Metropolitan Manila Development Authority vs. Trackworks Rail Transit Advertising, Vending and Promotions, Inc.

G.R. No. 179554          December 16, 2009

Petitioner: Metropolitan Manila Development Authority

Respondent: Trackworks Rail Transit Advertising, Vending and Promotions, Inc.

Facts: In 1997, the Government, through the Department of Transportation and Communications, entered into a build-lease-transfer agreement (BLT agreement) with Metro Rail Transit Corporation, Limited (MRTC) pursuant to Republic Act No. 6957 (Build, Operate and Transfer Law), under which MRTC undertook to build MRT3 subject to the condition that MRTC would own MRT3 for 25 years, upon the expiration of which the ownership would transfer to the Government. In 1998, respondent Trackworks Rail Transit Advertising, Vending & Promotions, Inc. (Trackworks) entered into a contract for advertising services with MRTC. Trackworks thereafter installed commercial billboards, signages and other advertising media in the different parts of the MRT3.  In 2001, however, MMDA requested Trackworks to dismantle the billboards, signages and other advertising media pursuant to MMDA Regulation No. 96-009, whereby MMDA prohibited the posting, installation and display of any kind or form of billboards, signs, posters, streamers, in any part of the road, sidewalk, center island, posts, trees, parks and open space. After Trackworks refused the request of MMDA, MMDA proceeded to dismantle the former’s billboards and similar forms of advertisement.

Issue: Whether MMDA has the power to dismantle, remove or destroy the billboards, signages and other advertising media installed by Trackworks on the interior and exterior structures of the MRT3.

Ruling: That Trackworks derived its right to install its billboards, signages and other advertising media in the MRT3 from MRTC’s authority under the BLT agreement to develop commercial premises in the MRT3 structure or to obtain advertising income therefrom is no longer debatable. Under the BLT agreement, indeed, MRTC owned the MRT3 for 25 years, upon the expiration of which MRTC would transfer ownership of the MRT3 to the Government.

Considering that MRTC remained to be the owner of the MRT3 during the time material to this case, and until this date, MRTC’s entering into the contract for advertising services with Trackworks was a valid exercise of ownership by the former. In fact, in Metropolitan Manila Development Authority v. Trackworks Rail Transit Advertising, Vending & Promotions, Inc., this Court expressly recognized Trackworks’ right to install the billboards, signages and other advertising media pursuant to said contract. The latter’s right should, therefore, be respected.

It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of Trackworks’ billboards, signages and other advertising media. MMDA simply had no power on its own to dismantle, remove, or destroy the billboards, signages and other advertising media installed on the MRT3 structure by Trackworks.  In Metropolitan Manila Development Authority v. Bel-Air Village Association, Inc., Metropolitan Manila Development Authority v. Viron Transportation Co., Inc., and Metropolitan Manila Development Authority v. Garin, the Court had the occasion to rule that MMDA’s powers were limited to the formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installing a system, and administration. Nothing in Republic Act No. 7924 granted MMDA police power, let alone legislative power. 

The Court also agrees with the CA’s ruling that MMDA Regulation No. 96-009 and MMC Memorandum Circular No. 88-09 did not apply to Trackworks’ billboards, signages and other advertising media. The prohibition against posting, installation and display of billboards, signages and other advertising media applied only to public areas, but MRT3, being private property pursuant to the BLT agreement between the Government and MRTC, was not one of the areas as to which the prohibition applied.

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