UNION BANK OF THE PHILIPPINES, petitioner, vs. DANILO L. CONCEPCION, respondent. G.R. No.

160727

June 26, 2007

8nion 9!n7, %it&out !%!itin) for t&e SEC1s ru$in) on its otion to dis iss SEC C!se No. 0997-B76<, fi$ed %it& t&e C5 ! petition for 'ertior!ri to nu$$if- %&!t it t!))ed !s t&e pre'ipit!te Septe .er 19, 1997 SEC suspension order !nd its 're!tion of t&e 6!nCo . 8nion 9!n7 !$$e)ed t&!t t&e Aurisdi'tion over t&e .!si' petition for de'$!r!tion of suspension of p!- ent pert!ins to t&e R+C under 5't No. 19B6, !s ! ended, or t&e ,nso$ven'- C!%.

Sept. 16, 1997 - EYCO Group of Co p!nies"EYCO or EYCO Group# fi$ed %it& t&e Se'urities !nd E('&!n)e Co ission "SEC# ! *E+,+,ON for t&e de'$!r!tion of suspension of p!- ent, !ppoint ent of ! re&!.i$it!tion re'eiver/'o ittee !nd !pprov!$ of re&!.i$it!tion p$!n %it& !n !$tern!tive pr!-er for $i0uid!tion !nd disso$ution of 'orpor!tions "*etition for Suspension of *!- ent, &erein!fter#. *eition 'ont!ins - EYCO depi'tin) t&e Group1s 'o posite 'orpor!tions !s &!vin) ! 'o .ined !ssets t&!t !re ore t&!n enou)& to p!- off !$$ t&eir de.ts, .ut nonet&e$ess un!.$e to p!- t&e !s t&e- f!$$ due. Joinin) EYCO !s 'o-petitioners %ere Eu$o)io Yutin)'o !nd t%o ot&er individu!$s &o$din) 'ontro$$in) interests in t&e 'o posite 'orpor!tions "'o$$e'tive$-, t&e Yutin)'os#. SEC 2e!rin) *!ne$ 3 4indin) t&e petition to .e suffi'ient in for !nd su.st!n'e, .- !n order of Septe .er 19, 1997, dire'ted t&e suspension of !$$ !'tions, '$!i s !nd pro'eedin)s !)!inst EYCO, et !$. pendin) .efore !n- 'ourt, tri.un!$, .o!rd or offi'e "t&e Suspension Order#. 5t t&e s! e ti e, t&e *!ne$ set t&e petition for &e!rin). 6e!n%&i$e, ! 'onsortiu of priv!te .!n7s %&i'& &!d )r!nted 'redit f!'i$ities to EYCO, ! on) t&e , 8nion 9!n7, 'onvened to !p out t&eir 'o$$e'tive 'o$$e'tion options. +&e for !tion of ! !n!)e ent 'o ittee "6!nCo # to represent t&e 'reditor .!n7s %!s !)reed upon in t&!t eetin). Su.se0uent$-, 8nion 9!n7 de'ided to .re!7 !%!- fro t&e 'onsortiu its e .ers, fi$ed ! s$e% of 'ivi$ '!ses !)!inst EYCO. !nd, %it&out notif-in)

Conse0uent$-, in order to )ive defend!nt-Spouses DYutin)'osE ! p$e ti e to prep!re for %&!tever defense t&e- !- r!ise, t&e- !re &ere.- )iven ! ne% fifteen "1B# d!-s period fro re'eipt of t&is Order %it&in %&i'& to fi$e t&eir !ns%er to t&e 'o p$!int !)!inst t&e . Another en banc order of March !, "##! fo$$o%ed, %&th the SEC th&' t&(e a))o&nt&n* re')ondent Conce)c&on to act, +&ce the d&''o$+ed L&,-&dat&on Co((&ttee, a' E.CO L&,-&dator. 5 on) Con'ep'ion1s first !'t !s su'& $i0uid!tor %!s to fi$e ! 6otion to ,ntervene !nd +o 5d it 6otion to Set 5side Order of 5tt!'& ent 16 "6otion to ,ntervene, for .revit-#. +&ree d!-s $!ter, Con'ep'ion su. itted .efore t&e SEC ! Ci0uid!tion *$!n17 for t&e EYCO Group.

