DPWH vs. City Advertising Ventures Corporation

A writ of preliminary injunction is properly issued where the applicant presents prima facie evidence of an existing right, a material and substantial invasion of that right, and an urgent necessity for the writ to prevent irreparable injury; the applicant need not conclusively establish its rights, as the writ merely preserves the status quo pending full adjudication on the merits. The RTC did not gravely abuse its discretion in issuing the writ because respondent's lease agreement and local government permits constituted an ostensible property right, and petitioners failed to demonstrate compliance with the due process safeguards of Administrative Orders Nos. 160 and 160-A before dismantling respondent's banners.

Respondent City Advertising Ventures Corporation is a company engaged in the advertising business, putting up banners and signages within Metro Manila. On December 28, 2005, it entered into a lease agreement with MERALCO Financing Services Corporation for the use of 5,000 Manila Electric Company (MERALCO) lampposts to display advertising banners, and obtained sign permits from the local government units of Quezon City, Pasay, and Makati. After Typhoon Milenyo struck in September 2006 and caused several billboards to collapse, former President Gloria Macapagal-Arroyo issued Administrative Order No. 160 on October 4, 2006, directing the Department of Public Works and Highways to conduct field investigations, evaluations, and assessments of billboards posing hazards and to abate and dismantle the same. Administrative Order No. 160-A was issued six days later, supplementing AO No. 160 and specifying legal grounds and procedures for the prohibition and abatement of billboards constituting public nuisance.

Respondent City Advertising Ventures Corporation is a company engaged in the advertising business, including the installation of banners and signages within Metro Manila. On December 28, 2005, it entered into a lease agreement with MERALCO Financing Services Corporation — described as the sole MERALCO-authorized marketing and managing firm for MERALCO-owned streetlight posts — for the use of 5,000 lampposts to display advertising banners. Pursuant to this contract, respondent obtained sign permits from the Quezon City Department of Engineering, Office of the Building Official, Signboard Permit Section, as well as similar permits from the cities of Pasay and Makati. It likewise obtained permits for setting up pedestrian overpass banners in Quezon City.

In September 2006, Typhoon Milenyo struck Metro Manila, and strong winds blew down several billboards. On October 4, 2006, former President Gloria Macapagal-Arroyo, through Executive Secretary Eduardo R. Ermita, issued Administrative Order No. 160, directing the Department of Public Works and Highways to conduct field investigations, evaluations, and assessments of all billboards, determine those that are hazardous and pose imminent danger to the public, and abate and dismantle the same. Section 1 of AO No. 160 laid out a sequential process: DPWH was tasked to conduct field inspections, make evaluations and assessments, issue certifications as to billboards found hazardous and violative of existing standards, furnish copies of such certifications to concerned local government units, and only then abate and dismantle the billboards. Section 2 directed the Metropolitan Manila Development Authority and local government units to give full support and assistance. Six days later, on October 10, 2006, Administrative Order No. 160-A was issued, supplementing AO No. 160 and specifying legal grounds and procedures for the prohibition and abatement of billboards constituting public nuisance. Section 4 of AO No. 160-A, proceeding from Articles 694, 695, and 699 of the Civil Code, identified the remedies available to DPWH: prosecution under the Revised Penal Code or local ordinance, a civil action, or abatement without judicial proceedings if the local Building Official determines this is the best remedy.

On October 6, 2006, DPWH announced that it would begin dismantling billboards. During its operations, it removed 250 of respondent's lamppost banners and frames, 12 pedestrian overpass banners, 17 pedestrian overpass frames, and 36 halogen lamps — all within a span of less than two weeks. Petitioners did not dispute these figures, and nothing in the record indicated they intended to restrict themselves to these items.

Respondent filed its Complaint for "Violation of [Administrative Order No.] 160, Tort, [and] Injunction with Prayer for [Temporary Restraining Order], Preliminary Injunction, and Preliminary Mandatory Injunction" on October 18, 2006, docketed as Civil Case No. 06-899 before Branch 66 of the Regional Trial Court of Makati City. Respondent asserted that AO No. 160 pertained specifically to "billboards" — large panels carrying outdoor advertising — and not to small advertising fixtures such as its signages and banners, and that DPWH exceeded its authority in dismantling them. It claimed that petitioners seriously impeded its legitimate business and unlawfully deprived it of property, income, and income opportunities without due process of law, in violation of Articles 19, 20, 21, and 32 of the Civil Code, and impaired its contractual obligations.

