Republic of the Philippines vs. Power Ads Intelli-Concepts Advertising and Production Corporation

A writ of preliminary injunction cannot issue where the applicant's right is doubtful or disputed, and grave abuse of discretion attends the trial court's grant when it ignores prima facie evidence that casts doubt on the existence of the applicant's claimed building permit. The issuance of a writ requires a clear and unmistakable right in esse, a material and substantial invasion of that right, an urgent need to prevent irreparable injury, and the absence of any other adequate remedy — all of which must be established by at least prima facie evidence.

The DPWH and the MMDA entered into a Memorandum of Agreement on August 31, 2010, deputizing the MMDA to enforce provisions on regulated signs under Chapters 8 and 20 of PD 1096 (National Building Code of the Philippines) and its Implementing Rules and Regulations within Metro Manila. Pursuant to this MOA, the MMDA issued Memorandum Circular No. 10, Series of 2011, prescribing implementing guidelines on the issuance of clearances for advertising materials along major thoroughfares. Separately, MMDA Regulation No. 04-004, Series of 2004, had earlier prescribed guidelines on the installation and display of billboards and advertising signs within Metro Manila. The OBO-Makati, headed by the City Building Official, is the local office responsible for issuing building permits and enforcing the National Building Code within Makati City under Section 205 of PD 1096.

On August 31, 2010, the DPWH and the MMDA entered into a Memorandum of Agreement deputizing the MMDA to enforce the provisions on regulated signs under Chapters 8 and 20 of PD 1096, also known as the National Building Code of the Philippines, and Rules VIII and XX of its Implementing Rules and Regulations within Metro Manila. Pursuant to this MOA, the MMDA issued Memorandum Circular No. 10, Series of 2011, containing implementing guidelines on the issuance of clearances for advertising materials along major thoroughfares. The MMDA thereafter sent a notice to Power Ads Intelli-Concepts Advertising and Production Corporation requiring it to demolish within ten days its billboard located at No. 81-B, 29th Street, C-5, Brgy. West Rembo, Makati City, on the ground that it was constructed without the necessary clearance and permit.

Aggrieved, Power Ads filed a Petition for Prohibition and Injunction with Prayer for TRO and Writ of Preliminary Injunction before the RTC of Mandaluyong City, assailing the validity of Memorandum Circular No. 10, Series of 2011, and MMDA Regulation No. 04-004, Series of 2004, for being an undue delegation of rule-making power. On January 20, 2012, the RTC granted the prayer for a TRO. Power Ads thereafter moved to amend its petition twice, the second time to implead the City Building Official of Makati City as an additional respondent, alleging that the MMDA had resorted to causing the OBO-Makati to issue demolition orders in an attempt to circumvent the TRO. The RTC granted the motion and admitted the Second Amended Petition.

During the hearings on the application for a writ of preliminary injunction, Power Ads presented witnesses Narciso Francelizo and Connie Erispe, while the DPWH and MMDA presented Noemie T. Recio and Edgardo Lara. The City Building Official presented Engr. Ruel B. Almazan as its lone witness. Engr. Almazan, a building inspector at the OBO-Makati since January 1996, testified through his Judicial Affidavit that Building Permit No. SB09-01-1271 — which Power Ads claimed was issued to its predecessor-in-interest, Ads and Signs Advertising, Inc., in 2001 — was spurious. He presented a Certification dated August 1, 2012, issued by then City Building Official Engr. Nelson B. Morales, stating that no such building permit was ever issued by the OBO-Makati to any person or entity regarding the subject billboard. The Certification further explained that the serial number in question was assigned to a building permit issued to Nokia Philippines, Inc. for a renovation project at a different location, and that the date of application in the purported permit conflicted with the permit number's encoding.

On April 4, 2012, the OBO-Makati, through Engr. Morales, sent Power Ads a Notice of Demolition informing it that the billboard was illegally constructed for lack of a building permit under Section 301 of PD 1096, was declared a nuisance, ruinous, or dangerous, and ordering its removal within fifteen days. On June 5, 2012, the OBO-Makati reiterated this order. Thereafter, MMDA representatives, in coordination with OBO-Makati personnel, attempted to roll down the billboard, prompting Power Ads to urgently move for the issuance of a writ of preliminary injunction. On May 11, 2016, the RTC granted the application and issued the writ, enjoining the DPWH, MMDA, and the City Building Official from damaging or rendering non-operational Power Ads' billboards. The RTC denied the respondents' motion for dissolution on August 12, 2016. The CA affirmed the RTC's orders on June 22, 2018, finding that Power Ads had satisfied the standards for injunctive relief as a successor-in-interest to a valid permit obtained in 2001, and that prudence dictated preservation of the status quo. The CA denied reconsideration on December 17, 2018.

