Umale vs ASB Realty Corporation

Facts:

 In 1986, Amethyst Pearl executed a Deed of Assignment in Liquidation of a parcel of land in favor of ASB
Realty in consideration of Amethyst Pearl’s outstanding capital stock from ASB Realty making ASB Realy the
owner of the parcel of land
 Sometime in 2003, ASB Realty commenced an action in the MTC for unlawful detainer against Umale. ASB
Realty alleged that it entered into a lease contract with Umale for the period June 1, 1999 to May 1, 2000.
Their agreement was for Umale to conduct a pay-parking business on the property and pay a monthly rent
of P60, 720. Upon the contract’s expiration on continued occupying the premises and paying rentals.
 In June 2003,ASB Realty served on Umale a Notice of Termination of Lease and Demand to Vacate and Pay.
ASB Realty stated that it was terminating the lease effective midnight of June 30, 2003. Umale failed to
comply with ASB Realty’s dmeands and continued in possession of the subject premises, even constructing
commercial establishments thereon.

Issue: Whether or not ASB Realty can file suit to recover an unlawfully detained corporate property despite the fact
that the corporation had already been placed under rehabilitation.

Held:

 YES
 What petitioners argue in this case is that the corporate officer of ASB Realty is incapacitated to file the suit
to recover a corporate property because ASB Realty has a duly appointed rehabilitation receiver. Allegedly,
this rehabilitation receiver is the only one that can file the instant suit.
 There is no denying that ASB Realty, as the owner of the leased premises, is the real party-in-interest in the
unlawful detainer suit. Real party-in-interest is defined as "the party who stands to be benefited or injured
by
 Corporations, such as ASB Realty, are juridical entities that exist by operation of law. As a creature of law,
the powers and attributes of a corporation are those set out, expressly or impliedly, in the law. Among the
general powers granted by law to a corporation is the power to sue in its own name.
 The concept of debtor-in-possession, is carried out more particularly in the SEC Rules, the rule that is
relevant to the instant case. It states therein that the interim rehabilitation receiver of the debtor
corporation "does not take over the control and management of the debtor corporation." Likewise, the
rehabilitation receiver that will replace the interim receiver is tasked only to monitor the successful
implementation of the rehabilitation plan. There is nothing in the concept of corporate rehabilitation that
would ipso facto deprive the Board of Directors and corporate officers of a debtor corporation, such as ASB
Realty, of control such that it can no longer enforce its right to recover its property from an errant lessee.
Lingkod Manggagawa vs Rubberworld

Facts:

 On August 26, 1994, Rubberworld filed with the Department of Labor and Employment (DOLE) a Notice of
Temporary Partial Shutdown due to severe financial crisis, therein announcing the formal actual company
shutdown a copy of which was served on the recognized labor union of Rubberworld, the Bisig
Pagkakaisa-NAFLU, the union with which the corporation had a collective bargaining agreement.
 On September 1, 1994, Bisig Pagkakaisa-NAFLU staged a strike. It set up a picket line in front of the
premises of Rubberworld and even welded its gate. As a result, Rubberworld's premises closed prematurely
even before the date set for the start of its temporary partial shutdown.
 On September 9, 1994, herein petitioner union, the Lingkod Manggagawa Sa Rubberworld, Adidas-Anglo
(Lingkod, for brevity), represented by its President, Sonia Esperanza, filed a complaint against Rubberworld
and its Vice Chairperson, Mr. Antonio Yang, for unfair labor practice (ULP), illegal shutdown, and non-
payment of salaries and separation pay. The said complaint was referred to Labor Arbiter Ernesto Dinopol
for appropriate action.
 On November 22, 1994, while the aforementioned complaint was pending with Labor Arbiter Dinopol,
Rubberworld filed with the SEC a Petition for Declaration of a State of Suspension of Payments with
Proposed Rehabilitation Plan.
 Notwithstanding the SEC's aforementioned suspension order and despite Rubberworld's submission on
January 10, 1995 of a Motion to Suspend Proceedings, Labor Arbiter Dinopol went ahead with the ULP case
and rendered his decision denying respondents motion to suspend proceedings and declaring respondent
Rubberworld Phils., Inc. to have committed unfair labor practice.
 On April 22, 1998, the SEC issued an Order finding that the continuance in business [of Rubberworld] would
neither be feasible/profitable nor work to the best of interest of the stockholders, parties-litigants, creditors,
or the general public, xxx Rubberworld Philippines, Inc. was hereby declared as DISSOLVED under Section
6(d) of P.D. 902-A. Accordingly, the suspension Order is LIFTED.

Issue: Whether or not the CA had committed grave abuse of discretion amounting to lack of jurisdiction or an
excess in the exercise thereof when it gave due course to the petition filed by Rubberworld (Phils.), Inc. and
annulled and set aside the decisions rendered by the labor arbiter a quo and the NLRC, when the said decisions
had become final and executory warranting the outright dismissal of the aforesaid petition
Held:
 NO
 It cannot be said that the decision of the Labor Arbiter, or the decision/dismissal order and writ of
execution issued by the NLRC, could ever attain final and executory status. The Labor Arbiter
completely disregarded and violated Section 6(c) of Presidential Decree 902-A, as
amended, which categorically mandates the suspension of all actions for claims against a
corporation placed under a management committee by the SEC. Thus, the proceedings before
the Labor Arbiter and the order and writ subsequently issued by the NLRC are all null and void for
having been undertaken or issued in violation of the SEC suspension Order dated December 28, 1994.
As such, the Labor Arbiter’s decision, including the dismissal by the NLRC of Rubberworld’s
appeal, could not have achieved a final and executory status.
 The Labor Arbiter's decision in this case is void ab initio, and therefore, non-existent. A void judgment
is in effect no judgment at all. No rights are divested by it nor obtained from it. Being worthless in itself,
all proceedings upon which the judgment is founded are equally worthless. It neither binds nor bars
anyone. All acts performed under it and all claims flowing out of it are void. In other words, a void
judgment is regarded as a nullity, and the situation is the same as it would be if there were no
judgment. It accordingly leaves the party-litigants in the same position they were in before the trial
Panlilio vs RTC

