JOSE MA. LOCSIN, JESUSA LOCSIN, CONCEPCION LOCSIN, EMMA LOCSIN, ROSARIO LOC­SIN AND TERESITA LOCSIN, PETITIONERS, VS. HON. RAFAEL C. CLIMACO, IN HIS CAPACITY AS DISTRICT JUDGE …

This is a petition for certiorari with preliminary
injunction by Jose Ma., Jesusa, Concepcion,
Emma, Rosario and Teresita, all surnamed Locsin (hereinafter referred to as the Locsins),
own­ers of the hacienda San Vicente situated in the Silay-Saravia
mill district in Negros Occidental, against Judge
Rafael C. Climaco of the Court of First Instance of Negros Occidental and the Hawaiian-Philippine Company
(hereinafter referred to as the Central).

The Central is a domestic corporation organized under the laws of
the Philippines, with principal office in Manila and branch office in Silay City.  The
Central owns a centrifugal sugar mill loc­ated in the said city, has operated
it since the 1920-1921 crop year, and manufactures sugar from sugar cane
planted and grown in the aforesaid mill district, also known as the
Hawaiian-Philippine mill district 19.

In 1919 the Central entered into identical milling contracts with
the sugar planters in the mill district, effective for thirty (30) crop years
from 1921-1922 to 1951-1952.  The
Central, under the milling contracts, undertook to construct, maintain and
operate a railway system over and across the lands of the sugar planters in the
mill district for the trans­portation of sugar cane, materials and
supplies.  Concomitant to the above
obligation, the landowners granted to the Central corresponding rights of way
over their lands.

In 1920 the Central constructed railroad tracks on the lands of
the sugar planters.  One trunk thereof
traverses the ha­cienda San Vicente.

The 1919 milling contracts expired automatically with the
1951-1952 crop year.

On March 30, 1953 the Central and the Asociacion
de Hacenderos de Silay-Saravia,
representing sugar planters in the mill district (hereinafter referred to as
the Asociacion), among them the Locsins, entered into a memorandum agreement, the term of
which was for twelve (12) crop years ending with the 1963­-1964 crop year.  Paragraphs 7, 8, 10 and 12 of this memorandum
agreement are hereunder quoted:

“7.  The Mill recognizes
the Asociacion de Hacenderos
de Silay-Saravia or its successors in interest as the
sole agent of the planters of the Silay-Saravia Mill
District in its dealings with them during the period of the milling
contract.  The Mill binds itself not to
enter into milling contracts with any individual planter except through the Asociacion de Hacenderos de Silay-Saravia.”

“8.  The Planter agrees
and undertakes to plant to cane at least one-third (1/3) of his land each crop
year, and to carry another one-third (1/3) thereof in ratoons,
or at his option, and sub­ject to the prior approval of the Planter’s Association, to plant to cane each crop
year not less than one-half (1/2) of his land, leaving the rest to fallow or
planted to other crops.”

“10.  Subject to the
provisions stated in paragraph 9 of this Agreement, the rights of way availed
of by the PARTY OF THE SECOND PART under the previous milling contract between
the Mill and the Planter shall be granted to said PARTY OF THE SECOND PART for
the entire period of the milling contract to be signed.  The PARTY OF THE SECOND PART shall have two (2) years from the expiration of the contract with­in
which to remove the railroad tracks at its expense, unless prevented from so
doing by force majeure, and after which period the
rail­road tracks not so removed shall become the absolute property of the Planter on whose pro­perty
it is situated.  During that period the
Plan­ters will be granted the use of said railroad tracks or the remaining
portions thereof, free of charge, provided that this does not delay or
interrupt the removal of the said tracks by the Mill.”

“12.  The Haciendas or
sugar cane plantations initially affected by this Agreement are more or less
the same as those affected by and described in the previous milling contracts
exe­cuted between the individual planters and the Hawaiian-Philippine Company
during the crop years 1921/1922-1951/1952 as registered in the offices of the
Register of Deeds of the Province of Negros
Occidental.”

The “previous milling contracts” referred to in para­graphs
10 and 12 above are the 1919 milling contracts.

The 1953 memorandum agreement expired automatically with the
1963-1964 crop year.

Prior to the expiration of the 1953 memorandum agreement, or
sometime in 1961, the Central and the Asociacion took
steps to negotiate a new agreement; the Asociacion
demanded a new milling contract on a 70% participation for the sugar planters
and 30% participation for the Central, and the eventual purchase by the sugar
planters of the sugar mill.  These
negotiations col­lapsed.  In April 1962
the Asociacion pressed its aforesaid de­mands and
made it known that unless the Central sold its sugar mill to the sugar
planters, the Asociacion would buy a sugar mill and
install and operate it in the mill district. 
Shortly afterwards the Asociacion organized
the Agricultural Industrial Development Company of Silay-Saravia
Incorporated (hereinafter referred to as the AIDSISA), with the primary purpose
of establishing and operating a sugar mill in the Silay-Saravia
mill district.  The Aso­ciacion
and the AIDSISA thereafter signed a 15-year milling con­tract to take effect
with the 1964-1965 crop year, and negotiations proceeded for the purchase of a
sugar mill from abroad.  The Loc­sins were among the signatories to this 15-year milling
contract.

