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[PEOPLE'S AIR CARGO v. FRANCISCO G. MENDIOLA](http://lawyerly.ph/juris/view/cd2c3?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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DIVISION

[ GR No. 181068, May 04, 2010 ]

PEOPLE'S AIR CARGO v. FRANCISCO G. MENDIOLA +

DECISION

634 Phil. 111

THIRD DIVISION

[ G.R. No. 181068, May 04, 2010 ]

PEOPLE'S AIR CARGO AND WAREHOUSING CO., INC, PETITIONER, VS. HONORABLE FRANCISCO G. MENDIOLA, IN HIS CAPACITY AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF PASAY CITY, BRANCH 115, AND CATHAY PACIFIC AIRWAYS, LTD., RESPONDENTS.

D E C I S I O N

MENDOZA, J.:

At bench is a "Petition for Certiorari under Rule 65 of the Rules of Court with Application for Issuance of Temporary Restraining Order (TRO), Writ of Preliminary Injunction and/or Other Protective Relief," filed by People's Air Cargo & Warehousing Co., Inc. (petitioner) against Hon. Francisco G. Mendiola, in his capacity as Presiding Judge of the Regional Trial Court, Branch 115, Pasay City (RTC); and Cathay Pacific Airways, Ltd. (respondents).

The petition challenges the January 16, 2008 Order[1] of the Regional Trial Court, Branch 115, Pasay City, the dispositive portion of which states:

WHEREFORE, the plaintiff's (petitioner herein) Motion for Leave to Admit Amended Complaint is GRANTED, and the writ of preliminary injunction previously affirmed by the Supreme Court shall continue in force and in effect, until further notice from this Court.

SO ORDERED.[2]

THE RELEVANT ANTECEDENTS:

On May 24, 2004, petitioner filed a Complaint[3] for Specific Performance, Injunction and Damages with application for Provisional Relief. This was docketed as Civil Case No. 04-0321-CFM. Pertinent portions of the said Complaint read:

1.4. In or about March 1997, plaintiff and defendant Cathay Pacific entered into an import cargo and warehousing contract in the form of a modified agreement following the 1993 Standard Ground Handling Agreement of the International Air Transport Association (`IATA') (the `Contract') whereby the latter agreed to inbound and warehouse for storage and safekeeping purposes `ALL [its] import and transit cargo arriving at the [NAIA] at plaintiff's above-described bonded warehouse, FREE OF CHARGE to defendant Cathay Pacific, for a period of FIVE (5) years from 01 June 1997, RENEWABLE for another period of five (5) years, UNLESS terminated by either party by serving a written notice sixty (60) days prior to the termination date on 31 May 2002, and subject to such duties and functions as may be imposed by law, rules, regulations and incidental orders by the Bureau of Customs and other relevant government agencies.

x x x x x x x x x

1.7 Based on the above `5 plus 5' or ten (10) year term security, plaintiff, with utmost diligence, honesty and good faith, faithfully discharged and performed its duties and obligations under the Contract for an UNINTERRUPTED period of almost seven (7) years now. Almost two (2) years have lapsed since the automatic renewal of the Contract for another five (5) years or until 31 May 2007, with a remaining term of three (3) years at date hereof.

x x x x x x x x x

1.9. Despite plaintiff's demand for defendant Cathay Pacific to recall its arbitrary and unlawful pre-termination of its subsisting contract valid until 31 May 2007, defendant Cathay Pacific however has, with grave abuse, adamantly failed and rejected it to date, on its flimsy, ridiculous and arrogant claim that it has purportedly no subsisting contract with plaintiff.

x x x x x x x x x

2.2 Plaintiff's subject Contract with defendant Cathay Pacific, Annexes `C' and `C-1,' is valid and effective until 31 May 2007. This, by virtue of its automatic renewal for a similar period of five (5) years from 31 May 2002 or until 31 May 2007.

2.3 However, defendant Cathay Pacific has, in utter breach thereof, fraudulently and in bad faith terminated it, without just and legal cause, and worse, has awarded to it another entity. Worst of all, defendant Cathay Pacific now arrogantly claims that it has no contractual relation with plaintiff, for which it has refused to arbitrate with it. Since there is a dispute between the parties, plaintiff is definitely entitled under the Contract to seek arbitration with defendant Cathay Pacific to resolve the following novel legal issues, to wit:

  1. Whether or not plaintiff's subject contract is valid until 31 May 2007?

  2. Conversely, whether or not defendant Cathay Pacific's Notice of Termination dated 25 March 2004 was lawful and justified, and produced any effect?

