Pablo and Pablina Marcelo-Mendoza vs. Peroxide Phils., Inc.

A writ of preliminary injunction and subsequent orders to padlock and re-padlock the subject property are proper where the complainant has established an ostensible right to the final relief prayed for, and the acts sought to be enjoined are continuing in nature and in derogation of the complainant's rights. The restoration of possession pending litigation is a mere provisional remedy and is not determinative of the question of validity of the petitioners' titles, which is the main issue in the case.

Petitioners Pablo and Pablina Marcelo-Mendoza are the children and successors-in-interest of Gregorio Marcelo, who executed a Contract of Lease on June 25, 1971 with respondent Peroxide Phils., Inc. (PPI) over a parcel of land covered by Transfer Certificate of Title No. T-71843 in Valenzuela. The Contract of Lease contained provisions that after termination of the agreement, the lessee shall remain the owner of all improvements erected or introduced by it, and that the lessor shall first offer the property to the lessee should he decide to sell. The dispute arose from an ejectment case filed by the petitioners against PPI, which led to a sheriff's sale and subsequent claims by third parties over the levied properties.

Petitioners Pablo and Pablina Marcelo-Mendoza are the children and successors-in-interest of Gregorio Marcelo, who on June 25, 1971 executed a Contract of Lease with respondent Peroxide Phils., Inc. (PPI) over a parcel of land covered by Transfer Certificate of Title No. T-71843 in Valenzuela. The contract contained provisions that after termination of the agreement, the lessee shall remain the owner of all improvements erected or introduced by it, and that the lessor shall first offer the property to the lessee should he decide to sell. On July 18, 1988, the MeTC issued a Decision ordering PPI to vacate the subject property and pay ₱1,864,685.38, and on June 2, 1995, the MeTC granted the issuance of a writ of execution.

On June 16, 1995, Affidavits of Third-Party Claims of United Energy Corporation and Springfield International, Inc. were filed with the sheriff. On August 3, 1995, the sheriff conducted a public auction and sold the levied properties of PPI found inside the subject property for ₱2 Million to Pablo as the highest bidder. The third-party claimants then filed a complaint with the RTC of Quezon City, docketed as Civil Case No. Q-93-24760, to declare void the sheriff's sale and Certificate of Sale, with a prayer for a TRO and WPI. In an Amended Complaint dated October 15, 2001, the third-party claimants added PPI as a party-plaintiff and prayed for the declaration of PPI's ownership over the improvements erected on the subject property.

On September 8, 1995, a WPI was issued by then Presiding Judge Pedro T. Santiago. Pablo challenged the WPI before the CA and later before the Supreme Court in G.R. No. 127271, where the Court upheld its validity. Meanwhile, the deputy sheriff padlocked the gate of the subject property, but Pablo forcibly opened it and brought out dismantled machineries of PPI. On October 4, 2000, the court issued an Order to re-padlock the subject property, but Pablo again ordered his men to tear down the gate and thereafter occupied the entire subject property, opening it as a resort with swimming pools to the public for a fee, with portions of the building rented to several businesses.

On May 31, 2005, PPI filed an Omnibus Motion alleging specific acts violative of the court's injunction. On February 20, 2006, Judge Jose G. Paneda issued an Order granting the reliefs prayed for, directing the deputy sheriff to conduct an inventory and to re-padlock the premises. When the order was not complied with, PPI filed a motion to direct the sheriff to re-padlock, which was granted on June 19, 2009, and a Notice to Vacate was served on Pablo. After Pablo refused to obey, he was forced out of the subject property on August 3, 2009. On August 4, 2009, Pablo filed a Motion for Reconsideration/Quash the Order dated June 19, 2009, and on July 27, 2010, he filed a Motion to Remove Padlock on the Gate of the Land Owned by the petitioners.

On April 4, 2011, PPI filed a Motion for Ocular Inspection, which was granted on May 9, 2011. On May 25, 2011, PPI filed a Motion for Clarification/Motion to Hold in Abeyance Ocular Inspection, and on June 8, 2011, PPI filed a Motion for Reconsideration and Inhibition. On June 22, 2011, the RTC issued an Omnibus Order denying PPI's Motion for Reconsideration and Inhibition, granting the petitioners' motion to remove padlock, recalling the Order dated June 19, 2009, and allowing Pablo to enter the premises and enjoy possession thereof. PPI filed a motion for reconsideration on June 30, 2011, but after no resolution was promulgated for five months, PPI elevated the case to the CA attributing grave abuse of discretion on the part of Judge Paneda.

