Land Bank of the Philippines v. Court of Appeals
REITERATIONFacts
The Antecedents: Manotoc Securities, Inc. (MSI), a securities broker, offered and sold securities to the public, including the private respondents. MSI entered into investment agreements with these respondents, promising to invest their funds in a portfolio of securities and return the principal with income upon maturity. As security, MSI delivered qualified securities to Insular Bank of Asia and America (IBAA) under a custodianship agreement, which appointed IBAA as custodian and attorney-in-fact. This agreement stipulated that upon MSI's default, IBAA could sell the securities to satisfy investor claims. Later, Land Bank of the Philippines (LBP) substituted IBAA as custodian bank, assuming its duties and liabilities. Procedural History: Following MSI's financial difficulties, the Securities and Exchange Commission (SEC) placed it under rehabilitation and appointed a Management Committee. The private respondents, whose investments with MSI had matured without payment, filed petitions with the Regional Trial Court (RTC) seeking the removal of IBAA and LBP as trustees and the appointment of a substitute trustee. The RTC, citing the SEC's primary jurisdiction over distressed corporations and their assets, suspended the proceedings. The private respondents appealed, arguing that the investment portfolios were not MSI's assets and thus outside the SEC's jurisdiction. The Court of Appeals (CA) reversed the RTC's order, holding that IBAA and LBP were trustees with legal title to the portfolios and that the RTC had jurisdiction to hear the petitions. The Petition: Land Bank of the Philippines (LBP), the petitioner, filed a petition for certiorari under Rule 65 of the Revised Rules of Court, seeking to annul the CA's decision. LBP argued that the CA committed grave abuse of discretion in ruling that it was a trustee and that the RTC had jurisdiction. LBP contended it was merely a custodian and agent, not a trustee, and that the SEC, not the RTC, had jurisdiction over claims against MSI and its assets. The private respondents moved to dismiss, arguing that LBP's proper remedy was an appeal under Rule 45, as the CA's decision was an error of judgment, not jurisdiction, and that LBP had failed to file its petition within the reglementary period, rendering the CA's decision final and executory.
Issue(s)
Whether the Court of Appeals committed a grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that the petitioner (LBP) was a trustee and that the RTC had jurisdiction over the petitions for removal of trustees. Whether a petition for certiorari under Rule 65 is the proper recourse when an appeal under Rule 45 is available and adequate. Whether the CA's decision had become final and executory, precluding review by certiorari.
Ruling
The petition is dismissed. The decision of the Court of Appeals in CA-G.R. CV Nos. 12533-35 is affirmed.
Ratio Decidendi
On the nature of LBP's role, RTC's jurisdiction, and SEC's jurisdiction: The Court agreed with the CA that the RTC had jurisdiction over petitions for the removal of trustees under Rule 98 of the Rules of Court. The CA's findings that IBAA and LBP were trustees, not mere custodians, and that the investment portfolios were not assets of MSI, were considered errors of judgment, correctible by appeal. The Court highlighted that the CA correctly pointed out that the RTC should have resolved the petitions on their merits, determining which reliefs were available, rather than archiving them based on the SEC's primary jurisdiction over MSI's assets. The CA's interpretation of the doctrine of primary jurisdiction, as not barring judicial relief in cases involving trusteeship, was also affirmed. The Court affirmed the CA's stance that the SEC's jurisdiction extends only to the properties and assets of MSI. Since the investment portfolios were held in trust by IBAA and LBP, they were not considered assets of MSI, and thus the SEC did not have jurisdiction over them. The CA's ruling that the RTC had jurisdiction to determine the nature of the trusteeship and the reliefs available was consistent with this principle. On the propriety of certiorari under Rule 65 and the availability of appeal as an adequate remedy: The Court reiterated that certiorari under Rule 65 is a remedy for errors of jurisdiction or grave abuse of discretion amounting to lack or excess of jurisdiction, and not for errors of judgment. The general rule is that certiorari will not issue where the remedy of appeal is available. The remedies of appeal and certiorari are mutually exclusive. The petitioner's recourse should have been a petition for review on certiorari under Rule 45, as the CA's findings on the nature of the relationship and jurisdiction were errors of judgment, not jurisdiction. The Court emphasized that certiorari cannot be a substitute for a lost appeal, especially if the loss was due to the petitioner's own negligence or error in choosing the remedy. The Court found that an appeal under Rule 45 is a plain, speedy, and adequate remedy in the ordinary course of law. Had the petitioner filed its petition for review on certiorari within the reglementary period, the CA's decision would have been stayed, allowing for the review of legal issues, including jurisdiction and the nature of claims against a corporation under SEC receivership. The petitioner's assertion that an appeal would not provide prompt relief was unsubstantiated. The Court noted that the petitioner failed to file its petition for review within the prescribed period after receiving the CA's resolution denying its motion for reconsideration. On the finality and executory nature of the CA's decision: The Court found that the petitioner received the CA's decision on November 18, 1996, and the resolution denying its motion for reconsideration on April 18, 1997. The petition for certiorari was filed on June 17, 1997, which was well beyond the reglementary period for filing an appeal. Consequently, the CA's decision had become final and executory, placing it beyond the Court's power to review through a petition for certiorari.
Main Doctrine
A petition for certiorari under Rule 65 is not a substitute for an appeal under Rule 45. The former is for correcting errors of jurisdiction or grave abuse of discretion, while the latter is for reviewing errors of judgment. If an appeal is available and adequate, certiorari will not lie. Furthermore, a decision that has become final and executory can no longer be reviewed by certiorari.