G.R.No.166197.February27,2007.

*
METROPOLITAN BANK & TRUST COMPANY, petitioner, vs.ASB
HOLDINGS, INC., ASB REALTY CORPORATION, ASB
DEVELOPMENTCORPORATION,ASBLAND,INC.,ASBFINANCE,
INC., MAKATI HOPE CHRISTIAN SCHOOL, INC., BELAIR
HOLDINGSCORPORATION,WINCHESTERTRADING,INC.,VYL
DEVELOPMENT CORPORATION, GERICK HOLDINGS
CORPORATION,NEIGHBORHOODHOLDINGS,INC.,andROSARIO
S.BERNALDO,respondents.
CAMERONGRANVILLE3ASSETMANAGEMENT,INC.,intervenor.
Corporation Law; Rehabilitation Plans; Receivership; The approval of the
RehabilitationPlanandtheappointmentofarehabili
_______________

*FIRSTDIVISION.

2
SUPREMECOURTREPORTSANNOTATED
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
tationreceivermerelysuspendtheactionsforclaimsagainstthecorporationa
mortgageespreferredstatusovertheunsecuredcreditorsrelativetothemortgage
liensisretained,buttheenforcementofsuchpreferenceissuspended.Wearenot
convincedthattheapprovaloftheRehabilitationPlanimpairspetitionerbankslien
overthemortgagedproperties.Section6[c]ofP.D.No.902Aprovidesthatupon
appointment of a management committee, rehabilitation receiver, board or body,
pursuanttothisDecree, allactionsforclaims againstcorporations,partnershipsor
associationsundermanagementorreceivershippendingbeforeanycourt,tribunal,
boardorbodyshallbe suspended.Bythatstatutoryprovision,itisclearthatthe
approvaloftheRehabilitationPlanandtheappointmentofarehabilitationreceiver
merely suspend the actions for claims against respondent corporations. Petitioner
bankspreferredstatusovertheunsecuredcreditorsrelativetothemortgageliensis
retained,buttheenforcementofsuchpreferenceissuspended.Theloanagreements
betweenthepartieshavenotbeensetasideandpetitionerbankmaystillenforceits
preference when the assets of ASB Group of Companies will be liquidated.
Consideringthattheprovisionsoftheloanagreementsaremerelysuspended,thereis
noimpairmentofcontracts,specificallyitslieninthemortgagedproperties.
Same;Same;Same;AdministrativeLaw;Itisafundamentalrulethatfactual
findingsofquasijudicialagencies,liketheSecuritiesandExchangeCommission,
whichhaveacquiredexpertiseastheirjurisdictionisconfinedtospecialmatters,are
generallyaccordedgreat respectandevenfinality,absentanyshowingthatthey
arbitrarilydisregardedevidenceormisapprehendedevidencetosuchanextentasto
compelacontraryconclusionifsuchevidencehadbeenproperlyappreciated.The
SECEnBancfoundthattheSECHearingPanelactedwithinitslegalauthorityin
resolvingthiscase.Neitheritoversteppeditslawfulauthoritynoractedwhimsically
inapprovingtheRehabilitationPlan.Hence,itcannotbefaultedofgraveabuseof
discretion.Wefindnoreasontodisturbsuchfinding,itbeingafundamentalrule
thatfactualfindingsofquasijudicialagencies,liketheSEC,whichhaveacquired
expertiseastheirjurisdictionisconfinedtospecialmatterssuchasthesubjectofthis
case,aregenerallyaccordedgreatrespectandevenfinality,absentanyshowingthat
theyarbitrarilydisregardedevidenceormisapprehendedevidencetosuchanextent
astocompelacontraryconclusionifsuchevidencehadbeenproperlyappreciated.
3
VOL.517,FEBRUARY27,2007
3
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
Same;Same;Same;Thepurposeofrehabilitationproceedingsistoenablethe
companytogainnewleaseonlifeandtherebyallowscreditorstobepaidtheir
claimsfromitsearnings.Onelastword.Thepurposeofrehabilitationproceedings
istoenablethecompanytogainnewleaseonlifeandtherebyallowscreditorstobe
paid their claims from its earnings. Rehabilitation contemplates a continuance of
corporate life and activities in an effort to restore and reinstate the financially
distressedcorporationtoitsformerpositionofsuccessfuloperationandsolvency.
This is in consonance with the States objective to promote a wider and more
meaningfulequitabledistributionofwealthtoprotectinvestmentsandthepublic.The
approvaloftheRehabilitationPlanbytheSECHearingPanel,affirmedbyboththe
SECEnBanc andtheCourtofAppeals,ispreciselyinfurtheranceoftherationale
behind P.D. No. 902A, as amended, which is to effect a feasible and viable
rehabilitationofailingcorporationswhichaffectthepublicwelfare.
PETITIONforreviewoncertiorariofthedecisionandresolutionofthe
CourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
 AlfonsoM.CruzLawOfficesforpetitioner.
Javier,Jose,Mendoza&Associatesforrespondents.
Rufus B. Rodriguez and Associates cocounsel for private
respondents.
Fortun,NarvasaandSalazarforintervenorCameron.
Rosario S. Bernaldo and Juname C. De Leon for rehabilitation
receiver.
SANDOVALGUTIERREZ,J.:

