Title
Marcelo vs. Peroxide Philippines, Inc.
Case
G.R. No. 203492
Decision Date
Apr 24, 2017
A protracted legal battle over a Valenzuela City property, involving ejectment, defiance of court orders, and disputes over ownership and possession, culminating in the Supreme Court upholding injunctions to protect PPI's rights.
ejectment case
writ of preliminary injunction
padlocking of property
A

Case Summary (G.R. No. 203492)

Factual Background

The dispute arose from an ejectment action in which the petitioners trace title to the parcel covered by Transfer Certificate of Title No. T-71843 and an earlier lease dated June 25, 1971 executed by their predecessor-in-interest with the respondent PEROXIDE PHILS., INC.. The MeTC rendered a decision on July 18, 1988 ordering the respondent to vacate and to pay P1,864,685.38, and proceedings culminated in a sheriff’s sale of corporate properties on August 3, 1995, when petitioner Pablo was the highest bidder for P2,000,000. Third-party claimants contested the sheriff’s sale and, by amended complaint, asserted ownership claims over improvements erected on the subject property and obtained a writ of preliminary injunction on September 8, 1995. Despite the injunction, petitioner Pablo repeatedly entered the premises, forcibly removed padlocks, dismantled and removed machinery and improvements, and opened portions of the land as a public resort and rentable commercial space.

Trial Court Proceedings

The trial court issued successive orders to inventory the properties, to padlock and to re-padlock the premises, and to enjoin the petitioners from further disturbances of the subject property. After PPI filed an Omnibus Motion on May 31, 2005, Judge Jose G. Paneda issued an order on February 20, 2006 directing the deputy sheriff to conduct inventory and re-padlock the premises; subsequent orders including that of June 19, 2009 reiterated the court’s control over the property. Petitioner Pablo resisted, filed motions for reconsideration and to remove the padlock, and sought to quash the June 19, 2009 order. The court granted a series of procedural acts including ocular inspection, but on June 22, 2011 the court issued an Omnibus Order granting the petitioners’ motion to remove the padlock, recalling the June 19, 2009 order, and allowing Pablo to reenter and enjoy possession pending the main case.

Proceedings in the Court of Appeals

Aggrieved, the respondent elevated the matter to the Court of Appeals by petition for certiorari under Rule 45, Rules of Court, alleging grave abuse of discretion and authority by Judge Paneda. On May 21, 2012 the Court of Appeals granted the petition, revoked and vacated the Omnibus Order dated June 22, 2011, directed the deputy sheriff to turn over possession to PPI for retrieval of its properties, ordered the premises to be re-padlocked and remain padlocked pending trial, and directed Judge Paneda to inhibit himself and the case to be raffled to another branch.

The Issue Presented

The narrow issue framed for the Supreme Court was whether the Court of Appeals erred in finding that the Regional Trial Court committed grave abuse of discretion in granting the petitioners’ motion to remove the padlock of the subject property.

Parties’ Contentions

The petitioners rested their defense on their status as the registered owners of the land that contained the contested improvements and machinery, and argued that therefore lower courts lacked authority to turn over the subject property to PPI or to order it padlocked pending trial. The respondent countered that the Contract of Lease conferred ownership or protectable rights over the improvements and substantial investments introduced by PPI and that specific contractual provisions granted the lessee priority to buy and the right to erect buildings and plant, thereby justifying injunctive protection to prevent dissipation of PPI’s assets.

Supreme Court Ruling

The Supreme Court denied the petition. The Court affirmed the Court of Appeals’ Decision dated May 21, 2012 and Resolution dated September 12, 2012. The Court held that the issuance of the writ of preliminary injunction and the attendant orders to padlock and re-padlock the premises were proper to preserve PPI’s ostensible rights during litigation. The Court also sustained the Court of Appeals’ directive that Judge Paneda inhibit himself because of undue delay in acting on PPI’s motion for reconsideration.

Legal Basis and Reasoning

The Court applied established principles governing injunctive relief. A writ of preliminary injunction is an extraordinary remedy designed to preserve the status quo pending final adjudication. The Court reiterated the three essential requisites for the issuance of a writ: (a) the invasion of the right sought to be protected must be material and substantial; (b) the right of the complainant must be clear and unmistakable or at least ostensible; and (c) there must be urgent and paramount necessity to prevent serious damage. The Court cited precedent including Co, Sr. v. Philippine Canine Club, Inc., G.R. No. 190112, April 22, 2015, Lukang v. Pagbilao Development Corporation, et al., 728 Phil. 608 (2014), and China Banking Corporation v. Spouses Ciriaco, 690 Phil. 480 (2012) to articulate these requisites and to note that a clear showing of right need not be conclusively established at the preliminary stage. Applying those principles, the Court found that PPI had shown an ostensible right to the improvements and that the petitioners’ repeated removal of machinery and conversion of the premises to commercial use constituted continuing acts tha

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