Philippine Sinter Corporation vs. Cagayan Electric Power and Light Co., Inc.

Injunction will not lie to restrain the execution of a final and executory judgment of a co-equal administrative body absent a showing that circumstances exist rendering execution unjust or inequitable, or that the movant possesses a clear legal right in esse that would be violated.

On January 21, 1987, a Cabinet Reform Policy authorized direct power connections from NAPOCOR to industries only until a regulatory board determined such connections were no longer necessary because the local franchise holder was financially and technically capable. Pursuant to this policy, CEPALCO, a franchise holder, filed a petition with the ERB to discontinue NAPOCOR's direct supply within its franchise area. The ERB granted the petition, declaring CEPALCO capable and ordering the discontinuation of direct supply. NAPOCOR's motion for reconsideration was denied, and its appeal to the Court of Appeals was dismissed for being filed out of time, rendering the ERB decision final and executory, which was subsequently affirmed by the Supreme Court. To implement the ERB decision, CEPALCO sought to disconnect Philippine Sinter Corporation (PSC), an industry operating within the PHIVIDEC Industrial Estate under PIA's management, which had a subsisting power supply contract with NAPOCOR. PSC refused, prompting the present dispute.

• CEPALCO's Franchise and ERB Petition: CEPALCO holds a legislative franchise to distribute electric power in specific municipalities in Misamis Oriental, including Tagoloan and Villanueva. Under the 1987 Cabinet Reform Policy, it petitioned the ERB to discontinue NAPOCOR's direct supply to industries in its franchise area. The ERB granted the petition after finding CEPALCO financially and technically capable.
• Finality of ERB Decision: NAPOCOR's attempt to appeal the ERB decision failed due to a late motion for reconsideration. The Supreme Court affirmed the CA's dismissal of NAPOCOR's petition, rendering the ERB decision final and executory on September 22, 1993.
• PSC's Refusal and Injunction Suit: CEPALCO sought to implement the ERB decision by disconnecting PSC, an industry within the PHIVIDEC Industrial Estate (under PIA's management) that had a direct NAPOCOR contract effective until July 26, 1996. PSC refused, citing its subsisting contract, lack of notice in the ERB case, and PIA's alleged exclusive franchise over the estate under PD 538. PSC and PIA sued for injunction in the RTC.
• RTC Ruling: The RTC granted the injunction, restraining CEPALCO from disconnecting PSC's power supply until the NAPOCOR contract expired.
• CA Reversal: The CA reversed the RTC and dissolved the injunction, prompting the present petition.

• Contrary to Cabinet Policy Reform: Petitioners argued that the ERB decision contradicts the Cabinet Memorandum because PIA, a relevant government agency, was not consulted or notified.
• Lack of Binding Effect: Petitioners maintained that the ERB decision does not bind PIA and PSC because they were not impleaded as parties in ERB Case No. 89-430.
• Statutory Exclusivity: Petitioners contended that PD 538 (PIA's charter) excluded Tagoloan and Villanueva from CEPALCO's franchise area and transferred it to PIA.
• Non-Finality: Petitioners asserted that the ERB decision is not final and executory because it is subject to periodic review under the Cabinet Memorandum.

• Compliance with Cabinet Policy: Respondent countered that the ERB decision demonstrates CEPALCO met the financial and technical capability standards required by the Cabinet Policy Reforms.
• In Rem Nature of Proceedings: Respondent argued that personal notice to PIA and PSC was not required because ERB proceedings are in rem, and the sole issue was CEPALCO's capability.
• Scope of Periodic Review: Respondent maintained that only the capability standards, not the entire decision, are subject to periodic review under the Cabinet Memorandum.

• Injunction against Final Judgment: Whether injunction lies against the final and executory judgment of the ERB.

• Injunction against Final Judgment: Injunction does not lie against a final and executory judgment of the ERB. The general rule is that courts must ministerially order the execution of final judgments, and no court should interfere by injunction to restrain such execution. Exceptions exist only when facts and circumstances render execution inequitable or unjust, or a change in the parties' situation occurs, neither of which was present here. Furthermore, the RTC is co-equal to the ERB and cannot interfere with its decision, a doctrine intended to ensure judicial stability. Even assuming the ERB decision was not final or the ERB was not co-equal, injunction would still fail because petitioners failed to show a clear legal right in esse to be protected. Exclusivity of public franchises is disfavored and prohibited by the Constitution, and PIA had previously allowed CEPALCO to distribute power within the estate, recognizing CEPALCO's franchise.