  3. Corollary, whether or not defendant Cathay Pacific's claim of `NO CONTRACTUAL RELATION' with plaintiff, based on its inconsistent premises and propositions stated in its letter of 26 April 2004, is valid and justified.

  4. Incidentally, whether or not plaintiff is entitled to its claim for damages against defendant Cathay Pacific based on utter breach of contract in bad faith and/or tort and/or grave abuse of stature in airline industry.

2.4 Per its subject contract, specifically Article 9, IATA 1993 Standard Ground Handling Agreement, which provides:

`x x x x x x x x x

ARTICLE 9. ARBITRATION.

9.1 Any dispute or claim concerning the scope, meaning, construction or effect of this Agreement or arising therefrom shall be referred to and finally settled by arbitration in accordance with the procedures set forth below and, if necessary, judgment on the award rendered may be entered in any Court having jurisdiction thereof:

x x x x x x x x x'

defendant Cathay Pacific is mandated to settle any dispute or controversy with plaintiff, including the present dispute vis-à-vis defendant Cathay Pacific's illegal and fraudulent termination effective 01 June 2004 of the subject Contract, which plaintiff conversely asserts to be effective until 31 May 2007.

x x x x x x x x x

3.3 As shown, plaintiff's subject contract is valid and effective until 31 May 2007. Defendant Cathay Pacific, therefore, acted wantonly, maliciously and in utter bad faith when it deliberately awarded plaintiff's scope of services under the Contract to another entity, there being three (3) more years left of the Contract term.

3.4 Moreover, by virtue of such automatic renewal until 31 May 2007, defendant Cathay Pacific's Notice of Termination dated 25 March 2004, therefore, is illegal, unlawful and unjustified. Per contract, defendant Cathay Pacific's right to terminate existed only within sixty (60) days on or before the termination date on 31 May 2002 x x x.

3.5 Plaintiff, therefore, respectfully prays that the Honorable Court declare its subject contract with defendant Cathay Pacific effective until 31 May 2007 and consequently defendant Cathay Pacific's Notice of Termination dated 25 March 2004 illegal and unjust, for which the parties ought be ordered and directed to fully comply with its terms in good faith, pending the final outcome of this case.

3.6 Clearly, defendant Cathay Pacific blatantly committed a further breach of the Contract (i.e. issued the unjustified Notice of Termination) to perpetuate its pre-conceived and malicious design to unlawfully dispossess plaintiff of its rights under the Contract, and award the same to a third party.

ALLEGATIONS IN SUPPORT OF THE APPLICATION FOR
ISSUANCE OF PROVISIONAL RELIEF, SPECIFICALLY
EXECUTIVE AND THEN EXTENDED TEMPORARY
RESTRAINING ORDER, WRIT OF PRELIMINARY
INJUNCTION, STATUS QUO ANTE ORDER AND/OR
PROTECTIVE ORDER


4.1 Plaintiff repleads therein by reference all of the foregoing allegations.

4.2 Plaintiff is entitled to the reliefs demanded, and the whole or part of such reliefs consist in:

a. On the main case, ordering defendant Cathay Pacific to fully comply, in good faith, with arbitration clause of its subject Contract with plaintiff, or alternatively, for the Honorable Court to declare the subject Contract valid and effective until 31 May 2004 and ordering defendant Cathay Pacific to fully comply with it in good faith;

b. Pending the final resolution of the above legal issues, whether via arbitration or directly by this Honorable Court, it is imperative that provisional or injunctive relief be issued by this Honorable Court to preserve the status quo ante respecting the rights of the Contract parties prior to the controversy, and more so, to prevent any judgment in the arbitration proceedings or in this case from being rendered moot, nugatory, ineffectual or impossible to enforce, should defendant Cathay Pacific be left unrestrained in (a) its unjust and illegal disregard for its valid and subsisting Contract with the plaintiff, and (b) its imminent turn over of its import and transit cargo to a third party, in blatant and brazen violation of Cathay Pacific's contractual commitment to deliver the same exclusively to plaintiff's custom bonded warehouse.

