SMC Quarry 2 Workers Union FSM Chapter v. Star Two [SPV-AMC], Inc.

FIRST DIVISION

[G.R. No. 244079. June 19, 2019.]

SMC QUARRY 2 WORKERS UNION FSM CHAPTER, petitioner, vs.STAR TWO [SPV-AMC], INC., TITANS MEGA BAGS INDUSTRIAL CORP. MULTI PURPOSE COOP. [SMC], AND THE REGISTRY OF DEEDS OF MANILA, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated June 19, 2019which reads as follows:

"G.R. No. 244079 (SMC Quarry 2 Workers Union FSM Chapter vs. Star Two [SPV-AMC], Inc., Titans Mega Bags Industrial Corp. Multi Purpose Coop. [SMC], and the Registry of Deeds of Manila). — The petitioner's motion for an extension of thirty (30) days within which to file a petition for review on certiorari is GRANTED, counted from the expiration of the reglementary period.

This petition for review on certiorari assails the Resolutions of the Court of Appeals (CA) which dismissed outright the petition for certiorari filed by petitioner for being a wrong remedy.

Facts of the Case

SMC Quarry 2 Workers Union FSM Chapter (petitioner) secured an alias writ of execution against Titans Mega Bags Industrial Corp. in a separate labor case for the satisfaction of a judgment sought to be enforced in the amount of P43,158,600.50 and successfully levied on execution the subject property, a parcel of land covered by Transfer Certificate of Title (TCT) No. 002-154845. The notice of levy dated November 9, 2012 was annotated on the TCT. 1

Meanwhile, on May 27, 2014, a Motion to Cancel Encumbrances was filed by the creditor, DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH asking the rehabilitation court in a special proceeding entitled, "In the Matter of the Petition for Corporate Rehabilitation with prayer for Staying all Claims, Actions and Proceedings against Pacific Activated Carbon Co., Inc." to order the Register of Deeds of Manila to cancel the notice of levy on execution. 2

The creditor argued that the notice of levy was issued in violation of Section 16 of the Financial Rehabilitation and Insolvency Act (FRIA) of 2010 and of the Commencement Order issued by the rehabilitation court on September 5, 2011 placing the debtor under rehabilitation and staying or suspending all actions or proceedings, in court or otherwise, for the enforcement of claims against the debtor and all actions to enforce any judgment, attachment, or other provisional remedies against the debtor. 3 CAIHTE

The Regional Trial Court (RTC) in its August 8, 2014 Order 4 cancelled the notice of levy on execution annotated on TCT No. 002-154845. It was determined that the levy was made after the issuance of the commencement order which suspends all actions for claims against the debtor under receivership pending before any court, tribunal, board, or body. 5

Aggrieved, petitioner filed a Petition for Certiorari to the CA.

In its May 10, 2018 Resolution, 6 the CA dismissed the petition outright. It was decided that petitioner filed the petition without first filing a motion for reconsideration which is required in petitions for certiorari. The motion for reconsideration would have been the proper, speedy and adequate remedy filed before the RTC to allow it to correct its imputed errors, petitions for certiorari being remedy of last resort. The CA enunciated that in the alternative, petitioner should have intervened in the rehabilitation case. 7

Another reason given by the CA for dismissing the case is the lack of personality of petitioner to file the petition. It was held that petitioner is not the aggrieved party contemplated by Rule 65 who has personality to file the petition for certiorari. It was admitted that petitioner was not a party to the rehabilitation case. 8

Lastly, the CA concluded that in direct contravention with Rule 65, petitioner failed to submit a certified true copy of the assailed RTC order as well as copies of pertinent pleadings and documents to support the allegations in its petition. 9

Aggrieved, petitioner moved for reconsideration which was denied in another Resolution 10 dated January 15, 2019, hence this petition for review on certiorari.

Ruling of the Court

After a perusal of the records of the case, this Court resolves to DENY the Petition for Review on Certiorari for failure of petitioner to show that the CA committed a reversible error in dismissing the petition.

