Case Summary (G.R. No. 229339)
Factual Background
Globe Asiatique Realty Holdings Corporation and Union Bank of the Philippines executed a Memorandum of Agreement on May 19, 2006 under which Union Bank agreed to purchase, from time to time, installment accounts receivables arising from Globe Asiatique’s sale of real estate units. Between October 30, 2006 and May 30, 2007 Globe Asiatique, through its officers, executed ten Deeds of Assignment and eleven Special Powers of Attorney covering ten condominium units in GA Tower 1, Mandaluyong City. The Deeds of Assignment purported to transfer all rights, title and interest in the parcels and improvements. The Special Powers of Attorney authorized Union Bank to cancel defaulted Contracts to Sell, execute Deeds of Absolute Sale, and restructure or convert assigned Contracts to Sell. Globe Asiatique later asserted that the instruments wrongly conveyed interests in the real properties themselves and not merely receivables.
Original Complaint and Parties’ Contentions
On September 27, 2012 Globe Asiatique filed a Complaint for reformation of the Deeds of Assignment and Special Powers of Attorney, alleging mutual mistake and praying for reformation under Article 1361, Civil Code and for attorney’s fees. Union Bank admitted the MOA and that the MOA contemplated assignments and SPAs, but denied that the DAs and SPAs were the product of a mutual mistake or that the parties intended to assign interests only in receivables. Union Bank averred that the NAIP served as the document effecting assignment of receivables and that the DAs were intended as security for a credit facility. Union Bank pleaded specific denials and affirmative defenses and prayed for dismissal and costs.
Trial Court Proceedings
After pretrial, Globe Asiatique moved for summary judgment on June 4, 2014. The RTC, in its Order dated September 2, 2014, denied the Motion for Summary Judgment, finding that the pleadings revealed conflicting allegations and genuine issues of fact requiring trial. The RTC noted that the parties’ divergent accounts of whether a mutual mistake had occurred and whether the DAs served as security could not be resolved without the presentation of evidence at trial. A motion for reconsideration was denied by the RTC on April 30, 2015.
Court of Appeals Ruling
Globe Asiatique petitioned the Court of Appeals, which, in its Decision dated July 13, 2016, dismissed the petition and affirmed the RTC’s Orders. The CA agreed that Union Bank’s Answer raised specific denials and affirmative defenses that created factual disputes. The CA held that the trial court did not commit grave abuse of discretion in denying summary judgment because the existence of genuine issues mandated full trial proceedings. A motion for reconsideration was denied by CA Resolution dated January 5, 2017.
Issue Presented to the Supreme Court
The limited issue before the Supreme Court was whether the Court of Appeals erred in ruling that the RTC did not commit grave abuse of discretion in denying Globe Asiatique’s Motion for Summary Judgment.
Supreme Court Ruling
The Supreme Court denied the petition for review on certiorari and affirmed the Court of Appeals’ Decision and Resolution. The Court held that the determinative question was whether the CA correctly found no grave abuse of discretion by the trial court in denying summary judgment. The petition failed.
Legal Basis and Reasoning
The Court reiterated that a Rule 45 petition seeking review of a CA Rule 65 decision must examine whether grave abuse of discretion had been committed. The Court defined grave abuse of discretion as a capricious or whimsical exercise of judgment amounting to lack of jurisdiction or a gross and patent abuse tantamount to an evasion of a positive duty, citing Yu v. Judge Reyes-Carpio, Bacelonia v. Court of Appeals, and others. The Court recalled the standard for summary judgment: it is proper only where no genuine issue as to any material fact exists and the moving party is entitled to judgment as a matter of law. A genuine issue is one that calls for presentation of evidence and cannot be resolved on the pleadings alone. The moving party bears the burden of showing clearly the absence of genuine issues. The Court found that Union Bank’s Answer raised specific denials as to mutual mistake and asserted that the DAs were intended as security, thereby creating factual issues on the parties’ true intent. Because Globe
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Case Syllabus (G.R. No. 229339)
Parties and Posture
- Globe Asiatique Realty Holdings Corporation filed a Complaint for reformation against Union Bank of the Philippines and later filed a Motion for Summary Judgment in the Regional Trial Court of Pasig City, Branch 265.
- The RTC denied Globe Asiatique's Motion for Summary Judgment in Orders dated September 2, 2014 and April 30, 2015, which prompted a petition for certiorari to the Court of Appeals in CA-G.R. SP No. 141501.
- The Court of Appeals affirmed the RTC Orders in a Decision dated July 13, 2016 and denied reconsideration in a Resolution dated January 5, 2017.
- Globe Asiatique then filed a Petition for Review on Certiorari under Rule 45, Rules of Court in the Supreme Court seeking reversal of the CA decision.
Facts
- The parties executed a Memorandum of Agreement dated May 19, 2006 whereby Union Bank agreed to purchase installment accounts receivable arising from Globe Asiatique's sale of condominium units.
- Between October 30, 2006 and May 30, 2007, Globe Asiatique, through its officers, executed ten Deeds of Assignment and 11 copies of Special Powers of Attorney in favor of Union Bank covering units in GA Tower 1, Mandaluyong City.
- The Deeds of Assignment contained language transferring “all its rights, title, interests and participation ‘on that parcel of land, and subsequent improvements thereon’” to Union Bank and its successors and assigns.
- The Special Powers of Attorney granted Union Bank authority to deliver Notices of Cancellation, execute Deeds of Absolute Sale, and restructure or convert assigned Contracts to Sell into Real Estate Mortgages.
- Globe Asiatique sent a letter on November 17, 2011 requesting reformation of the DAs and SPAs and thereafter filed the Complaint for reformation on September 27, 2012.
Claims and Defenses
- Globe Asiatique alleged mutual mistake and sought reformation under Article 1361 of the Civil Code, asserting that the parties intended only the sale or assignment of receivables and not conveyance of the land, and it prayed for P300,000.00 as attorney's fees and litigation expenses.
- Union Bank admitted the MOA and the use of DAs and SPAs to implement the MOA but denied that the DAs and SPAs were the product of mutual mistake or that the parties intended only assignment of receivables.
- Union Bank maintained that the Notice of Assignment and Instruction to Pay (NAIP) was the operative assignment document and that the DAs served as security or collateral for a credit facility, and it prayed for dismissal, costs, and at least P50,000.00 as attorney's fees.
Procedural History
- Union Bank filed its Answer on November 16, 2012 denying mutual mistake and asserting affirmative defenses based on annexed forms and the parties' knowledge of their contents.
- Globe Asiatique moved for summary judgment on June 4, 2014, and Union Bank filed its Opposition on June 20