8/11/2019 Rehabilitation Plan - Steel Corporation of the Philippines v Mapfre Insurance

1/2

Rehabilitation Plan

STEEL CORPORATION OF THE PHILIPPINES

vs.

MAPFRE INSULAR INSURANCE CORPORATIQN

NEW INDIA ASSURANCE COMPANY LIMITED

PHILIPPINE CHARTER

INSURANCECORPORATION MALAYAN

INSURANCECO. INC. and ASIA INSURANCE CO.

INC. and ASIA INSURANCE PHIL. CORP.

G.R. No. 201199 October 16 2013 J. Carpio

FACTS:

SCP is a domestic corporation engaged in themanufacture and distribution of cold-rolled andgalvanized steel sheets and coils. It obtained loansfrom several creditors and, as security, mortgaged itsassets in their favor. The creditors appointed Bank ofthe Philippine Islands (BPI) as their trustee. SCP andBPI entered into a Mortgage Trust Indenture (MTI)requiring SCP to insure all of its assets until the loansare fully paid. Under the MTI, the insurance policieswere to be made payable to BPI.

When SCP suffered financial difficulties, one of thecreditors filed a petition to have SCP placed undercorporate rehabilitation and the RTC issued a stayorder to defer all claims against SCP, appointed arehabilitation receiver and eventually approved themodified rehabilitation plan.

Fires broke out at 2 SCP-plants damaging itsmachineries. Invoking its right under the MTI, BPIdemanded and received from the insurers theinsurance proceeds. SCP sought to collect the

insurance proceeds claiming that it shall be used torehabilitate the corporation by having themachineries repaired and to buy replacements for theheavily damaged machines and that the assignmentof the RTC as rehabilitation court did not divest itfrom being a court of general jurisdiction. Theinsurance companies refused to pay SCP theinsurance proceeds contending that the fire wascaused by several factors attributable to SCP such asarson and negligence and that the rehabilitation courthas no jurisdiction over the propriety of the paymentor non-payment of the insurance proceeds as theclaims contemplated under the law do not cover the

claims of the distressed bank to its debtors. The RTC,acting as the rehabilitation court, ruled on the matterand directed the insurance companies to pay theproceeds to SCP. In an appeal with the CA, theappellate court reversed the decision of the trial court.Hence, the present petition.

ISSUE:

WON the rehabilitation court has jurisdiction over theissue of payment of the insurance proceeds to acorporation under rehabilitation and WON the claim

of SCP for insurance proceeds is covered by theclaims under the law

RULING

:

No. The RTC, acting as rehabilitation court, has nojurisdiction over the subject matter of the insuranceclaim of SCP against respondent insurers. SCP mustfile a separate action for collection where respondent

insurers can properly thresh out their defenses. SCPcannot simply file with the RTC a motion to directrespondent insurers to pay insurance proceedsSection 3 of Republic Act No. 10142 states thatrehabilitation proceedings are "summary and nonadversarial" in nature. They do not includeadjudication of claims that require full trial on themerits, like SCPs insurance claim against respondent

insurers. In Advent Capital and Finance Corporationv. Alcantara,the Court held that:

x x x Said insurance claims cannot be

considered as "claims" within thejurisdiction of the trial court functioning asa rehabilitation court. Rehabilitation courtsonly have limited jurisdiction over theclaims by creditors against the distressedcompany, not on the claims of saiddistressed company against its debtors. Theinterim rules define claim as referring to allclaims or demands, of whatever nature orcharacter against a debtor or its property,whether for money or otherwise.

Even under the new Rules of Procedure on

Corporate Rehabilitation, claim is definedunder Section 1, Rule 2 as "all claims ordemands of whatever nature or characteragainst a debtor or its property, whether formoney or otherwise." This is also thedefinition of a claim under Republic Act No.10142. Section 4(c) thereof reads:

"(c) Claim shall refer to all claims ordemands of whatever nature or characteragainst the debtor or its property, whetherfor money or otherwise, liquidated orunliquidated, fixed or contingent, maturedor unmatured, disputed or undisputed,including, but not limited to: (1) all claimsof the government, whether national orlocal, including taxes, tariffs and customsduties; and (2) claims against directors andofficers of the debtor arising from the actsdone in the discharge of their functionsfalling within the scope of their authority:Provided, That, this inclusion does notprohibit the creditors or third parties fromfiling cases against the directors and

8/11/2019 Rehabilitation Plan - Steel Corporation of the Philippines v Mapfre Insurance

2/2

officers acting in their personalcapacities." (Emphasis supplied)

Respondent insurers are not claiming or demandingany money or property from SCP. In other words,respondent insurers are not creditors of SCP.Respondent insurers are contingent debtors of SCPbecause they may possibly be, subject to proof duringtrial, liable to SCP. Thus, the RTC has no jurisdiction

over the insurance claim of SCP against respondentinsurers. SCP must file a separate action againstrespondent insurers to recover whatever claim it mayhave against them.