G.R. No. 195615 - Bank of Commerce vs. Radio Philippines Network, Inc.

Key Individuals and Context

Petitioner: Bank of Commerce (Bancommerce)
Original judgment debtor: Traders Royal Bank (TRB), later renamed Royal Traders Holding Co., Inc. (RTHCI)
Judgment creditors/respondents: Radio Philippines Network, Inc. (RPN); Intercontinental Broadcasting Corporation (IBC); Banahaw Broadcasting Corporation (BBC)
BSP Monetary Board; Metrobank (escrow trustee); Regional Trial Court (RTC) of Quezon City, Branch 98; Court of Appeals (CA)

Chronology of Events and Original Judgment

1985–1988: RPN, IBC and BBC purchased manager’s checks from TRB to pay taxes but checks were diverted, prompting suits and eventual RTC decision (1995) awarding them ₱9,790,716.87 plus interest and fees.
1999: CA affirmed with modification, holding TRB solely liable.
2002: SC Decision (G.R. No. 138510) became final and executory on April 9, 2003, deleting exemplary damages but confirming attorney’s fees.

Purchase and Sale Agreement Between TRB and Bancommerce

November 9, 2001: Bancommerce and TRB entered a Purchase and Sale Agreement (PSA), under which Bancommerce acquired specified recorded TRB assets (≈₱10.26 billion) and assumed certain recorded liabilities (≈₱10.40 billion), expressly excluding contingent litigation liabilities such as the respondent networks’ claim.
Article III of the PSA maintained both corporations as separate entities; TRB agreed to surrender its banking license and amend its corporate name.

BSP Approval and Escrow Fund Requirement

November 8, 2001: BSP approved the PSA subject to creation of a ₱50 million escrow fund (15-year trust) with another bank to cover TRB’s excluded contingent liabilities.
December 6, 2001: TRB placed ₱50 million in escrow with Metrobank; July 3, 2002: BSP gave final approval.

Procedural History of Execution Proceedings

October 10, 2002: SC ordered TRB to pay the respondent networks.
July 18, 2003 & January 20, 2004: Respondents filed motions for execution against “TRB [now Bank of Commerce]” and SBTC.
February 20, 2004: Bancommerce filed special appearance denying merger and contesting jurisdiction.
August 15, 2005: RTC granted execution writ against any and all TRB assets, “including those subject of the merger/consolidation” with Bancommerce.

Court of Appeals’ Decision on Scope of Execution

December 8, 2009: CA denied certiorari petitions, affirming RTC’s authority to execute against TRB assets in Bancommerce’s possession or under the escrow. It deleted the RTC’s characterization of the PSA as a “farce” merger tool but did not relieve Bancommerce of execution exposure.

Issues Before the Supreme Court

Whether Bancommerce was excused from filing a motion for reconsideration before seeking certiorari.
Whether the CA gravely erred in failing to rule the RTC execution order null because the CA itself found no merger between TRB and Bancommerce.

Legal Remedy for Certiorari and Motion for Reconsideration

Rule 65, Sec. 1 (Rules of Court) requires no plain, speedy, adequate remedy; a motion for reconsideration is generally that remedy.
Exceptions (e.g., patent nullity, due process deprivation, issues purely of law) must be clearly shown to dispense with the motion.
SC held Bancommerce failed to establish any exception warranting immediate certiorari without a prior motion for reconsideration; thus, CA did not err in dismissing the petition.

Legal Standards for Corporate Merger and Asset Acquisition

Corporation Code Secs. 76–80: Merger/consolidation procedures (board plan, stockholder approval, articles of merger, SEC certificate) and effects (surviving corporation assumes all liabilities; dissolved corporations cease).
Section 40: Sale of all or substantially all assets may require stockholder ratification and may effect a de facto merger if the buyer continues the seller’s enterprise.

Applicability of Exceptions to Non-Liability Rule

Common-law rule: purchaser of all assets generally not liable for seller’s debts unless (1) purchaser expressly or impliedly assumes debts; (2) merger/consolidation; (3) purchaser is mere continuation; (4) transaction fraudulently evades liability.
Bancommerce expressly assumed specified liabilities and excluded others; it continued TRB’s banking operations under BSP circular; escrow fund protected contingent claims