On May 28, 1962 the Central informed the Asociacion
and all adherent sugar planters of its willingness to negotiate a new milling
contract, with the admonition that in the event the parties (Central-Planters)
could not agree on an extension of the 1953 memorandum agreement, or, if no new
milling contract is entered into between them after its expiration, the Central
would invoke and “abide by the pertinent provisions of Republic Acts 809
and 1825 including the prescribed division of shares between the sugar mill and
the sugar planters if said Acts shall not final­ly be declared invalid by the
courts and are still in force.”

On June 14 the Asociacion informed the
Central that (1) it would resume negotiations for a new milling contract on a
70% participation for the sugar planters and 30% participation for the Central;
(2) it desired an option to buy 50% of the common shares of the Central upon
the signing of a new contract and the remaining 50% common shares 5 years
afterwards, and (3) its decision to buy and own the sugar mill or to establish
a new one is “irrevocable.”

On June 25 the Central filed an action for declaratory re­lief
with the Court of First Instance of Manila (CC 50760)^[1]
against the Asociacion, Arsenio
J. Jison, and others named in an attached list,
numbering 74 in all, praying that judgment be rendered:

“(1) Declaring Section 4 of Republic Act No. 1825 unconstitutional
and hence, null and void.

“(2) In any event, defining the rights and obligations of
petitioner Central and respondents Arsenio J. Jison, et al. and other sugar cane planters similarly
situated as said respondents, under said statutory provision; (a) the sugar
cane planter is not the owner of the totality of the su­gar production
allowance or quota; (b) the right of the sugar cane planter to transfer the
quota can not prejudice the central’s share in said
quota; (c) the sugar cane planter can not establish a new central in a district
where there is a milling contract in force and the existing central can sa­tisfactorily
meet the milling needs of planters therein;
(d) the sugar cane planter can not trans­fer the quota to a central which did
not produce sugar during the pre-war years specified under Philippine and
American sugar quota legislation; (e) the sugar cane planter can not transfer
the quota to any other central, so long as the exist­ing central in the
district is willing to grant it the sharing participations established under
Sec­tion 1 of Republic Act No.
809 in the absence of a written milling contract.”

On June 29 the Asociacion informed the Central by letter that it
“welcomes your initiative in instituting an action for decla­ratory relief
to determine the respective rights of the millers and the planters under R.A.
1825.  Such action would constitute a
distinct service not only to us but also the entire sugar indus­try * * *.
“

On February
14, 1965 the AIDSISA
put up a sugar mill in the Silay-Saravia mill
district.

Sometime in November,
1965, the Central submitted the following two proposals to the sugar planters
in the mill district respecting the use and operation of the railway system:

“1) The rights-of-way
granted by the Planters to the Central over and across their respective
plantations, as provided for in the Memorandum Agreement shall continue and be
effective, in the meantime that the issue pertinent to said rights?of-way
has not been finally decided by the courts.

“2) Should final court judgment be in favor of the planters, the
Central shall have one year from the date of such final judgment within which
to remove the rails from the plantations concern­ed, and those rails not so
removed within said period shall become the property of the owners of the
respective plantations.”

When
these proposals were rejected by a majority
of the sugar planters, the Central decided to dismantle the railway system and
remove the tracks from the lands of the sugar planters, and so informed the latter
that pursuant to paragraph 10 of the 1953 me­morandum agreement, the Central
“shall have two (2) years
from the expiration of this contract within which to remove the railroad tracks
at its expense, unless prevented from so doing by force majeure,
and after which period the railroad tracks not so re­moved shall become the
absolute property of the Planter on whose property it is situated.”

On January 31, 1966 Luis
F. Magalona and other sugar planters in the mill district,
numbering 94 in all (who do not cons­titute a majority of the sugar planters in
the said mill district), filed a complaint for injunction with the Court of
First Instance of Negros Occidental (CC 246), praying
that an ex parte writ of preliminary
injunction issue restraining the Central from removing the railway system or
any portion thereof from their lands; that after a hearing on the merits, the
writ be made permanent until the close of the 1978-1979 crop year, pursuant to
milling agreements which the plaintiffs allegedly entered into; and that the
Cen­tral be directed to remove the railway system only after the said 1978-1979
crop year under just and
equitable conditions.

