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#186 MANTRUSTE SYSTEM v.

CA AUTHOR: Kylie Dado


179 SCRA 136 (1989) Notes:
TOPIC: Interdependence, Blending of Powers and Checks and Balances
PONENTE: Grio-Aquino, J.

CASE LAW/ DOCTRINE:


While the judicial power may appear to be pervasive, the truth is that under the system of separation of powers set up in the Constitution, the
power of the courts over the other branches and instrumentalities of the Government is limited only to the determination of "whether or not there
has been a grave abuse of discretion (by them) amounting to lack or excess of jurisdiction" in the exercise of their authority and in the performance
of Page 145 their assigned tasks (Sec. 1, Art. VIII). Courts may not substitute their judgment for that of the APT, nor block, by an injunction, the
discharge of its functions and the implementation of its decisions in connection with the acquisition, sale or disposition of assets transferred to it.

Emergency Recit:
By virtue of the issuance of Proc. No. 50, DBP terminated the interim lease agreement with MSI, and the property will be sold through public
bidding. MSI contested arguing that it has acquired a priority right to purchase said properties. Lower court granted the petition however the CA
nullified it on the ground that it is violative of Sec. 31 of Proc. No. 50, which prohibits the courts from issuing restraining orders and writs of
injunction against the APT and the purchasers of any assets sold by it. SC ruled that such provision is constitutional, as it does not infringe any
provision of the Constitution. It does not impair the inherent power of courts "to settle actual controversies which are legally demandable and
enforceable and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the government" (Sec. 1, Art. VIII). The power to define, prescribe and apportion the jurisdiction of the various
courts belongs to the legislature, except that it may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section 5, Article
VIII of the Constitution.
FACTS:

Mantruste Systems, Inc. (MSI) entered into an interim lease agreement with the DBP, the owner of Bayview Plaza Hotel. The agreement provides
that MSI would operate the hotel for a minimum of three months or until such time that the said properties are sold to MSI or other third parties
by DBP. During the said period, the President issued Proclamation No. 50 (Launching a Program for the Expeditious Disposition or Privatization of
certain Government Corporations and/or the (acquired) assets thereof and creating a Committee on Privatization and the Asset Privatization Trust).
The Bayview Hotel has been one of the identified assets for privatization and it was transferred from DBP to APT for disposition.

DBP notified MSI that it was terminating the interim lease agreement. It has been agreed that 30 days from the signing of the Certification, the
lease contract will be considered as terminated; the Bayview Hotel will be made available for inspection at all times by other bidders; and said
property will be ready for delivery to any new owners 30 days from signing the Certification. A letter granting an extension of 30 days was sent by
APT to MSI. This is to allow the latter to wind up affairs and to facilitate a smooth turn-over of the facilities to its new owners without necessarily
interrupting the hotels regular operation.

After 15 days, MSI informed APT that since its lease on the hotel properties has been for more than one year now, its lessee status has taken the
character of a long term one. As such MSI as the lessee has acquired certain rights and privileges under the law and equity. It also contends that it
has acquired a priority right to purchase said properties above other interested parties.

APT, on a reply said that it has not found any stipulation tending to support MSIs claim and since the Pre-Bidding Conference has been conducted,
for APT to consider the request of MSI would not be in consonance with law, equity and fair play.

According to herein private respondent, because of the questions it posed to the Trust, it was "immediately disqualified from the public bidding."
The trust alleged on the other hand that MSI voluntarily desisted from participating in the bidding. The property eventually was awarded to herein
petitioners Makati-Agro Trading and La Filipina Uy Gongco Corporation.

MSI filed a petition for preliminary injunction with the lower court. The said court granted the petition but the Court of Appeals nullified the lower
courts ruling for being violative to Section 31 of Proclamation No. 50 which provides:

No court or administrative agency shall issue any restraining order or injunction against the trust in connection with the acquisition, sale or
disposition of assets transferred to it. Nor shall such order or injunction be issued against any purchaser of assets sold by the Trust to prevent such
purchaser from taking possession of any assets purchased by him.

The CA rejected the lower courts opinion that said proclamation is unconstitutional, rather it upheld that it continues to be operative after the
effectivity of the 1987 Constitution by virtue of Section 3 Art. XVIII. It also noted that MSI has not been deprived of its property rights since those
rights are non-existent and its only property right was the alleged reimbursable advances made to DBP, which it may sue to collect in a separate
action. It further held that the issuance of writ of preliminary injunction by the lower court against APT may not be justified as a valid exercise of
judicial power for MSI does not have a legally demandable and enforceable right of retention over the said property. The MSI then filed this
petition for certiorari with this Court.
ISSUE: W/N CA erred in not declaring Sec. 31 of Proc. No. 50 unconstitutional, prohibiting the issuance of of a writ of preliminary injunction by
the lower court

HELD: NO
RATIO:

Section 31 of Proclamation No. 50-A does not infringe any provision of the Constitution. It does not impair the inherent power of courts "to settle
actual controversies which are legally demandable and enforceable and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government" (Sec. 1, Art. VIII). The power to define,
prescribe and apportion the jurisdiction of the various courts belongs to the legislature, except that it may not deprive the Supreme Court of its
jurisdiction over cases enumerated in Section 5, Article VIII of the Constitution (Sec. 2, Art. VIII).

The President, in the exercise of her legislative power under the Freedom Constitution, issued Proclamation No. 50-A prohibiting the courts from
issuing restraining orders and writs of injunction against the APT and the purchasers of any assets sold by it, to prevent courts from interfering in
the discharge, by this instrumentality of the executive branch of the Government, of its task of carrying out "the expeditious disposition and
privatization of certain government corporations and/or the assets thereof' (Proc. No. 50), absent any grave abuse of discretion amounting to
excess or lack of jurisdiction on its part. This proclamation, not being inconsistent with the Constitution and not having been repealed or revoked
by Congress, has remained operative (Sec. 3, Art. XVIII).

While the judicial power may appear to be pervasive, the truth is that under the system of separation of powers set up in the Constitution, the
power of the courts over the other branches and instrumentalities of the Government is limited only to the determination of "whether or not there
has been a grave abuse of discretion (by them) amounting to lack or excess of jurisdiction" in the exercise of their authority and in the performance
of Page 145 their assigned tasks (Sec. 1, Art. VIII). Courts may not substitute their judgment for that of the APT, nor block, by an injunction, the
discharge of its functions and the implementation of its decisions in connection with the acquisition, sale or disposition of assets transferred to it.

There can be no justification for judicial interference in the business of an administrative agency, except when it violates a citizen's constitutional
rights, or commits a grave abuse of discretion, or acts in excess of, or without jurisdiction.
DISSENTING/CONCURRING OPINION(S):