Hermosa Savings and Loan Bank v. Development Bank of the Philippines, G.R. No. 222972

 

According to the Court, Section 3029 of RA 7653 "is curative in character when it declared that the liquidation court shall have jurisdiction in the same proceedings to assist in the adjudication of the disputed claims against the Bank." The Court explained that the rationale for consolidating all claims against the bank with the liquidation court is "to prevent multiplicity of actions against the insolvent bank and x x x to establish due process and orderliness in the liquidation of the bank, to obviate the proliferation of litigations and to avoid injustice and arbitrariness." The Court stated that it was the intention, of the lawmaking body "that for convenience only one court, if possible, should pass upon the claims against the insolvent bank and that the liquidation court should assist the Superintendent of Banks and regulate his operations."

To allow the complaint of DBP to proceed outside the Liquidation Court could result to iniquity not only to Hermosa Bank's depositors who were the most directly affected by its closure, but also to its other creditors because it would prioritize DBP's claim over their claims. The CA also committed a reversible error in ruling that the Liquidation Court has no jurisdiction over the bank employees who are being sued in their personal capacities. Section 30 of RA 7653 gives the liquidation court the authority to "adjudicate disputed claims against the institution, assist the enforcement of individual liabilities of the stockholders, directors and officers, and decide on other issues as may be material to implement the liquidation plan adopted." Hence, the Liquidation Court may resolve the respective liabilities, if any, of Hermosa Bank's officers pursuant to Section 30 of RA 7653. Finally, the Writ of Preliminary Attachment issued by the RTC Branch 136 is a provisional or ancillary remedy resorted to by a litigant to protect and preserve certain rights and interests pending final judgment. With the dismissal of DBP's complaint, the Writ of Preliminary Attachment no longer has a leg to stand on and should correctly be dissolved.

 

 

 

 

 

Yuseco v. PDIC, as statutory liquidator of Unitrust Bank, G.R. No. 217890

 

According to Section 30 of the NCBA, the determination of the propriety of receivership or liquidation proceedings is under the exclusive prerogative of the Monetary Board. The RTC, acting as liquidation court, has no power to overrule the findings of the MB. As a liquidation court, the power of the RTC is limited to adjudicating claims against the institution, assisting the enforcement of individual liabilities of stockholders and deciding on essential issues relevant to the liquidation plan. In the case at bar, the RTC, acting as liquidation court, did not have jurisdiction to decide on the propriety and validity of the proceedings. The trial court failed to consider Sec. 30 of the NCBA when it decided on the validity of the proceeding. Hence, the RTC committed grave abuse of discretion when it ordered the PDIC to cease and desist in the liquidation proceeding.

Apex Bancrights Holdings, Inc. et. al. v. Bangko Sentral ng Pilipinas, G.R. No. 214866, 2 October 2017

 

The Monetary Board may summarily and without need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation as receiver of the banking institution. The receiver shall immediately gather and take charge of all the assets and liabilities of the institution, administer the same for the benefit of its creditors, and exercise the general powers of a receiver under the Revised Rules of Court. If the receiver determines that the institution cannot be rehabilitated or permitted to resume business in accordance with the next preceding paragraph, the Monetary Board shall notify in writing the board of directors of its findings and direct the receiver to proceed with the liquidation of the institution.

Cu v. Small Business Guarantee and Finance Corporation, G.R. No. 211222

 

To digress, when a bank is ordered closed by the Monetary Board; PDIC is designated as the receiver which shall then proceed with the takeover and liquidation of the closed bank. The placement of a bank under liquidation has the following effect on interest payments: "The liability of a bank to pay interest on deposits and all other obligations as of closure shall cease upon its closure by the Monetary Board without prejudice to the first paragraph of Section 85 of Republic Act No. 7653 (the New Central Bank Act)," and on final decisions against the closed bank: "The execution and enforcement of a final decision of a court other than the liquidation court against the assets of a closed bank shall be stayed. The prevailing party shall file the final decision as a claim with the liquidation court and settled in accordance with the Rules on Concurrence and Preference of Credits under the Civil Code or other laws."

