FIRST DIVISION

[G.R. NO. 160732. June 21, 2004]

METROPOLITAN ATEROR!S AND
SEERAGE S"STEM, Petitioner, v. #ON.
RE"NALDO $. DAA", IN #IS
%APA%IT" AS PRESIDING J&DGE OF
T#E REGIONAL TRIAL %O&RT OF
'&E(ON %IT", $RAN%# )0 AND
MA"NILAD ATER SERVI%ES,
IN%., Respondents.
D E % I S I O N
A(%&NA, J.*
On November 17, 2003, the Regional Trial
Court (RTC) of Quezon Cit, !ran"h #0,
ma$e a $etermination that the %etition for
Rehabilitation &ith %raer for 'u()en(ion
of *"tion( an$ %ro"ee$ing( +le$ b
,anila$ -ater 'ervi"e(, .n"/ (,anila$)
"onforme$ (ub(tantiall to the )rovi(ion(
of 'e"/ 2, Rule 0 of the .nterim Rule( of
%ro"e$ure on Cor)orate Rehabilitation
(.nterim Rule()/ .t forth&ith i((ue$ a 'ta
Or$er
1
&hi"h (tate(, in )art, that the "ourt
&a( thereb1
2 2 22 2 22 2 2
2/ 'taing enfor"ement of all "laim(,
&hether for mone or other&i(e an$
&hether (u"h enfor"ement i( b "ourt
a"tion or other&i(e, again(t the )etitioner,
it( guarantor( an$ (uretie( not (oli$aril
liable &ith the
)etitioner3"hanroble(virtualla&librar
3/ %rohibiting the )etitioner from (elling,
en"umbering, tran(ferring, or $i()o(ing in
an manner an of it( )ro)ertie( e2"e)t in
the or$inar "our(e of
bu(ine((3"hanroble(virtualla&librar
0/ %rohibiting the )etitioner from ma4ing
an )ament of it( liabilitie(, out(tan$ing
a( at the $ate of the +ling of the )etition3
2 2 22 2 22 2 2
'ub(e5uentl, on November 27, 2003,
)ubli" re()on$ent, a"ting on t&o
6rgent Ex Parte motion(
2
+le$ b
re()on$ent ,anila$, i((ue$ the herein
5ue(tione$ Or$er
3
&hi"h (tate$ that it
thereb1789:r;bl<= >?r@A9l l9B l?br9rC
1/DECF*RE' that the a"t of ,-'' in
"ommen"ing on November 20, 2003 the
)ro"e(( for the )ament b the ban4( of
6'G#H million out of the 6'G120 million
(tan$b letter of "re$it (o the ban4( have
to ma4e goo$ (u"h "allI$ra&ing of
)ament of 6'G#H million b ,-'' not
later than November 27, 2003 at 10100 %/
,/ or an (imilar a"t for that matter, i(
violative of the aboveJ5uote$ (ubJ
)aragra)h 2/) of the $i()o(itive )ortion of
thi( Court( 'ta Or$er $ate$ November
17, 2003/
2/ORDER' ,-'' through it(
oK"er(IoK"ial( to &ith$ra& un$er )ain of
"ontem)t the &ritten "erti+"ationInoti"e of
$ra& to Citi"or) .nternational Fimite$
$ate$ November 20, 2003 an$ DECF*RE'
voi$ an )ament b the ban4( to ,-''
in the event (u"h &ritten
"erti+"ationInoti"e of $ra& i( not
&ith$ra&n b ,-'' an$Ior ,-''
re"eive( )ament b virtue of the
afore(ai$ (tan$b letter of "re$it/
*ggrieve$ b thi( Or$er, )etitioner ,anila
-ater&or4( L 'e&erage '(tem (,-'')
+le$ thi( %etition for Revie& b &a
of certiorari un$er Rule MN of the Rule( of
Court 5ue(tioning the legalit of (ai$ or$er
a( having been i((ue$ &ithout or in e2"e((
of the lo&er "ourt( Ouri($i"tion or that the
"ourt a quo a"te$ &ith grave abu(e of
$i("retion amounting to la"4 or e2"e(( of
Ouri($i"tion/
0
*nte"e$ent( of the Ca(e
On Pebruar 21, 1##7, ,-'' grante$
,anila$ un$er a Con"e((ion *greement a
t&entJear )erio$ to manage, o)erate,
re)air, $e"ommi((ion an$ refurbi(h the
e2i(ting ,-'' &ater $eliver an$
(e&erage (ervi"e( in the -e(t Qone
