Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 1989 > September 1989 Decisions > G.R. No. 78412 September 26, 1989 - TRADERS ROYAL BANK v. COURT OF APPEALS, ET AL.:




PHILIPPINE SUPREME COURT DECISIONS

FIRST DIVISION

[G.R. No. 78412. September 26, 1989.]

TRADERS ROYAL BANK, Petitioner, v. THE HONORABLE COURT OF APPEALS, HON. BALTAZAR M. DIZON, Presiding Judge, Regional Trial Court, Branch 113, Pasay City and ALFREDO CHING, Respondents.

San Juan, Africa, Gonzalez and San Agustin for Petitioner.

Balgos and Perez for Respondents.


SYLLABUS


1. COMMERCIAL LAW; CORPORATION LAW, SECURITIES AND EXCHANGE COMMISSION; HAS JURISDICTION OVER CORPORATION ONLY NOT OVER PRIVATE INDIVIDUALS, EXCEPT STOCKHOLDERS. — Although Ching was impleaded in SEC Case No. 2250, as a co-petitioner of PBM, the SEC could not assume jurisdiction over his person and properties. The Securities and Exchange Commission was empowered, as rehabilitation receiver, to take custody and control of the assets and properties of PBM only, for the SEC has jurisdiction over corporations only not over private individuals, except stockholders in an intra-corporate dispute (Sec. 5, P.D. 902-A and Sec. 2 of P.D. 1758).

2. ID.; ID.; ID.; JURISDICTION NOT DEPENDENT UPON CONSENT OR ACTS OF PARTIES. — Ching’s act of joining as a co-petitioner with PBM in SEC Case No. 2250 did not vest in the SEC jurisdiction over his person or property, for jurisdiction does not depend on the consent or acts of the parties but upon express provision of law (Tolentino v. Social Security System, 138 SCRA 428; Lee v. Municipal Trial Court of Legaspi City, Br. I, 145 SCRA 408).

3. ID.; ID.; ID.; ID.; A CREDITOR BANK IS NOT BARRED FROM FILING A CIVIL CASE AGAINST PRIVATE INDIVIDUAL JOINED AS PETITIONER IN THE SEC CASE. — Being a nominal party in SEC Case No. 2250, Ching’s properties were not included in the rehabilitation receivership that the SEC constituted to take custody of PBM’s assets. Therefore, the petitioner bank was not barred from filing a suit against Ching, as a surety for PBM. An anomalous situation would arise if individual sureties for debtor corporations may escape liability by simply co-filing with the corporation a petition for suspension of payments in the SEC whose jurisdiction is limited only to corporations and their corporate assets.

4. ID.; ID.; ID.; PARTIES IN INTEREST. — The term "parties-in-interest" in Section 6, Rule 3 of the SEC’s New Rules of Procedure contemplates only private individuals sued or suing as stockholders, directors, or officers of a corporation.

5. CIVIL LAW; OBLIGATIONS; SOLIDARY DEBTORS; CREDITORS MAY PROCEED AGAINST ANY OR ALL OF THEM SIMULTANEOUSLY. — Ching can be sued separately to enforce his liability as surety for PBM, as expressly provided by Article 1216 of the New Civil Code: "ART. 1216. The creditor may proceed against any of the solidary debtors or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, as long as the debt has not been fully collected."cralaw virtua1aw library

6. COMMERCIAL LAW; CORPORATION LAW; A CORPORATION HAS A PERSONALITY DISTINCT AND SEPARATE FROM STOCKHOLDERS OR MEMBERS, AND THEIR PROPERTY IS NOT PROPERTY OF THE CORPORATION. — It is elementary that a corporation has a personality distinct and separate from its individual stockholders or members. Being an officer or stockholder of a corporation does not make one’s property the property also of the corporation, for they are separate entities (Adelio Cruz v. Quiterio Dalisay, 152 SCRA 482).


D E C I S I O N


GRIÑO-AQUINO, J.:


This petition for certiorari assails the Court of Appeals’ decision dated April 29, 1987 in CA-G.R. SP No. 03593, entitled "Alfredo Ching v. Hon. Baltazar M. Dizon and Traders Royal Bank" nullifying the Regional Trial Court’s orders dated August 15, 1983 and May 24, 1984 and prohibiting it from further proceeding in Civil Case No. 1028-P.

