G.R. No. L-79128 June 16, 1988
ORTIGAS & COMPANY LIMITED PARTNERSHIP, petitioner, vs. COURT OF APPEALS and SPS. DALTON B. KING and CECILIA F. KING, respondents.

FACTS

Ortigas & Company leased a commercial unit to Wellington Syquiatco, who later sold his leasehold rights to spouses Dalton and Cecilia King with Ortigas’s approval. The original lease agreement, signed by Ortigas’s shopping center manager, contained a clause stating “Electric and water bins shall be for our account.” After a management change, Ortigas discovered this clause and claimed it was a typographical error, intending the utility costs to be for the lessee’s account. Ortigas proposed a new contract shifting utility payments to the Kings, which they refused to sign. When the Kings declined to pay subsequent electric bills, Ortigas disconnected their power supply.
The Kings filed a complaint for specific performance and damages with a prayer for a preliminary mandatory injunction to restore electricity, relying on the original contract’s clause. The Regional Trial Court denied the application for the writ. The Court of Appeals reversed the RTC and issued the writ upon the Kings’ posting of a bond.

ISSUE

Whether the Court of Appeals erred in issuing the writ of preliminary mandatory injunction, thereby overturning the RTC’s discretionary denial.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the RTC order, holding that the trial court did not commit grave abuse of discretion in denying the writ. The grant of a preliminary injunction is an equitable remedy resting within the sound discretion of the court, not a matter of right, and should not be used to sanction inequity. The Court found that Ortigas presented a compelling equitable consideration: the monthly electricity consumption of the Kings far exceeded their monthly rental, effectively forcing Ortigas to subsidize the Kings’ business if the original clause were enforced pending trial. This created an ostensibly unjust situation where the Kings would enrich themselves at Ortigas’s expense.
The Supreme Court emphasized that the issuance of a preliminary mandatory injunction, which would compel the reconnection of electricity, would effectively grant the main relief sought in the complaint (specific performance of the contract clause) without a full trial on the merits. This would preempt the trial court’s resolution of Ortigas’s substantive defenses, including allegations of a typographical error, collusion, and lack of authority by the signing manager. The RTC correctly exercised prudence by refusing to issue a writ that would dispose of the central contractual dispute prematurely. Therefore, no grave abuse of discretion attended the RTC’s order of denial.