• Absence of a Clear Legal Right: The Republic argued that Power Ads failed to show a clear legal right to construct the billboard because the OBO-Makati did not issue any building permit in its favor. Engr. Almazan testified that Building Permit No. SB09-01-1271 was spurious — the serial number was issued to Nokia Philippines, Inc. for a renovation at a different location, and the date of issuance preceded the date of application. The Republic further contended that Power Ads has a separate and distinct personality from Ads and Signs and cannot use the latter's building permit, and that billboard construction along public streets is merely a statutory privilege, not a vested right.
• No Material Violation of Right: The Republic maintained that it merely implemented PD 1096 and its IRR when it ordered the removal of the billboard, which the OBO-Makati had declared a nuisance, ruinous, and dangerous structure in violation of Section 301 and Rule VII of PD 1096.
• No Irreparable Injury: The Republic argued that the damages alleged by Power Ads — cost of construction, loss of income from commercial sponsors, and potential liability under lease contracts — were all quantifiable and fully compensable by damages. It further noted that Power Ads did not include any prayer for damages against the Republic, and that the RTC cannot grant relief not prayed for in the pleadings.

• Adequate Alternative Remedy: Power Ads argued that the Republic had a plain, speedy, and adequate remedy other than outright demolition — allowing Power Ads to comply with Makati City requirements. Power Ads claimed it was already engaged in off-court negotiations with the OBO-Makati and that the moratorium on billboard construction imposed by City Ordinance No. 2004-A-028 could not be applied retroactively to its billboard, which had existed since 2001. Power Ads further asserted that the moratorium had already been lifted by Ordinance No. 2013-A-044, rendering the DPWH's insistence on demolition moot.
• Invalid Delegation of Power: Power Ads contended that the DPWH unlawfully delegated its regulatory power to the MMDA through the MOA, and that the MMDA's issuances (Memorandum Circular No. 10 and Regulation No. 04-004) constituted an invalid delegation because the MOA did not authorize the MMDA to abolish the due process provisions of PD 1096, its IRR, and the DPWH's Additional Rules and Regulations (ARR).
• Violation of Due Process: Power Ads argued that the MMDA's arbitrary use of force in regulating billboards violated the due process clause, as the MMDA did not follow the administrative procedure for abatement under paragraph 8 of the ARR, which requires a declaration by the Building Official, written notice, and a fifteen-day period to appeal to the DPWH Secretary.
• MMDA Lacks Regulatory Power: Power Ads invoked the Court's rulings in MMDA vs. Trackworks (2009) and MMDA vs. Garin (2005), asserting that the MMDA is not vested with police power or legislative power and that all its functions are administrative in nature.
• Compliance with ARR Requirements: Power Ads argued that under Section 4.2.5 of the ARR, existing signboard structures constructed prior to October 31, 2007 need only present a certificate from a structural engineer that the billboard is structurally sound, which Power Ads had done.
• Building Permit Not Spurious: Power Ads contended that Engr. Almazan made serious misrepresentations, noting that Power Ads had a copy of Sogo Hotel's building permit (No. SB09-01-1183) different from that confirmed by him. Power Ads stated it never marked or introduced the allegedly spurious permit in evidence during the injunction hearings, and that after acquiring the billboard site in 2006, it applied for a building permit with Makati but none was issued due to the moratorium.
• Validity of the Writ: Power Ads maintained that the writ was valid, lawful, and necessary to protect its rights after several attempts at destruction of its billboard by MMDA personnel, and that the damages it suffered could not be compensated merely in money.

• Grave Abuse of Discretion in Issuance of Preliminary Injunction: Whether the CA erred in not finding grave abuse of discretion on the part of the RTC when it issued a writ of preliminary injunction in favor of Power Ads.

• Grave Abuse of Discretion in Issuance of Preliminary Injunction: Yes. The CA erred in affirming the RTC because Power Ads failed to establish by prima facie evidence a clear and unmistakable right to preserve its billboard, the building permit it relied upon having been shown to be spurious and the structure having been declared a nuisance by the OBO-Makati. Where the applicant's right is doubtful or disputed, a preliminary injunction should not issue.

