G.R. No. 163511 ; June 30, 2006
LEE HIONG WEE, Petitioner, vs. DEE PING WEE and MARINA U. TAN, Respondents.

FACTS

A dispute for control of Rico Philippines Industrial Corporation (RPIC) arose between the Lee Hiong group and the Dee Ping group. The Dee Ping group successfully petitioned the SEC to compel a stockholders’ meeting, which was held on October 9, 2003, resulting in a new board that ousted petitioner Lee Hiong Wee as president and chairman. The Lee Hiong group filed SEC Case No. 029-03 before the RTC of Imus, Cavite, seeking to nullify the meeting and election. The presiding judge issued a TRO, but later inhibited himself. The case was re-raffled, and eventually assigned to Judge Cesar Mangrobang, who issued a Writ of Preliminary Mandatory Injunction on March 3, 2004, effectively restoring the Lee Hiong group to control of RPIC and its plant.
The Dee Ping group challenged this writ via a petition for certiorari (CA-G.R. SP No. 82569) before the Court of Appeals. Meanwhile, a related petition (CA-G.R. SP No. 79988) concerning the initial TRO was pending before a different CA Division. The CA’s Second Division, in SP No. 82569, nullified Judge Mangrobang’s order, finding it constituted grave abuse of discretion. Petitioner Lee Hiong Wee elevated the case to the Supreme Court.

ISSUE

Whether the Court of Appeals committed reversible error in nullifying the Writ of Preliminary Mandatory Injunction issued by the RTC.

RULING

The Supreme Court denied the petition and affirmed the CA. The RTC’s issuance of the mandatory injunction constituted grave abuse of discretion. A preliminary mandatory injunction, which commands the performance of a positive act, is only granted in extreme and urgent cases where the right is clear and unmistakable. Here, the RTC’s order compelled a pre-meeting status quo, effectively nullifying the SEC-sanctioned stockholders’ meeting and the election of a new board before a full trial on the merits. This prematurely adjudicated the main case. The RTC ignored the CA’s prior directive in the related case (SP No. 79988) for an inventory and preservation of corporate assets, opting instead for a drastic takeover. Furthermore, the CA correctly applied its Internal Rules, as the Justices who participated in the related petition (SP No. 79988) were authorized to also participate in the adjudication of the subsequent petition (SP No. 82569) challenging the injunction that flowed from it. Thus, the CA’s composition was proper, and its finding of grave abuse of discretion by the RTC was legally sound.