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Rizal Commercial Banking Corporation vs.

Intermediate Appellate Court and BF Homes


G.R. No. 74851 (December 9, 1999)
Facts:
Petitioner RCBC is a mortgagor-creditor of the party respondent BF Homes. BF Homes, being a
distressed firm, filed before the Securities and Exchange Commission a Petition for Rehabilitation and for
Declaration of Suspension of Payments. Consequently, RCBC requested the sheriff of Rizal to levy on
execution the properties of party respondent, and consequently obtained favorable judgment. RCBC being
the highest bidder during the public auction is now seeking for the transfer certificate of titles from the
Register of Deeds issued in its name. It is worthy to note that it was on October 26, 1984 that RCBC
obtained favor over the execution of the respondents properties, and it was only on March 18, 1985 that a
Management Committee was organized by the SEC for BF Homes.
Issue:
Whether or not the Court may depart from the words of the law which clearly provides that a creditor may
levy execution on a firms properties when such execution precedes SECs organization of a Management
Committee to act as its receiver.
Held:
PD 209-A states that suspension of claims against a corporation under rehabilitation is counted or figured
up only upon the appointment of a management committee or a rehabilitation receiver. The holding that
suspension of actions for claims against a corporation under rehabilitation takes effect as soon as the
application or a petition for rehabilitation is filed with the SEC may, to some, be more logical and wise
but unfortunately, such is incongruent with the clear language of the law. Suspension of actions for claims
commences only from the time a management committee or receiver is appointed by the SEC. Petitioner
RCBC rightfully moved for the extrajudicial foreclosure of its mortgage on October 26, 1984 because a
management committee was not appointed by the SEC until March 18, 1985.
No matter how practical and noble a reason would be, in order to depart from the words of the law stated
in clear and unambiguous manner, would be to encroach upon legislative prerogative to define the
wisdom of the law. Such is plainly judicial legislation.