ForourresolutionistheinstantPetitionforReviewonCertiorari 1assailing
theDecisiondatedAugust16,20042of
_______________

1FiledunderRule45ofthe1997RulesofCivilProcedure,asamended.

2 PennedbyAssociateJusticeMarianoC.DelCastilloandconcurredinbyAssociate

JusticeEdgardoP.CruzandAssociateJusticeMagdangalM.DeLeon.
4
4
SUPREMECOURTREPORTSANNOTATED
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
theCourtofAppealsinCAG.R.SPNo.77260anditsResolutiondated
December1,2004.
Thefactsbornebytherecordsare:
TheMetropolitanBankandTrustCompany,petitioner,isacreditor
bankofrespondentcorporations,collectivelyknownastheASBGroupof
Companies,owneranddeveloperofcondominiumandrealestateprojects.
Specifically,theloansextendedbypetitionerbanktorespondentsASB
Realty Corporation and ASB Development Corporation amounted to
P523.5millionandP1.073billion,respectively.Theseloansweresecured
byrealestatemortgages.
On May 2, 2000, the ASB Group of Companies filed with the
SecuritiesandExchangeCommission(SEC)aPetitionForRehabilitation
With Prayer For Suspension Of Actions And Proceedings Against
Petitioners,3 pursuant to Presidential Decree (P.D.) No. 902A, as
amended,docketedasSECCaseNo.05006609.Thepertinentportions
ofthepetitionallege:
6.ThetotalassetsofpetitionerASBGroupofCompanies,togetherwithpetitioner
ASBAlliedCompanies,amounttoNineteenBillionFourHundredTenMillionPesos
(P19,410,000,000.00).
7.TheProjectswerefinancedwithloansorborrowingsfrombankandindividual
creditorswhichresultedinpetitionerGroupofCompanieshavingatotalliabilityin
theamountofTwelveBillionSevenHundredMillionPesos(P12,700,000,000.00).
_______________