On the same date, the Executive Judge of the RTC of Pasay issued a Temporary Restraining Order (TRO) valid for 72 hours. The civil case was subsequently raffled to Branch 115 of the RTC of Pasay with public respondent as the Presiding Judge.[4]

Public respondent judge, thereafter, extended the TRO for another seventeen (17) days. Injunction hearings were subsequently conducted.[5]

In his Order, dated June 11, 2004,[6] public respondent granted the Writ of Preliminary Injunction reasoning out that:

The evidence so far presented reveals that the right of the plaintiff to the relief prayed for is anchored on a written contract between the plaintiff and the defendant, which by virtue of an implied automatic renewal, is still set to expire on May 3, 2007. Undeniably, however, prior to the date of termination, defendant unilaterally terminated the contract in a letter dated March 25, 2004 without specifying any cause. Thus, in the eyes of this Court, it appears that the twin requirements for a valid injunction, together with the showing of a threatened irreparable damages, have been met.

Considering further that the sole object of a preliminary injunction is simply to preserve the status quo until the merits of the case can be fully heard, this Court deems it best, in the meanwhile, to restrain the defendant from unilaterally terminating its contract with the plaintiff.

WHEREFORE, the defendant, their agents or authorized representatives and all persons acting for and in their behalf are hereby enjoined from terminating their contract with the plaintiff.

The order dated May 27, 2004 granting Temporary Restraining Order (TRO) will, thus, remain in full force and effect until the merits of this case are fully heard.

The plaintiff is directed to post a bond in the sum of Five Hundred Thousand Pesos (P500,000.00) conditioned to answer for any damage that the defendant may suffer, by reason of the issuance of this Order of preliminary injunction should this Court finally decide that the said issuance is unwarranted.

On June 14, 2004, the public respondent issued the Writ of Preliminary Injunction.[7]

Private respondent then filed a Petition for Certiorari under Rule 65 with the Court of Appeals. The petition was docketed as CA-GR SP No. 85395. The petition alleged that:

"I. PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, BY ALLOWING A WRIT OF INJUNCTION TO ISSUE DESPITE THE ABSENCE OF A CLEAR LEGAL RIGHT ON THE PART OF THE PAIR.

II. PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, BY ALLOWING A WRIT OF INJUNCTION TO ISSUE DESPITE THE FACT THAT NO `GRAVE AND IRRAPARABLE INJURY' WILL RESULT TO PRIVATE RESPONDENT.

III. PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION BY DISREGARDING PETITIONER'S EVIDENCE."[8]

On February 7, 2005, the Court of Appeals dismissed the petition,[9] but ordered the public respondent to conduct the trial of the case and render judgment thereon with immediate dispatch so as not to render the case moot and academic, considering that the term of the implied renewal in the alleged agreement with People's Air Cargo and Warehousing was about to expire.

The Court of Appeals also pointed out that the petition was procedurally flawed. It stated that the mere fact that the assailed writ was issued did not necessarily create an urgency justifying a party (like petitioner in CA-GR SP No. 85395, private respondent herein) from ignoring the procedural requirement of filing a motion for reconsideration. In this case, Cathay Pacific Airways' business operations were not disrupted so as to produce such urgency that would have excused it from filing the required motion for reconsideration.

The Court of Appeals further held that the petition must still fail even on its merits. The Court of Appeals explained that there was ample justification for the issuance of the writ of preliminary injunction. The question of whether or not People's Air Cargo possessed the requisite right hinged on the prima facie existence of the subject Agreement, which was allegedly not terminated in accordance with the provision thereof. The allegation that the subject Agreement had been superseded by a separate Ground Handling Agreement effective October 1, 1997 was a matter that would be better assessed and considered in the trial proper.

The Court of Appeals resolved to DENY the Motion for Reconsideration of Cathay Pacific Airways in its June 27, 2005 Resolution.[10]

Private respondent then elevated the case to this Court by way of a Petition for Review on Certiorari. This was docketed as G.R. No. 168722. On June 5, 2006, this Court resolved to DENY the petition for failure of herein private respondent (petitioner therein) to sufficiently show that the Court of Appeals committed any reversible error in the challenged decision and resolution.[11]

On August 16, 2006, this Court resolved to DENY the motion for reconsideration with FINALITY.[12]

Acting on the premise that the implied renewal of the Agreement with petitioner would expire on May 31, 2007, private respondent gave a written notice to petitioner that it would consider the writ as functus officio beyond that date and, thereafter, act accordingly.

