G.R. No. 200934-35 - La Savoie Development Corp. vs. Buenavista Properties, Inc.

On May 7, 1992, Spouses San Juan and Spouses Buencamino (landowners), through attorney-in-fact, entered into a JVA with La Savoie Development Corporation (petitioner) over three parcels in Bulacan. Petitioner undertook to develop the properties into a subdivision by May 5, 1995, under penalty of ₱10,000 per day for delay.
On May 26, 1994, landowners sold the properties to Josephine Conde, who assigned her rights to Buenavista Properties, Inc. (respondent). Petitioner and respondent executed an Addendum extending completion to May 5, 1997, but petitioner still failed to finish.

On February 28, 1998, respondent sued for contract termination, recovery of property and damages before QC RTC (Civil Case No. Q-98-33682). Petitioner defaulted for failure to appear at pre-trial, and respondent presented ex parte evidence.
QC RTC rendered Decision on June 12, 2003, terminating the JVA and Addendum, ordering possession delivery, imposing ₱10,000/day penalty from March 3, 1998 until paid, ₱100,000 attorney’s fees, and costs. Judgment became final July 31, 2007.

Anticipating insolvency from the 1997 Asian crisis, petitioner filed for rehabilitation on April 25, 2003 before Makati RTC. On June 4, 2003, Makati RTC issued a Stay Order under PD 902-A and the 2000 Interim Rules, appointing a rehabilitation receiver, suspending all claims, including QC RTC case.
Despite the Stay Order, QC RTC proceeded and issued writ of execution on November 21, 2007. Petitioner moved in Rehabilitation Court for an order to enjoin enforcement. On December 28, 2007, Rehabilitation Court directed the deputy sheriff to stop execution, restore ejected residents, and lift garnishments.
Petitioner’s Amended Revised Rehabilitation Plan (ARRP) proposed condonation of surcharges and a cram-down reduction of respondent’s penalty from ₱10,000 to ₱5,000 per day (from March 3, 1998 to June 4, 2003). On June 30, 2008, Rehabilitation Court approved the ARRP with that penalty reduction.
Respondent filed certiorari petitions before CA (CA-G.R. SP Nos. 102114 and 104413). On November 4, 2011 Decision and February 24, 2012 Resolution, CA:

Annulled the Rehabilitation Court’s December 28, 2007 Order enjoining QC RTC execution, holding it had no power to restrain a co-equal court.
Annulled the ARRP insofar as it reduced respondent’s penalty, ruling that Rehabilitation Court cannot modify a final judgment’s penalty amount.

Whether the QC RTC Decision attained finality despite the Rehabilitation Court’s Stay Order, and thus whether the Rehabilitation Court could validly reduce the penalty in the ARRP.
Whether the Rehabilitation Court had the jurisdiction to enjoin the execution of the QC RTC Decision by issuing its December 28, 2007 Order.