The Ejectment or Unlawful Detainer Case

(G.R. Nos. 170505, 173355-56, and 173563-64)

Three Petitions before this Court are rooted in the Unlawful Detainer Case instituted by
LANDTRADE against NAPOCOR and TRANSCO.

On August 9, 1952, NAPOCOR took possession of two parcels of land in Sitio Nunucan,
Overton, Fuentes, Iligan City, denominated as Lots 2029 and 2043, consisting of 3,588 square
meters (or 0.36 hectares) and 3,177 square meters (or 0.32 hectares), respectively. On Lot 2029,
NAPOCOR constructed its power sub-station, known as the Overton Sub-station, while on Lot
2043, it built a warehouse, known as the Agus 7 Warehouse, both for the use of its Agus 7
Hydro-Electric Power Plant. For more than 30 years, NAPOCOR occupied and possessed said
parcels of land pursuant to its charter, Republic Act No. 6395.37 With the enactment in 2001 of
Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA),
TRANSCO assumed the functions of NAPOCOR with regard to electrical transmissions and
took over possession of the Overton Sub-station.

Claiming ownership of the parcels of land where the Overton Sub-station and Agus 7 Warehouse
are located, LANDTRADE filed with the MTCC on April 9, 2003 a Complaint for Unlawful
Detainer against NAPOCOR and TRANSCO, which was docketed as Civil Case No. 11475-AF.

In its Complaint, LANDTRADE alleged that it acquired from Teofilo, through Atty. Cabildo,
two parcels of land at Sitio Nunucan, Overton, Fuentes, Brgy. Maria Cristina, Iligan City, with a
combined area of 270,255 square meters or around 27.03 hectares, as evidenced by a Deed of
Absolute Sale38 dated October 1, 1996. Certain portions of said parcels of land were being
occupied by the Overton Sub-station and Agus 7 Warehouse of NAPOCOR and TRANSCO,
through the tolerance of LANDTRADE. Upon failure of NAPOCOR and TRANSCO to pay
rentals or to vacate the subject properties after demands to do so, LANDTRADE filed the present
Complaint for Unlawful Detainer, plus damages in the amount of P450,000.00 as yearly rental
from date of the first extra-judicial demand until NAPOCOR and TRANSCO vacate the subject
properties.

In their separate Answers, NAPOCOR and TRANSCO denied the material allegations in the
Complaint and countered, by way of special and affirmative defenses, that the Complaint was
barred by res judicata; that the MTCC has no jurisdiction over the subject matter of the action;
and that LANDTRADE lacked the legal capacity to sue.

On February 17, 2004, the MTCC rendered its Decision39 in favor of LANDTRADE. The MTCC
disposed:

WHEREFORE, premises considered, judgment is hereby rendered in favor of Plaintiff Land

Trade Realty Corporation represented by Atty. Max C. Tabimina and against defendant National
Power Corporation represented by its President, Mr. Rogelio M. Murga and co-defendant
TRANSCO represented by its President Dr. Allan T. Ortiz and Engr. Lorrymir A. Adaza,
Manager, NAPOCOR-Mindanao, Regional Center, Ma. Cristina, Iligan City, ordering:
 1. Defendants National Power Corporation and TRANSCO, their agents or
representatives or any person/s acting on its behalf or under its authority to vacate the
premises;

2. Defendants NAPOCOR and TRANSCO to pay Plaintiff jointly and solidarily:

a. Php500,000.00 a month representing fair rental value or compensation since

June 29, 1978 until defendant shall have vacated the premises;

b. Php20,000.00 for and as attorney’s fees and

c. Cost of suit.

Execution shall issue immediately upon motion, unless an appeal has been perfected and the
defendant to stay execution files a sufficient supersedeas bond, approved by this Court and
executed in favor of the plaintiff, to pay the rents, damages, and costs accruing down to the time
of judgment appealed from, and unless, during the pendency of the appeal, defendants deposit
with the appellate court the amount of P500,000.00 per month, as reasonable value of the use and
occupancy of the premises for the preceding month or period on or before the tenth day of each
succeeding month or period.40

NAPOCOR and TRANSCO seasonably filed a Joint Notice of Appeal. Their appeal, docketed as
Civil Case No. 6613, was initially assigned to the RTC-Branch 5, presided over by Judge
Maximino Magno Libre (Judge Libre).

LANDTRADE filed on June 24, 2004 a Motion for Execution, asserting that NAPOCOR and
TRANSCO had neither filed a supersedeas bond with the MTCC nor periodically deposited with
the RTC the monthly rental for the properties in question, so as to stay the immediate execution
pending appeal of the MTCC judgment. However, the said Motion failed to comply with the
required notice of hearing under Rule 15, Section 5 of the Rules of Court. LANDTRADE then
filed a Motion to Withdraw and/or Replace Notice of Hearing.