5pri$ 11, 2002 - 5fter due pro'eedin)s, t&e SEC !pproved, Con'ep'ion-su. itted Ci0uid!tion *$!n.1= Con'ep'ion1s otion to intervene, &o%ever, et ! different f!te. 5u)ust =, 2002 / Ma0at& 1TC den&ed Conce)c&on2' (ot&on to &nter+en e on t&e )round of $!'7 of st!ndin) to intervene, &is !ppoint ent !s Ci0uid!tor .ein), !''ordin) to t&e 'ourt, of dou.tfu$ v!$idit-. +&e order, in !ddition, )r!nted 8nion 9!n71s e!r$ier otion to de'$!re EYCO in def!u$t, !nd set ! d!te for t&e e(-p!rte re'eption of 8nion 9!n71s eviden'e. Con'ep'ion t&en to intervene. oved for re'onsider!tion 0uestionin) t&e .!sis of t&e deni!$ of &is otion

Of re$ev!n'e is t&e 1st 'o p$!int of su of one- .efore t&e R+C of 6!7!ti !)!inst EYCO Group !nd Spouses Eu$o)io !nd 9ee :u!n Yutin)'o !s sureties of 'orpor!te o.$i)!tion

R+C 3 issued %rit of pre !tt!'& ent pursu!nt to %&i'& $ev- on !tt!'& ent %!s !nnon!ted on 2 tit$es of $!nd "+C+ ;-<=192 !nd +C+ ;-<=19># of t&e R? of ;!$en@ue$! Cit5$so !tt!'&ed per &erein Respondent ?!ni$o Con'ep'ion, ! p!r'e$ of $!nd +C+ ;<967= of t&e s! e re)istr- !$$e)ed$- &e$d .- t&e Yutin)'os in trust.

,SS8EF G/N the co-rt %a' &n error &n fa+or&n* Conce)c&on2' r&*ht to &nter+ene &n 'a&d c&+&$ ca'e, de')&te h&' $ac0 of $e*a$ )er'ona$&t3, h&' a))o&nt(ent b3 the SEC a' $&,-&dator of E.CO be&n* n-$$ and +o&d for $ac0 of 4-r&'d&ct&on 2e$dF NO. 5a' to the 4-r&'c&t&on6 *etitioner st!tes t&!t EYCO is !$re!d- inso$vent !nd inso$ven'- pro'eedin)s f!$$ under t&e Aurisdi'tion of re)u$!r 'ourts under t&e ,nso$ven'- C!% "5't No. 19B6, !s ! ended# in re$!tion 1

O'to.er 22, 1997 - 8nion 9!n7 oved, on Aurisdi'tion!$ )round, for t&e dis iss!$ of SEC C!se No. 09-97-B76<. On t&e s! e d!te, EYCO su. itted its re&!.i$it!tion p$!n. +&e SEC 2e!rin) *!ne$ t&en !ppointed t&e re)u$!r for EYCO e .ers of t&e ne%$- 're!ted 6!nCo

to t&e pertinent provision of R.5. No. =799, ot&er%ise 7no%n !s t&e Se'urities Re)u$!tion Code. Ge !re not persu!ded. +&e under$-in) petition EYCO fi$ed %it& !nd over %&i'& t&e SEC !ssu ed Aurisdi'tion %!s one for de'$!r!tion of suspension of p!- ent, !ppoint ent of ! re&!.i$it!tion re'eiver/'o ittee, !pprov!$ of re&!.i$it!tion p$!n %it& !$tern!tive pr!-er for $i0uid!tion !nd disso$ution. SEC, !$on) t&e %!-, ord!ined EYCO1s $i0uid!tion !nd disso$ution did not, %it&out ore, strip t&e SEC of Aurisdi'tion over t&e $i0uid!tion pro'ess. 5$.eit Aurisdi'tion over ! petition to de'$!re ! 'orpor!tion in ! st!te of inso$ven'- stri't$- $ies %it& re)u$!r 'ourts, t&e SEC possessed, durin) t&e period !teri!$, ! p$e po%er under *.?. No. 902-5, !s ! ended, to de'$!re ! 'orpor!tion inso$vent !s !n in'ident of !nd in 'ontinu!tion of its !$re!d- !'0uired Aurisdi'tion over t&e petition to .e de'$!red in t&e st!te of suspension of p!- ents in t&e t%o inst!n'es provided in Se'tion B"d# t&ereof. Se'tion B"d# vests t&e SEC %it& e('$usive !nd ori)in!$ Aurisdi'tion over petitions for suspension of p!- ents %&i'& !- eit&er .eF "!# ! si p$e petition for suspension of p!- ents .!sed on t&e provisions of t&e ,nso$ven'C!%, i.e., t&e petitionin) 'orpor!tion &!s suffi'ient !ssets to 'over !$$ its de.ts, .ut foresees t&e i possi.i$it- of eetin) t&e o.$i)!tions !s t&e- f!$$ due, or ".# ! si i$!r petition fi$ed .- !n inso$vent 'orpor!tion !''o p!nied .- ! pr!-er for t&e 're!tion of ! !n!)e ent 'o ittee !nd/or re&!.i$it!tion re'eiver .!sed on t&e provisions of *.?. No. 902-5, !s ! ended .- *.?. No. 17B=. ,n t&e '!se !t .en'&, EYCO1s petition for suspension of p!- ent %!s, !t .otto , ! i( of .ot& situ!tions !dverted to !.ove. 4or, %&i$e EYCO, in t&e s!id petition, !$$e)ed .ein) so$vent .ut i$$i0uid, it nonet&e$ess p$e!ded for t&e 'onstitution of ! re&!.i$it!tion re'eiver/'o ittee, %it& !n !$tern!tive pr!-er for $i0uid!tion, if %!rr!nted. C$e!r$- t&en, t&e SEC &!s, fro t&e st!rt, Aurisdi'tion over EYCO1s petition for suspension of p!- ent, su'& Aurisdi'tion. G&en t&e $!% spe!7s of Hunti$ fin!$$- disposed,I t&e referen'e s&ou$d in'$ude t&e fin!$ disposition of t&e $i0uid!tion !nd disso$ution pro'esses sin'e it is %it&in t&e po%er of t&e SEC .- $!% or !s in'ident of or in 'ontinu!tion of its !$re!d- !'0uired Aurisdi'tion over t&e petition for suspension of p!- ent, to order t&e disso$ution/$i0uid!tion of ! 'orpor!tion !nd !''ordin)$- !ppoint ! $i0uid!tor. ,n fine, t&e 'ontinuin) e(er'ise of Aurisdi'tion .- t&e SEC over t&e $i0uid!tion !nd disso$ution of t&e EYCO Group is %!rr!nted. On'e Aurisdi'tion !tt!'&es, t&e 'ourt '!nnot .e ousted fro t&e '!se .- !n- su.se0uent events, su'& !s ! ne% $e)is$!tion p$!'in) su'& pro'eedin)s under t&e Aurisdi'tion of !not&er .od-. +&e on$- re'o)ni@ed e('eptions to t&e ru$e, %&i'& find no

