Joy Mart Consolidated Corp. v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the redevelopment of a consolidated block of land adjacent to the LRT Carriedo station in Manila. Joy Mart Consolidated Corporation, the owner of the Isetann Department Store and lessee of the Presidente Hotel on the property, agreed to sell its land and leasehold rights to the Light Rail Transit Authority (LRTA) for the LRT project. As part of the agreement, Joy Mart was given the first option to redevelop the consolidated block. Joy Mart subsequently entered into a sublease agreement with Philippine General Hospital Foundation Inc., a concessionaire of LRTA, and invested significantly in constructing an eight-storey building. However, LRTA later entered into a Commercial Stalls Concession Contract with Phoenix Omega Development and Management Corporation, awarding it the areas within the LRT terminals and stations, including the consolidated block Joy Mart believed it had the first option to redevelop. Joy Mart discovered construction activities by Phoenix within the consolidated block and initiated legal action. 2. Procedural History: 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. The RTC issued a writ of preliminary injunction, ordering Phoenix to cease construction. Phoenix and LRTA then filed a petition for certiorari and prohibition with the Court of Appeals (CA), seeking to lift the injunction. While this petition was pending, Phoenix and LRTA filed a motion in the RTC to dissolve the injunction, arguing it caused them significant financial losses. The RTC granted this motion, dissolving the injunction. Subsequently, the CA dismissed Phoenix and LRTA's certiorari petition as moot. Joy Mart then filed a new petition with the CA, seeking to nullify the RTC's order dissolving the injunction. The CA granted a temporary restraining order and later dismissed Joy Mart's petition, leading to the present Supreme Court review. 3. The Petition: Joy Mart filed a petition for review on certiorari with the Supreme Court, arguing that the Court of Appeals erred in several aspects. Primarily, Joy Mart contends that the trial court lost jurisdiction to dissolve the writ of preliminary injunction once the matter was elevated to the Court of Appeals for review. Joy Mart also argues that Phoenix and LRTA engaged in forum-shopping by seeking dissolution of the injunction from the trial court while a certiorari petition regarding the same injunction was pending before the appellate court. Furthermore, Joy Mart asserts that Phoenix should have been held in contempt for violating a temporary restraining order issued by the Court of Appeals. The core issue presented to the Supreme Court is whether the trial court retained jurisdiction to act on the motion to dissolve the preliminary injunction after it had been brought before the Court of Appeals for review.
Issue(s)
Whether the trial court had jurisdiction to dissolve a writ of preliminary injunction that was pending review in the Court of Appeals. Whether the actions of Phoenix Omega Development and Management Corporation and LRTA in seeking relief from the trial court after elevating the writ to the Court of Appeals constituted forum-shopping. Whether Phoenix Omega Development and Management Corporation was guilty of contempt for continuing construction and allowing occupancy despite a temporary restraining order from the Court of Appeals. Whether the Court of Appeals erred in dismissing Joy Mart's certiorari petition and in failing to find grave abuse of discretion by the trial court.
Ruling
The petition for review is granted. The Court of Appeals' decision dated February 28, 1989 in CA G.R. SP No. 15618 is annulled and set aside. The preliminary writ of injunction issued by the Regional Trial Court on September 23, 1987 in Civil Case No. 87-41731 is reinstated. The petition for certiorari in CA-G.R. SP No. 12998 filed by Phoenix and LRTA is properly dismissed for forum-shopping. Rentals received by private respondents after finality of this decision, if construction and occupancy have been completed, shall be deposited in the Regional Trial Court to await final judgment in Civil Case No. 87-41731. Costs are awarded against the private respondents. The Court of Appeals, Ninth Division, is ordered to hear and decide Joy Mart's petition to declare Phoenix in contempt of court for alleged disobedience of its temporary restraining order.
Ratio Decidendi
On Whether the trial court had jurisdiction to dissolve a writ of preliminary injunction pending review in the Court of Appeals: The Supreme Court held that the trial court lost jurisdiction to act upon the writ of preliminary injunction once the question of its annulment was elevated to the Court of Appeals for review. The Court explained that allowing the trial court to dissolve the writ while the appellate court was exercising review would preempt and divest the appellate court of its jurisdiction and frustrate the appellate process. The judgment emphasized that the appellate court possesses the power to try cases, conduct hearings, receive evidence and perform acts necessary to resolve factual issues within its jurisdiction (citing Sec. 9, par. (3), 2nd par., B.P. Blg. 129). The Court noted that the mere absence of a temporary restraining order from the appellate court did not authorize the trial court to interfere with or preempt the appellate court's determination of the writ. The trial court's action was characterized as an interference with the appellate court's jurisdiction and as grave abuse of discretion amounting to excess of jurisdiction. On Whether Phoenix and LRTA engaged in forum-shopping by seeking dissolution from the trial court after appealing to the Court of Appeals: The Supreme Court held that Phoenix and LRTA's application to the trial court to lift the writ of preliminary injunction after having elevated the matter to the Court of Appeals amounted to forum-shopping. The Court explained that by seeking relief in the trial court while a petition for certiorari was pending in the appellate court demanding annulment of the same writ, the respondents sought to divest the appellate court of its jurisdiction and to moot their own petition on appeal. The Court relied on the Interim Rules and Guidelines, Rules of Court, Rule 17, which treats the filing of similar petitions in different courts as forum-shopping and prescribes summary dismissal as a consequence. The Court found the dismissal by the Court of Appeals of Phoenix's certiorari petition to be correct in result but held that dismissal should have been grounded on forum-shopping rather than mootness. The Court concluded that such conduct merited extreme disapproval and warranted the reinstatement of the injunction and dismissal of the appellate petition for forum-shopping. On Whether Phoenix was guilty of contempt for continuing construction despite the Court of Appeals' temporary restraining order: The Supreme Court ordered that the Court of Appeals, Ninth Division, should hear and decide Joy Mart's petition to declare Phoenix in contempt for allegedly defying and disobeying the temporary restraining order issued on or about September 15-19, 1988. The Supreme Court's decision did not itself render a final finding of contempt but required the appellate court to take cognizance and adjudicate the contempt petition on the merits. The Court observed the factual allegation that Phoenix continued construction and allowed occupancy despite receiving the temporary restraining order, and directed that the matter be resolved by the Court of Appeals. The Supreme Court thus preserved Joy Mart's remedy for contempt and remanded that discrete question for proper determination by the appellate tribunal. On Whether the Court of Appeals erred in dismissing Joy Mart's certiorari petition: The Supreme Court found that the Court of Appeals, Ninth Division, committed grave abuse of discretion in dismissing Joy Mart's petition for certiorari which sought to set aside the trial court's dissolution of the injunction. The Court held that the appellate court displayed "regrettable indifference" by treating the trial court's interference as moot and academic rather than addressing the jurisdictional encroachment and forum-shopping concerns raised by Joy Mart. The Supreme Court therefore annulled and set aside the Court of Appeals' dismissal, reinstated the writ, and remanded the contempt question for disposition.
Main Doctrine
A trial court loses jurisdiction to dissolve or otherwise modify a writ of preliminary injunction after the propriety of that writ has been elevated to the intermediate appellate court for review; a party who seeks to litigate the same writ simultaneously before the trial court and the appellate court commits forum-shopping, warranting dismissal of the petition and reinstatement of the injunction.