NAPOCOR and TRANSCO filed on July 13, 2004 a Joint Motion to Suspend Proceedings citing
Amagan v. Marayag,41 in which the Court ruled that if circumstances should require, the
proceedings in an ejectment case may be suspended in whatever stage it may be found. Since
LANDTRADE anchors its right to possession of the subject parcels of land on the Deed of Sale
executed in its favor by Teofilo on October 1, 1996, the ejectment case should be held in
abeyance pending the resolution of other cases in which title over the same properties are in
issue, i.e., (1) Civil Case No. 6600, the action for the annulment of the Deed of Sale dated
October 1, 1996 filed by Teofilo against LANDTRADE pending before the RTC-Branch 4; and
(2) Civil Case No. 4452, the Quieting of Title Case filed by Vidal and AZIMUTH against
Teofilo and Atty. Cabildo pending before the RTC-Branch 3.

LANDTRADE filed on July 19, 2004 another Motion for Execution, which was heard together
with the Joint Motion to Suspend Proceedings of NAPOCOR and TRANSCO. After said
hearing, the RTC-Branch 5 directed the parties to file their memoranda on the two pending
Motions.

LANDTRADE, in its Memorandum, maintained that the pendency of Civil Case No. 4452, the
Quieting of Title Case, should not preclude the execution of the MTCC judgment in the
Unlawful Detainer Case because the issue involved in the latter was only the material possession
or possession de facto of the parcels of land in question. LANDTRADE also reported that Civil
Case No. 6600, the action for annulment of the Deed of Sale dated October 1, 1996 instituted by
Teofilo, was already dismissed given that the RTC-Branch 4 had approved the Compromise
Agreement executed between LANDTRADE and Teofilo.

NAPOCOR and TRANSCO likewise filed their respective Memoranda. Subsequently,

NAPOCOR filed a Supplement to its Memorandum to bring to the attention of the RTC-Branch
5 the Decision rendered on July 17, 2004 by the RTC-Branch 3 in Civil Case No. 4452, the
Quieting of Title Case, categorically declaring Teofilo, the predecessor-in-interest of
LANDTRADE, as having no right at all to the subject parcels of land. Resultantly, the right of
LANDTRADE to the two properties, which merely emanated from Teofilo, was effectively
declared as non-existent too.

On August 4, 2004, the RTC-Branch 5 issued an Order42 denying the Joint Motion to Suspend
Proceedings of NAPOCOR and TRANSCO. The RTC held that the pendency of other actions
involving the same parcels of land could not stay execution pending appeal of the MTCC
judgment because NAPOCOR and TRANSCO failed to post the required bond and pay the
monthly rentals.

Five days later, on August 9, 2004, the RTC-Branch 5 issued another Order43 granting the
Motion of LANDTRADE for execution of the MTCC judgment pending appeal.

The next day, on August 10, 2004, the Acting Clerk of Court, Atty. Joel M. Macaraya, Jr., issued
a Writ of Execution Pending Appeal44 which directed Sheriff IV Alberto O. Borres (Sheriff
Borres) to execute the MTCC Decision dated February 17, 2004.

A day later, on August 11, 2004, Sheriff Borres issued two Notices of Garnishment45 addressed
to PNB and Land Bank of the Philippines in Iligan City, garnishing all the goods, effects, stocks,
interests in stocks and shares, and any other personal properties belonging to NAPOCOR and
TRANSCO which were being held by and under the possession and control of said banks. On
even date, Sheriff Borres also issued a Notification46 to NAPOCOR and TRANSCO for them to
vacate the subject parcels of land; and to pay LANDTRADE the sums of (a) P156,000,000.00,
representing the total fair rental value for the said properties, computed at P500,000.00 per
month, beginning June 29, 1978 until June 29, 2004, or for a period of 26 years, and (b)
P20,000.00 as attorney's fees.

Thereafter, NAPOCOR and TRANSCO each filed before the Court of Appeals in Cagayan de
Oro City a Petition for Certiorari, under Rule 65 of the Rules of Court, with prayer for the
issuance of a TRO and writ of preliminary injunction. The Petitions, docketed as CA-G.R. SP
Nos. 85174 and 85841, were eventually consolidated.
The Court of Appeals issued on August 18, 2004 a TRO47 enjoining the enforcement and
implementation of the Order of Execution and Writ of Execution Pending Appeal of the RTC-
Branch 5 and Notices of Garnishment and Notification of Sheriff Borres.

