Case Summary (G.R. No. 191060)
Petitioner
TIDCORP (also known as PhilEXIM), a government-owned agency, executed a Guarantee Agreement to secure up to 90% of Series A Notes issued by PhilPhos under a Five-Year Floating Rate Note Facility Agreement.
Respondent
PVB, one of several Series A Noteholders under the Note Facility Agreement, committed ₱1 billion and sought enforcement of TIDCORP’s guarantee.
Key Dates
• November 23, 2011: Note Facility Agreement and Guarantee Agreement executed
• November 8, 2013: Typhoon Yolanda damages PhilPhos’ plant
• September 17, 2015: PhilPhos files for rehabilitation under FRIA
• September 22, 2015: Rehabilitation Court issues Commencement and Stay Orders
• November 5–6, 2015: PVB serves Notice of Claim on TIDCORP
• September 22, 2016: PVB files Complaint for Specific Performance (RTC Makati)
• February 14, 2017: PVB moves for summary judgment
• August 16, 2017: RTC grants summary judgment in favor of PVB
• November 5, 2018: PVB files Comment before the Supreme Court
• July 1, 2019: Supreme Court decision
Applicable Law
• 1987 Philippine Constitution
• Rules of Court, Rules 35, 41, 45
• Financial Rehabilitation and Insolvency Act of 2010 (RA 10142), Sec. 18(c)
• A.M. No. 00-8-10-SC (Interim Rules on Corporate Rehabilitation), Rule 4, Sec. 6
• Civil Code, Arts. 2047, 2058–2059
Facts and Antecedent Proceedings
PVB and other banks extended a ₱5 billion credit facility to PhilPhos. TIDCORP guaranteed 90% of PhilPhos’ obligations, expressly waiving the benefit of excussion and consenting to direct claims. After Typhoon Yolanda rendered PhilPhos unable to operate, PhilPhos sought rehabilitation. PVB served its Notice of Claim on TIDCORP within the 45-day guarantee period. TIDCORP declined on grounds of the rehabilitation stay order. PVB then filed a Complaint for Specific Performance in the RTC, Makati City.
Procedural History
• TIDCORP answered, asserting lack of jurisdiction due to the stay order.
• PVB filed a Motion for Summary Judgment (MSJ); TIDCORP opposed.
• RTC granted PVB’s MSJ, finding no genuine issue of material fact and declaring TIDCORP liable under the Guarantee Agreement.
• TIDCORP elevated the matter to the Supreme Court via Petition for Review on Certiorari under Rule 45.
• PVB moved to dismiss for improper mode of appeal; Supreme Court denied the motion.
Issue
Whether the RTC erred in granting PVB’s Motion for Summary Judgment against TIDCORP.
Court’s Ruling
I. Procedural Issue – Mode of Appeal
An order granting summary judgment that fully determines parties’ rights and obligations, leaving only damages unsettled, is a final order under Rule 45. The RTC’s MSJ resolved liability conclusively; hence the Petition is properly under Rule 45.
II. Substantive Issue – Propriety of Summary Judgment
Summary Judgment Standard
– No genuine issue as to any material fact exists where pleadings, affidavits, admissions, and documents show entitlement to judgment as a matter of law, except for damages (Rule 35, Secs. 1 & 3).Effect of Rehabilitation Stay Order
– The rehabilitation stay applied only to proceedings against PhilPhos, no
Case Syllabus (G.R. No. 191060)
Facts and Antecedent Proceedings
- On November 23, 2011, Philippine Veterans Bank (PVB), together with other Series A Noteholders, entered into a Five-Year Floating Rate Note Facility Agreement with Philippine Phosphate Fertilizer Corporation (PhilPhos) for up to ₱5 billion, with PVB committing ₱1 billion.
- On the same date, Trade and Investment Development Corporation of the Philippines (TIDCORP), aka PhilEXIM, executed a Guarantee Agreement guaranteeing 90% of the outstanding Series A Notes, waiving the benefit of excussion and any requirement of presentment, demand or protest.
- Typhoon Yolanda struck Central Visayas on November 8, 2013, devastating PhilPhos’s Leyte manufacturing plant and causing PhilPhos to suspend operations.
- On September 17, 2015, PhilPhos filed for voluntary rehabilitation under the Financial Rehabilitation and Insolvency Act (FRIA); on September 22, 2015, the Rehabilitation Court issued a Commencement Order and Stay Order.
- On November 5, 2015, PVB filed a Notice of Claim with TIDCORP (received November 6); by letter dated November 12, 2015, TIDCORP declined to honor the claim, invoking the Stay Order.
- PVB filed a Complaint for Specific Performance on September 22, 2016, alleging TIDCORP’s liability under the Guarantee Agreement; TIDCORP answered, contending that the Stay Order barred the RTC’s jurisdiction.
Ruling of the Regional Trial Court
- On February 14, 2017, PVB filed a Motion for Summary Judgment, supported by affidavits and admissions.
- TIDCORP filed its Comment on March 6, 2017, reiterating the Stay Order defense.
- On August 16, 2017, the RTC (Makati City, Branch 150) granted PVB’s Motion for Summary Judgment, finding no genuine issue of material fact and concluding