MALAYAN INTEGRATED INDUSTRIES, CORPORATION, PETITIONER, VS. THE HON. COURT OF APPEALS, CITY OF MANDAUE, MAYOR ALFREDO M. OUANO, VICE-MAYOR PATERNO P. CANETE, SANGGUNIANG PAN­LUN…

In this special civil action of certiorari and
prohibition, Malayan Integrated Industries Corporation (hereafter MALAYAN)
prays that upon the filing of its verified petition, a restraining order or a
writ of preliminary injunction be issued by this Court to stop the respondents
from further proceeding in CA-G.R. SP No. 25621 and, after a consideration of
the merits of the petition, judgment be rendered annulling the appellate
court’s resolutions dated August 9, 1991 and August 28, 1991, and the writ of
preliminary injunction issued by it on August 29, 1991.

The only issue in this case is whether the Court of Appeals
exceeded its jurisdiction, or acted with grave abuse of discretion, in issuing
a writ of preliminary injunction in CA-G.R. SP No. 25621 entitled, “The
City of Mandaue, et al. vs. Hon.
Leonardo B. Cañares and Malayan
Integrated Industries Corporation,” “enjoining the respondents and
anyone acting in their place and
stead, from enforcing the Orders of December 18, 1990 and June 28, 1991 in Civil Case No. CEB-9658 until
further orders x x x” (p. 1239, Rollo, Vol. II).

This is a simple case
which has been made to appear complicated by the over-extended pleadings of the
parties. The petition and its annexes
consist of 1,273 pages. The respondents
are not to be outdone with their comments of 395 pages. Running true to form, the petitioner filed a
reply of 307 pages. The pleadings
comprise 3 volumes, each several inches thick. Such profligacy with words is hard to match. Counsels on both sides should heed the admonition of Justice
Isagani A. Cruz that:

“Counsel should remember that they do a disservice to the
administration of justice and contribute to its delay by imposing on the time
of the courts with irrelevant discussions that only clutter the record.”
(Arturo E. Edudela, et al. vs.
Hon. Court of Appeals, et al., G.R. No. 89265, July 17, 1992.)

The records show that on December 12, 1977, a reclamation
contract was signed between the City of Mandaue and MALAYAN for the reclamation
of some 180 (later increased to 360) hectares of
offshore and foreshore land and their development into an industrial and
trading center with a modern harbor and port facilities for both domestic and
international commerce. The area would
connect Cebu City harbor with the City of Mandaue from the Cabahug coastway up
to the Cebu City-Mandaue boundary. The project was supposed to be completed within four (4) years
after approval of the contract by the Office of the President.

However, that transaction appeared to be unauthorized under P.D.
No. 3-A dated January 11, 1973 which provides that the reclamation of areas
under water, whether foreshore or inland, will be done only by the
national government or any person authorized
by it with a proper contract.

Moreover, Executive Order No. 525 of President Marcos designated
the Public Estates Authority (PEA) as “the central authority primarily
responsible for integrating, directing and coordinating all reclamation
projects for and in behalf of
the National Government.”

Acting Minister of Justice Catalino Macaraig, Jr., in his Opinion
No. 70, Series of 1979 dated
July 16, 1979, opined that P.D. No. 3-A impliedly withdrew or repealed the
right of Mandaue City under its charter (Sec. 94, R.A. 5519) to reclaim its
submerged or foreshore lands. He added,
however, that “if the PEA decides to authorize the City of Mandaue to
reclaim its own foreshore, the former may execute a contract with the latter
pursuant to the above-scored provision of Executive Order No. 3-A in connection
with Sec. 1, of P.D. No. 3-A, x x x” (p. 332, Rollo, Vol. I).

Accordingly, the Sangguniang Panlungsod of Mandaue, in its
session of October 12, 1979, passed Resolution No. 116 authorizing the City
Mayor to sign a Memorandum of Understanding with the PEA. Its Resolution No. 117 of the same date
authorized the City Mayor to enter into a contract with the PEA for the
reclamation of 360 hectares, more or less, of the foreshore and submerged lands
of Mandaue City.

