Meat Packing Corporation of the Philippines v. The Honorable Sandiganbayan, The Presidential Commission on Good Government and Philippine Integrated Meat Corporation
REITERATIONFacts
The Antecedents: Petitioner Meat Packing Corporation of the Philippines (MPCP), a government-owned entity, entered into a lease-purchase agreement with Philippine Integrated Meat Corporation (PIMECO) for MPCP's meat processing plant and land. The agreement stipulated annual rentals and included clauses for automatic cancellation and forfeiture upon default in rental payments equivalent to three cumulative annual installments. PIMECO later defaulted on its rental payments, leading MPCP to declare the agreement rescinded. Subsequently, the Presidential Commission on Good Government (PCGG) sequestered PIMECO's assets, including the lease-purchase agreement. Procedural History: The PCGG, after sequestering PIMECO, initially agreed to a turnover of the meat packing plant to MPCP, subject to Sandiganbayan approval. However, the Sandiganbayan, in Civil Case No. 0024, issued a temporary restraining order and later a preliminary injunction against the turnover, finding that the PCGG had gravely abused its authority. The Sandiganbayan subsequently declared the turnover resolutions and a related Memorandum of Agreement null and void. In a separate but related case (Civil Case No. 0108), PIMECO sought declaratory relief regarding the lease-purchase agreement. Meanwhile, PCGG tendered partial payment of accrued rentals to MPCP, which MPCP refused. PCGG then filed an urgent motion in Civil Case No. 0024, praying that MPCP be ordered to accept the payment. The Sandiganbayan issued resolutions on July 2, 1991, and November 29, 1991, ordering MPCP to accept the tendered payment, which had the effect of averting the cancellation of the lease-purchase agreement. The Petition: MPCP filed this petition for certiorari, mandamus, and prohibition, assailing the Sandiganbayan's July 2, 1991, and November 29, 1991, resolutions. MPCP argued that the Sandiganbayan lacked jurisdiction over its person as it was not a party to Civil Case No. 0024, and that the PCGG was estopped from taking a contrary position regarding the rescission of the lease-purchase agreement. MPCP sought to set aside the assailed resolutions, compel the Sandiganbayan to deny the PCGG's motion for consignation, and prohibit the Sandiganbayan from accepting further pleadings from PCGG or PIMECO against MPCP in Civil Case No. 0024. The petition is primarily anchored on the alleged grave abuse of discretion amounting to want of jurisdiction by the Sandiganbayan.
Issue(s)
Whether the Sandiganbayan committed grave abuse of discretion amounting to want of jurisdiction in ordering MPCP to accept the tendered payment and consignation. Whether the Sandiganbayan acquired jurisdiction over the person of MPCP despite its special appearance and claim of not being a party to Civil Case No. 0024. Whether the lease-purchase agreement between MPCP and PIMECO was validly rescinded.
Ruling
The petition is dismissed for lack of merit. The assailed Resolutions of the Sandiganbayan are affirmed.
Ratio Decidendi
On the validity of the tender of payment and consignation: The Sandiganbayan did not commit grave abuse of discretion in approving the consignation of P5,000,000.00 by the PCGG. Consignation, when validly made after a tender of payment that is refused without just cause, produces the effect of payment and extinguishes the obligation. MPCP's refusal to accept the payment, based solely on the theory that the lease-purchase agreement had been rescinded, was unjustified. The Sandiganbayan found that MPCP and GSIS had accepted payments for rentals and amortizations from January 1986 to January 1990, which negated any rescission of the agreement. The amount of arrears, even if P12,578,171.00 as alleged by MPCP, was reduced by the P5,000,000.00 payment to P7,578,171.00, which was less than the equivalent of three annual installments required for automatic cancellation under the contract. Therefore, the lease-purchase agreement could not be deemed rescinded. On the jurisdiction of the Sandiganbayan over MPCP: MPCP voluntarily submitted itself to the jurisdiction of the Sandiganbayan. While MPCP initially appeared specially in Civil Case No. 0024 and Civil Case No. 0108 (a related case for declaratory relief filed by PIMECO), it actively participated in the proceedings, arguing on the merits of the PCGG's motion and even seeking affirmative relief by implication. The Sandiganbayan correctly ruled that MPCP's active participation, which went beyond assailing jurisdiction, constituted a voluntary submission to the court's authority. The court's jurisdiction over the person is acquired by voluntary appearance or by service of summons, and active participation bars a party from later questioning the court's jurisdiction. On the rescission of the lease-purchase agreement: The lease-purchase agreement was not validly rescinded. MPCP's reliance on PCGG resolutions turning over the property to GSIS was misplaced, as these resolutions were subject to conditions precedent, including Sandiganbayan approval, which was never obtained. Furthermore, a subsequent Memorandum of Agreement executed by a single PCGG commissioner altered the conditions and was deemed invalid by the Sandiganbayan for lacking formal and substantial compliance with the PCGG's own resolutions. The Sandiganbayan's finding that the PCGG resolutions and the subsequent Memorandum of Agreement were null and void ab initio further supported the conclusion that the agreement was not rescinded based on these grounds. The crucial factor was that the amount of arrears, even with the P5,000,000.00 payment, did not reach the threshold for automatic rescission as stipulated in the contract.
Main Doctrine
A creditor's unjustified refusal to accept a valid tender of payment, followed by the debtor's consignation of the amount due, produces the effect of payment and extinguishes the obligation, thereby preventing the rescission of a contract based on non-payment. Furthermore, a party who actively participates in court proceedings, even with a special appearance, and argues on the merits of the case, voluntarily submits to the court's jurisdiction.