On March 30, 1982, the Philippine Blooming Mills, Inc. (PBM) and Alfredo Ching jointly submitted to the Securities and Exchange Commission a petition for suspension of payments (SEC No. 2250) where Alfredo Ching was joined as co-petitioner because under the law, he was allegedly entitled, as surety, to avail of the defenses of PBM and he was expected to raise most of the stockholders’ equity of P100 million being required under the plan for the rehabilitation of PBM. Traders Royal Bank was included among PBM’s creditors named in Schedule A accompanying PBM’s petition for suspension of payments.

On May 13, 1983, the petitioner bank filed Civil Case No. 1028-P in the Regional Trial Court, Branch CXIII in Pasay City, against PBM and Alfredo Ching, to collect P22,227,794.05 exclusive of interests, penalties and other bank charges representing PBM’s outstanding obligation to the bank. Alfredo Ching, a stockholder of PBM, was impleaded as co-defendant for having signed as a surety for PBM’s obligations to the extent of ten million pesos (P10,000,000) under a Deed of Suretyship dated July 21, 1977.

In its en banc decision in SEC-EB No. 018 (Chung Ka Bio, Et. Al. v. Hon. Antonio R. Manabat, Et. Al.), the SEC declared that it had assumed jurisdiction over petitioner Alfredo Ching pursuant to Section 6, Rule 3 of the new Rules of Procedure of the SEC providing that "parties in interest without whom no final determination can be had of an action shall be joined either as complainant, petitioner or respondent" to prevent multiplicity of suits.

On July 9, 1982, the SEC issued an Order placing PBM’s business, including its assets and liabilities, under rehabilitation receivership, and ordered that "all actions for claims listed in Schedule A of the petition pending before any court or tribunal are hereby suspended in whatever stage the same may be, until further orders from the Commission" (p 22, Rollo). As directed by the SEC, said order was published once a week for three consecutive weeks in the Bulletin Today, Philippine Daily Express and Times Journal at the expense of PBM and Alfredo Ching.

PBM and Ching jointly filed a motion to dismiss Civil Case No. 1028-P in the RTC, Pasay City, invoking the pendency in the SEC of PBM’s application for suspension of payments (which Ching co-signed) and over which the SEC had already assumed jurisdiction.

Before the motion to dismiss could be resolved, the court dropped PBM from the complaint, on motion of the plaintiff bank, for the reason that the SEC had already placed PBM under rehabilitation receivership.

On August 15, 1983, the trial court denied Ching’s motion to dismiss the complaint against himself. The court pointed out that "P.D. 1758 is only concerned with the activities of corporations, partnerships and associations. Never was it intended to regulate and/or control activities of individuals" (p. 11, Rollo). Ching’s motion for reconsideration of that order was denied on May 24, 1984. Respondent Judge argued that under P.D. 902-A, as amended, the SEC may not validly acquire jurisdiction over an individual, like Ching (p. 62, Rollo).chanrobles law library

Ching filed a petition for certiorari and prohibition in the Court of Appeals (CA-G.R. SP No. 03593) to annul the orders of respondent Judge and to prohibit him from further proceeding in the civil case.

The main issue raised in the petition was whether the court a quo could acquire jurisdiction over Ching in his personal and individual capacity as a surety of PBM in the collection suit filed by the bank, despite the fact that PBM’s obligation to the bank had been placed under receivership by the SEC.

On April 29, 1987, the Court of Appeals granted the writs prayed for. It nullified the questioned orders of respondent Judge and prohibited him from further proceeding in Civil Case No. 1028-P, except to enter an order dismissing the case. The pertinent ruling of the Court of Appeals reads:jgc:chanrobles.com.ph

"In sum, since the SEC had assumed jurisdiction over petitioner in SEC Case No. 2250 and reiterating the propriety of such assumption in SEC-EB No. 018; and since under PD 902-A, as amended by PD 1758, ‘. . . upon appointment of a . . . rehabilitation receiver . . . pursuant to this Decree, all actions for claims against corporation . . . under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly . . .’; respondent judge clearly acted without jurisdiction in taking cognizance of the civil case in the court a quo brought by respondent bank to enforce the surety agreement against petitioner for the purpose of collecting payment of PBM’s outstanding obligations. Respondent bank should have questioned the SEC’s assumption of jurisdiction over petitioner in an appellate forum and not in the court a quo a tribunal with which the SEC enjoys a co-equal and coordinate rank." (p. 27, Rollo.)

