G.R. No. 178407, March 18, 2015
METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. S.F. NAGUIAT ENTERPRISES, INC., Respondent.
D E C I S I O N
This case calls for the determination of whether the approval and consent of the insolvency court is required under Act No. 1956, otherwise known as the Insolvency Law, before a secured creditor like petitioner Metropolitan Bank and Trust Company can proceed with the extrajudicial foreclosure of the mortgaged property.
This is a Petition for Review1 under Rule 45, seeking to reverse and set aside the November 15, 2006 Decision2 and June 14, 2007 Resolution3 of the Court of Appeals (Sixth Division) in CA-G.R. SP No. 94968. The questioned Decision and Resolution dismissed Metropolitan Bank and Trust Company's Petition for Certiorari and Mandamus4 and denied its subsequent Motion for Reconsideration and Clarification.5
Sometime in April 1997, Spouses Rommel Naguiat and Celestina Naguiat and S.F. Naguiat Enterprises, Inc. (S.F. Naguiat) executed a real estate mortgage6 in favor of Metropolitan Bank and Trust Company (Metrobank) to secure certain credit accommodations obtained from the latter amounting to P17 million. The mortgage was constituted over the following properties:
(1) TCT No. 586767 - a parcel of land in the Barrio of Pulung Bulu, Angeles, Pampanga, with an area of 489 square meters; and
(2) TCT No. 310523 - a parcel of land in Marikina, Rizal, with an area of 1,200.10 square meters.8
By ruling that there must be a motion for leave of court to be filed and granted by the insolvency court, before the petitioner, as a secured creditor of an insolvent, can extrajudicially foreclose the mortgaged property, which is tantamount to a judicial legislation.
By ruling that the Honorable Executive Judge Bernardita Gabitan-Erum did not abuse her discretion in refusing to perform her ministerial duty of approving the subject certificate of sale, despite the fact that the petitioner and the designated sheriff complied with all the requirements mandated by Act No. 3135, as amended, circulars, administrative matters and memorandums issued by the Honorable Supreme Court.
By ruling that the action of the Honorable Executive Judge Bernardita Gabitan-Erum is proper in denying the approval of the Certificate of Sale on the grounds that the issuance of the Order dated 12 July 2005 declaring respondent insolvent and the pendency of the insolvency proceeding forbid the petitioner, as a secured creditor, to foreclose the subject mortgaged property.33 (Emphasis supplied)
Concurrence of credits occurs when the same specific property of the debtor or all of his property is subjected to the claims of several creditors. The concurrence of credits raises no questions of consequence where the value of the property or the value of all assets of the debtor is sufficient to pay in full all the creditors. However, it becomes material when said assets are insufficient for then some creditors of necessity will not be paid or some creditors will not obtain the full satisfaction of their claims. In this situation, the question of preference will then arise, that is to say who of the creditors will be paid ahead of the others. (Caguioa, Comments and Cases on Civil Law, 1970 ed., Vol. VI, p. 472.)61
SEC. 4. Definition of Terms. - As used in this Act, the term:
. . . .
(p) Insolvent shall refer to the financial condition of a debtor that is generally unable to pay its or his liabilities as they fall due in the ordinary course of business or has liabilities that are greater than its or his assets.
- [T]he value of the property may be fixed in a manner agreed upon by the creditor and the liquidator. When the value of the property is less than the claim . . . the [creditor] will be admitted ... as a creditor for the balance. If its value exceeds the claim . . . the liquidator may convey the property to the creditor and waive the debtor's right of redemption upon receiving the excess from the creditor;
- [T]he liquidator may sell the property and satisfy the secured creditor's entire claim from the proceeds of the sale; or
- [T]he secured creditor may enforce the lien or foreclose on the property pursuant to applicable laws.90
Under Section 14, "[a]n insolvent debtor, owing debts exceeding in amount the sum of one thousand pesos, may apply to be discharged from his debts and liabilities by petition to the Court of First Instance of the province or city in which he has resided for six months next preceding the filing of such petition. In his petition, he shall set forth his place of residence, the period of his residence therein immediately prior to filing said petition, his inability to pay all his debts in full, his willingness to surrender all his property, estate, and effects not exempt from execution for the benefit of his creditors, and an application to be adjudged an insolvent. He shall annex to his petition a schedule and inventory in the form hereinafter provided. The filing of such petition shall be an act of insolvency."