• Registered Ownership: The petitioners argued that since they are the registered owners of the subject property, the lower courts do not have legal basis in ordering that the subject property be turned over to PPI and the same be padlocked pending trial of the main case.

• Contractual Right to Improvements: PPI anchored its claim on the provisions in the Contract of Lease which induced it to introduce and put up various improvements in the subject property, specifically that after termination of the agreement, the lessee shall remain the owner of all improvements erected or introduced by it, and that the lessor shall first offer the property to the lessee should he decide to sell.
• Violation of Injunction: PPI alleged that Pablo committed specific acts violative of the court's injunction, including forcibly opening the gate, bringing out dismantled machineries, and occupying the subject property as a resort with swimming pools to the public for a fee.

• Grave Abuse of Discretion: Whether the CA erred in finding that the RTC committed grave abuse of discretion in granting the petitioners' motion to remove the padlock of the subject property.

• Grave Abuse of Discretion: No. The CA did not err in finding that the RTC committed grave abuse of discretion. The issuance of the WPI and the orders to padlock and re-padlock the subject property were proper to preserve the status quo and protect PPI's rights over the improvements and machineries pending litigation, and Judge Paneda's failure to act with dispatch on PPI's motion for reconsideration constituted undue delay warranting his inhibition.

• Grave Abuse of Discretion: The resolution of the issue boils down to the propriety of the issuance of the WPI. The Court noted that Pablo had already challenged the WPI before the CA and later before the Supreme Court in G.R. No. 127271, where the Court sustained its validity. The Court found the grant of injunction, as well as the order to padlock and re-padlock the subject property, to be in order. A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party to refrain from a particular act or acts. Its sole purpose is to preserve the status quo until the merits of the main case can be heard. Before a WPI may be issued, the concurrence of the following essential requisites must be present: (a) the invasion of right sought to be protected is material and substantial; (b) the right of the complainant is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious damage. While a clear showing of the right is necessary, its existence need not be conclusively established; it is sufficient that the complainant shows that he has an ostensible right to the final relief prayed for in his complaint.

Under the factual setting of this case, PPI was able to sufficiently establish that it had a right over the properties which should be protected while being litigated. PPI's claimed ownership over the improvements erected and/or introduced in the subject property was being violated by the petitioners who had started entering the premises and dismantling the improvements and machineries thereon. The petitioners even opened the subject property as a resort with swimming pools to the public for a fee and had portions of the buildings rented to several businesses. If not lawfully stopped, such acts would certainly cause irreparable damage to PPI and other claimants. The Court noted that the issue of possession of the subject property pending litigation has been resolved by the lower court under different judges in the Orders dated October 4, 2000, February 8, 2001, February 20, 2006, August 24, 2007, and June 19, 2009, all categorically commanding that the gates of the subject property be padlocked.

Even if the dispossession of PPI is already a consummated act, it is a settled rule that even if the acts complained of have already been committed, but such acts are continuing in nature and were in derogation of PPI's rights at the outset, preliminary mandatory injunction may be availed of to restore the parties to the status quo. The restoration of PPI to the possession of the subject property is not tantamount to the disposition of the main case; it is a mere provisional remedy and is not determinative of the question of validity of the petitioners' titles, which is the main issue in the case. As to the matter of inhibition, the Court sustained the findings of the CA that it is for the best interest of both parties that Judge Paneda inhibits himself from the case to preserve the integrity of the court, especially after going through the certiorari proceeding. Judge Paneda failed to act on PPI's motion for reconsideration for almost eight months, which constitutes undue delay. The Court emphasized that undue delay in the disposition of cases and motions erodes the faith and confidence of the people in the Judiciary and unnecessarily blemishes its stature.

• Preliminary Injunction — A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency or a person to refrain from a particular act or acts. It is the "strong arm of equity," an extraordinary peremptory remedy that must be used with extreme caution, affecting as it does the respective rights of the parties. Its sole purpose is to preserve the status quo until the merits of the main case can be heard. The Court applied this doctrine in upholding the validity of the WPI and the orders to padlock and re-padlock the subject property, as PPI had established an ostensible right to the final relief prayed for in its complaint.