s%!- in t&e present '!se, !rise %&en t&e st!tute e(press$- so provides or %&en t&e st!tute is '$e!r$- intended to !pp$- to !'tions pendin) .efore its en!'t ent. 5a' to $e*a$ )er'ona$&t3 of )art3 to &nter+ene6 , tervention is ! pro'edure .- %&i'& ! t&ird person, not ori)in!$$- p!rt- to t&e suit, .ut '$!i in) !n interest in t&e su.Ae't !tter, 'o es into t&e '!se, in order to prote't &is ri)&t or interpose &is '$!i . ,ts !in purpose is to sett$e in one !'tion !nd .- ! sin)$e Aud) ent !$$ 'onf$i'tin) '$!i s of or t&e %&o$e 'ontrovers- ! on) t&e persons invo$ved. +o %!rr!nt intervention under Ru$e 19, Se'tion 1 of t&e Ru$es of Court, 2 re0uisites ust 'on'urF "!# t&e ov!nt &!s ! $e)!$ interest in t&e !tter in $iti)!tion, !nd ".# intervention ust not undu$- de$!- or preAudi'e t&e !dAudi'!tion of t&e ri)&ts of t&e p!rties, nor s&ou$d t&e '$!i of t&e intervenor .e '!p!.$e of .ein) proper$- de'ided in ! sep!r!te pro'eedin). +&e interest, %&i'& entit$es one to intervene, ust invo$ve t&e !tter in $iti)!tion !nd of su'& dire't !nd i edi!te '&!r!'ter t&!t t&e intervenor %i$$ eit&er )!in or $ose .- t&e dire't $e)!$ oper!tion !nd effe't of t&e Aud) ent Just $i7e t&e C5, t&e Court &!s no dou.t !.out t&e respondent, !s t&e du$--!ppointed $i0uid!tor of EYCO1s re !inin) !ssets, &!vin) ! $e)!$ interest in t&e !tter $iti)!ted in Civi$ C!se No. 97-21=<. +&is is p!rti'u$!r$- true %it& respe't to t&e p!r'e$s of $!nd 'overed .- t&e %rit of !tt!'& ent %&i'&, in t&e i p$e ent!tion of t&e SEC-!pproved Ci0uid!tion *$!n for EYCO, &!d .een 'onve-ed to t&e respondentD<0E in trust for t&e .enefit of 'reditors, EYCO1s sto'7&o$ders !nd ot&er persons in interest. 5t t&e ver- $e!st, t&e respondent, !s $i0uid!tortrustee, is so situ!ted !s to .e !ffe'ted .- t&e distri.ution or disposition of t&e !tt!'&ed properties %&i'& %ere under t&re!t of .ein) $evied on e(e'ution !nd so$d !t pu.$i' !u'tion.