Consuelo Metal Corp. vs.
Planters Development Bank Ratio:
June 26 2008 G.R. NO. 152580
Doctrine:
a.) The SEC has jurisdiction over the dissolution of the
corporation while the RTC has the jurisdiction over its
liquidation. Thus, upon the declaration of the SEC of its
dissolution the case must be transferred to the RTC for
liquidation.
b.) The creditor-mortgagee may exercise his right to foreclose
the mortgage upon the termination of the rehabilitation
proceedings or upon the lifting of the stay order.
Facts:
On April 1, 1996 CMC filed a petition before the SEC for
suspension of payment which the SEC granted. The agency however
found that the CMC can no longer be rehabilitated thus ordering its
dissolution and liquidation on November 29, 2000. It also ordered
the commencement of the liquidation before the RTC with proper
jurisdiction in accordance with RA 8799. Thereafter Planters Bank
commenced the extra judicial foreclosure of CMC’s REM. CMC
then filed a TRO against the foreclosure before the RTC which
denied the said petition saying that the SEC already ruled upon their
suspension of payment thus they no longer have any legal basis to
act and that their only remedy is to file a new petition before the SEC
or RTC. CMC then raised it before the CA who partially granted
the petition and remanded the case back to the SEC. Despite this
they still filed a petition for review on certiorari before the SC.
Issue:
Whether the present case falls under Section 121 of the Corporation
Code, which refers to the SEC’s jurisdiction over CMC’s
dissolution and liquidation, or is only a continuation of the SEC’s
jurisdiction over CMC’s petition for suspension of payment;
Whether Planters Bank’s foreclosure of the real estate mortgage is
valid.
The petition has no merit;
a.) The SEC has jurisdiction over the dissolution of the
corporation while the RTC has the jurisdiction over its
liquidation. This is in accordance with RA 8799 which
transferred the jurisdiction of the SEC on cases under Sec.
5 of Presidential Decree No. 902-A. the law provides that
the agency will retain jurisdiction over the pending cases
before its office before June 30, 2000. In this case since the
SEC took cognizance of the case on 1996 it retained
jurisdiction over the case in terms of suspension of payment
and its dissolution but it does not have jurisdiction over
liquidation. Therefore the process followed by the order of
the SEC was correct It should be transferred to the RTC
for the liquidation after the SEC dissolved the corporation
this is because the trial court is in the best position to convene
all the creditors of the corporation, ascertain their claims, and
determine their preferences.
b.) The creditor-mortgagee has the right to foreclose the
mortgage over a specific real property whether or not the
debtor-mortgagor is under insolvency or liquidation
proceedings. The right to foreclose such mortgage is merely
suspended upon the appointment of a management committee
or rehabilitation receiver19 or upon the issuance of a stay
order by the trial court.20 However, the creditor-mortgagee
may exercise his right to foreclose the mortgage upon the
termination of the rehabilitation proceedings or upon the
lifting of the stay order.