The Bank assails that decision in this petition for review alleging that the appellate court erred;

1. in holding that jurisdiction over respondent Alfredo Ching was assumed by the SEC because he was a co-signer or surety of PBM and that the lower court may not assume jurisdiction over him so as to avoid multiplicity of suits; and

2. in holding that the jurisdiction assumed by the SEC over Ching was to the exclusion of courts or tribunals of coordinate rank.

The petition for review is meritorious.

Although Ching was impleaded in SEC Case No. 2250, as a co-petitioner of PBM, the SEC could not assume jurisdiction over his person and properties. The Securities and Exchange Commission was empowered, as rehabilitation receiver, to take custody and control of the assets and properties of PBM only, for the SEC has jurisdiction over corporations only not over private individuals, except stockholders in an intra-corporate dispute (Sec. 5, P.D. 902-A and Sec. 2 of P.D. 1758). Being a nominal party in SEC Case No. 2250, Ching’s properties were not included in the rehabilitation receivership that the SEC constituted to take custody of PBM’s assets. Therefore, the petitioner bank was not barred from filing a suit against Ching, as a surety for PBM. An anomalous situation would arise if individual sureties for debtor corporations may escape liability by simply co-filing with the corporation a petition for suspension of payments in the SEC whose jurisdiction is limited only to corporations and their corporate assets.

The term "parties-in-interest" in Section 6, Rule 3 of the SEC’s New Rules of Procedure contemplates only private individuals sued or suing as stockholders, directors, or officers of a corporation.

Ching can be sued separately to enforce his liability as surety for PBM, as expressly provided by Article 1216 of the New Civil Code:jgc:chanrobles.com.ph

"ART. 1216. The creditor may proceed against any of the solidary debtors or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, as long as the debt has not been fully collected."cralaw virtua1aw library

It is elementary that a corporation has a personality distinct and separate from its individual stockholders or members. Being an officer or stockholder of a corporation does not make one’s property the property also of the corporation, for they are separate entities (Adelio Cruz v. Quiterio Dalisay, 152 SCRA 482).chanrobles.com:cralaw:red

Ching’s act of joining as a co-petitioner with PBM in SEC Case No. 2250 did not vest in the SEC jurisdiction over his person or property, for jurisdiction does not depend on the consent or acts of the parties but upon express provision of law (Tolentino v. Social Security System, 138 SCRA 428; Lee v. Municipal Trial Court of Legaspi City, Br. I, 145 SCRA 408).

WHEREFORE, the petition for review is granted. The decision of the Court of Appeals in CA-G.R. SP No. 03593 is set aside. Respondent Judge of the Regional Trial Court in Pasay City is ordered to reinstate Civil Case No. 1028-P and to proceed therein against the private respondent Alfredo Ching. Costs against the private Respondent.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.




Back to Home | Back to Main




















chanrobles.com





ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com






September-1989 Jurisprudence                 

  • G.R. No. L-39215 September 1, 1989 - PHILIPPINE NATIONAL BANK v. UTILITY ASSURANCE & SURETY CO., INC.

  • G.R. No. 63118 September 1, 1989 - JOSE RODRIGUEZ, ET AL. v. SANDIGANBAYAN, ET AL.

  • G.R. No. 73642 September 1, 1989 - RESTITUTO PALMA GIL, ET AL. v. PEOPLE OF THE PHIL.

  • G.R. No. 84960 September 1, 1989 - PEOPLE OF THE PHIL. v. EFREN M. ASIO

  • G.R. No. 83216 September 4, 1989 - TERESITA QUINTOS-DELES, ET AL. v. COMMISSION ON CONSTITUTIONAL COMMISSIONS, ET AL.

  • G.R. No. 71681 September 5, 1989 - PEOPLE OF THE PHIL. v. CORNELIO S. MARILAO

  • G.R. No. 75206 September 5, 1989 - TOMAS GALGALA, ET AL. v. BENGUET CONSOLIDATED, INC., ET AL.

  • G.R. No. 79416 September 5, 1989 - ROSALINA BONIFACIO, ET AL. v. NATIVIDAD G. DIZON, ET AL.

  • G.R. No. 46064 September 7, 1989 - MIGUELA MIRANDA, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 51632 September 7, 1989 - PEPSICO, INCORPORATED vs.NATIONAL LABOR RELATIONS COMMISSION, ET AL

  • G.R. No. 73465 September 7, 1989 - LEONIDA CUREG, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 76883 September 7, 1989 - VASSAR INDUSTRIES, INC. v. VASSAR INDUSTRIES EMPLOYEES UNION, ET AL.

  • G.R. No. 78975 September 7, 1989 - IGNACIO V. SORIANO v. COURT OF APPEALS, ET AL.

