G.R. No. 177728 - Dela Cruz vs. Gracia

The case involves petitioners Dolmar Real Estate Development Corporation, Mariano K. Tan, Sr., Mariano John L. Tan, Jr., and Philip L. Tan versus respondents Spouses Philip and Nancy Young.
The dispute centers on agreements executed by the parties—the Memorandum of Agreement (MOA) dated March 4, 2003 and the Shareholders’ Agreement dated May 16, 2003—which govern the management and corporate actions of the real estate development corporation.

On June 1, 2005, respondents filed a complaint for specific performance and damages with the Regional Trial Court, Branch 211, Mandaluyong City.
The complaint sought not only specific performance of the agreements but also monetary damages.
Respondents also prayed for a Temporary Restraining Order (TRO) and a preliminary injunction to enforce:

The cessation of alleged violations of the MOA and Shareholders’ Agreement by petitioners.
The restoration of respondents’ management authority within the corporation.
The observation of quorum and consensus requirements in the exercise of corporate powers.
The prevention of a scheduled meeting of the Board of Directors on June 3, 2005.

On June 2, 2005, the trial court issued a 72‑hour restraining order to stop the Board meeting slated for June 3, 2005.
A summary hearing on June 17, 2005, led the trial court to:

Issue a TRO as prayed by respondents.
Set a hearing for the application of the writ of preliminary injunction (scheduled for June 21, 2005).
Approve a bond of ₱100,000.00 posted by respondents.

On October 14, 2005, the trial court issued an Order establishing the status quo ante, which:

Directed that the condition prior to December 13, 2004, be maintained.
Enforced the observance of the four‑director quorum and consensus rules.
Required counter‑signature by spouses Young on checks and banking transactions.
Mandated mutual compliance with the duties and responsibilities under the MOA and Shareholders’ Agreement.

Petitioners filed a petition for certiorari under Rule 65 to nullify the status quo ante Order of the trial court, arguing grave abuse of discretion amounting to lack or excess of jurisdiction.
On November 15, 2005, the appellate court initially dismissed the petition as fatally defective due to lack of required certification and deficiencies in the attached record.
Petitioners filed a Motion for Reconsideration with an amended petition on November 21, 2005, which resulted in:

The appellate court, in its Resolution dated December 7, 2005, granting the motion and reinstating the case.

On January 25, 2006, the Court of Appeals issued a Resolution denying petitioners’ application for a writ of preliminary injunction, finding that:

There was no compelling reason to disturb the prevailing state of affairs established by the trial court.
None of the grounds required under Section 3 of Rule 58 for the issuance of a preliminary injunction existed.

A subsequent motion for reconsideration by petitioners was denied in a Resolution dated April 24, 2006.

Petitioners contended that the appellate court’s resolutions were issued with grave abuse of discretion based on an arbitrary or simplistic assessment of the need for injunctive relief.
They argued that the court’s findings lacked a thorough discussion of the legal basis and that a proper analysis of the requirements for the issuance of a TRO or preliminary injunction was absent.
Respondents maintained that the primary objective of the injunctive relief was to preserve the status quo ante and that the trial court’s determination in this regard was sound and proper.

Whether the Court of Appeals exercised grave abuse of discretion in denying petitioners’ application for a writ of preliminary injunction.
Whether petitioners were entitled to disturb the status quo ante established by the trial court based on the evidentiary rules and requirements under Section 3 of Rule 58.
Whether the lack of an extensive finding of fact and conclusion in the appellate court’s resolution constitutes a legal defect warranting reversal.
Whether the procedural and substantive deficiencies cited by petitioners are sufficient to nullify the decisions of the lower courts.