G.R. No. 126126 - People vs. Sabadao

In 1947, the Republic of the Philippines purchased a large parcel of land from the Roman Catholic Church, originally known as Hacienda Baclaran, for distribution and resale to its bona fide occupants.
The property was later renamed the Baclaran Homesite and placed under various administrative bodies: first under the Rural Progress Administration, then the Land Tenure Administration, and ultimately the respondent Land Authority.

On January 13, 1955, the Government, through the Secretary of Agriculture and Natural Resources, sold lots 2, 3, 20-B, and 21-B of Block 6 of the Baclaran Homesite to the Iglesia Ni Cristo.
Two conditions were attached to the sale:

The property could not be sold, assigned, encumbered, mortgaged, or transferred for five years from the date of sale without written consent of the Secretary.
The property was to be used exclusively for religious purposes.

While the first condition was duly annotated on the transfer certificate, the second condition was included in the deed of sale but not reflected as an annotation.

In 1956, with the Iglesia Ni Cristo having decided to build its edifice on another location, it sought permission from the Land Tenure Administration to sell the property to Manuel Enriquez.
Despite Enriquez’s similar application, the request was denied on May 28, 1956 under Resolution No. 25 due to the property being originally awarded exclusively for religious purposes.
After the lapse of the five-year restriction on November 22, 1961, the Iglesia Ni Cristo transferred its ownership of the property to Enriquez following a successful petition to cancel the annotated limitation.
The transfer was effectuated without notifying the respondent Land Authority or its predecessor.

A 66-square-meter lot among the parcels acquired by Enriquez was occupied by Pastora Alcaparas (later succeeded in litigation by Enrique Lim, et al.), Anita Lim, and Severino Beo.
On August 10, 1963, Enriquez filed a complaint for ejectment against these occupants in the Paranaque justice of the peace court, alleging a verbal lease contract for a monthly rental of P10 which was not paid.
The case was heard ex parte, resulting in a judgment of ejectment in favor of Enriquez and the issuance of a writ of execution, which was later returned unsatisfied.
Subsequently, on July 12, 1963, Enriquez obtained a writ of demolition; however, before its enforcement, the occupants filed another complaint on July 23, 1963 with the Court of First Instance of Rizal, Branch VII.

The cancellation and annulment of Enriquez’s title over the 66-square-meter lot.
The reversion of the land ownership to the Government and its subsequent resale to Alcaparas, et al.

A writ of preliminary injunction was filed by the occupants to stop the demolition of their dwelling pending the resolution of the case.
Subsequent pleadings and amended complaints included:

The impleading of the Iglesia Ni Cristo as a party defendant.
Stipulation of facts agreed by the parties detailing the history of the Baclaran Homesite, the sale by the Government to the Iglesia Ni Cristo, and the subsequent transfer to Enriquez, along with the ejectment proceedings.

On March 10, 1965, Enriquez sought to require the occupants to post a bond and pay monthly rentals, a motion which was denied.
On April 19, 1965, the trial court allowed the posting of a P1,000 bond and issued a writ of preliminary injunction averting the demolition of the occupants’ dwelling, while refusing to order monthly rental payments.
Various other motions regarding dismissal of the injunction and amendments to the complaint were filed, with the latter being eventually allowed despite objections that the amendments would alter the nature or theory of the cause of action.

The petitioners, who succeeded the late Manuel Enriquez (represented by Josefa Montemayor Vda. de Enriquez, Joel, Victoria, and Dalisay Enriquez), challenged the trial court’s handling of the case.
Their contentions include:

Alleging that the initial complaint filed by Alcaparas, et al. did not state a cause of action sufficient for relief, as it did not show direct benefit from annulment of the transfer.
Asserting that the preliminary injunction curbing the demolition of the dwelling was improperly issued in light of the final judgment of eviction by the justice of the peace court.
Disputing the court’s authority under Rule 70 to order a supersedeas bond and monthly rental obligations from the occupants.
Objecting to the admittance of a second amended complaint that introduced additional allegations which they argued substantially changed the issues or party composition.

Does the complaint filed by Alcaparas, et al. state a valid cause of action that entitles them to judicial relief?
Are the elements of a cause of action—namely, the plaintiff’s primary right and the defendant’s wrongful act—adequately alleged?

Was it proper for the respondent court to issue a preliminary injunction to stop the demolition of the occupants’ dwelling despite the existence of a final judgment of eviction from the justice of the peace court?
Does the preliminary injunction improperly encroach upon the due process of evaluating the merits of the case as distinct from an appeal of the eviction judgment?

Did the trial court rightly exercise its discretion in refusing to order a supersedeas bond for damages and monthly rental payments under Section 8, Rule 70 of the Revised Rules of Court?
Is the context of an independent civil action for vindication of preferential rights distinct from a typical unlawful detainer appeal such that the bond requirement is immaterial?

Do the additional allegations and parties introduced in the second amended complaint substantially alter the cause of action or the court’s original jurisdiction?
Are such amendments proper when considering the underlying dispute of the occupants’ preferential right to purchase?