Philippine Supreme Court Resolutions > Year 2011 > June 2011 Resolutions > [G.R. Nos. 193937-38 : June 15, 2011] STEEL CORPORATION OF THE PHILIPPINES V. EQUITABLE PCIBANK, INC. AND ATTY. SANTIAGO T. GABIONZA, JR. :

Please take notice that the Court, Second Division, issued a Resolution dated 15 June 2011, which reads as follows: 

G.R. Nos. 193937-38 (Steel Corporation of the Philippines v. Equitable PCIBank, Inc. and Atty. Santiago T. Gabionza, Jr.).-

On September 11, 2006 respondent Equitable PCIBank (later merged into Banco de Oro-EPCI, Inc. or BDO-EPCIB) filed with Branch 2 of the Regional Trial Court (RTC) of Batangas City a petition to place petitioner Steel Corporation of the Philippines (SCP) under corporate rehabilitation in Sp. Proc. 06-7993.

Finding the petition sufficient in form and substance, the RTC gave it due course and appointed respondent Atty. Santiago T. Gabionza, Jr. (Atty. Gabionza) as rehabilitation receiver. The RTC then directed Atty. Gabionza to evaluate the rehabilitation plan that BDO-EPCIB and the other creditors proposed. For its part, SCP filed a motion for modification and referral, asking that Atty. Gabionza be directed to also consider SCP's counter rehabilitation plan. The RTC granted the motion.^[1]

Subsequently, however, SCP filed an urgent motion to disqualify and terminate Atty. Gabionza as rehabilitation receiver, alleging that he 1) performed acts in violation of the Interim Rules of Procedure on Corporate Rehabilitation; 2) collected exorbitant monthly fees, exclusive of monthly billings of his own law firm; 3) served as partner in a law firm that was counsel of the Philippine Bank of Communications, one of SCP's creditors; 4) lacked the impartiality and independence required of a rehabilitation receiver; and 5) did not have the requisite expertise in corporate rehabilitation.

The RTC denied the motion on February 15, 2007, prompting SCP to file a petition for certiorari with the Court of Appeals (CA) in CA-G.R. SP 98121, alleging that the RTC gravely abused its discretion in refusing to relieve Atty. Gabionza as rehabilitation receiver.

On June 14, 2007, SCP filed a motion for voluntary inhibition of Judge Maria Cecilia I. Austria, the RTC presiding judge, but the latter denied the motion on June 20, 2007.^[2] As a consequence, SCP filed another petition for certiorari with the CA in CA-G.R. SP 99442. Upon motion of SCP, the case was eventually consolidated with CA-G.R. SP 98121.

Meanwhile, Atty. Gabionza filed with the RTC a manifestation and motion to withdraw as rehabilitation receiver to dispel any doubts regarding his impartiality. On July 11, 2008, Judge Austria voluntarily recused herself from further hearing the case,^[3] resulting in its re-raffle to Branch 4 of the Batangas City RTC. The latter directed Atty. Gabionza to continue discharging his duties as rehabilitation receiver pending resolution of his motion to withdraw.^[4]

On June 22, 2010, the CA dismissed the consolidated petitions before it.^[5] It held that SCP failed to show grave abuse of discretion on the part of the RTC when it declined to relieve Atty. Gabionza and rejected the motion for voluntary inhibition. The CA also held that, at any rate, Judge Austria's subsequent voluntary inhibition rendered the issue in CA-G.R. SP 99442 moot and academic. With the denial of its motion for reconsideration,^[6] SCP filed these petitions for review under Rule 45 of the Rules of Court, mainly challenging the continued retention of Atty. Gabionza as rehabilitation receiver.

Meanwhile, however, in an ex parte manifestation and motion,^[7] Atty. Gabionza informed the Court that the RTC already granted his motion to withdraw as rehabilitation receiver. BDO-EPCIB confirmed this in its comment.

In Garcia v. Commission on Elections,^[8] the Court held that where the issues have become moot and academic, there is no justiciable controversy and resolving the issues would have no practical use or value. Indeed, it is useless to indulge in an academic discussion of a case presenting a moot question, as a judgment thereon cannot have any practical legal effect or cannot be enforced.^[9] 

Since the RTC already issued an order dated November 30, 2010 granting Atty. Gabionza's withdrawal as rehabilitation receiver,^[10] the issue concerning his fitness to continue in that office is already moot.

WHEREFORE, the Court DENIES the petition for being MOOT.

SO ORDERED. 

Very truly yours,

MA. LUISA L. LAUREA
Clerk of Court

By:

(Sgd.) TERESITA AQUINO TUAZON
Asst. Clerk of Court

Endnotes:

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^[1] Rollo, p. 418. 

^[2] Id. at 592-600. 

^[3] Id. at 686-691. 

^[4] Id. at 692. 

^[5] Id. at 152-172. Penned by Associate Justice Rosalinda Asuncion-Vicente and concurred in by Associate Justices Romeo F. Barza and Franchito N. Diamante. 

^[6] Id. at 174-176. 

^[7] Id. at 724-725. 

^[8] 328 Phil. 288, 292 (1996). 

^[9] Baldo, Jr. v. Commission on Elections, G.R. No. 176135, June 16, 2009, 589 SCRA 306 311. 

^[10] Rollo, pp. 726-727.