G.R. No. 172895 - UNION BANK OF THE PHILIPPINES, VS. ASB DEVELOPMENT CORPORATION.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, premises considered, petitioners' Motion dated 3 September 2003 is GRANTED. Accordingly, all proceedings pertaining to and in connection with the extrajudicial sale caused by Union Bank of the Philippines involving properties covered by TCTs Nos. 9836, 9837 and 9838 issued by the Registry of Deeds of Mandaluyong City are hereby ANNULLED and SET ASIDE. [2] Petitioner UBP filed with the SEC En Banc a Petition for Review on Certiorari assailing the afore-quoted Resolution of the SEC Hearing Panel, which was docketed as SEC-EB Case No. 12-03-08. Petitioner UBP contended that the annulment of the extrajudicial sale was contrary to law, arguing that: Article 1308 of the Civil Code of the Philippines on mutuality of contracts provides "The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them." In signing the MTI and its Supplemental, ASBDC had agreed and bound itself to comply with all the provisions of the contract. ASBDC violated the proscription against unilateral cancellation of contracts under Article 1159 of the Civil Code; Respondent SEC Hearing Panel amended or expanded the rule making powers in suspending all actions and claims against ASBDC immediately after the petition for rehabilitation is filed; Contravened the constitutional proscription against impairment of contracts; Deprived Union Bank of its substantial right over its property without due process of law; Unilaterally revoked and/or nullified the right of a secured creditor like Union Bank with existing contractual rights; Amended and/or modified existing and valid contracts between the parties, without their consent. On 6 July 2004, the SEC En Banc issued a Resolution denying the Petition, thus WHEREFORE, the Petition for Review on Certiorari assailing the Resolution dated 11 December 2003 issued by Respondent Hearing Panel is hereby DENIED for lack of merit. [3] In so doing, the SEC En Banc held that the SEC Hearing Panel acted in accordance with Section 6(c) of Presidential Decree No. 902-A [4] as amended, which granted to the SEC the following power: c) To appoint one or more receivers of the property, real and personal, which is the subject of the action pending before the Commission in accordance with the pertinent provisions of the Rules of Court in such other cases whenever necessary in order to preserve the rights of the parties- litigants and/or protect the interest of the investing public and creditors: x x x Provided, finally , That upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to the 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. (Emphasis supplied.) CA-G.R. SP No. 85780 Petitioner UBP then sought recourse with the Court of Appeals via a Petition for Review, docketed as CA-G.R. SP No. 85780, seeking the reve