Case Digest (G.R. No. 173610) Core Legal Reasoning Model
Facts:
The case at hand revolves around the consolidated petitions for review on certiorari filed by Town and Country Enterprises, Inc. (TCEI) against Hon. Norberto J. Quisumbing, Jr., and Metropolitan Bank and Trust Co. (Metrobank). The controversy stems from TCEI's failure to repay loans aggregating to ₱12,000,000.00, which led Metrobank to extrajudicially foreclose the mortgage on several parcels of land owned by TCEI, registered under Transfer Certificates of Title (TCT) in the Cavite Provincial Registry of Deeds. The foreclosure proceedings culminated in a public auction on November 7, 2001, where Metrobank emerged as the highest bidder, resulting in the issuance of a Certificate of Sale. Metrobank registered the Certificate with the Registry of Deeds on April 10, 2002.
Despite the foreclosure, TCEI attempted to forestall the legal actions by filing a petition for corporate rehabilitation on October 1, 2002, citing challenges in servicing its obligations stemming from the Asi
Case Digest (G.R. No. 173610) Expanded Legal Reasoning Model
Facts:
Town and Country Enterprises, Inc. (TCEI) secured a loan amounting to₱12,000,000.00 from Metropolitan Bank and Trust Co. (Metrobank) by executing a real estate mortgage over twenty parcels of land registered either in TCEI’s name or that of its officers. When TCEI defaulted on the loan, Metrobank, relying on Act No. 3135, extrajudicially foreclosed the mortgages and conducted a public auction on 7 November 2001. Metrobank, as the highest bidder, was issued a Certificate of Sale later registered on 10 April 2002.Subsequently, due to TCEI’s failure to surrender possession of the foreclosed properties, Metrobank filed a petition for the issuance of a writ of possession before a Regional Trial Court (RTC) in Imus, Cavite. In parallel, facing financial difficulty amid the Asian financial crisis, TCEI filed a petition for corporate rehabilitation on 1 October 2002, which led the Rehabilitation Court to issue a Stay Order on 8 October 2002 and later approve a rehabilitation plan on 29 March 2004. Despite the Stay Order and rehabilitation proceedings, Metrobank already had, by virtue of the redemption period lapsing without TCEI’s redemption, acquired ownership over the subject properties—further evidenced by the consolidation of titles in Metrobank’s name on 26 June 2003.
TCEI and the spouses involved then contested the writ of possession and the subsequent transfer of titles, arguing that the Stay Order and the approved rehabilitation plan rendered these acts invalid. They maintained that the rehabilitation receiver, as an officer of the court charged with safeguarding the debtor’s assets, should have exclusive control over the properties. Two petitions for review were filed challenging: (1) the RTC’s issuance of the writ of possession and the CA’s affirmation thereof, and (2) the transfer of the titles to Metrobank during the period when the Stay Order was in effect.
Issues:
- Whether the writ of possession issued in favor of Metrobank is valid and enforceable despite the existing Stay Order and ongoing corporate rehabilitation proceedings.
- Whether the transfer and consolidation of titles in favor of Metrobank—executed on 26 June 2003 during the effective period of the Stay Order and rehabilitation proceedings—are nullified by the protective provisions of corporate rehabilitation.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)