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Prado vs Veridiano II

1. Smith Bell and Company leased from the government blocks 144 and 145 of the
Port Area Manila. They transferred all their rights to Philippine Building
Corporation (PBC), duly approved by the Agriculture and Environment Secretary.
PBC was able to renew the lease contract but transferred all its rights to S.
Villanueva Enterprises, Inc. (SVEI), which secure a renewal of contract for
another 25 yrs.
2. The then Minister of General Services ordered the cancellation of the contract for
violation by SVEI of its provisions. SVEI appealed the order to the Office of the
President which affirmed the cancellation. SVEI's several motions for
reconsideration were denied.
3. Earlier on, EO 321 expanded the territorial area of the South Harbor Zone and
placed the whole area under the jurisdiction of the PPA.
4. PPA informed SVEI of its intention to take possession of the leased premises and
demanded payment for accrued rentals and interests. SVEI countered it with a
proposal to restructure its obligations but the same was rejected by PPA and
demanded SVEI to vacate the premise.
5. PPA caused to publish a notice of bidding over the premise. SVEI filed for a
preliminary injunction and/or TRO. The court issued a preliminary injunction
against PPA. The PPA then filed an ejectment case in the MTC against SVEI.
6. PPA filed a motion to dismiss the case filed against it by SVEI which the court
granted.
7. SVEI appealed to the CA, pending resolution.
8. On a separate case filed, the actual occupants of Block 145 filed a petition with
RTC Manila for Specific Performance with preliminary injunction and/or
restraining order against PPA, they claim to be sublessees of Block 145 which is
now a commercial complex. They stated that they were not served with notice
thus deprived them of due process.
9. Judge Veridiano issued a TRO served only after the bidding, which was declared
as a failure for there were only 2 bidders. PPA filed an opposition to the
injunction.
10.PPA then published another notice for another public bidding. A day before the
pre-trial, the lessees filed an unverified Urgent Motion for the Issuance of a
Status Quo Order. The motion does not contain any notice of hearing to the
counsel of the petitioners. There is a notice of hearing but was addressed to the
Clerk of Court. Judge Veridiano then ordered a Status Quo.
11.Petitioners challenged the issuance of the Status Quo Order stating that Judge
Veridiano committed grave abuse of discretion.

ISSUE: WON the Judge committed grave abuse of discretion with the issuance of the
Status Quo Order.

HELD: Yes. The act is deemed despotic, arbitrary and capricious.

1. The Judge should have taken notice that the motion for the SQO does not
contain a notice of hearing addressed to the counsel of the petitioners. It was
addressed to the Clerk of Court. Non-compliance with Secs. 4 and 5 Rule 15of
the RC. A notice that does not contain a notice of hearing is but a mere scrap of
paper; it presents no questions with merits the attention and consideration of the
court. It is not even a motion for it does not comply with the rules, the clerk has
no right to receive it. There was also no sufficient proof of service to the counsel
of the government.
2. The urgent motion for a status quo order is unverified. What is sought to be
enjoined is the scheduled public bidding, an event which is not pleaded or
covered by the original petition. It is therefore a subsequent event which could
properly be the subject of a supplemental pleading pursuant to Sec 6, Rule 10.
3. Sec 4, Rule 58 RC provides that a preliminary injunction may be granted only if:
a. The complaint is verified
b. The plaintiff files with the clerk of court the requisite bond
In the attempt to circumvent the rule, the Judge did not mention the term
preliminary injunction or TRO. He just directed the parties to maintain a status quo
condition. The SQO was in fact a preliminary injunction to enjoin the government from
continuing the public bidding. Both conditions of the Rule was not complied with.

4. The sublessees were worse, not entitled by the relied of preliminary injunction
for they are mere sublesssees. The contract of SVEI with the PPA was cancelled
as affirmed by the Office of the President. Such fact should have provided basis
for the dismissal of the preliminary injunction relief sought for by the sublessees.
For the moment SVEI is ousted from the premise, the sublessees was clearly
would have no leg to stand on.