Case Digest (G.R. No. 84132-33) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In National Development Company and New Agrix, Inc. v. Philippine Veterans Bank, G.R. Nos. 84132-33 (Dec. 10, 1990), petitioners NDC and New Agrix sought to annul a real estate mortgage in favor of respondent Philippine Veterans Bank that had been executed on July 7, 1978 over three parcels in Los Baños, Laguna. This dispute arose under Presidential Decree No. 1717, promulgated to rehabilitate the Agrix Group of Companies. Section 4(1) of the decree expressly extinguished all mortgages and other liens on dissolved Agrix assets. When Agrix Marketing, Inc. went bankrupt, PVB filed a claim with the Agrix Claims Committee created by the decree but later initiated an extrajudicial foreclosure. Petitioners filed two separate cases in the Regional Trial Court of Calamba—one to cancel the mortgage under Sec. 4(1) and another to enjoin the foreclosure—which the trial court consolidated. RTC Judge Francisco M.A. Guerrero annulled not just Sec. 4(1) but the entire decree, holding it violat Case Digest (G.R. No. 84132-33) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Object of the Dispute
- Petitioners: National Development Company (NDC) and New Agrix, Inc. (New Agrix) — appointed administrators under Pres. Decree No. 1717 to rehabilitate the Agrix Group of Companies.
- Respondents: Philippine Veterans Bank (PVB) — mortgagee of Agrix Marketing, Inc. (AGRIX); Ex-officio Sheriff and Deputy Sheriff of Calamba, Laguna.
- Presidential Decree No. 1717
- Enacted in 1978 by President Marcos to rehabilitate the Agrix companies; created an AGRIX Claims Committee and a procedure for filing and adjudicating claims.
- Section 4(1) extinguished “all mortgages and other liens presently attaching to any of the assets of the dissolved corporations”; subsections (ii) and (iii) prohibited interest on unsecured obligations and disallowed recognition of accrued interest, penalties, or charges as of the decree date.
- Mortgage, Claims, and Court Proceedings
- On July 7, 1978, AGRIX mortgaged three parcels in Los Baños, Laguna to PVB. AGRIX later became insolvent.
- PVB filed a claim with the AGRIX Claims Committee; the claim remained pending for over seven years for lack of supporting documents.
- Petitioners invoked Sec. 4(1) of the decree to petition the Regional Trial Court (RTC) for cancellation of PVB’s mortgage and later moved to enjoin its extrajudicial foreclosure. The two actions were consolidated.
- RTC Decision and Appeal
- RTC Judge Francisco Ma. Guerrero annulled the entire Pres. Decree No. 1717, finding violations of separation of powers, impairment of contracts, and equal protection.
- Petitioners’ motion for reconsideration was denied. They petitioned the Supreme Court en banc and secured a temporary restraining order (TRO) halting PVB’s foreclosure sale.
Issues:
- Estoppel
- Whether PVB is estopped from challenging the validity of Pres. Decree No. 1717 by having filed a claim under its provisions.
- Constitutionality of Pres. Decree No. 1717
- Whether Sec. 4(1) extinguishing all mortgages and liens violates the due process clause and the impairment‐of‐contracts clause of the Constitution.
- Whether the indiscriminate treatment of secured and unsecured creditors breaches the equal protection clause.
- Whether the creation of New Agrix, Inc. by special decree contravenes the constitutional requirement that private corporations be formed only by general law.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)