MANTRUSTE SYSTEMS VS CA

G.R. Nos. 86540-41 November 6, 1989 [Judicial Power]

FACTS:
MSI entered into an 4 interim lease agreement with DBP, owner of Bayview Plaza Hotel, where it would
operate the hotel for a minimum of 3 months or until such time that the said properties are sold to MSI or
other 3rd parties by DBP.
The Bayview Hotel was subsequently identified for privatization under Proclamation No. 50 and was
consequently transferred from DBP to Asset Privatization Trust for disposition. The DBP notified MSI that
it was terminating the interim lease agreement to effect the disposition of the property. The APT granted
the President of MSI's condition an extension of 30 days within which to effect the delivery of the Bayview
Hotel to APT.
However, MSI sent a letter to APT stating that in their opinion, having leased the property for more than 1
year the agreement is long term in character and MSI have acquired preference in buying the property,
while emphasizing that MSI has a legal lien on the property because of its advances for the hotel
operations and repairs which amounted to P12 Million.
APT answered MSI saying that there was no agreement to that effect. The bidding took place but MSI did
not participate. Makati-Agro Trading and La Filipina Uy Gongco Corporation were awarded the property
as the highest bidder for P85 Million. MSI filed a complaint with injunction on awarding and transfer of the
property to the winning bidders. Trial court granted, but the CA reversed the trial court ruling for being
violative to Sec 1 of Proclamation No. 50: "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 TC's opinion that said proclamation is unconstitutional, rather it up held 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.

ISSUE:
WoN the CA erred in not declaring unconstitutional Sec. 31 of Proclamation No. 50, prohibiting the
issuance of a writ of preliminary injunction by the TC.

RULING:
Sec 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, 1987 Constitution).
Courts may not substitute their judgement 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.