'ervi"e *rea, for &hi"h ,anila$
un$ertoo4 to )a the "orre()on$ing
1
"on"e((ion fee( on the $ate( agree$ u)on
in (ai$ agreement
N
&hi"h, among other
thing(, "on(i(te$ of )ament( of
)etitioner( mo(tl foreign loan(/
To (e"ure the "on"e((ionaire(
)erforman"e of it( obligation( un$er the
Con"e((ion *greement, ,anila$ &a(
re5uire$ un$er 'e"tion M/# of (ai$ "ontra"t
to )ut u) a bon$, ban4 guarantee or other
(e"urit a""e)table to ,-''/
.n "om)lian"e &ith thi( re5uirement,
,anila$ arrange$ on Rul 10, 2000 for a
threeJear fa"ilit &ith a number of foreign
ban4(, le$ b Citi"or) .nternational
Fimite$, for the i((uan"e of an .rrevo"able
'tan$b Fetter of Cre$it
M
in the amount of
6'G120,000,000 in favor of ,-'' for the
full an$ )rom)t )erforman"e of ,anila$(
obligation( to ,-'' a( afore(tate$/
'ometime in 'e)tember 2000, re()on$ent
,anila$ re5ue(te$ ,-'' for a
me"hani(m b &hi"h it ho)e$ to re"over
the lo((e( it ha$ allege$l in"urre$ an$
&oul$ be in"urring a( a re(ult of the
$e)re"iation of the %hili))ine %e(o again(t
the 6' Dollar/ Pailing to get &hat it
$e(ire$, ,anila$ i((ue$ a Por"e ,aOeure
Noti"e on ,ar"h H, 2001 an$ unilaterall
(u()en$e$ the )ament of the "on"e((ion
fee(/ .n an eSort to (alvage the
Con"e((ion *greement, the )artie(
entere$ into a ,emoran$um of *greement
(,O*)
7
on Rune H, 2001 &herein ,anila$
&a( allo&e$ to re"over foreign e2"hange
lo((e( un$er a formula agree$ u)on
bet&een them/ 'ometime in *ugu(t 2001
,anila$ again +le$ another Por"e
,aOeure Noti"e an$, (in"e ,-'' "oul$ not
agree &ith the term( of (ai$ Noti"e, the
matter &a( referre$ on *ugu(t 30, 2001 to
the *))eal( %anel for arbitration/ Thi(
re(ulte$ in the )artie( agreeing to re(olve
the i((ue( through an amen$ment of the
Con"e((ion *greement on O"tober N,
2001, 4no&n a( *men$ment No/ 1,
H
&hi"h
&a( ba(e$ on the term( (et $o&n in ,-''
!oar$ of Tru(tee( Re(olution No/ 0N7J
2001, a( amen$e$ b ,-'' !oar$ of
Tru(tee( Re(olution No/ 0H7J2001,
#
&hi"h
)rovi$e$ inter alia for a formula that &oul$
allo& ,anila$ to re"over foreign
e2"hange lo((e( it ha$ in"urre$ or &oul$
in"ur un$er the term( of the Con"e((ion
*greement/
*( )art of thi( agreement, ,anila$
"ommitte$, among other thing(,
to1789:r;bl<= >?r@A9l l9B l?br9rC
a) infu(e the amount of 6DGH0/0 million a(
a$$itional fun$ing (u))ort from it(
(to"4hol$er(3"hanroble(virtualla&librar
b) re(ume )ament of the "on"e((ion
fee(3 an$"rala&librar
") mutuall (ee4 the $i(mi((al of the "a(e(
)en$ing before the Court of *))eal( an$
&ith ,inor Di()ute *))eal( %anel/
To&ever, on November N, 2002, ,anila$
(erve$ u)on ,-'' a Noti"e of Event of
Termination, "laiming that ,-'' faile$ to
"om)l &ith it( obligation( un$er the
Con"e((ion *greement an$ *men$ment
No/ 1 regar$ing the a$Ou(tment
me"hani(m that &oul$ "over ,anila$(
foreign e2"hange lo((e(/ On De"ember #,
2002, ,anila$ +le$ a Noti"e of Earl
Termination of the "on"e((ion, &hi"h &a(
"hallenge$ b ,-''/ Thi( matter &a(
eventuall brought before the *))eal(
%anel on Ranuar 7, 2003 b ,-''/
10
On
November 7, 2003, the *))eal( %anel
