Philippine Laws Platform

G.R. No. L-23868, October 22, 1970,
♦ Decision,Castro, [J]
♦ Concurring Opinion,Barredo, [J]

Manila

EN BANC

G.R. No. L-23868 October 22, 1970

ZACARIAS C. AQUINO,petitioner,
vs.
FRANCISCO SOCORRO and COURT OF APPEALS,respondents.

Tranquilino O. Calo, Jr. for petitioner.

Alfaro and Associates for respondent Francisco Socorro.

CASTRO,J.:.

On February 14, 1964 the Court of Appeals, upon petition of Francisco Socorro in CA-G.R. 33560-R,1issued a writ of preliminary injunction in his favor upon his posting a P1,000 bond. The writ of preliminary injunction, among others, restrained Zacarias Aquino "from entering, cutting, hauling, selling and/or exporting logs or other forest products from the forest area" subject of litigation. Aquino, however, filed a counterbond in the amount of P2,000, effecting the immediate dissolution of the writ.

The Court of Appeals, on June 29, 1964, dismissed Socorro's petition re the main action, for lack of jurisdiction to entertain the same. Socorro subsequently appealed the decision of the appellate court to this Court. We affirmed the appellate court's decision in a resolution dated December 24, 1964 in case G.R. L-23608.

On July 15, 1964, before the appellate court's decision dismissing Socorro's petition became final, Aquino filed with the appellate court his claim for damages in the amount of P199,000 on account of the wrongful issuance of the writ of preliminary injunction. The appellate court denied Aquino's claim, for want of bad faith and malice on the part of Socorro in filing his petition and securing the issuance of the writ of preliminary injunction. Aquino's subsequent motion for reconsideration was denied.

Hence, the present petition forcertiorarito review the resolution of the Court of Appeals denying his claim for damages.ℒαwρhi৷

Aquino contends that the respondent appellate court erred in denying his claim for damages on the ground of want of bad faith and malice on the part of the respondent Socorro in filing the petition forcertiorarire the main case and securing the issuance of the writ of preliminary injunction. He invokes the provisions of Section 9, Rule 58 in relation to Section 20, Rule 57, of the Rules of Court. Section 9, Rule 58 recites:.

Judgement to include damages against party and surities. — 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.

Section 20, Rule 57 reads:.

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, be 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.

Aquino points out that the said provisions do not require a claimant who seeks to recover damages on account of the wrongful issuance of a writ of preliminary injunction, to prove bad faith and malice on the part of the party who obtained the issuance of the writ. To reinforce his contention, he invokes the provisions of Section 4 (b) of Rule 58 of the Rules of Court. This rule, Aquino avers, makes the party applying for an injunction liable for all damages sustained by the other party if the court finally decides the party applicant as not entitled thereto. He maintains that, in the case at bar, the dissolution of the writ of preliminary injunction by the respondent appellate court clearly demonstrates that the respondent Socorro was not entitled thereto.

Socorro, on the other hand, plays for the dismissal of the present petition on the following grounds: (1) The petitioner "refused to prosecute his claim for damages ... in the main action then already on appeal to this Court;" (2) The petitioner "failed to state in his motion claiming for damages the facts upon which his rights thereto are based;" (3) The petitioner, if "suing on the bond ... has no more cause of action as the said bond had already been dissolved2upon motion by the petitioner Aquino;" and (4) The petitioner, if "suing beyond the bond ... failed to show, or there is no showing that the respondent Socorro," in filing his petition forcertiorariand securing the issuance of the writ of preliminary injunction, "was motivated by malice or bad faith."

The present case raises the question of whether Aquino's claim for damages on account of the improvident issuance by the respondent appellate court of the writ of preliminary injunction should be dismissed on the ground that he has failed to show or prove bad faith and malice on the part of the respondent Socorro in obtaining the issuance of the writ of preliminary injunction.