Facts:

 Jose Marcel Panlilio, ErlindaPanlilio, Nicole Morris and Marlo Cristobal (petitioners), as corporate officers of
Silahis International Hotel, Inc. (SIHI), filed with the Regional Trial Court (RTC) of Manila, Branch 24, a
petition for Suspension of Payments and Rehabilitation.
 The RTC of Manila, Branch 24, issued an Order staying all claims against SIHI upon finding the petition
sufficient in form and substance.
 At the time, however, of the filing of the petition for rehabilitation, there were a number of criminal charges
pending against petitioners in Branch 51 of the RTC of Manila.
 These criminal charges were initiated by respondent Social Security System (SSS) and involved charges of
Estafa. Consequently, petitioners filed with the RTC of Manila, Branch 51, a Manifestation and Motion to
Suspend Proceedings.
 Petitioners argued that the stay order issued by Branch 24 should also apply to the criminal charges pending
in Branch 51. Petitioners, thus, prayed that Branch 51 suspend its proceedings until the petition for
rehabilitation was finally resolved but Branch 51 issued an Order denying petitioners’ motion to suspend the
proceedings. It ruled that the stay order issued by Branch 24 did not cover criminal proceedings.
 Branch 51 then denied the motion for reconsideration filed by petitioners. Petitioners filed a petition for
certiorari with the CA assailing the Order of Branch 51 but the CA issued a Decision denying the petition.
Hence petitioners filed before the Supreme Court a petition for review on certiorari.

Issue: Whether or not the suspension of "all claims" as an incident to a corporate rehabilitation also includes the
suspension of criminal charges filed against the corporate officers of the distressed corporation.

Held:

 NO
 No, the criminal charges are not included.
 The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals. The Regional
Trial Court of Manila, Branch 51, was ORDERED to proceed with the criminal cases filed against petitioners.
 The rehabilitation of SIHI and the settlement of claims against the corporation is not a legal
ground for the extinction of petitioners’ criminal liabilities. There is no reason why criminal
proceedings should be suspended during corporate rehabilitation, more so, since the prime purpose of the
criminal action is to punish the offender in order to deter him and others from committing the same or
similar offense, to isolate him from society, reform and rehabilitate him or, in general, to maintain social
order. As correctly observed in Rosario, it would be absurd for one who has engaged in criminal conduct
could escape punishment by the mere filing of a petition for rehabilitation by the corporation of which he is
an officer.
Bureau of Internal Revenue vs Lepanto

Facts:

 Respondent Lepanto Ceramics, Inc. (LCI) filed a petition 4 for corporate rehabilitation pursuant to Republic
Act No. (RA) 10142, otherwise known as the "Financial Rehabilitation and Insolvency Act (FRIA) of 2010,"
 Essentially, LCI alleged that due to the financial difficulties it has been experiencing dating back to the Asian
financial crisis, it had entered into a state of insolvency considering its inability to pay its obligations as they
become due and that its total liabilities amounting to ₱4,213 ,682, 715. 00 far exceed its total assets worth
₱1,112,723,941.00. Notably, LCI admitted in the annexes attached to the aforesaid Petition its tax liabilities
to the national government in the amount of at least ₱6,355,368.00.6
 On January 13, 2012, the Rehabilitation Court issued a Commencement Order,which, inter alia: (a) declared
LCI to be under corporate rehabilitation; (b) suspended all actions or proceedings, in court or otherwise, for
the enforcement of claims against LCI; (c) prohibited LCI from making any payment of its liabilities
outstanding as of even date, except as may be provided under RA 10142; and (d) directed the BIR to file
and serve on LCI its comment or opposition to the petition, or its claims against LCI.
 Accordingly, the Commencement Order was published in a newspaper of general circulation and the same,
together with the petition for corporate rehabilitation, were personally served upon LCI's creditors, including
the BIR.
 Despite the foregoing, Misajon, et al., acting as Assistant Commissioner, Group Supervisor, and Examiner,
respectively, of the BIR's Large Taxpayers Service, sent LCI a notice of informal conference dated May 27,
2013, informing the latter of its deficiency internal tax liabilities for the Fiscal Year ending June 30, 2010. In
response, LCI's court-appointed receiver, Roberto L. Mendoza, sent BIR a letter-reply, reminding the latter
of the pendency of LCI's corporate rehabilitation proceedings, as well as the issuance of a Commencement
Order in connection therewith.
 Undaunted, the BIR sent LCI a Formal Letter of Demand dated May 9, 2014, requiring LCI to pay deficiency
taxes in the amount of P567,519,348.39. This prompted LCI to file a petition for indirect contempt dated
August 13, 2014 against petitioners before RTC Br. 35.

Issue: Whether or not the BIR can still require LCI to pay for deficiency taxes.

Held:

 NO
 In the case at bar, it is undisputed that LCI filed a petition for corporate rehabilitation. Finding the same to
be sufficient in form and substance, the Rehabilitation Court issued a Commencement Order
 Notably, the acts of sending a notice of informal conference and a Formal Letter of Demand are part and
parcel of the entire process for the assessment and collection of deficiency taxes from a delinquent
taxpayer, - an action or proceeding for the enforcement of a claim which should have been suspended
pursuant to the Commencement Order. Unmistakably, Misajon, et al. 's foregoing acts are in clear defiance
of the Commencement Order.