Under Section 16, "[the] inventory must contain, besides the creditors, an accurate description of all the real and personal property, estate, and effects of the [insolvent], including his homestead, if any, together with a statement of the value of each item of said property, estate, and effects and its location, and a statement of the incumbrances thereon. All property exempt by law from execution shall be set out in said inventory with a statement of its valuation, location, and the incumbrances thereon, if any. The inventory shall contain an outline of the facts giving rises [sic], or which might give rise, to a right of action in favor of the insolvent debtor."
Under Section 18, upon receipt of the petition, the court shall issue an order declaring the petitioner insolvent, and directing the sheriff to take possession of and safely keep, until the appointment of a receiver or assignee, all the debtor's real and personal property, except those exempt by law from execution. The order also forbids the transfer of any property by the debtor.
Under Section 32, once an assignee is elected and qualified, the clerk of court shall assign and convey to the assignee all the real and personal property of the debtor, not exempt from execution, and such assignment shall relate back to the commencement of the insolvency proceedings, and by operation n of law, shall vest the tide to all such property in the assignee.
SEC. 2. Said sale cannot be made legally outside of the province in which the property sold is situated; and in case the place within said province in which the sale is to be made is the subject of stipulation, such sale shall be made in said place or in the municipal building of the municipality in which the property or part thereof is situated.
SEC. 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated, and if such property is worth more than four hundred pesos, such notice shall also be published once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city.
SEC. 4. The sale shall be made at public auction, between the hours of nine in the morning and four in the afternoon; and shall be under the direction of the sheriff of the province, the justice or auxiliary justice of the peace of the municipality in which such sale has to be made, or a notary public of said municipality, who shall be entitled to collect a fee of five pesos for each day of actual work performed, in addition to his expenses.
* Designated acting member per S.O. No. 1951 dated March 18,2015.
1Rollo, pp. 15-84,
2 Id. at 86-94. The Decision was penned by Associate Justice Rodrigo V. Cosico (Chair) and concurred in by Associate Justices Edgardo F. Sundiam and Celia C. Librea-Leagogo of the Sixth Division.
3 Id. at 95-99. The Resolution was penned by Associate Justice Rodrigo V. Cosico (Chair) and concurred in by Associate Justices Edgardo F. Sundiam and Celia C. Librea-Leagogo of the Former Sixth Division.
4 Id. at 86 and 94.
5 Id. at 95 and 99.
6 Id. at 115-116.
7 Id. at 118-123.
8 Id. at 116.
9 Id. at 114. The loan was evidenced by a non-negotiable promissory note, PN No. 411-369748-119- 016-99 dated March 3,2005. The loan was due on April 2, 2005.
10 Id. at 117.
11 Id. at 124-129. The case was docketed as SP. Proc. No. 7248.
12 By Act Nos. 3544, 3616, and 3962.
13Rollo, p. 130.
14 Id. at 106.
15 Id. at 131-132.
16 Id. at 133.
17 Id. at 133-136. The Manifestation and Motion was dated September 5, 2005.
18 Id. at 134.
19 Id. at 100 and 114. The principal amount of the loan was P1,575,000.00.
20 Id. at 100-103.
21 Id. at 148.
22 Id. at 104-105.
23 Id. at 106-107.
24 Id. at 108-113.
25 Id. at 170-239.
26 Id. at 242-244.
27 Id. at 242.
28 Id. at 93.
29 Id. at 94.
30 Id. at 99.
31 Id. at 98.
33 Id. at 35-36.
34 Id. at 290-292. Respondent filed a Manifestation instead of a Comment as directed in the court's Resolution dated September 12, 2007. (Rollo, p. 289)
35 Id. at 295.
36 Id. at 39.
37 Id. at 42-43. Petitioner cites the ruling in Supena v. De la Rosa, 334 Phil. 671, 677-678 (1997) [Per J. Hermosisima, Jr., First Division], which states that "extrajudicial foreclosures are not judicial proceedings, actions or suits."
38 Id. at 38-39.
39 Id. at 38.
40 Id. at 49.
41 Id. at 63.
43 Id. at 64.
44 Id. at 64-65.
45 48 Phil. 931, 938-956 (1921) [Per J. Araullo, En Banc].