rule$ that there &a( no Event of
Termination a( $e+ne$ un$er *rt/ 10/2 (ii)
or 10/3 (iii) of the Con"e((ion *greement
an$ that, therefore, ,anila$ (houl$ )a
the "on"e((ion fee( that ha$ fallen $ue/
The a&ar$ of the *))eal( %anel be"ame
+nal on November 22, 2003/ ,-'',
thereafter, (ubmitte$ a &ritten noti"e
11
on
November 20, 2003, to Citi"or)
.nternational Fimite$, a( agent for the
)arti"i)ating ban4(, that b virtue of
,anila$( failure to )erform it( obligation(
un$er the Con"e((ion *greement, it &a(
$ra&ing on the .rrevo"able 'tan$b Fetter
of Cre$it an$ thereb $eman$e$ )ament
in the amount of 6'G#H,#23,M00/1N/
%rior to thi(, ho&ever, ,anila$ ha$ +le$
on November 13, 2003, a )etition for
rehabilitation before the "ourt a quo&hi"h
2
re(ulte$ in the i((uan"e of the 'ta Or$er
of November 17, 2003 an$ the $i()ute$
Or$er of November 27, 2003/
12
%etitioner( Ca(e
%etitioner hereb rai(e( the follo&ing
i((ue(1789:r;bl<= >?r@A9l l9B l?br9rC
1/ D.D TTE TONOR*!FE %RE'.D.NU R6DUE
UR*VEFW ERR *NDIOR *CT %*TENTFW
-.TTO6T R6R.'D.CT.ON OR .N EXCE'' OP
R6R.'D.CT.ON OR -.TT UR*VE *!6'E OP
D.'CRET.ON *,O6NT.NU TO F*CY OR
EXCE'' OP R6R.'D.CT.ON .N CON'.DER.NU
TTE %ERPOR,*NCE !OND OR *''ET' OP
TTE .''6.NU !*NY' *' %*RT OR
%RO%ERTW OP TTE E'T*TE OP TTE %R.V*TE
RE'%ONDENT ,*WN.F*D '6!RECT TO
RET*!.F.T*T.ON/
2/ D.D TTE TONOR*!FE %RE'.D.NU R6DUE
*CT -.TT F*CY OR EXCE'' OP
R6R.'D.CT.ON OR CO,,.T * UR*VE ERROR
OP F*- .N TOFD.NU TT*T TTE
%ERPOR,*NCE !OND O!F.U*T.ON' OP
TTE !*NY' -ERE NOT 'OF.D*RW .N
N*T6RE/
3/ D.D TTE TONOR*!FE %RE'.D.NU R6DUE
UR*VEFW ERR .N *FFO-.NU ,*WN.F*D TO
.N EPPECT 'EEY * REV.E- OR *%%E*F OP
TTE P.N*F *ND !.ND.NU DEC.'.ON OP TTE
*%%E*F' %*NEF/
.n (u))ort of the +r(t i((ue, )etitioner
maintain( that a( a matter of la&, the
6'G120 ,illion 'tan$b Fetter of Cre$it
an$ %erforman"e !on$ are not )ro)ert of
the e(tate of the $ebtor ,anila$ an$,
therefore, not (ubOe"t to the in
rem rehabilitation Ouri($i"tion of the trial
"ourt/
%etitioner argue( that a "all ma$e on the
'tan$b Fetter of Cre$it $oe( not involve
an a((et of ,anila$ but onl a((et( of
the ban4(/ Purthermore, a "all on the
'tan$b Fetter of Cre$it "annot al(o be
"on(i$ere$ a "laim falling un$er the
)urvie& of the (ta or$er a( allege$ b
re()on$ent a( it i( not $ire"te$ again(t the
a((et( of re()on$ent ,anila$/
%etitioner "on"lu$e( that the )ubli"
re()on$ent erre$ in $e"laring an$ hol$ing
that the "ommen"ement of the )ro"e(( for
the )ament of 6'G#H million i( a violation
of the or$er i((ue$ on November 17, 2003/
Re()on$ent ,anila$( Ca(e
Re()on$ent ,anila$ (ee4( to refute thi(
argument b alleging
that1789:r;bl<= >?r@A9l l9B l?br9rC
a) the or$er obOe"te$ to &a( (tri"tl an$
)re"i(el &or$e$ an$ i((ue$ after "arefull
"on(i$eringIevaluating the im)ort of the
argument( an$ $o"ument( referre$ to b
,anila$, ,-'' an$Ior "re$itor(
Chinatru(t Commer"ial !an4 an$ 'uez in
relation to a$mi((ion(, )lea$ing( an$Ior
)ertinent re"or$(
13
an$ that )ubli"
re()on$ent ha$ the authorit to i((ue the
(ame3"hanroble(virtualla&librar
b) )ubli" re()on$ent never "on(i$ere$ nor
