MANILA The Supreme Court (SC) has denied the petition filed by Banco Filipino Savings and Mortgage Bank that seeks to enforce the ruling of the Makati City Regional Trial Court (RTC) ordering the release of up to PHP25 billion in financial assistance and other regulatory reliefs to the defunct Banco Filipino.
In a 26-page decision dated June 4 penned by Associate Justice Marvic Leonen, the SC's Third Division affirmed the Court of Appeals' (CA) July 2011 decision dismissing Civil Case No. 10-1042 filed by Banco Filipino against the Bangko Sentral Pilipinas (BSP) and the Monetary Board (MB) that became the basis for Makati RTC Judge Joselito C. Villarosa to order the release of a PHP25-billion financial assistance and other regulatory reliefs in favor of the closed bank.
The Court denied Banco Pilipino's petition to reverse the CA ruling issued on July 28, 2011 on two grounds.
First, the SC said Banco Filipino, being a closed bank under receivership, can only sue or be sued through its receiver, which is the Philippine Deposit Insurance Corp. (PDIC).
The second ground, according to the Court, is that BSP's Monetary Board is a quasi-judicial agency and under the Rules of Court petitions for certiorari against a quasi-judicial agency are cognizable only by the CA.
The petition is dismissed on the ground petitioner's lack of capacity to sue, the SC ruled.
The CA said the RTC has no jurisdiction over the case filed by Banco Filipino assailing MB Resolution No. 1668.
It noted that the bank filed the case before the Makati RTC on Oct. 20, 2010 or after the SC has ruled that petitions for writs of certiorari, prohibition or mandamus under Rule 65 of the Revised Rules of Court against the acts and omissions of quasi-judicial agencies should be filed with the appellate court for procedural uniformity.
Thus, the CA stressed Banco Filipino's contention that its case is likewise cognizable by the Makati RTC is untenable.
The SC pointed out that under Republic Act No. 7653, when the Monetary Board finds a bank insolvent, it may summarily and without need for prior hearing forbid the institution from doing business in the country and designate the PPDIC as receiver of the banking institution.
As a trustee of the insolvent bank, the PDIC conserves and manages the asset of the bank to prevent the assets' dissipation, which includes the power to file and answer suits that threaten to dissipate the closed bank's assets.
Petitioner's suit concerned its Business Plan, a matter that could have affected the status of its insolvency. Philippine Deposit Insurance Corp.'s participation would have been necessary, as it had the duty to conserve the petitioner's assets and to examine any possible liability that petitioner might undertake under the Business Plan, the SC explained.
The Court did not give merit to Banco Filipino's claim it was not a closed bank at the time it filed the petition on April 10, 2012 since the CA found its closure to have been illegal.
However, the SC said the CA decision was not yet final since the Monetary Board filed a timely motion for reconsideration.
It added that the CA eventually came out with an amended decision in 2012 confirming its status as a closed bank.
When banks become insolvent, depositors are secure in the knowledge that they can still recoup some part of their savings through (the) Philippine Deposit Insurance Corp. Thus, (the) Philippine Deposit Insurance Corp.'s participation in all suits involving the insolvent bank is necessary and imbued with the public interest, the SC said.
Meanwhile, the Court said pursuant to Article XII, Section 20 of the Constitution, Congress constituted Bangko Sentral as an independent central monetary authority, which is vested with quasi-judicial powers that it exercises through the Monetary Board.
Bangko Sentral's Monetary Board is a quasi-judicial agency. Its decisions, resolutions, and orders are the decisions, resolutions and orders of a quasi-judicial agency. Any action filed against the Monetary Board is an action against a quasi-judicial agency, the Court ruled.
The SC added that the Rules of Court categorically provide that petitions for certiorari involving acts or omissions of a quasi-judicial agency shall be filed in and cognizable only by the Court of Appeals.
The Makati RTC, in its October 2010 ruling, enjoined the BSP and the MB from employing acts inimical to the enforcement of Banco Filipino's approved business plan and from enforcing other regulatory measures that are intended to coerce the bank in agreeing to withdraw its suits against the BSP and MB.
It subsequently granted Banco Filipino's application for a writ of preliminary mandatory and preventive injunction and directed BSP and MB to immediately implement the bank's business plan by releasing its PHP25 billion financial assistance package and other regulatory reliefs without delay.
On Dec. 4, 2009, the MB issued Resolution No. 1668 that granted Banco Filipino's request for a PHP25-billion financial assistance and certain regulatory reliefs.
However, it set several conditions for the assistance, particularly the withdrawal by Banco Filipino of all its cases filed against the BSP and the MB in connection with its closure in 1985 that had been declared illegal and arbitrary by the Supreme Court.
Banco Filipino refused to comply with the conditions stipulated in Resolution No. 1668.
When the MB withheld the release of the financial assistance, Banco Filipino filed Civil Case No. 10-1042, which the Makati RTC granted in favor of the bank and directed the respondents, BSP and MB, to release the financial assistance intended for the petitioner. (PNA)
Source: Philippine News Agency