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(G.R. No. 121171) Asset Privatization Trust vs. Court of Appeals (Digest)

The RTC originally had jurisdiction over a civil case filed by minority stockholders of MMIC against DBP and PNB seeking to annul foreclosures on MMIC assets. However, the parties later agreed to arbitration. The arbitration committee ruled in favor of MMIC. When the respondents filed a motion to approve the arbitral award, the RTC granted it. However, the RTC previously dismissed the original civil case, so it no longer had jurisdiction to approve the arbitral award. The Supreme Court ruled that once the RTC dismissed the case, it lost jurisdiction and could not validly reacquire jurisdiction just through a motion by one of the parties.

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1K views1 page

(G.R. No. 121171) Asset Privatization Trust vs. Court of Appeals (Digest)

The RTC originally had jurisdiction over a civil case filed by minority stockholders of MMIC against DBP and PNB seeking to annul foreclosures on MMIC assets. However, the parties later agreed to arbitration. The arbitration committee ruled in favor of MMIC. When the respondents filed a motion to approve the arbitral award, the RTC granted it. However, the RTC previously dismissed the original civil case, so it no longer had jurisdiction to approve the arbitral award. The Supreme Court ruled that once the RTC dismissed the case, it lost jurisdiction and could not validly reacquire jurisdiction just through a motion by one of the parties.

Uploaded by

Ryan Leocario
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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[G.R. No.

121171] December 29, 1998

ASSET PRIVATIZATION TRUST, petitioner,


vs.
COURT OF APPEALS, JESUS S. CABARRUS, SR., JESUS S. CABARRUS, JR., JAIME T.
CABARRUS, JOSE MIGUEL CABARRUS, ALEJANDRO S. PASTOR, JR., ANTONIO U.
MIRANDA, and MIGUEL M. ANTONIO, as Minority Stock-Holders of Marinduque Mining
and Industrial Corporation, respondents.

Facts:

On 13 July 1981, Marinduque Mining and Industrial Coproration (MMIC), Philippine National Bank
(PNB), and Developmental bank of the Philippines (DBP) executed a Mortgage Trust Agreement
whereby MMIC, as mortgagor, agreed to constitute a mortgage in favor or PNB and DBP as
mortgagees, over all MMIC's assets.

As the various loans and advances incurred by MMIC had become overdue, DBP and PNB as
mortgagees decided to exercise their right to extrajudicially foreclose the mortgages in accordance
with the Mortgage Trust Agreement.

The foreclosed assets were transferred to the Asset Privatization Trust (APT) in 1986.

On 28 February 1985, Jesus S. Cabarrus, Sr., together with the other stockholders of MMIC
(respondents), filed a derivative suit against DBP and PNB before the Regional Trial Court of Makati
City (RTC) seeking to annul the foreclosures. In the course of the trial, APT, as successor of the
DBP and the PNB's interest, mutually agreed to submit the case to arbitration by entering into a
Compromise and Arbitration Agreement. The said agreement was approved by the RTC.

Eventually, the arbitration committee rendered judgment in favor of MMIC. The respondents then
filed, in the same court and under the same civil case, a motion for approval of the arbitral award
which was later on granted.

The petitioner, APT, contends that the RTC has not acquired jurisdiction to confirm the arbitral
award because it has already dismissed the civil case.

Issue:

Whether or not the RTC has jurisdiction to confirm the arbitral award despite already having
dismissed the civil case.

Ruling:

The RTC did not have jurisdiction to confirm the arbitral award. Since the RTC made the fatal
mistake of dismissing the case, when it should just have suspended, it had effectively lost
jurisdiction over the case. The RTC could not have validly reacquired jurisdiction over the
said case on mere motion of one of the parties.

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