hel$ that the %erforman"e bon$ or a((et(
of the i((uing ban4( are )art or )ro)ert of
the e(tate of re()on$ent ,anila$ (ubOe"t
to rehabilitation an$ &hi"h re()on$ent
,anila$ ha( not an$ ha( never "laime$ to
be3
10
7r>ll
") &hat i( relevant i( not &hether the
)erforman"e bon$ or a((et( of the i((uing
ban4( are )art of the e(tate of re()on$ent
,anila$ but &hether the a"t of )etitioner
in "ommen"ing the )ro"e(( for the
)ament b the ban4( of 6'G#H million
out of the 6'G120 million )erforman"e
bon$ i( "overe$ an$Ior )rohibite$ un$er
(ubJ)aragra)h( 2/) an$ 0/) of the (ta
or$er $ate$ November 17,
20033"hanroble(virtualla&librar
$) the Ouri($i"tion of )ubli" re()on$ent
e2ten$( not onl to the a((et( of
re()on$ent ,anila$ but al(o over
)er(on( an$ a((et( of all tho(e aSe"te$ b
the )ro"ee$ing( 2 2 2 u)on )ubli"ation of
the noti"e of "ommen"ement3
1N
an$
e) the obligation( un$er the 'tan$b
Fetter of Cre$it are not (oli$ar an$ are
not e2em)t from the "overage of the (ta
or$er/
3
Our Ruling
-e &ill $i("u(( the +r(t t&o i((ue( rai(e$
b )etitioner a( the(e are interrelate$ an$
ma4e u) the main i((ue of the )etition
before u( &hi"h i(, $i$ the rehabilitation
"ourt (itting a( (u"h, a"t in e2"e(( of it(
authorit or Ouri($i"tion &hen it enOoine$
herein )etitioner from (ee4ing the
)ament of the "on"e((ion fee( from the
ban4( that i((ue$ the .rrevo"able 'tan$b
Fetter of Cre$it in it( favor an$ for the
a""ount of re()on$ent ,anila$Z
"hanroble(virtuala&librar
The )ubli" re()on$ent relie$ on 'e"/ 1,
Rule 3 of the .nterim Rule( on Cor)orate
Rehabilitation to (u))ort it( Ouri($i"tion
over the .rrevo"able 'tan$b Fetter of
Cre$it an$ the ban4( that i((ue$ it/ The
(e"tion rea$( in )art that Ouri($i"tion over
tho(e aSe"te$ b the )ro"ee$ing( i(
"on(i$ere$ a"5uire$ u)on the )ubli"ation
of the noti"e of "ommen"ement of
)ro"ee$ing( in a ne&()a)er of general
"ir"ulation an$ goe( further to $e+ne
rehabilitation a( anin rem )ro"ee$ing/ Thi(
)rovi(ion i( a logi"al "on(e5uen"e of
the in rem nature of the )ro"ee$ing(,
&here Ouri($i"tion i( a"5uire$ b
)ubli"ation an$ &here it i( ne"e((ar that
the a((et( of the $ebtor "ome &ithin the
"ourt( Ouri($i"tion to (e"ure the (ame for
the bene+t of "re$itor(/ The referen"e to
all tho(e aSe"te$ b the )ro"ee$ing(
"over( "re$itor( or (u"h other )er(on( or
entitie( hol$ing a((et( belonging to the
$ebtor un$er rehabilitation &hi"h (houl$
be re[e"te$ in it( au$ite$ +nan"ial
(tatement(/ The ban4( $o not hol$ an
a((et( of re()on$ent ,anila$ that &oul$
be material to the rehabilitation
)ro"ee$ing( nor i( ,anila$ liable to the
ban4( at thi( )oint/
Re()on$ent ,anila$( Pinan"ial 'tatement
a( of De"ember 31, 2001 an$ 2002 $o not
(ho& the .rrevo"able 'tan$b Fetter of
Cre$it a( )art of it( a((et( or liabilitie(,
an$ b re()on$ent ,anila$( o&n
a$mi((ion it i( not/ .n i((uing the
"lari+"ator or$er of November 27, 2003,
enOoining )etitioner from "laiming from an
a((et that $i$ not belong to the $ebtor
an$ over &hi"h it $i$ not a"5uire
Ouri($i"tion, the rehabilitation "ourt a"te$
in e2"e(( of it( Ouri($i"tion/