After conducting summary hearings on October 25 and 30, 2006, the RTC issued a temporary restraining order on October 31, 2006, enjoining petitioners for twenty days from further removing, dismantling, and confiscating respondent's banners. The RTC noted that despite the opportunity extended to petitioners to present evidence of compliance with the procedural requirements of AO No. 160, AO No. 160-A, and Article 699 of the Civil Code, petitioners failed to show any such evidence. On November 21, 2006, the RTC granted respondent's prayer for a writ of preliminary injunction upon the filing of a ₱100,000 bond, ordering petitioners to cease and desist from further removing, dismantling, and confiscating respondent's lamppost and pedestrian overpass banners. Petitioners filed an Omnibus Motion for Reconsideration and Clarification and for Dissolution of the Writ, asserting that respondent failed to show a clear legal right worthy of protection and did not stand to suffer grave and irreparable injury. The RTC denied the Omnibus Motion on April 11, 2007, reiterating that petitioners had disregarded the minimum requirements of due process under AO No. 160 and had not shown compliance with the evaluation and certification process prior to dismantling.

• Absence of a Clear Legal Right: Petitioners maintained that respondent had no right to put up banners and signages, pointing out that respondent failed to secure the required MMDA clearance under MMDA Regulation No. 04-004, which designated the MMDA Chairman as the approving authority for clearances on the installation of billboards, signages, and advertising signs along major thoroughfares of Metro Manila.
• Public Character of Lampposts: Petitioners argued that sidewalk and streetlight posts are "outside the commerce of men" and therefore cannot be spaces for respondent's commercial activities.
• Expiration of Lease: Petitioners claimed that respondent's contract with MERALCO Financing Services Corporation had already expired, thereby extinguishing any proprietary interest respondent may have had.
• Police Power and Non-Impairment of Contracts: Petitioners underscored that the right against impairment of contracts is limited by the exercise of the police power of the State in the interest of public health, safety, morals, and general welfare.
• Prohibition Under RA No. 8975: Petitioners claimed that Republic Act No. 8975's prohibition on the issuance of temporary restraining orders and preliminary injunctions against the government applied to their efforts to protect the public welfare by dismantling billboards.
• Grave Abuse of Discretion by the RTC: Petitioners asserted that the RTC exceeded its authority in issuing the writ of preliminary injunction and that respondent failed to demonstrate grave and irreparable injury.

• Existing Property Right: Respondent argued that its lease agreement with MERALCO Financing Services Corporation and the permits it secured from the local government units of Makati, Pasay, and Quezon City gave it a property right to put up banners and signages, of which it could not be deprived without due process.
• Scope of AO No. 160: Respondent asserted that AO No. 160 pertained specifically to "billboards" — large panels carrying outdoor advertising — and not to small advertising fixtures such as its signages and banners, and that DPWH exceeded its authority in dismantling them.
• Deprivation Without Due Process: Respondent claimed that petitioners seriously impeded the pursuit of its legitimate business and unlawfully deprived it of property, income, and income opportunities without due process of law, in violation of Articles 19, 20, 21, and 32 of the Civil Code, and impaired its contractual obligations.
• Material and Substantial Invasion: Respondent pointed out that the filing of its complaint was precipitated by the removal of no less than 250 lamppost banners and frames, 12 pedestrian overpass banners, 17 pedestrian overpass frames, and 36 halogen lamps within less than two weeks, and that petitioners' incessant attempts to have the injunction lifted indicated their resolve to dismantle more.

