Case Digest (G.R. No. 223865)
Facts:
Silahis International Hotel, Inc. v. Court of Appeals and Pacific Wide Holdings, Inc., G.R. No. 223865; Silahis International Hotel, Inc. v. Commission on Audit, Philippine Amusement and Gaming Corporation, and Pacific Wide Holdings, Inc., G.R. No. 230631, June 13, 2023, Supreme Court En Banc, Singh, J., writing for the Court.The dispute arises from a Contract of Lease dated December 23, 1999 between Silahis International Hotel, Inc. (SIHI) (lessor) and the Philippine Amusement and Gaming Corporation (PAGCOR) (lessee) under which PAGCOR operated a casino and undertook, among other things, to pay a restoration cost upon vacation of the leased premises. The lease became effective March 15, 2000, was renewed in 2004, and SIHI terminated the lease effective July 2006, asserting PAGCOR’s obligation to pay restoration cost then amounting to PHP115,200,000.00. The contract provided for an independent appraiser to determine final restoration cost, with an initial PHP2,250,000 deposit serving as partial answer to that obligation.
When the parties failed to appoint a common appraiser, SIHI sued PAGCOR in the Regional Trial Court (RTC), Manila, Branch 15, by filing a Complaint for Specific Performance on July 10, 2006. After trial, the RTC rendered a Decision on December 27, 2006 designating an appraiser and directing appraisal and compliance; the court clarified that PAGCOR’s obligation was to pay money (restoration cost), not to physically restore the premises. The Court of Appeals (CA) affirmed with modifications on May 3, 2012: it deleted the RTC’s designation of Asian Appraisal, Inc., ordered PAGCOR to follow public bidding (RA 9184) to nominate an appraiser, and directed compliance with the contract once a joint appraisal was submitted. The 2012 CA Decision became final and executory on May 25, 2012, and execution proceedings followed; SIHI and PAGCOR eventually agreed on PHP102,114,040.00 as the restoration amount.
Meanwhile, Pacific Wide Holdings, Inc. (Pacific Wide) purchased the hotel property in a tax delinquency sale on November 7, 2007 but obtained final deed and registered titles only in 2013. During the RTC execution proceedings, Pacific Wide moved to be awarded the restoration cost as successor-in-interest, arguing it had become owner and thus entitled to the monies; the RTC denied that Verified Motion (Feb. 21, 2014) and denied reconsideration (Apr. 24, 2014). The RTC then approved the parties’ agreed amount and issued a writ of execution (Feb. 25, 2014).
PAGCOR moved for reconsideration of the writ, asserting SIHI’s monetary claim must be filed with the Commission on Audit (COA) for approval, prompting the RTC to set aside the writ and direct SIHI to file a monetary claim before COA. SIHI filed a Petition Ad Cautelam with the COA for the PHP102,114,040.00; Pacific Wide intervened in COA proceedings and separately filed a certiorari petition with the CA challenging the RTC orders denying its Verified Motion. The CA granted Pacific Wide’s certiorari petition and held Pacific Wide was an indispensable party whose nonjoinder rendered the RTC’s orders—and, by extension, the 2006 RTC Decision and subsequent orders—null and void; the CA remanded to the RTC to implead Pacific Wide (CA Decision, June 30, 2015). The COA meanwhile dismissed SIHI’s Petition Ad Cautelam on the ground that COA’s jurisdiction is limited to liquidated claims and that, in light of the CA’s nullification of the RTC decision, there was no final and executory court adjudication of the money claim.
SIHI filed two petitions to the Supreme Court. In G.R. No. 223865 (First SIHI Petition), dated May 26, 2016, SIHI sought review of the CA’s June 30, 2015 Decision and April 5, 2016 Resolution that annulled the RTC decision and remanded for impleading of Pacific Wide. In G.R. No. 230631 (Second SIHI Petition), dated April 3, 2017, SIHI assailed the COA...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in nullifying the RTC Decision dated December 27, 2006, as modified by the CA Decision dated May 3, 2012?
- Did the Commission on Audit act with grave abuse of discretion when it denied SIHI’s Petition Ad Cautelam on the ground that SIHI’s monetary claim was ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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