Facts:

The case of Bank of the Philippine Islands (BPI), as the successor-in-interest of Far East Bank and Trust Company, versus Eduardo Hong, who operates a business under the name "Super Line Printing Press," arose from a petition for review on certiorari under Rule 45. This petition challenged the Decision of the Court of Appeals dated September 27, 2002, and its Resolution dated January 12, 2004, in CA-G.R. SP No. 64166. In September of 1997, the EYCO Group of Companies (EYCO) sought a petition for suspension of payments and rehabilitation with the Securities and Exchange Commission (SEC), which was docketed as Case No. 09-97-5764. Following the issuance of a stay order on September 19, 1997, which halted any actions against EYCO except for regular business transactions, the SEC approved a proposed rehabilitation plan on December 18, 1998. However, a decision rendered on September 14, 1999, by the SEC ultimately disapproved the rehabilitation plan, thereby ordering the di

Facts:

The EYCO Group of Companies filed a petition for suspension of payments and rehabilitation before the SEC in September 1997, which led to a stay order restricting dispositions of its assets. Despite controversy between the rehabilitation plans proposed by EYCO and a consortium of creditor banks, the SEC eventually disapproved EYCO’s petition and ordered its dissolution and liquidation in September 1999. Meanwhile, while the SEC case was still pending with the Court of Appeals, the Bank of the Philippine Islands—petitioner and successor-in-interest of Far East Bank and Trust Company—initiated an extra-judicial foreclosure on properties mortgaged by subsidiaries of EYCO. Respondent Eduardo Hong, an unsecured creditor, filed a separate action in the Regional Trial Court (RTC) for injunction and damages, challenging the foreclosure. Hong contended that the foreclosure sale was improper because the mortgaged properties had been conveyed in trust to the SEC-appointed liquidator and that only the SEC, not the ex-officio sheriff, had jurisdiction over such assets. The RTC granted a temporary restraining order and denied BPI’s motion to dismiss the complaint. On appeal, the Court of Appeals affirmed the trial court’s ruling, holding that issues concerning the validity of foreclosure proceedings, even when overlapping with SEC jurisdiction, fall within the RTC’s power to decide.

Issue:

1. Whether the Regional Trial Court properly had jurisdiction to entertain an injunction suit filed to challenge extra-judicial foreclosure proceedings on assets that were allegedly already under SEC’s jurisdiction due to EYCO’s liquidation process.
2. Whether the pendency of SEC Case No. 09-97-5764 (or its disposition resulting in liquidation) automatically precluded RTC’s jurisdiction over an action for injunction and damages aimed at stopping the foreclosure sale.
3. Whether the foreclosure would unfairly prejudice other creditors by granting undue preference to the bank petitioner, thus raising jurisdictional concerns regarding the distribution of creditor claims.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)