46 Id. at 66-79.
47 Id. at 65.
48 Id. at 79-80.
49 Id. at 80.
50See Sun Life Assurance Company of Canada v. Ingersoll and Tan Sit, 42 Phil. 331, 336 (1921) [Per J. Street, En Bane] and Mitsui Bussan Kaisha (Ltd.) v. Hongkong & Shanghai Banking Corporation, 36 Phil. 27, 37 (1917) [Per J. Trent, En Banc].
51 Act No. 1956 (1909), sec. 2 provides:
SEC. 2. Petition. — The debtor who, possessing sufficient property to cover all his debts, be it an individual person, be it a sociedad or corporation, foresees the impossibility of meeting them when they respectively fall due, may petition that he be declared in the state of suspension of payments by the court, or the judge thereof in vacation, of the province or of the city in which he has resided for six months next preceding the filing of his petition.
He shall necessarily annex to his petition a schedule and inventory in the form provided in sections fifteen, sixteen, and seventeen of this Act, in addition to the statement of his assets and liabilities and the proposed agreement he requests of his creditors.
52 Act No. 1956 (1909), sec. 14 provides:
SEC. 14. Application. — An insolvent debtor, owing debts exceeding in amount the sum of one thousand pesos, may apply to be discharged from his debts and liabilities by petition to the Court of First Instance of province or city in which he has resided for six months next preceding the filing of such petition. In his petition he shall set forth his place of residence, the period of his residence therein immediately prior to filing said petition, his inability to pay all his debts in full, his willingness to surrender all his property, estate, and effects not exempt from execution for the benefit of his creditors, and an application to be adjudged an insolvent. He shall annex to his petition a schedule and inventory in the form hereinafter provided. The filing of such petition shall be an act of insolvency.
53 Act No. 1956 (1909), sec. 20 provides:
SEC. 20. Petition; Acts of insolvency. — An adjudication of insolvency may be made on the petition of three or more creditors, residents of the Philippine Islands, whose credits or demands accrued in the Philippine Islands, and the amount of which credits or demands are in the aggregate not less than one thousand pesos: Provided, That none of said creditors has become a creditor by assignment, however made, within thirty days prior to the filing of said petition. Such petition must be filed in the Court of First Instance of the province or city in which the debtor resides or has his principal place of business, and must be verified by at least three of the petitioners. The following shall be considered acts of insolvency, and the petition for insolvency shall set forth one or more of such acts: (1) That such person is about to depart or has departed from the Philippine Islands, with intent to defraud his creditors; (2) that being absent from the Philippine Islands, with intent to defraud his creditors, he remains absent; (3) that he conceals himself to avoid the service of legal process for the purpose of hindering or delaying or defrauding his creditors; (4) that he conceals, or is removing, any of his property to avoid its being attached or taken on legal process; (5) that he has suffered his property to remain under attachment or legal process for three days for the purpose of hindering or delaying or defrauding his creditors; (6) that he has confessed or offered to allow judgment in favor of any creditor or claimant for the purpose of hindering or delaying or defrauding any creditor or claimant; (7) that he has willfully suffered judgment to be taken against him by default for the purpose of hindering or delaying or defrauding his creditors; (8) that he has suffered or procured his property to be taken on legal process with intent to give a preference to one or more of his creditors and thereby hinder, delay, or defraud any one of his creditors; (9) that he has made any assignment, gift, sale, conveyance, or transfer of his estate, property, rights, or credits with intent to delay, defraud, or hinder his creditors; (10) that he has, in contemplation of insolvency, made any payment, gift, grant, sale, conveyance, or transfer of his estate, property, rights, or credits; (11) that being a merchant or tradesman he has generally defaulted in the payment of his current obligations for a period of thirty days; (12) that for a period of thirty days he has failed, after demand, to pay any moneys deposited with him or received by him in a fiduciary capacity; and (13) that an execution having been issued against him on final judgment for money, he shall have been found to be without sufficient property subject to execution to satisfy the judgment. The petitioners may, from time to time, by leave of the court, amend and correct the petition, so that the same shall conform to the facts, such amendment or amendments to relate back to and be received as embraced in the original petition. The said petition shall be accompanied by a bond, approved by the court, with at least two sureties, in such penal sum as the court shall direct, conditioned that if the petition in insolvency be dismissed by the court, or withdrawn by the petitioner, or if the debtor shall not be declared an insolvent, the petitioners will pay to the debtor alleged in the petition to be insolvent all costs, expenses, and damages occasioned by the proceedings in insolvency, together with a reasonable counsel fee to be fixed by the court. The court may, upon motion, direct the filing of an additional bond, with different sureties, when deemed necessary.
