695 Phil. 481
LEONARDO-DE CASTRO, J.:
[Petitioner] failed to show xxx [any] act by [respondent] [that constitutes] an injurious invasion of its rights stemming from a contract it signed with another party coupled by the limited scope of the transaction of [respondent] and its customers.
Hence, [petitioner] cannot be entitled to an injunction in the instant case. It has not shown that it has a right which must be protected by this court, and it failed to show also that defendant is guilty of acts which [violate] its rights.”
x x x x
WHEREFORE, premises considered, the complaint filed by [petitioner] is hereby ordered DISMISSED.[24]
Firstly, in Yu, the High Court did not make a final determination of the rights and obligations of the parties in connection with the exclusive sales agency agreement of wall covering products between Philip Yu and the House of Mayfair in England. Said case reached the High Court in connection with the incident on the preliminary injunction and the main suit for injunction was still pending with the Regional Trial Court of Manila. The High Court categorically stated that their “observations” do not in the least convey the message that they “have placed the cart ahead of the horse, so to speak.” This is the reason why in the dispositive portion of said case, the High Court remanded the case to the court of origin.
In the instant case, the trial court already rendered its assailed Decision which found that [petitioner] has not shown that it has a right which must be protected and that [respondent] is not guilty of acts which violate [petitioner’s] right. Thus, We fail to see how the High Court’s “observations” in the Yu case should be cited as a controlling precedent by [petitioner].
Secondly, in Yu, it appears that Philip Yu has an exclusive sales agency agreement with the House of Mayfair in England since 1987 to promote and procure orders for Mayfair wall covering products from customers in the Philippines. Despite [the] said exclusive sales agency agreement, Yu’s dealer, Unisia Merchandising Co., Inc., engaged in a sinister scheme of importing the same goods, in concert with the FNF Trading in West Germany, and misleading the House of Mayfair into believing that the wallpaper products ordered via said trading German firm were intended for shipment to Nigeria, although they were actually shipped to and sold in the Philippines.
In the case at bar, [respondent], who is a registered locator doing business at the Parkson Duty Free Shop within the [CSEZ] administered by the Clark Development Corporation, was not a dealer of [petitioner] nor was there any business dealing or transaction at all between [petitioner] and [respondent]. In fact, it was established in evidence, through the testimony of Adrian Phillimore, [petitioner]’s very own witness, that respondent was already selling imported Castrol GTX products even prior to the execution of the Variation to Marketing and Distribution Agreement dated 23 July 1998 between [petitioner] and Castrol Limited, a corporation established under the laws of England. Further, [petitioner] failed to show that [respondent’s] duty free importation of said Castrol GTX products which were sold at its Parkson Duty Free Shop was a sinister scheme employed by [respondent] in order to by-pass [petitioner].
Thirdly, in Yu, the House of Mayfair of England, in its correspondence to FNF Trading of West Germany, even took the cudgels for Philip Yu in seeking compensation for the latter’s loss as a consequence of the scheme of the dealer Unisia Merchandising Co., Inc., in concert with FNF Trading.
In the case at bar, [petitioner] did not allege in its Complaint nor prove who the supplier of [respondent] was with respect to said Castrol GTX products sold in Parkson Duty Free Shop. There is no showing that [respondent] sought Castrol Limited of England in order to procure Castrol GTX products for retailing inside the duty free shop of [respondent] within the Clark Special Economic Zone, with the intention of violating the purported exclusive marketing and distributorship agreement between [petitioner] and Castrol Limited of England. Neither do We find any showing that Castrol Limited of England took up the cudgels for [petitioner], by corresponding with [respondent], in connection with the latter’s retailing of Castrol GTX products with red caps in its duty free shop at the Clark Special Economic Zone.
Fourthly, in Yu, the House of Mayfair in England was duped into believing that the goods ordered through FNF Trading of West Germany were to be shipped to Nigeria only, but the goods were actually sent to and sold in the Philippines. Considering this circumstance, the Supreme Court stated that “(a) ploy of this character is akin to the scenario of a third person who induces a party to renege on or violate his undertaking under a contract, thereby entitling the other contracting party to relief therefrom (Article 1314, New Civil Code).”
