G.R. No. 151212 - Ten Forty Realty and Development Corp. vs. Cruz

The dispute involves China Banking Corporation (petitioner) and the private respondents, Paulino Roxas Chua and Kiang Ming Chu Chua, who are parties with interests in a residential property covered by Transfer Certificate of Title (TCT) No. 410603.
Prior adverse decisions were rendered in related cases, notably the Regional Trial Court (RTC) decision in Civil Case No. 82-14134 concerning Metropolitan Bank and Trust Company versus Pacific Multi Commercial Corporation and Alfonso Roxas Chua, which set in motion the levy on the property.

The residential land was subject to an execution levy following the RTC ruling, affecting the property held in the names of Alfonso Roxas Chua and Kiang Ming Chu Chua.
Kiang Ming Chu Chua contested the levy on the ground that the land constituted conjugal partnership property; consequently, a compromise was reached limiting the levy to the A12 undivided share corresponding to Alfonso Roxas Chua’s interest.
An alias notice of levy was issued specifically affecting the A12 share, and following the execution sale, a certificate of sale was executed in favor of Metrobank on December 22, 1987.

China Banking Corporation filed a separate complaint for a sum of money against Pacific Multi Agro-Industrial Corporation and Alfonso Roxas Chua (Civil Case No. 85-31257) and obtained a judgment on November 7, 1985, ordering the defendants to pay P2,500,000.00 plus interest, penalties, and attorney’s fees.
The defendants’ failure to timely appeal led to the issuance of a notice of levy on execution dated February 4, 1991 against Alfonso Roxas Chua’s interest in the property.

Prior to the levy, on November 21, 1988, Alfonso Roxas Chua executed an Assignment of Right to Redeem in favor of his son, Paulino Roxas Chua, specifically covering the A12 undivided share of the property.
Paulino subsequently redeemed the property from Metrobank on January 11, 1989, and both the Assignment and the act of redemption were annotated on the title on March 14, 1989.

Private respondents, asserting that Paulino possessed a prior and better right over the bank due to the earlier annotation of his redemption rights, filed Civil Case No. 63199 before the RTC of Pasig, Branch 163.
Both the trial court and the Court of Appeals ruled in favor of private respondents, issuing an injunction against Chinabank and other officers from disposing of the property in favor of the petitioner.

In their Motion for Reconsideration, private respondents challenged the earlier decision, asserting that the assignment of the right to redeem was supported by valuable consideration (P100,000.00) and was executed in good faith, which should rebut the presumption of fraud.
They also argued that rescinding the assignment was untimely and that the levy on execution was erroneously imposed on the wrong property, asserting that the redemption had already removed Alfonso Roxas Chua’s interest before the levy was effected.
The petitioner (China Banking Corporation) submitted counter-arguments and comments, while private respondents duly filed their reply with the leave of the Court.

Whether the assignment of the right to redeem executed by Alfonso Roxas Chua in favor of his son, Paulino, which was alleged to have been entered into in fraud of creditors, should be rescinded.

Did the evidence sufficiently demonstrate that the assignment was made for valuable consideration and in good faith, thereby rebutting the fraud presumption under Article 1387 of the Civil Code?

Whether the levy on execution, specifically against the A12 undivided share of the property, is valid considering that:

The redemption by Paulino had already taken place from Metrobank.
The property subject to the levy no longer belonged to Alfonso Roxas Chua at the time of execution.

Whether the petition rendered by China Banking Corporation properly vested the Court with jurisdiction to review the earlier decision of the Court of Appeals, and whether the petitioner’s objective to acquire ownership of the A12 share would have absurd and unjust consequences if allowed to proceed.