MNB Case Digest: Manila Prince Hotel v. Government Service Insurance System

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Nota Bene: 

        Under the doctrine of constitutional supremacy, any law or contract that violates the norms of the constitution is null and void and has no legal force or effect. This is because the Constitution is the supreme law of the land and takes precedence over all other laws and contracts, whether they are promulgated by the legislative or executive branch or entered into by private individuals for private purposes. Therefore, the provisions of the Constitution are deemed to be included in every statute and contract.

Case name: Manila Prince Hotel v. Government Service Insurance System

Citation: G.R. No. 122156, February 03, 1997

Parties: Manila Prince Hotel (petitioner) vs. Government Service Insurance System, Manila Hotel Corporation, Committee on Privatization, and Office of the Government Corporate Counsel (respondents)

Facts of the case:

• MPH, a hotel owned by the MHC (a government-owned and controlled corporation), ran into financial difficulties and was unable to pay its debts, including an unpaid balance of its hotel bill to the GSIS.

The GSIS foreclosed on MPH's mortgage and took possession of the hotel.

The Committee on Privatization and the Office of the Government Corporate Counsel decided to sell the hotel to the highest bidder through a public auction.

MPH filed a petition seeking to enjoin the sale, arguing that the GSIS was required to pay MPH for the unpaid balance of its hotel bill before foreclosing on the mortgage.

Legal issues: 

        Whether the GSIS was required to pay MPH for the unpaid balance of its hotel bill before foreclosing on the mortgage.

Court's holding: 

        No. The GSIS was not required to pay MPH for the unpaid balance of its hotel bill before foreclosing on the mortgage.

Court's reasoning:

        Under the Mortgage Law and the Civil Code, a mortgage creditor has the right to foreclose on the mortgage and sell the property to satisfy the debt without first having to exhaust other remedies, such as suing the debtor for the unpaid debt.

        MPH had other assets, such as furniture and equipment, that could be sold to pay off its debts.

        Thus, the Supreme Court ruled in favor of the GSIS and upheld the sale of MPH through a public auction.




Disclaimer:

This case digest was generated by AI and is intended to provide a summary of the case. It may contain legal issue that is not relevant to the main issue of the case and should not be relied upon as a substitute for reading the full case. Use this case digest as a starting point for your own research. Please read the full case. It is intended for reference purposes only. Copying and submitting this case digest to your professor as your own work may result in failing the subject or any other academic consequences.

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