3 In their petition for rehabilitation, the corporations comprising the ASB Group of
Companiesallegedthattheiralliedcompanies(ASBHoldings,Inc.,ASBLand,Inc.,ASB
Finance, Inc., Makati Hope Christian School, Inc., BelAir Holdings Corporation,
WinchesterTrading,Inc.,VYLDevelopmentCorporation,GerickHoldingsCorporation,
andNeighborhoodHoldings,Inc.)havejoinedinthesaidpetitionbecausetheyexecuted
mortgagesand/orpledgesovertheirrealandpersonalpropertiestosecuretheobligationsof
petitioner ASB Group of Companies. Further, (they)agreed to contribute, to the extent
allowedbylaw,someoftheirspecifiedpropertiesandassetstohelprehabilitatepetitioner
ASBGroupofCompanies.Rollo,pp.119120.
5
VOL.517,FEBRUARY27,2007
5
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
8.Onaccountofthesuddennonrenewaland/orthemassivewithdrawalbycreditors
oftheirloanstopetitionerASBHoldings,Inc.,coupledwiththerecentdevelopments
inthecountry,like,amongothers,(i)theglutintherealestatemarket;(ii)thesevere
dropinthesaleof real properties;(iii) thedepreciationof thepeso visavis the
dollar;and(iv)thedecreasedinvestorconfidenceintheeconomy,petitionerGroupof
Companieswasunabletocompleteandsellsomeofitsprojectsonscheduleand,
hence,wasunabletoserviceitsobligationsastheyfelldue.
9. Petitioner Group of Companies possesses sufficient property to cover its
obligations.However,petitionerGroupofCompaniesforeseesitsinabilitytopayits
obligationswithinaperiodofone(1)year.
10.BecauseoftheinabilityoftheGroupofCompaniestopayitsobligationsas
theyrespectivelyfalldue,itssecuredandnonsecuredcreditorspressedforpayments
ofdueandmaturingobligationsandthreatenedtoinitiateseparateactionsagainstit,
whichwilladverselyaffectitsoperationsandshatteritshopeinrehabilitatingitself
forthebenefitofitsinvestorsandcreditorsandthegeneralpublic.
 11.Thereisaclear,presentandimminentdangerthatthecreditorsofpetitioner
GroupofCompanieswillinstituteextrajudicialandjudicialforeclosureproceedings
andfilecourtactionsunlessrestrainedbythisHonorableCommission.
12.Theinstitutionofextrajudicialandjudicialforeclosureproceedingsandthe
filingofcourtactionsagainstpetitionerGroupofCompanieswillnecessarilyresult
intheparalizationofitsbusinessoperationanditsassetsbeinglost,dissipatedor
wasted.
13. There is, therefore, a need for the suspension of payment of all claims
againstpetitionerGroupofCompanies,intheseparateandcombinedcapacitiesofits
membercompanies,whileitisworkingforitsrehabilitation.
14. Petitioner Group of Companies has at least seven hundred twelve (712)
creditors, three hundred seventeen (317) contractors/suppliers and four hundred
ninetytwo(492)condominiumunitbuyers,whowillcertainlybeprejudicedbythe
disruptionoftheoperationsofpetitionerASBGroupofCompanieswhichseeksto
protecttheinterestofthepartiesfromanyprecipitateactionofanypersonwhomay
onlyhavehisindividualinterestinmind.
6
6
SUPREMECOURTREPORTSANNOTATED
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
15.ThebusinessofpetitionerASBGroupofCompaniesisfeasibleandprofitable.
PetitionerGroupofCompanieswilleventuallybeabletopayallitsobligationsgiven
some changes in its management, organization, policies, strategies, operations, or
finances.
16. With the support of this Honorable Commission, petitioner Group of
Companies is confident that it will be able to embark on a sound and viable
rehabilitationplan,withabuiltindebtrepaymentschedulethroughtheoptimaluse
oftheirpresentfacilities,assetsandresources.Althoughaproposedrehabilitation
planisattachedtothispetition,adetailedandcomprehensiverehabilitationproposal
willbepresentedfortheapprovalofthisHonorableCommission,withtheforegoing
salientfeatures:
a. Servicing and eventual full repayment of all debts and liabilities, focusing on debt
restructureandpossibleliquidationthrough dacionenpago,transferandassignment,or
outrightsaleofassets,inordertolightenthedebtburdenofpetitionerGroupofCompanies;
b.Formingofstrategicallianceswiththirdpartyinvestors,includingjointventuresand
similararrangements;
c.ContributingspecifiedpropertiesfrompetitionerASBAlliedCompanies;
 d.StreamliningtheoperationsofpetitionerASBGroupofCompanies,andtheeffective
management of its revenues and funds towards the strengthening of its financial and
businesspositions;and
e.StabilizingtheoperationsofpetitionerGroupofCompanies,andpreparingittotake
advantageoffutureopportunitiesforgrowthanddevelopment.
OnMay4,2000,theHearingPaneloftheSECSecuritiesInvestigation
andClearingDepartment,findingthepetitionforrehabilitationsufficient
informandsubstance,issuedasixtydaySuspensionOrder(a)suspending
allactionsforclaimsagainsttheASBGroupofCompaniespendingorstill
tobefiledwithanycourt,office,board,body,ortribunal;(b)enjoiningthe
ASB Group of Companies from disposing of their properties in any
manner,exceptintheordinarycourseofbusiness,andfrompayingtheir
liabilitiesoutstandingasofthedateofthefilingofthepetition;and(c)
appointingAtty.
7
VOL.517,FEBRUARY27,2007
7
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
MonicoV.JacobasinterimreceiveroftheASBGroupofCompanies.
OnMay22,2000,theSECHearingPanelissuedanOrderappointing
Mr.FortunatoCruzasinterimreceiveroftheASBGroupofCompanies,
replacingAtty.MonicoJacob.
OnAugust18,2000,theASBGroupofCompaniessubmittedtothe
SECforitsapprovalaRehabilitationPlan,4thus:
MetropolitanBankandTrustCo.
PrincipalAmount

