SECOND DIVISION

[G.R. No. 199324. January 7, 2013.]

EXECUTIVE SECRETARY, SECRETARY OF FINANCE, COMMISSIONER

OF CUSTOMS, DISTRICT COLLECTOR OF CUSTOMS, Port of Aparri,
Cagayan, DISTRICT COLLECTOR OF CUSTOMS, Port of San
Fernando, La Union, and HEAD OF THE LAND TRANSPORTATION
OFFICE, petitioners , vs . FORERUNNER MULTI RESOURCES, INC.,
respondent .
DECISION

CARPIO, J :
The Case

We review 1 a ruling 2 of the Court of Appeals enjoining the government from enforcing, litis
pendentia, a ban on the importation of used motor vehicles.

The Facts

Executive Order No. 156 (EO 156), 3 issued by President Gloria Macapagal-Arroyo
(President Arroyo) on 12 December 2002, imposes a partial ban on the importation of used
motor vehicles. 4 The ban is part of several measures EO 156 adopts to "accelerate the sound
development of the motor vehicle industry in the Philippines." 5 In Executive Secretary v.
Southwing Heavy Industries, Inc. and two related petitions 6 (collectively, Southwing), we found
EO 156 a valid executive issuance enforceable throughout the Philippine customs territory,
except in the Subic Special Economic and Freeport Zone in Zambales (Subic Freeport) by virtue
of its status as a "separate customs territory" under Republic Act No. 7227. 7

Respondent Forerunner Multi Resources, Inc. (respondent), a corporation engaged in the

importation of used motor vehicles via the ports of Aparri, Cagayan and San Fernando, La Union,
sued the government in the Regional Trial Court of Aparri, Cagayan (trial court) to declare invalid EO
156, impleading petitioner public officials as respondents. 8 Respondent attacked EO 156 for (1)
having been issued by President Arroyo ultra vires; (2) trenching the Due Process and Equal
Protection Clauses of the Constitution; and (3) having been superseded by Executive Order No. 418
(EO 418), 9 issued by President Arroyo on 4 April 2005, modifying the tariff rates of imported used
motor vehicles. Respondent sought a preliminary injunctive writ to enjoin, litis pendentia, the
enforcement of EO 156.

The Ruling of the Trial Court

Acting on respondent's application for preliminary injunctive remedy, the trial court
granted relief, initially by issuing a temporary restraining order followed by a writ of preliminary
injunction granted in its Order of 27 November 2008. 10 On petitioners' motion, however, the trial
court reconsidered its Order and lifted the injunctive writ on 7 July 2010. The trial court grounded
its ruling on Southwing which it considered as negating any "clear and unmistakable legal right" on
the part of respondent to receive the "protection of a writ of preliminary injunction."

Respondent elevated the case to the Court of Appeals in a certiorari petition.

The Ruling of the Court of Appeals

The Court of Appeals granted certiorari, set aside the trial court's Order of 7 July 2010
and reinstated its Order of 27 November 2008. In the appellate court's estimation, the trial court
committed grave abuse of discretion in lifting the preliminary injunctive writ it earlier issued. The
appellate court held that the implementation of EO 156 "would put petitioner in a financial crisis."
12
As authority, the appellate court invoked by analogy this Court's ruling in Filipino Metals
Corporation v. Secretary of the Department of Trade and Industry .
 Petitioners are now before this Court charging the Court of Appeals with having committed
an error of law in reinstating the preliminary injunctive writ for respondent. They argue that
Southwing controls the case, precluding the Court of Appeals from recognizing a clear legal right of
respondent to import used motor vehicles.

Respondent counters that the doctrinal import of Southwing was weakened by the
subsequent issuance of EO 418, allegedly repealing EO 156. Respondent invokes our minute
Resolution of 15 November 2010 denying the petition in G.R. No. 187475 (Executive Secretary v.
Feniz [CEZA] International, Inc.) as judicial confirmation of the supposed repeal.

As prayed for by petitioners, we issued a temporary restraining order on 16 January 2012

against the Court of Appeals' ruling.

The Issue

The question is whether the Court of Appeals erred in granting preliminary injunctive relief to
respondent to enjoin enforcement of EO 156.

The Court's Ruling

We hold that it was error for the Court of Appeals to grant preliminary injunctive relief to
respondent. We set aside the Court of Appeals' ruling and reinstate the trial court's Order of 7 July
2010.

Respondent Without Clear Legal Right to

Import Used Motor Vehicles

It is a deeply ingrained doctrine in Philippine remedial law that a preliminary injunctive

writ under Rule 58 14 issues only upon a showing of the applicant's "clear legal right" 15 being
violated or under threat of violation by the defendant. 16 "Clear legal right," within the meaning
of Rule 58, contemplates a right "clearly founded in or granted by law." Any hint of doubt or
dispute on the asserted legal right precludes the grant of preliminary injunctive relief. For suits
attacking the validity of laws or issuances with the force and effect of law, as here, the applicant
for preliminary injunctive relief bears the added burden of overcoming the presumption of
validity inhering in such laws or issuances. These procedural barriers to the issuance of a
preliminary injunctive writ are rooted on the equitable nature of such relief, preserving the
status quo while, at the same time, restricting the course of action of the defendants even
before adverse judgment is rendered against them.

