Case Summary (G.R. No. 176008)
Factual Background
Sacramento Steel Corporation (SSC) entered into a credit agreement with IEB for a loan and credit lines totaling P60,000,000.00 and P20,000,000.00, respectively, on September 10, 2001. To secure these loans, SSC executed multiple deeds of chattel mortgage on its equipment. When SSC defaulted, IEB filed an injunction against SSC to prevent it from removing the mortgaged equipment and later sought a writ of replevin while SSC counter-sued for annulment of the mortgages and sought specific performance regarding the restructuring of its obligations.
Procedural History
Two civil cases were initiated in the Regional Trial Court (RTC) of Misamis Oriental. The RTC issued orders to restrain IEB from foreclosing the mortgaged equipment pending the resolution of SSC's complaint. CSMC intervened by entering into a lease agreement with SSC, while Metrobank sought to intervene based on a claim that the mortgages were intended to defraud SSC’s creditors. The RTC allowed both interventions, prompting IEB to appeal these decisions to the Court of Appeals (CA).
Court of Appeals Decision
The CA ultimately ruled in favor of IEB, annulling the RTC's orders allowing preliminary injunctions, and mandated the return of the mortgaged properties for foreclosure. In their motions for reconsideration, neither CSMC nor Metrobank succeeded, and they subsequently filed petitions for review on certiorari.
Issues Raised by Metrobank
Metrobank contended that the CA erred in classifying its intervention as an accione pauliana, which presupposes an unsatisfied judgment. The court found that Metrobank’s allegations did not meet the requirements for an accion pauliana, as Metrobank had not pursued other available legal remedies before seeking to rescind the mortgages executed by SSC in favor of IEB.
Issues Raised by CSMC
CSMC alleged that IEB engaged in forum shopping by filing petitions on overlapping issues with ongoing litigation in the RTC. The Court rejected this argument, noting that the petition filed by IEB sought different reliefs than those addressed in its opposition to CSMC's lease agreement. CSMC also argued that IEB's failure to file a motion for reconsideration was fatal, but the Court found that it was unnecessary due to the legal nature of issues raised in the certiorari petition.
Legal Findings and Conclusions
The Supreme Court affirmed the CA's ruling while modifying certain procedural outcomes.
...continue readingCase Syllabus (G.R. No. 176008)
Background and Parties Involved
- The case involves consolidated petitions for review on certiorari under Rule 45 of the Rules of Court.
- Petitioners are Metropolitan Bank and Trust Company (substituted by Meridian (SPV-AMCI) Corporation) and Chuayuco Steel Manufacturing Corporation.
- Respondent is International Exchange Bank (IEB), now Union Bank of the Philippines.
- The case arose from the dispute involving Sacramento Steel Corporation (SSC), a steel manufacturer.
Facts and Procedural History
- SSC entered into a Credit Agreement with IEB for various loans and credit lines totaling up to P100 million.
- SSC executed five deeds of chattel mortgage over its steel manufacturing equipment as security for its loan obligations with IEB.
- SSC defaulted on loan payments; IEB's demands for payment were ignored.
- IEB filed an injunction against SSC to prevent removal of mortgaged equipment.
- SSC filed a complaint for annulment of mortgage and specific performance to compel debt restructuring and sought TRO and preliminary injunction against IEB's foreclosure actions.
- RTC issued a TRO, consolidated the cases, and later issued a writ of replevin in favor of IEB, which was held in abeyance.
- Further RTC Orders restrained IEB from foreclosing and dispossessing SSC's equipment pending litigation, conditioned on bond posting by SSC.
- SSC entered into a Capacity Lease Agreement with Chuayuco Steel Manufacturing (CSMC) to operate the manufacturing plant for five years.
- Metrobank filed a motion for intervention claiming creditor status and praying for rescission of SSC's chattel mortgages with IEB.
- CSMC filed a motion for intervention seeking permission to operate SSC's plant pursuant to the lease agreement.
- RTC admitted Metrobank's and CSMC's motions for intervention.
- RTC allowed CSMC to operate the machinery pendente lite.
- IEB petitioned the Court of Appeals (CA) for certiorari, assailing RTC orders allowing interventions and operation of equipment.
- CA annulled and set aside RTC orders, directing turn-over of mortgaged properties to IEB for foreclosure.
- Metrobank, CSMC, and SSC filed motions for reconsideration which CA denied.
- Metrobank was substituted by Meridian (SPV-AMCI) Corporation.
Issues Presented
- Whether Metrobank's Complaint-in-Intervention is properly an accion pauliana requiring an u