G.R. No. 153478 - MR Holdings, Ltd. vs. Bajar

Petitioner MR Holdings, Ltd. is a non-resident foreign corporation organized under the laws of the Cayman Islands, acting as a subsidiary of Placer Dome, Inc.
Respondent Marcopper Mining Corporation, partly owned by Placer Dome, was involved in an open-pit copper ore mining project in Sta. Cruz, Marinduque.
Other respondents include Sheriff Carlos P. Bajar (and his deputy), the RTC of Manila, Branch 26, Citadel Holdings, Inc., Vercingetorix Corporation, and Manila Golf & Country Club, Inc.

On November 4, 1992, Marcopper and the Asian Development Bank (ADB) entered into a Principal Loan Agreement and a Complementary Loan Agreement, with ADB agreeing to extend a US$40,000,000.00 loan to finance Marcopper’s mining project.
On the same day, Placer Dome executed a Support and Standby Credit Agreement, undertaking to provide cash flow support for Marcopper’s obligations to ADB.
Marcopper executed a Deed of Real Estate and Chattel Mortgage (November 11, 1992) and an Addendum to Mortgage (May 10, 1996) to secure its obligations, covering nearly all of its real and personal properties, including the Manila Golf Club membership certificates.

In March 1996, mining operations were halted after a spill incident involving mine tailings, which led to environmental damage and health concerns.
As a result, Marcopper defaulted on its loan obligations, triggering actions under the mortgage and loan agreements.
Under an Assignment Agreement dated March 20, 1997, ADB assigned to MR Holdings, Ltd. all rights and obligations under the involved loan and mortgage documents.

Marcopper executed a Deed of Assignment on December 8, 1997, transferring its properties and mining assets to the petitioner.
Solidbank Corporation, a creditor, filed a complaint in the RTC of Manila, Branch 26 (Civil Case No. 96-80083) seeking payment for its foreign currency loans.
A writ of preliminary attachment was issued, and on May 7, 1997, a Partial Judgment ordered Marcopper to pay Solidbank, accompanied by a motion for execution pending appeal.
Sheriff Bajar executed a notice of sale on execution covering several properties, including club membership shares, with a public auction set for July 21, 1997.

Marcopper filed a Petition for Certiorari and Prohibition in the Court of Appeals (CA-G.R. SP No. 44570) seeking to nullify the execution pending appeal, resulting in a temporary restraining order (TRO) on July 15, 1997.
Petitioner MR Holdings, Ltd. pursued additional remedies via formal notifications to Manila Golf Club and by filing a Manifestation and Notice of Prior Lien asserting its rights over the mortgaged membership shares.
On September 15, 1997, an extrajudicial foreclosure sale was conducted, with the subject club shares being sold to the petitioner as the highest bidder.
Following subsequent legal maneuvers, including additional pleadings, motions, and affidavits in various civil cases (notably Civil Cases Nos. 96-80083 and 99-605), a series of rulings and orders were issued regarding the sale and transfer of the disputed membership certificates.

Petitioner sought a motion to annotate a notice of lis pendens on the membership certificates to protect its lien and interest, arguing that alienation of these shares could defeat its superior right as assignee of the mortgage.
Several orders and decisions were issued in related actions by the RTCs, CA, and this Court, including:

A preliminary injunction in Civil Case No. 99-605 restraining the transfer of the certificates.
Decisions and orders nullifying the execution sale, and a Certificate of Sale was earlier issued to the petitioner.

Eventually, the Court of Appeals rendered a decision on May 8, 2002 (CA-G.R. SP No. 59476), affirming the lower court’s orders related to the non-annotation of lis pendens on the personal property (club membership certificates).

Whether the doctrine of lis pendens, typically applicable to real property, can be extended to actions affecting title or possession over personal property—specifically, club membership certificates.
The legal query centers on whether equity and general convenience justify the annotation of lis pendens on personal properties notwithstanding the statutory and judicial restrictions.

Whether the facts presented—such as the petitioner’s actual and constructive notice to Manila Golf Club and the sequence of foreclosure proceedings—create sufficient grounds for the court to allow the annotation of a notice of lis pendens.
The issue also examines if protecting the petitioner’s superior lien as assignee is a justifiable ground for such annotation despite the lack of statutory basis.