G.R. No. 159277 . December 21, 2004
PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION QUEZON CITY, petitioner, vs. HON. LITA S. TOLENTINO-GENILO, as Presiding Judge, Regional Trial Court of Quezon City, Branch 91, DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, LIGHT RAIL TRANSIT AUTHORITY, CITY ENGINEER OF QUEZON CITY, and BUILDING OFFICIAL OF QUEZON CITY, respondents.

FACTS

Petitioner Philippine School of Business Administration (PSBA) filed a complaint for reformation of a deed of conditional sale against the Department of Public Works and Highways (DPWH) and other government entities. PSBA alleged a mutual mistake, claiming it intended to sell only 543 square meters of land outside its perimeter fence to the DPWH for the Light Rail Transit Line 2 Project, not the 1,128 square meters stated in the deed. PSBA sought a temporary restraining order and a writ of preliminary injunction to prevent the respondents from taking possession of the disputed area within the fence and demolishing school improvements (e.g., bookstore, clinic) located thereon, arguing this would constitute a deprivation of property without due process.
The Regional Trial Court denied the application for injunctive relief. It ruled that the government infrastructure project could not proceed without the demolition, and the petitioner failed to prove the injury would be irreparable or that the services could not be relocated. The court also cited the need for caution under Administrative Circular No. 07-99 and the presumption of constitutionality of Presidential Decree No. 1818, which prohibits courts from issuing injunctions against government infrastructure projects. The Court of Appeals affirmed this denial.

ISSUE

Whether the Court of Appeals erred in affirming the denial of the application for a temporary restraining order and writ of preliminary injunction.

RULING

The Supreme Court denied the petition and upheld the denial of injunctive relief. The legal logic is twofold. First, the Court found that the deed of conditional sale, upon full payment by the DPWH, had ripened into an absolute contract of sale, which enjoys a presumption of validity. The DPWH, as buyer, acquired the right to use the property (jus utendi). Any reformation due to mutual mistake is a matter for the main case to resolve, and the presumption of the contract’s validity stands until overturned by a final judgment. Granting an injunction would impair this right prematurely.
Second, and decisively, the Court applied Presidential Decree No. 1818, which explicitly deprives courts of jurisdiction to issue restraining orders or preliminary injunctions against the implementation of government infrastructure projects. The Light Rail Transit Line 2 is unquestionably such a project. The Court rejected PSBA’s contention that it sought only to enjoin a demolition and not the project itself, agreeing with the trial court that the project could not be accomplished without the demolition. The prohibition under P.D. 1818 is jurisdictional and applies regardless of allegations of due process violations or grave abuse of discretion in a preliminary proceeding. The proper recourse for PSBA is to pursue its main action for reformation of the contract.