The 94 plaintiffs alleged that in the absence of written mill­ing
contracts between the Central and a majority of the sugar plan­ters in the mill
district, the Central-Planters relationship should be governed by sections 1
and 5 of R.A. 809,^[2]
Under which law the Central is bound to mill the sugarcane of the planters in
the mill district; that the then milling season in the district would continue
for 3 more months from February to April 1966, for which reason the Central had
to mill the sugar cane remaining in the fields; that a common practice in sugar
plantations is that new plantings and cultivation of ratoons
for the subsequent crop year are done simultaneously with the harvest of
seasoned canes, and for the ensuing 1966-1967 crop year the planters had
already planted sugar cane and/or cultivated ratoons
and they would continue to do so until the close of the 1965-1966 milling
season, and the new crops would be milled necessarily at the sugar mill of the
Cen­tral; that in view of the obligation of the Central to mill the sugar cane
the railway system would be absolutely necessary and indis­pensable; that the
Central has sued the Asociacion, et al., in the CFI
of Manila (CC 50760),^[3]
and the AIDSISA and others in the Court of First Instance of Negros Occidental (CC-214-S); that in the first case the
Central maintained that even in the absence of a milling agreement between the
Central and the sugar planters, the latter are obliged under existing laws to
mill their sugar cane in its (Central’s) sugar mill, and, without its consent,
cannot transfer their sugar production allowance and coefficient or quota to
any other sugar mill; that in CC 214-S the Central maintained that on the basis
of applicable laws and rulings of this Court, it has acquired a vested right as
the exclusive mill or mill company in the Silay-Saravia
mill district 19 for all sugar quotas allocated to the said district in the
form of production allowance and market­ing allotments, as well as the vested
right to demand from the planters after the expiration of the milling contracts
the reassump­tion by both parties of the same terms
and conditions mutually stipulated by them under the said milling contracts and
the continua­tion of the Central-Planters relationship as long as the said laws
are effective and the sugar limitation and quota system established thereunder continue; that the Central in the said civil
cases 50760 and 214-S impliedly assumed to keep the railway system intact at
least up to the termination of the said cases; that independently of the said
cases and in view of the absence of written milling con­tracts between the
Central and a majority of the sugar planters in the mill district, the former
might refuse to mill the sugar cane for the 1966-1967 crop year and on to
include the 1978-1979 crop year, or, during the same crop years, the sugar
planters may re­fuse or neglect to plant sugar cane in their lands, in any of
which eventuality the Philippine Government, pursuant to sections 4 and 5 of
R.A. 809, “in order to avoid a deficiency or delinquency of the national
quota,” might take over the sugar mill and/or the sugar plantations and
operate and administer them under its name and authority, and in these events
the railway system would be vital and necessary; that if not enjoined, the
Central will dismantle and remove the railway tracks thus precluding the
hauling and transportation of sugar cane and cause great and irreparable damage
to the sugar planters; that while other means of transportation might be
provided, like trucks and truck-trailers, their evi­dent shortcomings pitted
against the efficiency of locomotives and rail cars would result in permanent
irreparable injury to the com­plainants; that an injunctive writ would avoid
multiplicity of suits; and that their complaint for injunction is the only
plain, speedy and adequate remedy in the ordinary course of law to restrain the Central from removing
the railway system or any part thereof from the mill district.

On February 9 the CFI of Negros Occidental (CC 246) is­sued an order stating that at
the hearing on the petition for preli­minary injunction the counsel for the
Central “appeared and confirmed the main allegations in the Complaint –
particularly that despite its position that the previous milling agreement
between it and the Plaintiffs had been renewed by force of law, the Defendant
intends to remove the rails to protect its ownership over the said rails;”
and the same counsel further indicated that “an injunction would safeguard the said rights of ownership.” The same court
also stated that “the Plaintiffs are entitled to the relief de­manded,”
and consequently issued a writ of preliminary injunction restraining the
Central from removing the railway system or any portion thereof pending
decision of the case.

On March 4 the Central
filed its answer to the basic com­plaint, containing admissions with
clarifications and amplifica­tions, and averring that (1) under the doctrine
announced in Astu­rias Sugar Central, Inc. vs. Montinola,
69 Phil. 725, the railroad rights-of-way have by force of law been extended up
to July 3,1974 as to quota “A” and up to the end of 1973-1974 crop
year as to quo­tas “B” and “C”; (2) the grant of railroad
rights-of-way is an indi­visible obligation assumed collectively and generally
by all the sugar planters in the mill district under the 1919 milling contracts
and the 1953 memorandum agreement; (3) should it be eventually resolved
by the courts that there is no contract to govern the re­lationship between the
Central and the sugar planters in the mill district, still it would be
“quite remote” for the Central to refuse milling the sugar cane in
the district, it having manifested re­peatedly its willingness to mill the cane
on the basis of the parti­cipation rates fixed by section 1 of R.A . 809, and
until such time as the constitutionality of the said Act shall have been
decided by the courts; (4) the Central has decided to dismantle and remove the
railway system because “it would not want to run the risk of losing its
ownership over said railways,” pursuant to paragraph 10 of the 1953
memorandum agreement; (5) while in civil case 50760, the CFI of Manila, in its
order of February 11, 1966, held that “where the central is willing to
grant the participation pro­vided for in paragraph 4 of Republic Act 1825, and
the adherent planters are willing to accept such participation, the other
rights and obligations of the parties shall be covered by the memoran­dum of
the parties which shall be deemed reproduced in accord­ance with the ruling in
the case of Asturias Sugar Central vs. Montinola,”
nevertheless until that case is finally decided on ap­peal, the Central
“continues to be subject to the risk of losing ownership of its railways *
* * unless it dismantles the said rail­ways from the plantations;” and (6)
the basic complaint failed to include all the sugar planters in the mill
district, or, at least, all sugar planters who have granted rights-of-way to
the Central over and across their plantations, and their non-inclusion would
possibly prevent “the grant of complete relief as between the pre­sent
plaintiffs and defendant.”

