Case Digest (G.R. No. 89561)
Facts:
Buenaflor C. Umali, Mauricia M. Vda. de Castillo, Victoria M. Castillo, Bertilla C. Rada, Marietta C. Abanez, Leovina C. Jalbuena and Santiago M. Rivera, petitioners, v. Court of Appeals, Bormaheco, Inc. and Philippine Machinery Parts Manufacturing Co., Inc., G.R. No. 89561, September 13, 1990, Supreme Court Second Division, Regalado, J., writing for the Court.The Castillo heirs (petitioners) owned four contiguous parcels in Lucena City that had been subject to family intestate/administration proceedings. To secure obligations arising from transactions with Slobec Realty & Development, Inc. (represented by petitioner Santiago Rivera), the Castillos executed an Agreement of Counter-Guaranty with Real Estate Mortgage in favor of the Insurance Corporation of the Philippines (ICP) on October 24, 1970. Bormaheco, Inc. sold a reconditioned Caterpillar tractor to Slobec under a sales agreement and chattel mortgage (late 1970–January 1971); ICP issued a surety bond to Bormaheco guaranteeing Slobec’s payment, allegedly secured by the Castillo realties.
ICP foreclosed the real estate mortgage; a Certificate of Sale dated September 28, 1973 issued to ICP and transfer certificates of title followed. On April 10, 1975 ICP sold the parcels to PM Parts, which obtained new TCTs. In August 1976 PM Parts demanded that the Castillos vacate the lots. On September 29, 1976 the heirs, through Buenaflor Umali as administratrix, filed an action for annulment of title in the Court of First Instance (Civil Case No. 8085, Quezon). The plaintiffs alleged the transactions (counter-guaranty, chattel/sales agreements, certificate of sale and subsequent deeds/titles) were void for fraud and without the consent/approval of the probate court.
After trial the court a quo declared the agreements, the Sheriff’s certificate of sale and the subsequent titles null and void, ordered the Register of Deeds to issue TCTs in the plaintiffs’ names (except Rivera), and awarded moral, exemplary and litigation damages and attorney’s fees. The Court of Appeals, in CA-GR CV No. 15412 (decision dated August 3, 1989), reversed: it dismissed the complaint, ordered plaintiffs to vacate, and awarded to defendants (PM Parts and Bormaheco) damages and attorneys’ fees. The appellate court found the contracts valid, ICP had the right to foreclose, and PM Parts was a purchaser for value.
Petitioners soug...(Subscriber-Only)
Issues:
- Should this Court disturb the Court of Appeals’ findings of fact that the transactions among the parties were valid?
- Was the foreclosure by the Insurance Corporation of the Philippines valid (considering notice requirements and the surety bond’s stated period of liability)?
- Was piercing the corporate veil an appropriate remedy to set aside the foreclosure and related transfers?
- Did Philippine Machinery Parts Manufacturing Co., Inc. a...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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