• Grave Abuse of Discretion in Issuance of Preliminary Injunction: 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. These requisites need only be established by prima facie evidence, not conclusive proof. However, where the applicant's right is doubtful or disputed, the writ should not issue. Power Ads' claim to a clear legal right was two-pronged: first, that it had a building permit by virtue of one obtained by its predecessor-in-interest Ads and Signs in 2001; and second, that it had a right to be protected from demolition by the MMDA, which purportedly lacked authority. As to the first prong, the OBO-Makati's Certification dated August 1, 2012, and Engr. Almazan's Judicial Affidavit categorically established that Building Permit No. SB09-01-1271 was never issued by the OBO-Makati to any person or entity — the serial number was assigned to Nokia Philippines, Inc. for a renovation at a different location, and the permit's date of issuance preceded its date of application. This cast doubt on the existence of Power Ads' building permit, which doubt was sufficient to negate a clear legal right. As to the second prong, while the MMDA's initial demolition attempts were solely its own, its subsequent efforts were made in coordination with the OBO-Makati, which had issued a Notice of Demolition on April 4, 2012, declaring the billboard a nuisance, ruinous, and dangerous structure. Under Section 205 of PD 1096, the Building Official is responsible for enforcing the Code, and these declarations constituted regulatory acts within the OBO-Makati's power. This distinguished the case from Trackworks, where no declaration from a City Building Official was involved. Power Ads also failed to invoke the administrative remedy under paragraph 8 of the ARR — it did not appeal the OBO-Makati's findings to the DPWH Secretary. Power Ads could not rely on Section 4.2.5 of the ARR because that provision applies only to structures "which have not been found or declared to be dangerous or ruinous," and the OBO-Makati had so declared the billboard. The enactment of Makati Ordinance No. 2013-A-044 did not render the case moot because the ordinance merely prescribed rules for operating billboards and did not establish Power Ads' legal right over the structure or exempt it from PD 1096's building permit requirement; moreover, a local ordinance cannot contravene a statute. The RTC's order granting the writ was devoid of any justification and ignored the evidence presented by the City Building Official, constituting grave abuse of discretion.

• Requisites for Preliminary Injunction — A writ of preliminary injunction may issue only when the applicant establishes by prima facie evidence: (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) the absence of any other ordinary, speedy, and adequate remedy. The Court applied this test and found that the first requisite was absent because Power Ads' building permit was shown to be spurious, making its right doubtful or disputed.

• Prima Facie Standard for Injunction — At the hearing for a writ of preliminary injunction, mere prima facie evidence is needed to establish the applicant's rights; it is not required that the applicant conclusively show a violation of rights, as that issue will be litigated in the main case. The applicant need only show an ostensible right to the final relief prayed for. The Court clarified that while the standard is prima facie, the evidence must still establish a clear legal right — where doubt or dispute exists as to the right, the writ should not issue.

• Doubtful or Disputed Right Bars Injunction — Where there is doubt or dispute as to the plaintiff's right, a preliminary injunction should not issue. The possibility of irreparable damage absent proof of an actual existing right will not warrant the writ. The Court relied on this principle to reverse the RTC, as the OBO-Makati's evidence cast doubt on the existence of Power Ads' building permit.

• MMDA's Limited Powers — The MMDA's powers are limited to formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installing a system, and administration. Nothing in Republic Act No. 7924 grants the MMDA police power or legislative power. However, this limitation does not prevent the MMDA from acting in coordination with the City Building Official, who possesses regulatory authority under PD 1096.

• OSG's Mandate to Represent the Government — Under Section 35, Chapter 12, Title III, Book IV of the Administrative Code of 1987, the OSG represents the Government and its agencies in any litigation. The OSG should not be hindered from performing its mandate by the mere refusal of the government agency it represents to engage its services, as ruled in Sec. Orbos of DOTC vs. Civil Service Commission.

• "where there is doubt or dispute as to the plaintiff's right, a preliminary injunction should not issue. The possibility of irreparable damage on the part of the plaintiff absent any proof of an actual existing right would not warrant the issuance of a writ of preliminary injunction." — This passage states the controlling principle that doubtful or disputed rights are insufficient basis for injunctive relief, and is the ratio decidendi for reversing the RTC and CA.

• "while a clear showing of the right is necessary, its existence need not be conclusively established. x x x The evidence need only be a 'sampling' intended to give the court an idea of the justification for the preliminary injunction, pending judgment on the merits." — This formulation, quoted from MMDA vs. Trackworks (2005), defines the prima facie evidentiary standard for preliminary injunction applications and is frequently cited in subsequent jurisprudence.

• "The Court's previous pronouncement that the MMDA has no power to regulate billboards under its own charter will not tilt the present case in favor of Power Ads considering that as discussed, MMDA's subsequent efforts to dismantle the billboard structure of Power Ads were upon the declarations made by the OBO-Makati." — This passage explains the critical factual distinction between this case and Trackworks, establishing that MMDA action coordinated with the City Building Official falls within the latter's statutory authority under PD 1096.

• "existing free-standing or roof mounted off-premise signs or signboard structures, which have been found or declared to be dangerous or ruinous do not merit the issuance of the clearance, building, sign and other permits even if the other requirements under Section 4.2.5 of the ARR are met." — This passage interprets Section 4.2.5 of the ARR, establishing that a declaration of a structure as dangerous or ruinous disqualifies it from the ministerial issuance of permits.