The Court of Appeals, in its Decision48 dated November 23, 2005, determined that public
respondents did commit grave abuse of discretion in allowing and/or effecting the execution of
the MTCC judgment pending appeal, since NAPOCOR and TRANSCO were legally excused
from complying with the requirements for a stay of execution specified in Rule 70, Section 19 of
the Rules of Court, particularly, the posting of a supersedeas bond and periodic deposits of rental
payments. The decretal portion of said appellate court Decision states:

ACCORDINGLY, the two petitions at bench are GRANTED; the Order dated 9 August 2004,
the Writ of Execution Pending Appeal dated 10 August 2004, the two Notices of Garnishment
dated 11 August 2004, and the Notification dated 11 August 2004, are ANNULLED and SET
ASIDE.49

Displeased, LANDTRADE elevated the case to this Court on January 10, 2006 via a Petition for
Review on Certiorari under Rule 45 of the Rules of Court, which was docketed as G.R. No.
170505.

In the meantime, with the retirement of Judge Libre and the inhibition50 of Judge Oscar Badelles,
the new presiding judge of RTC-Branch 5, Civil Case No. 6613 was re-raffled to the RTC-
Branch 1, presided over by Judge Mangotara. The RTC-Branch 1 promulgated on December 12,
2005 a Decision51 in Civil Case No. 6613 which affirmed in toto the February 17, 2004 Decision
of the MTCC in Civil Case No. 11475-AF favoring LANDTRADE.

NAPOCOR and TRANSCO filed with the RTC-Branch 1 twin Motions, namely: (1) Motion for
Reconsideration of the Decision dated December 12, 2005; and (2) Motion for Inhibition of
Judge Mangotara. The RTC-Branch 1 denied both Motions in a Resolution dated January 30,
2006.

NAPOCOR and TRANSCO filed with the Court of Appeals separate Petitions for Review with
prayer for TRO and/or a writ of preliminary injunction, which were docketed as CA-G.R. SP
Nos. 00854 and 00889, respectively. In a Resolution dated March 24, 2006, the Court of Appeals
granted the prayer for TRO of NAPOCOR and TRANSCO.

With the impending lapse of the effectivity of the TRO on May 23, 2006, NAPOCOR filed on
May 15, 2006 with the Court of Appeals a Manifestation and Motion praying for the resolution
of its application for preliminary injunction.

On May 23, 2006, the same day the TRO lapsed, the Court of Appeals granted the motions for
extension of time to file a consolidated comment of LANDTRADE. Two days later,
LANDTRADE filed an Omnibus Motion seeking the issuance of (1) a writ of execution pending
appeal, and (2) the designation of a special sheriff in accordance with Rule 70, Section 21 of the
Rules of Court.
In a Resolution52 dated June 30, 2006, the Court of Appeals granted the Omnibus Motion of
LANDTRADE and denied the applications for the issuance of a writ of preliminary injunction of
NAPOCOR and TRANSCO. In effect, the appellate court authorized the execution pending
appeal of the judgment of the MTCC, affirmed by the RTC-Branch 1, thus:

IN LIGHT OF THE ABOVE DISQUISITIONS, this Court resolves to grant the

[LANDRADE]’s omnibus motion for execution pending appeal of the decision rendered in its
favor which is being assailed in these consolidated petitions for review. Accordingly, the
[NAPOCOR and TRANSCO’s] respective applications for issuance of writ of preliminary
injunction are both denied for lack of factual and legal bases. The Municipal Trial Court in
Cities, Branch 2, Iligan City, which at present has the custody of the records of the case a quo, is
hereby ordered to cause the immediate issuance of a writ of execution relative to its decision
dated 17 February 2004 in Civil Case No. 11475-AF.53

On July 20, 2006, NAPOCOR filed with this Court a Petition for Certiorari and Prohibition
under Rule 65 of the Rules of Court with an urgent plea for a TRO, docketed as G.R. No.
173355-56. On August 2, 2006, TRANSCO filed with this Court its own Petition for Certiorari,
docketed as G.R. No. 173563-64.

On July 21, 2006, NAPOCOR filed an Urgent Motion for the Issuance of a TRO in G.R. No.
173355-56. In a Resolution54 dated July 26, 2006, the Court granted the Motion of NAPOCOR
and issued a TRO,55 effective immediately, which enjoined public and private respondents from
implementing the Resolution dated June 30, 2006 of the Court of Appeals in CA-G.R. SP Nos.
00854 and 00889 and the Decision dated February 17, 2004 of the MTCC in Civil Case No.
11475-AF.

On July 31, 2006, Vidal and AZIMUTH filed a Motion for Leave to Intervene and to Admit
Attached Comment-in-Intervention, contending therein that Vidal was the lawful owner of the
parcels of land subject of the Unlawful Detainer Case as confirmed in the Decision dated July
17, 2004 of the RTC-Branch 3 in Civil Case No. 4452. In a Resolution dated September 30,
2006, the Court required the parties to comment on the Motion of Vidal and AZIMUTH, and
deferred action on the said Motion pending the submission of such comments.