G.R. No. 203492 - Marcelo vs. Peroxide Philippines, Inc.

Pablo Marcelo and Pablina Marcelo-Mendoza (petitioners) initiated an ejectment action against Peroxide Phils., Inc. (PPI) in Civil Case No. 3916, later raffled to the Metropolitan Trial Court (MeTC) of Valenzuela City, Branch 82.
On June 25, 1971, Gregorio Marcelo, the father and predecessor-in-interest of the petitioners, executed a Contract of Lease with PPI covering a parcel of land (subject property) documented by Transfer Certificate of Title No. T-71843, located in Barrio Paso de Blas, Municipality of Valenzuela, Bulacan.

On July 18, 1988, the MeTC issued a Decision ordering PPI to vacate the subject property and to pay a specific monetary amount.
Subsequent motions led to the issuance of a writ of execution (June 2, 1995) and the filing of affidavits of third-party claims by United Energy Corporation and Springfield International, Inc. on June 16, 1995.
On August 3, 1995, a public auction was conducted by the sheriff resulting in the sale of PPI’s levied properties located within the subject property to Pablo as the highest bidder.

Aggrieved third-party claimants filed a complaint with the RTC of Quezon City (Civil Case No. Q-93-24760) asking to void the sheriff’s sale and Certificate of Sale, coupled with a prayer for a temporary restraining order (TRO) and a writ of preliminary injunction (WPI).
A WPI was issued on September 8, 1995 by Presiding Judge Pedro T. Santiago and later upheld by the Supreme Court in an earlier petition (G.R. No. 127271).

Despite the injunction, Pablo forcibly reopened the gate of the subject property which had been padlocked by the deputy sheriff and removed dismantled machineries belonging to PPI.
On October 4, 2000, an Order to re-padlock the subject property was issued by the court a quo; however, Pablo’s noncompliance led to further actions.
Pablo eventually occupied the property, converting it into a resort with additional business rentals, in flagrant disregard of the injunction orders.

Further Litigation: Motions and Orders Pertaining to Possession and Padlock Removal

On May 31, 2005, PPI filed an Omnibus Motion alleging violations of court injunctions, resulting in an Order on February 20, 2006, by Judge Jose G. Paneda directing re-padlocking of the premises and other protective measures.
A subsequent motion directed the deputy sheriff to enforce a padlock, leading to the RTC’s Order on June 19, 2009, with a Notice to Vacate served to Pablo. After several days of non-compliance, Pablo was forcibly removed from the property on August 3, 2009.
Pablo filed motions for reconsideration and for removal of the padlock on different occasions, including motions on August 4, 2009, and July 27, 2010, which did not result in a reversal of the padlock order.
PPI, meanwhile, requested ocular inspections through motions filed on April 4, 2011 and May 25, 2011, with the latter resulting in rescheduling of the inspection on multiple dates.
On June 8, 2011, PPI filed a Motion for Reconsideration and Inhibition, which was denied on June 22, 2011, when the RTC issued an Omnibus Order granting the petitioners’ motion to remove the padlock and restore Pablo’s possession of the property.

PPI, aggrieved by the RTC’s Omnibus Order dated June 22, 2011, elevated the case to the CA, alleging grave abuse of discretion and abuse of authority by Judge Paneda.
On May 21, 2012, the CA granted PPI’s petition for certiorari, revoked and vacated the RTC’s Omnibus Order, and directed the deputy sheriff to return possession of the subject property to PPI, with the premises to be re-padlocked pending trial.
The CA also ordered Judge Paneda to inhibit himself from further involvement in the case.
Pablo’s subsequent motions for reconsideration were denied by the CA Resolution dated September 12, 2012.

The case ultimately reached the Supreme Court via a petition for review on certiorari challenging the CA’s findings and decisions regarding the removal of the padlock.
The core factual dispute revolved around the proper exercise of judicial discretion in issuing and executing injunction orders aimed at preserving the status quo and protecting PPI’s property rights.

Whether the Court of Appeals erred in finding that the RTC committed grave abuse of discretion in granting the petitioners’ motion to remove the padlock from the subject property.

Whether the lower courts exercised their judicial authority appropriately in issuing orders—such as the writ of preliminary injunction and subsequent padlocking orders—to protect the rights of PPI and other claimants.
Whether Pablo’s repeated defiance of the court’s orders and his unauthorized occupation of the subject property justified the issuance of the injunctive relief and the subsequent reversal of the order allowing remained possession.
Whether the issuance of a WPI, in light of the established contractual rights and the evidence of continued violations by the petitioners, was the proper measure to preserve the status quo pending the resolution of the main case.