Case Summary (G.R. No. 221932)
Petitioner's Motion for Intervention and RTC's Initial Decision
On October 15, 2004, petitioner sought leave to intervene in the rehabilitation proceedings, praying that the respondent be ordered to execute a deed of sale over a condominium unit (Unit 3306, Makati Prime Citadel Condominium) which she allegedly purchased and fully paid for. The respondent opposed, asserting the motion was filed out of time considering the RTC’s Stay Order and the deadlines under the Interim Rules of Procedure on Corporate Rehabilitation. The RTC nonetheless granted the petitioner's motion on August 24, 2011, holding the intervention was timely and concluding petitioner proved full payment. Consequently, the RTC ordered respondent to execute the deed of sale, deliver relevant documents, and transfer possession of the unit to petitioner.
Respondent's Motion for Reconsideration and the Regional Trial Court’s Denial
Respondent filed a motion for reconsideration arguing petitioner still owed interest and penalties, and that jurisdiction over the matter involving condominium units lay exclusively with the Housing and Land Use Regulatory Board (HLURB), not the RTC. The RTC denied the motion on April 16, 2012, maintaining its prior decision.
Court of Appeals’ Decision and Ruling
The respondent elevated the case to the CA, which issued a decision on April 28, 2015, annulling the RTC’s order granting intervention. The CA held that the rehabilitation court’s Stay Order suspended enforcement of all claims against respondent, including petitioner’s claim to execute a deed of sale. The CA further ruled that the RTC lacked jurisdiction over the matter, which falls under the exclusive jurisdiction of the HLURB. The CA denied petitioner’s motion for reconsideration on November 25, 2015.
Petitioner's Assignments of Error on Review
Petitioner raised three main errors in the petition before the Supreme Court: (1) that the CA erred in holding her claim was suspended by the Stay Order; (2) that the CA erred in ruling that the RTC lacked jurisdiction over her intervention; and (3) that the CA erred in nullifying the RTC’s factual finding that petitioner had fully paid the purchase price.
Applicable Law on Corporate Rehabilitation and Stay Order
Corporate rehabilitation in the Philippines is governed by Presidential Decree No. 902-A (PD 902-A), as amended, and the Interim Rules of Procedure on Corporate Rehabilitation promulgated through A.M. No. 00-8-10-SC in 2000. The purpose of rehabilitation is to preserve the corporate life and enable the distressed corporation to continue operations while settling debts. A key feature is the issuance of a Stay Order by the rehabilitation court which suspends enforcement of all claims against the debtor, whether monetary or otherwise, effective from the date of the order until resolution or termination of rehabilitation.
Effect and Scope of the Stay Order
Section 6 of Rule 4 of the Interim Rules mandates the Stay Order upon finding the petition sufficient, with sweeping suspension of enforcement of all claims by actions or otherwise against the debtor and its guarantors or sureties not solidarily liable. The Stay Order also suspends the debtor from disposing of properties outside of ordinary business and making payments on liabilities outstanding as of the petition date. All interested parties and creditors must file claims before the initial hearing to participate; failure to do so bars participation.
Legal Characterization of Petitioner’s Claim and Intervention
Under the definitions provided by the Interim Rules, a "claim" encompasses all demands of any character against the debtor, whether for money or otherwise. Petitioner’s prayer for the execution of a deed of sale transferring ownership of a condominium unit constitutes such a claim. Furthermore, intervention is explicitly prohibited under Section 1, Rule 3 of the Interim Rules on Corporate Rehabilitation as the proceedings are summary and non-adversarial. The filing of petitioner’s motion one year after the Stay Order and initial hearing unreasonably circumvented these rules.
Jurisdictional and Procedural Considerations
The CA properly held that the RTC, acting as rehabilitation court, had suspended all enforcement actions, safeguarding the orderly rehabilitation process free from claims that would interfere with the management committee’s functions. The exclusivity of the HLURB’s jurisdiction over condominium unit controversies, as invoked by respondent, further supports non-jurisdiction of the rehabilitation court on this matter. The adverse factual disputes between petitioner and respondent regarding payment of penalties and intere
...continue readingCase Syllabus (G.R. No. 221932)
Facts of the Case
- Respondent, Primetown Property Group, Inc., is a real estate company involved in projects in Makati and Cebu City.
- The company faced financial difficulties following the 1997 Asian financial crisis due to peso devaluation, rising interest rates, and limited credit access.
- In 2003, Primetown filed a petition for corporate rehabilitation and for suspension of payments and actions with the Regional Trial Court (RTC) of Makati City, Branch 138.
- The RTC issued a Stay Order on August 15, 2003, halting enforcement of claims against Primetown.
- Petitioner Patricia Cabrieto dela Torre filed a Motion for Leave to Intervene on October 15, 2004, seeking specific performance for the execution of a deed of sale for condominium Unit 3306 which she claimed to have fully paid.
- Respondent opposed the intervention, arguing it was barred by the Stay Order and the time limits for filing claims under the Interim Rules on Corporate Rehabilitation.
- The RTC granted petitioner’s motion on August 24, 2011, ordering respondent to execute the deed of sale and transfer possession of the unit.
- Respondent’s motion for reconsideration was denied by the RTC on April 16, 2012.
- Respondent brought the case to the Court of Appeals (CA), which annulled and set aside the RTC’s order, denying petitioner’s motion to intervene.
- Petitioner filed a petition for review on certiorari before the Supreme Court.
Issues Presented
- Whether petitioner’s claim to enforce the execution of a deed of sale for the condominium unit was stayed by the rehabilitation court’s Stay Order.
- Whether the RTC had jurisdiction to entertain petitioner’s intervention under the Interim Rules on Corporate Rehabilitation.
- Whether the CA erred in nullifying the RTC’s factual finding that petitioner had fully paid the purchase price for the condominium unit.
- The applicability of the Stay Order to claims other than pecuniary debts, including actions for specific performance.
Legal Framework and Rules Applied
- The case is governed by Presidential Decree No. 902-A (PD 902-A), as amended by Republic Act No. 8799, transferring rehabilitation jurisdiction to the Regional Trial Courts.
- The Interim Rules of Procedure on Corporate Rehabilitation promulgated under A.M. N