54 However, under Section 52 of Act No. 1956, no discharge is granted to an insolvent corporation.
55In the Matter of the Estate of Mindanao Motor Line, Inc. v. Alforque, 156 Phil. 71, 76 (1974) [Per J. Ruiz Castro, First Division].
56Philippine Trust Company and Smith, Bell & Company, Ltd. v. L.P. Mitchell, et al, 59 Phil. 30, 35-36 (1933) [Per J. Malcolm, En Banc]; Ingersoll v. The Philippine National Bank, 43 Phil. 308, 313 (1922) [Per J. Johns, En Banc].
57 Act No. 1956 (1909), sees. 2, 14, and 20.
58 CIVIL CODE, arts. 2241-2251.
59 CIVIL CODE, art. 2237 provides:
ART. 2237. Insolvency shall be governed by special laws insofar as they are not inconsistent with this Code."
60 209 Phil. 382 (1983) [Per J. Gutierrez, Jr., First Division].
61 Id. at 388-389.
62 CIVIL CODE, art. 2241 provides:
ART. 2241. With reference to specific movable property of the debtor, the following claims or liens shall be preferred:
(1) Duties, taxes' and fees due thereon to the State or any subdivision thereof;
(2) Claims arising from misappropriation, breach of trust, or malfeasance by public officials committed in the performance of their duties, on the movables, money or securities obtained by them;
(3) Claims for the unpaid price of movables sold, on said movables, so long as they are in the possession of the debtor, up to the value of the same; and if the movable has been resold by the debtor and the price is still unpaid, the lien may be enforced on the price; this right is not lost by the immobilization of the thing by destination, provided it has not lost its form, substance and identity; neither is the right lost by the sale of the thing together with other property for a lump sum, when the price thereof can be determined proportionally;
(4) Credits guaranteed with a pledge so long as the things pledged are in the hands of the creditor, or those guaranteed by a chattel mortgage, upon the things pledged or mortgaged, up to the value thereof;
(5) Credits for the making, repair, safekeeping or preservation of personal property, on the movable thus made, repaired, kept or possessed;
(6) Claims for laborers' wages, on the goods manufactured or the work done;
(7) For expenses of salvage, upon the goods salvaged;
(8) Credits between the landlord and the tenant, arising from the contract of tenancy on shares, on the share of each in the fruits or harvest;
(9) Credits for transportation, upon the goods carried, for the price of the contract and incidental expenses, until their delivery and for thirty days thereafter;
(10) Credits for lodging and supplies usually furnished to travellers by hotel keepers, on the movables belonging to the guest as long as such movables are in the hotel, but not for money loaned to the guests;
(11) Credits for seeds and expenses for cultivation and harvest advanced to the debtor, upon the fruits harvested;
(12) Credits for rent for one year, upon the personal property of the lessee existing on the immovable leased and on the fruits of the same, but not on money or instruments of credit;
(13) Claims in favor of the depositor if the depositary has wrongfully sold the thing deposited, upon the price of the sale.
In the foregoing cases, if the movables to which the lien or preference attaches have been wrongfully taken, the creditor may demand them from any possessor, within thirty days from the unlawful seizure.
63 CIVIL CODE, art. 2242 provides:
ART. 2242. With reference to specific immovable property and real rights of the debtor, the following claims, mortgages and liens shall be preferred, and shall constitute an encumbrance on the immovable or real right:
(1) Taxes due upon the land or building;
(2) For the unpaid price of real property sold, upon the immovable sold;
(3) Claims of laborers, masons, mechanics and other workmen, as well as of architects, engineers and contractors, engaged in the construction, reconstruction or repair of buildings, canals or other works, upon said buildings, canals or other works;
(4) Claims of furnishers of materials used in the construction, reconstruction, or repair of buildings, canals or other works, upon said buildings, canals or other works;
(5) Mortgage credits recorded in the Registry of Property, upon the real estate mortgaged;
(6) Expenses for the preservation or improvement of real property when the law authorizes reimbursement, upon the immovable preserved or improved;
(7) Credits annotated in the Registry of Property, in virtue of a judicial order, by attachments or executions, upon the property affected, and only as to later credits;
(8) Claims of co-heirs for warranty in the partition of an immovable among them, upon the real property thus divided;
(9) Claims of donors or real property for pecuniary charges or other conditions imposed upon the donee, upon the immovable donated;
(10) Credits of insurers, upon the property insured, for the insurance premium for two years.
