Case Digest: Stradcom v. Judge Laqui

G.R. No. 172712 : March 21, 2012

STRADCOM CORPORATION, Petitioner, v. HONORABLE HILARIO L. LAQUI as Acting Presiding Judge of the Regional Trial Court of Quezon City, Branch 97 and DTECH MANAGEMENT, INC., Respondents.



On 19 June 2003, respondent DTech Management Incorporated (DTECH), filed a complaint for injunction, with prayer for Issuance of a Preliminary Injunction and Temporary Restraining Order against the LTO. The complaint alleged, among other matters that, on 1 July 2002, a Memorandum of Understanding (MOU) was executed by the LTO, IC and ISAP which affirmed, among other matters, DTECHs accreditation and qualification as an entity that could effectively and efficiently provide the required IT services in the verification end of the COCAS.Consistent with the MOU, the LTO, IC, ISAP and DTECH also executed a Memorandum of Agreement (MOA) on the same date, specifying the terms and conditions of DTECHs engagement as the sole IT service provider for the verification of COC for a term of five (5) years commencing on July 24, 2002 until July 24, 2007.Under the MOA, verification was defined as the act of having an authenticated COC validated through the process of the on-line verification via the internet, SMS and other present day information technology and telecommunications applications.

DTECH further claimed that, on 17 January 2003, LTO wrote ISAP, suggesting the termination of DTECHs services in view of its supposed failure to interconnect with the LTO IT Motor Vehicle Registration System (LTO IT MVRS) owned and operated by STRADCOM under a Build Operate and Own (BOO) contract with the Department of Transportation and Communication (DOTC)/LTO. Accordingly, LTOs termination of its services and cancellation of the COCAS is violative of its contractual rights, the law as well as principles of fairness and due process.Since it was never a part of the parties agreement, DTECHs alleged failure to interconnect with LTO MVRS is neither a valid ground for the termination of its services nor a reason to give undue advantage to STRADCOM.

On June 25, 2003, the RTC issued an order granting DTECHs application for the issuance of a TRO against the termination of the implementation of the parties 1 July 2002 MOA. LTO filed an urgent motion to dismiss dated 8 July 2003, with opposition to DTECHs application for a writ of preliminary injunction for lack of showing of a right in ease and the resultant irreparable injury from the act complained against.

On 1 August 2003, the RTC issued two (2) resolutions, denying LTO's motion to dismiss and granting DTECHs application for a writ of preliminary injunction which was deemed necessary pending the determination of the validity of the MOAs termination at the trial of the case on the merits. Upon DTECHs posting of the bond which was fixed atP1,500,000.00, the RTC went on to issue the corresponding writ of preliminary prohibitory injunction dated 4 August 2003, restraining LTO from implementing the termination of the MOA.

On 6 August 2003, STRADCOM filed a motion for leave to admit its answer-in-intervention, manifesting its legal interest in the matter in litigation and its intent to unite with LTO in resisting the complaint.In its attached answer-in-intervention, STRADCOM averred that, on 26 March 1998, it executed with the DOTC a BOO Agreement for the implementation of infrastructure facilities in accordance with R.A. No. 6957, as amended by R.A. 7718.Having been authorized to design, construct and operate the IT system for the DOTC/ LTO, STRADCOM argued that the 1 July 2002 MOU and MOA breached the BOO Agreement which included the verification of COCs granted to DTECH without the requisite public bidding.With the latter's failure to comply with its contractual undertakings despite repeated warnings, STRADCOM claimed that LTO validly terminated the MOA on 26 May 2003 and effectively mooted DTECHs cause of action for injunction.STRADCOM likewise called attention to the prohibition against the issuance of a TRO and/or preliminary injunction against national infrastructure projects like those Covered by R.A. Nos. 6957 and 7718.

