Case Digest (G.R. No. 172880)
Facts:
In the case of China Banking Corporation v. Cebu Printing and Packaging Corporation, G.R. No. 172880, the controversy centers around a petition for rehabilitation filed by Cebu Printing and Packaging Corporation (CEPRI) on January 29, 2002, before the Regional Trial Court (RTC) of Cebu City, Branch 11. The RTC acknowledged the sufficiency of the petition and subsequently issued a Stay Order on February 11, 2002, which suspended enforcement of all claims against CEPRI and appointed Mr. Sergio D. Lim, Jr. as rehabilitation receiver, with a bond fixed at P100,000. Following due publication of the Stay Order, only China Banking Corporation (Chinabank) submitted a comment or opposition to the petition. On April 30, 2002, the RTC rendered an Order denying CEPRI's petition for rehabilitation, thereby lifting the Stay Order and recalling the appointment of the rehabilitation receiver.
CEPRI was notified of this Order on May 8, 2002, and filed an Urgent Motion for Reconsideration on
Case Digest (G.R. No. 172880)
Facts:
- Initiation of the Corporate Rehabilitation Process
- On January 29, 2002, Cebu Printing and Packaging Corporation (CEPRI) filed a Petition for Rehabilitation with the Regional Trial Court (RTC) of Cebu City, Branch 11.
- The petition was found sufficient in form and substance, prompting the RTC to issue a Stay Order on February 11, 2002.
- The Stay Order halted enforcement of all claims against CEPRI, its guarantors, and sureties.
- The Order appointed Mr. Sergio D. Lim, Jr. as rehabilitation receiver and fixed his bond at P100,000.00.
- CEPRI was required to publish the Stay Order in a newspaper of general circulation once a week for two consecutive weeks.
- It set the initial hearing for March 21, 2002 and directed creditors and interested parties to file verified comments or oppositions with supporting affidavits and documents.
- Early Proceedings and Responses
- After proper publication of the Stay Order, only China Banking Corporation (Chinabank) filed a Comment/Opposition on March 8, 2002.
- Following the initial hearing, the RTC issued an Order dated April 30, 2002 denying due course to the rehabilitation petition.
- The Order lifted the Stay Order and recalled the appointment of the initially designated rehabilitation receiver, Mr. Carlos G. Co.
- CEPRI’s Subsequent Motions and Appeals
- CEPRI received the RTC Order on May 8, 2002 and subsequently filed an Urgent Motion for Reconsideration on May 14, 2002.
- The RTC dismissed the motion on May 23, 2002, emphasizing that a motion for reconsideration of an order is a prohibited pleading under Section 1, Rule 3 of the Interim Rules of Procedure on Corporate Rehabilitation.
- CEPRI then filed a Petition for Certiorari with the Court of Appeals (CA) on June 4, 2002, which was denied.
- The CA affirmed the RTC’s Order dated April 30, 2002 in toto, thereby denying the relief sought by CEPRI.
- Reversal by the Court of Appeals
- On September 27, 2005, CEPRI filed a Motion for Reconsideration with the CA.
- The CA granted the motion and issued an Amended Decision on March 3, 2006.
- The Amended Decision reversed the RTC’s Order, reinstated the Stay Order, and restored the appointment of the rehabilitation receiver, Mr. Carlos G. Co.
- It also gave due course to the Petition for Rehabilitation and remanded the case to the lower court with instructions to evaluate the rehabilitation plan within 120 days.
- In response, Chinabank filed a motion for reconsideration on March 23, 2006, which was later denied by the CA on May 29, 2006.
- Issues of Remedy and Procedural Concerns
- The petition for review filed by China Banking Corporation raised issues regarding the proper mode of appeal given CEPRI’s filing of a petition for certiorari under Rule 65 instead of pursuing an appeal under Rule 43.
- Concerns were also raised regarding:
- The CA’s treatment and classification of the petition for certiorari as a petition for review, allegedly under A.M. No. 04-9-07-SC.
- The CA’s disregard of the factual findings of the RTC regarding CEPRI’s financial status and its state of insolvency.
- The sanctioning of forum shopping by allowing two incompatible cases to proceed simultaneously.
Issues:
- Whether the Court of Appeals committed reversible error by:
- Ruling that a petition for certiorari under Rule 65 is embraced under A.M. No. 04-9-07-SC and treating it as a petition for review under Rule 43.
- Disregarding the factual findings of the RTC, particularly regarding CEPRI’s state of insolvency versus illiquidity.
- Whether the amended decision effectively sanctioned forum shopping by permitting concurrent proceedings in:
- A corporate rehabilitation case (SRC Case No. 001-CEB).
- A separate case for annulment of loans and mortgage contracts under Civil Case No. MAN-4372.
- Whether the special civil action under Rule 65 can substitute for the lost remedy of an ordinary appeal under Rule 43, especially where such loss was occasioned by negligence or error in the choice of remedy.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)