64 CIVIL CODE, art. 2244 provides:
ART. 2244. With reference to other property, real and personal, of the debtor, the following claims or credits shall be preferred in the order named:
(1) Proper funeral expenses for the debtor, or children under his or her parental authority who have no property of their own, when approved by the court;
(2) Credits for services rendered the insolvent by employees, laborers, or household helpers for one year preceding the commencement of the proceedings in insolvency;
(3) Expenses during the last illness of the debtor or of his or her spouse and children under his or her parental authority, if they have no property of their own;
(4) Compensation due the laborers or their dependents under laws providing for indemnity for damages in cases of labor accident, or illness resulting from the nature of the employment;
(5) Credits and advancements made to the debtor for support of himself or herself, and family, during the last year preceding the insolvency;
(6) Support during the insolvency proceedings, and for three months thereafter;
(7) Fines and civil indemnification arising from a criminal offense;
(8) Legal expenses, and expenses incurred in the administration of the insolvent's estate for the common interest of the creditors, when properly authorized and approved by the court;
(9) Taxes and assessments due the national government, other than those mentioned in articles 2241, No. 1, and 2242, No. 1;
(10)Taxes and assessments due any province, other than those referred to in articles 2241, No. 1, and 2242, No. 1;
(11)Taxes and assessments due any city or municipality, other than those indicated in articles 2241, No. 1, and 2242, No. 1;
(12) Damages for death or personal injuries caused by a quasi-delict; (13)Gifts due to public and private institutions of charity or beneficence; (14) Credits which, without special privilege, appear in (a) a public instrument; or (b) in a final judgment, if they have been the subject of litigation.
These credits shall have preference among themselves in the order of priority of the dates of the instruments and of the judgments, respectively.
65 CIVIL CODE, art. 2245 provides:
ART. 2245. Credits of any other kind or class, or by any other right or title not comprised in the four preceding articles, shall enjoy no preference. Republic v. Judge Peralta, 234 Phil. 40, 49 (1987) [Per J. Feliciano, En Banc].
66 CIVIL CODE, art. 2243.
67 CIVIL CODE, arts. 2246 and 2248.
68 CIVIL CODE, arts. 2247 and 2249. Republic v. Judge Peralta, 234 Phil. 40, 50 (1987) [Per J. Feliciano, En Banc]; De Barretto v. Villanueva, G.R. No. L-14938, December 29, 1962, 6 SCRA 928, 931 [Per J. J.B.L. Reyes, En Banc].
69Republic v. Judge Peralta, 234 Phil. 40, 50 (1987) [Per J. Feliciano, En Banc].
70 Id. at 51.
71De Barretto v. Villanueva, G.R. No. L-14938, December 29, 1962, 6 SCRA 928, 932 [Per J. J.B.L. Reyes, En Banc], cited in Philippine Savings Bank v. Hon. Lantin, 209 Phil. 382, 388-390 (1983) [Per J. Gutierrez, Jr., First Division].
72 De Amuzategui v. Macleod, 33 Phil. 80, 82 (1915) [Per J. Moreland, En Bane].
73 Id. at 84.
74 Pres. Decree No. 1758 (1981), sec. 3 provides:
SEC. 3. Section 5 of the same Presidential Decree is hereby amended by adding thereunder sub-paragraph (d) to read as follows:
d) Petitions of corporations, partnerships or association to be declared in the state of suspension of payments in cases where the corporation, partnership or association possesses sufficient property to cover all its debts but foresees the impossibility of meeting them when they respectively fall due or in cases where the corporation, partnership or association has no sufficient assets to cover its liabilities, but is under the management of a Rehabilitation Receiver or Management Committee created pursuant to this Decree.
75Ching v. Judge Capistrano, 278 Phil. 214, 224 (1991) [Per C.J. Fernan, Third Division].