On May 11, 2007, after several exchanges of pleadings, petitioner filed a Motion for Leave to Admit Attached Amended Complaint.[13] While petitioner's original Complaint consistently alleged that its purported contract with private respondent was valid and effective until May 31, 2007,[14] its Amended Complaint now alleged that the same contract would be valid and effective at least until May 31, 2017.[15]

Petitioner, thereafter, filed an Urgent Motion to Cite for Contempt with Damages (Re: Violation and Breach of the Writ of Preliminary Injunction dated 14 June 2004 as affirmed by the Court of Appeals and the Supreme Court).[16] Private respondents Cathay Pacific Airways, Ltd., Ramon I. Joson, Eddie V. Monreal, and Antoinette Piamonte filed their Opposition.[17] Petitioner later filed its Reply.[18]

On January 16, 2008, public respondent issued the assailed Order[19] which, among others, GRANTED petitioner's Motion for Leave to Admit Amended Complaint.

While the public respondent granted petitioner's Motion for Leave to Admit Amended Complaint, it ruled that it need not dwell on the other pending incidents, as they had become moot. The public was referring to the following pending motions:

1.) Plaintiff's (petitioner's) Motion to Declare in Default Defendant Bureau of Customs;

2.) Cathay Pacific's Motion to Proceed to Trial on Damages;

3.) Plaintiff's Urgent Motion to Cite for Contempt;

4.) Addendum to the Motion to Cite for Contempt;

5.) Plaintiff's Motion for Leave to Admit Attached Amended Complaint;

6.) Cathay's Omnibus Motion; and

7.) PAGS' Motion for Leave to Intervene and to Admit Attached Petition-in-Intervention.

Neither petitioner nor private respondent filed a Motion for Reconsideration of the January 16, 2008 Order of public respondent.

Instead, the parties pursued separate petitions for Certiorari. Private respondent Cathay Pacific Airways Ltd. filed a Petition for Certiorari with the Court of Appeals (CA G.R. SP No. 102177).[20] Petitioner, on the other hand, filed this petition directly with this Court (G.R. No. 181068), questioning the mooting of its motion to cite respondent for indirect contempt. Specifically, the alleged grounds read:

"GROUNDS FOR ALLOWANCE
OF THE PETITION


RESPONDENT JUDGE ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN MOOTING PETITIONER'S MOTION TO CITE FOR INDIRECT CONTEMPT DESPITE HIS DUE ADMISSION OF PETITIONER'S AMENDED COMPLAINT IN THAT:

A. AS AFFIRMED BY THIS HONORABLE COURT IN G.R. NO. 168722, RESPONDENT JUDGE'S PRELIMINARY INJUNCTION IS VALID AND EFFECTIVE `UNTIL THE MERITS OF TH[E] CASE ARE FULLY HEARD.'

B. THE ADMISSION OF THE AMENDED COMPLAINT EXPLICITLY AMPLIFIES THE CONTINUING VALIDITY AND EFFECTIVITY OF THE PRELIMINARY INJUNCTION.

C. PRIVATE RESPONDENTS' ILLEGAL, ABUSIVE AND CONTUMACIOUS DISOBEDIENCE, DEFIANCE AND VIOLATION OF THE PRELIMINARY INJUNCTION THEREFORE CONSTITUTES INDIRECT CONTEMPT UNDER SECTION 3 (B), RULE 71, RULES OF COURT."[21]

On March 19, 2008, this Court issued a Resolution,[22] directing the parties and the Court of Appeals to hold in abeyance any action on the petition (CA G.R. SP No. 102177) pending final resolution of this petition. This Court further ruled that it was without prejudice to the dismissal of private respondent's petition in the Court of Appeals should it be found to have been filed in violation of the forum shopping rule.

After private respondent's Comment and petitioner's Reply, the Court resolved to give due course to the petition and to require both parties to submit their respective memoranda,[23] which they did.[24]

On October 9, 2009, private respondent filed a Motion for Early Resolution.

THE COURT'S RULING

The petition should be dismissed outright. Firstly, no motion for reconsideration was filed before petitioner filed this petition under Rule 65.

