G.R. No. 88705 June 11, 1992
JOY MART CONSOLIDATED CORPORATION, petitioners, vs. HON. COURT OF APPEALS, PHOENIX OMEGA DEVELOPMENT AND MANAGEMENT CORPORATION and LIGHT RAIL TRANSIT AUTHORITY, respondents.

FACTS

In 1978-79, the government planned the Light Rail Transit (LRT) system. Joy Mart’s property at Carriedo Street, Manila, was among those needed for the LRT system. Joy Mart consented to sell its property and waive its leasehold rights over adjacent lots, provided it would be given the first option to redevelop the entire area known as the consolidated block of the LRT Carriedo station. This agreement was embodied in a Deed of Absolute Sale dated February 22, 1983. Joy Mart subsequently constructed an eight-storey building in the area based on this understanding and assurances from the Light Rail Transit Authority (LRTA). However, on November 28, 1986, LRTA entered into a Commercial Stalls Concession Contract with Phoenix Omega Development and Management Corporation (Phoenix), awarding it all commercial spaces within the LRT stations, including the consolidated block. Upon learning of this in 1987, Joy Mart filed a complaint for specific performance and damages with a prayer for a writ of preliminary injunction against LRTA and Phoenix in the Regional Trial Court (RTC) of Manila, Branch XXXII (Civil Case No. 87-41731). On September 25, 1987, the RTC issued the writ of preliminary injunction, commanding Phoenix to cease and desist from construction adjacent to Joy Mart’s leased premises. Phoenix filed a Petition for Certiorari and Prohibition (CA-G.R. SP No. 12998) in the Court of Appeals to challenge this writ. While this petition was pending, LRTA and Phoenix filed a joint petition in the RTC to dissolve the writ, offering to post a counterbond. On July 6, 1988, the RTC dissolved the writ. The Court of Appeals (Sixteenth Division), apprised of this dissolution, dismissed Phoenix’s certiorari petition (CA-G.R. SP No. 12998) as moot and academic. Joy Mart then filed its own petition for certiorari (CA-G.R. SP No. 15618) in the Court of Appeals (Ninth Division) to challenge the RTC’s dissolution order. The Ninth Division dismissed Joy Mart’s petition, prompting Joy Mart to elevate the matter to the Supreme Court.

ISSUE

Does a trial court possess jurisdiction to dissolve a writ of preliminary injunction which is pending review on certiorari in the Court of Appeals?

RULING

No. The Supreme Court ruled that the trial court lost jurisdiction to dissolve the writ of preliminary injunction once a petition for certiorari questioning its issuance was filed and pending in the Court of Appeals. The filing of the certiorari petition (CA-G.R. SP No. 12998) seeking to annul the writ placed the issue of the injunction’s validity within the exclusive appellate jurisdiction of the Court of Appeals. Therefore, the RTC’s order dissolving the writ was null and void. The Supreme Court further held that LRTA and Phoenix’s act of applying to the RTC for dissolution while their certiorari petition was pending constituted forum shopping, which is prohibited. The Court of Appeals’ dismissal of Phoenix’s petition should have been based on this forum shopping, not on mootness. Consequently, the Supreme Court granted Joy Mart’s petition, annulled the Court of Appeals’ decision in CA-G.R. SP No. 15618, and ordered the reinstatement of the preliminary writ of injunction issued on September 23, 1987.