76 Pres. Decree No. 1758 (1981), sec. 4 provides:
SEC. 4. Sub-paragraphs c), d), h), and m) of Section 6 of Pres. Decree No. 902-A, as amended by Pres. Decree No. 1653, is hereby further amended to read as follows:
c) To appoint one or more receivers of the property, real and personal, which is the subject of the action pending before the Commission in accordance with the pertinent provisions of the Rules of Court in such other cases whenever necessary in order to preserve the rights of the parties-litigants and/or protect the interest of the investing public and creditors. Provided, however, That the Commission may, in appropriate cases, appoint a Rehabilitation Receiver who shall have, in addition to the powers of a regular receiver under the provisions of the Rules of Court, such functions and powers as are provided for in the succeeding paragraph d) hereof. Provided, further, that upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to this Decree, all actions for claims against corporations, partnerships or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly, d) To create and appoint a management committee, board, or body upon petition or motu propio to undertake the management of corporations, partnerships or other associations in appropriate cases when there is imminent danger of dissipation, loss, wastage or destruction of assets or other properties or paralyzation of business operations of such corporations or entities which may be prejudicial to the interest of minority stockholders, parties-litigants or the general public.
The management committee or rehabilitation receiver, board or body shall have the power to take custody of and control over, all the existing assets and property of such entities under management; to evaluate the existing, assets and liabilities, earnings and operations of such corporations, partnerships or other associations; to determine the best way to salvage and protect the interest of the investors and creditors; to study, review and evaluate the feasibility of continuing operations and restructure and rehabilitate such entities if determined to be feasible by the Commission. It shall report and be responsible to the Commission until dissolved by order of the Commission. Provided, however, That the Commission, may, on the basis of the findings and recommendation of the management committee, of rehabilitation receiver, board or body, or on its own findings, determine that the continuance in business of such corporation or entity would not be feasible or profitable nor work to the best interest of the stockholders, parties-litigants, creditors, or the general public, order the dissolution of such corporation entity and its remaining assets liquidated accordingly. The management committee or rehabilitation receiver, board or body may overrule or revoke the actions of the previous management and board of directors of the entity or entities under management notwithstanding any provision of law, articles of incorporation or by-laws to the contrary.
The management committee, or rehabilitation receiver, board or body shall not be subject to any action, claim or demand for, or in connection with, any act done or omitted to be done by it in good faith in the exercise of its functions, or in connection with the exercise of its power herein conferred.
77 SEC. 5. Powers and Functions of the Commission.
5.2. The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, that the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.
78 An Act Providing for the Rehabilitation or Liquidation of Financially Distressed Enterprises and Individuals.
79 Rep. Act No. 10142 (2010), sec. 2.
80 Rep. Act No. 10142 (2010), sec. 2.
81 Rep. Act No. 10142(2010), sec. 2.
82 Rep. Act No. 10142 (2010), sec. 2.
83 Rep. Act No. 10142 (2010), chap. IV.
84 Rep. Act No. 10142 (2010), chap. III.
85 Rep. Act No. 10142 (2010), chap. 11.
86 Rep. Act No. 10142 (2010), chap. V.
87 Rep. Act No. 10142 (2010), sec. 94.
88 Rep. Act No. 10142 (2010), sees. 103 and 105.
89 Rep. Act No. 10142(2010), sec, 114.
90 Rep. Act No. 10142(2010), sec. 114.
91 Rep. Act No. 10142 (2010), sec. 113(e).
92 (A) The Liquidation Order.
Sec. 112. Liquidation Order. - The Liquidation Order shall:
(a) declare the debtor insolvent;
(b) order the liquidation of the debtor and, in the case of a juridical debtor, declare it as dissolved;
(c) order the sheriff to take possession and control of all the property of the debtor, except those that may be exempt from execution;
(d) order the publication of the petition or motion in a newspaper of general circulation once a week for two (2) consecutive weeks;
(e) direct payments of any claims and conveyance of any property due the debtor to the liquidator;
(f) prohibit payments by the debtor and the transfer of any property by the debtor;
(g) direct all creditors to file their claims with the liquidator within the period set by the rules of procedure;
(h) authorize the payment of administrative expenses as they become due;
(i) state that the debtor and creditors who are not petitioner/s may submit the names of other nominees to the position of liquidator; and
(j) set the case for hearing for the election and appointment of the liquidator, which date shall not be less than thirty (30) days nor more than forty-five (45) days from the date of the last publication.
93 Rep. Act No. 10142 (2010), sec. 146.
94De Amuzategui v. Macleod, 33 Phil. 80, 82 (1915) [Per J. Moreland, En Bane].
95 Cu Unjieng e Hijos v. Mitchell, 58 Phil. 476, 478-480 (1933) [Per J. Malcolm, En Banc], citing Isaacs v. Hobbs Tie & Timber Co., 282 U.S. 734 (1931); Tirth Dharmdas v. Buenaflor, 57 Phil. 483, 485 (1932) [Per J. Street, En Bane]; De Kraffi v. Velez, 34 Phil. 854, 856-857 (1916) [Per J. Johnson, En Banc].