Re()on$ent ,anila$ in(i(t(, ho&ever,
that it i( 'e"/ M (b), Rule 0 of the .nterim
Rule( that (u))ort( it( "laim that the
"ommen"ement of the )ro"e(( to $ra& on
the 'tan$b Fetter of Cre$it i( an
enfor"ement of "laim )rohibite$ b an$
un$er the .nterim Rule( an$ the or$er of
)ubli" re()on$ent/
Re()on$ent ,anila$ &oul$ )er(ua$e u(
that the above )rovi(ion Ou(ti+e( a lea) to
the "on"lu(ion that (u"h an enfor"ement
i( )rohibite$ b (ai$ (e"tion be"au(e it i( a
"laim again(t the $ebtor, it( guarantor(
an$ (uretie( not (oli$aril liable &ith the
$ebtor an$ that there i( nothing in the
'tan$b Fetter of Cre$it nor in la& nor in
the nature of the obligation that &oul$
(ho& or re5uire the obligation of the ban4(
to be (oli$ar &ith the re()on$ent
,anila$/
-e $i(agree/
Pir(t, the "laim i( not one again(t the
$ebtor but again(t an entit that
re()on$ent ,anila$ ha( )ro"ure$ to
an(&er for it( nonJ)erforman"e of "ertain
term( an$ "on$ition( of the Con"e((ion
*greement, )arti"ularl the )ament of
"on"e((ion fee(/
'e"on$l, 'e"/ M (b) of Rule 0 of the
.nterim Rule( $oe( not enOoin the
enfor"ement of all "laim( again(t
guarantor( an$ (uretie(, +u, -n./ ,0-1e
2.3451 3634n1, 6u373n,-71 3n8
1u7e,4e1 90- 37e n-, 1-.48374./ .43+.e
94,0 ,0e 8e+,-7.Re()on$ent ,anila$(
"laim that the ban4( are not (oli$aril
liable &ith the $ebtor $oe( not +n$
(u))ort in Ouri()ru$en"e/
-e hel$ in Feati Bank & Trust Company v.
Court of Appeals
1M
that the "on"e)t of
guarantee visvis the "on"e)t of an
irrevo"able letter of "re$it are in"on(i(tent
&ith ea"h other/The guarantee theor
$e(tro( the in$e)en$en"e of the ban4(
re()on(ibilit from the "ontra"t u)on
0
&hi"h it &a( o)ene$ an$ the nature of
both "ontra"t( i( mutuall in "on[i"t &ith
ea"h other/ .n "ontra"t( of guarantee, the
guarantor( obligation i( merel "ollateral
an$ it ari(e( onl u)on the $efault of the
)er(on )rimaril liable/ On the other han$,
in an irrevo"able letter of "re$it, the ban4
un$erta4e( a )rimar obligation/ -e have
al(o $e+ne$ a letter of "re$it a( an
engagement b a ban4 or other )er(on
ma$e at the re5ue(t of a "u(tomer that
the i((uer (hall honor $raft( or other
$eman$( of )ament u)on "om)lian"e
&ith the "on$ition( ()e"i+e$ in the
"re$it/
17
7r>ll
Fetter( of "re$it &ere $evelo)e$ for the
)ur)o(e of in(uring to a (eller )ament of
a $e+nite amount u)on the )re(entation
of $o"ument(
1H
an$ i( thu( a "ommitment
b the i((uer that the )art in &ho(e favor
it i( i((ue$ an$ &ho "an "olle"t u)on it &ill
have hi( "re$it again(t the a))li"ant of the
letter, $ul )ai$ in the amount ()e"i+e$ in
the letter/
1#
The are in eSe"t ab(olute
un$erta4ing( to )a the mone a$van"e$
or the amount for &hi"h "re$it i( given on
the faith of the in(trument/ The are
)rimar obligation( an$ not a""e((or
"ontra"t( an$ &hile the are (e"urit
arrangement(, the are not "onverte$
thereb into "ontra"t( of guarant/
20
-hat
$i(tingui(he( letter( of "re$it from other
a""e((or "ontra"t(, i( the engagement of
the i((uing ban4 to )a the (eller on"e the
$raft an$ other re5uire$ (hi))ing