On November 26, 1979, the City of Mandaue and MALAYAN signed a
Confirmatory Agreement whereby MALAYAN bound itself to undertake and prepare at
its own expense, the detailed and integrated development plan on land use,
including technical, economic, marketing and financial feasibility studies
required by the Office of the President, and to submit the completed study
“not later than July 31, 1980” (p. 344, Rollo, Vol. I).

On August 13, 1980, MALAYAN submitted to PEA documents relating
to the Metro Cebu Reclamation and Development Project. Two days later, or on August 15, 1980,
MALAYAN submitted a detailed land use and development strategy and an overview
of the project.

On September 29, 1980, PEA Chairman, Ruben Ancheta, recommended
approval of the project.

Although President Marcos “approved in principle” the
reclamation and development project, the contract of reclamation
and development between the City of Mandaue and MALAYAN remained hanging in the
air (p. 338, Rollo, Vol. I).

After the 1986 “People Power” Revolution, the project
was resubmitted to President Corazon C. Aquino for approval.

On June 13, 1988, the City of Mandaue reiterated its request to
President Aquino “for approval and go-signal to commence the reclamation
work” (p. 417, Rollo, Vol. I). The letter was referred by the
President to PEA.

As of May 24, 1989, the detailed and integrated plan on land use,
including technical, economic, marketing and financial feasibility studies
submitted by MALAYAN remained “still pending approval by the Office of the
President.” (p. 441, Rollo,
Vol. I.)

On February 13, 1989, PEA’s General Manager, Eduardo C. Zialcita,
advised MALAYAN that the feasibility study
should be updated.

Since the Office of the President seemed to have reservations
concerning the contract between MALAYAN and the City of Mandaue, and in view of
the City’s desire to undertake the reclamation project without further delay,
City Mayor Alfredo M. Ouano informed the PEA on April 15, 1989 that the City
was negotiating with F.F. Cruz & Co., Inc., in consortium with the Cebu
Contractors Association, to undertake the preparation of the detailed
feasibility and development plan for the reclamation project. Mayor Ouano pointed out that F.F. Cruz &
Co., Inc. is a reputable private construction firm in Manila, “with
international prestige and proven capability as a reclamation contractor with
its own dredging equipment and the financial capacity to undertake, on its own,
the Mandaue reclamation project” (p. 483, Rollo, Vol. I).

On April 19, 1989, the Sangguniang Panlungsod of Mandaue passed
Resolution No. 134/89 authorizing the City Mayor to enter into a reclamation
contract with F.F. Cruz & Co., Inc. subject to the President’s approval.

The contract with F.F. Cruz & Co., Inc. was signed a week
later, on April 26, 1989.

Upon learning about the City’s contract with F.F. Cruz & Co.,
Inc., MALAYAN inquired from the Office of the President whether Section 7 of
R.A. 5519, known as the Charter of the City of Mandaue, providing that the City
alone shall have authority to reclaim its offshore land, had been repealed,
revoked, amended or superseded by Section 1 of P.D. No. 3-A, promulgated on January 11, 1973, and Section 1
of E.O. No. 525 dated February 14, 1979.

The query was answered in the affirmative on August 31, 1989 by
the Chief State Counsel, Elmer T. Bautista, citing Justice Secretary Macaraig’s
Opinion No. 70, S. 1979, “which opinion still stands” (p. 498, Rollo,
Vol. I).

On May 6, 1989, the PEA recommended the approval in principle of
the proposed reclamation project subject to the following conditions:

“(a) Submission to PEA by the City of Mandaue,
for review and approval a Master Development Plan for the planned reclamation,
within six (6) months from date hereof, otherwise project approval shall be
deemed automatically revoked.

“(b) Undertaking of Detailed Engineering Studies for the major
physical infrastructures involved.

“(c) Supervision by PEA of the reclamation and related
infrastructure works and the cost of such supervision to be charged to the
Project.

“(d) Delegation of authority to Mandaue
City to negotiate with a reputable Contractor that shall undertake physical
reclamation works under a proper contract, which shall contain stipulations on
the compensation, costs of the project and other relevant conditions subject to
the review and approval of the
Public Estates Authority as provided under existing laws.