96Cu Unjieng e Hijos v. Mitchell, 58 Phil. 476, 481 (1933) [Per J. Malcolm, En Banc], citing Straton v. New, 283 U.S. 318 (1931), See also Rizal Commercial Banking Corporation v. Royal Cargo Corporation, 617 Phil. 764, 780 (2009) [Per J. Carpio Morales, Second Division] where this court stated that "foreclosure suits may be initiated even during insolvency proceedings, as long as leave must first be obtained from the insolvency court" as what the petitioner in that case did. The case involved an extrajudicial foreclosure of a chattel mortgage initiated by petitioner with leave of the insolvency court.
97 In Villamar v. Barrios, 68 Phil. 430, 436 (1939) [Per J. Villa-Real, En Banc], this court declared that "the insolvency court has authority and jurisdiction to pass upon an incidental motion filed by an alleged mortgagee, praying that the assignee be ordered to deliver certain goods of the insolvent allegedly mortgaged, and to determine, upon hearing the parties, if the mortgage relied upon by the alleged mortgagee is legal and valid (Chase de Krafft v. Velez, 34 Phil. 854, Giberson vs. A. N. Jureidini Bros., 44 Phil. 216)[.]"
98Rollo, p. 49.
100 Id. at 50.
101 Id. at 49-50.
103See O'Brien v. Del Rosario and Bank of the Philippine Islands, 49 Phil. 657, 666 (1926) [Per J. Johns, En Banc].
103Director of Lands v. Lagniton, 103 Phil. 889, 893 (1958) [Per J. Labrador, En Banc], citing 21 Am. Jur. 176, held: "Ordinarily, statutory authority to redeem properly sold under execution is granted to the judgment debtor or his successor in interest, but is sometimes also granted to the 'owner' of the property, which means any owner of the real estate whose interest was subject to the payment of the judgment upon which it was sold, without regard to whether he is the judgment debtor or claims under him. Redemption is proper where made by the debtor's grantee, or assignee, or assignee for the benefit of creditors, or assignee or trustee in insolvency proceedings
104Rollo, p. 133.
105 Id. at 134.
106 A.M. No. 99-10-05-0 dated December 14, 1999, as amended, in relation to Admin. Order No. 6 dated June 30, 1975.
107 Sycamore Ventures Corporation v. Metropolitan Bank and Trust Company, G.R. No. 173183, November 18, 2013, 709 SCRA 559, 569 [Per J. Brion, Second Division].
108Angeles v. The Secretary of Justice, et al, 628 Phil. 381, 396 (2010) [Per J. Leonardo-De Castro, First A Division].
109Rollo, p. 106.
110Angeles v. The Secretary of Justice, et al. (62.S Phi!. 381, 397-398 (2010) [Per J. Leonardo-De Castro, First Division]) held that in Spouses Laburada v. Land Registration Authority (350 Phil. 779, 789-793 (1998) [Per J. Panganiban, First Division]), "the issuance by the LRA officials of a decree of registration is not a purely ministerial duty in cases where they find that such would result to the double titling of the same parcel of land in the-same vein, . . the Register of Deeds cannot be compelled by mandamus to comply with the RTC Order since there were existing transfer certificates of title covering the subject parcels of land and (here [were] reason[s] to question the rights of those requesting for the issuance of the [new titles]."
111Solidbank Corporation v. Goyu and Sons. Inc., G.R. No. 142983, November 26, 2014
<http://sc.judiciary.gov .ph/pdf/web/viewer.html?file-=/jurisprudence/2014/november2014/142983. pdf>
13 [Per J. Leonardo-De Castro, First Division], citing Yau v. The Manila Banking Corporation, 433 Phil. 701, 710 (2002) [Per J. Austria-Martinez, First Division]. See also Villanueva v. Court of Appeals, 314 Phil. 297 (1995) [Per J. Davide, Jr., First Division]; Philippine Veterans Bank v. Intermediate Appellate Court, 258-A Phil. 424 (1989) [Per J. Medialdea, First Division]; The Consolidated Bank and Trust Corporation (SOLIDBANK) v. Intermediate Appellate Court, 234 Phil. 582 (1987) [Per J. Gutierrez, Jr., First Division].
112Rollo, p. 106.