G.R. No. 163406 November 24, 2009
POWER SITES AND SIGNS, INC., Petitioner, vs. UNITED NEON (a Division of Ever Corporation), Respondent.

FACTS

Petitioner Power Sites and Signs, Inc. (Power Sites) secured permits and began constructing a billboard in Alabang, Muntinlupa. It later discovered respondent United Neon constructing its own billboard merely one meter away, which completely blocked Power Sites’s sign. Power Sites’s requests for United Neon to adjust or cease construction were ignored. Consequently, Power Sites filed a Petition for Injunction with the Regional Trial Court (RTC) to halt United Neon’s construction. United Neon claimed priority, asserting it had secured a lease contract for the property and registered it with the Outdoor Advertising Association of the Philippines (OAAP), thereby obtaining an exclusive four-month line-of-sight right under the OAAP Code of Ethics.
The RTC granted Power Sites’s application for a preliminary injunction, ordering United Neon to cease construction and dismantle any existing structures. The RTC found that United Neon’s continued construction would cause Power Sites grave injustice and irreparable damage through loss of profits and potential client claims. United Neon elevated the case to the Court of Appeals via a petition for certiorari, arguing the injunction was improper.

ISSUE

Whether the Court of Appeals correctly reversed the RTC’s grant of a writ of preliminary injunction in favor of Power Sites.

RULING

Yes, the Court of Appeals was correct. The Supreme Court affirmed the appellate court’s decision, holding that Power Sites failed to establish a clear and unmistakable right entitling it to the injunctive relief. A preliminary injunction requires a showing of a right in esse, or a clear legal right to be protected. The legal basis Power Sites invoked was Section 3.3 of the OAAP Code, which mandates avoiding installation that covers an existing sign. However, the evidence showed United Neon registered its lease contract with the OAAP on January 28, 2002, thereby securing an exclusive four-month line-of-sight right starting from that date. Power Sites’s building permit was issued later, on February 11, 2002. Therefore, at the time United Neon began its construction, it was acting pursuant to a prior, registered right under the industry’s self-regulatory code. Power Sites could not claim a superior right based on the same code. Since the core purpose of a preliminary injunction is to preserve the status quo ante litem, and the status quo was defined by United Neon’s prior registered right, the RTC’s order—which effectively altered that status by mandating dismantling—constituted a grave abuse of discretion. The injunction was improperly granted.