Case Summary (G.R. No. 188146)
Petitioner
Pilipinas Shell Petroleum Corporation – creditor asserting noncompliance with venue requirements and procedural defects in the insolvency proceedings.
Respondent
Royal Ferry Services, Inc. – a corporation originally domiciled in Makati City but operating from Intramuros, Manila when it filed its petition for voluntary insolvency.
Key Dates
• October 18, 1996 – Royal Ferry’s incorporation; principal office in Makati City.
• February 28, 2002 – Cessation of Royal Ferry’s operations.
• August 28, 2005 – Filing of petition for voluntary insolvency in the Regional Trial Court (RTC) of Manila.
• December 19, 2005 – RTC of Manila issues order declaring Royal Ferry insolvent.
• December 23, 2005 – Pilipinas Shell files Formal Notice of Claim and Motion to Dismiss for improper venue.
• January 30, 2006 – RTC denies Motion to Dismiss; February 24, 2006 motion for reconsideration filed.
• June 15, 2006 – RTC grants Shell’s Motion to Dismiss and dismisses the insolvency petition.
• October 26, 2006 – Royal Ferry appeals to the Court of Appeals (CA).
• January 30, 2009 – CA reverses the RTC’s dismissal, reinstates insolvency orders.
• May 26, 2009 – CA denies Shell’s motion for reconsideration.
• July 20, 2009 – Shell brings petition for review on certiorari to the Supreme Court.
• April 29, 2016 – Royal Ferry moves to dismiss on grounds of a Compromise Agreement with Shell and the Gascons.
Applicable Law
• Act No. 1956 (1909), Insolvency Law: Sections 14 (venue of insolvency petition), 81 (dismissal of petition), and 82 (appeal to Supreme Court).
• 1997 Rules of Court: Rule 44, Section 13 (formal requirements of appellate briefs); Rule 50, Section 1 (grounds for dismissal of appeal); Rule 45 (petition for review).
• Civil Code, Article 1215 (effect of remission by any solidary debtor).
• Corporation Code, Section 51 (treating Metro Manila as one city for stockholders’ meeting).
Factual Background
Royal Ferry suffered significant losses beginning in 2000, leading to asset foreclosures and its 2002 operational shutdown. In August 2005, its Board approved a voluntary insolvency petition. The RTC of Manila declared it insolvent on December 19, 2005, ordering asset seizure, creditor meetings, and a stay of proceedings.
Trial Court Proceedings
Pilipinas Shell filed a claim and moved to dismiss on venue grounds, arguing Royal Ferry’s residence was in Makati per its Articles of Incorporation. The RTC initially denied the motion (January 30, 2006), accepting evidence that Royal Ferry had abandoned its Makati office and was domiciled in Manila. On reconsideration (June 15, 2006), the RTC reversed, holding a corporation cannot change its residence without amending its Articles of Incorporation, and dismissed the insolvency petition.
Appellate Proceedings
Royal Ferry appealed to the CA, which on January 30, 2009 set aside the June 2006 dismissal and reinstated the December 2005 insolvency order. The CA ruled Shell failed to secure written consent of all creditors (Section 81) and found Manila the proper venue by analogy to Corp. Code Section 51. Shell’s motion for reconsideration was denied May 26, 2009.
Issues Presented
- Whether the petition is moot and academic due to the Compromise Agreement involving Shell and the Gascons.
- Whether the CA erred in hearing Royal Ferry’s appeal despite asserted formal defects under Rule 44, Section 13.
- Whether the insolvency petition was properly filed in the RTC of Manila.
Mootness Analysis
The Compromise Agreement was executed solely between Shell and the individual Gascons as solidary debtors. It did not release Shell’s claim against Royal Ferry. No evidence showed Shell abandoned its claim against Royal Ferry; hence, the controversy remains justiciable.
Formal-Defects Analysis
Although Royal Ferry’s appellate brief omitted certain formalities (page references, detailed statement of issues, alphabetical table of authorities, copy of the assailed order), the CA acted within its discretion under Rule 50
...continue readingCase Syllabus (G.R. No. 188146)
Facts and Background
- Royal Ferry Services, Inc. (“Royal Ferry”) was incorporated on October 18, 1996 under Philippine law.
- Articles of Incorporation initially stated its principal office at 2521 A. Bonifacio Street, Bangkal, Makati City.
- By 2005 Royal Ferry actually held office at Room 203, BF Condominium Building, Andres Soriano corner Solano Streets, Intramuros, Manila.
- In 2000 the company suffered serious business losses, incurred heavy debts, and saw most assets foreclosed or sold.
- Operations ceased on February 28, 2002.
- On August 25, 2005, the Board of Directors authorized filing a petition for voluntary insolvency.
- On August 28, 2005, Royal Ferry filed a verified Petition for Voluntary Insolvency with the Regional Trial Court (RTC) of Manila, Branch 24.
- The petition alleged insolvency, willingness to surrender non-exempt assets, and inventoried debts exceeding ₱1,000.
Procedural History
- December 19, 2005: RTC Manila issued an Order declaring Royal Ferry insolvent, stayed civil proceedings, and set a creditors’ meeting.
- December 23, 2005: Pilipinas Shell Petroleum Corporation (“Pilipinas Shell”) filed a Formal Notice of Claim for ₱2,769,387.67 and moved to dismiss the petition for wrong venue.
- January 30, 2006: RTC Manila denied the motion to dismiss, finding Royal Ferry had abandoned its Makati office and was resident in Manila.
- June 15, 2006: On reconsideration, RTC Manila granted the motion to dismiss for lack of an amended Articles of Incorporation reflecting the move; insolvency petition dismissed.
- October 26, 2006: Royal Ferry appealed to the Court of Appeals (CA), which received the records on November 7, 20