Case Summary (G.R. No. 179554)
Key Dates
1997: Government (DOTC) entered into BLT agreement with MRTC under R.A. No. 6957 granting development and advertising rights.
1998: Trackworks contracted with MRTC and installed advertising media on MRT3.
2001: MMDA invoked MMDA Regulation No. 96-009 to prohibit posting/display of advertising and requested dismantling; MMDA proceeded to dismantle after Trackworks refused.
March 1, 2002: Trackworks filed injunction suit (RTC, Pasig).
March 6 and March 25, 2002: RTC issued TRO and writ of preliminary injunction.
August 31, 2004 & March 14, 2005: CA denied MMDA’s certiorari petition and motion for reconsideration.
October 10, 2005: RTC rendered decision permanently enjoining MMDA from dismantling Trackworks’ advertising.
April 30, 2007 & September 3, 2007: CA denied MMDA’s appeal and motion for reconsideration.
Supreme Court disposition in this case affirmed the CA rulings (case materials supplied).
Applicable Law and Constitutional Framework
Governing constitution: 1987 Philippine Constitution (applicable because the decision falls after 1990). Primary statutes and regulations invoked in the case: R.A. No. 6957 (BLT/Build, Operate and Transfer framework), R.A. No. 7924 (MMDA charter), MMDA Regulation No. 96-009, MMC Memorandum Circular No. 88-09, and Presidential Decree No. 1096 (Building Code) and its implementing rules. Prior jurisprudence interpreting MMDA’s powers (cases cited in the decision) also formed part of the legal framework.
BLT Agreement and MRTC’s Development/Advertising Rights
Under the 1997 BLT agreement cited in the record, DOTC confirmed and awarded to MRTC rights to develop commercial premises in the depot and the air space above stations, to lease or sublease such interests, and to obtain advertising income from those areas. MRTC retained ownership of MRT3 for 25 years under the BLT, at which point ownership would revert to the Government. The BLT expressly authorized MRTC to assign development rights and to enter into agreements (such as advertising contracts) covering the airspace and structures where operation of the system did not require exclusive use.
Trackworks’ Contractual Rights and Installations
In 1998 Trackworks entered into a contract with MRTC to provide advertising services and thereafter installed billboards, signages and other advertising media on various interior and exterior portions of the MRT3 structure. The decision treats these installations as deriving from MRTC’s valid exercise of development and advertising rights under the BLT agreement while MRTC remained the owner.
MMDA Regulation and Enforcement Actions
MMDA invoked its Regulation No. 96-009, which broadly prohibited posting/installation/display of billboards, signs, posters, streamers and similar items in public road spaces, sidewalks, center islands, posts, trees, parks and open spaces. MMDA requested Trackworks to dismantle its advertising installations; upon Trackworks’ refusal, MMDA proceeded to dismantle the advertising media on MRT3. MMDA defended the action as part of its mandate to formulate, coordinate and monitor policies and standards for the use of thoroughfares and to promote safe and convenient movement of persons and goods under its charter (R.A. No. 7924).
Procedural History and Interim Relief
Trackworks filed an injunction suit in the RTC, which issued a TRO (March 6, 2002) and later a writ of preliminary injunction (March 25, 2002) enjoining MMDA from dismantling the advertising media. MMDA sought relief via certiorari and prohibition before the Court of Appeals, which denied MMDA’s petition (Aug. 31, 2004) and subsequent motion for reconsideration (Mar. 14, 2005). The RTC ultimately issued a permanent injunction (Oct. 10, 2005) enjoining MMDA from dismantling, removing or destroying Trackworks’ billboards and advertising media. The CA later affirmed the RTC decision on appeal (Apr. 30, 2007) and denied reconsideration (Sept. 3, 2007).
Issues Presented on Appeal
MMDA’s contentions: (a) its charter-mandated powers to formulate, coordinate and monitor policies for thoroughfare use and to promote safety justified Regulation No. 96-009 and the dismantling; (b) the conversion of the EDSA center island into the MRT3 carriageway did not exempt it from MMDA regulation; (c) the Government’s grant of development rights to MRTC did not abdicate regulatory authority; (d) the advertising installations presented safety hazards and distractions to motorists; and (e) public safety and welfare interests override private contractual interests. Trackworks’ position was that MMDA’s petition lacked a genuine question of law and that the CA’s decision denying MMDA’s relief was correct.
Court’s Analysis: Ownership and Validity of Trackworks’ Rights
The Court accepted that Trackworks’ rights flowed from MRTC’s BLT-derived authority to develop commercial premises and to obtain advertising income during the development rights period. Because MRTC remained owner of MRT3 for the BLT term and had validly entered into the advertising contract with Trackworks, Trackworks’ installations represented a legitimate exercise of MRTC’s ownership and contractual prerogatives. Prior recognition by the Court (cited G.R. No. 167514) confirmed Trackworks’ right to install advertising media pursuant to that contract.