In the instance case, there is no evidence that any party was duped and that [respondent], who is not a privy to the marketing and distribution agreement between [petitioner] and Castrol Limited of England, employed any sinister scheme or ploy at all. We do not find any showing of a scenario whereby [respondent] induced any party to renege or violate its undertaking under said agreement, thereby entitling [petitioner] to injunctive relief and damages. Thus, [petitioner’s] insistence that [respondent’s] obligation to [petitioner] does not arise from contract, but from law, which protects parties to a contract from the wrongful interference of strangers, does not have any factual or legal basis.
x x x x
Considering the foregoing findings, [petitioner] is not entitled to a permanent injunction and damages. [Petitioner] failed to establish the existence of a clear legal right to be protected and the acts of [respondent] which are violative of said right. In the absence of any actual, existing, clear legal right to be protected, injunction does not lie and consequently, there is no ground for the award of damages as claimed by [petitioner].
In any event, We take note, at this juncture, that [respondent] is a registered locator operating the Parkson Duty Free Shop within the confines of the Clark Special Economic Zone. In said duty free operation, goods sold within the duty free shops are imported duty free and also resold as such.
Section 1 of Executive Order No. 250, as amended, provides:SECTION 1. Allowable Areas for Duty Free Shop Operation. - The moratorium on the establishment of duty free stores/outlets imposed by E.O. No. 140 is hereby lifted. Accordingly, duty free stores/outlets, whether operated by the government and/or private entities, may be established within the country’s international ports of entry subject to the terms and conditions set forth in E.O. No. 46, as amended, and in the secured and fenced-in areas of special economic zones/freeports pursuant to the provisions of the Bases Conversion and Development Act of 1992 (RA 7227), establishing the Subic Special Economic Zone/Freeport Zone, Clark Special Economic Zone, John Hay Special Economic Zone, Poro Point Special Economic and Freeport Zone; RA 7922 (Establishing the Sta. Ana, Cagayan Special Economic Zone and Freeport); RA 7903 (Creating the Zamboanga City Special Economic Zone and Freeport).
x x x x
WHEREFORE, premises considered, the appeal is DENIED for lack of merit. The Decision dated 15 December 2002 of the Regional Trial Court of Angeles City, Branch 57 in Civil Case No. 9301 is AFFIRMED. Costs against [petitioner].[25]
Another circumstance which respondent court overlooked was petitioner’s suggestion, which was not disputed by herein private respondent in its comment, that the House of Mayfair in England was duped into believing that the goods ordered through the FNF Trading were to be shipped to Nigeria only, but the goods were actually sent to and sold in the Philippines. A ploy of this character is akin to the scenario of a third person who induces a party to renege on or violate his undertaking under a contract, thereby entitling the other contracting party to relief therefrom (Article 1314, New Civil Code). The breach caused by private respondent was even aggravated by the consequent diversion of trade from the business of petitioner to that of private respondent caused by the latter’s species of unfair competition as demonstrated no less by the sales effected inspite of this Court’s restraining order. This brings Us to the irreparable mischief which respondent court misappreciated when it refused to grant the relief simply because of the observation that petitioner can be fully compensated for the damage. x x x.[29] (Emphasis supplied.)
Injunction is a judicial writ, process or proceeding whereby a party is ordered to do or refrain from doing a certain act. It may be the main action or merely a provisional remedy for and as an incident in the main action.
The main action for injunction is distinct from the provisional or ancillary remedy of preliminary injunction which cannot exist except only as part or an incident of an independent action or proceeding. As a matter of course, in an action for injunction, the auxiliary remedy of preliminary injunction, whether prohibitory or mandatory, may issue. Under the law, the main action for injunction seeks a judgment embodying a final injunction which is distinct from, and should not be confused with, the provisional remedy of preliminary injunction, the sole object of which is to preserve the status quo until the merits can be heard. A preliminary injunction is granted at any stage of an action or proceeding prior to the judgment or final order. It persists until it is dissolved or until the termination of the action without the court issuing a final injunction. (Emphasis supplied, citations omitted.)
[U]pon the satisfaction of two requisites, namely: (1) the existence of a right to be protected; and (2) acts which are violative of said right. In the absence of a clear legal right, the issuance of the injunctive relief constitutes grave abuse of discretion. Injunction is not designed to protect contingent or future rights. Where the complainant’s right is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof of actual existing right is not a ground for an injunction.[31]
Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent.[28] Article 28 of the Civil Code provides: