Draft CMS FOR FINAL

8/19/2019 Draft CMS FOR FINAL

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Complaint for Collection for Sum of Money, Annulment of Contract and Checks with Prayer for

Preliminary Injunction and Temporary Restraining rder

SECOND CAUSE OF ACTION

11. Defendant Atty. Nepthalie Segarra arranged a loan in the amount of ONE MIION AND

FI!E "UND#ED T"OUSAND $%1&'((&(((.(() %ESOS for plaintiff at hi* o+n initiati,e-

1. Defendant Atty. Nepthalie Segarra re/ei,ed the %1&'((&(((.(( on or a0out Mar/h 1(&

12 from defendant Ne*tor Sal,ador in behalf of and for delivery to plaintiff;

13. Defendant Atty. Nepthalie Segarra paid Farmer* 4an5 the amount of %1&(6&77.1

lea,ing a 0alan/e of more than %6'(&(((.(( in hi* po**e**ion. A /opy of the re/eipt

e,iden/ing payment i* here+ith atta/hed a* Anne8 9A9 and made an integral part hereof-

16. Defendant Atty. Nepthalie Segarra made plaintiff *ign a %romi**ory Note e,iden/ing theloan of%1&'((&(((.((. A /opy of *aid %romi**ory Note i* here+ith atta/hed a* Anne8 949 and

made an integral part hereof- 7 :Under*/oring *upplied;

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udolfo %. Mur. $Mu


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oria al*o argued that Mu


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6. That the :re*pondent; and the :petitioner; entered into a Memorandum of Agreement in

Ma5ati City& +ithin the @uri*di/tion of thi* "onora0le Court& dated Fe0ruary 1& 12& +herein

the :%etitioner; /orporation agreed +ith and ordered the herein :#e*pondent;& a* Contra/tor&

to de*ign and in*tall INSU%ANE SKSTEMS at ,ariou* pa,ilion*& et/. at e8po pro@e/t* *ite-

and *pe/ifi/ally for the %ha*e I pro@e/t at an agreed amount of USG3&6'&2.6$%ar. .1). A

8ero8 /opy of thi* Memorandum of Agreement dated Fe0ruary 1& 12 0et+een:#e*pondent; and :%etitioner; /on*i*ting of *i8 $7) page*& i* atta/hed hereto a* Anne8 4 and

made an integral part hereof.

'. That pur*uant to thi* Memorandum of Agreement $E8hi0it 4)and /ontra/t pri/e of

USG3&6'&2.6& ,ariou* payment* ha,e 0een made 0y :%etitioner; Corporation on thi*

%ha*e I pro@e/t totaling USG3&1&77.3& thu* lea,ing a 0alan/e of USG71'&7(.33.12

Various payments\

The /ontro,er*y aro*e from a Complaint for a Sum of Money3 filed 0y petitioner %ua again*tre*pondent?*pou*e* 4enito o 4un Tiong 4enito) and Caroline Sio5 Ching Teng Caroline). In the

/omplaint& %ua prayed that& among other thing*& re*pondent*& or then defendant*& pay %ua the

amount eight million fi,e hundred thou*and pe*o* $%h% 2&'((&((()& /o,ered 0y a /he/5. $E8hi0it 9A&9

for plaintiff)

During trial& petitioner %ua /larified that the %h% 2&'((&((( /he/5 +a* gi,en 0y re*pondent* to pay

the loan* they o0tained from her under a /ompounded intere*t agreement on ,ariou* date* in

122.6 A* %ua narrated& her *i*ter& ilian 4al0oa $ilian)& ,ou/hed for re*pondent*B a0ility to pay *o

that +hen re*pondent* approa/hed her& *he immediately a//eded and lent money to re*pondent*

+ithout reuiring any /ollateral e8/ept po*t?dated /he/5* 0earing the 0orro+ed amount*.' In all&

re*pondent* i**ued 17 /he/5* for a total amount of one million nine hundred *e,enty?fi,e thou*andpe*o* $%h% 1&'&(((). The*e /he/5* +ere di*honored upon pre*entment to the dra+ee 0an5.

A* a re*ult of the di*honor& petitioner demanded payment. #e*pondent*& ho+e,er& pleaded for more

time 0e/au*e of their finan/ial diffi/ultie*.2 %etitioner %ua o0liged and *imply reminded the

re*pondent* of their inde0tedne** from time to time.

Sometime in Septem0er 17& +hen their finan/ial *ituation turned 0etter& re*pondent* allegedly

/alled and a*5ed petitioner %ua for the /omputation of their loan o0ligation*.1( "en/e& petitioner

handed them a /omputation dated O/to0er & 1711 +hi/h *ho+ed that& at the agreed

/ompounded intere*t rate per month& the amount of the loan paya0le to petitioner ro*e to thirteen

million t+o hundred eighteen thou*and fi,e hundred forty?four pe*o* and (L1(( $%h%13&12&'66.().1 On re/ei,ing the /omputation& the re*pondent* a*5ed petitioner to redu/e their

inde0tedne** to %h% 2&'((&(((.13 anting to get paid the *oone*t po**i0le time& petitioner %ua

agreed to the lo+ered amount.16

#e*pondent* then deli,ered to petitioner A*iatru*t Che/5 No. 4ND(''( 0earing the redu/ed

amount of %h% 2&'((&((( dated Mar/h 3(& 1 +ith the a**uran/e that the /he/5 +a* good.1' In

turn& re*pondent* demanded the return of the 1 pre,iou*ly di*honored /he/5*. %etitioner& ho+e,er&

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refu*ed to return the 0ad /he/5* and ad,i*ed re*pondent* that *he +ill do *o only after the

en/a*hment of A*iatru*t Che/5 No. 4ND(''(.17

i5e the 1 /he/5*& ho+e,er& Che/5 No. 4ND(''( +a* al*o di*honored +hen it +a* pre*ented 0y

petitioner to the dra+ee 0an5. "en/e& a* /laimed 0y petitioner& *he de/ided to file a /omplaint to

/olle/t the money o+ed her 0y re*pondent*.

For the defen*e& 0oth re*pondent* Caroline and 4enito te*tified along +ith #o*a Dela Cru= Tua=on

$Tua=on)& +ho +a* the OIC?Manager of A*iatru*t?4inondo 4ran/h in 1. #e*pondent*

/ategori/ally denied o0taining a loan from petitioner .1 #e*pondent Caroline& in parti/ular& narrated

that& in Augu*t 1'& *he and petitionerB* *i*ter& ilian& forged a partner*hip that operated a mah@ong

0u*ine**. Their agreement +a* for ilian to *er,e a* the /apitali*t +hile re*pondent Caroline +a* to

a/t a* the /a*hier. Caroline al*o agreed to u*e her per*onal /he/5* to pay for the operational

e8pen*e* in/luding the payment of the +inner* of the game*.12 A* the partner* anti/ipated that

Caroline +ill not al+ay* 0e in to+n to prepare the*e /he/5*& *he left +ith ilian fi,e $') pre?*igned

and /on*e/uti,ely num0ered /he/5*1 on the /ondition that the*e /he/5* +ill only 0e u*ed to /o,er

the /o*t* of the 0u*ine** operation* and in no /ir/um*tan/e +ill the amount of the /he/5* e8/eed%h% '&(((.(

In Mar/h 17& ho+e,er& re*pondent Caroline and ilian had a *eriou* di*agreement that re*ulted in

the di**olution of their partner*hip and the /e**ation of their 0u*ine**. In the ha*te of the di**olution

and a* a re*ult of their 0itter *eparation& re*pondent Caroline alleged that *he forgot a0out the fi,e

$') pre?*igned /he/5* *he left +ith ilian.1 It +a* only +hen ilianB* hu*0and& !i/ente 4al0oa

$!i/ente)& filed a /omplaint for *um of money in Fe0ruary 1 again*t re*pondent* to re/o,er fi,e

million one hundred *e,enty?fi,e thou*and t+o hundred fifty pe*o* $%h% '&1'&'()& /o,ering three

of the fi,e po*t?dated and pre?*igned /he/5*.

#e*pondent Caroline /ategori/ally denied ha,ing /ompleted Che/5 No. 4ND(''( 0y u*ing a/he/5 +riter or type+riter a* *he had no /he/5 +riter and *he had al+ay* /ompleted /he/5* in her

o+n hand+riting.3 She in*i*ted that petitioner and her *i*ter /ompleted the /he/5 after it*

deli,ery.6 Furthermore& *he /ould not ha,e gone to *ee petitioner %ua +ith her hu*0and a* they had

0een *eparated in fa/t for nearly 1( year*.' A* for the 1 /he/5* i**ued 0y her in 122& Caroline

alleged that they +ere not intended for %ua 0ut +ere i**ued for the 0enefit of other

per*on*.7 Caroline po*tulated that the /omplaint i* de*igned to allo+ %uaB* *i*ter& ilian& to re/o,er

her lo**e* in the foreign e8/hange 0u*ine** *he had +ith Caroline in the 12(*. #e*pondent 4enito

/orro0orated CarolineB* te*timony re*pe/ting their almo*t a de/ade *eparation. A* *u/h& he /ould

not ha,e had a//ompanied hi* +ife to *ee petitioner to per*uade the latter to lo+er do+n any

alleged inde0tedne**.2 In fa/t& 4enito de/lared& 0efore the filing of the Complaint& he had ne,er met

petitioner %ua& let alone approa/hed her +ith hi* +ife to 0orro+ money.

"e /laimed that he +a*impleaded in the /a*e to atta/h hi* property and for/e him to enter into an ami/a0le *ettlement +ith

petitioner .3( 4enito pointed out that Che/5 No. 4ND(''( +a* i**ued under A*iatru*t A//ount No.

''13?(('6?& +hi/h i* *olely under the name of hi* +ife.31

The +itne** for the re*pondent*& M*. Tua=on& te*tified that re*pondent Caroline opened A*iatru*t

A//ount No. ''13?(('6? in Septem0er 16.3 She /laimed that the a,erage maintaining 0alan/e of

re*pondent Caroline +a* %h% &((( and the highe*t amount i**ued 0y Caroline from her a//ount

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+a* %h% 63'&(((.33 She maintained that re*pondent Caroline had al+ay* /ompleted her /he/5* +ith

her o+n hand+riting and not +ith a /he/5 +riter. On O/to0er 1'& 17& CarolineB* /he/5ing a//ount

+a* /lo*ed at the in*tan/e of the 0an5 due to 7 in*tan/e* of /he/5 i**uan/e again*t in*uffi/ient

0alan/e.36

n the main& petitioner a**ert* that re*pondent* o+ed her a *um of money +ay 0a/5 in 122 for

+hi/h the latter ga,e her *e,eral /he/5*. The*e /he/5*& ho+e,er& had all 0een di*honored and

petitioner ha* not 0een paid the amount of the loan plu* the agreed intere*t. In 17& re*pondent*

approa/hed her to get the /omputation of their lia0ility in/luding the /ompounded intere*t. After

0argaining to lo+er the amount of their lia0ility& re*pondent* *uppo*edly ga,e her a po*tdated /he/50earing the di*/ounted amount of the money they o+ed to petitioner. i5e the 122 /he/5*& the

dra+ee 0an5 li5e+i*e di*honored thi* /he/5. To pro,e her allegation*& petitioner *u0mitted the

original /opie* of the 1 /he/5* i**ued 0y re*pondent Caroline in 122 and the /he/5 i**ued in

17& A*iatru*t Che/5 No. 4ND(''(. In ruling in her fa,or& the #TC *u*tained the ,er*ion of the

fa/t* pre*ented 0y petitioner.

#e*pondent*& on the other hand& /ompletely deny the e8i*ten/e of the de0t a**erting that they had

ne,er approa/hed petitioner to 0orro+ money in 122 or in 17. They hypothe*i=e& in*tead& that

petitioner %ua i* *imply a/ting at the in*tan/e of her *i*ter& ilian& to file a fal*e /harge again*t them

u*ing a /he/5 left to fund a gam0ling 0u*ine** pre,iou*ly operated 0y ilian and re*pondent

Caroline. hile not *aying *o in e8pre** term*& the appellate /ourt /on*idered re*pondent*B deniala* +orthy of 0elief.

he /laim of Caroline Sio5 Ching Teng that the three $3) /he/5* +ere part of the 0lan5 /he/5* *he

i**ued and deli,ered to ilian 4al0oa& +ife of plaintiff?appellee& and intended *olely for the

operational e8pen*e* of their mah@ong 0u*ine** i* 0elied 0y her admi**ion that *he i**ued three $3)

/he/5* $E8h*. 9A9& 949 9C9) 0e/au*e !i/ente *ho+ed the li*ting of their a//ounttotaling %'&1'&'(.(( $TSN& No,em0er 1& 1& p. 1().76 8 8 8

Clearly& re*pondent*B defen*e that Caroline left 0lan5 /he/5* +ith petitionerB* *i*ter +ho& it i* *aid& i*

no+ determined to re/oup her pa*t lo**e* and 0ring finan/ial ruin to re*pondent* 0y fal*ifying the

*ame 0lan5 /he/5*& had already 0een thoroughly pa**ed upon and re@e/ted 0y thi* Court. It /annot&

therefore& 0e u*ed to *upport re*pondent*B denial of their lia0ility.

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#e*pondent*B other defen*e* are eually un/on,in/ing. They a**ert that petitioner /ould not ha,e

a//epted a /he/5 +orth %h% 2.' million /on*idering that *he *hould ha,e 5no+n that re*pondent

Caroline had i**ued *e,eral /he/5* for %h% '&((( ea/h in fa,or of ilian and all of them had

0oun/ed.7' Needle** to *tate& an a/t done /ontrary to la+ /annot 0e *u*tained to defeat a legal

o0ligation- repeated failure to honor o0ligation* /o,ered 0y *e,eral negotia0le in*trument* /annot

*er,e to defeat yet another o0ligation /o,ered 0y another in*trument.

Indeed& it *eem* that re*pondent Caroline had di*played a /a,alier attitude to+ard* the ,alue& and

the o0ligation /on/omitant +ith the i**uan/e& of a /he/5. A* atte*ted to 0y re*pondent*B ,ery o+n

+itne**& re*pondent Caroline ha* a do/umented hi*tory of i**uing in*uffi/iently funded /he/5* for 7

time*& at the ,ery lea*t.77 Thi* fa/t alone 0ol*ter* petitionerB* allegation that the /he/5* deli,ered to

her 0y re*pondent Caroline +ere *imilarly not funded.

In Magdi+ang #ealty Corp. ,. Manila 4an5ing Corp.& e *tre**ed that the uantum of e,iden/e

reuired in /i,il /a*e*preponderan/e of e,iden/e9i* a phra*e +hi/h& in the la*t analy*i*& mean*

pro0a0ility to truth. It i* e,iden/e +hi/h i* more /on,in/ing to the /ourt a* +orthier of 0elief than that

+hi/h i* offered in oppo*ition thereto.97

4a*ed on the e,iden/e *u0mitted 0y the partie* and thelegal pre*umption* ari*ing therefrom& petitionerB* e,iden/e out+eigh* that of re*pondent*. Thi*

preponderan/e of e,iden/e in fa,or of %ua reuire* that a @udgment ordering re*pondent* to pay

their o0ligation 0e entered.

A* aptly held 0y the /ourt a uo& ho+e,er& re*pondent* /annot 0e o0liged to pay the intere*t of the

loan on the ground that the *uppo*ed agreement to pay *u/h intere*t +a* not redu/ed to +riting.

Arti/le 1'7 of the Ci,il Code& +hi/h refer* to monetary intere*t& *pe/ifi/ally mandate* that no

intere*t *hall 0e due unle** it ha* 0een e8pre**ly *tipulated in +riting.72 Thu*& the /olle/tion of

intere*t in loan* or for0earan/e of money i* allo+ed only +hen the*e t+o /ondition* /on/ur $1)

there +a* an e8pre** *tipulation for the payment of intere*t- $) the agreement for the payment of

the intere*t +a* redu/ed in +riting.7

A0*ent any of the*e t+o /ondition*& the money de0tor /annot0e made lia0le for intere*t. Thu*& petitioner i* entitled only to the prin/ipal amount of the loan plu*

the allo+a0le legal intere*t from the time of the demand&( at the rate of 7 per annum.1

#e*pondent 4enito /annot e*/ape the @oint and *olidary lia0ility to pay the loan on the ground that

the o0ligation aro*e from /he/5* *olely i**ued 0y hi* +ife. ithout any e,iden/e to the /ontrary& it i*

pre*umed that the pro/eed* of the loan redounded to the 0enefit of their family. "en/e& the /on@ugal

partner*hip i* lia0le therefor.The un*upported allegation that re*pondent* +ere *eparated in fa/t&

*tanding alone& doe* not per*uade thi* Court to *olely 0ind re*pondent Caroline and e8empt 4enito.

A* the head of the family& there i* more rea*on that re*pondent 4enito *hould an*+er for the lia0ility

in/urred 0y hi* +ife pre*uma0ly in *upport of their family.

"E#EFO#E& the Motion for #e/on*ideration i* #ANTED. The #e*olution of thi* Court dated

April 12& (1 i* *et a*ide and a ne+ one entered #E!E#SIN and SETTIN ASIDE the De/i*ion

dated Mar/h 31& (11 and the #e*olution dated Septem0er 7& (11 of the Court of Appeal* in CA?

.#. C! No. 3''. The De/i*ion in Ci,il Ca*e No. ?23( of the #egional Trial Court $#TC) of

the City of Manila& 4ran/h i* #EINSTATED +ith MODIFICATION.

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A//ordingly& re*pondent* 4enito o 4un Tiong and Caroline Sio5 Ching Teng are ordered @ointly and

*olidarily to pay petitioner %h% 1&'&((( plu* 7 intere*t per annum from April 12& 1& until fully

paid& and %((&(((.(( a* attorneyB* fee*.

Through a Spe/ial %o+er of Attorney $S%A)& the re*pondent authori=ed Engr. eonardo A. %arada

$eonardo)& the elde*t of hi* three /hildren& to perform the follo+ing a/t* in hi* 0ehalf a) to file a

/omplaint again*t the petitioner for *um of money +ith damage*- and 0) to te*tify in the trial thereof

and *ign all paper* and do/ument* related thereto& +ith full po+er* to enter into *tipulation and

/ompromi*e.1' In/identally& the re*pondent& a +ido+er& died of /ardio?pulmonary arre*t on >anuary

1&((&17

*ur,i,ed 0y hi* legitimate /hildren& namely& eonardo& ui*& >r.& and alaine& all *urnamed%arada. They ha,e *in/e *u0*tituted him in thi* petition& per the #e*olution of the Supreme Court

dated Septem0er & ((.1 Al*o& on >uly 3& ((& ui*& >r. and alaine %arada e8e/uted an S%A

authori=ing their 0rother eonardo to repre*ent them in the in*tant petition.12

In the ,erifi/ation and /ertifi/ation of non?forum *hopping atta/hed to the /omplaint in Ci,il Ca*e No.

H(1?6'1& eonardo a* attorney?in?fa/t of hi* father a/5no+ledged a* follo+*

8 8 8 8

That IL+e amLare the %laintiff in the a0o,e?/aptioned /a*e-

That IL+e ha,e /au*ed the preparation of thi* Complaint-

That IL+e ha,e read the *ame and that all the allegation* therein are true and /orre/t to the 0e*t of

myLour 5no+ledge-

8 8 8 8.1

In thi* petition& the petitioner reiterate* it* argument 0efore the CA that the a0o,e ,erifi/ation i*

in,alid& *in/e the S%A e8e/uted 0y the re*pondent did not *pe/ifi/ally in/lude an authority for

eonardo to *ign the ,erifi/ation and /ertifi/ation of non?forum *hopping& thu* rendering the

/omplaint defe/ti,e for ,iolation of Se/tion* 6 and ' of #ule . The *aid *e/tion* pro,ide& a* follo+*

Se/. 6. !erifi/ation. A pleading i* ,erified 0y an affida,it that the affiant ha* read the pleading and

that the allegation* therein are true and /orre/t of hi* per*onal 5no+ledge or 0a*ed on authenti/

re/ord*.

Se/. '. Certifi/ation again*t forum *hopping. The plaintiff or prin/ipal party *hall /ertify under oath

in the /omplaint or other initiatory pleading a**erting a /laim for relief& or in a *+orn /ertifi/ation

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anne8ed thereto and *imultaneou*ly filed there+ith $a) that he ha* not thereto fore /ommen/ed any

a/tion or filed any /laim in,ol,ing the *ame i**ue* in any /ourt& or tri0unal 8 8 8 and& to the 0e*t of

hi* 5no+ledge& no *u/h other a/tion or /laim i* pending therein- $0) if there i* *u/h other pending

a/tion or /laim& a /omplete *tatement of the pre*ent *tatu* thereof- and $/) if he *hould thereafter

learn that the *ame or *imilar a/tion or /laim ha* 0een filed or i* pending& he *hall report that fa/t 8 8

8 to the /ourt +herein hi* afore*aid /omplaint or initiatory pleading ha* 0een filed.

Failure to /omply +ith the foregoing reuirement* *hall not 0e /ura0le 0y mere amendment of the

/omplaint or other initiatory pleading 0ut *hall 0e /au*e for the di*mi**al of the /a*e +ithout

pre@udi/e& unle** other+i*e pro,ided& upon motion and after hearing.

The petitionerB* argument i* untena0le. The petitioner failed to re/5on that any o0@e/tion a* to

/omplian/e +ith the reuirement of ,erifi/ation in the /omplaint *hould ha,e 0een rai*ed in the

pro/eeding* 0elo+& and not in the appellate /ourt for the fir*t time.( In JIUSAN?OAIA ,. CA&1 it

+a* held that ,erifi/ation i* a formal& not a @uri*di/tional reui*ite

e ha,e empha*i=ed& time and again& that ,erifi/ation i* a formal& not a @uri*di/tional reui*ite& a* iti* mainly intended to *e/ure an a**uran/e that the allegation* therein made are done in good faith

or are true and /orre/t and not mere *pe/ulation. The Court may order the /orre/tion of the

pleading& if not ,erified& or a/t on the un,erified pleading if the attending /ir/um*tan/e* are *u/h that

a *tri/t /omplian/e +ith the rule may 0e di*pen*ed +ith in order that the end* of @u*ti/e may 0e

*er,ed.

Further& in rendering @u*ti/e& /ourt* ha,e al+ay* 0een& a* they ought to 0e& /on*/ientiou*ly guided

0y the norm that on the 0alan/e& te/hni/alitie* ta5e a 0a/5*eat ,i*??,i* *u0*tanti,e right*& and not

the other +ay around. 8 8 8. $Citation* omitted)

In Koung ,. >ohn Jeng Seng&3

it +a* al*o held that the ue*tion of forum *hopping /annot 0e rai*edin the CA and in the Supreme Court& *in/e *u/h an i**ue mu*t 0e rai*ed at the earlie*t opportunity in

a motion to di*mi** or a *imilar pleading. The high /ourt e,en +arned that 9in,o5ing it in the later

*tage* of the pro/eeding* or on appeal may re*ult in the di*mi**al of the a/tion 8 8 8.96

Moreo,er& granting that eonardo ha* no per*onal 5no+ledge of the tran*a/tion *u0@e/t of the

/omplaint 0elo+& Se/tion 6 of #ule pro,ide* that the ,erifi/ation need not 0e 0a*ed on the ,erifierB*

per*onal 5no+ledge 0ut e,en only on authenti/ re/ord*. Sale* in,oi/e*& *tatement* of a//ount*&

re/eipt* and /olle/tion letter* for the 0alan/e of the amount *till due to the re*pondent from the

petitioner are *u/h re/ord*. There i* /learly *u0*tantial /omplian/e 0y the re*pondentB* attorney?in?

fa/t +ith the reuirement of ,erifi/ation.

a*tly& it i* +ell?*ettled that a *tri/t /omplian/e +ith the rule* may 0e di*pen*ed +ith in order that the

end* of *u0*tantial @u*ti/e may 0e *er,ed.' It i* /lear that the pre*ent /ontro,er*y mu*t 0e re*ol,ed

on it* merit*& le*t for a te/hni/al o,er*ight the re*pondent *hould 0e depri,ed of +hat i* @u*tly due

him.

A *ole proprietor*hip ha* no

@uridi/al per*onality *eparate and

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10/31

di*tin/t from that of it* o+ner& and

need not 0e impleaded a* a party?

plaintiff in a /i,il /a*e.

On the ue*tion of +hether enlite Indu*trie* *hould ha,e 0een impleaded a* a party?plaintiff&

Se/tion 1 of #ule 3 of the #ule* of Court pro,ide* that only natural or @uridi/al per*on* or entitie*authori=ed 0y la+ may 0e partie* in a /i,il /a*e. Arti/le 66 of the Ne+ Ci,il Code enumerate* +ho

are @uridi/al per*on*

Art. 66. The follo+ing are @uridi/al per*on*

$1) The State and it* politi/al *u0di,i*ion*-

$) Other /orporation*& in*titution* and entitie* for pu0li/ intere*t or purpo*e& /reated 0y la+-

their per*onality 0egin* a* *oon a* they ha,e 0een /on*tituted a//ording to la+-

$3) Corporation*& partner*hip* and a**o/iation* for pri,ate intere*t or purpo*e to +hi/h thela+ grant* a @uridi/al per*onality& *eparate and di*tin/t from that of ea/h *hareholder& partner

or mem0er.

enlite Indu*trie* i* merely the DTI?regi*tered trade name or *tyle of the re*pondent 0y +hi/h he

/ondu/ted hi* 0u*ine**. A* *u/h& it doe* not e8i*t a* a *eparate entity apart from it* o+ner& and

therefore it ha* no *eparate @uridi/al per*onality to *ue or 0e *ued.7 A* the *ole proprietor of enlite

Indu*trie*& there i* no ue*tion that the re*pondent i* the real party in intere*t +ho *tood to 0e

dire/tly 0enefited or in@ured 0y the @udgment in the /omplaint 0elo+. There i* then no ne/e**ity for

enlite Indu*trie* to 0e impleaded a* a party?plaintiff& *in/e the /omplaint +a* already filed in the

name of it* proprietor& Engr. ui* U. %arada. To heed the petitionerB* *ophi*ti/ rea*oning i* to permit

a du0iou* te/hni/ality to fru*trate the end* of *u0*tantial @u*ti/e.

No,ation i* ne,er pre*umed 0ut

mu*t 0e /learly and uneui,o/ally

*ho+n.

No,ation i* a mode of e8tingui*hing an o0ligation 0y /hanging it* o0@e/t* or prin/ipal o0ligation*& 0y

*u0*tituting a ne+ de0tor in pla/e of the old one& or 0y *u0rogating a third per*on to the right* of the

/reditor . It i* 9the *u0*titution of a ne+ /ontra/t& de0t& or o0ligation for an e8i*ting one 0et+een the

*ame or different partie*.92 Arti/le 13 of the Ci,il Code define* no,ation a* follo+*

Art. 13. No,ation +hi/h /on*i*t* in *u0*tituting a ne+ de0tor in the pla/e of the original one& may0e made e,en +ithout the 5no+ledge or again*t the +ill of the latter& 0ut not +ithout the /on*ent of

the /reditor. %ayment 0y the ne+ de0tor gi,e* him right* mentioned in Arti/le* 137and 13.

Thu*& in order to /hange the per*on of the de0tor& the former de0tor mu*t 0e e8pre**ly relea*ed

from the o0ligation& and the third per*on or ne+ de0tor mu*t a**ume the formerB* pla/e in the

/ontra/tual relation. Arti/le 13 *pea5* of *u0*titution of the de0tor& +hi/h may either 0e in the

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11/31

form of e8promi*ion or delega/ion& a* *eem* to 0e the /a*e here. In 0oth /a*e*& the old de0tor mu*t

0e relea*ed from the o0ligation& other+i*e& there i* no ,alid no,ation. A* e8plained in ar/ia3(

In general& there are t+o mode* of *u0*tituting the per*on of the de0tor $1) e8promi*ion and $)

delega/ion. In e8promi*ion& the initiati,e for the /hange doe* not /ome fromand may e,en 0e

made +ithout the 5no+ledge ofthe de0tor& *in/e it /on*i*t* of a third per*onB* a**umption of theo0ligation. A* *u/h& it logi/ally reuire* the /on*ent of the third per*on and the /reditor. In

delega/ion& the de0tor offer*& and the /reditor a//ept*& a third per*on +ho /on*ent* to the

*u0*titution and a**ume* the o0ligation- thu*& the /on*ent of the*e three per*on* are ne/e**ary.

4oth mode* of *u0*titution 0y the de0tor reuire the /on*ent of the /reditor.31 $Citation* omitted)

From the /ir/um*tan/e* o0taining 0elo+& +e /an infer no /lear and uneui,o/al /on*ent 0y the

re*pondent to the relea*e of the petitioner from the o0ligation to pay the /o*t of the lighting

material*. In fa/t& from the letter* of the re*pondent to En,iro Jleen& it /an 0e *aid that he retained

hi* option to go after the petitioner if En,iro Jleen failed to *ettle the petitionerB* de0t. A* the trial

/ourt held

The fa/t that En,iro Jleen Te/hnologie*& In/. made payment* to the re*pondent and the latter

a//epted it doe* not ip*o fa/to re*ult inno,ation. No,ation to 0e gi,en it* legal effe/t reuire* that

the /reditor *hould /on*ent to the *u0*titution of a ne+ de0tor and the old de0tor 0e relea*ed from

it* o0ligation $Art. 13& Ne+ Ci,il Code). A reading of the letter* dated 16 April 1 $E8h. 1) and

dated 17 >une 1 $E8h*. 6 P6?a) *ent 0y the re*pondent to En,iro Jleen Te/hnologie*& In/. /learly

*ho+* that there +a* nothing therein that +ould e,in/e that the:re*pondent; ha* /on*ented to the

e8/hange of the per*on of the de0tor from the petitioner to En,iro Jleen Te/hnologie*& In/.

8 8 8 8

Nota0ly in E8h. 1& al0eit addre**ed to En,iro Jleen Te/hnologie*& In/.& the re*pondent e8pre**ly*tated that it ha* *er,ed noti/e to the petitioner that unle** the o,erdue a//ount i* paid& the matter

+ill 0e referred to it* la+yer* and there may 0e a pull?out of the deli,ered lighting fi8ture*. It +a*

li5e+i*e *tated therein that in/ident damage* that may re*ult to the *tru/ture in the /our*e of the

pull?out +ill 0e to the a//ount of the petitioner.

It i* e,ident from the t+o $) afore*aid letter* that there i* no indi/ation of the re*pondentB* intention

to relea*e the petitioner from it* o0ligation to pay and to tran*fer it to En,iro Jleen Te/hnologie*& In/.

The a/uie*/en/e of En,iro Jleen Te/hnologie*& In/. to a**ume the o0ligation of the petitioner to

pay the unpaid 0alan/e of :%;217&7.(( to the re*pondent +hen there i* /learly no agreement to

relea*e the petitioner +ill re*ult merely to the addition of de0tor* and not no,ation. "en/e& the

/reditor /an *till enfor/e the o0ligation again*t the original de0tor 8 8 8. A fa/t +hi/h point* *tronglyto the /on/lu*ion that the re*pondent did not a**ent to the *u0*titution of En,iro Jleen Te/hnologie*&

In/. a* the ne+ de0tor i* the pre*ent a/tion in*tituted 0y the re*pondent again*t the petitioner for the

fulfillment of it* o0ligation. A mere re/ital that the re*pondent ha* agreed or /on*ented to the

*u0*titution of the de0tor i* not *uffi/ient to e*ta0li*h the fa/t that there +a* a no,ation. 8 8 8. 3

The *ettled rule i* that no,ation i* ne,er pre*umed&33 0ut mu*t 0e /learly and uneui,o/ally

*ho+n.36 In order for a ne+ agreement to *uper*ede the old one& the partie* to a /ontra/t mu*t

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e8pre**ly agree that they are a0rogating their old /ontra/t in fa,or of a ne+ one.3' Thu*& the mere

*u0*titution of de0tor* +ill not re*ult inno,ation&37 and the fa/t that the /reditor a//ept* payment*

from a third per*on& +ho ha* a**umed the o0ligation& +ill re*ult merely in the addition of de0tor* and

not no,ation& and the /reditor may enfor/e the o0ligation again*t 0oth de0tor*.3 If there i* no

agreement a* to *olidarity& the fir*t and ne+ de0tor* are /on*idered o0ligated @ointly.32 A* e8plained

in #eye* ,. CA

3

The /on*ent of the /reditor to a no,ation 0y /hange of de0tor i* a* indi*pen*a0le a* the /reditorB*

/on*ent in /on,entional *u0rogation in order that a no,ation *hall legally ta5e pla/e. The mere

/ir/um*tan/e of AF%?M4AI re/ei,ing payment* from re*pondent Elea=ar +ho a/uie*/ed to a**ume

the o0ligation of petitioner under the /ontra/t of *ale of *e/uritie*& +hen there i* /learly no

agreement to relea*e petitioner from her re*pon*i0ility& doe* not /on*titute no,ation. At mo*t& it only

/reate* a @uridi/al relation of /o?de0tor*hip or *urety *hip on the part of re*pondent Elea=ar to the

/ontra/tual o0ligation of petitioner to AF%?M4AI and the latter /an *till enfor/e the o0ligation again*t

the petitioner. In A@a8 Mar5eting and De,elopment Corporation ,*. Court of Appeal* +hi/h i* rele,ant

in the in*tant /a*e& +e *tated that

9In the *ame ,ein& to effe/t a *u0@e/ti,e no,ation 0y a /hange in the per*on of the de0tor& it i*

ne/e**ary that the old de0tor 0e relea*ed e8pre**ly from the o0ligation& and the third per*on or ne+

de0tor a**ume* hi* pla/e in the relation. There i* no no,ation +ithout *u/h relea*e a* the third

per*on +ho ha* a**umed the de0torB* o0ligation 0e/ome* merely a /o?de0tor or *urety. 888.

No,ation ari*ing from a purported /hange in the per*on of the de0tor mu*t 0e /lear and e8pre**

888.9

In the /i,il la+ *etting& no,atio i* literally /on*trued a* to ma5e ne+. So it i* deeply rooted in the

#oman a+ @uri*pruden/e& the prin/iple no,atio non prae*umitur that no,ation i* ne,er

pre*umed. At 0ottom& for no,ation to 0e a @ural reality& it* animu* mu*t 0e e,er pre*ent& de0itum pro

de0ito 0a*i/ally e8tingui*hing the old o0ligation for the ne+ one.6(

$Citation omitted)

The trial /ourt found that the re*pondent ne,er agreed to relea*e the petitioner from it* o0ligation&

and thi* /on/lu*ion +a* upheld 0y the CA. e generally a//ord utmo*t re*pe/t and great +eight to

fa/tual finding* of the trial /ourt and the CA& unle** there appear* in the re/ord *ome fa/t or

/ir/um*tan/e of +eight and influen/e +hi/h ha* 0een o,erloo5ed& or the *ignifi/an/e of +hi/h ha*

0een mi*interpreted& that if /on*idered +ould ha,e affe/ted the re*ult of the /a*e.61 e find no *u/h

o,er*ight in the appre/iation of the fa/t* 0elo+& nor *u/h a mi*interpretation thereof& a* +ould

other+i*e pro,ide a /lear and uneui,o/al *ho+ing that a no,ation ha* o//urred in the /ontra/t

0et+een the partie* re*ulting in the relea*e of the petitioner.

%ur*uant to Arti/le ( of theCi,il Code& e8/ept a* pro,ided

under Central 4an5 Cir/ular

No. ('& and no+ under 4ang5o

Sentral ng %ilipina* Cir/ular

No. & +hi/h too5 effe/t on

>uly 1& (13& the re*pondent may

0e a+arded intere*t of *i8 per/ent

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$7) of the @udgment amount 0y

+ay of a/tual and /ompen*atory

damage*.

It appear* from the re/ital of fa/t* in the trial /ourtB* de/i*ion that the re*pondent demanded intere*t

of t+o per/ent $) per month upon the 0alan/e of the pur/ha*e pri/e of %217&7.((& from @udi/ialdemand until full payment. There i* then an o0,iou* /leri/al error /ommitted in the fallo of the trial

/ourtB* de/i*ion& for it in/orre/tly ordered the defendant there into pay 9the *um eui,alent to t+enty

per/ent $() per month of the prin/ipal o0ligation due from date of @udi/ial demand until fully paid

a* and for intere*t.96

A /leri/al mi*ta5e i* one +hi/h i* ,i*i0le to the eye* or o0,iou* to the under*tanding- an error made

0y a /ler5 or a tran*/ri0er- a mi*ta5e in /opying or +riting.63 The atin ma8im* Error pla/itandi

aeuitatem non tollit $9A /leri/al error doe* not ta5e a+ay euity9)& and Error */ri0enti* no/ere non

de0it $9An error made 0y a /ler5 ought not to in@ure- a /leri/al error may 0e /orre/ted9) are apt in thi*

/a*e.66 !ie+ed again*t the landmar5 /a*e of Medel ,. CA6'& an a+ard of intere*t of ( per month

on the amount due i* /learly e8/e**i,e and iniuitou*. It /ould not ha,e 0een the intention of the trial/ourt& not to mention that it i* +ay 0eyond +hat the plaintiff had prayed for 0elo+.

It i* *ettled that other than in the /a*e of @udgment* +hi/h are ,oid a0 initio for la/5 of @uri*di/tion& or

+hi/h are null and ,oid per *e& and thu* may 0e ue*tioned at any time& +hen a de/i*ion i* final&

e,en the /ourt +hi/h i**ued it /an no longer alter or modify it& e8/ept to /orre/t /leri/al error* or

mi*ta5e*.67

The foregoing not+ith*tanding& of more important /on*ideration in the /a*e 0efore u* i* the fa/t that

it i* no+here *tated in the trial /ourtB* de/i*ion that the partie* had in fa/t *tipulated an intere*t on

the amount due to the re*pondent. E,en granting that there +a* *u/h an agreement& there i* no

finding 0y the trial /ourt that the partie* *tipulated that the out*tanding de0t of the petitioner +ould 0e*u0@e/t to t+o per/ent $) monthly intere*t. The mo*t that the de/i*ion di*/lo*e* i* that the

re*pondent demanded a monthly intere*t of on the amount out*tanding.

Arti/le ( of the Ci,il Code pro,ide* that 9if the o0ligation /on*i*t* in the payment of a *um of

money& and the de0tor in/ur* in delay& the indemnity for damage*& there 0eing no *tipulation to the

/ontrary& *hall 0e the payment of the intere*t agreed upon& and in the a0*en/e of *tipulation& the

legal intere*t& +hi/h i* *i8 per/ent per annum.9 %ur*uant to the *aid pro,i*ion& then& *in/e there i* no

finding of a *tipulation 0y the partie* a* to the impo*ition of intere*t& only the amount of 1 per

annum6 may 0e a+arded 0y the /ourt 0y +ay of damage* in it* di*/retion& not t+o per/ent$) per

month& follo+ing the guideline* laid do+n in the landmar5 /a*e of Ea*tern Shipping ine* ,. Court of

Appeal*&62

to +it

II. ith regard parti/ularly to an a+ard of intere*t in the /on/ept of a/tual and /ompen*atory

damage*& the rate of intere*t& a* +ell a* the a//rual thereof& i* impo*ed& a* follo+*

1. hen the o0ligation i* 0rea/hed& and it /on*i*t* in the payment of a *um of money& i.e.& a

loan or for0earan/e of money& the intere*t due *hould 0e that +hi/h may ha,e 0een

*tipulated in +riting. Furthermore& the intere*t due *hall it*elf earn legal intere*t from the time

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it i* @udi/ially demanded. In the a0*en/e of *tipulation& the rate of intere*t *hall 0e 1 per

annum to 0e /omputed from default& i.e.& from @udi/ial or e8tra@udi/ial demand under and

*u0@e/t to the pro,i*ion* of Arti/le 117 of the Ci,il Code.

. hen an o0ligation& not /on*tituting a loan or for0earan/e of money& i* 0rea/hed& an

intere*t on the amount of damage* a+arded may 0e impo*ed at the di*/retion of the /ourt atthe rate of 7 per annum. No intere*t& ho+e,er& *hall 0e ad@udged on unliuidated /laim* or

damage* e8/ept +hen or until the demand /an 0e e*ta0li*hed +ith rea*ona0le /ertainty.

A//ordingly& +here the demand i* e*ta0li*hed +ith rea*ona0le /ertainty& the intere*t *hall

0egin to run from the time the /laim i* made @udi/ially or e8tra@udi/ially $Art. 117& Ci,il Code)

0ut +hen *u/h /ertainty /annot 0e *o rea*ona0ly e*ta0li*hed at the time the demand i*

made& the intere*t *hall 0egin to run only from the date the @udgment of the /ourt i* made $at

+hi/h time the uantifi/ation of damage* may 0e deemed to ha,e 0een rea*ona0ly

a*/ertained).The a/tual 0a*e for the /omputation of legal intere*t *hall& in any /a*e& 0e on

the amount finally ad@udged.

3. hen the @udgment of the /ourt a+arding a *um of money 0e/ome* final and e8e/utory&the rate of legal intere*t& +hether the /a*e fall* under paragraph 1 or paragraph & a0o,e&

*hall 0e 1 per annum from *u/h finality until it* *ati*fa/tion& thi* interim period 0eing

deemed to 0e 0y then an eui,alent to a for0earan/e of /redit.6 $Citation* omitted)

A* further /larified in the /a*e of Sunga?Chan ,. CA&'( a loan or for0earan/e of money& good* or

/redit de*/ri0e* a /ontra/tual o0ligation +here0y a lender or /reditor ha* refrained during a gi,en

period from reuiring the 0orro+er or de0tor to repay the loan or de0t then due and paya0le.'1 Thu*

In #eformina ,. Tomol& >r.& the Court held that the legal intere*t at 1 per annum under Central

4an5 $C4) Cir/ular No. 617 *hall 0e ad@udged only in /a*e* in,ol,ing the loan or for0earan/e of

money. And for tran*a/tion* in,ol,ing payment of indemnitie* in the /on/ept of damage* ari*ingfrom default in the performan/e of o0ligation* in general andLor for money @udgment not in,ol,ing a

loan or for0earan/e of money& good*& or /redit& the go,erning pro,i*ion i* Art. ( of the Ci,il Code

pre*/ri0ing a yearly 7 intere*t. Art. ( pertinently pro,ide*

9Art. (. If the o0ligation /on*i*t* in the payment of a *um of money& and the de0tor in/ur* in

delay& the indemnity for damage*& there 0eing no *tipulation to the /ontrary& *hall 0e the payment of

the intere*t agreed upon& and in the a0*en/e of *tipulation& the legal intere*t& +hi/h i* *i8 per /ent

per annum.9

The term 9for0earan/e&9 +ithin the /onte8t of u*ury la+& ha* 0een de*/ri0ed a* a /ontra/tual

o0ligation of a lender or /reditor to refrain& during a gi,en period of time& from reuiring the 0orro+eror de0tor to repay the loan or de0t then due and paya0le.

Ea*tern Shipping ine*& In/. *ynthe*i=ed the rule* on the impo*ition of intere*t& if proper& and the

appli/a0le rate& a* follo+* The1 per annum rate under C4 Cir/ular No. 617 *hall apply only to

loan* or for0earan/e of money& good*& or /redit*& a* +ell a* to @udgment* in,ol,ing *u/h loan or

for0earan/e of money& good*& or /redit& +hile the 7 per annum under Art. ( of the Ci,il Code

applie* 9+hen the tran*a/tion in,ol,e* the payment of indemnitie* in the /on/ept of damage ari*ing

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from the 0rea/h or a delay in the performan/e of o0ligation* in general&9 +ith the appli/ation of 0oth

rate* re/5oned 9from the time the /omplaint +a* filed until the ad@udged amount i* fully paid.9 In

either in*tan/e& the re/5oning period for the /ommen/ement of the running of the legal intere*t *hall

0e *u0@e/t to the /ondition 9that the /ourt* are ,e*ted +ith di*/retion& depending on the euitie* of

ea/h /a*e& on the a+ard of intere*t.9' $Citation* omitted and empha*i* our*)

%ur*uant& then& to Central 4an5 Cir/ular No. 617& i**ued on >uly &16&'3 in the a0*en/e of a

+ritten *tipulation& the intere*t rate to 0e impo*ed in @udgment* in,ol,ing a for0earan/e of /redit *hall

0e 1 per annum& up from 7 under Arti/le ( of the Ci,il Code. Thi* +a* reiterated in Central

4an5 Cir/ular No. ('& +hi/h *u*pended the effe/ti,ity of the U*ury a+ from >anuary 1& 123.'6 4ut

if the @udgment refer* to payment of intere*t a* damage* ari*ing from a 0rea/h or delay in general&

the appli/a0le intere*t rate i* 7 per annum& follo+ing Arti/le ( of the Ci,il Code.'' 4oth intere*t

rate* apply from @udi/ial or e8tra@udi/ial demand until finality of the @udgment. 4ut from the finality of

the @udgment a+arding a *um of money until it i* *ati*fied& the a+ard *hall 0e /on*idered a

for0earan/e of /redit& regardle** of +hether the a+ard in fa/t pertained to one& and therefore during

thi* period& the intere*t rate of 1 per annum for for0earan/e of money *hall apply.'7

4ut noti/e mu*t 0e ta5en that in #e*olution No. 7 dated May 17&(13& the Monetary 4oard of the

4ang5o Sentral ng %ilipina* appro,ed the re,i*ion of the intere*t rate to 0e impo*ed for the loan or

for0earan/e of any money& good* or /redit* and the rate allo+ed in @udgment*& in the a0*en/e of an

e8pre** /ontra/t a* to *u/h rate of intere*t. Thu*& under 4S% Cir/ular No.& i**ued on >une 1&

(13 and effe/ti,e on >uly 1& (13& the *aid rate of intere*t i* no+ 0a/5 at *i8 per/ent $7)& ,i=

4ANJO SENT#A N %II%INAS

OFFICE OF T"E O!E#NO#

CI#CUA# NO.

Serie* of (13

Su0@e/t #ate of intere*t in the a0*en/e of *tipulation

The monetary 4oard& in it* #e*olution No. 7 dated 17 May (13&appro,ed the follo+ing re,i*ion*

go,erning the rate of intere*t in the a0*en/e of *tipulation in loan /ontra/t*& there0y amending

Se/tion of Cir/ular No. ('& Serie* of 12

Se/tion 1. The rate of intere*t for the loan or for0earan/e of any money& good* or /redit* and

the rate allo+ed in @udgment*& in the a0*en/e of an e8pre** /ontra/t a* to *u/h rate of

intere*t& *hall 0e *i8 per/ent $7) per annum.

Se/tion . In ,ie+ of the a0o,e& Su0*e/tion Q3('.1 of the Manual of #egulation* for 4an5*

and Se/tion* 63('H.1& 63('S.3 and 63(3%.1 of the Manual of #egulation* for Non?4an5

Finan/ial In*titution* are here0y amended a//ordingly.