“(e) That the previous approval in principle
granted to Malayan Integrated Industries Corporation
for a similar reclamation project, jointly
with the Province of Cebu, City of Cebu, City of Mandaue, Municipality of
Cordova and the City of Lapu-Lapu, by former President Marcos be deemed
abandoned, and set aside, by reason of the failure
of Malayan Integrated Industries Corporation to execute/implement the project
for a long period of time
reckoned from 1979 to the present. Moreover, there appears to be a lack of indorsement by the local
government of Cebu Province and Mandaue City of this undertaking by Malayan
Integrated Industries Corporation.” (Underscoring ours; pp. 530-531,
Rollo, Vol. I.)

MALAYAN filed a protest with the Office of the President against
the reclamation contract between the City of Mandaue and F.F. Cruz & Co.
(pp. 542-545, Rollo, Vol. I).

On PEA’s recommendation, Executive Secretary Catalino Macaraig,
Jr., by authority of the President, approved on June 27, 1989, the proposed
Mandaue reclamation project, covering approximately 180 hectares of foreshore
and submerged lands, subject to certain conditions, and declared that “the
Contract of Reclamation and Development entered into by and between the City of
Mandaue and Malayan Integrated Industries Corporation on December 12, 1977 is
hereby DISAPPROVED, and/or is hereby declared
as without force and effect, it appearing
from the records that the same was entered in violation of the provisions of
Section 1 of Presidential Decree No. 3-A, and/or for the failure of said
corporation to implement, as stipulated, the project within a reasonable period
of time.” (pp. 583-584, Rollo, Vol. I; emphasis supplied.)

On November 26, 1990,
MALAYAN filed in the Regional Trial Court, Branch 10, Cebu City (originally in
the Regional Trial Court, Manila but it withdrew the case) a petition for
prohibitory and mandatory preliminary injunction against the City of Mandaue,
F.F. Cruz & Co., Inc., the Cebu Contractors Association, the Mandaue Realty
Resources Corporation and Philippine Orion Properties, Inc. The case was docketed as Civil Case No.
CEB-9658 in which MALAYAN prayed the Court to restrain the implementation of
the reclamation contract between the City of Mandaue and F.F. Cruz & Co.,
Inc. as it would work injustice to MALAYAN and violate MALAYAN’s valid and previously
perfected contract with the City of Mandaue, and it would cause damages to
MALAYAN which has already incurred expenses and invested huge sums of money in
the Mandaue Reclamation Project. MALAYAN also prayed the Court to issue a writ of preliminary mandatory
injunction allowing MALAYAN to immediately undertake actual reclamation works
in the Mandaue Reclamation Project.

On November 29, 1990, the trial court issued a temporary
restraining order enjoining the respondents “from further continuing with
the implementation of the aforementioned contract being questioned, until
further orders from this Court” (p. 649, Rollo, Vol. I).

An Urgent Motion to Quash the Restraining Order and a separate
Motion to Dismiss the petition filed by the respondents did not prosper.

After a proper hearing, Judge Leonardo B. Cañares granted on
December 18, 1990 the writ of preliminary prohibitory injunction prayed for by
MALAYAN upon its posting a P5 million injunction bond. The dispositive part of his order reads as
follows:

“WHEREFORE, upon the filing of an injunction bond with this
Court amounting to P5,000,000.00, let a writ of preliminary prohibitory
injunction be issued, enjoining all of the respondents, their assigns, agents,
representatives or anybody acting for them or in their behalf from implementing
the Contract of Reclamation dated April 26, 1989, executed by and between
Mandaue City and respondents F.F. Cruz & Co., Inc. and Cebu Contractors
Association and all other reclamation contracts executed in favor of said
respondents and/or assigns by the City of Mandaue and/or Public Estates
Authority, and from conducting any kind of works in any part of the area
covered by the Mandaue Reclamation Project.

“The motions to dismiss and other incidents filed by the
respondents are hereby denied for being premature.” (pp. 677-678, Rollo,
Vol. I.)