$o"ument( are )re(ente$ to it/
21
The are
$e+nite un$erta4ing( to )a at (ight on"e
the $o"ument( (ti)ulate$ therein are
)re(ente$/
Fetter( of Cre$it( have long been an$ are
(till governe$ b the )rovi(ion( of the
6niform Cu(tom( an$ %ra"ti"e for
Do"umentar Cre$it( of the .nternational
Chamber of Commer"e/ .n the 1##3
Revi(ion it )rovi$e( in *rt/ 2 that the
e2)re((ion( Do"umentar Cre$it(() an$
'tan$b Fetter(() of Cre$it mean an
arrangement, ho&ever ma$e or $e("ribe$,
&hereb a ban4 a"ting at the re5ue(t an$
on in(tru"tion( of a "u(tomer or on it( o&n
behalf i( to ma4e )ament again(t
(ti)ulate$ $o"ument(() an$ *rt/ # thereof
$e+ne( the liabilit of the i((uing ban4( on
an irrevo"able letter of "re$it a( a $e+nite
un$erta4ing of the i((uing ban4, )rovi$e$
that the (ti)ulate$ $o"ument( are
)re(ente$ to the nominate$ ban4 or the
i((uing ban4 an$ the term( an$ "on$ition(
of the Cre$it are "om)lie$ &ith, to )a at
(ight if the Cre$it )rovi$e( for (ight
)ament/
22
7r>ll
-e have a""e)te$, in Feati Bank and Trust
Company v. Court of Appeals
\23
an$ Bank
of America !T & "A v. Court of
Appeals,
20
to the e2tent that the are
)ertinent, the a))li"ation in our
Ouri($i"tion of the international "re$it
regulator (et of rule( 4no&n a( the
6niform Cu(tom( an$ %ra"ti"e for
Do"umentar Cre$it( (6/C/%) i((ue$ b the
.nternational Chamber of Commer"e,
&hi"h &e (ai$ in Bank of t#e P#ilippine
$slands v. !ery
2N
&a( Ou(ti+e$ un$er *rt/ 2
of the Co$e of Commer"e, &hi"h
(tate(1789:r;bl<= >?r@A9l l9B l?br9rC
*"t( of "ommer"e, &hether tho(e &ho
e2e"ute them be mer"hant( or not, an$
&hether ()e"i+e$ in thi( Co$e or not
(houl$ be governe$ b the )rovi(ion(
"ontaine$ in it3 in their ab(en"e, b the
u(age( of "ommer"e generall ob(erve$ in
ea"h )la"e3 an$ in the ab(en"e of both
rule(, b tho(e of the "ivil la&/
The )rohibition un$er 'e" M (b) of Rule 0
of the .nterim Rule( $oe( not a))l to
herein )etitioner a( the )rohibition i( on
the enfor"ement of "laim( again(t
guarantor( or (uretie( of the $ebtor(
&ho(e obligation( are not (oli$ar &ith the
$ebtor/ The )arti"i)ating ban4( obligation
are (oli$ar &ith re()on$ent ,anila$ in
that it i( a )rimar, $ire"t, $e+nite an$ an
ab(olute un$erta4ing to )a an$ i( not
"on$itione$ on the )rior e2hau(tion of the
$ebtor( a((et(/ The(e are the (ame
"hara"teri(ti"( of a (uret or (oli$ar
obligor/
!eing (oli$ar, the "laim( again(t them
"an be )ur(ue$ (e)aratel from an$
in$e)en$entl of the rehabilitation "a(e,
a( hel$ in Traders Royal Bank v. Court of
Appeals
2M
an$ reiterate$ in P#ilippine
Bloomin% &ills' $nc. v. Court of
N
Appeals,
27
&here &e (ai$ that )ro)ert of
the (uret "annot be ta4en into "u(to$ b
the rehabilitation re"eiver ('EC) an$ (ai$
(uret "an be (ue$ (e)aratel to enfor"e
hi( liabilit a( (uret for the $ebt( or
obligation( of the $ebtor/ The $ebt( or
obligation( for &hi"h a (uret ma be
liable in"lu$e future $ebt(, an amount
&hi"h ma not be 4no&n at the time the
(uret i( given/
The term( of the .rrevo"able 'tan$b
Fetter of Cre$it $o not (ho& that the
obligation( of the ban4( are not (oli$ar
