CASE DIGESTS

ON FINANCIAL REHABILITATION
AND INSOLVENCY ACT (FRIA) OF 2010
 TABLE OF CONTENTS

Kaizen Builders v. CA 2

Viva Shipping Lines, Inc v. Keppel Philippines 4

Bank of the Philippine Islands v. Sarabia Manor Hotel Corp. 6

Philippine Bank of Communications v. Basic Polyprinters

and Packaging Corporation 8

Metrobank v Liberty Corrugated Boxes Manufacturing Corporation 10

Spouses Eduardo Sobrejuanite and Fidela Sobrejuanite vs.

ASB Development Corporation 12

Negros Navigation Co., Inc. v. CA 14

Castillo v Uniwide Warehouse Club 15

Garcia v Philippine Airlines 17

Landbank v. Pollilo Paradise Island Corporation 19

Malayan Insurance Company, Inc. v. Victorias Milling Company, Inc. 21

Philippine Asset Growth Two, Inc. And Planters Development Bank vs.
Fastech Synergy Philippines, Inc. 23

Allied Banking vs In the Matter of the Petition to Have Steel Corp

Placed under Corporate Rehabilitation 25

Bustos vs. Millians Shoe 27

BPI Family Savings Bank, Inc. vs. St. Michael Medical Center, Inc. 29

Situs Development Corporation vs. Asiatrust Bank 31

Kaizen Builders v. CA
G.R. No. 226894 | September 03, 2020
Facts:
Ofelia invested the P2,200,000.00 in Kaizen Builders' development of the Kingstone
Ville project. In 2008, however, the parties rescinded the investment agreement where Ofelia
received P320,000.00 from Kaizen Builders. The parties then stipulated that the amount of
P380,000.00 will be paid on installment basis while the remaining P1,500,000.00 shall bear
an interest of 1.5% or P22,500.00 per month.
Despite repeated demands, Kaizen Builders stopped remitting the monthly interest
beginning November 2009 and refused to deliver the P380,000.00. In 2011, Ofelia filed
against Kaizen Builders and its chief executive officer Cecille F. Apostol (Cecille) filed a
complaint for sum of money before the Regional Trial Court (RTC).
RTC ruled in favor of Ofelia. Aggrieved, Kaizen elevated the case to the CA. Meantime,
Kaizen Builders filed before the special commercial court a petition for corporate
Rehabilitation. On August 12, 2015, the rehabilitation court issued a Commencement Order
which consolidated all legal proceedings by and against Kaizen Builders and suspended all
actions for the enforcement of claims against it.
CA denied the motion.
Issue:
Whether CA erred in not suspending the decision on the merits of the appeal pending
the rehabilitation case.

Ruling:
YES. Here, it is undisputed that Kaizen Builders filed a petition for corporate
rehabilitation. Finding the petition sufficient in form and substance, the rehabilitation court
issued a Commencement Order on August 12, 2015 or during the pendency of the appeal in
CA-G.R. CV No. 102330. Yet, the CA proceeded with the case and rendered judgment. On
this point we find grave abuse of discretion. To reiterate, the Commencement Order ipso
jure suspended the proceedings in the CA at whatever stage it may be, considering that the
appeal emanated from a money claim against a distressed corporation which is deemed
stayed pending the rehabilitation case. Moreover, the appeal before the CA is not one of the
instances where a suspension order is inapplicable. The CA should have abstained from
resolving the appeal. Taken together, the CA clearly defied the effects of a Commencement
Order and disregarded the state policy to encourage debtors and their creditors to
collectively and realistically resolve and adjust competing claims and property rights.
Applying the pronouncements in Lingkod Manggagawa sa Rubberworld and La Savoie
Development Corp., the CA's Resolution dated December 8, 2015 and Decision dated
October 1, 2018 in CA-G.R. CV No. 102330 are void for having been rendered with grave
abuse of discretion and against the provisions of a mandatory law. With findings warranting
the grant of the petition for certiorari and prohibition in G.R. No. 226894, there is no more
reason for this Court to decide the petition for review in G.R. No. 247647 sans a valid
judgment.