 

The petition for assistance in the liquidation of a closed bank is a special proceeding for the liquidation of a closed bank, and includes the declaration of the concomitant rights of its creditors and the order of payment of their valid claims in the disposition of assets. It is a proceeding in rem and the liquidation court has exclusive jurisdiction to adjudicate disputed claims against the closed bank, assist in the enforcement of individual liabilities of the stockholders, directors and officers, and decide on all other issues as may be material to implement the distribution plan adopted by PDIC for general application to all closed banks. The provisions of the Securities Regulation Code or RA 8799, and Supreme Court Administrative Matter No. 00-8-10-SC or the Rules of Procedure on Corporate Rehabilitation are not applicable to the petition for assistance in the liquidation of closed banks.

In Re : Petition for Assistance in the Liquidation in the Rural Bank of Bokod Benguet v. Bureau of Internal Revenue, G.R. No. 158261, 18 December 2006

 

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.

Miranda v. Philippine Deposit Insurance Corporation, G.R. No. 169334, 08 September 2006

 

It is well-settled in both law and jurisprudence that the Central Monetary Authority, through the Monetary Board, is vested with exclusive authority to assess, evaluate and determine the condition of any bank, and finding such condition to be one of insolvency, or that its continuance in business would involve a probable loss to its depositors or creditors, forbid bank or non-bank financial institution to do business in the Philippines; and shall designate an official of the BSP or other competent person as receiver to immediately take charge of its assets and liabilities.

In Central Bank of the Philippines v. De la Cruz, we held that the actions of the Monetary Board in proceedings on insolvency are explicitly declared by law to be "final and executory." They may not be set aside, or restrained, or enjoined by the courts, except upon "convincing proof that the action is plainly arbitrary and made in bad faith.

Rural Bank of Sta. Catalina Inc. v. Land Bank of the Philippines, G.R. No. 148019, 26 July 2004

 

It bears stressing that a defending party declared in default loses his standing in court and his right to adduce evidence and to present his defense. He, however, has the right to appeal from the judgment by default and assail said judgment on the ground, inter alia, that the amount of the judgment is excessive or is different in kind from that prayed for, or that the plaintiff failed to prove the material allegations of his complaint, or that the decision is contrary to law. Such party declared in default is proscribed from seeking a modification or reversal of the assailed decision on the basis of the evidence submitted by him in the Court of Appeals, for if it were otherwise, he would thereby be allowed to regain his right to adduce evidence, a right which he lost in the trial court when he was declared in default, and which he failed to have vacated. In this case, the petitioner sought the modification of the decision of the trial court based on the evidence submitted by it only in the Court of Appeals.

Manalo v. Court of Appeals, G.R. No. 141297, 08 October 2001

 

The exclusive jurisdiction of the liquidation court pertains only to the adjudication of claims against the bank. It does not cover the reverse situation where it is the bank which files a claim against another person or legal entity. The requirement that all claims against the bank be pursued in the liquidation proceedings filed by the Central Bank is intended to prevent multiplicity of actions against the insolvent bank and designed to establish due process and orderliness in the liquidation of the bank, to obviate the proliferation of litigations and to avoid injustice and arbitrariness. The lawmaking body contemplated that for convenience, only one court, if possible, should pass upon the claims against the insolvent bank and that the liquidation court should assist the Superintendents of Banks and regulate his operations. In addition, a bank which had been ordered closed by the monetary board retains its juridical personality which can sue and be sued through its liquidator. The only limitation being that the prosecution or defense of the action must be done through the liquidator. Otherwise, no suit for or against an insolvent entity would prosper. In such situation, banks in liquidation would lose what justly belongs to them through a mere technicality.

Banco Filipino Savings and Mortgage Bank v. Bangko Sentral ng Pilipinas, G.R. No. 200642

 

When a bank is ordered closed and placed under the receivership of PDIC by the Monetary Board, PDIC is mandated to proceed with the takeover and liquidation of the closed bank. It shall immediately gather and take charge of all the assets and liabilities of the bank, administer the same for the benefit of its creditors, and exercise the general powers of a receiver under the Revised Rules of Court. In its capacity as the receiver of the closed bank, the PDIC is authorized to perform several functions in its behalf, including bringing suits to enforce liabilities to or recoveries of the closed banks, hiring or retaining private counsels as may be necessary, and exercising such other powers as are inherent and necessary for the effective discharge of the duties of the corporation as a receiver. The powers and functions of the directors, officers, and stockholders of a closed bank under receivership are deemed suspended upon takeover by the PDIC.

