Semirara Coal Corporation vs. HGL Development Corporation

A writ of preliminary mandatory injunction is proper to restore a lawful possessor to possession during the pendency of an accion publiciana, provided the invasion of the right is material and substantial, the right of the complainant is clear and unmistakable, and there is an urgent and permanent necessity for the writ to prevent serious damage.

Semirara Coal Corporation held a Coal Operating Contract over Semirara Island, while HGL Development Corporation held a 25-year Forest Land Grazing Lease Agreement (FLGLA) over 367 hectares of the same island for cattle grazing. In 1999, Semirara requested and was granted permission by HGL to pass through the leased property, but subsequently constructed buildings, conducted blasting, and built an access road without HGL's consent, damaging the grazing land. The DENR unilaterally cancelled HGL's FLGLA in 2000, prompting HGL to challenge the cancellation in the Caloocan RTC, which enjoined the DENR from enforcing the cancellation. HGL then filed a separate action for recovery of possession and damages against Semirara in the Antique RTC, applying for a writ of preliminary mandatory injunction.

• Lease Agreements: Petitioner Semirara Coal Corporation is a grantee of a Coal Operating Contract over the entire Island of Semirara. Private respondent HGL Development Corporation is a grantee of FLGLA No. 184, a 25-year Forest Land Grazing Lease Agreement over 367 hectares of land in Semirara, effective until December 31, 2009, used for cattle grazing.
• Encroachment: In 1999, Semirara requested permission from HGL to pass through the leased property to access its minesite. HGL granted the request on the condition that Semirara's use would not violate the FLGLA. Semirara subsequently constructed buildings, conducted blasting, built an access road, and maintained a stockyard without HGL's consent, damaging the grazing land and decimating HGL's cattle.
• DENR Cancellation: On December 6, 2000, the DENR unilaterally cancelled FLGLA No. 184 due to HGL's failure to pay rentals and submit grazing reports. HGL sought reconsideration, which was denied. HGL then filed a complaint for specific performance against the DENR in the RTC of Caloocan City (Civil Case No. 20675), which issued a writ of preliminary injunction enjoining the DENR from enforcing the cancellation.
• Recovery of Possession Suit: On November 17, 2003, HGL filed a complaint against Semirara for Recovery of Possession and Damages with the RTC of Culasi, Antique (Civil Case No. C-146), applying for a writ of preliminary mandatory injunction.
• Procedural Missteps: The Antique RTC set hearings for the injunction application. Semirara failed to appear at two scheduled hearings, claiming its counsel had resigned via a letter from its President. The trial court refused to recognize the letter as a proper motion and deemed the application submitted for decision. Semirara filed an Omnibus Motion for reconsideration, which was denied. Semirara then filed a second motion for reconsideration on July 12, 2004, which was not resolved before the trial court granted the injunction on September 16, 2004.

• Lack of Cause of Action: Petitioner argued that HGL had no legal right or cause of action to support the injunction because FLGLA No. 184 had been cancelled by the DENR.
• Improper Remedy: Petitioner maintained that a writ of preliminary mandatory injunction cannot be used to transfer property possession to one without clear legal right, and that because the main case is an accion publiciana rather than forcible entry, a mandatory injunction is an improper ancillary remedy.
• Denial of Due Process: Petitioner contended it was arbitrarily deprived of due process when the trial court denied it the opportunity to present evidence in opposition to the injunction application.
• Premature Issuance: Petitioner asserted that the trial court committed grave abuse of discretion by issuing the injunction without first resolving its pending motion for reconsideration dated July 12, 2004.
• Exclusion of Evidence: Petitioner argued that the trial court should have admitted and considered the certified DENR records cancelling the FLGLA as conclusive proof of HGL's lack of cause of action.
• Forum Shopping: Petitioner maintained that the complaint should have been dismissed outright for violation of the rules on forum shopping given HGL's prior filing against the DENR in Caloocan City.

• Subsisting Right: Respondent countered that the FLGLA remains subsisting because its unilateral cancellation by the DENR is subject of a pending case in Caloocan RTC, which enjoined the DENR from enforcing the cancellation.
• Valid Cause of Action: Respondent argued that the three requisites of a cause of action are present: HGL's right to possess under the FLGLA, Semirara's obligation to respect it, and Semirara's blatant violation through unauthorized construction and blasting.
• No Due Process Violation: Respondent maintained that Semirara was given two settings to present evidence but opted not to appear, and that the essence of due process is simply the opportunity to be heard.
• Pro Forma Motion: Respondent argued that the pending motion for reconsideration was a prohibited second motion for reconsideration, partaking of the nature of a mere pro forma motion.
• Inapplicability of PD 605: Respondent asserted that Presidential Decree No. 605, which bans injunctions in cases involving natural resource concessions, does not apply because the case involves encroachment on HGL's leased property, not the suspension or revocation of Semirara's coal operating contract.