Principal(amount)plusanyinterestdueandunpaidasofApril30,2000,lessanyprepaid
interest,withoutanypenaltiesandcharges.
FormofAgreement

DacionenPagoAgreement
Purpose

Toretireexistingloans.
Tenor

ImmediateDacionenPagoofrelatedproperties,subjecttotheapprovaloftheSecurities
andExchangeCommission(SEC).
EffectiveDate

September1,2000,subjecttotheapprovaloftheSEC.
DacionEnPago
Arrangement

ASBwilldacionthebanksequityinSt.FrancisSquareandapplytheexcessdacionvalue
onitsBSATwinTowerloan.Further,MakatiHope,Buendiacor.Malugay,21Annapolis
(whichisexpectedtobereleasedbyPNB)and#28&23EisenhowerSt.,willbedacioned
toMetrobank,theexcessofwhichwillalsobeappliedtoMetrobanksexposureonBSA
TwinTowers.Inreturn,StateCondominiumwillbefreedupand
_______________

4Rollo,pp.470547.

8
8
SUPREMECOURTREPORTSANNOTATED
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.

placedintheASBcreditorsassetpool.Further,Metrobankshallalsoundertakethe
completionofBSATwinTowers.
OutstandingLoanBalance
AfterDacionEnPago

None5
Petitioner bank, in its Comment/Opposition to the Rehabilitation Plan,6
objectedtotheabovePlan,specificallythearrangementconcerningthe
mode of payment by respondents ASB Realty Corporation and ASB
DevelopmentCorporationoftheirloanobligations.
Petitionerbankclaimedthattheabovearrangementisnotacceptable
because:(1)itdoesnotagreewiththevaluationofthepropertiesoffered
fordacion;(2)thewaiverofinterests,penaltiesandchargesafterApril30,
2000isnotfeasibleconsideringthatthebankcontinuestoincurcostson
the funds owed by ASB Realty Corporation and ASB Development
Corporation;and (3) sincetheproposed dacion isnotacceptabletothe
bank,thereisnobasistoreleasethepropertieswhichserveascollateral
for the loans. Petitioner thus prayed that the Rehabilitation Plan be
disapproved.
 OnApril26,2001,theSECHearingPanel,findingpetitionerbanks
objections unreasonable, issued an Order7 approving the Rehabilitation
PlanandappointingMr.FortunatoCruzasrehabilitationreceiver,thus:
PREMISESCONSIDERED,theobjectionstotherehabilitationplanraisedbythe
creditorsareherebyconsideredunreasonable.
Accordingly, the Rehabilitation Plan submitted by petitioners is hereby
APPROVED,exceptthosepertainingtoMr.Roxasadvances,andtheASBMalayan
Towers.Finally,InterimReceiverMr.FortunatoCruzisappointedasRehabilitation
Receiver.
_______________

5Id.,pp.470,523.

