in the Court of Appeals and the Issuance of the Writ of Preliminary Injunction

On October 27, 1987, petitioners filed CA-G.R. SP No. 13186, again seeking certiorari with application for preliminary injunction and/or restraining order, specifically challenging the validity of the multiple restraining orders dated August 27, 1987, September 16, 1987, and October 6, 1987.

While that case was pending, respondent judge issued on November 4, 1987 an order granting private respondent’s application for a writ of preliminary injunction. On November 5, 1987, respondent judge approved the bond filed by private respondent. The corresponding writ issued on November 11, 1987. When the Court of Appeals later resolved CA-G.R. SP No. 13186 on May 11, 1988, it dismissed the petition for mootness because the writ had already been granted.

Petitioners’ Arguments in the Supreme Court

In the present petition, petitioners asserted that the writ of preliminary injunction was null and void because it was, in substance, a fourth restraining order issued beyond the twenty (20)-day effectivity of the TRO, and it was issued during an extended efficacy not contemplated by the rules. Petitioners also claimed that respondent judge disregarded the doctrine of exhaustion of administrative remedies, arguing that private respondent had brought the action below while his request for reinvestigation with the Commission on Audit was still pending.

Doctrine on Exhaustion of Administrative Remedies: Applicability of Recognized Exceptions

The Supreme Court acknowledged that the doctrine of exhaustion of administrative remedies is generally required unless otherwise provided by law or unless public interest and other recognized exceptions justify immediate resort to judicial relief. It held, however, that the doctrine is not a hard and fast rule. It sustained the trial court’s approach in light of the urgency of judicial intervention as one of the admitted exceptions, emphasizing that the circumstances establishing urgency are commonly best assessed by the court of original jurisdiction. It further reiterated the general standards for the grant of a preliminary injunction: the existence of a substantial controversy and a threat of immediate acts causing irreparable injury or destroying the status quo before a full hearing on the merits. It also stressed that the discretion to grant such relief must be exercised in accordance with the grounds and manner provided by law.

Validity of a Writ of Preliminary Injunction Issued After the TRO’s Twenty-Day Period

The principal question raised by the petition appeared to be one of first impression: whether a writ of preliminary injunction issued after the TRO’s twenty (20)-day effectivity could be treated as invalid merely because it was issued during the extended efficacy of the restraining order. The Court observed that jurisprudence on TROs had largely addressed the propriety of extending the TRO itself or issuing another TRO after the first expired, but had not squarely resolved the validity of a preliminary injunction granted after the TRO’s expiration.

The Supreme Court sustained the validity of the writ of preliminary injunction. It explained that a TRO, though a species of injunction, is interlocutory and functions as a restraint pending determination of whether a preliminary injunction should be issued, thereby serving to preserve the status quo until the court makes its determination. Once the preliminary injunction is granted, the TRO ceases by operation of its limited function and becomes functus officio. The Court connected this with the mootness issue already ruled upon by the Court of Appeals when the writ had been issued, noting that the earlier restraint would no longer have practical effect once substituted by the writ aimed at the same acts.

Rules of Court: Non-Extendibility of TRO and the Consequence of Late Action

The Court anchored its discussion on Section 5, Rule 58 of the Rules of Court, as amended by Batas Pambansa Blg. 224, which provides that if facts show that great or irreparable injury would result before the matter can be heard on notice, the judge may issue a restraining order effective only for twenty days. Within that period, the judge must cause service of an order requiring the defendant to show cause at a specified time and place and must determine within the same period whether to grant the preliminary injunction; if the application is denied, the restraining order is deemed automatically vacated. The Court held that the twenty-day effectivity of a TRO is non-extendible and terminates automatically at the end of the period without requiring a judicial declaration.

It further recognized that ordinary extensions would ordinarily be disallowed. Yet the Court ruled that where injunction is subsequently granted, any defect arising from the extension of enforceability is cured for purposes of the parties’ continued restraint because the writ is then the governing relief.

Late Issuance Does Not Automatically Void the Writ, Provided Rule Requirements Were Observed

The Supreme Court nonetheless confronted the claim that the mandatory timing in the rule meant that a writ issued after the twenty-day period is an absolute nullity. It held that the rule’s mandatory tenor should not be taken to mean that a writ issued beyond the time frame is always an absolute nullity, provided that the substantive and procedural requirements under the rules were satisfied—particularly that there was a hearing and the posting of a bond.

The Court characterized the timing requirement as a directive for the trial judge to act with corresponding dispatch on the application for preliminary injunction within the twenty-day period when a TRO has been issued, and as a safeguard against ex parte proceedings that would deprive affected parties of opportunity to be heard. It explained that Batas Pambansa Blg. 224 was adopted as a response to abusive practices in the issuance of writs of preliminary injunction and, specifically for TROs, to the fact that TROs were not historically conditioned on posting bonds. The Court noted that in the case at bar, the bond protection had been required, and the records showed that petitioners and private respondent were given opportunity to be heard and that the trial court had conducted a hearing prior to issuing the writ.

Disposition: Injunction Upheld, but Judge’s Conduct Sanctioned

The Supreme Court sustained the grant of the writ of preliminary injunction because, except for the delay in the resolution and the issuance of the writ, the other requisites for the grant of preliminary injunction were observed. It cautioned, however, that the courts could not, by indirection, do what should not be done dire

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