IN RE: Petition for Assistance in the Liquidation of the Rural Bank of Bokod (Benguet), Inc., Philippine Deposit Insurance Corporation vs. Bureau of Internal Revenue
G.R. No. 158261 December 18, 2006
511 SCRA 123
540 Phil. 142
FACTS:
The Bangko Sentral ng Pilipinas, after finding the irregularities in the operation and the insolvent condition of the Rural Bank of Bokod (Benguet), Inc. (RBBI) ordered its Board of Directors to take substantial measures to rehabilitate the bank but the latter failed to implement said measures. RBBI remained in insolvent financial condition and it could no longer safely resume business with the depositors, creditors, and the general public hence, the Monetary Board ordered the liquidation of the bank. The designated BSP liquidator filed with the RTC a Petition for Assistance in the Liquidation of RBBI. Subsequently, the receivership and liquidation was transferred to the Philippine Deposit Insurance Corporation (PDIC).The PDIC filed a Motion for Approval of Project of Distribution of the assets of RBBI without filing the final return of RBBI for the year its operations were stopped. During the hearing, the Bureau of Internal Revenue (BIR) manifested that PDIC should secure a tax clearance certificate from the BIR. The RTC ordered the PDIC to first secure a tax clearance from the appropriate BIR Regional Office and held in abeyance the approval of the Project of Distribution of the assets of the RBBI by virtue thereof.
ISSUE:
Whether or not a bank ordered closed and placed under receivership by the Monetary Board of the BSP still needs to secure tax clearance certificate from the BIR before the liquidation court approves the project of distribution of the assets of the bank.
RULING:
No. The procedure for involuntary dissolution and liquidation of a corporation under the Corporation Code is different from that of the banking corporation under the New Central Bank Act. A banking corporation is governed and regulated by a special law, which is the New Central Bank Act which does not require the prior issuance of a tax clearance from the BIR. Even if PDIC failed to file the final return of RBBI for the year its operations were stopped, the BIR should have requested from the RTC an order for the PDIC to submit the final return of RBBI not to secure a tax clearance.
Section 30 of the New Central Bank Act lays down the proceedings for receivership and liquidation of a bank. The Court explained the procedure for involuntary dissolution and liquidation of a banking corporation. It expounds that the Monetary Board may summarily and without need for prior hearing, forbid the banking corporation from doing business in the Philippines, for causes enumerated in afore-mentioned section of the New Central Bank Act; and appoint the PDIC as receiver of the bank. PDIC shall immediately gather and take charge of all the assets and liabilities of the closed bank and administer the same for the benefit of its creditors. The same provision states that the actions of the Monetary Board under the said Section or Section 29 shall be final and executory, and may not be restrained or set aside by the court except on a Petition for Certiorari filed by the stockholders of record of the bank representing a majority of the capital stock. PDIC, as the appointed receiver, shall file ex parte with the proper RTC, and without requirement of prior notice or any other action, a petition for assistance in the liquidation of the bank. The bank is not given the option to undertake its own liquidation.
An exit clearance is not necessary as a condition for the liquidation of a bank. Both the Tax Code and BIR-SEC Regulations No. 1 refer to a voluntary dissolution and/or liquidation of a corporation, or an involuntary dissolution of a corporation by order of the SEC. They make no reference to a situation where the BSP places a banking corporation under receivership and liquidates its assets.
NOTES:
What is the difference between an appeal by certiorari under Rule 45 of the Revised Rules of Court and an original action for certiorari under Rule 65?
The differences between an appeal by certiorari under Rule 45 of the revised Rules of Court and an original action for certiorari under Rule 65 of the same Rules have been laid down by this Court in the case of Atty. Paa v. Court of Appeals, to wit –
- In appeal by certiorari, the petition is based on questions of law which the appellant desires the appellate court to resolve. In certiorari as an original action, the petition raises the issue as to whether the lower court acted without or in excess of jurisdiction or with grave abuse of discretion.
- Certiorari, as a mode of appeal, involves the review of the judgment, award or final order on the merits. The original action for certiorari may be directed against an interlocutory order of the court prior to appeal from the judgment or where there is no appeal or any other plain, speedy or adequate remedy.
- Appeal by certiorari must be made within the reglementary period for appeal. An original action for certiorari may be filed not later than sixty (60) days from notice of the judgment, order or resolution sought to be assailed.
- Appeal by certiorari stays the judgment, award or order appealed from. An original action for certiorari, unless a writ of preliminary injunction or a temporary restraining order shall have been issued, does not stay the challenged proceeding.
- In appeal by certiorari, the petitioner and respondent are the original parties to the action, and the lower court or quasi-judicial agency is not to be impleaded. In certiorari as an original action, the parties are the aggrieved party against the lower court or quasi-judicial agency and the prevailing parties, who thereby respectively become the petitioner and respondents.
- In certiorari for purposes of appeal, the prior filing of a motion for reconsideration is not required (Sec. 1, Rule 45); while in certiorari as an original action, a motion for reconsideration is a condition precedent (Villa-Rey Transit vs. Bello, L-18957, April 23, 1963), subject to certain exceptions.