Under Sections 15 and 16 of the FRIA, if the court finds that the petition for rehabilitation is sufficient in form and substance, it shall issue a Commencement Order which shall include a stay order suspending all actions or proceedings, in court or otherwise, for the enforcement of claims against the debtor as well as to enforce any judgment, attachment or other provisional remedies against the debtor. In Veterans Philippines Scout Security Agency, Inc. v. First Dominion Prime Holdings, Inc., 11 the Court held that:

An essential function of corporate rehabilitation is the mechanism of suspension of all actions and claims against the distressed corporation upon the due appointment of a management committee or rehabilitation receiver. x x x The actions to be suspended cover all claims against a distressed corporation whether for damages founded on a breach of contract of carriage, labor cases, collection suits or any other claims of pecuniary nature. x x x.

xxx xxx xxx

The justification for the suspension of actions or claims, without distinction, pending rehabilitation proceedings is to enable the management committee or rehabilitation receiver to effectively exercise its/his powers free from any judicial or extrajudicial interference that might unduly hinder or prevent the "rescue" of the debtor company. x x x. 12

In view of the nature of the commencement order coupled with the stay order issued by the rehabilitation court on September 5, 2011, it was proper for the court to order the cancellation of the notice of levy annotated on TCT No. 002-154845 dated November 9, 2012. The subject property is registered in the name of H.M. Montenegro and Associates but is listed as part of Schedule 3-A Present Collateral (re: list assets presently owned by the mortgagors/debtors and third party mortgagors, and which shall be mortgaged to secure the long-term obligations). 13

Petitioner claimed that the subject property was registered in the name of Titans Megabags Industrial Corporation but the TCT showed that the owner was actually H.M. Montenegro and Associates, a third-party mortgagor of Pacific Activated Carbon Co., Inc., the corporation under rehabilitation.

If indeed petitioner has a claim over the properties included in the list of properties taken into consideration in the rehabilitation proceedings, what petitioner should have done was have its claim registered to the rehabilitation court under Rule 2, Section 12 of the Financial Rehabilitation Rules of Procedure (2013), also known as FR Rules 14 where it says that creditors are directed to file their verified notices of claim with the court at least five (5) days before the initial hearing date, with a warning that their failure to do so on time will bar them from participating in the rehabilitation proceedings, but will not prejudice their right to receive distributions if recommended by the rehabilitation receiver and approved by the court.

WHEREFORE, the instant petition for review on certiorari is hereby DENIED for lack of merit and for failure of petitioner to show that the Court of Appeals committed any reversible error in the challenged resolutions as to warrant the exercise of this Court's discretionary appellate jurisdiction. The Resolutions dated May 10, 2018 and January 15, 2019 of the Court of Appeals in CA-G.R. SP No. 153989 are hereby AFFIRMED. DETACa

The petitioner is hereby required to SUBMIT within five (5) days from notice hereof, a verified declaration of the petition for review on certiorari pursuant to A.M. Nos. 10-3-7-SC and 11-9-4-SC; and the Hon. Dennis Z. Alcantara, in his capacity as Presiding Judge of the Regional Trial Court, Branch 18, Misamis Oriental, is DELETED as party respondent in this case pursuant to Sec. 4, Rule 45, 1997 Rules of Civil Procedure, as amended.

SO ORDERED."

Very truly yours,

(SGD.) LIBRADA C. BUENADivision Clerk of Court

 

Footnotes

1.Rollo, p. 63.

2.Id. at pp. 55-57.

3.Id.

4.Id.

5.Id.

6. Penned by Associate Justice Ramon M. Bato, Jr., with Associate Justices Ramon A. Cruz and Pablito A. Perez, concurring; id. at 22-26.

7.Id. at 23-24.

8.Id. at 24-25.

9.Id. at 25-26.

10.Id. at 37-38.

11. 693 Phil. 336 (2012).

12.Id. at 346-347.

13.Rollo, p. 56.

14. A.M. No. 12-12-11-SC dated August 27, 2013.