Professional Documents
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BPI v. Sarabia Manor Hotel
BPI v. Sarabia Manor Hotel
BPI v. Sarabia Manor Hotel
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* SECOND DIVISION.
433
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Corporation
PERLASBERNABE, J.:
Before the Court is a petition for review on certiorari1
assailing the Decision2 dated April 24, 2006 and
Resolution3 dated December 6, 2006 of the Court of
Appeals, Cebu City (CA) in CAG.R. CV. No. 81596 which
affirmed with modification the rehabilitation plan of
respondent Sarabia Manor Hotel Corporation (Sarabia) as
approved by the Regional Trial Court of Iloilo City, Branch
39 (RTC) through its Order4 dated August 7, 2003.
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1 Rollo, pp. 2846.
2 Id., at pp. 4964. Penned by Associate Justice Enrico A. Lanzanas,
with Associate Justices Isaias P. Dicdican and Pampio A. Abarintos,
concurring.
3 Id., at pp. 6667. Penned by Associate Justice Isaias P. Dicdican, with
Associate Justices Pampio A. Abarintos and Romeo F. Barza, concurring.
4 Id., at pp. 189213. Penned by Acting Presiding Judge Alfonso V.
Combong, Jr.
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The Facts
Sarabia is a corporation duly organized and existing
under Philippine laws, with principal place of business at
101 General Luna Street, Iloilo City.5 It was incorporated
on February 22, 1982, with an authorized capital stock of
P10,000,000.00, fully subscribed and paidup, for the
primary purpose of owning, leasing, managing and/or
operating hotels, restaurants, barber shops, beauty parlors,
sauna and steam baths, massage parlors and such other
businesses incident to or necessary in the management or
operation of hotels.6
In 1997, Sarabia obtained a P150,000,000.00 special
loan package from Far East Bank and Trust Company
(FEBTC) in order to finance the construction of a five
storey hotel building (New Building) for the purpose of
expanding its hotel business. An additional P20,000,000.00
standby credit line was approved by FEBTC in the same
year.7
The foregoing debts were secured by real estate
mortgages over several parcels of land8 owned by Sarabia
and a comprehensive surety agreement dated September 1,
1997 signed by its stockholders.9 By virtue of a merger,
Bank of the Philippine Islands (BPI) assumed all of
FEBTC’s rights against Sarabia.10
Sarabia started to pay interests on its loans as soon as
the funds were released in October 1997. However, largely
because of the delayed completion of the New Building,
Sarabia
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5 Id., at p. 192.
6 Id.
7 Id., at p. 10.
8 Id., at p. 70. Including parcels of land covered by Transfer
Certificates of Title Nos. T116065 to T116088.
9 Id. Referring to Sps. Salvador Sr. and Amparo Sarabia, Salvador
Sarabia, Jr., Suzanne Javelosa, Sandra S. Gomez, Gina S. Espinosa,
Rosalie S. Treñas, Melvin D. Sarabia, and John Paul Sarabia.
10 Id., at p. 10.
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11 Id., at p. 69. Sarabia had total assets in the amount of
P481,586,031.21 with total liabilities amounting to P225,962,556.99.
12 Id., at pp. 6895. Docketed as Civil Case No. 0227252.
13 Id., at p. 70.
14 Id., at pp. 7273.
15 Id., at pp. 7172.
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16 Id., at p. 80.
17 Records, pp. 269285.
18 Rollo, pp. 98100.
19 Id., at pp. 101122.
20 Id., at p. 191.
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22 Id., at p. 171.
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23 Id., at p. 172.
24 Id., at p. 173.
25 Id.
26 Id.
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27 Id.
28 Id.
29 Id., at pp. 173174.
30 Id., at p. 174.
31 Id., at p. 175.
32 Id.
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33 Id., at pp. 189213.
34 Id., at p. 204.
35 Id.
36 Id., at p. 205.
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37 Id., at p. 204.
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38 Id., at pp. 207208.
39 Id., at pp. 4964.
40 Id., at pp. 6263.
41 Id., at p. 59.
42 Id., at p. 60.
43 Id.
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44 Id., at pp. 6667.
45 Id., at pp. 3742.
46 Id., at pp. 4244.
47 Id., at pp. 473479.
48 Id., at pp. 480489.
49 Id., at pp. 491500.
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50 Westmont Investment Corporation v. Francia, Jr., G.R. No. 194128,
December 7, 2011, 661 SCRA 787, 797. (Citations omitted)
51 Id.
52 Section 5(g), Rule 56 of the Rules of Court states:
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SEC. 5. Grounds for dismissal of appeal.—The appeal may be
dismissed motu proprio or on motion of the respondent on the following
grounds:
x x x x
(g) The fact that the case is not appealable to the Supreme Court.
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53 Rollo, p. 169.
54 See Express Investments III Private Ltd. v. Bayan
Telecommunications, Inc., G.R. Nos. 17445759, December 5, 2012, 687
SCRA 50, 8687.
55 Id., at p. 87.
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56 A.M. No. 00810SC dated November 21, 2000. The Court deems it
proper to assess Sarabia’s rehabilitation within the parameters of the
Interim Rules since these were the rules applicable at the time the
rehabilitation plan was approved. Republic Act No. 10142, otherwise
known as the “Financial Rehabilitation and Insolvency Act of 2010”
(FRIA), which is the current law on the matter, took effect only on August
31, 2010. Its rules of procedure have yet to be promulgated as of date.
57 See Section 64 of the FRIA.
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58 Section 25 of the FRIA provides:
SEC. 25. Giving Due Course to or Dismissal of Petition, or Conversion of
Proceedings.—Within ten (10) days from receipt of the report of the rehabilitation
receiver mentioned in Section 24 hereof the court may:
x x x x
(c) convert the proceedings into one for the liquidation of the debtor upon
a finding that:
(1) the debtor is insolvent; and
(2) there is no substantial likelihood for the debtor to be
successfully rehabilitated as determined in accordance with the
rules to be promulgated by the Supreme Court.
59 G.R. No. 187316, July 16, 2012, 676 SCRA 489.
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60 Id., at p. 501.
61 Rollo, p. 204.
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62 Id., at p. 205.
63 Id., at p. 8.
64 Id., at p. 9.
65 Id.
66 Id.
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67 Id., at p. 10.
68 Id., at p. 20.
69 Id., at pp. 1819, 21.
70 Section 23, Rule 4 of the Interim Rules partly provides:
SEC. 23. Approval of the Rehabilitation Plan.—x x x.
In determining whether or not the opposition of the creditors is
manifestly unreasonable, the court shall consider the following:
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a. That the plan would likely provide the objecting class of
creditors with compensation greater than that which they would
have received if the assets of the debtor were sold by a liquidator
within a threemonth period;
b. That the shareholders or owners of the debtor lose at least their
controlling interest as a result of the plan; and
c. The Rehabilitation Receiver has recommended approval of the
plan.
x x x x
71 Rollo, p. 37.
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73 Id., at pp. 123141.
74 Id., at pp. 127 and 495.
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75 Id., at pp. 61 and 495.
76 Id., at p. 43.
77 Id., at p. 40.
78 “It is basic in the rule of evidence that bare allegations,
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