Professional Documents
Culture Documents
As culled from the records, the facts of the case are xxx
as follows:
5. To include the names of Mr. Catalino Banez, Mr.
The 16th regular examination of the books and Romeo Busuego and Mr. Renato Lim in the Sector's
records of the PAL Employees Savings and Loan watchlist to prevent them from holding responsible
Association, Inc. ("PESALA") was conducted from March positions in any institution under Central Bank
14 to April 16, 1988 by a team of CB examiners headed supervision;
by Belinda Rodriguez. Following the said examination,
several anomalies and irregularities committed by the
6. To require PESALA to enforce collection of the
herein petitioners; PESALA's directors and officers, were overpayment to the Vista Grande Management and
uncovered, among which are: Development Corporation and to require the
1. Questionable investment In a multi-million accounting of P12.28 million unaccounted and
peso real estate project (Pesalaville) unremitted bank loan proceeds and P3.9 million
other unsupported cash disbursements from the
2. Conflict of interest in the conduct of responsible directors and officers; or to properly
business charge these against their respective accounts, if
3. Unwarranted declaration and payment of necessary;
dividends
7. To require the board of directors of PESALA to
4. Commission of unsound and unsafe business file civil and criminal cases against Messrs. Catalino
practices. Banez, Romeo Busuego and Renato Lim for all the
On July 19, 1988,, Central Bank ("CB") Supervision misfeasance and malfeasance committed by them,
and Examination Section ("SES") Department IV Director as warranted by the evidence;
Ricardo. F. Lirio sent a letter to the Board of Directors of
PESALA inviting them to a conference on July 21, 1988 to 8. To require the board of directors of PESALA to
discuss subject findings noted in the said 16th regular improve the operations of the Association, correct
examination, but petitioners did not attend such all violations noted, and adopt internal control
conference. measures to prevent the recurrence of similar
incidents as shown in Annex E of the subject
On July 28, 1988, petitioner Renato Lim wrote the memorandum of the Director, SES Department
PESALA's Board of Directors explaining his side on the IV;"[3]
said examination of PESALA's records and requesting
that a copy of his letter be furnished the CB, which was xxx xxx xxx
fortwith made by the Board.[2]
x x x Although the Monetary Board is free from the "SEC. 28. Supervisory powers over savings and loan
rigidity of certain procedural requirements, it failed 'to associations. - In addition to whatever powers have been
observe the essential requirement of due process' conferred by the foregoing provisions, the Monetary
(Adamson and Adamson, Inc. v. Amores, 152 SCRA 237) Board shall have the power to exercise the following:
specifically its failure to afford petitioners the
xxx
opportunity to be heard. In short, there is a clear
showing of arbitrariness resulting in an irreparable injury
(c) To conduct at least once every year, and whenever-
necessary, any inspection, examination or investigation
THE ANTECEDENTS On April 20, 1994, the BOC sold the remaining four (4)
CB bills to Capital One Equities Corporation13 which
The Central Bank bills transferred them to All-Asia Capital and Trust
Corporation (All Asia). On September 30, 1994, All Asia
I. First set of CB bills further transferred the four CB bills back to the RCBC.14
The Rizal Commercial Banking Corporation (RCBC) was On November 16, 1994, the RCBC sold back to All Asia
the registered owner of seven Central Bank (CB) bills one of these 4 CB bills. When the BSP refused to release
with a total face value of 70 million, issued on January the amount of this CB bill on maturity, the BOC
2, 1994 and would mature on January 2, 1995.2 As purchased from All Asia this lone CB bill,15 particularly
evidenced by a "Detached Assignment" dated April 8, described as follows:16
1994,3 the RCBC sold these CB bills to the BOC.4 As Serial No.: 2BB XM 045348
evidenced by another "Detached Assignment"5 of even
date, the BOC, in turn, sold these CB bills to the Quantity: One (1)
PDB.6 The BOC delivered the Detached Assignments to Denomination: Php 10 million
the PDB.7
Total Face Value: Php 10 million
On April 15, 1994 (April 15 transaction), the PDB, in turn,
sold to the BOC Treasury Bills worth 70 million, with
maturity date of June 29, 1994, as evidenced by a
(c) the legal rate of interest from the filing of this The alleged assignment of subject CB Bills in PDBs favor
Petition until full payment of the sums is not recorded/registered in BSPs
40
mentioned in this Petition; and books. (underscoring supplied)
Alternatively, the BSP asked that an interpleader suit be In view of the BOCs acquisition of all the CB bills, All
allowed between and among the claimants to the Asia50 moved to be dropped as a respondent (with the
subject CB bills on the position that while it is able and PDBs conformity51 ), which the RTC granted.52 The RCBC
willing to pay the subject CB bills face value, it is duty subsequently followed suit.53
bound to ensure that payment is made to the rightful
owner. The BSP prayed that judgment be rendered: In light of the developments, on May 4, 1998, the RTC
required the parties to manifest their intention
a. Ordering the dismissal of the PDBs petition regarding the case and to inform the court of any
for lack of merit; amicable settlement; "otherwise, th[e] case shall be
dismissed for lack of interest."54 Complying with the
b. Determining which between/among [PDB] RTCs order, the BOC moved (i) that the case be set for
and the other claimants is/are lawfully entitled pre-trial and (ii) for further proceeding to resolve the
to the ownership of the subject CB bills and the remaining issues between the BOC and the PDB,
proceeds thereof; particularly on "who has a better right over the subject
CB bills."55 The PDB joined the BOC in its motion.56
c. x x x;
On September 28, 2000, the RTC granted the BSPs
d. Ordering PDB to pay BSP and Nuqui such motion to interplead and, accordingly, required the BOC
actual/compensatory and exemplary damages to amend its Answer and for the conflicting claimants to
as the RTC may deem warranted; and comment thereon.57 In October 2000, the BOC filed its
Amended Consolidated Answer with Compulsory
e. Ordering PDB to pay Nuqui moral damages Counterclaim, reiterating its earlier arguments asserting
and to pay the costs of the suit.41 ownership over the subject CB bills.58
Subsequent events In the alternative, the BOC added that even assuming
that there was no effective transfer of the nine CB bills
The PDB agreed with the BSPs alternative response for ultimately to the BOC, the PDB remains obligated to
an interpleader deliver to the BOC, as buyer in the April 15 transaction
and ultimate successor-in-interest of the buyer (Bancap)
4. PDB agrees that the various claimants should now in the April 19 transaction, either the original subjects of
interplead and substantiate their respective claims on the sales or the value thereof, plus whatever income
the subject CB bills. However, the total face value of the that may have been earned during the pendency of the
subject CB bills should be deposited in escrow with a case.59
private bank to be disposed of only upon order of the
RTC.42 That BOC prayed:
Accordingly, on June 9, 199543 and August 4, 1995,44 the 1. To declare BOC as the rightful owner of the
BOC and the PDB entered into two separate Escrow nine (9) CB bills and as the party entitled to the
Agreements.45 The first agreement covered the first set proceeds thereof as well as all income earned
of CB bills, while the second agreement covered the pursuant to the two (2) Escrow Agreements
second set of CB bills. The parties agreed to jointly entered into by BOC and PDB.
collect from the BSP the maturity proceeds of these CB
bills and to deposit said amount in escrow, "pending 2. In the alternative, ordering PDB to deliver the
final determination by Court judgment, or amicable original subject of the sales transactions or the
settlement as to who shall be eventually entitled value thereof and whatever income earned by
thereto."46 The BOC and the PDB filed a Joint way of interest at prevailing rate.
Motion,47 submitting these Escrow Agreements for court
approval. The RTC gave its approval to the parties Joint
The BOC argues that the present cases do not fall within Assignment Affected by Fraud. Any assignment for
the limited provision of Section 10 (d) 4 of CB Circular transfer of ownership of registered certificate obtained
No. 28, which contemplates only of three situations: through fraudulent representation if honored by the
first, where the fraudulent assignment is not coupled Central Bank or any of its authorized service agencies
with a notice to the BSP, it can grant no relief; second, shall not make the Central Bank or agency liable
where the fraudulent assignment is coupled with a therefore unless it has previous formal notice of the
notice of fraud to the BSP, it will make a notation against fraud. The Central Bank, upon notice under oath that the
the assignment and require the owner and the holder to assignment was secured through fraudulent means, shall
substantiate their claims; and third, where the case does immediately issue and circularize a "stop order" against
not fall on either of the first two situations, the BSP will the transfer, exchange, redemption of the Certificate
have to await action on the assignment pending including the payment of interest coupons. The Central
settlement of the case, whether by agreement or by Bank or service agency concerned shall continue to
court order. withhold action on the certificate until such time that
the conflicting claims have been finally settled either by
The PDBs case cannot fall under the first two situations. amicable settlement between the parties or by order of
With particular regard to the second situation, CB the Court.
Circular No. 28 requires that the conflict must be
between an "owner" and a "holder," for the BSP to Unlike CB Circular No. 28, CB Circular No. 769-80 limited
exercise its limited jurisdiction to resolve conflicting the BSPs authority to the mere issuance and
claims; and the word "owner" here refers to the circularization of a "stop order" against the transfer,
registered owner giving notice of the fraud to the BSP. exchange and redemption upon sworn notice of a
The PDB, however, is not the registered owner nor is it fraudulent assignment. Under this Circular, the BSP shall
THE PDBS COMMENT At the outset, we note that the parties have not raised
the validity of either CB Circular No. 28 or CB Circular No.
The PDB claims that jurisdiction is determined by the 769-80 as an issue. What the parties largely contest is
allegations in the complaint/petition and not by the the applicable circular in case of an allegedly
defenses set up in the answer.70 In filing the petition with fraudulently assigned CB bill. The applicable circular, in
the RTC, the PDB merely seeks to compel the BSP to turn, is determinative of the proper remedy available to
determine, pursuant to CB Circular No. 28, the party the PDB and/or the BOC as claimants to the proceeds of
legally entitled to the proceeds of the subject CB bills, the subject CB bills.
which, as the PDB alleged, have been transferred
through fraudulent representations an allegation Indisputably, at the time the PDB supposedly invoked
which properly recognized the BSPs jurisdiction to the jurisdiction of the BSP in 1994 (by requesting for the
resolve conflicting claims of ownership over the CB bills. annotation of its claim over the subject CB bills in the
BSPs books), CB Circular No. 769-80 has long been in
The PDB adds that under the doctrine of primary effect. Therefore, the parties respective interpretations
jurisdiction, courts should refrain from determining a of the provision of Section 10 (d) 4 of CB Circular No. 28
controversy involving a question whose resolution do not have any significance unless it is first established
demands the exercise of sound administrative that that Circular governs the resolution of their
discretion. In the present case, the BSPs special conflicting claims of ownership. This conclusion is
knowledge and experience in resolving disputes on important, given the supposed repeal or modification of
securities, whose assignment and trading are governed Section 10 (d) 4 of CB Circular No. 28 by the following
by the BSPs rules, should be upheld. provisions of CB Circular No. 769-80:
The PDB asserts that the existence of CB Circular No. ARTICLE XII
769-80 or the abolition of Nuquis office does not result EFFECTIVITY
in depriving the BSP of its jurisdiction: first, CB Circular
No. 769-80 expressly provides that CB Circular No. 28
On that note, the Court could have written finis to the In light of the above principles pointing to jurisdiction as
present controversy by simply sustaining the BSPs a matter of substantive law, the provisions of the law
hands-off approach to the PDBs problem under CB itself that gave CB Circular 769-80 its life and jurisdiction
Circular No. 769-80. However, the jurisdictional must be examined.
provision of CB Circular No. 769-80 itself, in relation to
CB Circular No. 28, on the matter of fraudulent The Philippine Central Bank
assignment, has given rise to a question of jurisdiction -
the core question of law involved in these petitions - On January 3, 1949, Congress created the Central Bank
which the Court cannot just treat sub-silencio. of the Philippines (Central Bank) as a corporate body
with the primary objective of (i) maintaining the internal
Broadly speaking, jurisdiction is the legal power or and external monetary stability in the Philippines; and (ii)
authority to hear and determine a cause.80 In the preserving the international value and the convertibility
exercise of judicial or quasi-judicial power, it refers to of the peso.90 In line with these broad objectives, the
the authority of a court to hear and decide a case.81 In Central Bank was empowered to issue rules and
the context of these petitions, we hark back to the basic regulations "necessary for the effective discharge of the
principles governing the question of jurisdiction over the responsibilities and exercise of the powers assigned to
subject matter. the Monetary Board and to the Central
Bank."91 Specifically, the Central Bank is authorized to
First, jurisdiction over the subject matter is determined organize (other) departments for the efficient conduct of
only by the Constitution and by law.82 As a matter of its business and whose powers and duties "shall be
substantive law, procedural rules alone can confer no determined by the Monetary Board, within the authority
jurisdiction to courts or administrative agencies.83 In fact, granted to the Board and the Central Bank"92 under its
an administrative agency, acting in its quasi-judicial original charter.
capacity, is a tribunal of limited jurisdiction and, as such,
could wield only such powers that are specifically With the 1973 Constitution, the then Central Bank was
granted to it by the enabling statutes. In contrast, an RTC constitutionally made as the countrys central monetary
is a court of general jurisdiction, i.e., it has jurisdiction authority until such time that Congress93 shall have
over cases whose subject matter does not fall within the established a central bank. The 1987 Constitution
exclusive original jurisdiction of any court, tribunal or continued to recognize this function of the then Central
body exercising judicial or quasi-judicial functions.84 Bank until Congress, pursuant to the Constitution,
created a new central monetary authority which later
Second, jurisdiction over the subject matter is came to be known as the Bangko Sentral ng Pilipinas.
determined not by the pleas set up by the defendant in
his answer85but by the allegations in the Under the New Central Bank Act (R.A. No. 7653),94 the
complaint,86 irrespective of whether the plaintiff is BSP is given the responsibility of providing policy
entitled to favorable judgment on the basis of his directions in the areas of money, banking and credit; it is
assertions.87 The reason is that the complaint is given, too, the primary objective of maintaining price
supposed to contain a concise statement of the ultimate stability, conducive to a balanced and sustainable
facts constituting the plaintiff's causes of action.88 growth of the economy, and of promoting and
maintaining monetary stability and convertibility of the
Third, jurisdiction is determined by the law in force at peso.95
the time of the filing of the complaint.89
4.4. Regular investigation which shall not be Under Section 10.b. (2)
oftener than once a year from the last date of
examination to determine whether an x x x Detached assignment will be recognized or
institution is conducting its business on a safe or accepted only upon previous notice to the Central Bank
sound basis: Provided, That the
The PDBs claim is not accurate. What the PDB Undoubtedly, the BSP Monetary Board is a quasi-judicial
requested the BSP on that date was not the recording of agency exercising quasi-judicial powers or functions. As
the assignment of the CB bills in its favor but the aptly observed by the Court of Appeals, the BSP
annotation of its claim over the CB bills at the time when Monetary Board is an independent central monetary
(i) it was no longer in possession of the CB bills, having authority and a body corporate with fiscal and
been transferred from one entity to another and (ii) all it administrative autonomy, mandated to provide policy
has are the detached assignments, which the PDB has directions in the areas of money, banking and credit. It
not shown to be compliant with Section 10 (b) 2 above- has power to issue subpoena, to sue for contempt those
quoted. Obviously, the PDB cannot insist that the BSP refusing to obey the subpoena without justifiable
take cognizance of its plaint when the basis of the BSPs reason, to administer oaths and compel presentation of
refusal under existing regulation, which the PDB is books, records and others, needed in its examination, to
bound to observe, is the PDBs own failure to comply impose fines and other sanctions and to issue cease and
therewith. desist order. Section 37 of Republic Act No. 7653, in
particular, explicitly provides that the BSP Monetary
True, the BSP exercises supervisory powers (and Board shall exercise its discretion in determining
regulatory powers) over banks (and quasi banks). The whether administrative sanctions should be imposed on
issue presented before the Court, however, does not banks and quasi-banks, which necessarily implies that
concern the BSPs supervisory power over banks as this the BSP Monetary Board must conduct some form of
power is understood under the General Banking Law. In investigation or hearing regarding the same. [citations
fact, there is nothing in the PDBs petition (even omitted]
SEC. 90. Principles of Open Market Operations. The Once the issue and/or sale of a security is made, the BSP
open market purchases and sales of securities by the would necessarily make a determination, in accordance
Bangko Sentral shall be made exclusively in accordance with its own rules, of the entity entitled to receive the
with its primary objective of achieving price stability. proceeds of the security upon its maturity. This
determination by the BSP is an exercise of its
xxxx administrative powers113 under the law as an incident to
its power to prescribe rules and regulations governing
The PDB takes a contrary position through its insistence At any rate, regardless of the nature of the BOCs
that a compulsory counterclaim should be one where "counterclaims," for purposes of payment of filing fees,
the presence of third parties, of whom the court cannot both the BOC and the PDB, properly as defendants-in-
acquire jurisdiction, is not required. It reasons out that interpleader, must be assessed the payment of the
since the RCBC and All Asia (the intervening holders of correct docket fee arising from their respective claims.
the CB bills) have already been dropped from the case, The seminal case of Sun Insurance Office, Ltd. v. Judge
then the BOCs counterclaim must only be permissive in Asuncion150 provides us guidance in the payment of
nature and the BOC should have paid the correct docket docket fees, to wit:
fees.
1. x x x Where the filing of the initiatory pleading
We see no reason to belabor this claim. Even if we gloss is not accompanied by payment of the docket
over the PDBs own conformity to the dropping of these fee, the court may allow payment of the fee
entities as parties, the BOC correctly argues that a within a reasonable time but in no case beyond
remedy is provided under the Rules. Section 12, Rule 6 the applicable prescriptive or reglementary
of the Rules of Court reads: period.
SEC. 12. Bringing new parties. When the presence of 2. The same rule applies to permissive
parties other than those to the original action is required counterclaims, third-party claims and similar
for the granting of complete relief in the determination pleadings, which shall not be considered filed
of a counterclaim or cross-claim, the court shall order until and unless the filing fee prescribed therefor
them to be brought in as defendants, if jurisdiction over is paid. The court may also allow payment of
them can be obtained. said fee within a reasonable time but also in no
case beyond its applicable prescriptive or
Even then, the strict characterization of the BOCs reglementary period. [underscoring ours]
counterclaim is no longer material in disposing of the
PDBs argument based on non-payment of docket fees. This must be the rule considering that Section 7, Rule 62
of which reads:
When an action is filed in court, the complaint must be
accompanied by the payment of the requisite docket SEC. 7. Docket and other lawful fees, costs and litigation
and filing fees by the party seeking affirmative relief expenses as liens. The docket and other lawful fees
from the court. It is the filing of the complaint or paid by the party who filed a complaint under this Rule,
appropriate initiatory pleading, accompanied by the as well as the costs and litigation expenses, shall
payment of the prescribed docket fee, that vests a trial constitute a lien or charge upon the subject matter of
court with jurisdiction over the claim or the nature of the action, unless the court shall order otherwise.
the action.147 However, the non-payment of the docket
fee at the time of filing does not automatically cause the only pertain to the docket and lawful fees to be paid by
dismissal of the case, so long as the fee is paid within the the one who initiated the interpleader suit, and who,
applicable prescriptive or reglementary period, under the Rules, actually "claims no interest whatever in
especially when the claimant demonstrates a willingness the subject matter." By constituting a lien on the subject
to abide by the rules prescribing such payment.148 matter of the action, Section 7 in effect only aims to
actually compensate the complainant-in-interpleader,
In the present case, considering the lack of a clear who happens to be the stakeholder unfortunate enough
guideline on the payment of docket fee by the claimants to get caught in a legal crossfire between two or more
in an interpleader suit, compounded by the unusual conflicting claimants, for the faultless trouble it found
manner in which the interpleader suit was initiated and itself into. Since the defendants-in-interpleader are
the circumstances surrounding it, we surely cannot actually the ones who make a claim - only that it was
deduce from the BOCs mere failure to specify in its extraordinarily done through the procedural device of
prayer the total amount of the CB bills it lays claim to (or interpleader - then to them devolves the duty to pay the
the value of the subjects of the sales in the April 15 and
The importance of paying the correct amount of docket Before this Court are two petitions that
fee cannot be overemphasized: originated from a Complaint filed by Ana Maria A.
Koruga (Koruga) before the Regional Trial Court (RTC) of
The matter of payment of docket fees is not a mere Makati City against the Board of Directors of Banco
triviality. These fees are necessary to defray court Filipino and the Members of the Monetary Board of the
expenses in the handling of cases. Consequently, in Bangko Sentral ng Pilipinas (BSP) for violation of the
order to avoid tremendous losses to the judiciary, and to Corporation Code, for inspection of records of a
the government as well, the payment of docket fees corporation by a stockholder, for receivership, and for
cannot be made dependent on the outcome of the case, the creation of a management committee.
except when the claimant is a pauper-litigant.152
G.R. No. 168332
WHEREFORE, premises considered the consolidated
PETITIONS are GRANTED. The Planters Development The first is a Petition for Certiorari under Rule 65
Bank is hereby REQUIRED to file with the Regional Trial of the Rules of Court, docketed as G.R. No. 168332,
Court its comment or answer-in-interpleader to Bank of praying for the annulment of the Court of Appeals (CA)
Commerces Amended Consolidated Answer with Resolution[1] in CA-G.R. SP No. 88422 dated April 18,
Compulsory Counterclaim, as previously ordered by the 2005 granting the prayer for a Writ of Preliminary
Regional Trial Court. The Regional Trial Court of Makati Injunction of therein petitioners Teodoro O. Arcenas, Jr.,
City, Branch 143, is hereby ORDERED to assess the Albert C. Aguirre, Cesar S. Paguio, and Francisco A.
docket fees due from Planters Development Bank and Rivera (Arcenas, et al.).
Bank of Commerce and order their payment, and to
resolve with DELIBERATE DISPATCH the parties Koruga is a minority stockholder of Banco
conflicting claims of ownership over the proceeds of the Filipino Savings and Mortgage Bank. On August 20, 2003,
Central Bank bills. she filed a complaint before the Makati RTC which was
raffled to Branch 138, presided over by Judge Sixto
The Clerk of Court of the Regional Trial Court of Makati Marella, Jr.[2] Korugas complaint alleged:
City, Branch 143, or his duly authorized representative is
hereby ORDERED to assess and collect the appropriate 10. 1 Violation of Sections 31 to 34 of the
amount of docket fees separately due the Bank of Corporation Code (Code) which prohibit self-
Commerce and Planters Development Bank as dealing and conflicts of interest of directors and
conflicting claimants in Bangko Sentral ng Pilipinas officers, thus:
interpleader suit, in accordance with this decision.
(a) For engaging in unsafe,
SO ORDERED. unsound, and fraudulent banking practices
that have jeopardized the welfare of the
ANA MARIA A. KORUGA, Bank, its shareholders, who includes among
Petitioner, others, the Petitioner, and depositors. (sic)
- versus -
TEODORO O. ARCENAS, JR., ALBERT C. AGUIRRE, CESAR S. (b) For granting and approving
PAGUIO, FRANCISCO A. RIVERA, and THE HONORABLE loans and/or loaned sums of money to six (6)
COURT OF APPEALS, THIRD DIVISION, dummy borrower corporations (Borrower
Respondents. Corporations) which, at the time of loan
x-----------------------------x approval, had no financial capacity to justify
TEODORO O. ARCENAS, JR., ALBERT C. AGUIRRE, CESAR S. the loans. (sic)
PAGUIO, and FRANCISCO A. RIVERA,
Petitioners, (c) For approving and accepting
- versus - a dacion en pago, or payment of loans with
HON. SIXTO MARELLA, JR., Presiding Judge, Branch property instead of cash, resulting to a
138, Regional Trial Courtof Makati City, and ANA MARIA A. diminished future cumulative interest income
KORUGA,
(d) For knowingly giving favorable (g) The General Banking Law of 2000 and the
treatment to the Borrower Corporations in New Central Bank Act.[3]
which some or most of them have
interests, i.e. interlocking directors/officers
thereof, interlocking ownerships. (sic) On September 12, 2003, Arcenas, et al. filed
their Answer raising, among others, the trial courts lack
(e) For employing their respective of jurisdiction to take cognizance of the case. They also
offices and functions as the Banks officers filed a Manifestation and Motion seeking the dismissal
and directors, or omitting to perform their of the case on the following grounds: (a) lack of
functions and duties, with negligence, jurisdiction over the subject matter; (b) lack of
unfaithfulness or abuse of confidence of jurisdiction over the persons of the defendants; (c)
fiduciary duty, misappropriated or misapplied forum-shopping; and (d) for being a
or ratified by inaction the misappropriation nuisance/harassment suit. They then moved that the
or misappropriations, of (sic) almost P1.6 trial court rule on their affirmative defenses, dismiss the
Billion Pesos (sic) constituting the Banks intra-corporate case, and set the case for preliminary
funds placed under their trust and hearing.
administration, by unlawfully releasing loans
to the Borrower Corporations or refusing or In an Order dated October 18, 2004, the trial
failing to impugn these, knowing before the court denied the Manifestation and Motion, ruling thus:
loans were released or thereafter that the
Banks cash resources would be dissipated The result of the procedure sought by
thereby, to the prejudice of the Petitioner, defendants Arcenas, et al. (sic) is for the
other Banco Filipino depositors, and the Court to conduct a preliminary hearing on
public. the affirmative defenses raised by them in
their Answer. This [is] proscribed by the
10.2 Right of a stockholder to inspect the Interim Rules of Procedure on Intracorporate
records of a corporation (including financial (sic) Controversies because when a
statements) under Sections 74 and 75 of the preliminary hearing is conducted it is as if a
Code, as implemented by the Interim Rules; Motion to Dismiss was filed (Rule 16, Section
(a) Unlawful refusal to allow the 6, 1997 Rules of Civil Procedure). A Motion to
Petitioner from inspecting or otherwise Dismiss is a prohibited pleading under the
accessing the corporate records of the bank Interim Rules, for which reason, no favorable
despite repeated demand in writing, where consideration can be given to the
she is a stockholder. (sic) Manifestation and Motion of defendants,
Arcenas, et al.
10.3 Receivership and Creation of a
Management Committee pursuant to: The Court finds no merit to (sic) the claim
that the instant case is a nuisance or
(a) Rule 59 of the 1997 Rules of Civil harassment suit.
Procedure (Rules);
WHEREFORE, the Court defers resolution of
(b) Section 5.2 of R.A. No. 8799; the affirmative defenses raised by the
defendants Arcenas, et al.[4]
(c) Rule 1, Section 1(a)(1) of the Interim
Rules;
Arcenas, et al. moved for reconsideration[5] but,
(d) Rule 1, Section 1(a)(2) of the Interim on January 18, 2005, the RTC denied the motion.[6] This
Rules; prompted Arcenas, et al. to file before the CA a Petition
for Certiorari and Prohibition under Rule 65 of the Rules
(e) Rule 7 of the Interim Rules; of Court with a prayer for the issuance of a writ of
On February 9, 2005, the CA issued a 60-day They, likewise, alleged that the Petition may
TRO enjoining Judge Marella from conducting further have already been rendered moot and academic by the
proceedings in the case.[8] July 20, 2005 CA Decision,[13] which denied their Petition,
and held that the RTC did not commit grave abuse of
On February 22, 2005, the RTC issued a Notice discretion in issuing the assailed orders, and thus
of Pre-trial[9] setting the case for pre-trial on June 2 and ordered the RTC to proceed with the trial of the case.
9, 2005. Arcenas, et al. filed a Manifestation and
Motion[10] before the CA, reiterating their application for Meanwhile, on March 13, 2006, this Court
a writ of preliminary injunction. Thus, on April 18, 2005, issued a Resolution granting the prayer for a TRO and
the CA issued the assailed Resolution, which reads in enjoining the Presiding Judge of Makati RTC, Branch 138,
part: from proceeding with the hearing of the case upon the
filing by Arcenas, et al. of a P50,000.00 bond. Koruga
(C)onsidering that the Temporary Restraining filed a motion to lift the TRO, which this Court denied on
Order issued by this Court on February 9, 2005 July 5, 2006.
expired on April 10, 2005, it is necessary that a
writ of preliminary injunction be issued in On the other hand, respondents Dr. Conrado P.
order not to render ineffectual whatever final Banzon and Gen. Ramon Montao also filed their
resolution this Court may render in this case, Comment on Korugas Petition, raising substantially the
after the petitioners shall have posted a bond same arguments as Arcenas, et al.
in the amount of FIVE HUNDRED THOUSAND
(P500,000.00) PESOS. G.R. No. 169053
Arcenas, et al. argue that Korugas petition The case is REMANDED to the
should be dismissed for its defective Verification and court a quo for further proceedings and
Certification Against Forum-Shopping, since only a to resolve with deliberate dispatch the
facsimile of the same was attached to the Petition. They intra-corporate controversies and
also claim that the Verification and Certification Against determine whether there was actually a
Forum-Shopping, allegedly executed valid service of summons. If, after
in Seattle, Washington, was not authenticated in the hearing, such service is found to have
manner prescribed by Philippine law and not certified by been improper, then new summons
the Philippine Consulate in the United States. should be served forthwith.[20]
Korugas Complaint charged defendants with 4.1 The issuance of rules of conduct or
violation of Sections 31 to 34 of the Corporation Code, the establishment of standards
prohibiting self-dealing and conflict of interest of of operation for uniform
directors and officers; invoked her right to inspect the application to all institutions or
corporations records under Sections 74 and 75 of the functions covered, taking into
Corporation Code; and prayed for Receivership and consideration the distinctive
Creation of a Management Committee, pursuant to Rule character of the operations of
59 of the Rules of Civil Procedure, the Securities institutions and the substantive
Regulation Code, the Interim Rules of Procedure similarities of specific functions
Governing Intra-Corporate Controversies, the General to which such rules, modes or
Banking Law of 2000, and the New Central Bank Act. She standards are to be applied;
accused the directors and officers of Banco Filipino of
engaging in unsafe, unsound, and fraudulent banking 4.2 The conduct of examination to
practices, more particularly, acts that violate the determine compliance with laws
prohibition on self-dealing. and regulations if the
circumstances so warrant as
It is clear that the acts complained of pertain to determined by the Monetary
the conduct of Banco Filipinos banking business. A bank, Board;
as defined in the General Banking Law,[21] refers to an
entity engaged in the lending of funds obtained in the 4.3 Overseeing to ascertain that laws and
form of deposits.[22] The banking business is properly Regulations are complied with;
subject to reasonable regulation under the police power
of the state because of its nature and relation to the 4.4 Regular investigation which shall
fiscal affairs of the people and the revenues of the not be oftener than once a
state.Banks are affected with public interest because year from the last date of
they receive funds from the general public in the form of examination to determine
deposits. It is the Governments responsibility to see to it whether an institution is
that the financial interests of those who deal with banks conducting its business on a
and banking institutions, as depositors or otherwise, are safe or sound
protected. In this country, that task is delegated to the basis: Provided, That
BSP, which pursuant to its Charter, is authorized to the deficiencies/irregularities
administer the monetary, banking, and credit system of found by or discovered by an
the Philippines. It is further authorized to take the audit shall be
necessary steps against any banking institution if its immediately addressed;
The Rural Bank of San Jose (Batangas), Inc., Rural Bank of On May 26, 2008, petitioners filed a Motion to Dismiss
Carmen (Cebu), Inc., Pilipino Rural Bank, Inc., Philippine against all the complaints (except that of the San Pablo
Countryside Rural Bank, Inc., Rural Bank of Calatagan City Development Bank, Inc.), on the grounds that the
(Batangas), Inc., Rural Bank of Darbci, Inc., Rural Bank complaints stated no cause of action and that a
of Kananga (Leyte), Inc., and Rural Bank de Bisayas condition precedent for filing the cases had not been
Minglanilla followed suit, filing complaints with the RTC complied with. On May 29, 2008, a hearing was
substantially similar to that of RBPI, including the reliefs conducted on the application for a TRO and for a writ of
prayed for, which were raffled to different branches and preliminary injunction of San Pablo City Development
docketed as Civil Cases Nos. 08-119244, 08-119245, 08- Bank, Inc.
119246, 08-119247, 08-119248, 08-119249, 08-119250,
and 08-119251, respectively. The Ruling of the RTC
On May 13, 2008, the RTC denied the prayer for a TRO After the parties filed their respective memoranda, the
of Pilipino Rural Bank, Inc. The bank filed a motion for RTC, on June 4, 2008, ruled that the banks were entitled
reconsideration the next day. to the writs of preliminary injunction prayed for. It held
that it had been the practice of the SED to provide the
On May 14, 2008, Fonacier and the BSP filed their ROEs to the banks before submission to the MB. It
opposition to the application for a TRO and writ of further held that as the banks are the subjects of
preliminary injunction in Civil Case No. 08-119243 with examinations, they are entitled to copies of the
the RTC. Respondent Judge Nina Antonio-Valenzuela of ROEs. The denial by petitioners of the banks requests for
Branch 28 granted RBPIs prayer for the issuance of a copies of the ROEs was held to be a denial of the banks
TRO. right to due process.
The dispositive portion of the RTCs order reads:
The other banks separately filed motions for WHEREFORE, the Court rules as follows:
consolidation of their cases in Branch 28, which motions
were granted. Judge Valenzuela set the complaint of 1) Re: Civil Case No. 08-119243. Pursuant to
Rural Bank of San Jose (Batangas), Inc. for hearing on Rule 58, Section 4(b) of the Revised Rules
May 15, 2008. Petitioners assailed the validity of the of Court, plaintiff Rural Bank of Paranaque
consolidation of the nine cases before the RTC, alleging Inc. is directed to post a bond executed to
that the court had already prejudged the case by the the defendants, in the amount of
earlier issuance of a TRO in Civil Case No. 08-119243, P500,000.00 to the effect that the plaintiff
and moved for the inhibition of respondent will pay to the defendants all damages
judge. Petitioners filed a motion for reconsideration which they may sustain by reason of the
regarding the consolidation of the subject cases. injunction if the Court should finally
decide that the plaintiff was not entitled
On May 16, 2008, San Pablo City Development Bank, Inc. thereto. After posting of the bond and
filed a similar complaint against the same defendants approval thereof, let a writ of preliminary
with the RTC, and this was docketed as Civil Case No. 08- injunction be issued to enjoin and restrain
119273 that was later on consolidated with Civil Case the defendants from submitting the
No. 08-119243. Petitioners filed an Urgent Motion to Report of Examination or any other similar
Lift/Dissolve the TRO and an Opposition to the earlier report prepared in connection with the
motion for reconsideration of Pilipino Rural Bank, Inc. examination conducted on the plaintiff, to
the Monetary Board. In case such a Report
On May 19, 2008, Judge Valenzuela issued an Order on Examination [sic] or any other similar
granting the prayer for the issuance of TROs for the report prepared in connection with the
other seven cases consolidated with Civil Case No. 08- examination conducted on the plaintiff
119243. On May 21, 2008, Judge Valenzuela issued an has been submitted to the Monetary
Order denying petitioners motion for reconsideration Board, the latter and its members (i.e.
regarding the consolidation of cases in Branch 28. On defendants Tetangco, Neri, Valdepenas,
May 22, 2008, Judge Valenzuela granted the urgent Boncan, Amatong, Antonio, and
Our Ruling
3. Ordering the defendants, jointly and severally, to pay (1) In the course of its banking operations, the
plaintiffs Jose A. Janolo and Demetrio Demetria the sums defendant Producer Bank of the Philippines acquired six
of P 200,000.00 each in moral damages; parcels of land with a total area of 101 hectares located
at Don Jose, Sta. Rosa, Laguna, and covered by Transfer
4. Ordering the defendants, jointly and severally, to pay Certificates of Title Nos. T-106932 to T-106937. The
plaintiffs the sum of P 100,000.00 as exemplary property used to be owned by BYME Investment and
damages; Development Corporation which had them mortgaged
with the bank as collateral fora loan. The original
5. Ordering the defendants, jointly and severally, to pay plaintiffs, Demetrio Demetria and Jose O. Janolo, wanted
the plaintiffs the amount of P400,000.00 for and by way to purchase the property and thus initiated negotiations
of attorneys fees; for that purpose.
6. Ordering the defendants to pay the plaintiffs, jointly (2) In the early part of August 1987 said plaintiffs, upon
and severally, actual and moderate damages in the the suggestion of BYME Investments legal counsel, Jose
amount of P20,000.00; Fajardo, met with defendant Mercurio Rivera, Manager
of the Property Management Department of the
defendant bank. The meeting was held pursuant to
With costs against the defendants.
plaintiffs plan to buy the property (TSN of Jan. 16, 1990,
August 30, 1987 (4)On September 17, 1987, plaintiff Janolo, responding
to Riveras aforequoted reply, wrote (Exh.
The Producers Bank of the Philippines
Makati, Metro Manila
September 17, 1987
Attn. Mr. Mercurio Q. Rivera Producers Bank
Manager, Property Paseo de Roxas
Management Dept. Makati, Metro Manila
Thank you.
