By: Zennia Marie V. Deleonio on 3 August 2018
FACTS:
FACTS:
Both are domestic corporations engaged in the construction and/or development of roads, bridges, infrastructure projects, subdivisions, housing, land, memorial parks, and other industrial and commercial projects for the government or any private entity or individual. In the course of their business, FADI and UDI availed of separate loan accommodations or credit lines with petitioner Asiatrust Development Bank. The respondents religiously and faithfully complied with their loan obligations, but during the Asian Financial Crisis, respondent negotiated with petitioner for different modes of payment that the former might avail of. Petitioner thus agreed that respondents assign the receivables of their various contracts to sell involving the lots in the residential subdivision projects they were developing, instead of paying in cash.
Notwithstanding the above agreement, petitioner insisted on collecting the loan per the loan documents. Petitioner claimed that respondents were already in default. Respondents filed a consolidated Petition for Corporate Rehabilitation with Prayer for Suspension of Payments[8] with the Regional Trial Court (RTC) of Baguio City, alleging that they were unable to pay their loan based on the claim of petitioner. Though they have sufficient assets to pay their loan, respondents averred that they were not liquid. They also stated that they were threatened by petitioner with various cases aimed at disrupting the operations of respondents which might eventually lead to the cessation of their business. RTC issued an order, ORDER STAYING enforcement of all claims whether for money or otherwise, against petitioner, their guarantors, and sureties not solitarily liable. By way of rehabilitation, respondents also sought the determination of the true and correct amount of their loan obligation with petitioner. The rehabilitation receiver called for a conference and presented the draft of the rehabilitation report to petitioner, represented by Atty. Ong and to respondents. Petitioner filed a manifestation and motion in court calling its attention to the alleged refusal of the receiver to hear its side. Petitioner this asked for judicial assistance to enable it to actively participate in the rehabilitation proceedings and protect its interest. The receiver finalized and later on filed his evaluation report in court. He recommended the approval of the rehabilitation plan.
ISSUE:
Whether or not RTC acquired jurisdiction.
RULING:
Though the rehabilitation proceedings had gone as far as the approval and the subsequent implementation of the rehabilitation plan, we must confront the issue of the rehabilitation court's jurisdiction to hear and decide the case insofar as respondent UDI is concerned. A perusal of petitioner's pleadings clearly shows that it had repeatedly raised the jurisdictional question. The courts below, however, ignored this issue as they did not recognize petitioner's right to participate in the rehabilitation proceedings.
While it is true that petitioner had been asking the rehabilitation and appellate courts that it be allowed to participate, contrary to respondents' contention, the same did not amount to estoppel that would bar it from questioning the rehabilitation court's jurisdiction. It is well-settled that the court's jurisdiction may be assailed at any stage of the proceedings, even for the first time on appeal. The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action. In its Opposition to the petition for rehabilitation, petitioner already questioned the court's jurisdiction over UDI. On appeal to the CA, it again raised the same issue, but it failed to obtain a favorable decision. We cannot, therefore, say that petitioner slept on its rights. It is not estopped from raising the jurisdictional issue even at this stage. In any event, even if petitioner had not raised the issue of jurisdiction, the reviewing court would still not be precluded from ruling on the matter of jurisdiction.
Records show that the Petition for Corporate Rehabilitation with Prayer for Suspension of Payments was filed by two corporations, namely, FADI and UDI. Respondent FADI is a real estate corporation duly organized and existing under and by virtue of Philippine laws, with principal place of business in Baguio City. Respondent UDI, on the other hand, is a real estate corporation with principal place of business in Pasig City. Respondents explain in their petition that they filed the consolidated petition because they availed of separate but intertwined loan obligations or credit lines, and that they have interlocking directors, owners, and officers. As such, a full and complete settlement of the loan obligations will involve the two corporations and, consequently, the rehabilitation of one will entail the rehabilitation of the other.
