Malayan v.

Victorias Milling

For our resolution of the instant case, we briefly revisit the
following undisputed facts:

the SEC issued a Stay Order, suspending all actions for claims against
respondent pending before any court, tribunal, office, board, body or
commission. the SEC constituted a Management Committee. the Labor
Arbiter rendered a decision in Abelido v. Victorias Milling, ordering
respondent to pay Abelido the sum ofP6,605,275.24. Then respondent
procured from the petitioner a surety bond as a requisite to the filing of an
appeal with the NLRC from the Labor Arbiters decision. On, the NLRC
affirmed the decision of the Labor Arbiter, and a writ of execution was
issued.

The Executive Labor Arbiter issued three orders directing the
petitioner to turn over to the NLRC the amount of P6.605,275.24, on pain
of contempt. petitioner served a demand upon BPI for the release of the
bank deposits that respondent had assigned in its favor, but BPI refused.,
respondent advised petitioner that the enforcement of the writ of execution
was premature and without legal basis. The following day, petitioner
replied that the NLRC was bent on enforcing the writ, and sought from the
respondent a copy of a TRO, if any, issued by the Court of Appeals. On
petitioner released the amount to the NLRC.

Failing to obtain reimbursement from the respondent despite a series
of demands, petitioner, filed a complaint for sum of money with the RTC.
SEC issued an order appointing a rehabilitation receiver for respondent. the
RTC suspended the proceedings against respondent, and subsequently
denied the petitioners motion for reconsideration.

Petitioner then went to the CA on a petition for certiorari which
the CA dismissed concurring with the RTC that the SEC Stay Order
covered petitioners claim. the CA denied the petitioners motion for
reconsideration.

Meanwhile, on June 5, 2003, the CA resolved the petition
for certiorari filed by the respondent assailing the NLRC decision. The
appellate court, while affirming the NLRC decision, set aside the latters
resolution on the respondents motion for reconsideration, and remanded
the case to the NLRC for suspension of the proceedings, ruling that the
NLRC decision cannot be enforced while [the respondent] is under a
management committee.
[30]


Petitioner now comes to us, insisting that since its claim (for
reimbursement of the amount it released to NLRC to satisfy the judgment
on the labor claims of Abelido) arose after the respondent was placed under
a management committee, such claim should not be suspended nor covered
by the SEC Stay Order.

Petitioner maintains that the Stay Order applies only to claims
existing prior to or at the time of the issuance of the said order. It avers that
Sec. 6(c) of P.D. No. 902-A is clear and categorical that the suspension
covers actions for claims which are pending before any court at the time of
the appointment of the management committee or rehabilitation
receiver.
[22]
And, not being a pre-existing claim, payment of petitioners
claim will not result in undue preference which is the mischief sought to be
prevented by a stay order.


Petitioner further contends that the suspension of actions
commences either upon the appointment of a management receiver or
rehabilitation receiver, not successively as interpreted by the CA. It argues
that the use of the disjunctive word or in Sec. 6(c) signifies that
suspension of actions commences either upon appointment of a
management committee or a rehabilitation receiver.

The petition is bereft of merit.

It must be noted that petitioners claim is for reimbursement of
whatever it may have paid to the NLRC as full and final settlement of the
award rendered against respondent in the Abelido case. In order to resolve
whether said proceedings should be suspended, it is necessary to determine
whether the complaint for sum of money with damages is a claim within
the contemplation of P.D. No. 902-A.

In Finasia Investments and Finance Corp. v. Court of
Appeals,
[32]
we construed claim to refer to debts or demands of a
pecuniary nature. It means the assertion of a right to have money
paid. More importantly, the Interim Rules of Procedure on Corporate
Rehabilitation provides an all-encompassing definition of the term and thus
includes all claims or demands of whatever nature or character against a
debtor or its property, whether for money or otherwise.

Clearly then, the complaint filed by petitioner against respondent
falls under the category of claim whether under our rulings
in Finasia, Arranza or Kurangking, or as defined in the Interim
Rules, considering that it is for pecuniary considerations.
[35]


We have consistently held in Rubberworld (Phils.) Inc. v.
NLRC,
[36]
in Sobrejuanite v. ASB Development Corporation,
[37]
and
in Garcia v. Philippine Airlines,
[38]
that the suspension of proceedings
referred to in Section 6 (c) of Presidential Decree No. 902-A, which
pertinently provides

x x x Provided, finally, that upon appointment of a
management committee, rehabilitation receiver, board or
body, pursuant to this Decree,all actions for claims
against corporations, partnerships or associations
under management or receivership pending before
any court, tribunal, board or body, shall be suspended
accordingly.
[39]


uniformly applies to all actions for claims filed against a corporation,
partnership or association under management or receivership, without
distinction.
[40]



The suspension of action for claims against a corporation under
rehabilitation receiver or management committee embraces all phases of the
suit, be it before the trial court or any tribunal or before this Court.
Otherwise stated, what are automatically stayed or suspended are the
proceedings of an action or suit and not just the payment of claims.
Furthermore, the actions that are suspended cover all claims against a
distressed corporation whether for damages founded on a breach of contract
of carriage, labor cases, collection suits or any other claims of a pecuniary
nature.
[42]


The indiscriminate suspension of actions for claims is intended to
expedite the rehabilitation of the distressed corporation. As this Court held
in Rubberworld,
[43]
the automatic stay of actions is designed to enable the
management committee or the rehabilitation receiver to effectively exercise
its/his powers free from any judicial or extrajudicial interference that might
unduly hinder or prevent the rescue of the debtor company. To allow such
other actions to continue would only add to the burden of the management
committee or rehabilitation receiver, whose time, effort and resources
would be wasted in defending claims against the corporation instead of
being directed toward its restructuring and rehabilitation.

x x x x

Given these premises, it is not difficult to understand why actions for
claims against the ailing enterprise have to be suspended. It then becomes
easy to accept the hypothesis that the date when the claim arose, or when
the action is filed, is of no moment. As long as the corporation is under a
management committee or a rehabilitation receiver, all actions for claims
against it --- for money or otherwise --- must yield to the greater imperative
of corporate rehabilitation, excepting only, as already mentioned, claims for
payment of obligations incurred by the corporation in the ordinary course
of business. Enforcement of writs of execution issued by judicial or quasi-
judicial tribunals, since such writs emanate from actions for claims, must,
likewise, be suspended.

If we allow the reimbursement action to proceed, and if
petitioners claim is granted, it would be in a position to assert a preference
over other creditors. Worse, respondent would be compelled to dispose of
its properties in order to satisfy the claim of petitioner. It would in effect
be a clear defiance of the proscription set forth in the Interim Rules on
selling, encumbering, transferring, or disposing in any manner any of its
(respondents) properties except in the ordinary course of
business.
[44]
Certainly, petitioners claim for reimbursement did not arise
from the usual operations of respondents business. Neither can we
consider it as an ordinary expense for the conduct of its operations.

All told, the suspension of the proceedings before the trial court is
therefore imperative.