Attention: Atty. Demetrio Demetria In behalf of our client, therefore, we are making this
formal demand upon you to consummate and execute
Dear Sir: the necessary actions/documentation within three (3)
days from your receipt hereof We are ready to remit the
Your proposal to buy the properties the bank foreclosed agreed amount of P5.5 million at your advice. Otherwise,
from Byme Investment Corp. located at Sta. Rosa, we shall be constrained to file the necessary court action
Laguna is under study yet as of this time by the newly to protect the interest of our client.
created committee for submission to the newly
designated Acting Conservator of the bank. We trust that you will be guided accordingly.
3) Assuming there was, was the said contract 3) Although the CERTIFICATION/VERIFICATION (supra)
enforceable under the statute of frauds? signed by the Bank president and attached to the
4) Did the bank conservator have the unilateral Petition identifies the action as a derivative suit, it does
power to repudiate the authority of the bank officers not mean that it is one and (t)hat is a legal question for
and/or to revoke the said contract? the courts to decide;
5) Did the respondent Court commit any reversible 4) Petitioners did not hide the Second Case as they
error in its findings of facts? mentioned it in the said VERIFICATION/CERTIFICATION.
We rule for private respondent.
The First Issue: Was There Forum-Shopping? To begin with, forum-shopping originated as a
In order to prevent the vexations of multiple concept in private international law,[12] where non-
petitions and actions, the Supreme Court promulgated resident litigants are given the option to choose the
Revised Circular No. 28-91 requiring that a party must forum or place wherein to bring their suit for various
certify under oath x x x [that] (a) he has not (t)heretofore reasons or excuses, including to secure procedural
commenced any other action or proceeding involving advantages, to annoy and harass the defendant, to avoid
the same issues in the Supreme Court, the Court of overcrowded dockets, or to select a more friendly
Appeals, or any other tribunal or agency; (b) to the best venue. To combat these less than honorable excuses,
of his knowledge, no such action or proceeding is the principle of forum non conveniens was developed
pending in said courts or agencies. A violation of the said whereby a court, in conflicts of law cases, may refuse
circular entails sanctions that include the summary impositions on its jurisdiction where it is not the most
dismissal of the multiple petitions or complaints. To be convenient or available forum and the parties are not
sure, petitioners have included a precluded from seeking remedies elsewhere.
VERIFICATION/CERTIFICATION in their Petition stating In this light, Blacks Law Dictionary[13] says that
for the record(,) the pendency of Civil Case No. 92-1606 forum-shopping occurs when a party attempts to have
before the Regional Trial Court of Makati, Branch 134, his action tried in a particular court or jurisdiction where
involving a derivative suit filed by stockholders of he feels he will receive the most favorable judgment or
petitioner Bank against the conservator and other verdict. Hence, according to Words and Phrases,[14] a
defendants but which is the subject of a pending Motion litigant is open to the charge of forum shopping
to Dismiss Without Prejudice.[9] whenever he chooses a forum with slight connection to
Private respondent Ejercito vigorously argues that factual circumstances surrounding his suit, and litigants
in spite of this verification, petitioners are guilty of actual should be encouraged to attempt to settle their
forum shopping because the instant petition pending differences without imposing undue expense and
before this Court involves identical parties or interests vexatious situations on the courts.
Apparently, the divisor of 314 is arrived at by This petition seeks review of the decision of the Court of
subtracting all Sundays from the total number of Appeals in CA G.R. S.P. No. 07867 entitled "The Central
calendar days in a year, since Saturdays are considered Bank of the Philippines and Ramon V. Tiaoqui vs. Hon.
paid rest days, as stated in the inter-office Jose C. de Guzman and Triumph Savings Bank,"
memorandum. Thus, the use of 314 as a divisor leads to promulgated 26 September 1986, which affirmed the
the inevitable conclusion that the ten legal holidays are twin orders of the Regional Trial Court of Quezon City
already included therein. issued 11 November 19851 denying herein petitioners'
We agree with the labor arbiter that the reduction motion to dismiss Civil Case No. Q-45139, and directing
petitioner Ramon V. Tiaoqui to restore the private
of the divisor to 303 was done for the sole purpose of
increasing the employees overtime pay, and was not management of Triumph Savings Bank (TSB) to its
meant to exclude holiday pay from the monthly salary of elected board of directors and officers, subject to
petitioners employees. In fact, it was expressly stated in Central Bank comptrollership.2
the inter-office memorandum - also referred to by
private respondent in its pleadings - that the divisor of The antecedent facts: Based on examination reports
314 will still be used in the computation for cash submitted by the Supervision and Examination Sector
conversion and in the determination of the daily rate. (SES), Department II, of the Central Bank (CB) "that the
Thus, based on the records of this case and the parties financial condition of TSB is one of insolvency and its
own admissions, the Court holds that petitioner has continuance in business would involve probable loss to
complied with the requirements of Article 94 of the its depositors and creditors,"3 the Monetary Board (MB)
Labor Code. issued on 31 May 1985 Resolution No. 596 ordering the
closure of TSB, forbidding it from doing business in the
Damages Philippines, placing it under receivership, and appointing
On 11 June 1985, TSB filed a complaint with the Regional Instead of proceeding to trial, petitioners elevated the
Trial Court of Quezon City, docketed as Civil Case No. Q- twin orders of the RTC to the Court of Appeals on a
45139, against Central Bank and Ramon V. Tiaoqui to petition for certiorari and prohibition under Rule 65.9 On
annul MB Resolution No. 596, with prayer for injunction, 26 September 1986, the appellate court, upheld the
challenging in the process the constitutionality of Sec. 29 orders of the trial court thus
of R.A. 269, otherwise known as "The Central Bank Act,"
as amended, insofar as it authorizes the Central Bank to Petitioners' motion to dismiss was premised on two
take over a banking institution even if it is not charged grounds, namely, that the complaint failed to state
with violation of any law or regulation, much less found a cause of action and that the Triumph Savings
guilty thereof.5 Bank was without capacity to sue except through its
appointed receiver.
On 1 July 1985, the trial court temporarily restrained
petitioners from implementing MB Resolution No. 596 Concerning the first ground, petitioners themselves
"until further orders", thus prompting them to move for admit that the Monetary Board resolution placing
the quashal of the restraining order (TRO) on the ground the Triumph Savings Bank under the receivership of
that it did not comply with said Sec. 29, i.e., that TSB the officials of the Central Bank was done without
failed to show convincing proof of arbitrariness and bad prior hearing, that is, without first hearing the side
faith on the part of petitioners;' and, that TSB failed to of the bank. They further admit that said resolution
post the requisite bond in favor of Central Bank. can be the subject of judicial review and may be set
aside should it be found that the same was issued
On 19 July 1985, acting on the motion to quash the with arbitrariness and in bad faith.
restraining order, the trial court granted the relief
sought and denied the application of TSB for injunction. The charge of lack of due process in the complaint
Thereafter, Triumph Savings Bank filed with Us a petition may be taken as constitutive of allegations of
for certiorariunder Rule 65 of the Rules of Court6 dated arbitrariness and bad faith. This is not of course to
25 July 1985 seeking to enjoin the continued be taken as meaning that there must be previous
implementation of the questioned MB resolution. hearing before the Monetary Board may exercise
its powers under Section 29 of its Charter. Rather,
Meanwhile, on 9 August 1985; Central Bank and Ramon judicial review of such action not being foreclosed,
Tiaoqui filed a motion to dismiss the complaint before it would be best should private respondent be
the RTC for failure to state a cause of action, i.e., it did given the chance to show and prove arbitrariness
not allege ultimate facts showing that the action was and bad faith in the issuance of the questioned
plainly arbitrary and made in bad faith, which are the resolution, especially so in the light of the
only grounds for the annulment of Monetary Board statement of private respondent that neither the
resolutions placing a bank under conservatorship, and bank itself nor its officials were even informed of
that TSB was without legal capacity to sue except any charge of violating banking laws.
through its receiver.7
In regard to lack of capacity to sue on the part of
On 9 September 1985, TSB filed an urgent motion in the Triumph Savings Bank, we view such argument as
RTC to direct receiver Ramon V. Tiaoqui to restore TSB being specious, for if we get the drift of petitioners'
to its private management. On 11 November 1985, the argument, they mean to convey the impression
RTC in separate orders denied petitioners' motion to that only the CB appointed receiver himself may
dismiss and ordered receiver Tiaoqui to restore the question the CB resolution appointing him as such.
management of TSB to its elected board of directors and This may be asking for the impossible, for it cannot
officers, subject to CB comptrollership. be expected that the master, the CB, will allow the
receiver it has appointed to question that very
Since the orders of the trial court rendered moot the appointment. Should the argument of petitioners
petition for certiorari then pending before this Court, be given circulation, then judicial review of actions
Central Bank and Tiaoqui moved on 2 December 1985 of the CB would be effectively checked and
foreclosed to the very bank officials who may feel,
The heavy reliance of respondents on the Banco In sum, appeal to procedural due process cannot just
Filipino case is misplaced in view of factual outweigh the evil sought to be prevented; hence, We
circumstances therein which are not attendant in the rule that Sec. 29 of R.A. 265 is a sound legislation
present case. We ruled in Banco Filipino that the closure promulgated in accordance with the Constitution in the
of the bank was arbitrary and attendant with grave exercise of police power of the state. Consequently, the
abuse of discretion, not because of the absence of prior absence of notice and hearing is not a valid ground to
notice and hearing, but that the Monetary Board had no annul a Monetary Board resolution placing a bank under
sufficient basis to arrive at a sound conclusion of receivership. The absence of prior notice and hearing
insolvency to justify the closure. In other words, the cannot be deemed acts of arbitrariness and bad faith.
arbitrariness, bad faith and abuse of discretion were Thus, an MB resolution placing a bank under
determined only after the bank was placed under receivership, or conservatorship for that matter, may
conservatorship and evidence thereon was received by only be annulled after a determination has been made
the trial court. As this Court found in that case, the by the trial court that its issuance was tainted with
Valenzuela, Aurellano and Tiaoqui Reports contained arbitrariness and bad faith. Until such determination is
unfounded assumptions and deductions which did not made, the status quo shall be maintained, i.e., the bank
reflect the true financial condition of the bank. For shall continue to be under receivership.
instance, the subtraction of an uncertain amount as
valuation reserve from the assets of the bank would As regards the second ground, to rule that only the
merely result in its net worth or the unimpaired capital receiver may bring suit in behalf of the bank is, to echo
and surplus; it did not reflect the total financial condition the respondent appellate court, "asking for the
of Banco Filipino. impossible, for it cannot be expected that the master,
the CB, will allow the receiver it has appointed to
Furthermore, the same reports showed that the total question that very appointment." Consequently, only
assets of Banco Filipino far exceeded its total liabilities. stockholders of a bank could file an action for annulment
Consequently, on the basis thereof, the Monetary Board of a Monetary Board resolution placing the bank under
had no valid reason to liquidate the bank; perhaps it receivership and prohibiting it from continuing
could have merely ordered its reorganization or operations.22 In Central Bank v. Court of Appeals, 23 We
rehabilitation, if need be. Clearly, there was in that case explained the purpose of the law
a manifest arbitrariness, abuse of discretion and bad
faith in the closure of Banco Filipino by the Monetary . . . in requiring that only the stockholders of record
Board. But, this is not the case before Us. For here, what representing the majority of the capital stock may
is being raised as arbitrary by private respondent is the bring the action to set aside a resolution to place a
denial of prior notice and hearing by the Monetary bank under conservatorship is to ensure that it be
Board, a matter long settled in this jurisdiction, and not not frustrated or defeated by the incumbent Board
On 17 September 1987, plaintiff-appellant through On 15 June 1989, then Presiding Judge Enrique B. Inting
his counsel, sent a letter to CB demanding for the issued an order allowing the purchase of the two lots at
latter to execute the corresponding deed of the price of P150,000.00. 14 The Central Bank liquidator
conveyance in favor of appellant. CB did not of the PVB moved for the reconsideration of the order
On 26 July 1989, Miguela Villanueva filed her claim with 1. Setting aside the order of this court issued on
the liquidation court. She averred, among others, that June 15, 1989 under the caption Civil Case No. 87-
she is the lawful and registered owner of the subject lots 42550 entitled "Ildefonso Ong vs. Central Bank of
which were mortgaged in favor of the PVB thru the the Phils., et al.;
falsification committed by Jose Viudez, the manager of
the PVB Makati Branch, in collusion with Andres 2. Dismissing the claim of Ildefonso Ong over the
Sebastian; that upon discovering this fraudulent two parcels of land originally covered by TCT No.
