G.R. No. 117964 March 28, 2001
Placido O. Urbanes, Jr., petitioner, vs. Court of Appeals, Social Security System, Hector B. Inductivo, in his capacity as Chairman of the Purchase and Bidding Committee, Godofredo S. Sison, Isabelo I. Liscano, Aurora E.L. Ortega, Susana K. Inciong, Edgar B. Solilapsi and Cecilia C. Canlas, as Members, respondents.

FACTS

Petitioner Placido O. Urbanes, Jr., owner of Catalina Security Agency (CATALINA), had a security services contract with the Social Security System (SSS) extended month-to-month after its initial term. Following a public bidding in 1990, the contract was awarded to Bolinao Security. CATALINA sued, alleging irregularities, and obtained a preliminary injunction from the trial court. The SSS’s petitions to the Court of Appeals to annul this injunction were dismissed. The parties eventually entered into a compromise agreement, approved by the trial court, wherein the SSS agreed to conduct a new public bidding with CATALINA as a qualified participant and to let CATALINA continue services until a valid award was made.
Pursuant to the compromise, the SSS conducted a new bidding and awarded the contract to Jaguar Security. CATALINA, convinced the bid evaluation was fraudulent and arbitrary, filed a new action for damages and injunction before the Regional Trial Court (RTC). The RTC issued a writ of preliminary injunction, enjoining the SSS from terminating CATALINA’s services and from proceeding with the award to Jaguar. The SSS filed a petition for certiorari with the Court of Appeals, which granted the petition, declared the RTC’s orders and writ null and void, and ordered the dismissal of the main civil case.

ISSUE

Whether the Court of Appeals committed reversible error in nullifying the RTC’s writ of preliminary injunction and in dismissing the main civil case.

RULING

Yes, the Court of Appeals erred. The Supreme Court held that the issuance of a preliminary injunction rests on the sound discretion of the trial court, and its exercise will not be interfered with unless there is manifest abuse. A preliminary injunction is a provisional remedy, a preservative measure to protect the rights of a litigant pending the final adjudication of the main case. For its issuance, the applicant must show a clear legal right, a violation of that right, and the urgent necessity for the writ to prevent serious damage.
The Supreme Court found that the RTC did not commit grave abuse of discretion. The compromise agreement created an interim right for CATALINA to continue providing services until a valid award was made from a new bidding. CATALINA’s allegations of fraud and arbitrariness in the new bidding, if proven, could constitute a violation of its rights under that agreement, justifying injunctive relief to preserve the status quo. The SSS was given its day in court to oppose the application, and the RTC’s evaluation of the evidence for the provisional remedy was within its discretion.
Furthermore, the Court of Appeals overstepped its jurisdiction by dismissing the main case. Even assuming the injunction was improperly issued, a certiorari petition against an interlocutory order only questions that specific order. The appellate court’s authority was limited to annulling the injunction, not to disposing of the entire case on the merits, which remains for the trial court to hear and decide. Thus, the case was remanded to the RTC for further proceedings.