Also on March 4 the
Central filed a third-party complaint against Lourdes de la Paz and other
third-party defendants, numbering 170 in all, including the Locsins, averring, in addition to allegations (1) to (6)
above, as an alternative cause of action, that if the 1919 milling contracts,
the 1953 memorandum agree­ment and the ruling in Asturias, supra,
do not justify a grant and/ or continuation of railroad rights-of-way over and
across the plantations in the Silay-Saravia mill
district, “the third-party plaintiff is entitled to said rights-of-way as
a legal easement un­der the Philippine Civil Code, the sugar limitation laws,
and the pertinent executive orders and regulations issued in implementa­tion
thereof.” The Central prayed that judgment be rendered, in the
alternative, (1) to compel the sugar planters in the mill dis­trict, including
the third-party defendants to grant the Central railroad rights-of-way
necessary for its railway system; or (2) if the sugar planters cannot be
compelled to grant the same, the Central be given a reasonable time (not less
than a year) to dis­mantle and remove the railway system from the plantations
concerned; and that the status quo be preserved during the pendency of the case.

On April 30 the third-party defendants answered the third-party
complaint, alleging, inter alia,
that the Central had never averred or maintained that the grant of railroad
rights-of-way over and across the lands of the sugar planters is an indivisible
obliga­tion assumed collectively and generally by all the sugar planters in the
mill district; that such averment was made by the Central only after and as a
result of the sugar planters’ assertion of their rights under paragraph 10 of
the 1953 memorandum agreement; that no such indivisible and collective obligation
could have been under­taken by the sugar planters under the milling contracts
or memo­randum agreement as no consideration was given to or received by them
in virtue of such obligation; that their obligations under the milling
contracts and the memorandum agreement are individual and separate, unrelated
to any other similar obligation in the same contracts and agreement; that there
is no need for the Central to demand a railroad right-of-way in the mill
district because the su­gar cane produced therein can be transported by other
means of transportation such as trucks and truck-trailers; that the acts of the
Central after the enactment of Act 4166^[4]
of executing and at­tempting to execute new milling contracts with the sugar
planters in the mill district providing for definite expiration periods in them
clearly indicate that it did not believe that the milling con­tracts and the
memorandum agreement were automatically re­newed; that assuming arguendo that the ruling in Asturias, supra,
is still controlling, nonetheless the reassumption mentioned in that case refers to the rights
and obligations of the Central and the planters on the basic milling
conditions, such as participation, rate, polarization, etc., and does not cover
other terms like the grant of railroad rights-of-way, which, even if related,
are nei­ther essential nor indispensable to its milling obligation since the
Central can comply with its milling obligations by transporting su­gar cane
from the plantations to the mill site by truck and truck-trailers; that having
failed to dismantle or remove its rails within two years after the 1963-1964 crop year, the
Central has lost own­ership thereof to the sugar planters-owners; and that they
deny they were “duly informed” of the Central’s decision to dismantle
its railroad tracks, the truth being that it was more practical for the Central
to risk an adverse court decision after several years in respect to the
ownership of the rails rather than remove them at its expense, aside from the
fact that it does not want to incur additional expense in acquiring trucks and
truck-trailers.  The third-party
defendants prayed that the third-party complaint be dismissed, that they be
declared owners of the railroad tracks found in their respective lands, and
that they be awarded reason­able attorney’s fees.

The third-party defendants O. Ledesma
& Co., Inc., Jua­nita J. Ledesma, Velia and Anita Gorres, filed a
separate answer to the third-party complaint, reproducing “in toto the allegations of the basic Complaint” in civil
case 246, “in so far as said alle­gations affect each of them, and adopt
and make their own all said allegations and prayers, reserving unto them,
however, the right to file
amendatory answer as the development of the issues warrants.”

On May 19 the Central answered the counterclaim for attor­ney’s
fees, further averring that the construction and maintenance of the railroad
rights-of-way and system by it were “sufficient and valid consideration
for the collective, solidary and indivisible obli­gation
of petitioners to grant or cause to be granted the rights-of­-way necessary for
said railway system;” that it had two years from the 1963-1964 crop year
within which to remove the railroad tracks and that said period has not yet
expired; and that by reason of the writ of preliminary injunction issued by the
respondent Judge, it had been prevented by force majeure
from removing the railroad tracks and that therefore it remained the owner
thereof. The Cen­tral prayed for the dismissal of the third-party defendants’
coun­terclaim.

On November 18 Jose Ma. Locsin notified
the Central that five days from receipt of such notice, he will “place
obstructions and close my hacienda, Hda. San Vicente x x x to all traffic tra­versing the same by way of the
railroad lines,” placed a sign “PRIVATE PROPERTY NO TRESPASSING JOSE
MA. LOCSIN” alongside the portion of the railroad tracks traversing a
boundary of the hacienda, and erected two posts, one on each side of the
railroad tracks.

On November 21 the Central
filed an urgent ex parte motion for
issuance of a writ of preliminary injunction, reiterating the main allegations
in its third-party complaint, and praying that the Locsins
be enjoined from obstructing and closing the portion of hacienda San
Vicente through which the railroad lines pass.