Thi* Cir/ular *hall ta5e effe/t on 1 >uly (13.

FO# T"E MONETA#K 4OA#D

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DIA C. UINIUNDO

Offi/er?In?Charge

The a+ard of attorneyB* fee* i* not proper.

Other than to *ay that the petitioner 9un@u*tifia0ly failed and refu*ed to pay the re*pondent&9 the trial/ourt did not *tate in the 0ody of it* de/i*ion the fa/tual or legal 0a*i* for it* a+ard of attorneyB* fee*

to the re*pondent& a* reuired under Arti/le (2 of the Ne+ Ci,il Code& for +hi/h rea*on +e ha,e

re*ol,ed to delete the *ame. The rule i* *ettled that the trial /ourt mu*t *tate the fa/tual& legal or

euita0le @u*tifi/ation for it* a+ard of attorneyB* fee*.' Indeed& the matter of attorneyB* fee* /annot

0e *tated only in the di*po*iti,e portion& 0ut the rea*on* mu*t 0e *tated in the 0ody of the /ourtB*

de/i*ion.'2 Thi* failure or o,er*ight of the trial /ourt /annot e,en 0e *upplied 0y the CA. A* /on/i*ely

e8plained in Fria* ,. San Diego?Si*on'

Arti/le (2 of the Ne+ Ci,il Code enumerate* the in*tan/e* +here *u/h may 0e a+arded and& in all

/a*e*& it mu*t 0e rea*ona0le& @u*t and euita0le if the *ame +ere to 0e granted. AttorneyB* fee* a*

part of damage* are not meant to enri/h the +inning party at the e8pen*e of the lo*ing litigant. Theyare not a+arded e,ery time a party pre,ail* in a *uit 0e/au*e of the poli/y that no premium *hould

0e pla/ed on the right to litigate. The a+ard of attorneyB* fee* i* the e8/eption rather than the

general rule. A* *u/h& it i* ne/e**ary for the trial /ourt to ma5e finding* of fa/t* and la+ that +ould

0ring the /a*e +ithin the e8/eption and @u*tify the grant of *u/h a+ard. The matter of attorneyB* fee*

/annot 0e mentioned only in the di*po*iti,e portion of the de/i*ion. They mu*t 0e /learly e8plained

and @u*tified 0y the trial /ourt in the 0ody of it* de/i*ion. On appeal& the CA i* pre/luded from

*upplementing the 0a*e* for a+arding attorneyB* fee* +hen the trial /ourt failed to di*/u** in it*

De/i*ion the rea*on* for a+arding the *ame.!"wphi! Con*euently& the a+ard of attorneyB* fee* *hould 0e

deleted.7( $Citation* omitted)

"E#EFO#E& premi*e* /on*idered& the De/i*ion dated April 3(& ((2 of the Court of Appeal* inCA?.#. C! No. 23211 i* AFFI#MED +ith MODIFICATION. %etitioner S.C. Mega+orld Con*tru/tion

and De,elopment Corporation i* ordered to pay re*pondent Engr. ui* A. %arada& repre*ented 0y

Engr. eonardo A. %arada& the prin/ipal amount due of %217&7.((& plu* intere*t at t+el,e per/ent

$1) per annum& re/5oned from @udi/ial demand until >une 3(& (13& and *i8 per/ent $7) per an

o+n from >uly 1& (13 until finality hereof& 0y +ay of a/tual and /ompen*atory damage*. Thereafter&

the prin/ipal amount due a* ad@u*ted 0y intere*t *hall li5e+i*e earn intere*t at *i8 per/ent $7) per

annum until fully paid. The a+ard of attorneyR* fee* i* DEETED.

SO O#DE#ED.

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G.R. No. 190907 August 23 2012

!"#"RAN$ %&'('%%'N" $)*+# $")+R'#, AG"N), 'N). %etitioner&

,*.

-'R$# */'N'*N %R'/" &*('NG$ 'N). #e*pondent.

EONA#DO?DE CAST#O& >.&

%E#AS?4E#NA4E&

" ) ' $ ' * N

!'((ARA/A R. J.:

4efore u* i* a petition for re,ie+ on certiorari under #ule 6' of the 1 #ule* of Ci,il %ro/edure& a*

amended& *ee5ing to re,er*e the Augu*t 6& (( De/i*ion1 and De/em0er 1& (( #e*olution of

the Court of Appeal* $CA) in CA?.#. S% No. 1('26. The CA had re,er*ed and *et a*ide theDe/i*ion3 of the #egional Trial Court $#TC)& 4ran/h 7& of Hue=on City& in*ofar a* it held that the

Rdi*mi**al of petitionerR* amended /omplaint +a* +ithout pre@udi/e.

The ante/edent fa/t* of the /a*e are a* follo+*

%etitioner !eteran* %hilippine S/out Se/urity Agen/y& In/. $!eteran*) i* a /orporation duly organi=ed

and e8i*ting under %hilippine la+*. It i* engaged in the 0u*ine** of pro,iding *e/urity *er,i/e*.

#e*pondent Fir*t Dominion %rime "olding*& In/. $FD%"I)& on the other hand& i* a holding in,e*tment

and management /ompany +hi/h o+n* and operate* ,ariou* *u0*idiarie* and affiliate*. Among it*

*u0*idiarie* are Clear+ater Tuna Corporation& Marana+ Canning Corporation and Nauti/a CanningCorporation& /olle/ti,ely referred to a* the FD%"I roup of Companie*. Said /ompanie* are

engaged in the produ/tion of /anned tuna.

On Fe0ruary 1'& ((1& re*pondent FD%"I and it* aforementioned *u0*idiarie* @ointly filed 0efore the

#TC of %a*ig City& 4ran/h 1'2 a %etition for #eha0ilitation.6 Said petition +a* do/5eted a* Ci,il

Ca*e No. 72363. Atta/hed to the petition +a* a S/hedule of De0t* and ia0ilitie* a* of >anuary 31&

((1 *ho+ing that Clear+ater Tuna Corporation $Clear+ater) had an out*tanding inde0tedne** to

petitioner in the total amount of %3'7&26.6.' Said amount repre*ent* the *e/urity *er,i/e*

rendered 0y petitioner to Clear+ater pur*uant to a Contra/t of uard Ser,i/e*7 0et+een petitioner

and Inglenoo5 Food Corporation $Clear+aterB* former name) for the latterB* manufa/turing fa/ility at

the Na,ota* Fi*h %ort Comple8.

After finding the petition *uffi/ient in form and *u0*tan/e& the #eha0ilitation Court i**ued a Stay

Order on Fe0ruary & ((1. The di*po*iti,e portion of the order read*

"E#EFO#E& the %etition 0eing *uffi/ient in form and *u0*tan/e& a *tay order pur*uant to Se/tion

7& #ule 6 of the Interim #ule* of %ro/edure on Corporate #eha0ilitation i* i**ued a* follo+*

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18/31

$a) Staying enfor/ement of all /laim*& +hether for money or other+i*e and +hether *u/h

enfor/ement i* 0y /ourt a/tion or other+i*e& in/luding the e8tra?@udi/ial fore/lo*ure pro/eeding* in

E>F Ca*e No. (1?(& entitled 9Metropolitan 4an5 and Tru*t Co. ,*. Nauti/a Canning Corporation9& of

the #egional Trial Court of eneral Santo* City& again*t petitioner FD%"I roup of Companie*&

/ompri*ing of petitioner* Fir*t Dominion %rime "olding*& In/.& and it* *u0*idiarie*& petitioner*

Nauti/a Canning Corporation& Marana+ Canning Corporation and Clear+ater

Tuna Corporation& their guarantor* and *uretie* not *olidarily lia0le +ith the petitioner*-

$0) %rohi0iting petitioner FD%"I roup of Companie* from *elling& en/um0ering& tran*ferring& or

di*po*ing in any manner any of it* propertie*& e8/ept in the ordinary /our*e of 0u*ine**-

$/) %rohi0iting petitioner FD%"I roup of Companie* from ma5ing any payment of it* lia0ilitie*

out*tanding a* :of; the date of filing of the %etition-

8 8 8 8

Mr. Moni/o !. >a/o0 i* appointed reha0ilitation re/ei,er +ho /an a**ume the po*ition upon hi*

ta5ing an oath and after po*ting a 0ond in the amount of Fi,e "undred Thou*and $% '((&(((.(()

%e*o*& e8e/uted in fa,or of petitioner FD%"I roup of Companie*& to guarantee that he +ill faithfully

di*/harge hi* dutie* and the order* of thi* Court.

et thi* Stay Order 0e pu0li*hed in a ne+*paper of general /ir/ulation in the %hilippine* on/e a

+ee5 for t+o $) /on*e/uti,e +ee5* from date of the Order.

All /reditor* and all intere*ted partie* $in/luding the Se/uritie* and E8/hange Commi**ion) are

dire/ted to file and *er,e on the petitioner FD%"I roup of Companie*& their ,erified /omment on& or

oppo*ition to& the %etition& +ith *upporting affida,it* and do/ument*& not later than ten $1() day*0efore the date of the initial hearing. 8 8 82

The FD%"I roup of Companie* /au*ed the pu0li/ation of the *tay order to gi,e noti/e to the +hole

+orld of the filing and penden/y of the reha0ilitation pro/eeding*. Thereafter& after due pro/eeding*&

the #eha0ilitation Court appro,ed the reha0ilitation plan *u0mitted 0y FD%"I and it* *u0*idiarie*.