transaction, she offered to purchase the property from 438073 and 366364 in the names of Miguela
the bank; and that she reported the matter to the Villanueva and Celestino Villanueva, respectively
PC/INP Criminal Investigation Service Command, Camp which are now covered by TCT No. 115631 and
Crame, and after investigation, the CIS officer 115632 in the name of the PVB;
recommended the filing of a complaint for estafa
through falsification of public documents against Jose 3. Declaring the Deed of Absolute Sale bearing the
Viudez and Andres Sebastian. She then asked that the signature of Miguela Villanueva and the falsified
lots be excluded from the assets of the PVB and be signature of Celestino [sic] Viudez under date May
conveyed back to her. 16 Later, in view of the death of 6, 1975 and all transactions and related
her husband, she amended her claim to include her documents executed thereafter referring to the
children, herein petitioners Mercedita Villanueva- two lots covered by the above stated titles as null
Tirados and Richard Villanueva. 17 and void;
On 31 October 1991, the trial court rendered 4. Ordering the Register of Deeds of Makati which
judgment 18 holding that while the board resolution has jurisdiction over the two parcels of land in
approving Ong's offer may have created in his favor a question to re-instate in his land records, TCT No.
vested right which may be enforced against the PVB at 438073 in the name of Miguela Villanueva and TCT
the time or against the liquidator after the bank was No. 366364 in the name of Celestino Villanueva
placed under liquidation proceedings, the said right was who were the registered owners thereof, and to
no longer enforceable, as he failed to exercise it within cancel all subsequent titles emanating therefrom;
the prescribed 15-day period. As to Miguela's claim, the and
court ruled that the principle of estoppel bars her from
questioning the transaction with Viudez and the 5. Ordering the Liquidator to reconvey the two lots
subsequent transactions because she was a co- described in TCT No. 115631 and 115632 and
participant thereto, though only with respect to her executing the corresponding deed of conveyance
undivided one-half (1/2) conjugal share in the disputed of the said lots upon the payment of One Hundred
lots and her one-third (1/3) hereditary share in the Ten Thousand Four Hundred Sixteen and 20/100
estate of her husband. (P110,416.20) Pesos without interest and less the
amount deposited by the claimant, Miguela
Nevertheless, the trial court allowed her to purchase the Villanueva in connection with the bidding where
lots if only to restore their status as conjugal properties. she had participated and conducted by the PVB on
It further held that by reason of estoppel, the August 29, 1984.
transactions having been perpetrated by a responsible
officer of the PVB, and for reasons of equity, the PVB Cost against Ildefonso Ong and the PVB.
should not be allowed to charge interest on the price of
the lots; hence, the purchase price should be the PVB's SO ORDERED. 19
claim as of 29 August 1984 when it considered the
sealed bids, i.e., P110,416.20, which should be borne by Only Ong appealed the decision to the Court of Appeals.
Miguela Villanueva alone. The appeal was docketed as CA-G.R. CV No. 35890. In its
decision of 27 January 1994, the Court of Appeals
The dispositive portion of the decision of the trial court reversed the decision of the trial court and ruled as
reads as follows: follows:
Under Article 1323 of the Civil Code, an offer becomes The assets of an institution under receivership or
ineffective upon the death, civil interdiction, insanity, or liquidation shall be deemed in custodia legis in the
insolvency of either party before acceptance is hands of the receiver or liquidator and shall, from
conveyed. The reason for this is that: the moment of such receivership or liquidation, be
exemp from any order of garnishment, levy,
[T]he contract is not perfected except by the attachment, or execution.
concurrence of two wills which exist and continue
until the moment that they occur. The contract is In a nutshell, the insolvency of a bank and the
not yet perfected at any time before acceptance is consequent appointment of a receiver restrict the bank's
conveyed; hence, the disappearance of either party capacity to act, especially in relation to its property,
or his loss of capacity before perfection prevents the Applying Article 1323 of the Civil Code, Ong's offer to
contractual tie from being formed. 30 purchase the subject lots became ineffective because
the PVB became insolvent before the bank's acceptance
It has been said that where upon the insolvency of a of the offer came to his knowledge. Hence, the
bank a receiver therefor is appointed, the assets of the purported contract of sale between them did not reach
bank pass beyond its control into the possession and the stage of perfection. Corollarily, he cannot invoke the
control of the receiver whose duty it is to administer the resolution of the bank approving his bid as basis for his
assets for the benefit of the creditors of the alleged right to buy the disputed properties.
bank.31 Thus, the appointment of a receiver operates to
suspend the authority of the bank and of its directors Nor may the acceptance by an employee of the PVB of
and officers over its property and effects, such authority Ong's payment of P100,000.00 benefit him since the
being reposed in the receiver, and in this respect, the receipt of the payment was made subject to the
receivership is equivalent to an injunction to restrain the approval by the Central Bank liquidator of the PVB thus:
bank officers from intermeddling with the property of
the bank in any way. 32 Payment for the purchase price of the former
property of Andres Sebastian per approved BR No.
Section 29 of the Central Bank Act, as amended, 10902-84 dated 11/13/84, subject to the approval
provides thus: of CB liquidator. 33
Sec. 29. Proceedings upon insolvency. Whenever, This payment was disapproved on the ground that
upon examination by the head of the appropriate the subject property was already in custodia legis,
supervising or examining department or his and hence, disposable only by public auction and
examiners or agents into the condition of any bank subject to the approval of the liquidation court. 34
or non-bank financial intermediary performing
quasi-banking functions, it shall be disclosed that the The Court of Appeals therefore erred when it held that
condition of the same is one of insolvency, or that its Ong had a better right than the petitioners to the
continuance in business would involve probable loss purchase of the disputed lots.
to its depositors or creditors, shall be the duty of the
department head concerned forthwith, in writing, to Considering then that only Ong appealed the decision of
inform the Monetary Board of the facts. The Board the trial court, the PVB and the Central Bank, as well as
Subsequently, defendant Manila Bank, followed a WHEREFORE, finding serious reversible error, the appeal
month later by its co-defendant Estate of Vicente G. is GRANTED.
Puyat, filed separate motions to dismiss the complaint.
In an Order dated April 15, 1996, the trial court The Decision dated May 27, 1999 of the Regional Trial
granted the motion to dismiss filed by the Estate of Court of Makati City, Branch 59 is REVERSED and SET
Vicente G. Puyat, but denied that of Manila Bank and ASIDE.
directed the latter to file its answer.
Cost of the appeal to be paid by the appellee.
Before plaintiff Abacus could adduce evidence but
after pre-trial, defendant Manila Bank filed a Motion for SO ORDERED.
Partial Summary Judgment, followed by a Supplement to
Motion for Partial Summary Judgment. While initially On June 25, 2003, Abacus filed a Motion for
Reconsideration, followed, with leave of court, by an
WHETHER OR NOT PETITIONER ABACUS HAS ACQUIRED Secondly, the appellants manifestation filed in the RTC
THE RIGHT TO PURCHASE THE LOT AND BUILDING IN personally on July 7, 1999 contains the following self-
QUESTION. explanatory statements, to wit:
We rule for respondent Manila Bank on both issues.
2. Defendant [Manila Bank] also filed with this
Addressing the first issue, petitioner submits that Honorable Court a Motion for Reconsideration of the
respondent banks appeal to the Court of Appeals from Decision dated 27 May 1999 promulgated by this
the adverse decision of the trial court was belatedly Honorable Court in this case, and served a copy thereof
filed. Elaborating thereon, petitioner alleges that to the plaintiff, by registered mail yesterday, 6 July 1999,
respondent bank received a copy of the May 27, 1999 due to lack of material time and messenger to effect
RTC decision on June 22, 1999, hence, petitioner had 15 personal service and filing.
days, or only up to July 7, 1999 within which to take an
appeal from the same decision or move for a 3. In order for this Honorable Court to be able to review
reconsideration thereof. Petitioner alleges that defendant [Manila Banks] Motion for Reconsideration
respondent furnished the trial court with a copy of its without awaiting the mailed copy, defendant [Manila
Motion for Reconsideration only on July 7, 1999, the last Bank] is now furnishing this Honorable Court with a copy
day for filing an appeal. Under Section 3, Rule 41 of the of said motion, as well as the entry of appearance, by
1997 Rules of Civil Procedure, the period of appeal shall personal service.
be interrupted by a timely motion for new trial or
reconsideration. Since, according to petitioner, The aforecited reference in the manifestation to the
respondent filed its Motion for Reconsideration on the mailing of the motion for reconsideration on July 6, 1999,
last day of the period to appeal, it only had one (1) more in light of the handwritten annotations adverted to
day within which to file an appeal, so much so that when herein, renders beyond doubt the appellants insistence
it received on August 23, 1999 a copy of the trial courts of filing through registered mail on July 6, 1999.
order denying its Motion for Reconsideration,
respondent bank had only up to August 24, 1999 within Thirdly, the registry return cards attached to the
which to file the corresponding appeal. As respondent envelopes separately addressed and mailed to the RTC
bank appealed the decision of the trial court only on and the appellees counsel, found in pages 728 and 729
August 25, 1999, petitioner thus argues that of the rollo, indicate that the contents were the motion
respondents appeal was filed out of time. for reconsideration and the formal entry of appearance.
Although the appellee argues that the handwritten
As a counterpoint, respondent alleges that it sent
annotations of what were contained by the envelopes at
the trial court a copy of its Motion for Reconsideration
the time of mailing was easily self-serving, the fact
on July 6, 1999, through registered mail. Having sent a
remains that the envelope addressed to the appellees
copy of its Motion for Reconsideration to the trial court
It appears that from the years 1986 to 1991, Vargas On April 21, 1998, the court a quo granted the
negotiated with the respondent (through its then petition for the issuance of the Writ of
liquidator, the Central Bank) for the repurchase of the Possession.[13] The writ was subsequently issued on April
foreclosed property. The negotiations, however, fizzled 24, 1998, the pertinent portion of which reads:[14]
out as Vargas cannot afford the repurchase price fixed
by the respondent based on the appraised value of the NOW THEREFORE you are hereby commanded that you
land at that time. On October 4, 1991, Vargas filed a cause oppositors THERESE VILLANUEVA VARGAS and S.
case for annulment of mortgage and extra-judicial VILLANUEVA ENTERPRISES, INC. and any and all persons
foreclosure sale before Branch 116 of the Pasay City claiming rights or title under them, to forthwith vacate
Regional Trial Court. On July 22, 1993, the court and surrender the possession of subject premises in
rendered a decision[6] dismissing the complaint and question known as that parcel of land and
upholding the validity of the mortgage and foreclosure improvements covered by TCT No. 6076 of the Registry
sale. On appeal, the appellate court upheld the assailed of Deeds of Pasay City; you are hereby further ordered
judgment and declared the said mortgage and to take possession and deliver to the petitioner PAIC
foreclosure proceedings to be in accord with law.[7] This
In the present case, the Court finds that In an Order6 dated September 4, 1997, the trial court
analogous considerations exist to warrant the gave the petition due course and approved it.
application of Valenzuela. Petitioner Restituto was 78
years old at the time the petition was filed in this Court, As an incident of the proceedings, the Bureau of Internal
and his co-petitioner-wife Erlinda died[10] during the Revenue (BIR) intervened as one of the creditors of RBTI.
pendency of the case. And, except for co-petitioner The BIR prayed that the proceedings be suspended until
Corazon, Restituto is a resident of Ozamis City. To PDIC has secured a tax clearance required under Section
compel him to appear and relitigate the case in the 52(C) of Republic Act No. 8424, otherwise known as the
liquidation court-Nasugbu RTC when the issues to be "Tax Reform Act of 1997" or the "Tax Code of 1997,"
raised before it are the same as those already which provides:
exhaustively passed upon and decided by the Balayan
RTC would be superfluous. SEC. 52. Corporation Returns.
On the other hand, EGI is a corporation duly On 18 January 2000, EGI and UCPB executed an
organized and existing under Philippine laws and Amendment of Agreement[8] to reflect the true and
engaged in real estate construction and development correct valuation of the properties of EGI listed in the
business. In G.R. No. 168897, EGI prays for this Court to MOA that would be transferred to UCPB in settlement of
review the same Decision dated 14 October 2004 and the total loan obligations of the former with the
According to the MOA and its amendments, titles to the Consequently, EGI wrote UCPB a letter dated 21 May
properties of EGI shall be transferred to UCPB by the 2001,[12] which included, among other demands, the
following modes: (1) foreclosure of mortgage; (2) dacion refund by UCPB to EGI of the over-payment
en pago; (3) creation of a holding company; and (4) use of P83,000,000.00;[13] return to EGI of all the remaining
of other alternatives as may be deemed appropriate by Transfer Certificates of Title (TCTs)/Condominium
UCPB. Certificates of Title (CCTs) in the possession of UCPB;
and cost of damage to EGI for the delay in the release of
UCPB proceeded to foreclose some of the properties of its certificates of title.
