G.R. No. 160399, December 9, 2015
THE CITY OF ILOILO, Represented by HON. MAYOR JERRY P. TRENAS, Petitioner vs. HON. JUDGE RENE B. HONRADO, PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 29, ILOILO CITY, AND JPV MOTOR VEHICLE EMISSION TESTING & CAR CARE CENTER, CO., REPRESENTED BY JIM P. VELEZ, Respondents

FACTS

Respondent JPV Motor Vehicle Emission Testing and Car Care Center (JPV) operates a Private Emission Testing Center (PETC) in Iloilo City with a four-lane capacity. It filed a complaint for injunction against the City of Iloilo to prevent the latter from acting on a pending application for a new PETC filed by Grahar Emission Testing Center. JPV anchored its claim on Department Order No. 2002-31 from the DOTC, which rationalized PETC authorization based on vehicle population, setting a guideline of one PETC lane per 15,000 registered vehicles. JPV argued that with 53,647 registered vehicles in Iloilo City, its four lanes (capable of serving 60,000 vehicles) were sufficient, making a new PETC unnecessary and potentially leading to “ruinous competition.”
The Regional Trial Court (RTC) granted JPV’s application for a writ of preliminary injunction, ordering the City to desist from issuing a mayor’s permit to the new applicant. The City and the intervenor, Grahar, moved for reconsideration, pointing out that the DOTC had subsequently issued Department Order No. 2003-24, amending the vehicle requirement from 15,000 to 12,000 vehicles per lane. This amendment meant JPV’s capacity was effectively reduced to serving 48,000 vehicles, which was less than the registered vehicle population. The RTC denied the motion, insisting the injunction was proper to prevent unhealthy competition.

ISSUE

Whether the Regional Trial Court committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the writ of preliminary injunction.

RULING

Yes, the Supreme Court granted the petition and annulled the RTC’s orders. The Court held that the RTC committed grave abuse of discretion by effectively prejudging the main case and deciding controverted facts through the injunctive writ. A preliminary injunction is a provisional remedy meant to preserve the status quo pending final adjudication; it should not determine the merits of the case. Here, the RTC’s orders conclusively ruled on the core issue of whether another PETC was necessary or permissible under the DOTC guidelines. By enjoining the City Mayor based on its interpretation of the DOTC orders and its finding that JPV’s capacity was sufficient, the RTC prematurely decided the very question that required a full trial on the merits. This overstepped the purpose of a preliminary injunction. Furthermore, the RTC disregarded the subsequent DOTC amendment, which altered the factual basis for JPV’s claim of exclusive sufficiency. The writ, therefore, improperly restricted the City’s exercise of its discretionary power to issue business permits based on a finding that was not yet final.