G.R. No. 221932 . February 14, 2018.
PATRICIA CABRIETO DELA TORRE, represented by BENIGNO T. CABRIETO, JR., Petitioner, vs. PRIMETOWN PROPERTY GROUP, INC., Respondent.

FACTS

Respondent Primetown Property Group, Inc., a real estate developer, filed a petition for corporate rehabilitation in 2003 due to financial difficulties. The Rehabilitation Court (RTC Branch 138, Makati) issued a Stay Order on August 15, 2003, suspending all actions for claims against the corporation. On October 15, 2004, petitioner Patricia Cabrieto Dela Torre filed a Motion for Leave to Intervene in the rehabilitation proceedings. She sought an order for specific performance, compelling respondent to execute a deed of absolute sale for a condominium unit she allegedly fully paid for as early as July 25, 1996. Respondent opposed, arguing the motion was filed out of time per the Interim Rules on Corporate Rehabilitation and that the claim was suspended by the Stay Order.
The RTC granted the intervention and ordered respondent to execute the deed of sale, deliver the title, and transfer possession. Respondent moved for reconsideration, contending petitioner still had unpaid interest and that jurisdiction over the sale dispute lay with the HLURB, not the RTC. The RTC denied reconsideration. Respondent elevated the case via certiorari to the Court of Appeals, which annulled the RTC Order and denied the intervention. The CA ruled that petitioner’s action was a “claim” suspended by the Stay Order and that the RTC, as a rehabilitation court, lacked jurisdiction to adjudicate the specific performance issue, which required a full trial.

ISSUE

Whether the Court of Appeals correctly held that petitioner’s motion for intervention and prayer for specific performance constituted a “claim” suspended by the Stay Order in the corporate rehabilitation proceedings.

RULING

Yes, the Supreme Court affirmed the CA Decision. The petition was denied. The legal logic centers on the nature and purpose of corporate rehabilitation under Presidential Decree No. 902-A, as amended. Rehabilitation is an in rem, summary, and non-adversarial proceeding aimed at preserving the financially distressed corporation as a going concern, allowing it to regain viability. The Stay Order is a crucial tool to achieve this by suspending all claims, whether for money or specific performance, against the corporation. This suspension prevents a scramble for assets that could dismantle the company.
Petitioner’s action to compel the execution of a deed of sale is unequivocally a “claim” under the rehabilitation rules. A claim encompasses all demands or assertions of a right to payment or performance, not merely monetary debts. By seeking to compel the transfer of a condominium unit, petitioner was asserting a right to a corporate asset. Allowing such an action would contravene the statutory moratorium, potentially deplete assets needed for rehabilitation, and invite piecemeal litigation. Furthermore, resolving her claim would necessitate a full-blown trial on the merits of the alleged full payment—a contentious factual issue disputed by respondent, which claimed unpaid interest. Such adversarial adjudication is precisely what the summary rehabilitation process seeks to avoid. The rehabilitation court’s role is to approve a rehabilitation plan, not to litigate individual contract disputes. Therefore, the intervention was properly denied, and the claim remains suspended pending the rehabilitation.