• Grave Abuse of Discretion: Whether the Regional Trial Court gravely abused its discretion in issuing its November 21, 2006 and April 11, 2007 Orders granting and maintaining the writ of preliminary injunction in favor of respondent.
• Applicability of RA No. 8975: Whether Republic Act No. 8975's prohibition on the issuance of temporary restraining orders and preliminary injunctions against the government applies to the dismantling of billboards, banners, and signages.
• Dismissal of Civil Case: Whether the Supreme Court may order the dismissal of Civil Case No. 06-899 at this stage of the proceedings.

• Grave Abuse of Discretion: No. The RTC did not gravely abuse its discretion in issuing the writ of preliminary injunction, respondent having established a prima facie existing right through its lease agreement and local government permits, and petitioners having failed to demonstrate compliance with the due process safeguards of AO Nos. 160 and 160-A.
• Applicability of RA No. 8975: No. The dismantling of billboards, banners, and signages does not qualify as acts relating to the implementation and completion of government infrastructure projects or national government projects within the contemplation of RA No. 8975.
• Dismissal of Civil Case: No. The Court cannot rule on the dismissal of Civil Case No. 06-899 because a Rule 45 petition engendered by a prior Rule 65 petition is bound by the same issue of grave abuse of discretion, and ordering dismissal would require examination of the merits, which must be litigated through trial.

• Grave Abuse of Discretion: The sole issue before the Court was whether the RTC's issuance of the writ of preliminary injunction was tainted with grave abuse of discretion, defined as capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. The requisites for a writ of preliminary injunction are: (1) a clear and unmistakable right in esse; (2) a material and substantial invasion of such right; (3) an urgent need for the writ to prevent irreparable injury; and (4) no other ordinary, speedy, and adequate remedy exists. The applicant need only present prima facie evidence, not conclusive proof, as the writ merely preserves the status quo pending full adjudication. Respondent satisfied these requisites: its lease agreement with MERALCO Financing Services Corporation and permits from local government units gave it an actual property right — a right in esse, not merely in posse. Petitioners conceded the existence of the lease agreement and the permits. The material and substantial invasion was evident from the removal of 250 lamppost banners and frames, 12 pedestrian overpass banners, 17 pedestrian overpass frames, and 36 halogen lamps within less than two weeks, and petitioners' persistent efforts to lift the injunction indicated their resolve to dismantle more. Petitioners' counterarguments — that respondent lacked MMDA clearance under Regulation No. 04-004, that lampposts are outside the commerce of men, and that the lease had expired — involved disputed matters requiring full litigation, not summary resolution. The expiration of the lease, by petitioners' own allegation, occurred only after November 21, 2006, when the writ was issued. Crucially, petitioners failed to show compliance with the procedural requirements of AO No. 160 and 160-A: they did not conduct prior field inspections, evaluations, and assessments; did not issue certifications; and did not furnish copies to concerned local government units. Their complete silence on compliance with these due process safeguards was detrimental to their cause. The RTC therefore acted within its competence in requiring petitioners to temporarily desist pending a more complete estimation of the parties' rights.

• Applicability of RA No. 8975: Republic Act No. 8975 was enacted to ensure the expeditious and efficient implementation and completion of government infrastructure projects, specifically to avoid unnecessary increases in construction, maintenance, and repair costs and to immediately enjoy the social and economic benefits therefrom. The statute prohibits courts from issuing injunctions against the government to restrain the acquisition, clearance, and development of right-of-way; the bidding or awarding of contracts; the commencement, prosecution, execution, implementation, or operation of contracts or projects; the termination or rescission of contracts; and the undertaking of other lawful activities necessary for such contracts or projects. Removing or dismantling billboards, banners, and signages cannot qualify as acts relating to the implementation and completion of government infrastructure projects. They do not involve construction, operation, maintenance, repair, or rehabilitation of structures for public use, nor the acquisition, supply, or installation of equipment and materials relating to such structures. They entail preventive and confiscatory mechanisms serving the interest of public safety, not the completion of infrastructure projects. Accordingly, RA No. 8975's prohibition does not apply.

