G.R. No. L-27319 January 31, 1969
JOSE MA. LOCSIN, JESUSA LOCSIN, CONCEPCION LOCSIN, EMMA LOCSIN, ROSARIO LOCSIN and TERESITA LOCSIN, petitioners, vs. HON. RAFAEL C. CLIMACO, in his capacity as District Judge of the Court of First Instance of Negros Occidental, 12th Judicial District, and HAWAIIAN-PHILIPPINE COMPANY, respondents.

FACTS

Petitioners, the Locsins, are owners of Hacienda San Vicente in the Silay-Saravia sugar mill district. Respondent Hawaiian-Philippine Company (the Central) is a sugar milling company that operated in the district since the 1920-1921 crop year. In 1919, the Central entered into 30-year milling contracts with planters, granting it rights of way to construct and operate a railway system on their lands, including the Locsins’ hacienda. These contracts expired in 1952. On March 30, 1953, the Central and the Asociacion de Hacienderos de Silay-Saravia, representing the planters, entered into a 12-year memorandum agreement. Paragraph 10 of this agreement provided that the rights of way from the previous contracts were granted for the agreement’s term, and the Central had two years after its expiration to remove the railroad tracks, after which unremoved tracks would become the planter’s property. This 1953 agreement expired with the 1963-1964 crop year. Negotiations for a new agreement collapsed, and the Asociacion organized a new company to establish a competing sugar mill. The Central informed planters it would abide by Republic Acts 809 and 1825 if no new contract was made. In 1965, the Central proposed to continue using the railway pending a court decision on the rights of way, but this was rejected. The Central then decided to dismantle the railway, invoking its 2-year removal period under paragraph 10. On January 31, 1966, a group of 94 planters (not including the Locsins) filed an injunction suit (CC 246) to prevent the removal, arguing that under R.A. 809, the Central was bound to continue milling. The trial court issued a preliminary injunction ordering the Central not to remove the tracks and to allow their use for transporting cane. The Locsins, who were not parties to CC 246 but whose land was traversed by the railway, filed the present certiorari petition, arguing the injunction affected their property rights without due process and was issued with grave abuse of discretion.

ISSUE

Whether the respondent Judge committed grave abuse of discretion in issuing the writ of preliminary injunction in Civil Case No. 246, which ordered the Central not to remove its railway tracks from the lands of the plaintiff planters and to allow the use of said railway for transporting sugar cane, thereby affecting the property rights of the petitioners who were not parties to the case.

RULING

Yes, the respondent Judge committed grave abuse of discretion. The Supreme Court granted the petition for certiorari and annulled the challenged orders. The Court held that the preliminary injunction was issued on an erroneous premise. The Central’s right to use the railway under the 1953 memorandum agreement had expired, and there was no existing contractual basis for its continued use. The injunction effectively extended the contractual rights beyond their stipulated term, which the court cannot do. Furthermore, for the Central to claim a compulsory legal easement of right of way under the Civil Code, it must prove the existence of all statutory requisites, including that the easement is established at the point least prejudicial to the servient estate and that indemnity is paid. The trial court made no specific findings that these prerequisites existed. The issuance of the injunction, which presumed the Central’s entitlement to such an easement without proper averment or proof, constituted a grave abuse of discretion. The function of an injunction is to maintain the status quo at the time of issuance; at that time, the Central’s contractual right had already expired. The orders were annulled and set aside.