G.R. No. 106043. March 4, 1996.
CAGAYAN DE ORO CITY LANDLESS RESIDENTS ASSOCIATION INC. (COCLAI), petitioner, vs. COURT OF APPEALS and the NATIONAL HOUSING AUTHORITY (NHA), respondents.

FACTS

The dispute involves Lot No. 1982 in Cagayan de Oro City. Petitioner COCLAI, an association of landless residents, had occupied portions of the lot since the 1960s under a Survey Authority from the Bureau of Lands and a pending Miscellaneous Sales Application. The land was originally public land, and a title (OCT No. 0-257) previously issued to private parties was annulled by the Supreme Court in 1982, reverting the property to the public domain. Subsequently, President Marcos issued Proclamation No. 2292 in 1983, reserving the entire lot for a Slum Improvement and Resettlement (SIR) Project to be implemented by respondent NHA. The Bureau of Lands then rejected COCLAI’s subdivision survey.
In 1986, NHA agents, with police assistance, demolished structures erected by COCLAI members. COCLAI filed a forcible entry case (Civil Case No. 11204) and won in the Municipal Trial Court, with an order for restitution of possession. While that case was pending, the national government issued a Special Patent covering the lot in favor of NHA, which then obtained Original Certificate of Title No. P-3324 in 1990. The day after COCLAI moved for execution of the forcible entry judgment, NHA filed a new action for Quieting of Title with an application for a preliminary injunction to prevent COCLAI from retaking possession via the writ of execution.

ISSUE

Whether the Court of Appeals correctly granted a writ of preliminary injunction in favor of NHA to enjoin the enforcement of the MTCC’s decision in the forcible entry case.

RULING

Yes, the Court of Appeals was correct. The Supreme Court affirmed the grant of the preliminary injunction. The legal logic rests on the superior right established by NHA’s Torrens title and the nature of the pending quieting of title suit. A preliminary injunction is a preservative remedy to prevent irreparable injury and to ensure the efficacy of a future judgment. Here, NHA demonstrated a clear legal right based on its certificate of title issued by virtue of a special patent and presidential proclamation. This right is prima facie evidence of ownership.
In contrast, COCLAI’s claim, based on a mere sales application, was rendered ineffectual after the land was proclaimed for a public purpose and its survey was officially rejected. Its possession thus became that of a squatter. Enforcing the MTCC’s restitution order, from which NHA was not a party, would transfer possession of titled land and cause irreparable injury to NHA by rendering the quieting of title action moot. The general rule against using injunction to transfer possession admits an exception when one party holds a Torrens title, as NHA does. Therefore, the injunction was proper to maintain the status quo and preserve the subject matter of the litigation pending final adjudication of ownership.