On November 21 also, the
94 sugar planters, complainants in civil case 246, filed a manifestation that
as such plaintiffs, they “in general, have legal interest in the
preservation and free use of the entire railways system subject matter of the
Complaint, and the plaintiffs Danilo Gamboa, Estate of Enrique Jaranilla,
Letty Mijares, Priscilla Maglinte, and Pilar G. Hofileña, in particular, have a special legal interest in
that portion of the said railways passing through Hacienda San Vicente, for the
additional reason that their sugar cane are presently being hauled or about to
be hauled by cane railways;” that they “have legal interest in the
success of the afore­said ‘Urgent Ex-Parte Motion for
Preliminary Injunction’ of the defendant and legal interest against the acts
which defendant seeks to be restrained in that pleading;” and that they
adopt the urgent ex parte motion for
preliminary injunction and join in the prayer for its approval.

On November 22 the CFI of
Negros Occidental
issued an order, granting a writ of preliminary injunction restraining any and
all parties to the case, particularly the Locsins,
“from removing or in any manner damaging the railroad lines of the
third-party plaintiff (Central), and/or obstructing, impeding or in any manner
hindering its continued use and operation thereof, pending final decision of
this case.” This order reads in part:

“The plaintiffs have filed a manifestation joining in the
petition for the issuance of such a writ, because the sugar of some of them are
hauled on the portion of the railways going thru Hacienda San Vicente.

“Among the issues raised by the pleadings are:

(a) 
Who owns the railways — the
Central or the individual planters?

(b) 
Does the Central still own and
enjoy a right-or-way thru the land of the planters?

“To allow any of the planters (whether plain­tiffs or
third-party defendants) to block the free movements of cane cars at this time —
i.e., before final resolution of the issues and during the milling season — is
to disturb the status quo; would work injustice to the Central
and to the plan­ters whose crop has to be transported to the mill; and would
seriously affect the production of sugar and
injure the national economy.

“The said railways system, it may be added, has been in use by
planters and Central these many, many years. 
To maintain the status quo for sometime yet cannot possibly prejudice greatly any one.”

On November 28 the Locsins moved to dissolve the writ, on the ground that it
was issued with grave abuse of discretion, because (1) the Central’s right to
maintain and operate the rail­way system within the hacienda San Vicente ceased to exist at the end of the
1964-1965 crop year, pursuant to paragraph 1 of the 1953 memorandum agreement;
(2) there is no specific averment in the Central’s third-party complaint and
Urgent Ex-Parte Mo­tion for Preliminary Injunction
that it has established the precon­ditions for the grant of a railroad
right-of-way over the hacienda, pursuant to articles 649 and 650 of the
Civil Code of the Philippines; (3) assuming arguendo
that the Civil Code grants the Cen­tral the necessary railroad right-of-way
over and across the hacienda, the Central waived this right when it
executed the 1919 milling
contracts and the 1953 memorandum agreement stipulating therein that the existence of the railroad
tracks would be co­terminous with the life of the said contracts; (4) the
railroad tracks are neither necessary nor indispensable to the operation of the
Central’s sugar mill, pointing out that at least two other sugar centrals in Negros Occidental employ trucks and truck-trailers in
transporting their cane from the plantations to their respective mill sites;
and (5) the Central in fact threatened to dismantle its railway complex in the
entire Silay-Saravia mill district and would have
succeeded in doing so had it not been res­trained.

On or about December 8
the Central opposed the motion to dissolve the writ of injunction, asserting
that its dissolution would pave the way for the perpetration of the threatened
acts – the blocking off of portions of the railway system – and once free
movement through the railway system is impeded, the railway system would be
rendered useless; that dissolution of the injunc­tion would negate whatever
judgment may be rendered on the main reliefs sought
by the 94 plaintiffs in their basic complaint and would do violence to the
judgment of the CFI of Manila in CC 50760, which, “in fine, directs the
continued operation of the railway sys­tem as one of the obligations under the Memorandum Agreement (milling
contract) which were indeclinably reassumed by the par­ties by operation of
law,” and now on appeal in L-26344; and that the Central being “in
uncontested possession of the railway sys­tem at the time the threatened acts of disturbance became known, to allow
any of the movants to block off portions of the said
rail­way system would be to run roughshod over the cardinal rule of law that
every possessor should be respected in his possession (art. 539, Civil
Code).”

On January 7, 1967 the
said court issued another order, stating that “to dissolve the preliminary injunction at this stage is to allow one of the parties to go ahead
and do what it pleases with the railway system even before the Supreme Court
will have resolved in the appealed case from the Court of First Instance of
Manila exactly what the rights of the Company and the planters are under the
Asturias case — and particularly the right to ope­rate and maintain the
railway,” and consequently maintained the writ of preliminary injunction.

Hence the present
petition, the Locsins contending that the orders of
November 22, 1966, and January 7, 1967, were is­sued with grave abuse of
discretion and in excess of jurisdiction, and praying that a restraining order
issue pending a hearing of the petition enjoining respondent court from
enforcing the writ, and that after a hearing on the merits the said orders be
annulled and the injunction made permanent.

