Facts:

The case involves the petitioner, Bank of Commerce, and the respondents which include Hon. Estela Perlas-Bernabe in her capacity as Presiding Judge of the Regional Trial Court (RTC) of Makati City, Branch 142, Bancapital Development Corporation (Bancapital), and Exchange Capital Corporation (Excap). The events leading to the lawsuit began with a multimillion-peso treasury bill scam in the mid-1990s, which severely impacted the Philippine financial markets, culminating in substantial losses for various financial institutions, particularly the petitioner bank. Bancapital was suspected of engaging in fraudulent securities transactions and was believed to have transferred its assets to Excap to evade creditor claims.

On February 7, 1996, the Bank of Commerce filed a petition for involuntary dissolution, liquidation, and receivership against Bancapital with the Securities and Exchange Commission (SEC), alleging defraud in unauthorized trading in government securities. The SEC declar

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Facts:

Background of the Scam

• A multimillion-peso treasury bill scam in the mid‑1990s shook the Philippine financial markets.
• Bancapital Development Corporation (Bancapital) was alleged to have engaged in fraudulent and unauthorized dealings in government securities.
• Allegations included the funneling of Bancapital’s funds to Exchange Capital Corporation (Excap) allegedly to insulate its assets from creditors.
• The scandal adversely affected several financial institutions, including petitioner Bank of Commerce.

Initiation of the Cases and SEC Involvement

• On February 7, 1996, Bank of Commerce filed a petition with the Securities and Exchange Commission (SEC) for involuntary dissolution, liquidation, and receivership against Bancapital (SEC Case No. 02‑96‑5259).
• Excap was allowed to intervene in the proceedings.
• The SEC constituted a Receivership Committee composed of three members to investigate and report on the alleged anomalies.
• Petitioner submitted evidences including the National Bureau of Investigation (NBI) Report and copies of checks, which pointed to questionable transactions between Bancapital and Excap.

Findings, Orders, and Procedural Developments

• The NBI Report raised doubts about the adequacy of accounting for Bancapital’s funds and suggested an effort to keep assets beyond creditor reach.
• The Receivership Committee’s report found Bancapital insolvent and admitted the inability to take custody or control of its assets.
• Hearing Officer Marciano Bacalla, Jr. issued an Order on October 22, 1999, accepting the Committee Report and, in explicit terms, ruling that Excap did not have custody of Bancapital’s assets.
• A motion for reconsideration was filed by petitioner but was denied in a subsequent December 16, 1999 Order.

Appeal and Motion for Consolidation

• On January 18, 2000, petitioner filed a Petition for Certiorari (SEC EB Case No. 692) with the SEC En Banc alleging grave abuse of discretion by the hearing officer.
• On April 19, 2000, the hearing officer, in view of the Committee Report and Bancapital’s insolvency, dismissed the Receivership Case.
• The enactment of Republic Act (R.A.) No. 8799 on August 8, 2000 transferred the SEC’s jurisdiction over the cases to the Regional Trial Courts (RTC).
• Consequently, the SEC En Banc denied due course to the Certiorari Petition on November 23, 2000 by declaring its oversight power functus officio, and transferred the cases to the RTC of Makati City with separate docket numbers (Civil Case No. 01‑855 for the Receivership Case and Civil Case No. 01‑974 for the Certiorari Petition).

Dispute on Consolidation

• Petitioner moved to consolidate Civil Case No. 01‑974 (the Certiorari Petition) with Civil Case No. 01‑855 (the Receivership Case) to avoid redundancy and conflicting decisions.
• The RTC of Makati City, Branch 142, denied the motion for consolidation, holding that consolidation was unnecessary since the dismissal orders had attained finality.
• The petitioner elevated the matter via a Rule 65 petition before the Court of Appeals, arguing grave abuse of discretion in the denial.
• The Court of Appeals, in its June 22, 2004 Decision and the April 21, 2006 Resolution, affirmed the trial court’s decision and dismissed the petition, noting that both the dismissal of the Receivership Case and the SEC En Banc’s Order in the Certiorari Petition had acquired finality.

Contentions and Subsequent Developments

• Petitioner contended that under Rule 31 of the Rules of Court, cases involving common issues must be consolidated for judicial economy.
• It argued that the hearing officer’s dismissal order had not achieved finality because the motion to recall (filed on May 4, 2000) – essentially a plea for reconsideration – was never acted upon.
• Petitioner maintained that the unresolved factual controversy regarding whether Excap was holding Bancapital’s assets warranted consolidation so that the ultimate resolution by the SEC En Banc could impact the Receivership Case.
• On the other hand, Excap argued that finality had been reached, leaving no basis for consolidation.

Supreme Court’s Intervention

• The Supreme Court was faced with determining whether the record truly reflected finality of the dismissal orders and whether consolidation of the cases was proper given the overlapping issues.
• It noted that the pending motion to recall the dismissal demonstrated that the issue on the existence of Bancapital’s assets was still open.
• The decision was rendered to avoid multiplicity, prevent potential conflicting decisions, and achieve judicial economy by consolidating the cases into a single trial.

Issue:

• Whether the trial court (RTC of Makati City) erred in denying petitioner’s motion to consolidate the Certiorari Petition (Civil Case No. 01‑974) with the Receivership Case (Civil Case No. 01‑855).
• Whether the dismissal orders rendered by the SEC hearing officer (April 19, 2000) and by the SEC En Banc (November 23, 2000) had indeed attained finality, particularly in light of the pending motion to recall the former.
• Whether the proper application of Rule 31 of the Rules of Court supports consolidation when the same issues and reliefs are present, even if the cases are pending in different branches of the RTC.
• Whether the impending unresolved factual controversy regarding whether Excap held Bancapital’s assets necessitates consolidation to avoid conflicting rulings and ensure efficient judicial administration.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)