• Requisites for Issuance of a Writ of Preliminary Injunction — Before a WPI may be issued, the concurrence of the following essential requisites must be present: (a) the invasion of right sought to be protected is material and substantial; (b) the right of the complainant is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious damage. While a clear showing of the right is necessary, its existence need not be conclusively established; it is sufficient that the complainant shows that he has an ostensible right to the final relief prayed for in his complaint. The Court found that PPI satisfied these requisites, as it had a right over the improvements and machineries that was being violated by the petitioners' acts of dismantling and disposing of them.

• Continuing Violation and Preliminary Mandatory Injunction — Even if the acts complained of have already been committed, but such acts are continuing in nature and were in derogation of the complainant's rights at the outset, preliminary mandatory injunction may be availed of to restore the parties to the status quo. The Court applied this rule to justify the restoration of PPI to possession of the subject property pending litigation, notwithstanding that the dispossession was already a consummated act.

• Undue Delay in the Disposition of Cases — Undue delay in the disposition of cases and motions erodes the faith and confidence of the people in the Judiciary and unnecessarily blemishes its stature. The requirement that cases be decided within the reglementary period is designed to prevent delay in the administration of justice, for obviously, justice delayed is justice denied. The Court applied this doctrine in sustaining the CA's order for Judge Paneda's inhibition, as his failure to act on PPI's motion for reconsideration for almost eight months constituted undue delay.

• "A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency or a person to refrain from a particular act or acts." — This passage defines the nature of a preliminary injunction and establishes the procedural context for its issuance, serving as the foundational definition applied by the Court in this case.

• "It is the 'strong arm of equity,' an extraordinary peremptory remedy that must be used with extreme caution, affecting as it does the respective rights of the parties." — This excerpt characterizes the preliminary injunction as a powerful equitable remedy requiring careful application, which the Court cited to underscore the gravity of the remedy while nonetheless upholding its validity in this case.

• "Before a WPI may be issued, the concurrence of the following essential requisites must be present, namely: (a) the invasion of right sought to be protected is material and substantial; (b) the right of the complainant is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious damage." — This passage states the canonical three-part test for the issuance of a writ of preliminary injunction, which the Court applied to find that PPI had satisfied all requisites.

• "There should be no more doubt that undue inaction on judicial concerns is not just undesirable but more so detestable especially now when our all-out effort is directed towards minimizing, if not totally eradicating the perennial problem of congestion and delay long plaguing our courts." — This excerpt, quoted from Biggel v. Judge Pamintuan, articulates the Court's strong stance against undue delay in judicial proceedings, which supported the order for Judge Paneda's inhibition.

• Co, Sr. vs. Philippine Canine Club, Inc., G.R. No. 190112, April 22, 2015, 757 SCRA 147 — Cited as controlling authority for the definition of a preliminary injunction and its sole purpose of preserving the status quo until the merits of the main case can be heard.

• BPI vs. Judge Hontanosas, Jr., et al., 737 Phil. 38 (2014) — Cited for the characterization of a preliminary injunction as the "strong arm of equity," an extraordinary peremptory remedy that must be used with extreme caution.

• Lukang vs. Pagbilao Development Corporation, et al., 728 Phil. 608 (2014) — Cited for the essential requisites for the issuance of a writ of preliminary injunction, including the requirement that the complainant show an ostensible right to the final relief prayed for.

• China Banking Corporation vs. Spouses Ciriaco, 690 Phil. 480 (2012) — Cited for the requirement that a hearing, where both parties can introduce evidence and present their side, must be held before the courts may issue a TRO or an injunctive writ.

• Sps. Sarmiento, et al. vs. Sps. Magsino, 719 Phil. 573 (2013) — Cited for the rule that even if the acts complained of have already been committed, but such acts are continuing in nature and were in derogation of the complainant's rights at the outset, preliminary mandatory injunction may be availed of to restore the parties to the status quo.

• Biggel vs. Judge Pamintuan, 581 Phil. 319 (2008) — Cited for the doctrine that undue delay in the disposition of cases erodes the faith and confidence of the people in the Judiciary, which supported the order for Judge Paneda's inhibition.

• Rule 45, Rules of Court — The petition for review on certiorari was filed under this rule, which governs appeals from judgments, final orders, or resolutions of the Court of Appeals to the Supreme Court on questions of law.

• Section 13, Article VIII, Constitution — Cited in the certification portion of the decision, this provision requires that the conclusions in a case be reached in consultation before the case is assigned to the writer of the opinion of the Court's Division.

Presbitero J. Velasco, Jr., Lucas P. Bersamin, Francis H. Jardeleza, and Noel G. Tijam concurred in the decision.