3) DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs.

HONORABLE COURT OF APPEALS

and REMINGTON INDUSTRIAL SALES CORPORATION, respondents.

Under the system of the Civil Code of the Philippines, only taxes enjoy a similar absolute preference. All
the remaining thirteen classes of preferred creditors under Article 2242 enjoy no priority among
themselves, but must be paid. Thus, Article 2249 provides:

"If there are two or more credits with respect to the same specific real property or real rights, they shall be
satisfied pro rata, after the payment of the taxes and assessments upon the immovable property or real
rights."

But in order to make this prorating fully effective, the preferred creditors enumerated in Nos. 2 to 14 of
Article 2242 (or such of them as have credits outstanding) must necessarily be convened, and the import
of their claims ascertained. It is thus apparent that the full application of Articles 2249 and 2242 demands
that there must be first some proceeding where the claims of all the preferred creditors may be bindingly
adjudicated, such as insolvency, the settlement of decedent's estate under Rule 87 of the Rules of Court,
or other liquidation proceedings of similar import.

This explains the rule of Article 2243 of the new Civil Code that -

"The claims or credits enumerated in the two preceding articles shall be considered as mortgages or
pledges of real or personal property, or liens within the purview of legal provisions governing
insolvencyxxx (Italics supplied).

"The question as to whether the Civil Code and the Insolvency Law can be harmonized is settled by this
Article (2243). The preferences named in Articles 2261 and 2262 (now 2241 and 2242) are to be
enforced in accordance with the Insolvency Law."

Thus, one preferred creditor's third-party claim to the proceeds of a foreclosure sale is not the proceeding
contemplated by law for the enforcement of preferences under Article 2242, unless the claimant were
enforcing a credit for taxes that enjoy absolute priority. If none of the claims is for taxes, a dispute
between two creditors will not enable the Court to ascertain the pro rata dividend corresponding to each,
because the rights of the other creditors likewise enjoying preference under Article 2242 cannot be
ascertained.

8) G.R. No. 74851 December 9, 1999

RIZAL COMMERCIAL BANKING CORPORATION, petitioner,

vs.
INTERMEDIATE APPELLATE COURT AND BF HOMES, INC

It behooves the Court, therefore, to settle the issue in this present resolution once and for all, and for
the guidance of the Bench and the Bar, the following rules of thumb shall are laid down:

1. All claims against corporations, partnerships, or associations that are pending before any court,
tribunal, or board, without distinction as to whether or not a creditor is secured or unsecured, shall be
suspended effective upon the appointment of a management committee, rehabilitation receiver,
board, or body in accordance which the provisions of Presidential Decree No. 902-A.

2. Secured creditors retain their preference over unsecured creditors, but enforcement of such
preference is equally suspended upon the appointment of a management committee, rehabilitation
receiver, board, or body. In the event that the assets of the corporation, partnership, or association
are finally liquidated, however, secured and preferred credits under the applicable provisions of the
Civil Code will definitely have preference over unsecured ones.

The Majority ruling in our 1992 decision that preferred creditors of distressed corporations shall, in a
way, stand an equal footing with all other creditors, must be read and understood in the light of the
foregoing rulings. All claims of both a secured or unsecured creditors, without distinction on this
score, are suspended once a management committee is appointed. Secured creditors, in the
meantime, shall not be allowed to assert such preference before the Securities and Exchange
Commission. It may be stressed, however, that this shall only take effect upon the appointment of a
management committee, rehabilitation receiver, board, or body, as opined in the dissent.

If rehabilitation is no longer feasible and the assets of the corporation are finally liquidated, secured
creditors shall enjoy preference over unsecured creditors, subject only to the provisions of the Civil
Code on concurrence and preference of credits. Creditors of secured obligations may pursue their
security interest or lien, or they may choose to abandon the preference and prove their credits as
ordinary claims.

Moreover, Section 2248 of the Civil Code provides:

"Those credits which enjoy preference in relation to specific real property or real rights, exclude all
others to the extent of the value of the immovable or real right to which the preference refers."

13) SPOUSES ALFREDO and SUSANA ONG, petitioners,

vs. PHILIPPINE COMMERCIAL INTERNATIONAL BANK, respondent.
Petitioners-spouses are not guarantors but sureties of BMCs debts. Under Article
1216 of the Civil Code, respondent bank as creditor may proceed against
[6]

petitioners-spouses as sureties despite the execution of the MOA which

provided for the suspension of payment and filing of collection suits against
BMC. Respondent banks right to collect payment from the surety exists
independently of its right to proceed directly against the principal debtor. In
fact, the creditor bank may go against the surety alone without prior demand
for payment on the principal debtor. [7]

The provisions of the MOA regarding the suspension of payments by

BMC and the non-filing of collection suits by the creditor banks pertain
only to the property of the principal debtor BMC.