Certiorari is not a defense against the unfavorable consequences of a failure to file the required motion for reconsideration. Petitioner may not designate to itself the determination of whether a motion for reconsideration is necessary or not. The plain and adequate remedy referred to in Section 1 of Rule 65 is a motion for reconsideration of the assailed decision. The purpose of this requirement is to enable the court or agency to rectify its mistakes without the intervention of a higher court. To dispense with the requirement of filing a motion for reconsideration, petitioner must show a concrete, compelling, and valid reason for doing so.[25] In this case, the petitioner failed. Thus, petitioner should have first interposed a motion for reconsideration.

Secondly, the petition violates the principle of hierarchy of courts. The assailed Order is an order from the RTC of Pasay. This petition should have been filed with the Court of Appeals, after the filing of a Motion for Reconsideration.

Thirdly, the petitioner considers this petition as a petition under Rule 65 of the Rules of Court, and yet petitioner insists (somehow to justify direct resort to this Court) that the petition involves a PURE QUESTION OF LAW, presenting the lone issue of "[w]hether or not respondent Judge's admission of petitioner's amended complaint can validly moot its indirect contempt suit against private respondent and its responsible officers."[26]

Petitioner is confusing this Court. Rule 65 does not deal with pure questions of law. It involves grave abuse of discretion amounting to lack or excess of jurisdiction, and this grave abuse of discretion amounting to lack or excess of jurisdiction should be alleged and proved. In this regard, petitioner failed again.

The Court cannot bear petitioner's utter disregard of procedural rules and frustrate the objective of attaining just, speedy and orderly judicial proceedings.

Even if this Court ignores the mentioned procedural lapses, still the petition fails on the merits. There was no grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public respondent in issuing the assailed order. Public respondent had sufficient basis for not giving due attention to the Urgent Motion to Cite for Contempt.

Section 4, Rule 71 of the Rules of Court prescribes the procedure for the institution of proceedings for indirect contempt, viz:

"Sec. 4. How proceedings commenced. - Proceedings for indirect contempt may be initiated motu proprio by the court against which the contempt was committed by an order or any other formal charge requiring the respondent to show cause why he should not be punished for contempt.

In all other cases, charges for indirect contempt shall be commenced by a verified petition with supporting particulars and certified true copies of documents or papers involved therein, and upon full compliance with the requirements for filing initiatory pleadings for civil actions in the court concerned. If the contempt charges arose out of or are related to a principal action pending in the court, the petition for contempt shall allege that fact but said petition shall be docketed, heard and decided separately, unless the court in its discretion orders the consolidation of the contempt charge and the principal action for joint hearing and decision."[27]

In this case, petitioner filed a mere motion in the same civil case.

Also, even if this Court treats this petition as a Petition under Rule 45, it is not convinced that this case involves a pure question of law.

A question of law exists when there is doubt or controversy as to what the law is on a certain state of facts.[28] This is not so in the case at bar.

It bears stressing too that the basis of the petitioner for its Urgent Motion to Cite for Contempt is yet to be determined in a full-blown trial by the public respondent.

All told, there was no grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public respondent in issuing the assailed July 16, 2008 Order.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Corona, (Chairperson), Velasco, Jr., Nachura, and Bersamin,* JJ., concur.



* Designated as additional member of the Third Division in lieu of Justice Diosdado M. Peralta per raffle dated January 11, 2010.

[1] Rollo, pp. 33-35.

[2] Words in parenthesis ours.

[3] Rollo, pp. 36-54.

[4] Rollo, pp. 8, 337.

[5] Rollo, pp. 8, 337.

[6] Rollo, pp. 105-106.

[7] Rollo, pp. 107-109.

[8] Rollo, pp. 114-115.

[9] Rollo, pp. 110-123.

[10] Rollo, pp. 124-125.

[11] Rollo, p. 126.

[12] Rollo, p. 127.

[13] Rollo, pp. 140-165.

[14] Rollo, p. 39.

[15] Rollo, p. 147.

[16] Rollo, pp. 166-179.

[17] Rollo, pp. 188-205.

[18] Rollo, pp. 206-215.

[19] Rollo, pp. 33-35.

[20] Rollo, pp. 251-286.

[21] Rollo, pp. 13-14.

[22] Rollo, p. 326.

[23] Rollo, p. 640.

[24] Rollo, pp. 646 and 681.

[25] Metro Transit Organization, Inc. v. Court of Appeals, G.R. No. 142133, November 19, 2002; 392 SCRA 229.

[26] Rollo, p. 4.

[27] Emphases supplied.

[28] See Abad v. Guimba, G.R. No. 157002, July 29, 2005; 465 SCRA 356.
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