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RICHARD K. TOM v. SAMUEL N. RODRIGUEZ

FACTS:

The case involves a dispute over the control and management of Golden Dragon International Terminals, Inc. (GDITI), the exclusive Shore Reception Facility (SRF) Service Provider of the Philippine Ports Authority (PPA). Fidel Cu sold his shares in GDITI to Virgilio Ramos and Cirilo Basalo, but they failed to pay the purchase price. Cu then sold some of the shares to Edgar Lim, Eddie Ong, and Arnold Gunnacao, who also did not pay. On September 11, 2009, Lim, Basalo, Ong, and Gunnacao were elected as officers of GDITI. However, another group led by Ramos forcibly took over the GDITI offices.

GDITI, through Lim, filed a case for injunction and damages against Ramos. Cu intervened in the case, claiming ownership of the shares that were subject to the previous contracts. The court granted Cu's application for preliminary injunction, which gave Cu the authority to put GDITI's business operations in order. Cu executed a Special Power of Attorney (SPA) in favor of Cezar Mancao to exercise the authority granted by the court.

Cu and Basalo entered into an Addendum to Agreement to set the terms of payment for the sale of shares. However, Cu later revoked the authority granted to Mancao and Basalo. Mancao and Basalo then filed a complaint for specific performance against Cu and Richard Tom.

Samuel Rodriguez intervened, claiming that Basalo authorized him to take over the operations of GDITI in the Luzon area. The trial court granted Rodriguez's application for a writ of preliminary mandatory injunction.

ISSUES:

  1. Whether the CA committed grave abuse of discretion in denying Tom's prayer for the issuance of a TRO and/or writ of preliminary injunction.

  2. Whether the management and control of Golden Dragon International Terminals, Inc. (GDITI) is vested in its duly elected Board of Directors.

  3. Whether the Court of Appeals (CA) committed grave abuse of discretion in affirming the trial court's Order placing the management and control of GDITI to Samuel N. Rodriguez, a mere intervenor.

RULING:

  1. The petition is meritorious. The CA committed grave abuse of discretion amounting to lack or excess of jurisdiction in denying Tom's prayer for the issuance of a TRO and/or writ of preliminary injunction. The issuance of an injunctive writ is warranted to enjoin the RTC-Nabunturan from implementing its November 13, 2013 and December 11, 2013 Orders in the specific performance case placing the management and control of GDITI to Rodriguez, among other directives.

  2. The Supreme Court granted the petition and nullified and set aside the Resolutions of the Court of Appeals. The Court held that the management and control of GDITI, being a stock corporation, are vested in its duly elected Board of Directors. The CA committed grave abuse of discretion in affirming the trial court's order that placed the management and control of GDITI to Rodriguez, in violation of the provision of the Corporation Code. The Court also ruled that the petitioner, Tom, has legal standing to seek the issuance of an injunctive writ as the original party-defendant and a member of the current Board of Directors of GDITI.

PRINCIPLES:

  • Grave abuse of discretion refers to capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction.

  • The requisites for the issuance of an injunctive writ are: (1) clear and unmistakable right to be protected; (2) direct threat to the right by the act sought to be enjoined; (3) material and substantial invasion of the right; and (4) urgent and paramount necessity for the writ to prevent serious and irreparable damage.

  • The exercise of judicial discretion in injunctive matters must not be interfered with, except when there is grave abuse of discretion.

  • The corporate powers of a corporation are exercised, and the business conducted and property controlled, by the board of directors or trustees, unless otherwise provided in the Corporation Code.

  • The management and control of a stock corporation are vested in its duly elected Board of Directors.

  • A director must own at least one share of the capital stock of the corporation of which he is a director, and ceases to be a director if he ceases to be the owner of at least one share.

  • Trustees of non-stock corporations must be members thereof.

  • The majority of the directors or trustees of all corporations organized under the Corporation Code must be residents of the Philippines.

  • The Court has the power to grant the issuance of an injunctive writ if the petitioner has legal standing and the conditions for the grant of injunction are met.