- Petitioner
- The Wellex Group
- Respondent
- Sheriff Edgardo A. Urieta of the Sandiganbayan Security
- Citation
- G.R. No. 211098
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Perez, J.
- Decided
- April 20, 2016
Summary
Wellex obtained a P500 million loan from BDO secured by WPI shares. When the IMA Account was forfeited in the Estrada plunder case, the State became Wellex's creditor by subrogation. The Sheriff scheduled the mortgaged WPI shares for public auction, prompting Wellex to file a civil case for recovery. The RTC dismissed for lack of jurisdiction, but the Supreme Court reversed, ruling that the State cannot unilaterally sell the mortgaged shares without proper foreclosure proceedings as this would violate the prohibition against pactum commissorium. The Court held this was a purely civil matter within RTC jurisdiction, requiring due process protection for the debtor. The case was remanded for further proceedings, establishing important precedent on creditor rights in forfeiture cases and third-party claims procedures.