Banco Filipino Savings and Mortgage Bank v. Bangko Sentral ng Pilipinas, G.R. No. 200678, 04 June 2018

 

    A closed bank under receivership can only sue or be sued through its receiver, the Philippine Deposit Insurance Corporation (PDIC). Under R.A. 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 Philippines and designate PDIC as receiver of the banking institution. The relationship between a closed bank, in this case, Banco Filipino, and the PDIC is fiduciary in nature. Section 30 of R.A. 7653 directs the receiver of a closed bank to “immediately gather and take charge of all the assets and liabilities of the institution.”

Considering that the receiver has the power to take charge of ALL the assets of the closed bank and to institute for or defend any action against it, only the receiver, in its fiduciary capacity, may sue and be sued on behalf of the closed bank. When the petitioner was placed under receivership, the power of its Board of Directors and its officers were suspended. Thus, its Board of Directors could not have validly authorized its Executive Vice Presidents to file the suit on its behalf. Considering that the petition was filed by signatories who were not validly authorized to do so, the petition does not produce any legal effect. Being unauthorized to do so, the Supreme Court never validly acquired jurisdiction over the case. The petition, therefore, must be dismissed.

So v. Philippine Deposit Insurance Corporation, G.R. No. 230020, 19 March 2018

 

There is no controversy as to the proper remedy to question the PDIC's denial of petitioner's deposit insurance claim. Section 4(f) of its Charter, as amended, clearly provides that:

x x x

The actions of the Corporation taken under this section shall be final and executory, and may not be restrained or set aside by the court, except on appropriate petition for certiorari on the ground that the action was taken in excess of jurisdiction or with such grave abuse of discretion as to amount to a lack or excess of jurisdiction. The petition for certiorari may only be filed within thirty (30) days from notice of denial of claim for deposit insurance.

Spouses Chugani v. Philippine Deposit Insurance Corporation, G.R. No. 230037, 19 March 2018

 

Section 4(f) of R.A. No. 3591, as amended by R.A. No. 9576 states that deposit means the unpaid balance of money or its equivalent received by a bank in the usual course of business and for which it has given or is obliged to give credit to a commercial, checking, savings, time or thrift account, or issued in accordance with Bangko Sentral rules and regulations and other applicable laws, together with such other obligations of a bank, which, consistent with banking usage and practices.

Section 2(d) of PDIC Regulatory Issuance No. 2011-0221 states that for deposit to be considered as legitimate, it should be 1) received by a bank as a deposit in the usual course of business; 2) recorded in the books of the bank as such; 3) opened in accordance with established forms and requirements of the BSP and/or the PDIC.

Further, in Phil. Deposit Insurance Corp. v. CA, this Court held that in order for the claim for deposit insurance with the PDIC may prosper, it is necessary that the corresponding deposit must be placed in the insured bank.

Vivas, v. Monetary Board of the Central Bank of the Philippines, G.R. No. 191424, 07 August 2013

 

The "close now, hear later" doctrine has already been justified as a measure for the protection of the public interest. Swift action is called for on the part of the BSP when it finds that a bank is in dire straits. Unless adequate and determined efforts are taken by the government against distressed and mismanaged banks, public faith in the banking system is certain to deteriorate to the prejudice of the national economy itself, not to mention the losses suffered by the bank depositors, creditors, and stockholders, who all deserve the protection of the government

The doctrine is founded on practical and legal considerations to obviate unwarranted dissipation of the bank’s assets and as a valid exercise of police power to protect the depositors, creditors, stockholders, and the general public. Swift, adequate and determined actions must be taken against financially distressed and mismanaged banks by government agencies lest the public faith in the banking system deteriorate to the prejudice of the national economy.