Case Summary (G.R. No. 223404)
Petitioner
Bank of the Philippine Islands
Respondents
Marciano S. Bacalla, Jr.; Federation of Investors Tulungan, Inc. (FITI); Eduardo M. Abacan; Erlinda U. Lim; Felicito A. Madamba; Pepito M. Delgado
Key Dates
• September 24, 2004 – RTC orders dissolution of TGICI and appoints Bacalla as receiver
• August 10, 2012 & January 14, 2013 – RTC denies BPI’s motion to declare respondents non-suited and refuses requests for admission under the Interim Rules
• July 27, 2015 & March 4, 2016 – Court of Appeals denies BPI’s petitions for certiorari (CA-G.R. SP No. 129574)
• July 15, 2020 – Supreme Court promulgates decision in G.R. No. 223404
Applicable Law
• 1987 Philippine Constitution (as case decided post-1990)
• Corporation Code of the Philippines (PD No. 902-A)
• Securities Regulation Code (RA No. 8799) and Interim Rules on Intra-Corporate Controversies
• Rules of Court: Rule 65 (Certiorari), Rule 2, Sections 3–4 (splitting cause of action)
Antecedents
TGICI investors sought enforcement of receivership authority granted under PD 902-A and RA 8799’s Interim Rules by filing Civil Case No. LP-05-0212 against Prudential Bank and TGICI subsidiaries for fraudulent inducement, issuance of unregistered securities, diversion of investor funds, and improper stock acquisitions.
Trial Court Proceedings
• September 20, 2010 – BPI orally moves to non-suit respondents for lack of special powers of attorney; motion denied in November 28, 2011 Order
• February 8, 2012 – BPI serves Requests for Admission challenging respondents’ authority and knowledge of corporate matters; denied in August 10, 2012 Order for violating “Doctrine of Non-interference” and to expedite pre-trial
• January 14, 2013 – RTC denies BPI’s motion for reconsideration on Interim Rules applicability
Court of Appeals Ruling
The CA affirmed the RTC, holding that:
- The complaint falls squarely under Section 5(a) of PD 902-A (fraudulent schemes by corporate officers) and the Interim Rules, since it seeks recovery of assets dissipated through subsidiaries.
- Relationship test (parent–subsidiary fraud) and nature-of-controversy test (enforcement of intra-corporate rights) both satisfied.
- BPI’s splitting of certiorari petitions violated Rule 2, Sections 3–4, and the later petition was time-barred; remedy prescribed.
Issues Presented
- Whether the Interim Rules on Intra-Corporate Controversies govern the proceedings below.
- Whether BPI violated the anti-splitting rule by filing successive petitions for certiorari.
Supreme Court Ruling
Applicability of Interim Rules
– PD 902-A, Section 5, transferred fraud and intra-corporate disputes to RTC; Interim Rules (effective April 1, 2001) implement this transfer.
– Complaint alleged specific fraudulent schemes (corporate layering, diversion of investor funds, manipulative stock transactions), fulfilling the face-of-the-complaint requirement for invoking special commercial jurisdiction.
– Relationship test: Dispute between TGICI receiver/investors and subsidiaries/third-party purchasers over corporate misdeeds.
– Nature-of-controversy test: Enforcement of intra-corporate rights under the Corporation Code.
– Conclusion: RTC correctly applied Interim Rules; CA properly denied BPI’s belated requests for admission.Rule Aga
Case Syllabus (G.R. No. 223404)
Antecedents and Factual Background
- September 24, 2004 RTC Decision dissolved Tibayan Group of Investment Companies, Inc. (TGICI) and related entities under Sections 121–122, Corporation Code; appointed Atty. Marciano S. Bacalla, Jr. as receiver to liquidate assets.
- Receiver Bacalla and TGICI investors (Abacan, Lim, Madamba, Delgado) and FITI filed Civil Case No. LP-05-0212 for fraudulent schemes under P.D. No. 902-A and Interim Rules of R.A. 8799 against Prudential Bank & Trust Co., JAMCOR Holdings, Cielo Azul, among others.
- Complaint alleged deceit and misrepresentation by TGICI in issuing unregistered securities via front corporations; diversion of investment proceeds to JAMCOR and Cielo Azul; purchase of Prudential Bank shares with illicit funds.
Procedural History
- Pre-trial (Sept. 20, 2010): BPI orally moved to non-suit respondents for lack of Special Powers of Attorney; RTC ordered written motion.
- November 28, 2011 RTC Order denied non-suit motion, finding judicial authorization and board resolutions sufficed for Bacalla and FITI.
- February 8, 2012 BPI served Requests for Admission on respondents challenging their authority and knowledge of Cielo Azul proceedings.
- August 10, 2012 RTC Order denied reconsideration and Requests for Admission, invoking the Doctrine of Non-interference and directing Pre-Trial Conference to proceed.
- January 14, 2013 RTC Order denied petitioner’s Motion for Reconsideration on Interim Rules applicability.
- BPI filed two certiorari petitions before CA: CA-G.R. SP No. 127072 (challenging non-suit rulings) and CA-G.R. SP No. 129574 (challenging Interim Rules application and denial of Requests for Admission).
- July 27, 2015 CA Decision in SP 129574 denied the petition; March 4, 2016 CA Resolution denied reconsideration.