G.R. No. 128743 - Oro Cam Enterprises, Inc. vs. Court of Appeals

Angel Chaves, Inc. (private respondent) is the owner of a commercial building in Cagayan de Oro City, which is leased to various business establishments.
The building, with frontage along J.R. Borja and Yacapin Extension Streets, has been leased out on a one-year basis since 1986.
On January 15, 1991, Angel Chaves, Inc. filed a complaint for unlawful detainer before the Municipal Trial Court in Cities (MTCC), Cagayan de Oro City, docketed as Civil Case No. 13040.
The complaint specifically alleged that:

Written contracts of lease executed on July 31, 1988, set forth distinct lease periods and monthly rentals involving several business establishments, including Oro Cam Enterprises and others.
Prior to the expiration of the then-current leases on June 30, 1989, forms for a new lease with increased rental rates were sent to the lessees.
Upon the lessees’ failure to agree to or pay the increased rentals, a suit for unlawful detainer was initiated.

In the answer submitted by defendant Constancio Manzano (representing the interests of Oro Cam Enterprises), it was raised that the agreed monthly rentals were different from those alleged by the complaint; the answer set the agreed rent at P5,000.00 beginning July 1, 1988, for Oro Cam Enterprises.
The MTCC, on July 23, 1992, rendered a decision:

Dismissing the complaint against three defendants including petitioner Oro Cam Enterprises for lack of cause of action.
Ordering the ejectment of a fourth defendant, Alfredo Co.

On appeal, the Regional Trial Court (RTC), Branch 23, Misamis Oriental, reversed the MTCC decision by:

Ordering the ejectment of the four defendants.
Specifying that the defendants should vacate the premises and pay reasonable monthly rents (with differing rates assigned to each defendant) from July 1, 1990, until full vacation of the premises.
Ordering the payment of attorney’s fees, litigation expenses, and costs of the suit.

Vicente Manzano, brother of the deceased Constancio Manzano, filed a petition for review with the Court of Appeals (CA-GR Sp. No. 34167) which was dismissed due to being filed beyond the reglamentary period; this dismissal was later affirmed by the Supreme Court in G.R. No. 116933.

On January 9, 1995, private respondent Angel Chaves, Inc. filed a motion with the MTCC for the issuance of a writ of execution against Constancio Manzano and Oro Cam Enterprises.
Petitioner Oro Cam Enterprises opposed the issuance of the writ on the ground that it was not properly impleaded in the ejectment suit (Civil Case No. 13040).
Subsequently, petitioner Oro Cam Enterprises filed a petition for certiorari and prohibition, along with an application for a writ of preliminary injunction, in the RTC, Branch 37, Cagayan de Oro City (Sp. Civil Case No. 95-560).
On December 7, 1995, the RTC granted the application for the preliminary injunction, thereby ordering:

All respondents and their agents to cease the issuance, implementation, or enforcement of any writ of execution related to Civil Case No. 13040.
A prohibition against any act prejudicial to the rights of petitioner Oro Cam Enterprises.

In response, private respondent Angel Chaves, Inc. filed a petition for certiorari with the Court of Appeals.
On November 27, 1996, the Court of Appeals rendered a decision declaring:

The dispute eventually centered on whether Oro Cam Enterprises, a corporation, is considered privy to the lease agreement between Angel Chaves, Inc. and defendant Constancio Manzano.
Oro Cam Enterprises, while claiming its separate corporate personality and maintaining that it was never formally impleaded in the ejectment suit, had consistently paid the monthly rentals and occupied the leased portion of the commercial building.
The submissions and evidence in the pleadings and answers demonstrated that Oro Cam Enterprises was interlinked with the lease contract, thereby raising the issue of privity between the corporation and the lease agreement.

Whether the Court of Appeals erred in holding that Oro Cam Enterprises is privy to the lease contract between Angel Chaves, Inc. and Constancio Manzano.
Whether, as a consequence of its privity, the MTCC had acquired jurisdiction over Oro Cam Enterprises in the ejectment proceedings.

Jurisdictional and Discretionary Issues Regarding the Preliminary Injunction

Whether the Court of Appeals acted without or in excess of its jurisdiction with grave abuse of discretion in declaring null and void the RTC’s order granting the writ of preliminary injunction.
Whether the order of preliminary injunction, being interlocutory in nature, should have been subject to review and if the petition for certiorari was the proper remedy in this context.