&ith tho(e of re()on$ent ,anila$/ On the
"ontrar, it i( i((ue$ at the re5ue(t of an$
for the a""ount of ,anila$ -ater
'ervi"e(, .n"/, in favor of the ,etro)olitan
-ater&or4( an$ 'e&erage '(tem, a( a
bon$ for the full an$ )rom)t )erforman"e
of the obligation( b the "on"e((ionaire
un$er the Con"e((ion *greement
2H
an$
herein )etitioner i( authorize$ b the
ban4( to $ra& on it b the (im)le a"t of
$elivering to the agent a &ritten
"erti+"ation (ub(tantiall in the form
*nne2 ! of the Fetter of Cre$it/ .t )rovi$e(
further in 'e"/ M, that for a( long a( the
'tan$b Fetter of Cre$it i( vali$ an$
(ub(i(ting, the !an4( (hall honor an
&ritten Certi+"ation ma$e b ,-'' in
a""or$an"e &ith 'e"/ 2, of the 'tan$b
Fetter of Cre$it regar$le(( of the $ate on
&hi"h the event giving ri(e to (u"h -ritten
Certi+"ation aro(e/
2#
7r>ll
Ta4ing into "on(i$eration our o&n ruling(
on the nature of letter( of "re$it an$ the
"u(tom( an$ u(age $evelo)e$ over the
ear( in the ban4ing an$ "ommer"ial
)ra"ti"e of letter( of "re$it, &e hol$ that
e2"e)t &hen a letter of "re$it ()e"i+"all
(ti)ulate( other&i(e, the obligation of the
ban4( i((uing letter( of "re$it are (oli$ar
&ith that of the )er(on or entit
re5ue(ting for it( i((uan"e, the (ame
being a $ire"t, )rimar, ab(olute an$
$e+nite un$erta4ing to )a the bene+"iar
u)on the )re(entation of the (et of
$o"ument( re5uire$ therein/
The )ubli" re()on$ent, therefore,
e2"ee$e$ hi( Ouri($i"tion, in hol$ing that
he &a( "om)etent to a"t on the obligation
of the ban4( un$er the Fetter of Cre$it
un$er the argument that thi( &a( not a
(oli$ar obligation &ith that of the $ebtor/
!eing a (oli$ar obligation, the letter of
"re$it i( e2"lu$e$ from the Ouri($i"tion of
the rehabilitation "ourt an$ therefore in
enOoining )etitioner from )ro"ee$ing
again(t the 'tan$b Fetter( of Cre$it to
&hi"h it ha$ a "lear right un$er the la&
an$ the term( of (ai$ 'tan$b Fetter of
Cre$it, )ubli" re()on$ent a"te$ in e2"e((
of hi( Ouri($i"tion/
*$$itional .((ue(
-e )ro"ee$ to "on(i$er the other i((ue(
rai(e$ in the oral argument( an$ in"lu$e$
in the )artie(
memoran$a1789:r;bl<= >?r@A9l l9B l?br9rC
1/Re()on$ent ,anila$ argue( that
)etitioner ha$ a )lain, ()ee$ an$
a$e5uate reme$ un$er the .nterim Rule(
it(elf &hi"h )rovi$e( in 'e"/ 12, Rule 0
that the "ourt ma on motion or motu
proprio, terminate, mo$if or (et
"on$ition( for the "ontinuan"e of the (ta
or$er or relieve a "laim from "overage
thereof/ -e +n$, ho&ever, that the )ubli"
re()on$ent ha$ alrea$ a""om)li(he$ thi(
$uring the hearing (et for the t&o
6rgent Ex Parte motion( +le$ b
re()on$ent ,anila$ on November 21 an$
20, 2003,
30
&here the )artie( in"lu$ing the
"re$itor(, 'uez an$ Chinatru(t Commer"ial
)re(ente$ their re()e"tive
argument(/
31
The )ubli" re()on$ent then
rule$, after "arefull
"on(i$eringIevaluating the im)ort of the
argument( an$ $o"ument( referre$ to b
,anila$, ,-'' an$Ior the "re$itor(
Chinatru(t Commer"ial !an4 an$ 'uez in
relation to the a$mi((ion(, the )lea$ing(,
an$ Ior )ertinent )ortion( of the re"or$(,
thi( "ourt i( of the "on(i$ere$ an$ humble
