The power of the
Monetary Board to take over insolvent banks for the protection of the public is
recognized by Section 29 of R.A. No. 265, which took effect on June 15, 1948,
the validity of which is not in question.
The Board
Resolution No. 1049 issued on August 13,1965 cannot interrupt the default of
Island Savings Bank in complying with its obligation of releasing the
P63,000.00 balance because said resolution merely prohibited the Bank from
making new loans and investments, and nowhere did it prohibit island Savings
Bank from releasing the balance of loan agreements previously contracted.
Besides, the mere pecuniary inability to fulfill an engagement does not
discharge the obligation of the contract, nor does it constitute any defense to
a decree of specific performance. And, the mere fact of insolvency of a debtor
is never an excuse for the non-fulfillment of an obligation but 'instead it is
taken as a breach of the contract by him.
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