G.R. No. L-21263 - Lawyers Cooperative Publishing Co. vs. Tabora

In December 1987, Robert Young and co-respondents acquired Home Bankers Savings and Trust Co. (later Insular Savings Bank) for ₱65,000,000; Young’s group held 55% equity, Jorge Go’s group 45%.
The Bank granted individual loans totaling ₱153,000,000 to Young and others, secured by promissory notes.

December 1990: Benito Araneta agreed to buy 99.82% of the Bank’s shares for ₱340,000,000, paying ₱14,000,000 down, subject to consolidation in Young’s name.
Young financed the purchase of the remaining 45% from Jorge Go’s group with a ₱170,000,000 short-term loan from Interbank; Araneta later withdrew and demanded his downpayment.

August 27, 1991: Young entered a Credit Agreement with Insular Life for a ₱200,000,000 loan, secured by a Deed of Pledge over 1,324,864 shares (99.82% of outstanding stock).
October 1–9, 1991: Insular Life and its Pension Fund agreed to purchase 830,860 and 311,572 shares respectively, for ₱198,000,000 under a Memorandum of Agreement (MOA), subject to Young’s representations and warranties and two conditions precedent: infusion of ₱50,000,000 additional capital and a due diligence audit on doubtful accounts of ₱60,000,000.

October 11, 1991: Due diligence audit uncovered P340,000,000 in check-kiting operations. In a special board meeting on October 17, Young admitted responsibility and tendered resignation (deferred).
October 21, 1991: Young’s letter waived the loan period and acknowledged default; Insular Life, after notice, held two public auctions (October 28–29) without competitive bidders and appropriated the pledged 1,324,864 shares plus 250,000 subsequently issued shares.

November 12, 1991: Bangko Sentral ng Pilipinas approved Insular Life’s 99.82% ownership of the Bank.
October 31–December 27, 1991: Insular Life infused ₱325,000,000 into the Bank; November 27, 1991: Board accepted Young’s resignation as President.

January 7, 1992: Young and associates filed Civil Case No. 92-049 for annulment of notarial sale, specific performance, and damages against the Bank, Insular Life, and its counsel.
May 10, 1995: RTC dismissed the complaint, upheld the foreclosure, and granted petitioners’ counterclaims against co-respondents (loans and interest).
September 22, 1999: CA reversed the RTC, declared the Credit Agreement and MOA valid, deemed co-respondents’ loans fully paid, and ordered Insular Life to pay Young ₱162,000,000, moral damages ₱5,000,000, and attorney’s fees ₱1,500,000.
December 1, 1999: CA denied petitioners’ reconsideration. March 10, 2000: CA granted respondents’ motion for execution pending appeal.
March 27, 2000: SC consolidated G.R. Nos. 140964 and 142267, ordering status quo ante.

Whether the October 9, 1991 MOA is a perfected contract of sale enforceable despite Young’s misrepresentations and failure to satisfy conditions precedent.
Whether the foreclosure sale of pledged shares was void for insufficient notice of the second auction.
Whether moral damages and attorney’s fees awarded by the CA to Young are supported by law.
Whether the CA committed grave abuse of discretion in granting execution pending appeal of its own decision.