Case Digest (G.R. No. 253428)
Facts:
The case involves Guerrero Estate Development Corporation (GEDCOR) as petitioner, and Leviste & Guerrero Realty Corporation (LGRC) along with the heirs of Conrad C. Leviste, represented by Lauro S. Leviste II, as respondents. The dispute centers on a parcel of land in Barangay San Dionisio, Parañaque City originally owned by Guillerma Santos. After her death, her heirs formed GEDCOR to develop the property. GEDCOR entered into a joint venture with Conrad Leviste in 1987 for the construction of a warehouse on a 1,506-square meter portion of the land, with a profit-sharing scheme entitling GEDCOR to 45% of the rental income from the warehouse and Leviste to 55%. Leviste and GEDCOR organized LGRC, which leased the warehouse and shared rental proceeds accordingly.
In 2006, GEDCOR offered to terminate the Joint Venture Contract, asserting that Leviste had already recouped his investment and earned reasonable profits, but Leviste did not act on this offer. Later, LGRC ceased remi
Case Digest (G.R. No. 253428)
Facts:
- Background of the Property and Parties
- Guillerma Santos was the registered owner of a large parcel of land in Barangay San Dionisio, Parañaque City, covered by Original Certificate of Title No. 96, with an area of approximately 33,895 square meters.
- Upon Guillerma’s death, her surviving heirs inherited the property. The heirs entered into a Joint Venture Agreement with Allanigue Realty and Development Corporation (ADRC) on January 13, 1983, to develop a portion of the property (20,379 square meters) for commercial and industrial purposes.
- The heirs subsequently formed Guerrero Estate Development Corporation (GEDCOR) on October 28, 1985. The developed portion of the property was divided on a 60%-40% basis, with GEDCOR holding 60%.
- GEDCOR was allocated a specific lot of approximately 1,506 square meters in San Dionisio, covered by Transfer Certificate of Title No. (103259) 23998 of Pasay City Registry of Deeds (the subject property).
- Joint Venture Contract with Conrad Leviste and Formation of LGRC
- On June 2, 1987, GEDCOR contracted with Conrad Leviste to develop a warehouse on the subject property. The contract stipulated:
- Conrad would construct the warehouse within six months.
- Upon completion, the parties would form a corporation (Leviste & Guerrero Realty Corporation or LGRC) to hold the asset.
- GEDCOR’s share in LGRC would be 45%, with Conrad holding 55%.
- Conrad completed the warehouse at an estimated cost of ₱995,102.20 and formed LGRC on August 3, 1988.
- LGRC began leasing the warehouse in 1988, remitting 45% of rental income to GEDCOR and 55% to Conrad. The current lessee is Lambert Williams Logistics, Inc.
- Attempts to Terminate Contract and Non-Remittance of Rental Share
- GEDCOR sent letters in 2006 and 2009 proposing to terminate the Joint Venture Contract and demanding turnover of possession, noting that Conrad had already recouped his investment and profit. Conrad did not act on the first letter.
- Beginning June 2009, LGRC stopped remitting GEDCOR’s 45% share of rental income. By September 1, 2011, the total unpaid rental share was ₱2,596,041.09. GEDCOR demanded payment, which LGRC refused.
- Trial Court Proceedings
- GEDCOR filed a Complaint for fixing the period under Article 1197 of the Civil Code, collection of money, and accounting against Conrad and LGRC (Civil Case No. 12-003, RTC Parañaque City, Branch 274).
- GEDCOR alleged:
- The Joint Venture Contract has no set term and should be fixed at 25 years, akin to a build-operate-transfer scheme.
- Conrad has already recouped costs and profit; thus, contract termination is warranted.
- LGRC’s refusal to remit 45% share justifies payment and accounting.
- Conrad and LGRC answered, asserting the contract is a partnership, not build-operate-transfer; GEDCOR is not a stockholder of LGRC and has no right to dividends; and the action is premature without formal demand for accounting.
- RTC Orders on Motion to Deposit Rentals
- GEDCOR filed a Motion to Deposit Rentals in Court.
- On February 19, 2018, the RTC granted the Motion to Deposit, ordering defendants to deposit:
- ₱5,936,461.65 (representing 45% of rental income from June 1, 2009, to September 30, 2015)
- 45% share of monthly rental income thereafter until final resolution
- RTC denied the subsequent motion for reconsideration filed by respondents.
- Court of Appeals (CA) Proceedings
- Respondents filed a Petition for Certiorari under Rule 65 before the CA to assail the RTC Orders.
- On June 26, 2019, the CA reversed and set aside the RTC Orders, ruling:
- The Deposit Order is akin to preliminary attachment but was issued without complying with Rule 57 procedures, amounting to grave abuse of discretion.
- The order amounted to a prejudgment because the computation of GEDCOR’s rental share was accepted without accounting and proper evidence.
- It was premature to issue the Deposit Order as the correct rental share was yet to be determined.
- The CA denied GEDCOR’s Motion for Reconsideration on August 24, 2020.
- Petition for Review Before the Supreme Court
- GEDCOR filed the present Petition for Review on Certiorari, arguing:
- The RTC’s issuance of the Deposit Order is a valid exercise of its inherent powers under Sections 5(g) and 6, Rule 135 of the Rules of Court.
- The Deposit Order is not an attachment and thus does not require compliance with Rule 57.
- The order is preservatory and provisional, not prejudgment.
- Respondents maintained the CA’s findings and submitted that the Deposit Order amounted to prejudgment and disregarded procedural rules.
Issues:
- Whether the Court of Appeals erred in ruling that the Regional Trial Court gravely abused its discretion when it granted Guerrero Estate Development Corporation’s Motion to Deposit Rentals; specifically, whether the RTC’s issuance of the Deposit Order constituted an improper provisional remedy akin to preliminary attachment issued without adherence to proper procedure and prejudgment of the case.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)