Respondent sought preliminary injunctive relief as ancillary to its principal cause of action to
invalidate EO 156. Respondent's attack on EO 156, however, comes on the heels of Southwing
where we passed upon and found EO 156 legally sound, albeit overextended in application. We
found EO 156 a valid police power measure addressing an "urgent national concern":

There is no doubt that the issuance of the ban to protect the domestic
industry is a reasonable exercise of police power. The deterioration of the local
motor manufacturing firms due to the influx of imported used motor vehicles is an
urgent national concern that needs to be swiftly addressed by the President. In the
exercise of delegated police power, the executive can therefore validly proscribe the
importation of these vehicles. . . .

The narrow ambit of this review precludes us from passing upon the merits of the
constitutional and administrative issues respondent raised to attack EO 156. Nevertheless, we
have no hesitation in holding that whatever legal right respondent may possess vis à vis the
operation of EO 156, we find such legal right to be doubtful by force of the Southwing
precedent. Until reversed or modified by this Court, Southwing makes conclusive the
presumption of EO 156's validity. Our holding is bolstered by respondent's failure to remove its
case from the confines of such ruling.
 In arriving at a contrary conclusion, the Court of Appeals dwelt on the "grave and
irremediable" financial losses respondent was poised to sustain as a result of EO 156's
enforcement, finding such prejudice "inequitable." 21 No doubt, by importing used motor
vehicles in contravention of the ban under EO 156, respondent risked sustaining losses. Such
risk, however, was self-imposed. Having miscalculated its chances, respondent cannot look to
courts for injunctive relief against self-inflicted losses which are in the nature of damnum
absque injuria. Injunction will not issue on the mere possibility that a litigant will sustain
damage, without proof of a clear legal right entitling the litigant to protection.

Nor does our ruling in Filipino Metals furnish doctrinal support for respondent. We
sustained the trial court's issuance of a preliminary injunctive writ in that case to enjoin the
enforcement of Republic Act No. 8800 (RA 8800) delegating to a cabinet member the power to
adopt measures to address prejudicial importations in contravention of relevant international
agreements. We grounded our ruling on the fact that the petitioners, which principally argued
that RA 8800 violates Article VI, Section 28 (2) of the Constitution (limiting Congress' delegation
of the power to fix trade quotas to the President), "have established a strong case for the
unconstitutionality of [RA 8800]." 23 In short, the petitioners in Filipino Metals discharged the
burden of overcoming the presumption of validity accorded to RA 8800, warranting the issuance
of a preliminary injunctive writ in their favor. Southwing forecloses a similar finding for
respondent.

Lastly, we find no merit in respondent's submission that EO 418 repealed EO 156,

removing the legal bar to its importation of used motor vehicles. The question of whether EO
418 repealed EO 156 was already settled in our Resolution dated 22 August 2006 denying
reconsideration of our ruling in Southwing. The respondents in those cases, importers of
used motor vehicles via the Subic Freeport, had espoused the theory presently advanced by
respondent. We rejected the proffered construction of the two issuances:

The subsequent issuance of E.O. No. 418 increasing the import duties on used
motor vehicles did not alter the policy of the executive department to prohibit the
importation of said vehicles. . . . [T]here is nothing in the text of E.O. No. 418 which
expressly repeals E.O. No. 156. The Congress, or the Office of the President in this
case, is presumed to know the existing laws, such that whenever it intends to
repeal a particular or specific provision of law, it does so expressly. The failure to
add a specific repealing clause indicates that the intent was not to repeal previous
administrative issuances. . . .

[E].O. No. 156 is very explicit in its prohibition on the importation of used
motor vehicles. On the other hand, E.O. No. 418 merely modifies the tariff and
nomenclature rates of import duty on used motor vehicles. Nothing therein
expressly revokes the importation ban. (Italicization supplied)

Contrary to respondent's claim, our minute Resolution dated 15 November 2010

denying the petition in Feniz did not have the effect of modifying much less reversing our
holding in Southwing. The petition in Feniz sought a review of the ruling of the trial court
striking down Section 2 of EO 418. The trial court found such provision, which imposed
additional specific duty of P500,000 on each imported used motor vehicle, void for having
been issued by President Arroyo ultra vires. Neither the validity of EO 156 nor the alleged
repeal by EO 418 of EO 156 was the lis mota in Feniz.

WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 27

June 2011 and the Resolution dated 14 November 2011 of the Court of Appeals. The
Order dated 7 July 2010 of the Regional Trial Court of Aparri, Cagayan, Branch 10, is
REINSTATED . The temporary restraining order issued on 16 January 2 012 is made .
PERMANENT

SO ORDERED.