18) G.R. No. 171132 August 15, 2012

MANUEL D. YNGSON, JR. (in his capacity as the Liquidator of ARCAM & COMPANY,
INC.), Petitioner,
vs.
PHILIPPINE NATIONAL BANK,

Secured creditor enjoys preference over a specific mortgaged property and has a right to foreclose
the mortgage under Section 2248 of the Civil Code. The creditor-mortgagee has the right to
foreclose the mortgage over a specific real property whether or not the debtor-mortgagor is under
insolvency or liquidation proceedings. The right to foreclose such mortgage is merely suspended
upon the appointment of a management committee or rehabilitation receiver or upon the issuance of
a stay order by the trial court. However, the creditor-mortgagee may exercise his right to foreclose
the mortgage upon the termination of the rehabilitation proceedings or upon the lifting of the stay
order.27 (Emphasis supplied)

It is worth mentioning that under Republic Act No. 10142, otherwise known as the Financial
Rehabilitation and Insolvency Act (FRIA) of 2010, the right of a secured creditor to enforce his lien
during liquidation proceedings is retained. Section 114 of said law thus provides:

SEC. 114. Rights of Secured Creditors. The Liquidation Order shall not affect the right of a secured
creditor to enforce his lien in accordance with the applicable contract or law. A secured creditor may:

(a) waive his rights under the security or lien, prove his claim in the liquidation proceedings and
share in the distribution of the assets of the debtor; or

(b) maintain his rights under his security or lien;

If the secured creditor maintains his rights under the security or lien:

(1) the value of the property may be fixed in a manner agreed upon by the creditor and the
liquidator. When the value of the property is less than the claim it secures, the liquidator may
1wphi1

convey the property to the secured creditor and the latter will be admitted in the liquidation
proceedings as a creditor for the balance; if its value exceeds the claim secured, the liquidator may
convey the property to the creditor and waive the debtors right of redemption upon receiving the
excess from the creditor;

(2) the liquidator may sell the property and satisfy the secured creditors entire claim from the
proceeds of the sale; or

(3) the secured creditor may enforce the lien or foreclose on the property pursuant to applicable
laws. (Emphasis supplied)

In this case, PNB elected to maintain its rights under the security or lien; hence, its right to foreclose
the mortgaged properties should be respected, in line with our pronouncement in Consuelo Metal
Corporation.

Special laws
5) PHILIPPINE NATIONAL BANK, petitioner, vs. HON. PRES. JUDGE BENITO C. SE,
JR., RTC, BR. 45, MANILA; NOAHS ARK SUGAR REFINERY; ALBERTO T. LOOYUKO,
JIMMY T. GO and WILSON T. GO, respondents.
Under the subject Warehouse Receipts provision, storage fees are chargeable. PNB is legally bound to
stand by the express terms and conditions on the face of the Warehouse Receipts as to the payment of
storage fees. Even in the absence of such a provision, law and equity dictate the payment of the
warehousemans lien pursuant to Sections 27 and 31 of the Warehouse Receipts Law (R.A. 2137), to wit:

SECTION 27. What claims are included in the warehousemans lien. Subject to the provisions of section
thirty, a warehouseman shall have lien on goods deposited or on the proceeds thereof in his hands, for all
lawful charges for storage and preservation of the goods; also for all lawful claims for money advanced,
interest, insurance, transportation, labor, weighing coopering and other charges and expenses in relation
to such goods; also for all reasonable charges and expenses for notice, and advertisement of sale, and
for sale of the goods where default has been made in satisfying the warehousemans lien.

SECTION 31. Warehouseman need not deliver until lien is satisfied.

A warehouseman having a lien valid against the person demanding the goods may refuse to deliver the
goods to him until the lien is satisfied. After being declared as the warehouseman, PRs cannot legally be
deprived of their right to enforce their claim for warehousemans lien, for reasonable storage fees and
preservation expenses. Pursuant to Section 31 which we quote earlier, the goods under storage may not
be delivered until said lien is satisfied.

Considering that PNB does not deny the existence, validity and genuineness of the Warehouse Receipts
on which it anchors its claim for payment against PRs, it cannot disclaim liability for the payment of the
storage fees stipulated therein. PNB is in estoppel in disclaiming liability for the payment of storage fees
due the PRs as warehouseman while claiming to be entitled to the sugar stocks covered by the subject
Warehouse Receipts on the basis of which it anchors its claim for payment or delivery of the sugar stocks.
The unconditional presentment of the receipts by PNB for payment against PRs on the strength of the
provisions of the Warehouse Receipts Law (R.A. 2137) carried with it the admission of the existence and
validity of the terms, conditions and stipulations written on the face of the Warehouse Receipts, including
the unqualified recognition of the payment of warehousemans lien for storage fees and preservation
expenses. PNB may not now retrieve the sugar stocks without paying the PRs as warehouseman