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That terrible rapier of oppression

(Article published in the Feb 11, 2009 issue of Manila Standard Today)

For lawyers, TRO means temporary restraining order; for normal people, it means terrible rapier of oppression.  For both, it is a quick and pointed thrust that initially draws blood and, if not effectively neutralized by the victim, eventually matures into a constricting weapon of immobilization leading to a win by submission. 

Lucky for the Bangko Sentral ng Pilipinas, the Supreme Court stopped the implementation of the TRO that was issued by Judge Nina G. Antonio-Valenzuela of Branch 28 of the Manila Regional Trial Court on application by Legacy’s Celso de los Angeles.  It was a close call since her order was in turn affirmed by the Court of Appeals' 8th Division chaired by Justice Bienvenido L. Reyes and with Justices Vicente Q. Roxas as senior member and Justice Apolinario D. Bruselas as ponente. Had it not been for the timely intervention of the Supreme Court that neutralized the restraining effect of the TRO, the Bangko Sentral would have been reduced to watching helplessly on the sidelines as more people continue to be victimized by De Los Angeles’ ponzi scheme. 

It is incidents like the De los Angeles’ getting a TRO to restrain legitimate and bona fide measures of regulators that give TRO a bad name. Much it has been abused. But, actually, the TRO is a good device, similar to a momentary time out called in the course of a basketball game that gives the parties in a litigation time to pause and rethink.


Although already in vogue in litigation practice by the time great Jesus Y. Perez, Justice of the Court of Appeals, delivered his lecture touching on it at the UP Law Center series, “Law Practice for the Senior Lawyer” in 1968, only in 1982, on April 16, when Batasang Pambansa Blg. 224 took effect, did the TRO become part of the law of the land. 

Prior to BP 224, all that courts and practitioners had to rely on were the broad descriptions of the remedy found in the encyclopedias of American law from which we imported the idea.  Still, the purpose was clear, namely, to restrain a defendant for a brief period to maintain the status quo-- pending a hearing on and resolution of the petitioner’s application for a more stable remedy called preliminary injunction.  Its laudable function, like all good things, however became subjected to so much abuse that lawmakers considered it opportune in 1982 to formally recognize the practice and ring fence it with limitations.

The sponsorship speech of Parliamentary Bill No. 293 delivered by then Batasang Pambansa Member, Honorable Hilario Davide, Jr., described the situation that brought about BP 224.  Davide observed, “Presently, there is no specific provision in the Rules of Court or any statute regulating the issuance of restraining orders…While in some instances the issuance may be justified by reason of the urgency or the necessity to preserve the status quo or to prevent irreparable damage or injury, the fact remains that great injustices have resulted in the issuance of restraining orders.” 

Among those injustices, noted Davide, were the fact that restraining orders are issued without a bond being posted by the applicant to answer for the damages that being restrained may cause the defendant leaving him no recourse should damage in fact be suffered.  To the same result, the prevailing applicant usually employs all strategies to delay the hearing on the preliminary injunction thus unduly prolonging the period of such informal arrangement.

This legislative intent was duly recognized by the courts.  The Supreme Court in 1990 observed that “…Batas Pambansa Blg.224 was adopted precisely as a reaction to the indiscriminate issuance of writs of preliminary injunction which, not infrequently, converted the writ from an instrument in furtherance of justice to a shield for injustice.” (Aquino v. Luntok, 184 SCRA 177, 185)

Blaming both the bar and bench, the Supreme Court added, “This was made possible not only by unscrupulous lawyers and adventurous litigants but also by idle and corrupt judges who tolerated the improvident and ex parte issuance thereof and, in the case of TROs, apparently oblivious of or insensitive to the fact that these were not conditioned on the posting of bonds to indemnify the parties against whom they were issued.” (Ibid.)

The then free-for-all attitude was well expressed elsewhere in Finley Peter Dunne’s Mr. Dooley’s Philosophy: Casual Observations, “I care not who makes th’ laws iv a nation iv I can get out an injunction.”

Legal reforms come slowly but they do come eventually.  Several refinements were later made on BP Blg. 224 and as things stand now, only if it appears from the facts alleged in the affidavits applying for preliminary injunction or in the verified application  that “great or irreparable injury” would result to the applicant before the matter could be heard on notice may the court issue ex parte a TRO.

 The “T” in “TRO” is now given an exact definition, i.e., for the RTC 20 days from service on the party or person to be restrained.  The Court must also order the party enjoined to show cause, at a specified time and place within those 20 days, why the injunction applied for should not be granted.  The date of the hearing cannot be too near the end of the 20 days since the court is required to rule on the application for preliminary injunction within the same period. 

The proceedings are further expedited in cases of “extreme urgency” and “when the applicant will suffer grave injustice and irreparable injury.”  In that situation, the executive judge of a multiple-sala court or the presiding judge of a single-sala court is authorized to issue ex parte a TRO good for 72 hours from issuance.  Within those 72 hours, preceded by immediate service of summons and supporting documents to the defendant, the judge before whom the case is pending shall conduct a summary hearing to determine whether the TRO ought to be extended for the another 17 days, during which the application for a preliminary injunction can be heard and ruled upon.

The Supreme Court’s resolution on the propriety of the TRO issued by Judge Nina G. Antonio-Valenzuela of Branch 28 of the Manila Regional Trial Court is in every court observer’s What to Watch For List since the case is admittedly of first impression.  It is expected to shed light on the statutory immunity granted by R.A. No. 7653, the BSP Charter against restraining orders and injunctions.

The last paragraph of Sec. 25 of the BSP Charter says that “no restraining order or injunction shall be issued by the court enjoining the Bangko Sentral from examining any institution subject to supervision or examination by the Bangko Sentral, unless there is convincing proof that the action of the Bangko Sentral is plainly arbitrary and made in bad faith…” 

From what media report, Celso de Los Angeles did not win an injunction against the Bangko Sentral going into his Legacy Banks and examining their books and operations.  Such examinations were in fact already conducted and therefore could no longer be enjoined. What he reportedly did get was an injunction against the submission by the examining department of its report to the Monetary Board.  De Los Angeles’ ground for seeking the injunction, from his own account, is that the report was not discussed with him prior to the examining department’s attempt to submit it to the Monetary Board.

The central issue of substance that the banking community is waiting for the Supreme Court to resolve is whether or not the Bangko Sentral’s immunity from injunction, justified as it is by the need to effectively supervise the operations of banks and exercise regulatory power over them, covers all stages of examination, from the beginning, i.e., from the time the Monetary Board resolves to authorize the examination, regular or special, all the way to the end, i.e., up to the Monetary Board receiving the results of the examination conducted by the Bangko Sentral’s  Supervision and Examination Sector.

         A liberal construction of the relevant provision in Sec. 25 would confine objections of the petitioning bank to the grounds of “plainly arbitrary and made in bad faith”; a narrow one would reveal a crack in the regulatory framework that Celso De Los Angeles may have been able to exploit to his advantage.