GR 223404; (July, 2020) (Digest)
G.R. No. 223404 . July 15, 2020
Bank of the Philippine Islands, Petitioner, vs. Marciano S. Bacalla, Jr., Eduardo M. Abacan, Erlinda U. Lim, Felicito A. Madamba, and Pepito M. Delgado, Respondents.
FACTS
The case originated from a Petition for Involuntary Dissolution filed against the Tibayan Group of Investment Companies, Inc. (TGICI). On September 24, 2004, the Regional Trial Court (RTC) granted the petition, declared the dissolution of TGICI and related corporations, and ordered the receiver, Atty. Marciano S. Bacalla, Jr., to proceed with liquidation pursuant to the Interim Rules of Procedure for Intra-Corporate Controversies (Interim Rules). Pursuant to his authority, Atty. Bacalla, together with TGICI investors (respondents), instituted Civil Case No. LP-05-0212 for violation of Presidential Decree No. 902-A and the Interim Rules against Prudential Bank and Trust Company (predecessor of petitioner Bank of the Philippine Islands), JAMCOR Holdings Corp., and Cielo Azul Holdings Corp., among others. The complaint alleged that TGICI, through fraudulent means, solicited investments from the public and diverted the funds to its subsidiaries, which were used to purchase shares of Prudential Bank. During pre-trial, petitioner moved to declare respondents non-suited for lack of Special Powers of Attorney, which the RTC denied. Petitioner also filed Requests for Admission. The RTC, in an Order dated August 10, 2012, denied the Requests for Admission and refused to apply the Interim Rules, holding that previous orders of the co-equal court (which did not apply the Interim Rules) should be respected under the doctrine of non-interference. Petitioner filed a Petition for Certiorari before the Court of Appeals (CA) assailing this Order. The CA denied the petition, ruling that the complaint involved an intra-corporate dispute under Section 5(a) of P.D. No. 902-A, and that petitioner was guilty of splitting its cause of action and that its remedy had prescribed. Petitioner’s motion for reconsideration was denied.
ISSUE
1. Whether the Court of Appeals committed reversible error in ruling that the Interim Rules govern the case despite the alleged absence of an intra-corporate controversy.
2. Whether the Court of Appeals committed reversible error in ruling that petitioner’s certiorari petition was filed out of time and in violation of the rule against splitting a cause of action.
RULING
The Supreme Court denied the petition and affirmed the assailed CA Decision and Resolution.
1. On the applicability of the Interim Rules: The Supreme Court held that the complaint filed by the receiver and investors involved an intra-corporate controversy. The action was a continuation of the liquidation proceedings ordered by the RTC in the dissolution case, which specifically directed the receiver to exercise powers under the Interim Rules. The complaint sought to recover assets allegedly acquired using funds from TGICI’s illegal activities, which is integral to the liquidation process of the dissolved corporations. This falls under Section 5(a) of P.D. No. 902-A, which includes controversies arising out of intra-corporate relations. The Court applied the nature of the controversy test, finding the dispute intrinsically connected to the regulation of the corporation (TGICI and its subsidiaries) and to the rights of its investors. Thus, the Interim Rules applied, and the RTC’s refusal to apply them was correct.
2. On splitting of cause of action and prescription: The Supreme Court held that the proscription against splitting a cause of action under Rule 2, Sections 3 and 4 of the Rules of Court does not apply to special civil actions for certiorari under Rule 65. A certiorari petition does not originate from a cause of action but from the existence of grave abuse of discretion. The issue of the applicability of the Interim Rules was distinct from the issue of the respondents’ authority to sue (which was the subject of a separate certiorari petition). The RTC resolved the Interim Rules issue only in its August 10, 2012 Order, and petitioner timely challenged it. Therefore, the CA erred in dismissing the certiorari petition on these grounds. However, this error did not affect the ultimate disposition, as the Court found the petition lacked merit on the substantive issue regarding the Interim Rules.
The Supreme Court affirmed the CA’s denial of the petition, upholding the RTC’s orders refusing to apply the Interim Rules and denying the Requests for Admission. Costs were imposed against the petitioner.