• Dismissal of Civil Case: A Rule 45 petition is a mode of appeal and a continuation of the original suit, not an original action. It is bound by the same issues raised in the prior Rule 65 petition, which are limited to questions of jurisdiction or grave abuse of discretion. The RTC's November 21, 2006 and April 11, 2007 Orders were interlocutory orders pertaining to provisional relief, not judgments disposing of Civil Case No. 06-899. Ruling on the dismissal of the civil action would compel an examination of the merits, which must be litigated through trial, reception of evidence, and examination of witnesses. That process would be frustrated if the Court were to rule on dismissal based only on allegations made in reference to provisional relief extended before trial even began.

• Requisites for Preliminary Injunction — The requisites for the issuance of a writ of preliminary injunction, whether mandatory or prohibitory, are: (1) the applicant must have a clear and unmistakable right, that is, a right in esse; (2) there is a material and substantial invasion of such right; (3) there is an urgent need for the writ to prevent irreparable injury to the applicant; and (4) no other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury. The Court applied this doctrine by finding that respondent's lease agreement and local government permits constituted a prima facie existing right, that the dismantling of hundreds of its banners constituted a material and substantial invasion, and that the writ was necessary to prevent continuing irreparable injury.

• Prima Facie Evidence Standard for Preliminary Injunction — At the hearing for a writ of preliminary injunction, mere prima facie evidence is needed to establish the applicant's rights or interests in the subject matter of the main action. The applicant is not required to conclusively show a violation of rights, as that issue will be fully litigated in the main case; the applicant need only show an ostensible right to the final relief prayed for. The Court applied this standard by holding that respondent's lease and permits sufficed to establish an ostensible right, and that disputed questions — such as whether MMDA clearance was required or whether lampposts are outside the commerce of men — were matters for full litigation, not summary resolution in an injunction hearing.

• Grave Abuse of Discretion — Grave abuse of discretion means capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, such as when power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform the duty enjoined. The Court found that the RTC's issuance of the injunction was not capricious or whimsical but was grounded in established standards and supported by prima facie evidence.

• Rule 45 as Continuation of Prior Rule 65 Action — A Rule 45 petition engendered by a prior Rule 65 petition for certiorari and/or prohibition is bound by the same basic issue at the crux of the prior Rule 65 petition, that is, issues of jurisdiction or grave abuse of discretion. The Court cannot go beyond the issues raised in the original action, and cannot rule on matters — such as the dismissal of the underlying civil case — that require examination of the merits.

• "For a writ of preliminary injunction to be issued, the applicant must show, by prima facie evidence, an existing right before trial, a material and substantial invasion of this right, and that a writ of preliminary injunction is necessary to prevent irreparable injury." — This opening statement frames the controlling standard for the entire decision, articulating the three core requisites as applied to the facts.

• "It is crystal clear that at the hearing for the issuance of a writ of preliminary injunction, mere prima facie evidence is needed to establish the applicant's rights or interests in the subject matter of the main action. It is not required that the applicant should conclusively show that there was a violation of his rights as this issue will still be fully litigated in the main case. Thus, an applicant for a writ is required only to show that he has an ostensible right to the final relief prayed for in his complaint." — This passage, quoted from Republic vs. Evangelista, defines the evidentiary standard for preliminary injunction and is frequently cited in subsequent jurisprudence on provisional remedies.

• "Petitioners' own arguments demonstrate the need for litigation — a thorough study and adjudication — of the parties' competing claims. When the Regional Trial Court extended provisional relief on November 21, 2006, it did not yet have the benefit of exhaustive litigation. That it acted without such benefit is not something for which it can be faulted." — This passage articulates the ratio decidendi on why the RTC's issuance of the writ was not gravely abusive: the disputed questions raised by petitioners required full trial, and the RTC could not be faulted for acting on prima facie evidence at the provisional stage.

• "Removing or dismantling billboards, banners, and signages cannot qualify as acts relating to the implementation and completion of 'government infrastructure projects,' or of 'national government projects' within the contemplation of Republic Act No. 8975." — This statement resolves the RA No. 8975 issue by defining the statute's scope and excluding billboard dismantling from its coverage.

