G.R. No. 179761 ; January 15, 2010
Catmon Sales International Corporation, Petitioner, vs. Atty. Manuel D. Yngson, Jr., as Liquidator of Catmon Sales International Corporation, Respondent.

FACTS

On February 8, 1999, petitioner Catmon Sales International Corporation filed a Petition for Declaration in a State of Suspension of Payments with the Securities and Exchange Commission (SEC), docketed as SEC Case No. 02-99-6204. On May 10, 2000, the SEC declared petitioner technically insolvent. In an Order dated August 28, 2000, the SEC appointed respondent Manuel D. Yngson, Jr. as petitioner’s liquidator. On May 31, 2001, the SEC terminated respondent’s services. Respondent submitted an Accomplishment Report and billed the SEC the sum of ₱623,214.35, representing his liquidator’s fee and reimbursement of out-of-pocket expenses. The SEC ordered an audit to determine the proper amount. On June 23, 2005, the SEC, through its General Counsel, ordered the members of petitioner’s Board of Directors, as trustees, to pay respondent a total of ₱398,284.40. Petitioner’s motion for reconsideration was denied. On appeal, the SEC En Banc modified the order, directing the board members to pay respondent ₱225,000.00 from the assets of petitioner, representing his liquidator’s fee, and deleted the claim for reimbursement of expenses. Petitioner elevated the matter to the Court of Appeals, which affirmed the SEC En Banc decision. Petitioner’s motion for reconsideration was likewise denied.

ISSUE

Whether the Court of Appeals committed gross error in affirming the SEC En Banc’s decision which fixed the liquidator’s fee, despite petitioner’s contention that such fee should have been determined by agreement between the parties pursuant to SEC Memorandum Circular No. 14, Series of 2001, and that petitioner was denied due process.

RULING

The petition is without merit. The Supreme Court denied the petition and affirmed the Court of Appeals Decision and Resolution. The Court stressed the settled rule that factual findings of administrative bodies like the SEC, especially when affirmed by the CA, are accorded great respect and finality, absent grave abuse of discretion or lack of substantial evidence. The Court found no reversible error. On the specific issue, while SEC Memorandum Circular No. 14 states that the compensation of liquidators shall be determined by agreement between the parties, and in case of failure of agreement, the SEC shall determine the fees, the Court agreed with the CA that the SEC’s broad powers under Presidential Decree No. 902-A authorize it to determine such fees not only upon failure of agreement but also in the absence thereof. The Court noted that petitioner’s challenge to the SEC’s authority to fix the fee was a mere afterthought, raised only in its Memorandum of Appeal to the SEC En Banc and not in its initial motion for reconsideration. The Court also found that the SEC’s determination was reasonable, as it was based on an audit and considered respondent’s initial demand and subsequent willingness to reduce his fee. The Court held that petitioner was not denied due process, as it had the opportunity to question the award through its motion for reconsideration and appeal. Furthermore, the decision on the amount had become final as to respondent, who did not appeal, and thus could no longer be reviewed.