6Id.,pp.548549.

7Id.,pp.573577.

9
VOL.517,FEBRUARY27,2007
9
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
SOORDERED.
OnJuly10,2001,petitionerbankfiledwiththeSEC EnBanc aPetition
forCertiorari,8docketedasEB725,allegingthattheSECHearingPanel,
inapprovingtheRehabilitationPlan,committedgraveabuseofdiscretion
amountingtolackorexcessofjurisdiction;andprayingfortheissuanceof
atemporaryrestrainingorderand/orawritofpreliminaryinjunctionto
enjoinitsimplementation.Subsequently,theASBGroupofCompanies
filedtheir Opposition9 tothepetition,towhichpetitionerbankfiledits
Reply.10
In a Resolution11 dated April 15, 2003, the SEC En Banc denied
petitioner banks Petition for Certiorari and affirmed the SEC Hearing
PanelsOrderofApril26,2001.
Petitioner bank then filed with the Court of Appeals a Petition for
Review.12OnAugust16,2004,theappellatecourtrendereditsDecision13
denyingduecoursetothepetition,thus:
WHEREFORE,findingtheinstantpetitionnotimpressedwithmerit,thesameis
DENIEDDUECOURSE.Nopronouncementastocosts.
SOORDERED.
Petitioner banks Motion for Reconsideration was likewise denied in a
ResolutiondatedDecember1,2004.14
Hence,thispetitionforreviewoncertiorari.
_______________

8Id.,pp.578608.

9Id.,pp.609624.

10Id.,pp.625635.

11Id.,pp.636642.

12UnderRule43ofthe1997RulesofCivilProcedure,asamended.

13Rollo,pp.6080.

14Id.,pp.643644.

10
10
SUPREMECOURTREPORTSANNOTATED
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
In the meantime, or on June 1, 2006, Cameron Granville 3 Asset
Management,Inc.(CameronGranville)fileda MotionForIntervention15
allegingthatinSeptemberof2003,petitionerbankassignedtheloansand
mortgagesofASBRealtyCorporationandASBDevelopmentCorporation
toAssetRecoveryCorporation(ARC).However,pursuanttoitsService
AgreementwithARC,petitionercontinuedtopursueitsactionbeforethe
CourtofAppealsinCAG.R.SPNo.77260andbeforethisCourtinthe
instant case. On March 31, 2006, ARC in turn assigned the loans and
mortgagesofthesaidtworespondentcorporationstohereinintervenor,
CameronGranville.
InaResolutiondatedJune5,2006,16theCourtgrantedthemotionfor
intervention. Accordingly, on August 28, 2006, the intervenor filed its
PetitionForIntervention17andmanifestedthereinthatitadoptsasitsown
petitioner banks petition and all its other pleadings. Thereafter,
respondentASBGroupofCompaniesfiledtheirComment.18
Nowtotheresolutionoftheinstantpetition.
PetitionerbankcontendsthattheCourtofAppealserred:
1. In not nullifying the SEC Resolution dated April 15, 2003 approving the
Rehabilitation Plan. Such approval illegally compels petitioner bank to accept,
through a dacion en pago arrangement, the mortgaged properties based on ASB
GroupofCompaniestransfervaluesandtoreleasepartofthecollateral.Thisforced
transferofpropertiesanddiminutionofthebanksrighttoenforceitslienonthe
mortgagedpropertiesviolateitsconstitutionalrightagainstimpairmentofcontracts
andrighttodueprocess.
2.InnotfindingthattheRehabilitationPlancompelspetitionerbanktowaivethe
interests,penaltiesandotherchargesthataccruedaftertheSECissueditsStayOrder.
Again,thisisinviola
_______________

15Id.,pp.11811188.

