G.R. No. 101469 September 4, 1992
MALAYAN INTEGRATED INDUSTRIES, CORPORATION, petitioner, vs. THE HON. COURT OF APPEALS, CITY OF MANDAUE, MAYOR ALFREDO M. OUANO, VICE MAYOR PATERNO P. CANETE, SANGGUNIANG PANGLUNGSOD MEMBERS MANUEL M. MASANGKAY, NOEL C. SOON, CESAR CABAHUG, JR., RAYMUNDO A. CENIZA, CYNTHIA S. BLANCO, PONTICO E. FORTUNA, RAFAEL J. MAYOL and PAULINO P. DY, F.F. CRUZ & CO., INC., CEBU CONTRACTORS ASSOCIATION, MANDAUE REALTY & RESOURCES CORPORATION AND PHILIPPINE ORION PROPERTIES, INC., respondents.

FACTS

On December 12, 1977, the City of Mandaue and Malayan Integrated Industries Corporation (MALAYAN) signed a contract for the reclamation and development of approximately 360 hectares of offshore and foreshore land. This contract required approval from the Office of the President. Presidential Decree No. 3-A (1973) and Executive Order No. 525 (1979) designated the Public Estates Authority (PEA) as the central authority for reclamation projects. An Opinion by the Minister of Justice in 1979 stated that P.D. No. 3 -A impliedly withdrew the city’s charter right to reclaim land, but the city could be authorized by PEA. Accordingly, the city passed resolutions to enter into a contract with PEA, and MALAYAN signed a Confirmatory Agreement in 1979 to prepare required feasibility studies. Although President Marcos “approved in principle” the project, a formal contract remained pending. After the 1986 revolution, the project was resubmitted to President Aquino but remained unapproved. In 1989, PEA recommended updating the feasibility study. The City of Mandaue, desiring to proceed, informed PEA it was negotiating with F.F. Cruz & Co., Inc. The Sanggunian authorized the Mayor to enter into a reclamation contract with F.F. Cruz on April 19, 1989, and the contract was signed on April 26, 1989. On June 27, 1989, by authority of the President, Executive Secretary Catalino Macaraig, Jr. approved the Mandaue reclamation project with F.F. Cruz and expressly disapproved and declared without force and effect the 1977 contract with MALAYAN for violation of P.D. No. 3 -A and failure to implement the project within a reasonable time. On November 26, 1990, MALAYAN filed a petition for prohibitory and mandatory preliminary injunction in the Regional Trial Court of Cebu (Civil Case No. CEB-9658) to restrain the implementation of the city’s contract with F.F. Cruz and to allow MALAYAN to undertake the reclamation. The RTC issued orders on December 18, 1990 (granting a preliminary injunction) and June 28, 1991 (denying a motion to dissolve it). The City of Mandaue, et al. filed a petition for certiorari with the Court of Appeals (CA-G.R. SP No. 25621). The Court of Appeals issued a resolution on August 28, 1991, granting a writ of preliminary injunction enjoining the enforcement of the RTC’s orders. MALAYAN filed the present special civil action of certiorari and prohibition before the Supreme Court, assailing the Court of Appeals’ resolutions and the writ of preliminary injunction.

ISSUE

Whether the Court of Appeals exceeded its jurisdiction or acted with grave abuse of discretion in issuing a writ of preliminary injunction in CA-G.R. SP No. 25621.

RULING

The Supreme Court denied the petition for lack of merit. The Court held that the Court of Appeals did not commit grave abuse of discretion. The core of the dispute was the validity and implementation of the reclamation contracts. The approval or disapproval of reclamation contracts by the President, through the Executive Secretary, is an executive function. The Executive Secretary, as an alter ego of the President, acts with the President’s presumptive authority. The Office of the President’s approval of the contract with F.F. Cruz and the disapproval of the contract with MALAYAN is not subject to judicial review under the principle of separation of powers, absent a showing of grave abuse of discretion amounting to lack or excess of jurisdiction. MALAYAN’s petition in the RTC did not assail the Office of the President’s action or implead the President or Executive Secretary as parties. Therefore, the Court of Appeals’ issuance of the preliminary injunction to maintain the status quo and prevent the enforcement of the RTC’s orders, which interfered with a project approved by the Chief Executive, was not a grave abuse of discretion. The petition was denied.