• MMDA vs. Trackworks Rail Transit Advertising, Vending and Promotions, Inc., 623 Phil. 236 (2009) and 510 Phil. 826 (2005) — The Court distinguished both the 2005 and 2009 Trackworks decisions. In the 2005 case, the Court affirmed the issuance of a writ of preliminary injunction in favor of the respondent and ruled that the MMDA had no independent power to dismantle billboards. In the 2009 decision, the Court ruled on permanent injunction, holding that the MMDA had no power to dismantle, remove, or destroy billboards on the MRT structure. The Court distinguished these cases on factual grounds: in Trackworks, no declaration from a City Building Official that the billboards were a nuisance or dangerous was involved, unlike in the present case where the OBO-Makati issued a Notice of Demolition.

• DPWH, et al. vs. City Advertising Ventures Corp., 799 Phil. 47 (2016) — Cited for the rule that applicants for preliminary injunction need only establish their claims by prima facie evidence, not complete and conclusive evidence, and for the requisites of a writ of preliminary injunction.

• Republic of the Philippines vs. Judge Evangelista, 504 Phil. 115 (2005) — Quoted for the principle that at the hearing for a writ of preliminary injunction, mere prima facie evidence is needed to establish the applicant's rights, and the applicant is required only to show an ostensible right to the final relief prayed for.

• Sps. Nisce vs. Equitable PCI Bank, Inc., 545 Phil. 138 (2007) — Cited for the doctrine that where the plaintiff's right is doubtful or disputed, a preliminary injunction is not proper, and that the possibility of irreparable damage without proof of an actual existing right is not a ground for preliminary injunction.

• Sec. Orbos of DOTC vs. Civil Service Commission, 267 Phil. 476 (1990) — Cited for the principle that the OSG is the lawyer of the government and its services cannot be lightly rejected by the office or officials concerned; the OSG should not be hindered from performing its mandate by the refusal of the government agency it represents.

• Peñafrancia Sugar Mill, Inc. vs. Sugar Regulatory Administration, 728 Phil. 535 (2014) — Cited for the definition of mootness: a case is moot when it ceases to present a justiciable controversy by virtue of supervening events, so that adjudication would be of no practical value or use.

• Mayor Magtajas vs. Pryce Properties, Corp., Inc., 304 Phil. 428 (1994) — Cited for the basic rule that an ordinance cannot contravene a statute.

• Section 3, Rule 58 of the Rules of Court — Provides the grounds for issuance of preliminary injunction: (a) the applicant is entitled to the relief demanded; (b) the commission or non-performance of the acts complained of would probably work injustice to the applicant; or (c) a party is doing, threatening, or attempting acts probably in violation of the applicant's rights tending to render judgment ineffectual. The Court applied this provision to evaluate whether the RTC properly granted the writ.

• Section 205, PD 1096 (National Building Code of the Philippines) — Provides that the Building Official shall be responsible for carrying out the provisions of the Code in the field and the enforcement of orders and decisions made pursuant thereto. The Court relied on this provision to establish that the OBO-Makati possessed regulatory authority over the billboard structure, distinguishing the case from Trackworks.

• Section 301, PD 1096 — Requires that no person, firm, or corporation shall erect, construct, alter, repair, move, convert, or demolish any building or structure without first obtaining a building permit from the Building Official. The Court applied this provision to support the finding that Power Ads lacked a valid building permit and that the OBO-Makati's declaration of the billboard as illegally constructed was proper.

• Section 4.2.5, Additional Rules and Regulations (ARR) on Signs or Signboard Structures — Provides that existing free-standing or roof-mounted off-premise signs or signboard structures with or without a current building permit and which have not been found or declared to be dangerous or ruinous may continue to operate upon submission of a structural engineer's certification. The Court held that this provision did not apply to Power Ads because its billboard had been declared dangerous and ruinous by the OBO-Makati.

• Paragraph 8, ARR on Signs or Signboard Structures — Prescribes the procedure for abatement or demolition of signs or signboard structures, including a declaration by the Building Official, written notice with a fifteen-day period to comply, and the right to appeal to the DPWH Secretary. The Court noted that Power Ads invoked this provision but failed to avail itself of the appeal remedy it provides.

• Section 35, Chapter 12, Title III, Book IV, Administrative Code of 1987 (EO 292) — Provides that the OSG shall represent the Government of the Philippines, its agencies and instrumentalities, and its officials and agents in any litigation, proceeding, investigation, or matter requiring the services of a lawyer. The Court applied this provision to uphold the OSG's authority to file the petition despite the MMDA Chairman's position against appealing.

Leonen (Chairperson), Hernando, Rosario, and J. Lopez, JJ., concurred.