InPacis vs. The Commission on Elections,3this Court made an extensive discussion of the principles applicable to the recovery of damages caused through the improvident issuance of a writ of preliminary injunction. This Court said that "damages sustained as a result of a wrongfully obtained injunction may be recovered upon the injunction bond required to be filed with the court." The same provisions permitting the issuance of the writ of preliminary injunction require the filing of a bond before the grant of the writ. "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. 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 the bond a useless formality."

Continuing, this Court said 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." Thus, for the purpose of recovery upon the injunction bond, "the dissolution of the injunction because of the failure of petitioner's main cause of action" provides the "actionable wrong" for the purpose of recovery upon the bond.

This Court also stressed, in the same case, that "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, and it specifically states that ... '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.' " Under this provision, the party restrained, if he can recover anything, can recover only by reason of and upon the bond — the only security and protection conceded to him by the rules. Consequently, the rule limits the amount of recovery in a suit on an injunction bond to the sum thus fixed, the amount measuring the extent of the assumed liability.

This Court also finds it necessary to restate the rule inMolina vs. Somes4that "an action for damages for the improper suing out of an injunction must be maintained upon the same principles which govern an action for the wrongful bringing of an action." This rule, however, applies only when the party restrained pursues his claim for damages not upon the injunction bond. In such a case where the party restrained sues not on the injunction bond, the rules accord him no relief by way of a claim for damages unless he can establish that the party applicant secured the issuance of the writ maliciously and without probable cause. This Court stated that "... when the process has been sued out maliciously there may be a right of action in favor of the defendant. But this right depends upon the law governing malicious prosecutions, and has no relation to the claim for damages urged by the defendant in this case. ..."5

Additionally, this Court, citingPalmer vs. Foley(71 N.Y. 106, 108), said:.

It seems that, without some security given before the granting of an injunction order, or without some order of the court or a judge, requiring some act on the part of the plaintiff, which is equivalent to the giving of security — such as a deposit of money in court — the defendant has no remedy for any damages which he may sustain from the issuing of the injunction, unless the conduct of the plaintiff has been such as to give ground for an action for malicious prosecution.

In the case at bar, the record reveals that the petitioner Aquino, in the proceedings before the respondent appellate court filed a counterbond in the amount of P2,000 and opposed the injunction bond filed by the respondent Socorro on the ground of its insufficiency. In effect, those brought about the immediate dissolution of the writ of preliminary injunction. Thus Aquino pursues his claim for damages in the amount of P199,000 no longer upon the injunction bond in the amount of P1,000 filed by Socorro with the respondent appellate court. This being the case, applicable here is the holding inMolina vs. Somes, supra, that an application for damages on account of the improvident issuance of a preliminary injunction writ must be governed by the same principles applicable to an action for the wrongful bringing of action. Before the respondent's liability can attach, it must appear that he filed his petition forcertiorarire the main action and obtained the issuance of the writ of preliminary injunction maliciously and without probable cause. These two essential requisites, malicious prosecution and lack of probable cause, are neither alleged nor proved in this case before us. Nothing in the record tends to establish the liability of the respondent Socorro.

ACCORDINGLY, the present petition forcertiorariis hereby denied. No cost.

Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Fernando, Teehankee, Villamor and Makasiar, JJ., concur.

Concepcion, C.J., is on leave.

Footnotes

1"Francisco Socorro, petitioner, vs. Hon. Montano A. Ortiz, as Presiding Judge of the Court of First Instance of Agusan, Director of Forestry, Zacarias C. Aquino, and the Commissioner of Customs, respondents."

2Respondent Socorro alleges on page five of his brief that the filing by the petitioner of a counterbond brought about the dissolution of the injunction bond he filed with the respondent appellate court. Aquino offered no statement to rebut this allegation of Socorro. Assuming, however, this allegation of Socorro to be true, the dissolution or cancellation of Socorro's bond contravenes the accepted rule that the filing of a counter bond by a party opposing the injunction bond on the ground of its insufficiency does not automatically cancel or effect the dissolution of the injunction bond.

3L-29026, August 29, 1969, 29 SCRA 25.

424 Phil. 66 (1913).

5Note 4, at p. 67, citing the case of the City of St. Louis vs. St. Louis Gaslight Company, 82 Mo. 349-357.