Case Summary (G.R. No. 246179)
Disputed Offsets and Urgent Motion for Collection
SPFC asserted that accrued rentals and common-use service area fees (CUSA) under the MOA, Addendum, and BTS had extinguished its realty tax liabilities. After CGT refused to recognize offsets beyond 2006 and disavowed the BTS’s validity, SPFC paid the taxes under protest on October 27, 2015, then moved for collection of ₱10,335,208.84 from CGT, covering rentals, utilities, interest, and penalties. CGT opposed for lack of jurisdiction and alleged perjurious statements in the motion; SPFC replied with documentary support.
RTC-Makati Order and Jurisdictional Challenge
On December 8, 2015, RTC-Makati Branch 149 granted SPFC’s urgent motion, finding the amounts reasonable, CGT’s liability undisputed, and its non-payment an unjust enrichment. CGT then filed a petition for certiorari with the Court of Appeals, arguing that a rehabilitation court cannot decide such collection claims pursuant to Steel Corporation v. Mapfre Insular.
Court of Appeals Ruling
In August 2018, the Court of Appeals affirmed the RTC-Makati Order, ruling that SPFC’s claims arose from transactions expressly sanctioned by the Revised Rehabilitation Plan and were incidental to the rehabilitation proceedings. It distinguished Steel Corporation on its facts and held that the RTC-Makati had authority over all matters necessary to effect rehabilitation. Reconsideration was denied in March 2019.
Issue on Supreme Court Review
The Supreme Court framed the sole legal issue as whether the RTC-Makati, acting as rehabilitation court, gravely abused its discretion in granting SPFC’s Urgent Motion for Collection.
Powers of Rehabilitation Courts and Scope of Jurisdiction
Under PD 902-A (as amended) and RA 10142, rehabilitation courts possess exclusive jurisdiction over all matters attendant to rehabilitation and may issue orders “necessary to carry out the rehabilitation of the insolvent debtor.” Jurisdiction is in rem, summary, and non-adversarial, designed to restore the debtor to solvency expeditiously. Jurisprudence (Lepanto Ceramics; Allied Banking) confirms that once jurisdiction is acquired, the court can subject all affected parties to orders consistent with rehabilitation, including reversal of transfers and approval of incidental motions.
Applicability of Steel Corporation and Advent Capital Precedents
Steel Corporation held that rehabilitation courts lack jurisdiction over claims by the debtor against third parties where the dispute requires full trial; its facts involved insurance proceeds payable to a trustee. Advent Capital likewise denied rehabilitation-court relief for disputed ownership claims against non-debtors. Here, by contrast, SPFC’s Urgent Motion for Collection sought enforcement of offset arra
...continue readingCase Syllabus (G.R. No. 246179)
Facts
- Shoppers Paradise Realty & Development Corporation (SPRDC) and Shoppers Paradise FTI Corporation (SPFC) are affiliate Philippine corporations engaged in constructing, developing, maintaining, and leasing commercial buildings, including the Sunshine Plaza Mall at the FTI Complex in Taguig City.
- In May 2005, SPRDC and SPFC filed a joint Petition for Rehabilitation (SP Proc. Case No. M-6075) before RTC-Makati as a response to financial setbacks from the 1997 Asian Financial Crisis; the City Government of Taguig (CGT) was among their creditors for unpaid realty taxes.
- On October 5, 2006, RTC-Makati ordered CGT to issue individual tax declarations for each mall stall owner, naming SPRDC and SPFC jointly and severally liable for the realty taxes; CGT complied on May 30, 2007 by issuing new Tax Declaration Certificates.
- On November 7, 2006, RTC-Makati approved the Revised Rehabilitation Plan, which provided that lease rentals from available units (including Sunshine Plaza Mall) would offset SPRDC/SPFC’s tax obligations.
- Pursuant to the Plan, CGT and SPFC executed a Memorandum of Agreement on October 29, 2007: SPFC would lease unoccupied mall units to CGT, applying accruing rentals against CGT’s realty tax credit, with an automatic renewal clause if CGT remained in possession.
- A Clarificatory Letter/Addendum dated December 5, 2007 amended the MOA by shortening the lease term and expanding the leased area, under CGT’s Pamantasan ng Lungsod ng Taguig (PLT) and its canteen.
- CGT also used additional mall areas to establish a One-Stop Local Government Center (OSLGC) for “Area III” under EO No. 032 (Series 2005); although no formal lease agreement was cited, a Booking Term Sheet (February 27, 2009) signed by an “Area 3 Manager” laid out lease terms for a Satellite Office.
- Various letters (e.g., November 13, 2008 and September 5, 2009) from SPFC to CGT officials acknowledged a “mutual agreement” to offset Common Use Service Area (CUSA) fees against SPFC’s tax delinquencies.
- An Internal Memorandum of CGT’s City Treasurer (May 5, 2015) and an SPFC letter (May 6, 2015) confirmed the closure of the Area 3 Satellite Office and directed final accountings of rentals and utilities.
- Believing its tax delinquencies fully offset, SPFC invoked the MOA offset in an August 28, 2015 letter; CGT’s City Treasurer responded on September 7, 2015, disputing offsets beyond December 31, 2006 and rejecting the BTS as unauthorized, thus demanding payment.
- The Rehabilitation Receiver filed Special Reports (September 22 and October 7,