Prado vs Veridiano II 1.

Smith Bell and Company leased from the government blocks 144 and 145 of the Port Area Manila. hey transferred all their rights to Philippine B!ilding Corporation "PBC#$ d!ly approved by the Agric!lt!re and %nvironment Secretary. PBC &as able to rene& the lease contract b!t transferred all its rights to S. 'illan!eva %nterprises$ (nc. "S'%(#$ &hich sec!re a rene&al of contract for another )5 yrs. ). he then Minister of *eneral Services ordered the cancellation of the contract for violation by S'%( of its provisions. S'%( appealed the order to the +ffice of the President &hich affirmed the cancellation. S'%(,s several motions for reconsideration &ere denied. -. %arlier on$ %+ -)1 e.panded the territorial area of the So!th /arbor 0one and placed the &hole area !nder the 1!risdiction of the PPA. 4. PPA informed S'%( of its intention to take possession of the leased premises and demanded payment for accr!ed rentals and interests. S'%( co!ntered it &ith a proposal to restr!ct!re its obligations b!t the same &as re1ected by PPA and demanded S'%( to vacate the premise. 5. PPA ca!sed to p!blish a notice of bidding over the premise. S'%( filed for a preliminary in1!nction and2or 3+. he co!rt iss!ed a preliminary in1!nction against PPA. he PPA then filed an e1ectment case in the M C against S'%(. 4. PPA filed a motion to dismiss the case filed against it by S'%( &hich the co!rt granted. 5. S'%( appealed to the CA$ pending resol!tion. 6. +n a separate case filed$ the act!al occ!pants of Block 145 filed a petition &ith 3 C Manila for Specific Performance &ith preliminary in1!nction and2or restraining order against PPA$ they claim to be s!blessees of Block 145 &hich is no& a commercial comple.. hey stated that they &ere not served &ith notice th!s deprived them of d!e process. 7. 8!dge 'eridiano iss!ed a 3+ served only after the bidding$ &hich &as declared as a fail!re for there &ere only ) bidders. PPA filed an opposition to the in1!nction. 19. PPA then p!blished another notice for another p!blic bidding. A day before the pre:trial$ the lessees filed an !nverified ;rgent Motion for the (ss!ance of a Stat!s <!o +rder. he motion does not contain any notice of hearing to the co!nsel of the petitioners. here is a notice of hearing b!t &as addressed to the Clerk of Co!rt. 8!dge 'eridiano then ordered a Stat!s <!o. 11. Petitioners challenged the iss!ance of the Stat!s <!o +rder stating that 8!dge 'eridiano committed grave ab!se of discretion. ISSUE: =+> the 8!dge committed grave ab!se of discretion &ith the iss!ance of the Stat!s <!o +rder. HELD: Yes. he act is deemed despotic$ arbitrary and capricio!s. 1. he 8!dge sho!ld have taken notice that the motion for the S<+ does not contain a notice of hearing addressed to the co!nsel of the petitioners. (t &as addressed to the Clerk of Co!rt. >on:compliance &ith Secs. 4 and 5 3!le 15of the 3C. A notice that does not contain a notice of hearing is b!t a mere scrap of paper? it presents no @!estions &ith merits the attention and consideration of the co!rt. (t is not even a motion for it does not comply &ith the r!les$ the clerk has no right to receive it. here &as also no s!fficient proof of service to the co!nsel of the government. ). he !rgent motion for a stat!s @!o order is !nverified. =hat is so!ght to be en1oined is the sched!led p!blic bidding$ an event &hich is not pleaded or covered by the original

petition. (t is therefore a s!bse@!ent event &hich co!ld properly be the s!b1ect of a s!pplemental pleading p!rs!ant to Sec 4$ 3!le 19. -. Sec 4$ 3!le 56 3C provides that a preliminary in1!nction may be granted only ifA a. he complaint is verified b. he plaintiff files &ith the clerk of co!rt the re@!isite bond (n the attempt to circ!mvent the r!le$ the 8!dge did not mention the term preliminary in1!nction or 3+. /e 1!st directed the parties to maintain a stat!s @!o condition. he S<+ &as in fact a preliminary in1!nction to en1oin the government from contin!ing the p!blic bidding. Both conditions of the 3!le &as not complied &ith. 4. he s!blessees &ere &orse$ not entitled by the relied of preliminary in1!nction for they are mere s!blesssees. he contract of S'%( &ith the PPA &as cancelled as affirmed by the +ffice of the President. S!ch fact sho!ld have provided basis for the dismissal of the preliminary in1!nction relief so!ght for by the s!blessees. Bor the moment S'%( is o!sted from the premise$ the s!blessees &as clearly &o!ld have no leg to stand on.