G.R. Nos. 135180-81; 135425-26 August 16, 2000
Heirs of the Late Justice Jose B. L. Reyes, et al. vs. Court of Appeals and Metro Manila Builders, Inc.

FACTS

The petitioners, co-owners of a parcel of land in Pasay City, entered into a 25-year lease contract with respondent Metro Manila Builders, Inc. (MMB) in 1976. Petitioners later discovered that MMB breached the contract by failing to maintain the premises, not securing adequate insurance, and unlawfully sub-leasing the property for substantial profit. Consequently, petitioners served a notice to terminate the lease and vacate, and upon MMB’s refusal, filed an unlawful detainer case with the Metropolitan Trial Court (MTC). The MTC ruled in favor of the petitioners, ordering MMB to vacate and pay rentals and attorney’s fees. MMB appealed to the Regional Trial Court (RTC), which dismissed the appeal for failure to file the required memorandum. The MTC then issued a writ of execution.
MMB subsequently withdrew its appeal from the Court of Appeals and instead filed a petition for annulment of judgment with the RTC, alleging the MTC lacked jurisdiction. Simultaneously, MMB filed a petition for certiorari with the Court of Appeals. The appellate court’s Special Fourth Division, through a resolution signed by only two justices, issued a temporary restraining order against the execution. The Court of Appeals later rendered a decision setting aside the MTC and RTC orders, restoring possession to MMB, and granting execution pending appeal. It also found petitioners guilty of indirect contempt.

ISSUE

The primary issue is whether the Court of Appeals committed grave abuse of discretion in issuing its resolutions and decision, particularly the TRO issued by an incomplete division and the grant of execution pending appeal.

RULING

The Supreme Court granted the petitions, annulling the challenged Court of Appeals resolutions and decision. The legal logic is anchored on procedural infirmities and jurisdictional overreach. First, the TRO issued by only two members of a three-member division of the Court of Appeals is void. The law requires a quorum of three members for division sessions, and a unanimous vote of three is necessary for a final resolution, a rule that applies to interlocutory orders as well. While a single justice may issue a TRO, the subsequent resolution extending or considering it must comply with the three-member quorum and voting requirement, which was not done here.
Second, the Court of Appeals gravely abused its discretion in allowing execution pending appeal. Execution pending appeal is an exception, permissible only for good reasons stated in a special order. The appellate court’s cited reasons—that the MTC judgment was void and that damages would be irreparable—were specious. The MTC clearly had jurisdiction over the ejectment suit, which was filed well within the one-year period from the last demand to vacate. The alleged breach of contract by the lessee is a valid ground for judicial ejectment. The Supreme Court found no compelling reason to justify discretionary execution, which deprived the petitioners of possession despite their prevailing in the lower courts. The contempt citation was likewise unjustified.