Case Digest (G.R. No. 73123)
Facts:
In re: Petition for Declaration of Insolvency of Filand Manufacturing and Estate Development Company; Top Construction Enterprises, Inc.; and Spouses Emilio Ching and Inai Teh, G.R. No. 73123, September 02, 1991, Supreme Court Third Division, Fernan, C.J., writing for the Court.Petitioner Land Bank of the Philippines (Land Bank) loaned P10,000,000 to private respondents Filand Manufacturing and Estate Development Co., Inc. (Filand Manufacturing) and Emilio Ching on September 19, 1980; Filand Manufacturing and Ching defaulted and Land Bank filed a collection suit (Civil Case No. 0184-P) before the Regional Trial Court (RTC) of Manila.
While that collection action was pending, on December 29, 1984 Filand Manufacturing, Emilio Ching and his spouse Inai Teh, and Top Construction Enterprises, Inc. (through Ching) filed before the RTC of Pasay City Special Proceedings No. 3232‑P, a petition for declaration of insolvency alleging inability to pay debts caused by a fire (January 2, 1984) and economic difficulties after the 1983 political crisis.
The RTC of Pasay City, by Order of Adjudication dated January 29, 1985, declared the petitioners insolvent, directed the sheriff to take custody of records and property, and set a creditors’ meeting for March 25, 1985. Land Bank moved for reconsideration, contending (1) the RTC lacked jurisdiction over insolvency petitions involving corporations because such jurisdiction belonged to the Securities and Exchange Commission (SEC) under P.D. No. 902‑A, as amended; and (2) the petition was defective.
On July 19, 1985 the RTC denied the motions, appointed Land Bank as assignee for the creditors without bond (Land Bank declined), and the City Treasurer of Pasay was appointed instead. Land Bank filed a Notice of Appeal and the trial court forwarded the records directly to the Supreme Court. The Court required explanations and directed Land Bank to file a petition for review on certiorari under Rule 45 (per R.A. No. 5440); Land Bank complied and the petition was given due course.
The RTC meanwhile rendered a decision on March 3, 1986 adjudging Filand Manufacturing and Top Construction insolvent and discharging spouses Ching and Teh. Land Bank sought injunctive relief; the Supreme Court issued a temporary restraining order (TRO) on April 14, 1986 enjoining enforcement of the Pasay RTC decision, but later lifted the TRO insofar as the spouses (natural persons) were concerned.
In its Rule 45 petition Land Bank argued that P.D. No. 902‑A, as amended by P.D. No. 1758 (citing Sections 3, 5(d), 6(c) and (d)), had repealed the Insolvency Law (Act No. 1956) and vested original and exclusive jurisdiction over corporate insolvency proceedi...(Subscriber-Only)
Issues:
- Did the Regional Trial Court of Pasay City have jurisdiction over the petition for declaration of insolvency filed by private respondent corporations?
- Did P.D. No. 902‑A, as amended (notably Section 5(d) and Section 6(c),(d) by P.D. No. 1758), repeal or otherwise transfer exclusive original jurisdiction over corporate insolvency proceedings from the regular courts to the Sec...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
- (Subscriber-Only)