GR 180036; (January, 2013) (Digest)
G.R. No. 180036 ; January 16, 2013
Situs Development Corporation, Daily Supermarket, Inc. and Color Lithograph Press, Inc., Petitioners, vs. Asiatrust Bank, Allied Banking Corporation, Metropolitan Bank and Trust Company and Cameron Granville II Asset Management, Inc., Respondents.
FACTS
Petitioners filed a Motion for Reconsideration of the Court’s July 2012 Decision. They argued that properties belonging to their majority stockholders, which were mortgaged to secure the corporations’ loans, should be included within the ambit of the Stay Order issued by the rehabilitation court in 2002. They contended that the Financial Rehabilitation and Insolvency Act of 2010 (FRIA) should apply retroactively, as its provisions allow a Stay Order to cover third-party accommodation mortgages if the properties are necessary for rehabilitation. Petitioners also questioned the ownership status of respondent banks over the mortgaged properties at the time the Stay Order was issued.
ISSUE
Whether the Stay Order issued in 2002 under the then-governing Interim Rules could validly suspend foreclosure proceedings against properties mortgaged by third parties (the majority stockholders) to secure the obligations of the debtor corporations.
RULING
The Supreme Court denied the Motion for Reconsideration. The legal logic is anchored on the principle of prospectivity. The Stay Order was issued in 2002, when the governing law was the 2000 Interim Rules of Procedure on Corporate Rehabilitation. Under these rules, a Stay Order could only suspend claims against the debtor, its guarantors, and sureties not solidarily liable. Crucially, the Interim Rules did not authorize the suspension of foreclosure proceedings against properties of third-party mortgagors, regardless of whether those properties were used by or necessary for the debtor corporation. This was explicitly affirmed in Pacific Wide Realty and Development Corp. v. Puerto Azul Land, Inc.
The Court rejected the argument for the retroactive application of the FRIA. While Section 146 of the FRIA states it applies to further proceedings in pending cases, this presupposes prospective application from the law’s effectivity. It cannot retroactively validate a Stay Order issued nearly a decade prior. The cited footnote from the Metrobank case was merely a factual recital, not a doctrinal ruling allowing such inclusion. Consequently, the rehabilitation court in 2002 acted beyond its jurisdiction in attempting to stay the foreclosure of the third-party mortgaged properties. Since these properties were rightly excluded from the Stay Order, foreclosure could proceed, rendering the proposed rehabilitation plan infeasible and justifying its dismissal. The issue of the banks’ ownership of the properties at the time of the Stay Order was deemed immaterial to this core jurisdictional limitation.