Court’s Analysis: MMDA’s Powers and Absence of Authority to Dismantle
The Court held that MMDA did not possess plenary police powers to unilaterally dismantle, remove or destroy private property installed pursuant to a valid contractual grant of rights. Citing prior decisions (Metropolitan Manila Development Authority v. Bel-Air Village Association, Inc.; MMDA v. Viron Transportation Co., Inc.; MMDA v. Garin), the Court reiterated that MMDA is a development authority with administrative, planning, monitoring, coordinative, regulatory and supervisory functions, but no
...continue readingCase Syllabus (G.R. No. 179554)
Case Citation and Court Panel
- Reported as 623 Phil. 236, First Division, G.R. No. 179554, December 16, 2009.
- Decision authored by Justice Bersamin.
- Concurrence by Puno (Chairperson), Carpio Morales, Leonardo-De Castro, and Villarama, Jr.
- Costs awarded against the petitioner.
Central Question Presented
- Whether the Metropolitan Manila Development Authority (MMDA) could unilaterally dismantle the billboards, signages, and other advertising media installed on the Metro Rail Transit 3 (MRT3) structures by respondent Trackworks pursuant to its contract with Metro Rail Transit Corporation, Limited (MRTC).
Antecedent Contractual Framework (BLT Agreement)
- In 1997, the Government, through the Department of Transportation and Communications (DOTC), entered into a build-lease-transfer agreement (BLT agreement) with Metro Rail Transit Corporation, Limited (MRTC) pursuant to Republic Act No. 6957.
- Under the BLT agreement:
- MRTC would build MRT3 and own it for 25 years, after which ownership would transfer to the Government.
- Clause 16.1 (Details of Development Rights) confirmed and awarded to MRTC rights to:
- (a) develop commercial premises in the Depot and the air space above the Stations, to a legally and technically feasible height;
- (b) lease, sub-lease, assign interests in the Depot and such air space;
- (c) obtain any advertising income from the Depot and said air space and LRTS Phase I.
- Clause 16.2 (Assignment of Rights) provided that during the Development Rights Period MRTC could assign all or any of its rights, titles and interests in the Development Rights to bona fide real estate developers and enter into development, lease, sub-lease or other agreements relating to the Depot and air space above the Stations (space not needed for the operation of the LRTS).
- “LRTS Phase I” was defined as the rail transport system comprising about 16.9 line kilometers along EDSA with specified stations, light rail vehicles and ancillary facilities, as detailed in the Specifications.
Factual Background (Installation and Removal Attempts)
- In 1998, Trackworks entered into a contract for advertising services with MRTC.
- Trackworks installed commercial billboards, signages and other advertising media in different parts of the MRT3.
- In 2001, MMDA requested Trackworks to dismantle the installed billboards, signages and other advertising media pursuant to MMDA Regulation No. 96-009, which prohibited posting, installation and display of billboards, signs, posters, streamers, etc., in road, sidewalk, center island, posts, trees, parks and open space.
- Trackworks refused MMDA’s request.
- MMDA proceeded to dismantle Trackworks’ advertising materials.
Procedural History — Lower Courts
- March 1, 2002: Trackworks filed an injunction suit in the Regional Trial Court (RTC) in Pasig City (Civil Case No. 68864) with prayer for a TRO and preliminary injunction.
- March 6, 2002: RTC (Branch 155) issued a TRO enjoining MMDA from dismantling or destroying Trackworks’ advertising media.
- March 25, 2002: RTC issued a writ of preliminary injunction for the same purpose.
- March 2002 – 2005: MMDA filed a petition for certiorari and prohibition before the Court of Appeals (CA), docketed C.A.-G.R. SP No. 70932; the CA denied the petition and affirmed the RTC on August 31, 2004, and denied MMDA’s motion for reconsideration on March 14, 2005.
- October 25, 2005: This Court denied MMDA’s earlier petition for review in G.R. No. 167514.
- October 10, 2005: RTC (Branch 155) rendered a decision permanently enjoining MMDA from dismantling, removing or destroying the billboards, signages and other advertising media installed by Trackworks on the interior and exterior structures of the MRT3.
- MMDA appealed the RTC decision to the CA.
- April 30, 2007: CA denied MMDA’s appeal, holding Trackworks’ right to install advertising media on MRT3 must be protected by a writ of permanent injunction and that MMDA had no power to dismantle, remove or destroy Trackworks’ advertising media.
- September 3, 2007: CA denied MMDA’s motion for reconsideration.
- Thereafter, MMDA filed the present petition for review to this Court (G.R. No. 179554).
Positions of the Parties
- MMDA’s Contentions:
- Its charter mandates formulation, coordination and monitoring of policies, standards, progress and projects for the use of thoroughfares and the promotion of safe and convenient movement of persons and goods, justifying MMDA Regulation No. 96-009.
- MMDA Regulation No. 96-009 declares it unlawful to post or display billboards, signs, posters, streamers