We gave due course to the
petition on March 15, 1967 and required the respondents to file their
answer.

On the
Procedural Issues

The petition, the
respondents maintain, is fatally defective and should be dismissed, because (1)
it was filed without the peti­tioners first instituting a motion for
reconsideration of the order of January 7, 1967; and (2) it
does not implead as co-respondents the 94
complainants and the 170 third-party defendants (minus the Locsins),
pursuant to section 5 of Rule 65 of the Revised Rules of Court providing in
part that when the petition filed relates to the acts or omissions of a court
or judge, “the petitioner shall join, as parties defendant with
such court or judge, the person or per­sons interested in sustaining  the proceeding  in the court.”

1.  When a definite question
has been properly raised, ar­gued, and submitted to a lower court, and the
latter has decided the question, a motion for reconsideration is no longer
necessary as a condition precedent to the filing of a petition for certiorari
in this Court.^[5]
From the order of November 22, 1966, enjoining any and all parties to the case
“from removing or in any manner damaging the railroad lines,” the Locsins filed a motion to dis­solve the said writ,
contending that the writ was issued in excess of jurisdiction and with grave
abuse of discretion, and alleging five reasons in support thereof.  This motion was denied by the respondent
court when, in its order of January 7,
1967, it main­tained the effectivity of
the writ.  The motion to dissolve the
writ satisfied the requirements of a motion for reconsideration; ano­ther one
of the same specie would be a patent superfluity.

2.  43 C.J.S. 35 says that
in order to be entitled to an in­junction, a complainant must be the “real
party in interest,” and that a real party in interest is one “who has
an actual and subs­tantial interest in the subject matter, as distinguished
from one who has only a nominal interest, having reference not merely to the
name in which the action was brought, but to the facts as they appear or
record.” And 1 Sutherland’s Code Pleading, Practice and Forms, section 12,
page 11, defines a real party in interest as “the party who would be
benefited or injured by the judgment or the ‘party entitled to the avails of
the suit’.  ‘Interest’, within the
meaning of this rule, means material interest, an interest in issue and to be
affected by the decree, as distinguished from a mere interest in the question
involved, or mere incidental inte­rest.”

Tested by these rules the 94 plaintiffs and 170 third-party
defendants (minus the Locsins) are not real parties
in interest en­titled to an injunction. 
While the respondent court found that they “have legal interest in
the preservation and free use of the entire railway system,”
including of course the portion a the
hacienda San Vicente in question, such “legal interest” is
merely inciden­tal to, and entirely dependent upon, the primary rights and inte­rests
of the Central in maintaining and operating the railway sys­tem.  This is so because the 94 plaintiffs and the
170 third-party defendants have no cause of action against the Locsins, that is, they
have no right to demand from the latter “the preservation and free
use” of the part of the railway system that traverses the hacienda
San Vicente.  They have no contractual
relations with the Locsins.  Neither have they demanded that the Locsins grant them a railroad right of way over the hacienda
San Vicente.  And, significantly, they
have not come forward to ask that they be im­pleaded
as parties to the instant petition.

On the Merits

The basic issue herein
posed is whether or not the res­pondent court acted in excess of jurisdiction
and/or with grave abuse of discretion in issuing the writ of preliminary
injunction.

This Court, in Angela
Estate, Inc., et al. vs. Court of First Instance of Negros
Occidental et al.,^[6] explained quite un­equivocally that a writ
of preliminary injunction

“may be issued at any time after the
commence­ment of an action and before judgment, when it is established that the
plaintiff is entitled to the relief demanded and only when his complaint
shows facts entitling him to such relief. 
This extraordinary writ is not designed to protect contingent or future
rights.  ‘An injunction will not issue to
protect a right not in esse and which
may never arise or to restrain an act which does not give rise to a cause of
action.  (32 C.J. pp. 34, 35)’
‘Injunction, like other equitable reme­dies, will issue only at the instance of
a suitor who has sufficient interest or title in the right or pro­perty sought
to be protected. … For the court to act, there must be an existing basis of
facts af­fording a present right which is directly threat­ened by the
act sought to be enjoined.  An impend­ing
or threatened invasion of some legal right of the complainant, and some
interest in preventing the wrong sought to be perpetrated must be shown.  It is always a ground for denying
injunction that the party seeking it has insufficient title or interest to
sustain it, and no claim to the ultimate relief sought – in other words,
that he shows no equity.  Want of equity
on the part of the plaintiff in attempting to use the injunctive process of the court to enforce a mere barren right will
justify the court in refusing the relief even though the defendant has little
equity on his side.  The complainant’s
right or title, moreover, must be clear and unquestioned, for
equity, as a rule, will not take cognizance of suits to establish ti­tle, and
will not lend its preventive aid by injunction where the complainant’s title or
right is doubtful or
disputed.  He
must stand on the strength of his own
right or title, rather than on the weakness of that claimed by his adversa­ry.’
The possibility of irreparable damage, without proof of violation of an
actually existing right, is no ground for an injunction, being a mere damnum absque injuria.’“

The principal relief
sought by the Central, found in its third-party complaint, is that in the event
the 1919 milling con­tracts, the 1953 memorandum agreement, and the ruling in As­turias,
supra, do not justify the granting and/or continuation of the railroad
rights-of-way, the Central is entitled to, and should therefore be granted, a
right-of-way as a legal easement under the Civil Code of the Philippines, Act
4166 (otherwise known as “the Sugar Limitation Law”), and the pertinent
executive orders and regulations issued in implementation thereof.

