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UNION BANK OF PHILIPPINES v. DANILO L. CONCEPCION

FACTS:

The case involves Union Bank of the Philippines (Union Bank) filing a petition for review against the Court of Appeals (CA) decision in CA-G.R. SP No. 75355. The case started with a petition for the declaration of suspension of payment filed by the EYCO Group of Companies (EYCO) with the Securities and Exchange Commission (SEC). The SEC Hearing Panel issued a Suspension Order, which suspended all actions, claims, and proceedings against EYCO. Union Bank, part of a consortium of banks, filed several civil cases against EYCO without informing the other banks. One of these cases was a complaint for a sum of money filed in the Regional Trial Court (RTC) of Makati City. Union Bank also filed a petition for certiorari with the CA to nullify the SEC's suspension order and the creation of a management committee. The CA dismissed Union Bank's petition, which was affirmed by the Supreme Court in a previous case. Consequently, the RTC suspended the proceedings in Union Bank's collection suit.

In another aspect of the case, the dispute involves the consortium of creditor banks and respondent Francisco Concepcion, who was appointed as the liquidator of the EYCO Group by the SEC. The consortium of banks appealed the SEC Hearing Panel's approval of the rehabilitation plan for EYCO and sought the liquidation and dissolution of EYCO. The SEC en banc granted the appeal, disapproved the suspension of payment petition, terminated the rehabilitation plan, and ordered the liquidation and dissolution of the EYCO Group. Concepcion was appointed as the liquidator by the SEC. Concepcion filed a motion to intervene in Civil Case No. 97-2184 but was denied by the Makati RTC for lack of standing. The RTC also granted Union Bank's motion to declare EYCO in default and rendered a partial judgment in favor of Union Bank. Concepcion filed a petition for certiorari and prohibition before the CA, which ruled in favor of Concepcion, allowing him to intervene in Civil Case No. 97-2184. Union Bank then filed a petition with the Supreme Court challenging the CA's ruling on Concepcion's intervention right and the validity of his appointment as liquidator.

ISSUES:

  1. Whether the respondent's appointment as liquidator of EYCO was valid.

  2. Whether the SEC had jurisdiction over EYCO's liquidation and dissolution.

  3. Whether the Securities and Exchange Commission (SEC) retains jurisdiction over pending suspension of payment cases filed before June 30, 2000.

  4. Whether the respondent has a legal interest to intervene in Civil Case No. 97-2184.

  5. Whether the Court of Appeals committed a reversible error in allowing the petition for certiorari filed by the respondent.

  6. Whether an appeal from the denial of a motion for intervention constitutes a plain, speedy, and adequate remedy.

  7. Whether the Regional Trial Court had jurisdiction over the appointment made by the Securities and Exchange Commission (SEC).

RULING:

  1. The respondent's appointment as liquidator of EYCO was valid. The SEC had jurisdiction to appoint the respondent or any qualified individual as liquidator.

  2. The SEC had jurisdiction over EYCO's liquidation and dissolution. The SEC possessed the power to declare a corporation insolvent as an incident of its jurisdiction over the petition for suspension of payments, as provided in Section 5(d) of P.D. No. 902-A. Even after the transfer of jurisdiction to the RTC under R.A. No. 8799, the SEC retained jurisdiction over SEC Case No. 09-97-5764, as it had already issued the suspension order prior to the transfer.

  3. The SEC retains jurisdiction over pending suspension of payment cases filed before June 30, 2000 until finally disposed.

  4. The respondent has a legal interest to intervene in Civil Case No. 97-2184.

  5. The Court of Appeals did not commit any reversible error in allowing the petition for certiorari filed by the respondent.

  6. An appeal from the denial of a motion for intervention does not constitute a plain, speedy, and adequate remedy.

  7. The Regional Trial Court had no jurisdiction over the appointment made by the Securities and Exchange Commission (SEC).

PRINCIPLES:

  • The jurisdiction of a court or body is determined by the allegations of the complaint or petition and the relief sought.

  • The SEC, under P.D. No. 902-A, has exclusive and original jurisdiction over petitions for suspension of payments, which may include a petition for liquidation and dissolution.

  • The SEC's jurisdiction over the liquidation and dissolution of a corporation continues even after it declares the corporation insolvent.

  • The transfer of jurisdiction under R.A. No. 8799 did not divest the SEC of its jurisdiction over cases where it had already issued a suspension order prior to the transfer.

  • Once jurisdiction attaches, the court cannot be ousted from the case by any subsequent events, unless the statute expressly provides or is clearly intended to apply to pending actions.

  • Intervention is a procedure by which a third person, with a legal interest in the matter in litigation, comes into the case to protect their rights or interpose their claim. The interest must be of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment.

  • Allowance of intervention may help settle conflicting claims and protect the collective interests of creditors. Disallowing intervention may result in unfair advantage to the petitioner and disregard other legitimate but unpaid creditors' interests.

  • Certiorari may be availed of when an appeal would be slow, inadequate, and insufficient.

  • The availability of an appeal does not foreclose recourse to the remedies of certiorari or prohibition where appeal is not adequate, equally beneficial, expeditious, and sufficient.

  • The determination of what constitutes a plain, speedy, and adequate remedy rests on judicial discretion and depends on the particular circumstances of each case.

  • Intervention is merely accessory to the principal action and is an interlocutory proceeding dependent on the case between the original parties.

  • A court should not take cognizance of a case when it is notified of a pending petition before a specialized agency or entity that has jurisdiction over the matter.