16Id.,pp.11851186.

17Id.,pp.12531323.

18Id.,pp.13261350.

11
VOL.517,FEBRUARY27,2007
11
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
tionoftheconstitutionalmandateonnonimpairmentofcontractsanddueprocess.
3. In not finding that only respondent ASB Holdings, Inc. suffered financial
distressasstatedintheRehabilitationPlanand,assuch,thecoercivereachofthe
SECsStayOrderunderP.D.902Acanextendonlytotheenforcementofclaims
againstthisdistressedcorporation.Itcannotsuspendtheclaimsandactionsagainst
itsaffiliatecorporations.
IntheirComment,respondentcorporationscomprisingtheASBGroupof
Companies prayed for the dismissal of the instant petition for being
unmeritorious.
The firsttwo(2)assignederrors lackmerit.Weshalldiscussthem
jointlyastheyarecloselyinterrelated.
We are not convinced that the approval of the Rehabilitation Plan
impairspetitionerbankslienoverthemortgagedproperties.Section6[c]
of P.D. No. 902A provides that upon appointment of a management
committee,rehabilitationreceiver,boardorbody,pursuanttothisDecree,
allactionsforclaims againstcorporations,partnershipsorassociations
under management or receivership pending before any court, tribunal,
boardorbodyshallbesuspended.
By that statutory provision, it is clear that the approval of the
RehabilitationPlanandtheappointmentofarehabilitationreceivermerely
suspendtheactionsforclaimsagainstrespondentcorporations.Petitioner
banks preferred status over the unsecured creditors relative to the
mortgage liens is retained, but theenforcement of such preference is
suspended. Theloanagreementsbetweenthepartieshavenotbeenset
asideandpetitionerbankmaystillenforceitspreferencewhentheassets
of ASB Group of Companies will be liquidated. Considering that the
provisions of the loan agreements are merely suspended, there is no
impairmentofcontracts,specificallyitslieninthemortgagedproperties.
12
12
SUPREMECOURTREPORTSANNOTATED
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
AswestressedinRizalCommercialBankingCorporationv.Intermediate
Appellate Court,19 such suspension shall not prejudice or render
ineffectivethestatusofasecuredcreditorascomparedtoatotally
unsecuredcreditor,forwhatP.D.No.902Amerelyprovidesisthatall
actions for claims against the distressed corporation, partnership or
association shall be suspended. This arrangement provided by law is
intendedtogivethereceiverachancetorehabilitatethecorporationif
thereshouldstillbeapossibilityfordoingso,withoutbeingunnecessarily
disturbed by the creditors actions against the distressed corporation.
However, in the event that rehabilitation is no longer feasible and the
claims against the distressed corporation would eventually have to be
settled,thesecuredcreditors,likepetitionerbank,shallenjoypreference
overtheunsecuredcreditors.
Likewise, there is no compulsion on the part of petitioner bank to
acceptadacionenpagoarrangementofthemortgagedpropertiesbasedon
ASBGroupofCompaniestransfervaluesandtocondoneinterestsand
penalties. The Rehabilitation Plan itself, underitem IVA,explains the
dacionenpagoproposal,thus:
IV.THEREVISEDREHABILITATIONPLAN

A.TheTotalApproach
ItisapparentthatASBscorporateindebtednessneedstobereducedasquicklyas
possibleinordertopreventrapiddeteriorationinequity.xxx.Inordertoreduce
debtquickly,wemustdothefollowing:
1. 1.
Completeorsellongoingprojects;
 2. 2.
Invitesecuredcreditorstocompletedacionenpagotransactions,waivingall
penalties;and
3. 3.
Inviteunsecuredcreditorstopurchaserealestateparcelsandotherassetsandset
offtheamountoftheiroutstandingclaimagainstthepurchaseprice.
_______________

19G.R.No.74851,December9,1999,320SCRA279.