The 1919 milling
contracts, as earlier stated, expired automatically with the 1951-1952 crop
year.  The 1953 memoran­dum agreement
expired automatically with the 1963-1964 crop year.

The Central contends,
notwithstanding, that its relationship with the sugar planters in the mill
district, and its right to maintain and operate the railroad rights of way,
continue by ope­ration of law, conformably with the ruling in Asturias,
hereun­der reproduced:

“Fue en virtud
de las mencionadas Leyes No. 213 del Congreso de los Estados Unidos,
y No. 4166 de la Legislatura Filipina, como los recurridos se vieron obligados
a moler sus cañas en la Central de la recurrente.  Hubo por consi­guiente una indeclinable reasuncion tanto por los
recurridos como por la recurrente de su contrato celebrado
antes de la zafra de 1931-1932, reanudando
entre si, las relaciones que entre ellos
entonces existian, y
viendose necesariamente obligadas a las prestaciones que se habian pro­metido mutua mente.  Esto es obvio porque
las obligaciones no solamente nacen de los contra­tos y cuasi contratos, y de los actos y omisiones ilicitos, o culposos o negligentes sino tambien y mas principalmente, de la ley.  (Art. 1089, Codigo
Civil.).”

The contention is old
saw, in a manner of speaking, which we disposed of in Angela Estate, supra, in the following words: “That case referred to a
planter who had a verbal milling contract with a central before the crop
year 1931-32.  Under this contract the
former received from the latter a certain form of bonus as additional
participation.  In the crop years
1932-1933 and 1933-1934, the planter milled his sugar cane with another
central.  After the passage of Act 4166
in 1934, the planter resumed milling his su­gar cane with the first
central.  Resolving the question whether
the planter was entitled to the same bonus which the central had given him in
the 1931-1932 and previous crop years, this Court ruled in the affirmative,
holding that there was an indeclinable
reassump­tion both by the central and the planter
of their contract subsisting before the 1931-1932 crop year, reviewing
the relations which between them
then existed, they finding themselves
necessarily obli­gated by the undertaking which they had mutually
assumed.” Apart, therefore, from the fact that the issue therein posed is
completely alien to the main issue in the present case, which is, whether the
Central is entitled to a right of way over the hacienda San Vicente the
inescapable, fundamental and decisive difference is that the verbal milling
contract of the parties in Asturias was deemed re­newed to govern the
relationship which existed between them; while in the case at bar, the 1919
milling contracts and the 1953
memorandum agreement were not renewed.

Is the Central entitled
to a legal easement under the new Civil Code? 
This was the self-same question resolved by this Court in Angela Estate,
supra:

“By express provision of articles 649 and 650 of the new Civil
Code, the owner of an estate may claim a compulsory right of way only after he
has established the existence of four requisites, namely, (1) the estate is
surrounded by other immovables and is without adequate outlet to a pub­lic
highway; (2) after payment of the proper indem­nity; (3) the isolation was not
due to the proprietor’s own acts; and (4) the right of way claimed is ‘at a
point least prejudicial to the servient estate, and
in so far as consistent with this rule, where the distance from the dominant
estate to a public highway may be the shortest.’ The onus is upon the
owner of the dominant estate to show by speci­fic averments in his complaint
the existence of the requisites or pre-conditions enumerated.  And in granting the writ of preliminary
injunction, the order of the court must show by specific finding, even
preliminary, that the preconditions exist.”

The record yields no
indication that the Central has met or satisfied the requisites or
pre-conditions required by the Ci­vil Code. 

The Sugar Limitation Law
(Act 4166) is erroneously invoked as authority to sustain the position that the
Central is en­titled to railroad rights of way on the hacienda San
Vicente.  Act 4166, even with the amendments introduced by Commonwealth Acts 77 and 323 and Republic Acts 1072 and
1825, contains no provision conferring upon the Central the right to establish
rights of way on the lands of the adherent planters.  It would appear from its title and
declaration of policy that Act 4166 was enacted sole­ly for the purposes of
limiting and allocating the production of sugar in the Philippines as well as
regulating the processing and marketing thereof.

The respondents Iikewise contend that the dissolution of the writ of
preliminary injunction would do violence to the judg­ment of the CFI of Manila
in CC 50760, which, according to them, “directs the continued operation of
the railway system as one of the obligations under the 1953 Memorandum
Agreement which were indeclinably reassumed by the parties by operation of
law.”

