Facts:

The case at hand involves the Government Service Insurance System (GSIS) as the petitioner and the Philippine Village Hotel, Inc. (PVHI) as the respondent. PVHI, also known at one point as Sulo ng Nayon, Inc., had taken a loan of ₱22,000,000.00 from GSIS on September 18, 1972, to construct a hotel on land leased from the Nayong Pilipino Foundation. To secure this loan, PVHI hypothecated the hotel and its contents as collateral. Over time, PVHI took additional loans from GSIS, amounting to ₱14,500,000.00 for subsequent constructions and agreements. Between December 15, 1972, and June 30, 1986, PVHI paid GSIS a total of ₱98,924,227.80, but still fell behind on mortgage payments. After failing to meet payment demands, GSIS initiated foreclosure proceedings against PVHI’s properties.

Adding to the complexity, on June 6, 1986, the Presidential Commission on Good Government (PCGG) issued a writ of sequestration over PVHI’s assets. Subsequently, the government filed a case against PVHI

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Facts:

Background of the Transaction and Mortgage

• In 1972, Philippine Village Hotel, Inc. (PVHI), then known as Sulo ng Nayon, Inc., obtained a loan amounting to P22,000,000.00 from the Government Service Insurance System (GSIS) for the construction of a hotel on land leased from the Nayong Pilipino Foundation.
• To guarantee the repayment of the loan, PVHI hypothecated the hotel and its contents to GSIS.
• Additional accommodations were granted by GSIS on 24 April 1974 (P8,000,000.00) and 11 June 1975 (P6,500,000.00) under the same terms.
• A lease-purchase agreement was entered into around June 1980 over a building annexed to the hotel, amounting to P67,800,000.00, wherein PVHI was to make monthly installment payments.
• PVHI also secured debenture bonds totalling P7,000,000.00 from GSIS as part of its financing arrangement.

Payment Performance and Arrears

• Between December 1972 and June 1986, PVHI paid a total of P98,924,227.80 toward its liabilities.
• Despite these payments, the mortgage-backed loan obligation remained in arrears due to PVHI’s continual requests for extension instead of prompt payment.
• The GSIS, facing non-compliance with payment deadlines, eventually proceeded with foreclosure measures.

Foreclosure and Sequestration Proceedings

• GSIS, to secure its interest, instituted separate foreclosure proceedings through the Sheriff of Pasay City for both real estate and chattel mortgages.
• On 06 June 1986, the Presidential Commission on Good Government (PCGG) issued a writ of sequestration over all of PVHI’s assets, records, and documents.
• Subsequently, the Republic of the Philippines filed an action in the Sandiganbayan against PVHI’s President Rebecco Panlilio and his wife for reconveyance of the encumbered property and damages.

Relational Litigation and Protective Measures

• In response to the actions initiated by GSIS and PCGG, PVHI (through the Panlilios) sought to halt the foreclosure proceedings by filing for a temporary restraining order (TRO) and preliminary injunction before the Sandiganbayan.
• The Sandiganbayan initially granted the TRO (15 May 1988), but later, following PCGG’s manifestation of no objection, denied further injunctions against the foreclosure.
• GSIS resumed foreclosure plans, scheduling a sale for 25 August 1988, while PVHI simultaneously sought redress in the Manila RTC and later in the Court of Appeals via multiple petitions and motions.

Escalation and Multiple Proceedings

• PVHI filed a complaint in Civil Case No. 88-45876 in the Manila RTC seeking to annul the foreclosure sale and secure a writ of preliminary injunction; a TRO was granted on 24 August 1988 and later, a writ of preliminary injunction was issued on 11 October 1989.
• The Supreme Court interceded by issuing orders that affected proceedings in both the Manila RTC and the Sandiganbayan, including setting aside orders and limiting injunctions regarding the foreclosure sale.
• An ex-parte petition for a writ of possession in LRC Case No. 3079 was filed by GSIS, leading to further litigation wherein PVHI attempted to suspend issuance of possession pending the resolution of other related cases.
• Despite these multiple motions, various petitions, and even a Memorandum of Agreement (MOA) between GSIS and PVHI (which later failed to meet approval requirements), the foreclosure sale proceeded, with GSIS being declared the winning bidder on 13 October 1988.

The Sequencing of Appeals and the Question of Jurisdiction

• PVHI filed a petition for certiorari in the Court of Appeals (CA-G.R. SP No. 20336) contesting the RTC’s dismissal of its petition to set aside the foreclosure sale on the ground of lack of jurisdiction.
• GSIS argued that PVHI engaged in forum-shopping and that certiorari was used as an improper substitute for an appeal.
• The appellate court previously rendered decisions, including a ruling on 24 May 1990 dismissing PVHI’s petition, a reconsideration denial on 21 November 1990, and a reversal on 14 June 1991 which is the subject of the instant petition for review on certiorari.
• Throughout these proceedings, multiple issues arose regarding the right of recourse under Section 8 of Act No. 3135 and procedural proprieties involving motions for reconsideration, where technical rules on finality and filing of "second motions for reconsideration" were critically analyzed.

Issue:

Jurisdictional Authority and Proper Forum

• Whether the Regional Trial Court of Pasay City had proper jurisdiction to decide on PVHI’s petition to set aside the foreclosure sale.
• The question of forum-shopping is raised and whether PVHI’s multiple actions before different courts compromised the integrity of the judicial proceedings.

Appropriateness of Using Certiorari in This Context

• Whether PVHI’s use of a petition for certiorari is appropriate as a substitute for an appeal when contesting the RTC’s order dismissing its petition.
• The contention regarding the timing and propriety of using certiorari while other remedial avenues, like an ordinary appeal, may have been available.

Validity and Impact of the Second Motion for Reconsideration

• Whether the Court of Appeals erred in accepting PVHI’s subsequent or second motion for reconsideration despite rules (Batas Pambansa Blg. 129, Interim Rules, and the Revised Internal Rules of the Court of Appeals) prohibiting a second reconsideration motion without leave.
• Whether reversing its own final and executory decision undermines the principle of finality in judicial rulings.

Procedural Flexibility and the Pursuit of Substantial Justice

• The extent to which the appellate court may relax its strict application of procedural rules in light of the broader objective of achieving substantive justice.
• Whether such flexibility might encourage a “bickering” of multiple proceedings over the same subject matter, thereby affecting the orderly administration of justice.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)