13
VOL.517,FEBRUARY27,2007
13
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
Theassetsincludedintheaboveprogramincludeallrealestateassets.
Inordertodeterminethefeasibilityoftheabove,representativesofourfinancial
advisorsmetwithorhaddiscussionswithmostofthesecuredcreditors.Preliminary
discussionsindicatesupportfromthesecuredcreditorstowardstheconceptsofthe
programassociatedwiththem.Themajorityofthesesecuredcreditorsappeartowant
tocompletedacionenpagotransactionsbasedonMUTUALLYAGREEDUPON
TERMS.xxx.Wecontinuetopursuediscussionswithsecuredcreditors.Basedon
theprogram,securedcreditorsclaimsamountingtoPhP5.192billionwillbepaidin
fullincludinginterestuptoApril30,2000.Securedcreditors havebeenasked to
waiveallpenaltiesandothercharges.This dacionenpago programisessentialto
eventuallypayallcreditorsandrehabilitatetheASBGroupofCompanies.Ifthe
dacionenpago hereincontemplateddoesnotmaterializeforfailureofthesecured
creditors to agree thereto, this rehabilitation plancontemplates to settle the
obligations(withoutinterest,penalties,andotherrelatedchargesaccruingafterthe
dateoftheinitialsuspensionorder)tosecuredcreditorswithmortgagedpropertiesat
ASBsellingpricesforthegeneralinterestontheemployees,creditors,unitbuyers,
government,generalpublicandtheeconomy.xxx.20(Italicssupplied)
Indeed, based on the above explanation in the Rehabilitation Plan,
thedacionenpago programandtheintentofrespondentASBGroupof
Companiestoaskcreditorstowaivetheinterests,penaltiesandrelated
chargesarenotcompulsoryinnature.Theyaremerelyproposalsforthe
creditors to accept. In fact, as explained, there was already an initial
discussionontheseproposalsandthemajorityofthesecuredcreditors
showedtheirdesiretocompletedacionenpagotransactions,buttheymust
bebasedonMUTUALLYAGREEDUPONTERMS.TheSEC En
Banc initsResolutiondatedApril15,2003,affirmingtheSECHearing
Panels
_______________

20Rollo,pp.491492.

14
14
SUPREMECOURTREPORTSANNOTATED
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
OrderofApril26,2001approvingtheRehabilitationPlan,aptlydeclared:
xxx,petitionerassertsthattheRehabilitationPlanisnotlegallyfeasiblebecause
respondentscannotdictatethetermsofdacion.
We do not agree. A cursory reading of the Rehabilitation Plan debunks this
assertion.ThePlanprovidesthatdacionenpagotransactionwillbeeffectedonlyif
the secured creditors, like petitioner, agree thereto and under terms and
conditionsmutuallyagreeabletoprivaterespondentsandthesecuredcreditor
concerned.Thedacionenpagoprogramisessentialtoeventuallypayallcreditors
andrehabilitateprivaterespondents.Ifthedacionenpagodoesnotmaterializein
case secured creditors refuse to agree thereto, the Rehabilitation Plan
contemplates to settle the obligations to secured creditors with mortgaged
properties at selling prices. This is for the general interest of the employees,
creditors, unit buyers, government, general public, and the economy. 21 (Italics
supplied)
Withrespecttothe thirdassignederror,wenotethatthesamewasnot
raisedbypetitionerbankinitsComment/OppositiontotheRehabilitation
Plan filed with the SEC Hearing Panel. Such belated issue cannot be
considered, especially because it involves a question of fact, the
resolutionofwhichisnormallybeyondtheauthorityofthisCourtasitis
notatrieroffacts.22
Atanyrate,theSECEnBancfoundthattheSECHearingPanelacted
withinitslegalauthorityinresolvingthiscase.Neitheritoversteppedits
lawful authority nor acted whimsically in approving the Rehabilitation
Plan.Hence,itcannotbefaultedofgraveabuseofdiscretion. 23Wefind
noreasonto
_______________
 21Id.,p.639.