• Finality of Judgments / Injunction — After a judgment gains finality, it becomes the ministerial duty of the court to order its execution. No court should interfere by injunction to restrain such execution, except when facts and circumstances later transpire that would render execution inequitable or unjust, or a change in the situation of the parties occurs.
• Non-Interference of Co-Equal Bodies — Where the law provides for an appeal from the decisions of administrative bodies to the Supreme Court or the Court of Appeals, such bodies are co-equal with Regional Trial Courts in rank and stature. Trial courts cannot interfere with the decisions of co-equal administrative bodies to ensure judicial stability, whereby the judgment of a court of competent jurisdiction may not be opened, modified, or vacated by any court of concurrent jurisdiction.
• Requisites of Injunction — To justify injunctive relief, the movant must show: (1) the existence of a right in esse or a right to be protected; and (2) the act against which injunction is directed is a violation of such right.

• "The rule indeed is, and has almost invariably been, that after a judgment has gained finality, it becomes the ministerial duty of the court to order its execution. No court, perforce, should interfere by injunction or otherwise to restrain such execution. The rule, however, concededly admits of exceptions; hence, when facts and circumstances later transpire that would render execution inequitable or unjust, the interested party may ask a competent court to stay its execution or prevent its enforcement."
• "Settled is the rule that where the law provides for an appeal from the decisions of administrative bodies to the Supreme Court or the Court of Appeals, it means that such bodies are co-equal with the Regional Trial Courts in terms of rank and stature, and logically, beyond the control of the latter."

• Bachrach Corporation vs. Court of Appeals, 296 SCRA 487 (1998) — Followed. Established the rule that injunction does not lie against a final and executory judgment except when execution would be inequitable or unjust, or there is a change in the parties' situation.
• Camarines Norte Electric Cooperative, Inc. vs. Torres, 286 SCRA 666 (1998) — Followed. Emphasized the principle that administrative decisions must end sometime and what has been terminated should not be disturbed (non quieta movere).
• National Power Corporation vs. Court of Appeals, 161 SCRA 101 (1988); 279 SCRA 506 (1997) — Followed. Established that CEPALCO is the lawful provider of increased power supply under PD 40, and that the authority to determine whether NAPOCOR should supply power directly to PIA/industries pertains exclusively to the ERB/DOE.
• Cagayan Electric Power and Light Company, Inc. vs. National Power Corporation, 180 SCRA 628 (1989) — Followed. Sustained that NAPOCOR's statutory authority to sell energy in bulk directly to BOI-registered enterprises is subordinate to the total-electrification-on-an-area-coverage-basis policy enunciated in PD 40.
• Olaguer vs. Regional Trial Court, 170 SCRA 478 (1989) — Cited. Supported the doctrine that administrative bodies with appeals to the SC or CA are co-equal with RTCs.

• Section 10, Executive Order No. 172 (ERB Charter) — Provides that review of ERB decisions or orders is lodged in the Supreme Court (now transferred to the CA via Rule 43). Applied to establish that the ERB is co-equal in rank with the RTC, precluding the RTC from interfering with the ERB's final decision.
• Sections 1 and 3, Presidential Decree No. 40 — Establishes the basic policy for the electric power industry, mandating that the distribution of electric power generated by NPC shall be undertaken by cooperatives, private utilities (like CEPALCO), local governments, and other authorized entities. Applied to show that CEPALCO's right to distribute power in its franchise area is supported by long-standing government policy, subordinating NAPOCOR's direct supply authority.
• Section 11, Article XII, 1987 Constitution — Prohibits monopoly of franchise. Applied to reject petitioners' claim of an exclusive franchise over the PHIVIDEC Industrial Estate.
• Presidential Decree No. 538 — Creates the PHIVIDEC Industrial Authority (PIA). Petitioners invoked it to claim exclusivity over the estate's power distribution, which was rejected by the Court.

Vitug, Panganiban, and Carpio, JJ., concur. Melo, J., on official leave.