G.R. No. 112443 - Bordalba vs. Court of Appeals

Parties and Procedural History
University of the Philippines (UP) filed a petition for certiorari and prohibition against Judge Walfredo de los Angeles of the Court of First Instance (CFI) of Rizal (Quezon City) and Associated Lumber Manufacturing Company, Inc. (ALUMCO) to annul three CFI orders:

Order of 25 February 1966 enjoining UP from awarding logging rights over its Land Grant.
Order of 14 January 1967 citing UP for contempt and enjoining Sta. Clara Lumber Co., Inc. from logging.
Order of 12 December 1967 denying reconsideration of the contempt citation.

The Supreme Court issued a writ of preliminary injunction on 9 February 1968 restraining enforcement of the questioned orders.

Logging Concession and Contractual Breach
UP’s timber concession (Land Grant) was segregated and endowed under Act 3608. On 2 November 1960, UP and ALUMCO executed a logging agreement valid to 31 December 1965, extendible for five years, under which ALUMCO paid royalties and fees in exchange for exclusive logging rights.
ALUMCO accrued an unpaid balance of ₱219,362.94 by 8 December 1964. On 9 December 1964 it signed an “Acknowledgment of Debt and Proposed Manner of Payments” approved by UP, providing:

A payment schedule culminating in full liquidation by 30 June 1965.
A stipulation that UP could consider the logging agreement rescinded without judicial suit upon ALUMCO’s default, plus a P50,000 liquidated-damages clause.

ALUMCO continued logging, incurred an additional unpaid ₱61,133.74 by 15 July 1965, and was notified on 19 July 1965 of UP’s extrajudicial rescission.

Subsequent Proceedings and Lower Court Actions
UP filed suit on 7 September 1965 (CFI Civil Case No. 9435) for collection of unpaid royalties, securing preliminary attachment and injunction on 30 September 1965, and advertised a new bidding. Sta. Clara Lumber Co., Inc. won the contract, signed 16 February 1966, and began logging.
ALUMCO’s motions to lift injunctions were denied. On 12 November 1965 it petitioned to enjoin UP’s bidding; on 27 November 1965 it filed a second injunction petition.
On 25 February 1966 the CFI enjoined UP from awarding logging rights; on 14 January 1967 it held UP in contempt and enjoined Sta. Clara; on 12 December 1967 it denied UP’s motion for reconsideration.

Whether UP, by virtue of the stipulation in the Acknowledgment of Debt, could validly treat the logging agreement as rescinded extrajudicially without a prior court decree.
Whether the CFI’s issuance and denial of injunctions and the contempt order constituted grave abuse of discretion correctible by certiorari.