Case Digest (G.R. No. 226213)
Facts:
From March 1990, Cagayan Electric Power and Light Company, Inc. (CEPALCO) supplied electricity to Ferrochrome Philippines, Inc. (FPI) at the PHIVIDEC Industrial Estate in Tagoloan, Misamis Oriental. By May 1996, FPI accumulated unpaid bills of ₱29,509,240.89. CEPALCO disconnected service, sent a demand for ₱30,147,835.65 (including surcharges), and in July 1996 filed a collection suit (RTC-Pasig, Civil Case No. 65789). The RTC granted partial summary judgment in April 1999 for ₱25,608,579.98 and in January 2004 awarded additional charges, prompting FPI to appeal to the Court of Appeals (CA G.R. CV No. 86228) and seek injunctive relief against execution. On March 11, 2003, FPI executed a Deed of Assignment in favor of its sister company G. Holdings, Inc. (GHI) to settle obligations of ₱50,366,926.71 by assigning all its smelter assets. On April 1–2, 2004, the RTC-Pasig sheriff levied and scheduled auction of FPI’s assets. On April 5, 2004, GHI sued Sheriff Baron, CEPALCO and FPICase Digest (G.R. No. 226213)
Facts:
- Parties and Background
- Petitioner G. Holdings, Inc. (GHI) claimed ownership of a ferro-alloy smelting facility and related assets under a Deed of Assignment dated March 11, 2003 executed by Ferrochrome Philippines, Inc. (FPI).
- Respondent Cagayan Electric Power and Light Company, Inc. (CEPALCO) supplied power to FPI’s plant at the PHIVIDEC Industrial Estate in Tagoloan, Misamis Oriental, beginning March 1990.
- Factual and Procedural History
- FPI defaulted on power bills totaling ₱16,301,588.06 as of March 1996; partial payments left a balance which grew to over ₱29 million by May 1996. CEPALCO disconnected service and filed a collection suit (Civil Case No. 65789) in RTC-Pasig in July 1996.
- RTC-Pasig granted partial summary judgment on April 22, 1999, awarding CEPALCO ₱25.6 million; on January 19, 2004 it affirmed this amount and added surcharges and other charges. FPI appealed, and CEPALCO obtained execution pending appeal.
- Sheriff Baron levied FPI’s real and personal properties in April 2004. FPI secured a TRO and preliminary injunction from the Court of Appeals (CA) in CA G.R. SP No. 83224.
- On April 5, 2004, GHI filed Civil Case No. 2004-111 in RTC-Cagayan de Oro (RTC-CDO) for nullification of the levy, recovery of possession, and damages, alleging valid transfer of assets under the Deed of Assignment.
- CEPALCO filed its Answer with compulsory counterclaim and cross-claim, attacking the Deed of Assignment as simulated and fraudulent, made in fraud of creditors after the partial judgment.
- The CA in CA G.R. CV No. 86228 (collection case) partially modified and otherwise affirmed the RTC-Pasig decisions; FPI’s further petition was denied by the Supreme Court in April 2010. The CA also dismissed FPI’s certiorari petition in the execution case.
- RTC-CDO on July 22, 2013 rendered judgment: rescinded the Deed of Assignment, awarded CEPALCO actual (₱256,587.48) and exemplary (₱1 million) damages plus attorney’s fees (₱500,000), and lifted the injunctive relief.
- GHI appealed to the CA (CA-G.R. CV No. 03366-MIN); on April 14, 2016 the CA denied the appeal, affirmed the RTC-CDO Decision, and its July 25, 2016 Resolution denied reconsideration. GHI then filed this Rule 45 petition.
Issues:
- Whether the CA erred in not dismissing CEPALCO’s compulsory counterclaim for non-payment of docket fees.
- Whether the CA erred in holding the Deed of Assignment to be absolutely simulated.
- Whether the CA erred in affirming rescission of the Deed of Assignment absent an independent rescission action.
- Whether the CA erred in finding the Deed of Assignment fraudulent vis-à-vis creditors and accompanied by badges of fraud.
- Whether GHI is entitled to recover damages under its Complaint.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)