- In appeal by certiorari, the appellate court is in the exercise of its appellate jurisdiction and power of review, while in certiorari as an original action, the higher court exercises original jurisdiction under its power of control and supervision over the proccedings of lower courts.
What is the distinction between a “Final Order” and “Interlocutory Order”?
This Court has repeatedly and uniformly held that a judgment or order may be appealed only when it is final, meaning that it completely disposes of the case and definitively adjudicates the respective rights of the parties, leaving thereafter no substantial proceeding to be had in connection with the case except the proper execution of the judgment or order. Conversely, an interlocutory order or judgment is not appealable for it does not decide the action with finality and leaves substantial proceedings still to be had.
As a general rule, an interlocutory order is not appealable until after the rendition of the judgment on the merits, given that a contrary rule would delay the administration of justice and unduly burden the courts. This Court, however, has also held that an original action for certiorari under Rule 65 of the revised Rules of Court is an appropriate remedy to assail an interlocutory order when (1) the tribunal issued such order without or in excess of jurisdiction or with grave abuse of discretion, and (2) the assailed interlocutory order is patently erroneous and the remedy of appeal would not afford adequate and expeditious relief. Thus, despite this Court’s finding that PDIC, as the liquidator of RBBI, availed itself of the wrong remedy by filing an appeal by certiorari under Rule 45 of the revised Rules of Court, We shall adopt a positive and pragmatic approach, and, instead of dismissing the instant Petition outright, it shall treat the same as an original action for certiorari under Rule 65 of the same Rules, in consideration of the crucial issues and substantial arguments already presented by the concerned parties before this Court.
Banks and Banking; Liquidation: Taxation
The afore-quoted Tax Code provision and regulations refer to a voluntary dissolution and/or liquidation of a corporation through its adoption of a resolution or plan to that effect, or an involuntary dissolution of a corporation by order of the SEC. They make no reference at all to a situation similar to the one at bar in which a banking corporation is ordered closed and placed under receivership by the BSP and its assets judicially liquidated. Now, the determining question is, whether Section 52(C) of the Tax Code of 1997 and BIR-SEC Regulations No. 1 could be made to apply to the present case.
This Court rules in the negative.
First, Section 52(C) of the Tax Code of 1997 and the BIR-SEC Regulations No. 1 regulate the relations only as between the SEC and the BIR, making a certificate of tax clearance a prior requirement before the SEC could approve the dissolution of a corporation. In Spec. Proc. No. 91-SP-0060 pending before the RTC, RBBI was placed under receivership and ordered liquidated by the BSP, not the SEC; and the SEC is not even a party in the said case, although the BIR is. This Court cannot find any basis to extend the SEC requirements for dissolution of a corporation to the liquidation proceedings of RBBI before the RTC when the SEC is not even involved therein.
Section 30 of the New Central Bank Act lays down the proceedings for receivership and liquidation of a bank. The said provision is silent as regards the securing of a tax clearance from the BIR. The omission, nonetheless, cannot compel this Court to apply by analogy the tax clearance requirement of the SEC, as stated in Section 52(C) of the Tax Code of 1997 and BIR-SEC Regulations No. 1, since, again, the dissolution of a corporation by the SEC is a totally different proceeding from the receivership and liquidation of a bank by the BSP. This Court cannot simply replace any reference by Section 52(C) of the Tax Code of 1997 and the provisions of the BIR-SEC Regulations No. 1 to the “SEC” with the “BSP.” To do so would be to read into the law and the regulations something that is simply not there, and would be tantamount to judicial legislation.
It should be noted that there are substantial differences in the procedure for involuntary dissolution and liquidation of a corporation under the Corporation Code, and that of a banking corporation under the New Central Bank Act, so that the requirements in one cannot simply be imposed in the other.
Section 54 of the Tax Code of 1997 imposes a general duty on all receivers, trustees in bankruptcy, and assignees, who operate and preserve the assets of a corporation, regardless of the circumstances or the law by which they came to hold their positions, to file the necessary returns on behalf of the corporation under their care. The filing by PDIC of a final tax return, on behalf of RBBI, should already address the supposed concern of the BIR and would already enable the latter to determine if RBBI still had outstanding tax liabilities.
The Government, in this case, cannot generally claim preference of credit, and receive payment ahead of the other creditors of RBBI. Duties, taxes, and fees due the Government enjoy priority only when they are with reference to a specific movable property, under Article 2241(1) of the Civil Code, or immovable property, under Article 2242(1) of the same Code. However, with reference to the other real and personal property of the debtor, sometimes referred to as “free property,” the taxes and assessments due the National Government, other than those in Articles 2241(1) and 2242(1) of the Civil Code, will come only in ninth place in the order of preference.
Liquidation proceedings cannot be summary in nature. It requires the holding of hearings and presentation of evidence of the parties concerned, i.e., creditors who must prove and substantiate their claims, and the liquidator disputing the same. It also allows for multiple appeals, so that each creditor may appeal a final order rendered against its claim. Hence, liquidation proceedings may very well be highly-contested and drawn-out, because, at the end of it all, all claims against the corporation undergoing litigation must be settled definitively and its assets properly disposed off.
SOURCES
Recalde, Eric. A Treatise on Tax Principles and Remedies. 2016. p.188
Myline Cordial 
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