  • G.R. No. 82458 September 7, 1989 - CONCRETE AGGREGATES CORPORATION v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 82478 September 7, 1989 - JUANITO DE ASIS v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 84578 September 7, 1989 - JOSE VICENTE SANTIAGO, IV v. BONIER DE GUZMAN, ET AL.

  • G.R. No. 85468 September 7, 1989 - QUINTIN S. DOROMAL v. SANDIGANBAYAN, ET AL.

  • G.R. No. 87140 September 7, 1989 - NATIONAL POWER CORPORATION v. ARSENIO M. GONONG, ET AL.

  • G.R. No. 88637 September 7, 1989 - ENRIQUE T. GARCIA v. BOARD OF INVESTMENTS, ET AL.

  • G.R. No. 74978 September 8, 1989 - MARKET DEVELOPERS, INC. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 75819 September 8, 1989 - FERMIN ONG v. COURT OF APPEALS, ET AL.

  • G.R. No. 81861 September 8, 1989 - BERNABE QUE, ET AL. v. RODRIGO V. COSICO

  • G.R. No. 82696 September 8, 1989 - PEOPLE OF THE PHIL. v. NOELITO MANZANARES

  • A.M. No. MTJ-89-251 September 8, 1989 - CONRADO SANTOS v. OSCAR I. LUMANG

  • G.R. No. 68203 September 13, 1989 - METUROGAN L. SAREP v. SANDIGANBAYAN

  • G.R. No. 69251 September 13, 1989 - PEOPLE OF THE PHIL. v. DANILO GOLE CRUZ

  • G.R. No. 83907 September 13, 1989 - NAPOLEON GEGARE v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 87014-16 September 13, 1989 - SALIC B. DUMARPA, ET AL. v. JAMIL DIMAPORO, ET AL.

  • G.R. No. 76216 September 14, 1989 - GERMAN MANAGEMENT & SERVICES, INC. v. COURT OF APPEALS, ET AL.

  • G.R. No. 76573 September 14, 1989 - MARUBENI CORPORATION v. COMMISSIONER OF INTERNAL REVENUE, ET AL.

  • G.R. No. 78409 September 14, 1989 - NORBERTO SORIANO v. OFFSHORE SHIPPING AND MANNING CORPORATION, ET AL.

  • G.R. No. 35453 September 15, 1989 - INDUSTRIAL FINANCE CORPORATION v. SERGIO A. F. APOSTOL, ET AL.

  • G.R. No. 63996 September 15, 1989 - EUSEBIO FRANCISCO v. INTERMEDIATE APPELLATE COURT, ET AL,

  • G.R. No. 67880 September 15, 1989 - FELIX ESMALIN v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. Nos. 72355-59 September 15, 1989 - PEOPLE OF THE PHIL. v. JUAN P. DAVID

  • G.R. No. 73053 September 15, 1989 - CARMELITA U. CRUZ v. GUILLERMO C. MEDINA, ET AL.

  • G.R. No. 74060 September 15, 1989 - PEOPLE OF THE PHIL. v. CRESTITO HERMOSA, ET AL.

  • G.R. No. 75662 September 15, 1989 - MERCURY DRUG CORPORATION v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 75693 September 15, 1989 - MARCELO BONDOC v. COURT OF APPEALS, ET AL.

  • G.R. No. 80599 September 15, 1989 - ERNESTINA CRISOLOGO-JOSE v. COURT OF APPEALS, ET AL.

  • G.R. No. 81949 September 15, 1989 - METERIO GUZMAN, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 82670 September 15, 1989 - DOMETILA M. ANDRES v. MANUFACTURERS HANOVER & TRUST CORPORATION, ET AL.

  • G.R. No. 82703 September 15, 1989 - MAURO DE LA CRUZ v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 82971 September 15, 1989 - PHILIPPINE NATIONAL BANK v. COURT OF APPEALS, ET AL.

  • G.R. No. 82973 September 15, 1989 - MARIO CARTAGENAS, ET AL. v. ROMAGO ELECTRIC COMPANY, INC., ET AL.

  • G.R. No. 83695 September 15, 1989 - PEOPLE OF THE PHIL. v. ROY ALZAGA

  • G.R. No. 88211 September 15, 1989 - FERDINAND E. MARCOS, ET AL. v. RAUL MANGLAPUS, ET AL.

