G.R. No. L-72566. April 12, 1988.
DELBROS HOTEL CORPORATION, petitioner, vs. THE INTERMEDIATE APPELLATE COURT [FIRST SPECIAL CASES DIVISION], HILTON INTERNATIONAL COMPANY, ACHIM IHLENFELD as successor to RICHARD CHAPMAN and FLAVIANO MOSQUERA JR., respondents.

FACTS

Petitioner Delbros Hotel Corporation (DELBROS) filed a complaint for termination of agreement and damages against private respondent Hilton International Company (HILTON) before the Regional Trial Court (RTC) of Manila. DELBROS alleged that HILTON, as manager of the Manila Hilton Hotel under a Management Agreement, violated its terms by refusing to remit DELBROS’ share in the gross operating profit, improperly transferring reserve funds, and mismanaging the hotel. The RTC, presided by Judge Abelardo Dayrit, issued a writ of preliminary injunction enjoining HILTON from disposing of hotel assets, records, and funds. HILTON challenged this writ via a petition for certiorari before the Intermediate Appellate Court (IAC).
The IAC’s Third Special Cases Division initially issued a temporary restraining order (TRO) against the RTC’s orders, later replaced by a writ of preliminary injunction. Subsequently, DELBROS filed a motion to admit a supplemental complaint in the RTC, which included a confirmation of termination via a five-day notice. The RTC granted this motion. HILTON again elevated the matter to the IAC, this time to the First Special Cases Division, which issued another TRO and later a writ of preliminary injunction to restrain the RTC from enforcing its orders related to the supplemental complaint. DELBROS then filed the instant petition, arguing the IAC acted with grave abuse of discretion.

ISSUE

Whether the Intermediate Appellate Court committed grave abuse of discretion in issuing a temporary restraining order and a writ of preliminary injunction against the orders of the Regional Trial Court in the main case.

RULING

No. The Supreme Court held the IAC did not commit grave abuse of discretion. The legal logic centers on the IAC’s appellate jurisdiction and authority to issue ancillary writs. Under the Judiciary Reorganization Act (B.P. Blg. 129), the IAC possesses the power to issue writs of certiorari, prohibition, mandamus, and injunction in aid of its appellate jurisdiction. When HILTON filed its petition for certiorari with the IAC, questioning the RTC’s interlocutory orders (including the grant of the motion to admit the supplemental complaint), the IAC had the authority to determine if the RTC acted without or in excess of jurisdiction or with grave abuse of discretion. To preserve the status quo and prevent the proceedings from becoming moot, the IAC could properly issue a TRO and later a preliminary injunction. This is a provisional remedy incidental to its certiorari jurisdiction. The Court found no capricious or whimsical exercise of judgment by the IAC; its actions were within its jurisdictional bounds to prevent irreparable injury and maintain the integrity of the appellate process. The petition was dismissed for lack of merit.