After the respondents’ motions for reconsideration were denied by
the Court, they filed in the Court of Appeals on August 9, 1991, a petition for
certiorari with prohibitory and mandatory preliminary restraining order
and/or preliminary injunction. (CA-G.R.
SP No. 25621, entitled, “City of Mandaue, F.F. Cruz & Co., Inc., et
al., petitioners vs. Judge Leonardo B. Cañares and Malayan Integrated
Industries Corporation, respondents” praying that the preliminary writ of
injunction issued by Judge Cañares be nullified, that respondent MALAYAN be
prohibited from interfering with the reclamation works of the petitioners, City
of Mandaue and F.F. Cruz; that respondents Judge Cañares and MALAYAN be
restrained from enforcing the orders dated December 19, 1990 and June 28, 1991
of respondent Judge; that the petition of MALAYAN in the Case No. CEB-­9658 be
dismissed; and that MALAYAN be prohibited from interfering with the contract of
reclamation between the City of Mandaue and F.F. Cruz & Co., Inc., the
Memorandum of Agreement between the PEA, the City of Mandaue and MARECO, and
all other related contracts and activities concerning the Mandaue Reclamation
Project.

The Court of Appeals
issued on August 9, 1991 a temporary restraining order to preserve the status quo and enjoined the respondents and anyone acting in
their place from enforcing Judge Cañares’
orders of December 19, 1990 and June 28, 1991, until further orders from
said court.

On August 28, 1991, the Court of Appeals issued a writ of
preliminary injunction upon a P10,000,000.00 bond posted by F.F. Cruz &
Co., Inc.

Upon the denial of its motion for reconsideration of the
appellate court’s resolution, MALAYAN filed a petition for certiorari
and prohibition in this Court to annul it.

After a careful consideration of the voluminous petition and the
equally voluminous responses of the public and private respondents, the Court
finds that the Court of Appeals did not abuse its discretion in stop­ping Judge
Cañares and MALAYAN from interfering with the prosecution of the Mandaue
reclamation project by res­pondents F.F. Cruz & Co., Inc. and its
associates, the Cebu Contractors Association, Mandaue Realty Resources
Corporation and Philippine Orion Properties, Inc.

In the first place, as explained in the Appellate Court’s
resolution, the contract between the City of Mandaue and F.F. Cruz & Co.,
Inc., et al. “had been approved by the Office of the President,”
while the reclamation contract with MALAYAN “was disapproved” (pp.
1236-1237, Rollo, Vol. II).

“x x x the Mandaue Reclamation Project, subject of the
contract between the Mandaue local government and private petitioners, has
been approved by the Office of the
President of the Philippines (Annex ‘M’ of the
Petition). In the same official
document, the ‘Contract of Reclamation and Development’
entered into by and
between the City of Mandaue and private
respondent Malayan Integrated Industries Corporation
on December 12, 1977 was disapproved. And pursuant to the approved reclamation
project and the contract entered into by and between them, petitioners
undertook the reclamation of foreshore and submerged lands from the Cabahug
Causway in Mandaue City towards the boundary with Cebu City. In the course thereof at least a total of
23.4710 hectares of said lands have been reclaimed by private petitioners after spending the sum of
P181,476,690.59 as of December 31, 1990.” (Underscoring supplied.)

Secondly, Judge Cañares’ writ of preliminary prohibitory
injunction, halting the prosecution of the Mandaue reclamation project,
violated P.D. No. 1818 which prohibits courts from issuing such writ to stop
any person, entity, or government official, from proceeding with or continuing
the execution or implementation of an infrastructure project,
such as the reclamation of foreshore and submerged lands along the coast of
Mandaue City up to the Cebu City boundary for the purpose of developing the
reclaimed area into an industrial and trading center with a modern harbor and
port facilities for both domestic and international commerce. P.D. No. 1818 provides:

“P.D. 1818 – Prohibiting courts from issuing restraining
orders or preliminary injunctions in cases involving infrastructure and natural
resource development projects of, and public utilities operated by, the
Government.

