GR 123379; (July, 1997) (Digest)
G.R. No. 123379 July 15, 1997
BAROTAC SUGAR MILLS, INC., petitioner, vs. COURT OF APPEALS and PITTSBURGH TRADE CENTER, CO., INC., respondents.
FACTS
On April 26, 1994, private respondent Pittsburgh Trade Center Co., Inc. (PITTSBURGH) filed a complaint for a sum of money against petitioner Barotac Sugar Mills, Inc. (BAROTAC) before the Regional Trial Court (RTC) of Quezon City, docketed as Civil Case No. Q-94-20347. Instead of filing an answer, BAROTAC filed a Motion to Suspend Proceedings on June 21, 1994, on the ground that a Petition for Suspension of Payments with Prayer for the Appointment of a Management or Rehabilitation Committee had been filed with the Securities and Exchange Commission (SEC) pursuant to Presidential Decree 902-A, as amended. The RTC denied the motion on September 27, 1994, noting that the SEC order dated December 10, 1993, showed the petition was filed by Arcam and Company, Inc., and not by BAROTAC, and that suspension would be premature as there was no showing the SEC had appointed a management committee or placed BAROTAC under receivership. The RTC’s denial of BAROTAC’s motion for reconsideration on March 16, 1995, was affirmed by the Court of Appeals in its decision dated September 28, 1995, which held that under Section 6(c) of P.D. 902-A, as amended, suspension of court actions occurs only upon the appointment of a management committee or rehabilitation receiver by the SEC, and no such appointment was shown. The Court of Appeals also found the ruling in RCBC v. Intermediate Appellate Court inapplicable.
ISSUE
Whether the mere filing of a petition for suspension of payments with the SEC ipso facto suspends proceedings in a court action for collection of a sum of money against the petitioner corporation.
RULING
No. The Supreme Court affirmed the decision of the Court of Appeals. It held that pursuant to the proviso in Section 6(c) of P.D. No. 902-A, as amended, taken together with Sections 5(d) and 6(d), a court action is suspended only upon the appointment of a management committee or a rehabilitation receiver by the SEC. Since there was no showing that a management committee or rehabilitation receiver for BAROTAC had been appointed by the SEC, the suspension of proceedings in the collection case before the RTC was not warranted. The Court also upheld the inapplicability of RCBC v. Intermediate Appellate Court, as the factual circumstances differed, notably the absence of an actual SEC appointment in this case and the finding that BAROTAC was not the named petitioner in the SEC proceeding. The petition was dismissed and the challenged decision and orders were affirmed.