• Cause of Action: Whether HGL has a clear legal right and cause of action to support the issuance of a writ of preliminary mandatory injunction despite the DENR cancellation of its FLGLA.
• Propriety of Mandatory Injunction in Accion Publiciana: Whether a writ of preliminary mandatory injunction is a proper ancillary remedy in an accion publiciana to restore possession.
• Due Process: Whether Semirara was denied due process when the trial court deemed the injunction application submitted for decision after Semirara's failure to appear at hearings.
• Premature Issuance: Whether the trial court committed grave abuse of discretion by issuing the writ without first resolving Semirara's motion for reconsideration.

• Cause of Action: HGL's right to the injunction was clear and unmistakable. The unilateral DENR cancellation did not automatically invalidate the FLGLA, the cancellation having been enjoined by the Caloocan RTC. As the lawful possessor, HGL was entitled to protection of its possession. Semirara's possession was merely by tolerance, and its unauthorized activities caused material and substantial injury to HGL's business operations, constituting irreparable damage.
• Propriety of Mandatory Injunction in Accion Publiciana: The issuance of a writ of preliminary mandatory injunction is proper to restore possession during the pendency of an accion publiciana pursuant to Article 539 of the Civil Code. Prior to the New Civil Code, it was improper to issue such a writ when the defendant had taken complete material possession; however, Article 539 now explicitly allows a plaintiff to avail of the writ to restore possession pending the action.
• Due Process: No denial of due process occurred. Semirara was given reasonable opportunity to be heard but failed to appear at two scheduled hearings. The letter from its President was not a proper motion for postponement, as it failed to comply with the requisites for filing motions and lacked proof of the President's authority to represent the corporation.
• Premature Issuance: The trial court did not commit grave abuse of discretion. The motion for reconsideration dated July 12, 2004, was a mere pro forma motion, reproducing arguments from the previously denied Omnibus Motion. Furthermore, as a second motion for reconsideration, it was a prohibited motion under the Rules of Court, and the trial court was under no duty to resolve it.

• Article 539, Civil Code on Mandatory Injunction — A lawful possessor is entitled to be respected in his possession; any disturbance of possession is a ground for the issuance of a writ of preliminary mandatory injunction to restore the possession. This modifies the pre-Civil Code rule that injunction was improper where the defendant had already taken complete material possession, allowing the writ even in an accion publiciana.
• Requisites for Mandatory Injunction — A writ of mandatory injunction is granted upon a showing that: (a) the invasion of the right is material and substantial; (b) the right of complainant is clear and unmistakable; and (c) there is an urgent and permanent necessity for the writ to prevent serious damage.

• "Under Article 539 of the New Civil Code, a lawful possessor is entitled to be respected in his possession and any disturbance of possession is a ground for the issuance of a writ of preliminary mandatory injunction to restore the possession."
• "The essence of due process is reasonable opportunity to be heard. What the law proscribed is lack of opportunity to be heard."

• Torre v. Querubin, 101 Phil. 53 (1957) — Followed. Established that under Article 539 of the Civil Code, a writ of preliminary mandatory injunction is proper to restore possession even in an accion publiciana, overturning the pre-Civil Code rule.
• Mara, Inc. v. Estrella, 65 SCRA 471 (1975) — Followed. Cited in support of the ruling in Torre regarding the propriety of mandatory injunction to restore possession under Article 539.
• Pelejo v. Court of Appeals, 117 SCRA 665 (1982) — Followed. Enumerated the three requisites for the issuance of a writ of mandatory injunction: material and substantial invasion, clear and unmistakable right, and urgent and permanent necessity.
• Conti v. Court of Appeals, 307 SCRA 486 (1999) — Cited. Established that a motion for reconsideration is a condition sine qua non for the grant of the extraordinary writ of certiorari, which Semirara failed to file before resorting to certiorari in the Court of Appeals.

• Article 539, Civil Code — Provides that a lawful possessor is entitled to be respected in his possession and any disturbance of possession is a ground for the issuance of a writ of preliminary mandatory injunction to restore the possession. Applied to affirm the trial court's issuance of the writ in favor of HGL.
• Rule 37, Sec. 5, Rules of Court — Prohibits second motions for reconsideration. Applied to characterize Semirara's July 12, 2004 motion as a prohibited pleading, relieving the trial court of the duty to resolve it before issuing the injunction.
• Presidential Decree No. 605 — Bans courts from issuing injunctions in cases involving concessions, licenses, and permits for the exploitation of natural resources. Distinguished and held inapplicable because the case involved encroachment on HGL's leased property, not the issuance, suspension, or revocation of Semirara's coal operating contract.

Carpio, Carpio Morales, Tinga, and Velasco, Jr.