G.R. No. 215764 , July 6, 2015
Richard K. Tom, Petitioner, vs. Samuel N. Rodriguez, Respondent.

FACTS

Golden Dragon International Terminals, Inc. (GDITI) is the exclusive Shore Reception Facility Service Provider of the Philippine Ports Authority. A dispute over the control and management of GDITI arose from a series of sales of shares by Fidel Cu. After failed sales to other parties, Cu sold his shares to Cirilo C. Basalo, Jr. via an Agreement dated April 30, 2010. Cu successfully intervened in an earlier injunction case (Civil Case No. 09-122149) before the Regional Trial Court (RTC) of Manila, Branch 46, and was granted authority to manage GDITI. Cu initially appointed Cezar O. Mancao II as his representative via a Special Power of Attorney but later revoked it. Consequently, Mancao and Basalo filed a Complaint for Specific Performance with a prayer for a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction against Cu and Richard K. Tom (allegedly authorized by Cu to manage GDITI) before the RTC of Nabunturan, Compostela Valley, Branch 3 (Civil Case No. 1043). Samuel N. Rodriguez filed a Complaint-in-Intervention, alleging a Memorandum of Agreement (MOA) dated May 2, 2012, with Basalo granting him management and control of GDITI operations in Luzon and a share in profits. Basalo failed to controvert these allegations. The RTC-Nabunturan, in an Order dated November 13, 2013, granted Rodriguez’s application for a writ of preliminary mandatory injunction based on the uncontroverted MOA. Tom filed a motion for reconsideration, which was denied. Tom then filed a petition for certiorari with the Court of Appeals (CA), seeking to nullify the RTC Orders and praying for a TRO and/or writ of preliminary injunction. The CA, in Resolutions dated May 16, 2014, and November 5, 2014, denied Tom’s prayer for injunctive relief, finding no extreme urgency or clear irreparable injury. Tom elevated the matter to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether or not the Court of Appeals committed grave abuse of discretion in denying Tom’s prayer for the issuance of a TRO and/or writ of preliminary injunction.

RULING

The Supreme Court ruled that the petition was meritorious. Initially, the Court noted that Tom erroneously filed a petition for review under Rule 45 instead of a petition for certiorari under Rule 65, as the assailed CA Resolutions were interlocutory orders. However, in the interest of substantial justice and considering the petition was filed within the reglementary period for Rule 65 and alleged a departure from usual judicial proceedings, the Court treated the petition as one for certiorari. The Court found that the CA committed grave abuse of discretion in denying the injunctive relief. The requisites for issuing a TRO or writ of preliminary injunction are: (1) a clear and unmistakable right to be protected; (2) this right is directly threatened; (3) the invasion of the right is material and substantial; and (4) there is an urgent and paramount necessity to prevent serious and irreparable damage. The Court held that Tom, as a party to the specific performance case, had a clear legal right to be protected from the implementation of the RTC’s preliminary mandatory injunction order, which directed actions affecting GDITI’s management and control. The implementation of this order posed a material and substantial threat to Tom’s rights, and there was an urgent necessity to prevent irreparable damage, as the injunction would alter the status quo and affect corporate operations. The CA’s denial, without substantiating its finding of no irreparable injury, constituted a capricious and whimsical exercise of judgment equivalent to grave abuse of discretion. Therefore, the Supreme Court granted the petition and nullified the CA Resolutions.