“WHEREAS, Presidential Decree No. 605 prohibits the issuance
by the courts of restraining orders or injunctions in cases involving
concessions, licenses, and other permits issued by administrative officials or
bodies for the exploitation, development and utilization of natural resources
of the country;

“WHEREAS, it is in the public interest to adopt a similar
prohibition against the issuance of such restraining orders or injunctions in
other areas of activity equally critical to the economic development effort of
the nation, in order not to disrupt or hamper the pursuit of essential
government projects;

“NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby decree and order as follows:

“SECTION 1. No court in the Philippines
shall have jurisdiction to
issue any restraining order,
preliminary injunction, or preliminary mandatory
injunction in any case,
dispute, or controversy involving
an infrastructure project, or a mining, fishery,
forest or other natural resource development project of the government, or any
public utility operated by the government, including among others public
utilities for the transport of the goods or commodities, stevedoring and arrastre contracts, to
prohibit any person or persons, entity
or government official from proceeding with,
or continuing the execution or implementation
of any such project, or the operation of such public
utility, or pursuing any lawful activity necessary for such execution,
implementation or operation.”

The Court of Appeals further observed that “in the balance
of inconveniences the petitioners appear to stand to suffer grave and
irreparable injury, and much more damages than MIIC (MALAYAN) which has not
done any reclamation works on the area subject of the dispute.” (p. 1239,
Rollo, Vol. II.)

Although the letter to the PEA advising it of the approval of the
reclamation contract between the City of Mandaue and F.F. Cruz & Co., Inc.
and the disapproval of the earlier agreement between the City of Mandaue and
MALAYAN, was signed by the
Executive Secretary, “by authority
of the President,” and not by the
President’s own hand, the Executive Secretary’s action is presumed to be valid
and to have been regularly performed in behalf of the President (Section 2[m],
Rule 131, Revised Rules on Evidence) and thus should be accorded due respect
(Lacson-Magallanes vs. Paño, 129 Phil. 123; GSIS vs. CIR, December 30, 1961;
Soriano vs. Ancheta, March 18, 1985; Roque vs. Director of Lands, July 1,
1976). As head of the Executive Office,
the Executive Secretary, is an alter ego of the President (Sec.
22, Chap. 8, Title II, Book II, 1987 E.O. 292, Adm. Code of 1987). One of his myriad functions is “to exercise primary
authority to sign papers ‘By authority of the President,’ attest executive orders and other presidential issuances
unless attestation is specifically delegated to other officials by him or by
the President; assist the President in the administration of special projects;
and perform such other functions as the President may direct” (Sec. 22,
subpars. 10, 14 and 18, Ibid). Paraphrasing Villena vs. Secretary of the Interior, 67 Phils. 451, his
personality is in reality “but the projection of that of the
President,” his acts, “performed and promulgated in the regular
course of business, are, unless disapproved or reprobated by the Chief
Executive, presumptively the acts of the Chief Executive.” The approval by
the Office of the President of the reclamation contract in favor of F.F. Cruz & Co., Inc. and the rejection of the contract with MALAYAN, is
not subject to review by the courts in view of the principle of separation of
powers which accords co-equal status to the three great branches of the
government, absent any showing that the President, in doing so, acted with
grave abuse of discretion amounting to lack or excess of jurisdiction (Sec. 1,
Art. VIII, 1987 Constitution). Only on
that ground may this Court justifiably intervene in a transaction that
otherwise would be the exclusive preserve of the Chief Executive.

In fact, while MALAYAN
has asked the courts to nullify the reclamation contract between the City of Mandaue and F.F. Cruz & Co., Inc., it did not assail the Office of the President for
having approved it. Its petition for
prohibitory and mandatory injunction in the Regional Trial Court of Cebu City
(CEB-9658), did not implead, as respondents, nor charge with grave abuse
of discretion, the President of the Philippines, Executive Secretary Catalino
Macaraig, Jr., Deputy Executive Secretary Magdangal Elma, Jr., and PEA General
Manager Eduardo Zialcita, for having approved, or recommended the approval, by
the President, of the said reclamation contract with F.F. Cruz & Co., Inc.
and the disapproval of the prior agreement between the City of Mandaue and
MALAYAN.

WHEREFORE, finding
no grave abuse of discretion in the assailed resolution dated August 28, 1991 of
the Court of Appeals in CA-G.R. SP No. 25621, the petition for certiorari
and prohibition is DENIED for lack of merit. Costs against the petitioner.

SO ORDERED.

Cruz, (Chairman), J., I concur,
subject to my reservation in APT v. Court of Appeals, G.R. No. 101344

Medialdea, and
Bellosillo, JJ., concur.