EGI listed in the MOA. Per the Certificate of
Sale[9] dated 13 April 2000, the foreclosure proceeds of In response, UCPB explained[14] that the ACTUAL column
said properties amounted only to P723,592,000.00, less in its Internal Memorandum dated 22 February
than the value of the properties of EGI stipulated in its 2001 contained the same amounts reflected or recorded
amended MOA with UCPB. in its financial statements, in accordance with the
Manual of Accounts for Banks, Manual of Regulations for
UCPB applied the entire foreclosure proceeds Banks[15] and BSP Circular No. 202,[16] Series of 1999. In
of P723,592,000.00 to the principal amount of the loan contrast, the DISCLOSED TO EGI column showed the
obligations of EGI, pursuant to BSP Circular No. total amount still due from EGI, including the total
239,[10] which provided that partial property payments principal, interests, transaction and other costs after the
shall first be applied to the principal. After deducting the foreclosure, whether reflected in the financial books of
said amount from the total loan obligations of EGI, there UCPB or not. Further, UCPB maintained that the
was still an unpaid balance of P192,246,822.50. difference in the figures in the two columns was because
BSP Circular No. 202 and Section X305.4 of the Manual
On 8 May 2001, some of the other properties of EGI of Regulations for Bank disallowed banks from accruing
at EGI Rufino Plaza, valued at P166,127,369.50, were in its books interest on loans which had become non-
transferred by way of dacion en pago to UCPB. However, performing.
during the signing of the transaction papers for Despite the explanation of UCPB, EGI insisted that the
the dacion en pago, EGI Senior Vice-President, Architect figures appearing in the ACTUAL column of the formers
Grace S. Layug (Layug), noticed that said papers stated Internal Memorandum dated 22 February 2001 revealed
that the remaining loan balance of EGI in the amount the true and actual amount of its loan obligations to
of P192,246,822.50 had increased UCPB, P146,849,412.58.
to P226,963,905.50.The increase was allegedly due to
the addition of the transaction costs amounting EGI Senior Vice-President Layug met with UCPB
to P34,717,083.00. EGI complained to UCPB about the Vice-President, Jaime W. Jacinto (Jacinto) to discuss the
increase, yet UCPB did not take any action on the demand of EGI for the return of its overpayment. UCPB
matter. Vice-President Jacinto, however, refused to concede
that UCPB had any obligation to make a refund to EGI
This prompted EGI President Engineer Eulalio Ganzon and, instead, insisted that EGI Senior Vice-President
(Ganzon) and Senior Vice-President Layug to review their Layug disclose who gave her a copy of the UCPB Internal
files to verify the figures on the loan obligations of EGI as Memorandum dated 22 February 2001.
computed by UCPB. In the process, they discovered the
UCPB Internal Memorandum dated 22 February Based on the possession by EGI of the UCPB Internal
2001,[11] signed by UCPB corporate officers. The said Memorandum dated 22 February 2001, UCPB filed a
Internal Memorandum presented two columns, one with criminal case for theft and/or discovery of secrets
the heading ACTUAL and the other DISCLOSED TO against EGI President Ganzon and Senior Vice-President
EGI. The figures in the two columns were conflicting. The Layug, but the said case was dismissed.[17]
figures in the DISCLOSED TO EGI column computed the
unpaid balance of the loan obligations of EGI to On 5 November 2002, EGI, also on the basis of
be P226,967,194.80, the amount which UCPB actually the UCPB Internal Memorandum dated 22 February
made known to and demanded from EGI. The figures in 2001, EGI filed with the BSP an administrative
complaint[18] against UCPB, et al., for violation of
Please be informed that the Monetary Board UCPB, et al., moved for the reconsideration of the 14
decided to dismiss the complaint based October 2004 Decision of the appellate court, praying
on the evaluation conducted by the for a new judgment dismissing the appeal of EGI for lack
Supervision and Examination of jurisdiction and/or lack of merit. EGI also filed a Partial
Department I and the Office of the Motion for Reconsideration of the same Court of
General Counsel and Legal Services to Appeals Decision, with the prayer that the appellate
the effect that: court, instead of still remanding the case to the BSP
Monetary Board for further proceedings, already direct
1. UCPB computed interest on the loans based the latter to impose the applicable administrative
on BSP rules and regulations which sanctions upon UCPB, et al.,.
prohibit banks from accruing interest on
loans that have become non-performing In a Resolution dated 7 July 2005, the Court of Appeals
(BSP Circular No. 202). This is different denied for lack of merit both the Motion for
from interest which may have run and Reconsideration of UCPB, et al. and the Motion for
accrued based on the promissory Partial Reconsideration of EGI.
notes/loan documents from the date of
default up to settlement date. G.R. No. 168859
2. Fair market value of assets to be foreclosed is
different from the bid price submitted during Aggrieved by the 14 October 2004 Decision and 7 July
foreclosure and there is no statutory obligation 2005 Resolution of the Court of Appeals, UCPB, et al.
for the latter to be equivalent to the former. comes before this Court, via a Petition for Review
3. Regarding the alleged P145,163,000.00 on Certiorari under Rule 45 of the 1997 Revised Rules of
fabricated loan, the documents showed that Civil Procedure, based on the following assignment of
there were the EGI Board Resolution to errors:
borrow, promissory note signed by Mr. Eulalio
Ganzon, and Loan Agreement stating that the I. THE HONORABLE COURT OF
proceeds shall be used to pay outstanding APPEALS ACTED WITHOUT JURISDICTION
availments and interest servicing. AND GRAVELY ERRED IN HOLDING THAT IT
HAS APPELLATE JURISDICTION OVER
4. There is no finding by Supervision and DECISIONS OF THE BSP/MONETARY
Examination Department I on the alleged double BOARD.
charging and/or padding of transaction costs.[25]
II. THE HONORABLE COURT OF
APPEALS GRAVELY ERRED IN HOLDING
EGI filed a Motion for Reconsideration and a THAT THE BANGKO SENTRAL SUMMARILY
Supplemental Motion for Reconsideration of the DISMISSED THE COMPLAINT OF [EGI].
aforequoted letter-decision of the BSP Monetary
Board. The BSP Monetary Board denied both motions in III. THE HONORABLE COURT OF
its letter[26] dated 8 December 2003 as there was no APPEALS GRAVELY ERRED IN
sufficient basis to grant the same. DISREGARDING THE FINDINGS OF FACT OF
EGI then filed a Petition for Review under Rule 43 of the THE BANGKO SENTRAL AND IN HOLDING
1997 Revised Rules of Civil Procedure with the Court of THAT [UCPB, et al.] COMMITTED
Appeals raising the sole issue of whether the Bangko IRREGULAR AND UNSOUND BANKING
Sentral ng Pilipinas erred in dismissing the administrative
Given the gravity and seriousness of the charges of EGI The BSP Monetary Board similarly failed to
against UCPB, et al., the sweeping statement of the BSP clarify whether UCPB can foreclose the mortgaged
Monetary Board that it was inclined to dismiss the properties of EGI in amounts that were less than the
complaint of EGI based on the evaluation made by its values of the said properties as determined and
Supervision and Examination Department I and Office of stipulated by EGI and UCPB in their amended MOA. The
the General Counsel and Legal Services, is simply Court once more agrees in the ruling of the Court of
insufficient and unsatisfactory. Worse, the BSP Monetary Appeals that the MOA entered into by EGI and UCPB
Board merely presented the following conclusions serves as a contract between them, and it is the law that
without bothering to explain its bases for the same: (1) should govern their relationship, which neither of the
UCPB computed interest on loans based on BSP rules parties can simply abrogate, violate, or
and regulations which prohibit banks from accruing disregard. Unfortunately, the BSP Monetary Board never
interest on loans that have become non-performing (BSP even referred to the MOA executed by the parties in its
Circular No. 202); (2) fair market value of assets to be letter-decision dated 16 September 2003.
foreclosed is different from the bid price submitted
during foreclosure and there is no statutory obligation Moreover, the BSP Monetary Board found that
for the latter to be equivalent to the former; (3) the P145,163,000.00 loan of EGI from UCPB was not
regarding the alleged P145,163,000.00 fabricated loan, fabricated based on several documents. However, there
the documents showed that there were the EGI Board is absolute lack of explanation by the BSP Monetary
resolution to borrow, promissory note signed by Mr. Board as to why said documents deserved more
Eulalio Ganzon, and Loan Agreement stating the weight vis--vis evidence of EGI of suspicious
proceeds shall be used to pay outstanding availments circumstances surrounding the said loan, such as UCPB
and interest servicing; and (4) there is no finding by granting EGI said loan even when the latter was already
Supervision and Examination Department I on the in default on its prior loan obligations, and without
alleged double charging and/or padding of transaction requiring additional security, detailed business plan, and
costs. financial projections from EGI.
Further, in resolving the matter before it, the BSP The disregard by BSP Monetary Board of all the
Monetary Board never considered the UCPB Internal foregoing facts and issues in its letter-decision dated 16
Memorandum dated 22 February 2001, which was the September 2003 leads this Court to declare that it
heart of the administrative complaint of EGI against summarily dismissed the administrative complaint of EGI
UCPB, et al. The BSP Monetary Board did not even against UCPB, et al. There can be no complete resolution
attempt to establish whether it was regular or sound of the administrative complaint of EGI without
practice for a bank to keep a record of its borrowers loan
By remanding the case to the BSP Monetary Board, the This is a Petition for Review under Rule 45 of the Rules of
Court of Appeals only acted in accordance with Republic Court assailing the Decision of the Court of Appeals in
Act No. 7653 and Republic Act No. 8791, which tasked CA-G.R. SP No. 876001 dated April 20, 2005, which
the BSP, through the Monetary Board, to determine reversed and set aside the September 13, 20042 and
whether a particular act or omission, which is not November 5, 20043 Orders issued by the Regional Trial
otherwise prohibited by any law, rule or regulation Court of Manila, Branch 364 in Criminal Case No. 02-
affecting banks, quasi-banks or trust entities, may be 202158 for qualified theft. The said orders, in turn,
deemed as conducting business in an unsafe or unsound respectively denied the motion filed by herein
manner.Also, the BSP Monetary Board is the proper respondent Sally Go for the suppression of the
body to impose the necessary administrative sanctions testimonial and documentary evidence relative to a
for the erring bank and its directors or officers. Security Bank account, and denied reconsideration.
The Court of Appeals did not deem it appropriate, on Petitioner, the BSB Group, Inc., is a duly organized
appeal, to outright reverse the judgment of the BSP domestic corporation presided by its herein
Monetary Board. The Court of Appeals held that the BSP representative, Ricardo Bangayan (Bangayan).
