Tom v. Rodriguez
REITERATIONFacts
The Antecedents: Golden Dragon International Terminals, Inc. (GDITI) is the exclusive Shore Reception Facility (SRF) Service Provider for ship-generated oil wastes. Fidel Cu sold shares in GDITI to various individuals who failed to pay. Subsequently, Cu resold his remaining shares and the previously sold shares to Virgilio S. Ramos and Cirilo C. Basalo, Jr. A dispute arose when a group led by Ramos, including Richard K. Tom (Tom), forcibly took over GDITI offices. An injunction case was filed by the duly elected officers. Cu intervened, claiming ownership of the shares as an unpaid seller, and was granted preliminary injunctions by the RTC-Manila, authorizing him to manage GDITI. Cu then appointed Cezar O. Mancao II and Basalo as representatives. Later, Cu revoked Mancao and Basalo's authority. Mancao and Basalo filed a specific performance case against Cu and Tom, alleging Tom's unauthorized exercise of control over GDITI. Samuel N. Rodriguez (Rodriguez) intervened, claiming Basalo authorized him to manage GDITI's Luzon operations via a Memorandum of Agreement (MOA), and sought to compel Basalo to comply. Basalo did not present evidence to contradict Rodriguez. Procedural History: The RTC-Nabunturan granted Rodriguez's application for a writ of preliminary mandatory injunction, ordering Basalo to place management and control of GDITI in Luzon to Rodriguez, allocate management of Visayas and Mindanao to Rodriguez as a partner, allow Rodriguez to provide manpower, and give Rodriguez his share in net proceeds. Motions for reconsideration by Basalo, Mancao, and Tom were denied. Tom filed a petition for certiorari with prayer for TRO/preliminary injunction before the Court of Appeals (CA), seeking to nullify the RTC-Nabunturan orders. The Petition: The CA denied Tom's prayer for TRO and/or preliminary injunction, finding no extreme urgency and no clear and irreparable injury. Tom filed a motion for reconsideration, which was denied. Hence, this petition for review on certiorari before the Supreme Court.
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion in denying Tom's prayer for the issuance of a Temporary Restraining Order (TRO) and/or writ of preliminary injunction. Whether the RTC-Nabunturan's Order granting preliminary mandatory injunction to Rodriguez, a mere intervenor, placing the management and control of GDITI to him, was valid.
Ruling
The petition is meritorious. The Resolutions of the Court of Appeals dated May 16, 2014 and November 5, 2014 are NULLIFIED and SET ASIDE. A Writ of Preliminary Injunction is ISSUED against respondent Samuel N. Rodriguez, his agents, and all persons acting under his authority, enjoining them from further exercising any powers of management and control over Golden Dragon International Terminals, Inc.
Ratio Decidendi
On the Issue of Grave Abuse of Discretion by the CA: The Court found that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction in denying Tom's prayer for injunctive relief. The CA's denial was based on the absence of extreme urgency and clear and irreparable injury, without addressing the substantive merits of the case. However, the CA's affirmation of the RTC-Nabunturan's order effectively allowed an intervenor to take over the management of a corporation, which is a matter that requires careful scrutiny. The Court emphasized that injunctive reliefs are preservative remedies for the protection of substantive rights and interests, and their issuance requires a clear and unmistakable right to be protected, which is directly threatened by an act sought to be enjoined, with the invasion being material and substantial, and an urgent and paramount necessity to prevent serious and irreparable damage. The CA's failure to consider these aspects, particularly in light of the potential violation of corporate governance rules, constituted grave abuse of discretion. On the Propriety of the RTC-Nabunturan's Order and the CA's Affirmation: The Court held that the RTC-Nabunturan's Order, affirmed by the CA, which placed the management and control of GDITI to Rodriguez, a mere intervenor, was in violation of Section 23 of Batas Pambansa Bilang 68 (The Corporation Code of the Philippines). This provision clearly states that the corporate powers of all corporations shall be exercised by the board of directors or trustees. The management and control of a stock corporation like GDITI are vested in its duly elected Board of Directors. Allowing an intervenor, through a Memorandum of Agreement with one of the parties, to take over the management and control of the corporation contravenes this fundamental principle of corporate law. The CA, by denying the injunctive relief, effectively allowed this violation to stand, thus committing grave abuse of discretion. The Court reiterated that the issuance of an injunctive writ is warranted to enjoin the RTC-Nabunturan from implementing its orders that violate the Corporation Code.
Main Doctrine
The Court of Appeals commits grave abuse of discretion amounting to lack or excess of jurisdiction when it denies a prayer for a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction based on a finding of no extreme urgency or clear and irreparable injury, if such denial effectively affirms an order that violates the Corporation Code provisions on the exercise of corporate powers by the Board of Directors.