G.R. No. 185024 - Bustos vs. Millians Shoe, Inc.

Spouses Fernando and Amelia Cruz owned a 464-square-meter lot covered by TCT No. N-126668.
On January 6, 2004, the City Government of Marikina levied the property for nonpayment of real estate taxes; the notice was annotated on the title on January 8, 2004.
On October 14, 2004, the lot was auctioned and Joselito Hernand M. Bustos emerged as the winning bidder.

Petitioner Bustos applied for cancellation of TCT No. N-126668.
On July 13, 2006, the RTC of Marikina City, Branch 273, rendered a final and executory decision canceling the previous title and directing issuance of a new one in Bustos’s name.

On October 25, 2004, the RTC, Imus, Cavite, Branch 21 issued a Stay Order in SEC Corp. Case No. 036-04, covering assets under rehabilitation of Millians Shoe, Inc. (MSI).
Notices of lis pendens reflecting the Stay Order were annotated on TCT No. N-126668 on February 9, 2005.

On September 26, 2006, Bustos moved to exclude the lot from the Stay Order, arguing (a) the lot belonged to Spouses Cruz as mere MSI officers and stockholders, and (b) his purchase on October 14, 2004 predated the annotation of lis pendens.
The RTC denied the motion and its reconsideration, finding Spouses Cruz retained ownership during the redemption period (until October 15, 2005).
Bustos filed a certiorari petition in the Court of Appeals, which on June 12, 2008 held that (a) the Stay Order included the lot because Spouses Cruz were still owners and liable as stockholders of a close corporation, and (b) Bustos’s motion was time-barred under the 10-day rule to oppose rehabilitation petitions.

Whether the Court of Appeals correctly treated the lot owned by Spouses Cruz as an asset answerable for MSI’s obligations by characterizing MSI as a close corporation and imposing personal liability on its stockholders.
Whether the Stay Order in rehabilitation proceedings undermines the taxing power of the City Government of Marikina.
Whether petitioner Bustos was time-barred from opposing the rehabilitation plan under the 10-day reglementary period.