Monetary Board did not have sufficient basis for Respondent Sally Go, alternatively referred to as Sally Sia
dismissing the administrative complaint of EGI in its 16 Go and Sally Go-Bangayan, is Bangayans wife, who was
September 2003 letter-decision; yet, the appellate court employed in the company as a cashier, and was
likewise did not find enough evidence on record to engaged, among others, to receive and account for the
already resolve the administrative complaint in favor of payments made by the various customers of the
EGI and against UCPB, et al., precisely the reason why it company.
still remanded the case to the BSP Monetary Board for
further proceedings. The Court of Appeals never meant In 2002, Bangayan filed with the Manila Prosecutors
to give EGI an assurance of a favorable judgment; it only Office a complaint for estafa and/or qualified
ensured that the BSP Monetary Board shall accord all theft5 against respondent, alleging that several
parties concerned to equal opportunity for presentation checks6 representing the aggregate amount of
and consideration of their allegations, arguments, and 1,534,135.50 issued by the companys customers in
Respondent filed a motion to quash the subpoena dated Aggrieved, and believing that the trial court gravely
November 4, 2003, addressed to Metrobank, noting to abused its discretion in acting the way it did, respondent
the court that in the complaint-affidavit filed with the elevated the matter to the Court of Appeals via a
prosecutor, there was no mention made of the said bank petition for certiorari under Rule 65. Finding merit in the
account, to which respondent, in addition to the Security petition, the Court of Appeals reversed and set aside the
Bank account identified as Account No. 01-14-006,
In this Petition24 under Rule 45, petitioner averred in the We derive from the conflicting advocacies of the parties
main that the Court of Appeals had seriously erred in that the issue for resolution is whether the testimony of
reversing the assailed orders of the trial court, and in Marasigan and the accompanying documents are
effect striking out Marasigans testimony dealing with irrelevant to the case, and whether they are also
respondents deposit account with Security Bank.25 It violative of the absolutely confidential nature of bank
asserted that apart from the fact that the said evidence deposits and, hence, excluded by operation of R.A. No.
had a direct relation to the subject matter of the case for 1405. The question of admissibility of the evidence thus
qualified theft and, hence, brings the case under one of comes to the fore. And the Court, after deliberative
the exceptions to the coverage of confidentiality under estimation, finds the subject evidence to be indeed
R.A. 1405.26 Petitioner believed that what constituted inadmissible.
the subject matter in litigation was to be determined by
the allegations in the information and, in this respect, it Prefatorily, fundamental is the precept in all criminal
alluded to the assailed November 5, 2004 Order of the prosecutions, that the constitutive acts of the offense
trial court, which declared to be erroneous the limitation must be established with unwavering exactitude and
of the present inquiry merely to what was contained in moral certainty because this is the critical and only
the information.27 requisite to a finding of guilt. 31 Theft is present when a
person, with intent to gain but without violence against
For her part, respondent claimed that the money or intimidation of persons or force upon things, takes
represented by the Security Bank account was neither the personal property of another without the latters
relevant nor material to the case, because nothing in the consent. It is qualified when, among others, and as
criminal information suggested that the money therein alleged in the instant case, it is committed with abuse of
deposited was the subject matter of the case. She confidence.32 The prosecution of this offense necessarily
invited particular attention to that portion of the focuses on the existence of the following elements: (a)
criminal Information which averred that she has stolen there was taking of personal property belonging to
and carried away cash money in the total amount of another; (b) the taking was done with intent to gain; (c)
1,534,135.50. She advanced the notion that the term the taking was done without the consent of the owner;
"cash money" stated in the Information was not (d) the taking was done without violence against or
synonymous with the checks she was purported to have intimidation of persons or force upon things; and (e) it
stolen from petitioner and deposited in her personal was done with abuse of confidence.33 In turn, whether
banking account. Thus, the checks which the these elements concur in a way that overcomes the
prosecution had Marasigan identify, as well as the presumption of guiltlessness, is a question that must
testimony itself of Marasigan, should be suppressed by pass the test of relevancy and competency in
the trial court at least for violating respondents right to accordance with Section 334 Rule 128 of the Rules of
due process.28 More in point, respondent opined that Court.
admitting the testimony of Marasigan, as well as the
evidence pertaining to the Security Bank account, would Thus, whether these pieces of evidence sought to be
violate the secrecy rule under R.A. No. 1405.29 suppressed in this case the testimony of Marasigan, as
Subsequent statutory enactments43 have expanded the Mr. Ramos: The attachment will only apply after the
list of exceptions to this policy yet the secrecy of bank court has pronounced sentence declaring the liability of
deposits still lies as the general rule, falling as it does such person. But where the primary aim is to determine
within the legally recognized zones of privacy.44 There is, whether he has a bank deposit in order to bring about a
in fact, much disfavor to construing these primary and proper assessment by the [BIR], such inquiry is not
supplemental exceptions in a manner that would allowed by this proposed law.
authorize unbridled discretion, whether governmental
or otherwise, in utilizing these exceptions as authority Mr. Marcos: But under our rules of procedure and under
for unwarranted inquiry into bank accounts. It is then the Civil Code, the attachment or garnishment of money
perceivable that the present legal order is obliged to deposited is allowed. Let us assume for instance that
conserve the absolutely confidential nature of bank there is a preliminary attachment which is for
deposits.45 garnishment or for holding liable all moneys deposited
belonging to a certain individual, but such attachment or
The measure of protection afforded by the law has been garnishment will bring out into the open the value of
explained in China Banking Corporation v. Ortega.46 That such deposit. Is that prohibited by... the law?
case principally addressed the issue of whether the
prohibition against an examination of bank deposits Mr. Ramos: It is only prohibited to the extent that the
precludes garnishment in satisfaction of a judgment. inquiry... is made only for the purpose of satisfying a tax
Ruling on that issue in the negative, the Court found liability already declared for the protection of the right in
guidance in the relevant portions of the legislative favor of the government; but when the object is merely
deliberations on Senate Bill No. 351 and House Bill No. to inquire whether he has a deposit or not for purposes
3977, which later became the Bank Secrecy Act, and it of taxation, then this is fully covered by the law. x x x
held that the absolute confidentiality rule in R.A. No.
1405 actually aims at protection from unwarranted Mr. Marcos: The law prohibits a mere investigation into
inquiry or investigation if the purpose of such inquiry or the existence and the amount of the deposit.
investigation is merely to determine the existence and
nature, as well as the amount of the deposit in any given Mr. Ramos: Into the very nature of such deposit. x x x47
bank account. Thus,
In taking exclusion from the coverage of the
x x x The lower court did not order an examination of or confidentiality rule, petitioner in the instant case posits
inquiry into the deposit of B&B Forest Development that the account maintained by respondent with
Corporation, as contemplated in the law. It merely Security Bank contains the proceeds of the checks that
required Tan Kim Liong to inform the court whether or she has fraudulently appropriated to herself and, thus,
not the defendant B&B Forest Development Corporation falls under one of the exceptions in Section 2 of R.A. No.
had a deposit in the China Banking Corporation only for 1405 that the money kept in said account is the
purposes of the garnishment issued by it, so that the subject matter in litigation. To highlight this thesis,
bank would hold the same intact and not allow any petitioner avers, citing Mathay v. Consolidated Bank and
withdrawal until further order. It will be noted from the Trust Co.,48 that the subject matter of the action refers
discussion of the conference committee report on to the physical facts; the things real or personal; the
Senate Bill No. 351 and House Bill No. 3977which later money, lands, chattels and the like, in relation to which
became Republic Act No. 1405, that it was not the the suit is prosecuted, which in the instant case should
intention of the lawmakers to place banks deposits refer to the money deposited in the Security Bank
Mr. RAMOS. The attachment will only apply after Mr. MARCOS. I see. Suppose there has been a
the court has pronounced sentence declaring the decision, definitely establishing the liability of an
liability of such person. But where the primary aim individual for taxation purposes and this judgment
is to determine whether he has a bank deposit in is sought to be executed ... in the execution of that
order to bring about a proper assessment by the judgment, does this bill, or this proposed law, if
Bureau of Internal Revenue, such inquiry is not approved, allow the investigation or scrutiny of
authorized by this proposed law. the bank deposit in order to execute the
judgment?
Mr. MARCOS. But under our rules of procedure
and under the Civil Code, the attachment or Mr. RAMOS. To satisfy a judgment which has
garnishment of money deposited is allowed. Let us become executory.
assume, for instance, that there is a preliminary
attachment which is for garnishment or for Mr. MARCOS. Yes, but, as I said before, suppose
holding liable all moneys deposited belonging to a the tax liability is P1,000,000 and the deposit is
certain individual, but such attachment or half a million, will this bill allow scrutiny into the
garnishment will bring out into the open the value deposit in order that the judgment may be
of such deposit. Is that prohibited by this executed?
amendment or by this law?
Mr. RAMOS. Merely to determine the amount of
Mr. RAMOS. It is only prohibited to the extent that such money to satisfy that obligation to the
the inquiry is limited, or rather, the inquiry is made Government, but not to determine whether a
only for the purpose of satisfying a tax liability deposit has been made in evasion of taxes.
already declared for the protection of the right in
favor of the government; but when the object is xxx xxx xxx
merely to inquire whether he has a deposit or not
for purposes of taxation, then this is fully covered Mr. MACAPAGAL. But let us suppose that in an
by the law. ordinary civil action for the recovery of a sum of
money the plaintiff wishes to attach the properties
Mr. MARCOS. And it protects the depositor, does of the defendant to insure the satisfaction of the
it not? judgment. Once the judgment is rendered, does
the gentleman mean that the plaintiff cannot
Mr. RAMOS. Yes, it protects the depositor. attach the bank deposit of the defendant?
Mr. MARCOS. The law prohibits a mere Mr. RAMOS. That was the question raised by the
investigation into the existence and the amount of gentleman from Pangasinan to which I replied that
the deposit. outside the very purpose of this law it could be
reached by attachment.
Mr. RAMOS. Into the very nature of such deposit.
Mr. MACAPAGAL. Therefore, in such ordinary civil
Mr. MARCOS. So I come to my original question. cases it can be attached?
Therefore, preliminary garnishment or attachment
of the deposit is not allowed? Mr. RAMOS. That is so.
Mr. RAMOS. No, without judicial authorization. (Vol. II, Congressional Record, House of
Representatives, No. 12, pp. 3839-3840, July 27,
1955).
Concepcion, C.J. and Teehankee, J., took no part. Summons was eventually served upon petitioners on
January 9, 1992, while defendant Dio was served with
G.R. No. 107303 February 21, 1994 summons on January 16, 1992.
EMMANUEL C. OATE and ECON HOLDINGS
CORPORATION, petitioners, On January 21, 1992, petitioners filed an "Urgent Motion
vs. to Discharge/Dissolve Writ of Attachment." That same
HON. ZUES C. ABROGAR, as Presiding Judge of Branch 150 day, Sun Life filed an ex-parte motion to examine the
of the Regional Trial Court of Makati, and SUN LIFE books of accounts and ledgers of petitioner Brunner
ASSURANCE COMPANY OF CANADA, respondents. Development Corporation (Brunner, for brevity) at the
G.R. No. 107491 February 21, 1994 Urban Bank, Legaspi Village Branch, and to obtain copies
BRUNNER DEVELOPMENT CORPORATION, petitioner, thereof, which motion was granted by respondent
vs. Judge. The examination of said account took place on
HON. ZUES C. ABROGAR, as Presiding Judge of Branch 150 January 23, 1992. Petitioners filed a motion to nullify the
of the Regional Trial Court of Makati, and SUN LIFE proceedings taken thereat since they were not present.
ASSURANCE COMPANY OF CANADA, respondents.
On January 30, 1992, petitioners and their co-
NOCON, J.: defendants filed a memorandum in support of the
motion to discharge attachment. Also on that same day,
These are separate petitions for certiorari with a prayer Sun Life filed another motion for examination of bank
for temporary restraining order filed by Emmanuel C. accounts, this time seeking the examination of Account
Oate and Econ Holdings Corporation (in G.R. No. No. 0041-0277-03 with the Bank of Philippine Islands
107303), and Brunner Development Corporation (in G.R. (BPI) which, incidentally, petitioners claim not to be
No. 107491), both of which assail several orders issued owned by them and the records of Philippine National
by respondent Judge Zues C. Abrogar in Civil Case No. Bank (PNB) with regard to checks payable to Brunner.
91-3506. Sun Life asked the court to order both banks to comply
with the notice of garnishment.
The pertinent facts are as follows: On December 23,
1991, respondent Sun Life Assurance Company of On February 6, 1992, respondent Judge issued an order
Canada (Sun Life, for brevity) filed a complaint for a sum (1) denying petitioners' and the co-defendants' motion
of money with a prayer for the immediate issuance of a to discharge the amended writ of attachment, (2)
writ of attachment against petitioners, and Noel L. Dio, approving Sun Life's additional attachment, (3) granting
which was docketed as Civil Case No. 91-3506 and Sun Life's motion to examine the BPI account, and (4)
Petitioners initially argue that respondent Judge erred in Petitioners then contended that the writ should have
granting Sun Life's prayer for a writ of preliminary been discharged since the ground on which it was issued
attachment on the ground that the trial court had not fraud in contracting the obligation was not
acquired jurisdiction over them. This argument is clearly present. This cannot be considered a ground for lifting
unavailing since it is well-settled that a writ of the writ since this delves into the very complaint of the
preliminary attachment may be validly applied for and Sun Life. As this Court stated in Cuatro v. Court of
granted even before the defendant is summoned or is Appeals:4
heard from.2 The rationale behind this rule was stated by
the Court in this wise: Moreover, an attachment may not be dissolved by
a showing of its irregular or improper issuance if it
A preliminary attachment may be defined, is upon a ground which is at the same time the
paraphrasing the Rules of Court, as the provisional applicant's cause of action in the main case since an
remedy in virtue of which a plaintiff or other anomalous situation would result if the issues of
proper party may, at the commencement of the the main case would be ventilated and resolved in a
action or any time thereafter, have the property of mere hearing of the motion (Davao Light and
the adverse party taken into the custody of the Power Co., Inc. vs. Court of Appeals, supra, The
court as security for the satisfaction of any Consolidated Bank and Trust Corp. (Solidbank) vs.
judgment that may be recovered. It is a remedy Court of Appeals, 197 SCRA 663 [1991]).
which is purely statutory in respect of which the
law requires a strict construction of the provisions In the present case, one of the allegation in
granting it. Withal no principle, statutory or petitioner's complaint below is that the defendant
jurisprudential, prohibits its issuance by any court spouses induced the plaintiff to grant the loan by
before acquisition of jurisdiction over the person issuing postdated checks to cover the installment
of the defendant. payments and a separate set of postdated checks
for payment of the stipulated interest (Annex "B").
