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Jose Marcel Panlilio, et. al. v. RTC Br. 51, et. al. G.R. No. 173846; February 2, 2011

Facts:

 Petitioners were corporate officers of Silahis International Hotel Inc. (SIHI) who were charged with violation of the SSS law in relation to the Revised Penal Code. The criminal case was raffled in RTC Br 51. 

 Meanwhile, a petition for suspension of payments and rehabilitation was pending in RTC Br 24. SIHI's petition was granted and a suspension order was issued by RTC Br 24, staying all claims against SIHI.

 On the basis of RTC 24's order, petitioners now claim that the proceeding before RTC Br 51 should be suspended.

 RTC Br 51 denied the petitioners' motion and ruled that the stay order does not include the suspension of criminal proceedings. This decision was affirmed by the CA. Hence, this case.

 Issue:

 Whether or not the stay order stays criminal cases

 Held:

 No. Section 18 of FRIA explicitly provides that criminal actions against the individual officer of a corporation are not subject to the Stay or Suspension Order in rehabilitation proceedings.

The prosecution of the officers of the corporation has no bearing on the pending rehabilitation of the corporation, especially since they are charged in their individual capacities. Such being the case, the purpose of the law for the issuance of the stay order is not compromised, since the appointed rehabilitation receiver can still fully discharge his functions as mandated by law. It bears to stress that the rehabilitation receiver is not charged to defend the officers of the corporation. If there is anything that the rehabilitation receiver might be remotely interested in is whether the court also rules that petitioners are civilly liable.

Such a scenario, however, is not a reason to suspend the criminal proceedings, because as aptly discussed in Rosario, should the court prosecuting the officers of the corporation find that an award or indemnification is warranted, such award would fall under the category of claims, the execution of which would be subject to the stay order issued by the rehabilitation court. The penal sanctions as a consequence of violation of the SSS law, in relation to the revised penal code can therefore be implemented if petitioners are found guilty after trial. However, any civil indemnity awarded as a result of their conviction would be subject to the stay order issued by the rehabilitation court. Only to this extent can the order of suspension be considered obligatory upon any court, tribunal, branch or body where there are pending actions for claims against the distressed corporation. 

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