Philippine Islands Corporation for Tourism Development, Inc. v. Victorias Milling Company, Inc.
REITERATIONFacts
The Antecedents: Philippine Islands Corporation for Tourism Development, Inc. (PICTD) filed a civil case for collection of a sum of money against Victorias Milling Company, Inc. (VMC), alleging that VMC obtained loans from two entities which were subsequently assigned to PICTD. PICTD claimed VMC failed to pay the matured loans. A writ of preliminary attachment was issued against VMC's properties but was later lifted upon VMC's posting of a counter-attachment bond. Procedural History: VMC subsequently filed a petition with the Securities and Exchange Commission (SEC) to declare itself in suspension of payments, citing financial difficulties. The SEC ordered the suspension of all actions against VMC, leading VMC to move for the suspension of the civil collection case before the Regional Trial Court (RTC). The RTC granted this motion. PICTD then moved to lift the suspension before the SEC, which was denied. The SEC ruled that PICTD, as a general creditor who attached property before judgment, did not have a claim that took precedence over secured creditors. The Court of Appeals affirmed the SEC's order, leading to the present petition. The Petition: PICTD seeks review under Rule 45 of the Rules of Court, arguing that the Court of Appeals erred in limiting the issue to the applicability of the SEC's suspension order and in failing to recognize the SEC's power to lift or modify such orders. PICTD contends its claim should be excluded from the stay order and that it is not guilty of forum shopping. VMC counters that PICTD's claim is covered by the SEC's suspension order and that PICTD is indeed guilty of forum shopping.
Issue(s)
Whether or not the proceedings of the complaint for collection of a sum of money filed by PICTD against VMC before the RTC of Makati City should be excluded from the SEC Order suspending all actions or claims against VMC pending before any court, tribunal, office, board, body and/or commission. Whether or not PICTD is guilty of forum shopping.
Ruling
The petition is DENIED. The assailed Decision dated June 30, 2004 and the Resolution dated March 30, 2005 of the Court of Appeals in CA-G.R. SP No. 79230 are AFFIRMED.
Ratio Decidendi
On whether PICTD's claim should be excluded from the SEC Order suspending proceedings: The Court sustained the ruling of the appellate court affirming the SEC Order suspending the proceedings of the collection suit. Section 6(c) of P.D. No. 902-A, as amended by P.D. No. 1799, explicitly states that upon the appointment of a management committee or rehabilitation receiver, all actions for claims against the corporation pending before any court shall be suspended. The purpose of this suspension is to prevent creditors from gaining an advantage over others and to allow the management committee or receiver breathing space for rehabilitation without diversion to litigations. Unlike the Insolvency Law, P.D. No. 902-A does not provide an exemption for secured creditors from this suspension order. Therefore, PICTD's claim, even if it considered itself a secured creditor, was subject to the suspension order. On whether PICTD is guilty of forum shopping: The Court ruled that PICTD is not guilty of forum shopping. Forum shopping involves seeking a favorable judgment in another forum after an adverse one has been rendered, or instituting multiple actions on the same cause. In this case, PICTD's motion to lift the suspension before the SEC was a proper recourse to address the issue of its exemption from the suspension order, distinct from the earlier proceedings before the RTC and the Court of Appeals which dealt with the initial suspension of the civil case. The two proceedings involved related issues but were pursued through appropriate legal remedies, thus not constituting forum shopping.
Main Doctrine
Under Presidential Decree No. 902-A, as amended by P.D. No. 1799, all actions for claims against corporations under management or receivership pending before any court, tribunal, board, or body shall be suspended, and this provision does not contain an exemption for secured creditors, unlike the Insolvency Law.