Without prejudging
the merits of the appeal in L-26344,
nothing in either the body or the dispositive portion
of the decision in that case supports this contention.  The dispositive
portion of the said decision is quoted hereunder:

“WHEREFORE, judgment is hereby rendered declaring that
Sections 1 and 2, Republic Act 809, Section 4, Republic Act 1825, and Section
3, Repu­blic Act 1072, are valid and constitutional; that the respondent
planters cannot transfer their export sugar, or ‘A’ and ‘AA’ sugar to a central
which did not produce sugar in 1940; and that the respon­dent planters cannot
transfer their export quota, or ‘A’ and ‘AA’ sugar to any other central as Iong as the
petitioner is willing to grant them the participation provided for in Section
1, Republic Act 809 in the absence of a milling contract.”          

Indeed, the CFI of Manila in the said civil case could not have
decreed the continuous operation of the railway system as one of the
obligations under the 1953 milling agreement that were indeclinably reassumed
by the parties by operation of law, since all that the Central prayed for in
the said cases are (1) to declare section 4 of R.A. 1825 unconstitutional; and
(2) in any event, to define the rights
and obligations of the Central and the sugar planters in the district under the
said Act.  This Act, by its title, pro­vides
for “THE ALLOCATION, REALLOCATION AND ADMINISTRATION OF THE ABSOLUTE QUOTA
ON SUGAR,” and this Court has expressed the view in Angela Estate, supra, that R.A. 1825, among
other Acts therein mentioned, “contains no provision con­ferring upon the
Central the right to establish rights of way on the lands of the adherent
planters.”

It then follows ineluctably that in the absence of a renewal
contract or the establishment of a compulsory servitude of right of way on the
same spot and route which must be predicated on the satisfaction of the
preconditions required by law, there subsists no right of way to be protected
or respected.

The Central finally maintains that the writ of preliminary
injunction should be preserved to safeguard its rights of owner­ship of the
railways.  Such claim of ownership,
however, is contested by the sugar
planters, particularly the third-party defen­dants, claiming that the Central,
having failed to dismantle or re­move the rails within two years after the
1963-1964 crop year, thereby lost ownership in their favor.  This conflict as to the ownership of the
railways can best be considered after this case is tried on the merits.

The pronouncements of this Court in Bacolod-Murcia Mill­ing Co. vs. Capitol Subdivision, et al.,^[7]
L-25887, July 26, 1966, reiterated in Angela Estate, supra, are apropos to the present case:

“In truth, the court of origin seems to have proceeded on the
erroneous assumption that, even after expiration of its contractual right of
way, pe­titioner Central was entitled to a compulsory right of way in the same
location and route it has been using up
to the present. This is not true: the Cen­tral’s use of the present
railway for the preced­ing 45 years was based on the assent of the Sub­division’s
predecessors-in-interest, as evidenced by their milling contract, while a
compulsory ser­vitude of right of way on the same spot and route must be
predicated on the minimum inconvenience to the would-be servient
estate, in addition to the other requisites above set forth.  There is no specific finding by the court of
origin that the prerequisites exist, and the lack of it suffices to negate the
Central’s right to the servitude claimed, as it likewise negates the propriety
of the temporary injunction issued.

“In issuing the preliminary writ for defen­dant to permit the
Central to use its railway, in the manner established under the milling
contract, the court of origin in effect extended that corres­ponding part of
the contract even beyond the term stipulated by the parties.  Such action is not warranted by law.  The function of an injunction is the
maintenance of the status quo as of the time of its issuance, and
at that time, the right of the Central under the milling contract had
uncontrovertibly expired.  It needs no
emphasizing that the court can not create contracts between the parties.

x        x          x

“[T]he preliminary
injunction was issued on an erroneous premise, ‘the premature assumption
that respondent Bacolod-Murcia Milling Co., Inc., is
entitled to the legal easement prayed for by it’, since the existence of the
statutory requi­sites for such easement had not been properly aver­red or
proved.  x x x Of course, petitioner may duly show at the hearing on the
merits that the pre­conditions required by the Civil Code do actually exist;
but until that is done, the right to the legal servitude is not clear, and the
writ of injunction is unwarranted, and issued in grave abuse of dis­cretion.”

ACCORDINGLY, the petition for certiorari is granted, and the orders of November
22, 1966, and January
7, 1967 are annulled
and set aside, at the private respondent’s cost.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Capistrano, and Barredo, JJ., concur.

Teehankee, J., did not take part.

^[1]
The case is now on appeal to this Court (G.R. L-26344, entitled
“Hawaiian-Philippine Company, Petitioner-Appellant versus Asociacion de Hacenderos de Silay-Saravia, Inc., et al., Respondents-Appellants”).

^[2]
“AN ACT TO REGULATE THE
RELATIONS AMONG PERSONS ENGAGED IN THE SUGAR INDUSTRY.”

^[3]
Luis F. Magalona, et al. ceased to be members of the Asociacion de Hacenderos de Silay-Saravia, Inc. in 1964, and have organized themselves
into an association denomina­ted ASSOCIATED PLANTERS OF SILAY-SARAVIA

^[4]
Otherwise known as “The Sugar Limitation Law,” approved Dec. 14, 1934.

^[5]
Pajo, et al. vs. Ago, et al., L-15414, June 30, 1960.

^[6]
L-27084, July 31, 1968, 24
SCRA 500.

^[7]
L-25887, July 26, 1966, 17
SCRA 738-739.