G.R. No. L-4398 - Santiago Rodrigo vs. Isabel Cantor and Perfecto Palacio, Judge of the Court of 1st Instance of Camarines Sur

The controversy concerns a real property known as the BASECO property, situated at Mariveles, Bataan. It was formerly registered under the names of Bataan Shipyard and Engineering Corporation (BASECO), the Philippine Dockyard Corporation, or the Baseco Drydock and Construction Co., Inc.
Due to real estate tax delinquency amounting to P7,914,281.72 (including penalties), the Provincial Treasurer of Bataan, under Presidential Decree No. 464 (Real Property Tax Code of 1974), advertised the BASECO property for auction.
The auction held on February 12, 1988, failed to generate bidders; hence, the property was adjudged and acquired by the Province of Bataan.
After one year elapsed without redemption, the Province consolidated its title and acquired corresponding certificates of title in its name.

The Province of Bataan, through Governor Enrique T. Garcia, entered a ten-year lease contract with 7-R Port Services, Inc., leasing portions of the BASECO property for a minimum escalating annual rental of P18 million.
Subsequently, on May 10, 1993, the Province executed a lease contract with Marina Port Services for a ten-hectare portion of the same property.
On May 11, 1993, the Presidential Commission on Good Government (PCGG), on its behalf, the Republic of the Philippines, and the former registered owners, filed a complaint for annulment of sale before the Regional Trial Court (RTC) of Bataan, Branch 4 (Civil Case No. 210-ML), challenging the validity of the tax delinquency sale.

For defying an injunctive order issued by PCGG under Executive Order No. 1 (1986).
For contravening the Real Property Tax Code of 1974.
Because the ownership issue was pending before the Sandiganbayan.
Due to the inscription of a sequestration order on the property titles.

Annulment of the sale and reconveyance to rightful owners.
Accounting and recovery of income and damages from the Province and lessees.
Cease payment of lease rentals to the Province, ordering direct payment to plaintiffs.
Cancellation of Torrens titles issued to the Province and issuance of new titles to plaintiffs.

PCGG filed a motion for preliminary injunction to stop the Province from entering into or enforcing leases with Marina Port Services; the court denied this motion on July 6, 1993, for failure to implead Marina as a party.
On June 30, 1993, PCGG filed an urgent motion to deposit lease rentals received by the Province, alleging risk of dissipation of rents amounting to "Hundreds of Millions of Pesos."
On July 28, 1993, the RTC issued an order directing the Province of Bataan to remit lease rentals from 7-R Port Services and Marina Port Services to the court, to be placed in a special time deposit with Land Bank of the Philippines (Balanga Branch) in escrow pending final adjudication.
The Province moved for reconsideration of the escrow order, which was denied on November 11, 1993.
The Province appealed to the Court of Appeals (CA) via a petition for certiorari, challenging the jurisdiction of the RTC and the propriety of the escrow order.

On March 26, 1996, the CA granted the motion of the former registered owners to intervene and filed their answer seeking dismissal of the petition.
On December 19, 1996, the CA decision upheld the RTC’s orders, denying the Province's petition.
The Province filed a motion for reconsideration which was denied by the CA on July 21, 1997.
The Province then elevated the case to the Supreme Court, assailing the CA's ruling on the jurisdiction and legal basis for issuing the escrow order.

Whether the Regional Trial Court acted without jurisdiction or with grave abuse of discretion in ordering the deposit in escrow of the lease rentals received by the Province of Bataan from the lessees of the BASECO property.

Whether there exists legal basis or authority under Philippine law or the Rules of Court for the trial court to issue an escrow order as a provisional or ancillary remedy in an annulment of sale case.