• Marquez vs. Sanchez, 544 Phil. 507 (2007) — Cited for the summary of the four requisites of preliminary injunction, whether mandatory or prohibitory. The formulation was adopted as the controlling standard in this case.
• Spouses Nisce vs. Equitable PCI Bank, 545 Phil. 138 (2007) — Cited for the discussion of the requisites vis-à-vis the proof required for issuing a writ of preliminary injunction, particularly the principle that the plaintiff's right must be present and unmistakable, and that where the right is doubtful or disputed, a preliminary injunction is not proper.
• Republic vs. Evangelista, 504 Phil. 115 (2005) — Cited for the principle that mere prima facie evidence suffices at the hearing for a writ of preliminary injunction, and that the applicant need only show an ostensible right to the final relief prayed for.
• First Global Realty and Development Corporation vs. San Agustin, 427 Phil. 593 (2002) — Cited for the definition of the purpose of a writ of preliminary injunction: to prevent threatened or continuous irremediable injury before claims can be thoroughly studied and adjudicated, and to preserve the status quo until the merits can be heard fully.
• Sy vs. Commission on Settlement of Land Problems, 417 Phil. 378 (2001) — Cited for the distinction between Rule 65 and Rule 45 petitions: a Rule 65 petition is an original and independent action, while a Rule 45 petition is a mode of appeal and a continuation of the original suit, bound by the same issues raised below.
• Aurelio vs. Aurelio, 665 Phil. 693 (2011) — Cited for the definition of grave abuse of discretion as capricious and whimsical exercise of judgment equivalent to lack of jurisdiction.

• Rule 58, Section 3, 1997 Rules of Civil Procedure — Identifies the grounds for the issuance of a preliminary injunction: (a) the applicant is entitled to the relief demanded; (b) the commission or continuance of the act complained of would probably work injustice to the applicant; or (c) a party is doing or threatening acts probably in violation of the applicant's rights and tending to render judgment ineffectual. The Court applied this provision to determine whether the RTC properly granted respondent's application.
• Administrative Order No. 160 (Oct. 4, 2006) — Directed DPWH to conduct field inspections, evaluations, and assessments of billboards, issue certifications as to those found hazardous, furnish copies to concerned LGUs, and then abate and dismantle hazardous billboards. The Court found that petitioners failed to comply with the sequential procedural requirements of paragraphs 1.1 and 1.2 before dismantling respondent's banners.
• Administrative Order No. 160-A (Oct. 10, 2006) — Supplemented AO No. 160 and prescribed remedies against public nuisance consistent with Article 699 of the Civil Code: prosecution, civil action, or abatement without judicial proceedings if the local Building Official determines it is the best remedy. The Court noted that petitioners failed to adduce proof of compliance with Section 4's remedies.
• Article 699, Civil Code — Provides that the remedies against a public nuisance are: (1) prosecution under the Penal Code or local ordinance; (2) a civil action; or (3) abatement without judicial proceedings. The Court found that petitioners did not follow any of these remedies before dismantling respondent's banners.
• Articles 694 and 695, Civil Code — Define nuisance as public or private, with a public nuisance affecting a community or considerable number of persons. AO No. 160-A proceeded from these articles in classifying hazardous billboards as public nuisances.
• Section 3, Republic Act No. 8975 — Prohibits courts, except the Supreme Court, from issuing temporary restraining orders or preliminary injunctions against the government to restrain the acquisition, clearance, development, bidding, awarding, commencement, prosecution, execution, implementation, operation, termination, or rescission of national government projects. The Court held that billboard dismantling does not fall within the statute's scope.
• MMDA Regulation No. 04-004 — Prescribes guidelines on the installation and display of billboards and advertising signs along major and secondary thoroughfares in Metro Manila, designating the MMDA Chairman as the approving authority for clearances on major thoroughfares. Petitioners invoked this regulation to argue that respondent lacked the required MMDA clearance, but the Court held that the conflict between this regulation and respondent's local government permits was a matter for full litigation, not summary resolution.

Antonio T. Carpio (Associate Justice, Chairperson), Arturo D. Brion (Associate Justice), and Jose Catral Mendoza (Associate Justice). Mariano C. del Castillo was on official leave. No separate concurring opinions were written.