  • G.R. No. 71116 September 19, 1989 - PEOPLE OF THE PHIL. v. DIONISIO HORTILLANO

  • G.R. No. 81231 September 19, 1989 - PHILIPPINE NATIONAL RAILWAYS v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 65418 September 25, 1989 - COLLECTOR OF CUSTOMS OF MANILA v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-43810 September 26, 1989 - TOMAS CHIA v. ACTING COLLECTOR OF CUSTOMS, ET AL.

  • G.R. No. 75305 September 26, 1989 - MICHAEL PEÑALOSA, ET AL. v. CANDIDO P. VILLANUEVA, ET AL.

  • G.R. No. 78412 September 26, 1989 - TRADERS ROYAL BANK v. COURT OF APPEALS, ET AL.

  • G.R. No. 78519 September 26, 1989 - VICTORIA YAU CHU, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 80719 September 26, 1989 - HILDA RALLA ALMINE v. COURT OF APPEALS, ET AL.

  • G.R. No. 82325 September 26, 1989 - ESPIRITU SANTO PAROCHIAL SCHOOL, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 83250 September 26, 1989 - COMMISSIONER OF INTERNAL REVENUE v. MANILA HOTEL CORPORATION, ET AL.

  • G.R. No. 47206 September 27, 1989 - GLORIA M. DE ERQUIAGA v. COURT OF APPEALS, ET AL.

  • A.M. No. MTJ-86-11 September 27, 1989 - DAVID G. OMPOC v. NORITO E. TORRES

  • G.R. No. 39507 September 28, 1989 - IN RE: FRANCISCO SIM v. REPUBLIC OF THE PHIL.

  • G.R. No. 46454 September 28, 1989 - NICETAS C. RODRIGUEZ v. EMPLOYEES’ COMPENSATION COMMISSION, ET AL.

  • G.R. Nos. 54472-77 September 28, 1989 - GUTIERREZ HERMANOS v. COURT OF APPEALS, ET AL.

  • G.R. No. 35652 September 29, 1989 - PEOPLE OF THE PHIL. v. HERMINIO TAACA, ET AL.

  • G.R. No. 42782 September 29, 1989 - FIGURADO O. PLAZA v. JUAN C. TUVERA, ET AL.

  • G.R. No. 48603 September 29, 1989 - GOVERNMENT SERVICE INSURANCE SYSTEM v. ALFREDO C. FLORENDO

  • G.R. No. 50702 September 29, 1989 - ALFREDO CABRAL v. COURT OF APPEALS, ET AL.

  • G.R. No. 57079 September 29, 1989 - PHILIPPINE LONG DISTANCE TELEPHONE CO., INC. v. COURT OF APPEALS, ET AL.

  • G.R. No. 61272 September 29, 1989 - BAGONG BAYAN CORPORATION, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 69190 September 29, 1989 - PEOPLE OF THE PHIL. v. EDUARDO NIEBRES

  • G.R. No. 73006 September 29, 1989 - PEOPLE OF THE PHIL. v. LEONARDO PERIODICA, JR.

  • G.R. No. 75009 September 29, 1989 - FRANCISCO M. ANGELES v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 76353 September 29, 1989 - SOPHIA ALCUAZ, ET AL. v. PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION

  • G.R. No. 76612 September 29, 1989 - ROMELITO ZAGADO v. COURT OF APPEALS, ET AL.

  • G.R. No. 78339 September 29, 1989 - WENCESLAO D. MONSERRATE, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 79622 September 29, 1989 - ENRIQUETO F. TEJADA v. HOMESTEAD PROPERTY CORPORATION, ET AL.

  • G.R. No. 80352 September 29, 1989 - BENJAMIN G. INDINO v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 80892 September 29, 1989 - ISLAMIC DA’WAH COUNCIL OF THE PHILIPPINES v. COURT OF APPEALS, ET AL.

  • G.R. No. 82508 September 29, 1989 - FILINVEST CREDIT CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 83751 September 29, 1989 - MANILA ELECTRIC COMPANY v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 83946 September 29, 1989 - NENITA E. BABIDA v. PEOPLE OF THE PHIL, ET AL.

  • G.R. No. 83988 September 29, 1989 - RICARDO C. VALMONTE, ET AL. v. RENATO DE VILLA, ET AL.

  • G.R. No. 85879 September 29, 1989 - NG SOON v. 0ALOYSIUS ALDAY, ET AL.

  • G.R. Nos. 86105-06 September 29, 1989 - PHILIPPINE NATIONAL BANK v. COURT OF APPEALS, ET AL.