vie& that the i((ue mu(t )erfor"e be
re(olve$ in favor of ,anila$/
32
Ten"e to
)ur(ue their o))o(ition before the (ame
"ourt &oul$ re(ult in the )re(entation of
the (ame argument( an$ i((ue( )a((e$
u)on b )ubli" re()on$ent/
Purthermore, 'e"/ N, Rule 3 of the .nterim
Rule( &oul$ )re"lu$e an other eSe"tive
M
reme$ 5ue(tioning the or$er( of the
rehabilitation "ourt (in"e the are
imme$iatel e2e"utor an$ a %etition for
Revie& or an a))eal therefrom (hall not
(ta the e2e"ution of the or$er unle((
re(traine$ or enOoine$ b the a))ellate
"ourt/ .n thi( (ituation, it ha$ no other
reme$ but to (ee4 re"our(e to u( through
thi( %etition for Certiorari/
.n "ilvestre v. Torres and ()en,
33
&e (ai$
that it i( not enough that a reme$ i(
available to )revent a )art from ma4ing
u(e of the e2traor$inar reme$
of certiorari but that (u"h reme$ be an
a$e5uate reme$ &hi"h i( e5uall
bene+"ial, ()ee$ an$ (uK"ient, not onl
a reme$ &hi"h at (ome time in the future
ma oSer relief but a reme$ &hi"h &ill
)rom)tl relieve the )etitioner from the
inOuriou( a"t( of the lo&er tribunal/ .t i( the
ina$e5ua" JJ not the mere ab(en"e JJ of
all other legal reme$ie( an$ the $anger of
failure of Ou(ti"e &ithout the &rit, that
mu(t u(uall $etermine the )ro)riet
of certiorari/
30
7r>ll
2/Re()on$ent ,anila$ argue( that b
"ommen"ing the )ro"e(( for )ament
un$er the 'tan$b Fetter of Cre$it,
)etitioner violate$ an imme$iatel
e2e"utor or$er of the "ourt an$,
therefore, "ome( to Court &ith un"lean
han$( an$ (houl$ therefore be $enie$ an
relief/
.t i( true that the (ta or$er i( imme$iatel
e2e"utor/ .t i( al(o true, ho&ever, that the
'tan$b Fetter of Cre$it an$ the ban4(
that i((ue$ it &ere not &ithin the
Ouri($i"tion of the rehabilitation "ourt/ The
"all on the 'tan$b Fetter of Cre$it,
therefore, "oul$ not be "on(i$ere$ a
violation of the 'ta Or$er/
3/Re()on$ent( "laim that the +ling of the
)etition )reJem)t( the original Ouri($i"tion
of the lo&er "ourt i( &ithout merit/ The
)ur)o(e of the initial hearing i( to
$etermine &hether the )etition for
rehabilitation ha( merit or not/ The
)ro)riet of the (ta or$er a( &ell a( the
"lari+"ator or$er ha$ alrea$ been
)a((e$ u)on in the hearing )reviou(l ha$
for that )ur)o(e/ The $etermination of
&hether the )ubli" re()on$ent &a( "orre"t
in enOoining the )etitioner from $ra&ing on
the 'tan$b Fetter of Cre$it &ill have no
bearing on the $etermination to be ma$e
b )ubli" re()on$ent &hether the )etition
for rehabilitation ha( merit or not/ Our
$e"i(ion on the in(tant )etition $oe( not
)reJem)t the original Ouri($i"tion of the
rehabilitation "ourt/
#EREFORE, the %etition for Certiorari i(
grante$/The Or$er of November 27, 2003
of the Regional Trial Court of Quezon Cit,
!ran"h #0, i( hereb $e"lare$ null an$
voi$an$ (et a(i$e/ The (tatu( quo Or$er
herein )reviou(l i((ue$ i( hereb F.PTED/
.n vie& of the urgen" atten$ing thi( "a(e,
thi( $e"i(ion i( imme$iatel e2e"utor/
No "o(t(/SO ORDERED/ D3:48e,
J7., C.J., (Chairman), P3n63n4+3n, 3n8
%37;4-, JJ., 2-n2u7.
"n37e1<S3n,436-, J.,-n .e3:e.
7