22 Batangas Laguna Tayabas Bus Company, Inc. v. Bitanga, G.R. Nos. 137934 &
137936,August10,2001,362SCRA635,citing Palomadov.NationalLaborRelations
Commission,257SCRA680(1996).
23Rollo,p.641.

15
VOL.517,FEBRUARY27,2007
15
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
disturbsuchfinding,itbeingafundamentalrulethatfactualfindingsof
quasijudicialagencies,liketheSEC,whichhaveacquiredexpertiseas
theirjurisdictionisconfinedtospecialmatterssuchasthesubjectofthis
case,aregenerallyaccordedgreatrespectandevenfinality,absentany
showing that they arbitrarily disregarded evidence or misapprehended
evidence to such an extent as to compel a contrary conclusion if such
evidencehadbeenproperlyappreciated.24
PetitionerbankalsoarguesthatASBGroupofCompaniesismerely
agenericnameusedtodescribecollectivelyvariouscompaniesandas
such,itisnotalegalentitywithjuridicalpersonalityandcannotbeaparty
toasuit.True,ASBGroupofCompaniesismerelyusedinthiscaseasa
generic name, for brevity, to collectively describe the various
companies/corporationsthatfileda PetitionForRehabilitation withthe
SEC. However, in their petition, all the respondent corporations are
individuallynamedaspetitioners,notASBGroupofCompanies.
Onelastword.Thepurposeofrehabilitationproceedingsistoenable
thecompanytogainnewleaseonlifeandtherebyallowscreditorstobe
paid their claims from its earnings.25 Rehabilitation contemplates a
continuance of corporate life and activities in an effort to restore and
reinstate the financially distressed corporation to its former position of
successfuloperationandsolvency.26ThisisinconsonancewiththeStates
objectivetopromoteawiderandmoremeaningfulequitabledistribution
of wealth to protect investments and the public.27 The approval of the
RehabilitationPlanbytheSECHearingPanel,affirmedbyboththeSEC
EnBancand
_______________

24BatangasLagunaTayabasBusCompany,Inc.v.Bitanga,supra
 25Rubberworld(Phils.),Inc.v.NationalLaborRelationsCommission,G.R.No.126773,

April14,1999,305SCRA721.
26RubyIndustrialCorporationv.CourtofAppeals,G.R.Nos.12418587,January20,

1998,284SCRA445.
27P.D.902A,asamended,FirstWhereasclause.

16
16
SUPREMECOURTREPORTSANNOTATED
MetropolitanBank&TrustCompanyvs.ASBHoldings,Inc.
theCourtofAppeals,ispreciselyinfurtheranceoftherationalebehind
P.D.No.902A,asamended,whichistoeffectafeasibleandviable
rehabilitation28ofailingcorporationswhichaffectthepublicwelfare.
WHEREFORE,weDENYtheinstantpetitionforreviewoncertiorari.
TheassailedDecisionandResolutionoftheCourtofAppealsinCAG.R.
SPNo.77260areAFFIRMED.
CostsagainstintervenorCameronGranville.
SOORDERED.
Puno(C.J.,Chairperson),CoronaandGarcia,JJ.,concur.
Azcuna,J.,OnOfficialLeave.
Petitiondenied,assaileddecisionandresolutionaffirmed.
Notes.A court action is ipso jure suspended only upon the
appointment of a management committee or a rehabilitation receiver.
(BarotacSugarMills,Inc.vs.CourtofAppeals,275SCRA497[1997])
The Department of Labor and Employment, Labor Arbiters and the
NationalLaborRelationsCommissionmaynotlegallyactonthelabor
claimsofemployeesaftertheSecuritiesandExchangeCommissionhas
issued an order suspending all actions against a company under
rehabilitation by a management committee created by the SEC.
(Rubberworld[Phils.],Inc.vs.NationalLaborRelationsCommission,336
SCRA433[2000])
o0o

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28 Rizal Commercial Banking Corporation v. Intermediate Appellate Court,G.R. No.

74851,September14,1992,213SCRA830.
17
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