Case Summary (G.R. No. 179554)
Applicable Law and Regulatory Instruments
1987 Philippine Constitution – basis for creation of MMDA and delineation of local autonomy and development authority powers.
Republic Act No. 6957 (“Build, Operate and Transfer Law”) – authorizes DOTC to enter into build-lease-transfer agreements for rail systems.
Build-Lease-Transfer Agreement (1997) – grants MRTC exclusive development rights over commercial premises and advertising income in MRT3 structures for 25 years.
Republic Act No. 7924 (MMDA Charter) – defines MMDA’s administrative, planning, coordination, and regulatory functions without granting police or legislative power.
MMDA Regulation No. 96-009 – prohibits posting, installation, or display of billboards, signs, and similar media on roads, sidewalks, center islands, posts, trees, parks, and open spaces.
Manila Metropolitan Council Memorandum Circular No. 88-09 – prohibits similar displays but issued prior to MRT3 construction and not explicitly covering MRT3 structures.
Presidential Decree No. 1096 (National Building Code) and its Implementing Rules – enforcement vested in the Department of Public Works and Highways (DPWH), not MMDA.
Factual Background
Under the 1997 BLT agreement, MRTC built MRT3, owned it for 25 years, and gained the right to develop commercial premises and secure advertising income from air rights and station structures. In 1998 Trackworks contracted with MRTC and installed various advertising media throughout MRT3. In 2001 MMDA invoked Regulation No. 96-009 to order dismantling of Trackworks’ installations on the ground that they constituted prohibited visual clutter. Trackworks refused, prompting MMDA to dismantle the billboards and signages.
Procedural History
March 2002 – Trackworks filed an injunction suit in the Pasig City RTC (Civil Case No. 68864), obtained a temporary restraining order (TRO) on March 6, and a writ of preliminary injunction on March 25 prohibiting MMDA from further dismantling.
2002–2005 – MMDA petitioned the Court of Appeals (CA) for certiorari and prohibition; CA denied relief on August 31, 2004 and again on March 14, 2005 after reconsideration.
October 25, 2005 – The Supreme Court denied MMDA’s petition for review (G.R. No. 167514). Meanwhile, on October 10, 2005, the RTC rendered a final decision permanently enjoining MMDA from dismantling Trackworks’ advertising media.
April 30, 2007 – The CA, in the interlocutory appeal from the RTC decision, affirmed the permanent injunction. Its resolution denying MMDA’s motion for reconsideration was issued on September 3, 2007.
December 16, 2009 – The Supreme Court resolved MMDA’s petition for review under G.R. No. 179554.
Issue
Whether MMDA, under its charter and regulatory issuances, had the authority to unilaterally dismantle, remove, or destroy billboards, signages, and other advertising media installed by Trackworks on privately owned MRT3 structures pursuant to a valid contract with MRTC.
Supreme Court Ruling
- Contractual and Property Rights. The Court recognized that MRTC, as owner of MRT3 under the 1997 BLT agreement, validly contracted with Trackworks for advertising services. Trackworks thereby acquired lawful proprietary rights to install and maintain billboards and signages in the MRT3 structures during the development rights period.
- MMDA’s Statutory Powers. Under the MMDA Charter (RA 7924) and consistent with the 1987 Constitution’s framework for local government authorities, MMDA’s functions are planning, coordination, monitoring, regulation, and supervision of metro-wide servic
Case Syllabus (G.R. No. 179554)
Antecedents
- In 1997, the Department of Transportation and Communications (DOTC) entered into a Build-Lease-Transfer (BLT) Agreement with Metro Rail Transit Corporation, Limited (MRTC) under Republic Act No. 6957.
- Under the BLT Agreement, MRTC was to build, own, and operate the Metro Rail Transit Line 3 (MRT3) for 25 years, after which ownership would transfer to the Government.
- The BLT Agreement expressly granted MRTC development rights over commercial premises and air space in the MRT3 structures, including the right to obtain advertising income therefrom.
- In 1998, Trackworks Rail Transit Advertising, Vending & Promotions, Inc. (“Trackworks”) contracted with MRTC to provide advertising services and installed billboards, signages, and other media on MRT3 structures.
Contractual Provisions under the BLT Agreement
- Section 16.1 confirmed MRTC’s rights to:
- Develop commercial premises in the depot and air space above the stations.
- Lease, sub-lease, or assign interests in those areas.
- Obtain all advertising income from the depot and air space.
- Section 16.2 allowed MRTC to assign or sub-contract its development rights to bona fide real estate developers, including agreements for advertising.
Installation of Advertising Media by Trackworks
- Following its contract, Trackworks installed commercial billboards, signs, and other advertising media throughout the interior and exterior structures of MRT3.
- These installations remained in place from 1998 until challenged by the MMDA in 2001.
MMDA Regulation and Dismantling
- In 2001, the Metropolitan Manila Development Authority (MMDA) issued Regulation No. 96-009, prohibiting the posting or display of any form of billboard, sign, poster, or streamer on public roads, sidewalks, center islands, posts, trees, parks, and open spaces.
- MMDA requested Trackworks to dismantle its installations on the EDSA center island, now occupied by MRT3, asserting its mandate to regulate thoroughfares and ensure public safety.
- Upon Track