On O/to0er 6& ((3& the #eha0ilitation Court li5e+i*e i**ued an Order appro,ing the Amended

#eha0ilitation %lan for the FD%"I roup of Companie*. The fallo of the O/to0er 6& ((3 Order

read*

"E#EFO#E& petitioner*B Motion to Amend their #eha0ilitation %lan i* #ANTED and the

Amended #eha0ilitation %lan $a* of Augu*t 7& ((3) +hi/h i* atta/hed a* Anne8 9A9 and madeintegral part of thi* Order i* A%%#O!ED.

All pro,i*ion* of the original #eha0ilitation %lan appro,ed 0y thi* Court on Fe0ruary & (( that

are not in/on*i*tent or in/ompati0le +ith the *aid Amended #eha0ilitation %lan $a* of Augu*t 7&

((3) *hall remain in effe/t.

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19/31

Con*euently& petitioner* are *tri/tly en@oined to a0ide 0y the term* and /ondition* of the original

#eha0ilitation %lan appro,ed on Fe0ruary & (( a* amended 0y the Amended #eha0ilitation %lan

$a* of Augu*t 7& ((3)& and they *hall& in /on*ultation +ith the #eha0ilitation #e/ei,er& unle**

dire/ted other+i*e& *u0mit a uarterly report on the progre** of the implementation of the

#eha0ilitation %lan.

The #eha0ilitation #e/ei,er i* dire/ted to furni*h all the /on/erned partie* in/luding the Se/uritie*

and E8/hange Commi**ion& /opie* of thi* Order and it* Anne8 9A9 +ithin ten $1() day* from O/to0er

2& ((3. "e +ill then furni*h thi* Court proof of *er,i/e of hi* underta5ing.

SO O#DE#ED.1(

Su0*euently& petitioner filed a Complaint11 for Sum of Money and Damage* again*t Clear+ater

andLor Atty. >a/o0 in hi* /apa/ity a* appointed #e/ei,er 0efore the Metropolitan Trial Court $MeTC)&

4ran/h 31& of Hue=on City. The /omplaint& +hi/h +a* filed on May & ((6& +a* do/5eted a* Ci,il

Ca*e No. 33. E**entially& petitioner *ought to re/o,er from Clear+ater the amount

of % 3&1.2( repre*enting the unpaid *e/urity *er,i/e* rendered 0y petitioner from >anuary 17&((( to >anuary 31& ((1 pur*uant to their /ontra/t. On May 6& (('& the MeTC di*mi**ed the

/omplaint for failure to pro*e/ute&1 0ut later rein*tated the *ame upon motion for re/on*ideration 0y

petitioner .13

On O/to0er (& (('& petitioner filed an Amended Complaint16 for Sum of Money and Damage*

again*t herein re*pondent FD%"I a,erring that Clear+ater had /hanged it* 0u*ine** name to Fir*t

Dominion %rime "olding*& In/.

#e*pondent FD%"I filed a Motion to Di*mi**1' an/hored on the follo+ing ground* $1) petitionerB*

/laim for payment of *e/urity *er,i/e* i* 0arred 0y re* @udi/ata- $) the filing of the /omplaint

/on*titute* forum *hopping- and $3) the /omplaint fail* to *tate a /au*e of a/tion again*t re*pondentFD%"I. #e*pondent a**erted that petitionerB* /laim i* 0arred a* the *ame had 0een *ettled&

determined and finally ad@udi/ated in the Amended #eha0ilitation %lan appro,ed 0y the

#eha0ilitation Court and that the filing of the /omplaint /on*titute* forum *hopping *in/e petitioner

+a* fully a+are of the penden/y of the reha0ilitation pro/eeding* in,ol,ing Clear+ater in Ci,il Ca*e

No. 72363. #e*pondent li5e+i*e argued that the /omplaint failed to *tate a /au*e of a/tion again*t

re*pondent FD%"I *in/e a* *ho+n in the allegation* in the amended /omplaint it*elf& a* +ell a* the

anne8e* atta/hed thereto& the o0ligation *ought to 0e enfor/ed 0y petitioner i* not an o0ligation

/ontra/ted 0y re*pondent FD%"I 0ut 0y Clear+ater under it* former name Inglenoo5 Food

Corporation.

%etitioner thereafter duly filed it* Comment andLor Oppo*ition to the Motion to Di*mi** to +hi/hre*pondent filed a reply.

On April 3& ((& the MeTC i**ued a #e*olution17 granting re*pondentB* motion to di*mi**. In

di*mi**ing the amended /omplaint& the trial /ourt noted that de*pite the pu0li/ation and noti/e of the

petition for reha0ilitation in Ci,il Ca*e No. 72363& petitioner had not filed any /omment or oppo*ition

to the petition nor parti/ipated in the pro/eeding*. "en/e& petitioner +a* 0ound 0y the #eha0ilitation

CourtB* Fe0ruary & ((1 *tay order *taying enfor/ement of all /laim* again*t the FD%"I roup of

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20/31

Companie* a* +ell a* the O/to0er 6& ((3 Order appro,ing the Amended #eha0ilitation %lan +hi/h

had already 0e/ome final. Furthermore& the trial /ourt +a* /on,in/ed that the Amended Complaint

failed to *tate a /au*e of a/tion again*t re*pondent. The trial /ourt noted that the /ontra/t for

*e/urity *er,i/e* +a* entered into 0y petitioner and Inglenoo5 Food Corporation& no+ Clear+ater.

#e*pondent FD%"I had no parti/ipation +hat*oe,er nor had re*pondent 0enefitted from the *aid

/ontra/t. The MeTC +a* al*o not per*uaded 0y petitionerB* /laim that re*pondent FD%"I a/ted a*an 9um0rella /ompany9 of all the other /orporation* +hi/h filed a petition for reha0ilitation.

Aggrie,ed& petitioner *ought re/on*ideration of the *aid #e*olution& 0ut the MeTC denied the *ame

for la/5 of merit in a #e*olution1 dated O/to0er 3& ((. The MeTC li5e+i*e denied petitionerB*

alternati,e prayer that the di*mi**al 0e de/lared to 0e +ithout pre@udi/e& *tre**ing that the di*mi**al

of the /a*e +a* not merely for failure to *tate a /au*e of a/tion 0ut al*o for ha,ing 0een 0arred 0y

the #eha0ilitation CourtB* Stay Order and 0y it* Order finally appro,ing the Amended #eha0ilitation

%lan.

Un*ati*fied& petitioner appealed to the #TC. On >une 6& ((2&12 the #TC partially granted petitionerB*

appeal. hile the #TC di*mi**ed the Amended Complaint for failure to *tate a /au*e of a/tion&ne,erthele**& it found that the di*mi**al i* +ithout pre@udi/e to petitionerB* rein*titution of a *eparate

a/tion for the enfor/ement of it* /laim 0e/au*e purportedly& the Stay Order and the appro,ed

Amended #eha0ilitation %lan for the FD%"I roup of Companie* 9/annot operate to depri,e

petitionerB* right to pre*ent it* o+n /a*e or ha,e the effe/t of *tifling *u/h right.91

#e*pondent FD%"I mo,ed for partial re/on*ideration of the #TC de/i*ion in*ofar a* it de/lared the

di*mi**al of the Amended Complaint to 0e 9+ithout pre@udi/e&9 0ut the motion +a* denied in an

Order ( dated O/to0er & ((2. Thu*& re*pondent FD%"I appealed to the CA.

On Augu*t 6& ((& the CA a* afore*aid& re,er*ed the trial /ourtB* >une 6& ((2 De/i*ion and

O/to0er & ((2 Order. The CA agreed +ith the ruling of the MeTC that the i**uan/e of a *tay orderand the appointment of a reha0ilitation re/ei,er in the petition for reha0ilitation @ointly filed 0y FD%"I

and it* *u0*idiarie* in/luding Clear+ater *tayed the enfor/ement of all /laim*& in/luding petitionerB*

money /laim. %ertinently& the CA ruled that

"en/e& /on*idering that the o0ligation under the Contra/t of uard Ser,i/e* +a* /ontra/ted *olely

0y Clear+ater under it* former name& Inglenoo5 Food Corporation& and *in/e the /laim i* re/ogni=ed

and admitted a* de0t of Clear+ater in the #eha0ilitation %ro/eeding*& re*pondent ha* no /au*e of

a/tion to 0ring a *eparate *uit for /olle/tion of *um of money again*t petitioner.

"E#EFO#E& premi*e* /on*idered& the petition i* here0y #ANTED. The De/i*ion of the #TC&

4ran/h 7& Hue=on City dated >une 6& ((2 and the Order dated O/to0er & ((2& in Ci,il Ca*e No.H?(?717 are here0y #E!E#SED and SET ASIDE. The #e*olution* dated April 3& (( and

O/to0er 3& (( of the MTC& 4ran/h 31& Hue=on City& in Ci,il Ca*e No. 33 are here0y

AFFI#MED.

SO O#DE#ED.1

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21/31

%etitioner *ought re/on*ideration of the CA de/i*ion& 0ut it* motion +a* denied 0y the CA in the

a**ailed #e*olution dated De/em0er 1& ((.

"en/e& thi* petition.