On 21 August 2003, LTO moved for the reconsideration of the RTCs 1 August 2003 Resolution.With the admission of its answer-in-intervention, STRADCOM, in turn, filed its 15 October 2003 motion for the dissolution of the preliminary injunction issued in the case.On 3 March 2004, the RTC issued a resolution, denying the motions filed by LTO and STRADCOM. nied for lack of merit in the RTCs Resolution dated 16 August 2004.

Aggrieved, STRADCOM filed the Rule 65 petition forcertiorariand prohibition which was dismissed for lack of merit in the herein assailed Decision dated 8 May 2006.In affirming the RTCs Resolutions dated 3 March 2004 and 16 August 2004, the CAs ruled that the writ of preliminary prohibitory injunction issueda quowas directed against the pre-termination of the 1 July 2002 MOA and not STRADCOMs BOO Agreement with the LTO.Finding that the scope of the BOO Agreement had yet to be threshed out in the trial of the case on the merits, the CA discounted the grave abuse of discretion STRADCOM imputed against the RTC which, in issuing the injunctive writ, was found to be exercising a discretionary act outside the ambit of a writ of prohibition.Absent showing of manifest abuse, the CA desisted from interfering with the RTCs exercise of its discretion in issuing the injunctive writ as it involved determination of factual issues which is not the function of appellate courts.


Whether or not the RTCs grant of the writ of preliminary injunction sought by DTECH amounted to grave abuse of discretion?


The petition is denied.

POLITICAL LAW: moot and academic

Where a case has become moot and academic, there is no more justiciable controversy, so that a declaration thereon would be of no practical value.A case becomes moot and academic when,by virtue of supervening events, there is no more actual controversy between the parties and no useful purpose can be served in passing upon the merits.Since they are constituted to pass upon substantial rights, courts of justice will not consider questions where no actual interests are involved.As a rule, courts decline jurisdiction over such cases or dismiss them on the ground of mootness.

Records show that STRADCOMs petition assailing the CAs decision which upheld the validity of the writ of preliminary injunction issued by the RTC had been rendered moot and academic.It is beyond dispute, after all, that DTECH commenced its main action for injunction for no other purpose than to restrain the LTO from putting into effect its termination of the 1 July 2002 MOA and, with it, DTECHs services as sole IT provider of the verification aspect of the COCAS.

As may be gleaned from the MOA, however, the engagement of DTECH as exclusive IT service provider for the verification aspect of the COCAS was only for a limited period of five years.In specifying the term of the agreement, Section 2 of the MOA provides that, (t)he engagement of [DTECH] by ISAP as the sole IT service provider for the verification of COCs shall be five (5) years commencing on July 24, 2002 until July 24, 2007, renewable for the same period of time under such terms and conditions mutually acceptable, subject to the provisions of sections 7and 8 hereof.Having been prompted by LTOs supposed wrongful pre-termination of the MOA on26 May 2003, it cannot, therefore, be gainsaid that DTECHs cause of action for injunction had been mooted by the superveningexpiration of the term agreed upon by the parties.

Considering that DTECHs main case has been already mooted, it stands to reason that the issue of the validity of the writ of preliminary injunction issued by the RTC had likewise been mooted.Indeed, a preliminary injunction is a provisional remedy, an adjunct to the main case subject to the latter's outcome.It is resorted to by a litigant for the preservation or protection of his rights or interest and for no other purpose during the pendency of the principal action.Under the above-discussed factual milieu, the Court finds no more reason to determine whether or not the RTCs grant of the writ of preliminary injunction sought by DTECH amounted to grave abuse of discretion.

While courts should abstain from expressing its opinion where no legal relief is needed or called for,we are well aware of the fact that the moot and academic principle is not a magical formula that should automatically dissuade courts from resolving a case.Accordingly, it has been held that a court will decide a case, otherwise moot and academic, if it finds that:(a) there is a grave violation of the Constitution; (b) the situation is of exceptional character and paramount public interest is involved; (c) the constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public; and (d) the case is capable of repetition yet evading review. None of these exceptions is, however, present in this case.