%etitioner /ontend* that the di*mi**al of the Amended Complaint again*t re*pondent FD%"I doe*not 0ar petitioner from in*tituting an a/tion for /olle/tion of money again*t Clear+ater. %etitioner

fault* the CA for ruling that Clear+aterB* de0t to petitioner +a* already /o,ered 0y the Amended

#eha0ilitation %lan and in*i*t* that *aid de0t +a* not in/luded in the */hedule of payment* under

the Amended #eha0ilitation %lan. A//ording to petitioner& the Amended #eha0ilitation %lan only

pertain* to re*pondent FD%"I and Marana+ Canning Corporation& +hi/h remain* operational. It i*

not appli/a0le to Clear+ater /on*idering that there +a* no mention of ho+ the plan +ill operate to

0enefit Clear+ater and it* /reditor*. %urportedly& Clear+aterB* petition for reha0ilitation +a* not

pur*ued or +a* in effe/t denied. And the amended plan not 0eing appli/a0le to Clear+ater& petitioner

argue* that it* appro,al +ill not pre/lude petitioner from in*tituting a *eparate a/tion to enfor/e it*

/laim.

#e*pondent FD%"I /ounter* that in the /orporate reha0ilitation pro/eeding* for the FD%"I roup of

Companie*& petitionerB* /laim had already 0een pa**ed upon 0y the #eha0ilitation Court and

fa/tored into the appro,ed Amended #eha0ilitation %lan a* among it* un*e/ured de0t*.

"en/e& it /annot 0e the *u0@e/t of a *eparate a/tion.3 #e*pondent a,er* that petitioner i* 0arred

from a**erting it* payment for *e/urity *er,i/e* +ith Clear+ater *in/e the *u0@e/t /laim i* already

re/ogni=ed and admitted in the appro,ed reha0ilitation plan +hi/h i* under implementation. Thu*&

re*pondent a**ert* that the CA +a* /orre/t in holding that the e8i*ten/e of the reha0ilitation

pro/eeding* effe/ti,ely 0arred petitioner from enfor/ing it* money /laim again*t Clear+ater. To

re*pondent& a *eparate a/tion 0y petitioner +ould only re*ult in multipli/ity of *uit* +hi/h the la+

a0hor*. #e*pondent *tre**e* that any and all /laim* again*t the FD%"I roup of Companie*&in/luding that of petitioner& are *tayed and 0arred until the termination of reha0ilitation pro/eeding*

pur*uant to Se/tion* 7 and 11 of the Interim #ule* of %ro/edure on Corporate #eha0ilitation.

The i**ue to 0e re*ol,ed in thi* /a*e i* +hether the CA erred in ruling that petitionerB* a/tion to

enfor/e the payment of the unpaid *e/urity *er,i/e* i* /o,ered 0y the Amended #eha0ilitation %lan

*u/h that petitioner /an no longer in*titute a *eparate a/tion to /olle/t the *ame.

e deny the petition.

Fir*t of all& it mu*t not 0e o,erloo5ed that petitioner initially filed it* /omplaint again*t Clear+ater 0ut

it* /omplaint +a* di*mi**ed for failure to pro*e/ute. %etitioner amended it* /omplaint and impleadedre*pondent FD%"I a* defendant& on it* o+n allegation that Clear+ater had /hanged it* name to

herein re*pondent Fir*t Dominion %rime "olding*& In/. "o+e,er& a* /an 0e gleaned from the re/ord*

and pleading* of the partie*& re*pondent FD%"I and Clear+ater are t+o *eparate /orporate entitie*

and the o0ligation petitioner *ee5* to enfor/e +a* not /ontra/ted 0et+een petitioner and re*pondent

FD%"I 0ut 0y petitioner and Clear+ater under it* former name& Inglenoo5 Food* Corporation. For

thi* rea*on& 0oth the trial /ourt and the appellate /ourt are in agreement that the Amended

Complaint fail* to *tate a /au*e of a/tion again*t re*pondent FD%"I. On thi* ground alone& the

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22/31

Amended Complaint filed 0y petitioner again*t re*pondent FD%"I +a* properly di*mi**ed. Indeed&

+hile re*pondent FD%"I may 0e the parent /ompany of Clear+ater& the*e t+o /orporation* ha,e

di*tin/t and *eparate @uridi/al per*onalitie* and therefore re*pondent FD%"I /annot 0e held lia0le for

the de0t* of it* *u0*idiary Clear+ater nor /an re*pondent FD%"I a**ume the lia0ilitie* of Clear+ater.

A* aptly found 0y the CA

Clear+ater and FD%"I ha,e 0een organi=ed a* *eparate /orporate entitie*& a* e,iden/ed 0y their

re*pe/ti,e Certifi/ate* of Filing of Amended Arti/le* of In/orporation on file +ith the Se/uritie* and

E8/hange Commi**ion. The filing of petitioner of >oint %etition for #eha0ilitation for the FD%"I

roup of Companie* /annot in any +ay 0e ta5en a* an a**umption 0y petitioner of any lia0ility of

Clear+ater. It mu*t 0e noted that in the Con*olidated In,entory of A**et* and Con*olidated S/hedule

of A//ount* #e/ei,a0le* of the FD%"I roup of Companie*& Clear+ater hold* a**et* entirely

*eparate from it* parent /ompany.6

No+ a* to the i**ue of +hether the e8i*ten/e of the /orporate reha0ilitation pro/eeding* of the

FD%"I roup of Companie* ha* the effe/t of 0arring petitioner from a**erting it* /laim for the

payment of *e/urity *er,i/e* again*t Clear+ater 0y rea*on of the appro,ed Amended #eha0ilitation%lan& +e rule in the affirmati,e.

An e**ential fun/tion of /orporate reha0ilitation i* the me/hani*m of *u*pen*ion of all a/tion* and

/laim* again*t the di*tre**ed /orporation upon the due appointment of a management /ommittee or

reha0ilitation re/ei,er .'Se/tion 7$/) of %D (?A mandate* that upon appointment of a management

/ommittee& reha0ilitation re/ei,er& 0oard& or 0ody& all a/tion* for /laim* again*t /orporation*&

partner*hip* or a**o/iation* under management or re/ei,er*hip pending 0efore any /ourt& tri0unal&

0oard& or 0ody *hall 0e *u*pended. The a/tion* to 0e *u*pended /o,er all /laim* again*t a

di*tre**ed /orporation +hether for damage* founded on a 0rea/h of /ontra/t of /arriage& la0or

/a*e*& /olle/tion *uit* or any other /laim* of pe/uniary nature. >uri*pruden/e i* *ettled that the

*u*pen*ion of pro/eeding* referred to in the la+ uniformly applie* to 9all a/tion* for /laim*9 filedagain*t the /orporation& partner*hip or a**o/iation under management or re/ei,er*hip& +ithout

di*tin/tion& e8/ept only tho*e e8pen*e* in/urred in the ordinary /our*e of 0u*ine**.7 The *tay order

i* effe/ti,e on all /reditor* of the /orporation +ithout di*tin/tion& +hether *e/ured or un*e/ured.

Thu*& petitionerB* a/tion to /olle/t the *um o+ed to it i* not e8empted from the /o,erage of the *tay

order. The enfor/ement of petitionerB* /laim through /ourt a/tion i* li5e+i*e *u*pended to gi,e +ay

to the *peedy and effe/ti,e reha0ilitation of the FD%"I roup of Companie*.

The @u*tifi/ation for the *u*pen*ion of a/tion* or /laim*& +ithout di*tin/tion& pending reha0ilitation

pro/eeding* i* to ena0le the management /ommittee or reha0ilitation re/ei,er to effe/ti,ely e8er/i*e

it*Lhi* po+er* free from any @udi/ial or e8tra@udi/ial interferen/e that might unduly hinder or pre,entthe 9re*/ue9 of the de0tor /ompany. To allo+ *u/h other a/tion* to /ontinue +ould only add to the

0urden of the management /ommittee or reha0ilitation re/ei,er& +ho*e time& effort and re*our/e*

+ould 0e +a*ted in defending /laim* again*t the /orporation in*tead of 0eing dire/ted to+ard it*

re*tru/turing and reha0ilitation.2 It i* +orthy to note that the *tay order remain* effe/ti,e during the

duration of the reha0ilitation pro/eeding*.

http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt26http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt27http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt28http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt26http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt27http://www.lawphil.net/judjuris/juri2012/aug2012/gr_190907_2012.html#fnt28


23/31

"o+e,er& in an attempt to e8empt it* money /laim from the /o,erage of the reha0ilitation

pro/eeding*& petitioner /laim* that Clear+ater +a* denied reha0ilitation and a**ert* that the

Amended #eha0ilitation %lan did not in/lude Clear+aterB* o0ligation to petitioner. Thi* /ontention&

ho+e,er& i* 0ereft of merit.

Nothing in the re/ord* of the /a*e *upport* petitionerB* /laim that the petition for reha0ilitation ofClear+ater +a* denied or +a* not pur*ued. On the /ontrary& the reha0ilitation pro/eeding* in,ol,ed

all the petitioning /orporation*& i.e.& FD%"I& Marana+ Canning Corporation& Clear+ater Tuna

Corporation and Nauti/a Canning Corporation. The *tay order i**ued 0y the reha0ilitation /ourt al*o

*tayed the enfor/ement of all the /laim* again*t FD%"I and it* *u0*idiarie* in/luding Clear+ater.

More& the appro,ed Amended #eha0ilitation %lan /o,ered all the de0t* of the FD%"I roup of

Companie*. The fa/t that Clear+ater +a* not *pe/ifi/ally mentioned in the Amended #eha0ilitation

%lan doe* not mean the denial of it* reha0ilitation. A /areful peru*al of the Amended #eha0ilitation

%lan +ould *ho+ that all the a**et* and lia0ilitie* of FD%"I and it* *u0*idiarie* undergoing

reha0ilitation +ere /olle/ti,ely managed and a payment */heme +a* introdu/ed for the *ettlement of

all of the FD%

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