Rule 57 in fact speaks of the grant of the remedy The issue of fraud, then, is clearly within the
"at the commencement of the action or at any competence of the lower court in the main action.5
time thereafter." The phrase "at the
commencement of the action," obviously refers to The fact that a criminal complaint for estafa filed by Sun
the date of the filing of the complaint which, as Life against the petitioners was dismissed by the
abovepointed out, its the date that marks "the Provincial Prosecutor of Rizal for Makati on April 21,
commencement of the action;" and the reference 1992 and was upheld by the Provincial Prosecutor on
plainly is to a time before summons is served on July 13, 1992 is of no moment since the same can be
As evidence, Lim annexed bank records purporting Upon approval of the Application for Managers
to establish the deception practiced by Santos and Checks or Term Investment Application, the funds of the
Genuino. Some of the documents pertained to the dollar bank client covered thereof were then deposited in the
deposits of petitioners Carmen Ll. Intengan, Rosario Ll. Citibank accounts of Torrance and/or Global.
Neri, and Rita P. Brawner, as follows:
Second step: Once the said fund transfers had been
a) Annex A-6[7] - an Application for Money
effected, Global and/or Torrance would then issue its/
Transfer in the amount of US $140,000.00,
their checks drawn against its/their Citibank accounts in
executed by Intengan in favor of Citibank $
favor of the other companies whose financial products,
S/A No. 24367796, to be debited from her
such as securities, shares of stocks and other certificates,
Account No. 22543341;
were offering higher yields.
b) Annex A-7[8] - a Money Transfer Slip in the
amount of US $45,996.30, executed by Third step: On maturity date(s) of the placements made
Brawner in favor of Citibank $ S/A No. by Torrance and/or Global in the other companies, using
24367796, to be debited from her Account the monies of the Citibank client, the other companies
No. 22543236; and would then. return the placements to Global
and/or Torrance with the corresponding interests
c) Annex A-9[9] - an Application for Money
earned.
Transfer in the amount of US $100,000.00,
executed by Neri in favor of Citibank $ S/A
Fourth step: Upon receipt by Global and/or Torrance of
No. 24367796, to be debited from her
the remittances from the other companies, Global
Account No. 24501018.
and/or Torrance would then issue its/their own checks
In turn, private respondent Joven Reyes, vice- drawn against their Citibank accounts in favor
president/business manager of the Global Consumer of Santos and Genuino.
Banking Group of Citibank, admits to having authorized
Lim to state the names of the clients involved and to The amounts covered by the checks represent the
attach the pertinent bank records, including those of shares of Santos and Genuino in the margins Global
petitioners.[10] He states that private respondents Aziz and/or Torrance had realized out of the placements
Rajkotwala and William Ferguson, Citibank, N.A. Global [using the diverted monies of the Citibank clients] made
Consumer Banking Country Business Manager and with the other companies.
Country Corporate Officer, respectively, had no hand in
the disclosure, and that he did so upon the advice of Fifth step: At the same time, Global
counsel. and/or Torrance would also issue its/their check(s)
drawn against its/their Citibank accounts in favor of the
In his memorandum, the Solicitor General
bank client.
described the scheme as having been conducted in this
manner:
The check(s) cover the principal amount (or parts
thereof) which the Citibank client had previously
transferred, with the help of Santos and/or Genuino,
TORRES, JR., J.: On August 22, 1985, she filed with the GSIS a claim for
disability benefits under P.D. 626, as amended.[3] The
A teacher is likened to that of a candle which GSIS denied the claim by reason of prescription, holding
consumes itself in the process of giving light. The good that the petitioner should have filed her claim within
teacher not only gives the light of knowledge but also one year from the occurrence of the contingency in
touches the heart serving not only the lowly and the March 1982.
least, but even the lost.
This case is about such a teacher who was disabled The petitioner appealed to the ECC. In its resolution
in the process of giving light. dated January 11, 1989, the ECC reversed the decision of
the GSIS and ruled that the application for leave of
Dissatisfied with the decision[1] of the Court of absence of herein petitioner with the Department of
Appeals in CA-G.R. SP No. 29930 promulgated on May Education on July 19, 1982 is considered a constructive
17, 1994, the Government Service Insurance System filing of the compensation claim under our rules.
(GSIS) comes to this court by way of a petition for review Pursuant to the ECC resolution, the GSIS awarded
on certiorariimpugning the aforesaid decision the petitioner permanent partial disability
dispositive portion of which reads: benefits corresponding to 45 months.
WHEREFORE, the petition is hereby given due course In November, 1985, the petitioner underwent a surgical
and is GRANTED. The assailed decision of respondent operation on her spine. Her condition worsened.
ECC affirming the decision of the GSIS is
REVERSED. Petitioners permanent partial disability is On June 28, 1989, the petitioner filed with the GSIS a
converted into permanent total disability. The ECC and petition for conversion praying that her disability status
GSIS are ordered to make the corresponding adjustment be changed from permanent partial disability to
The recent case of People v. De Venecia, G.R. No. L- The verdict in this special civil action of certiorari turns
20808, July 31, 1965 invites comparison with this case. upon the question of whether or not the "Law on
There it was held: Secrecy of Bank Deposits" 1 precludes production by
subpoena duces tecum of bank records of transactions
The Customs special agent involved is Manuel Caturla, This Order is now impugned in the instant certiorari
and the accusation against him was filed by the Bureau action instituted by BF Bank before this Court, as having
of Internal Revenue. 3 In the course of the preliminary been issued with grave abuse of discretion, amounting
investigation thereof, the Tanodbayan issued a to lack of jurisdiction. It is the bank's theory that the
subpoena duces tecum to the Banco Filipino Savings & order declining to grant that remedy operated as a
Mortgage Bank, commanding its representative to premature adjudication of the very issue raised in the
appear at a specified time at the Office of declaratory suit, and as judicial sufferance of a
the Tanodbayan and furnish the latter with duly certified transgression of the bank deposits statute, and so
copies of the records in all its branches and extension constituted grievous error correctible by certiorari. It
offices, of the loans, savings and time deposits and other further argues that subpoenae in question are in the
banking transactions, dating back to 1969, appearing in nature of "fishing expeditions" or "general warrants"
the names of Caturla, his wife, Purita Caturla, their since they authorize indiscriminate inquiry into bank
children Manuel, Jr., Marilyn and Michael and/or records; that, assuming that such an inquiry is allowed as
Pedro Escuyos. 4 regards public officials under investigation for a violation
of the Anti-Graft & Corrupt Practices Act, it is
Caturla moved to quash the subpoena duces constitutionally impermissible with respect to private
5
tecum arguing that compliance therewith would result individuals or public officials not under investigation on a
in a violation of Sections 2 and 3 of the Law on Secrecy charge of violating said Act; and that while prosecution
of Bank Deposits. Then Tanodbayan Vicente Ericta not of offenses should not, as a rule, be enjoined, there are
only denied the motion for lack of merit, and directed recognized exceptions to the principle one of which is
compliance with the subpoena, 6 but also expanded its here present, i.e. to avoid multiplicity of suits, similar
scope through a second subpoena duces tecum,7 this subpoenae having been directed to other banks as well.
time requiring production by Banco Filipino of the bank
records in all its branches and extension offices, of It is difficult to see how the refusal by the Court a quo to
Siargao Agro-Industrial Corporation, Pedro Escuyos or issue the temporary restraining order applied for by the
his wife, Emeterio Escuyos, Purita Caturla, Lucia Escuyos petitioner in other words, its disagreement with the
or her husband, Romeo Escuyos, Emerson Escuyos, petitioner's advocated theory could be deemed so
Fraterno Caturla, Amparo Montilla, Cesar Caturla, whimsical, capricious, despotic or oppressive an act as to
Manuel Caturla or his children, Manuel Jr., Marilyn and constitute grave abuse of discretion. Obviously, the writ
Michael, LTD Pub/Restaurant, and Jose Buo or his wife, of certiorari cannot issue simply on a showing of
Evelyn. Two other subpoena of substantially the same disagreement between a party and the court upon some
tenor as the second were released by material factual or legal issue. There must be a
the Tanodbayan's Office. 8 The last required obedience reasonable demonstration that a party's contentions are
under sanction of contempt. so clearly correct, or the court's ruling thereon so clearly
wrong, to justify the issuance of a writ of certiorari. No
The Banco Filipino Savings & Mortgage Bank, hereafter such demonstration exists in this case. Indeed, for aught
referred to simply as BF Bank, took over from Caturla in that the record shows, the Court's refusal to grant the
the effort to nullify the subpoenae. It filed a complaint application for a restraining order was, in the premises,
for declaratory relief with the Court of First Instance of licit and proper, or its validity, fairly debatable, at the
Manila, 9which was assigned by raffle to the sala of very least. Be this as it may, on the merits the petitioner
respondent Judge Fidel Purisima. BF Bank prayed for a cannot succeed. Its declared theory is untenable.
judicial declaration as to whether its compliance with
the subpoenae duces tecum would constitute an The provisions of R.A. No. 1405 subject of BF's
infringement of the provisions of Sections 2 and 3 of R.A. declaratory action, read as follows:
No. 1405 in relation to Section 8 of R.A. No. 3019. It also
asked that pending final resolution of the question,
The other provision involved in the declaratory action is ... Cases of unexplained wealth 14 are similar to
Section 8 of R.A. No. 3019. It reads: cases of bribery or dereliction of duty 15 and no
reason is seen why these two classes of cases
Sec. 8. Dismissal due to unexplained wealth. If in cannot be excepted from the rule making bank
accordance with the provisions of Republic Act deposits confidential. The policy as to one cannot
Numbered One thousand three hundred seventy- be different from the policy as to the other. This
nine, a public official has been found to have policy expresses the notion that a public office is a
acquired during his incumbency, whether in his public trust and any person who enters upon its
name or in the name of other persons, an amount discharge does so with the full knowledge that his
of property and/or money manifestly out of life, so far as relevant to his duty, is open to public
proportion to this salary and to his other lawful scrutiny.
income, that fact shall be a ground for dismissal or
removal. Properties in the name of the spouse and The inquiry into illegally acquired property or
unmarried children of such public official may be property NOT "legitimately acquired" extends to
taken into consideration, when their acquisition cases where such property is concealed by being held by
through legitimate means cannot be satisfactorily or recorded in the name of other persons. This
shown. Bank deposits shall be taken into proposition is made clear by R.A. No. 3019 which quite
consideration in the enforcement of this section, categorically states that the term, "legitimately acquired
notwithstanding any prohibition of law to the property of a public officer or employee shall not include
contrary. .. property unlawfully acquired by the respondent, but
its ownership is concealed by its being recorded in the
In our decision in Philippine National Bank v. Gancayco, name of, or held by, respondent's spouse, ascendants,
rendered on September 30, 1966, 11 we upheld the descendants, relatives or any other persons." 16
judgment of the Trial Court "sustaining the power of the
defendants (special prosecutors of the Department of To sustain the petitioner's theory, and restrict the
Justice) to compel the disclosure (by PNB) of bank inquiry only to property held by or in the name of the
accounts of ACCFA Administrator Jimenez (then under government official or employee, or his spouse and
investigation for unexplained wealth), .. (it being ruled) unmarried children is unwarranted in the light of the
that, by enacting section 8 of the Anti-Graft and Corrupt provisions of the statutes in question, and would make
Practices Act, Congress clearly intended to provide an available to persons in government who illegally acquire
additional ground for the examination of bank deposits .. property an easy and fool-proof means of evading
(for) without such provision, the .. prosecutors would be investigation and prosecution; all they would have to do
hampered if not altogether frustrated in the prosection would be to simply place the property in the possession
of those charged with having acquired unexplained or name of persons other than their spouse and
a. Annul and set aside, for having been issued Clearly, the specific provision of R.A. 6770, a later
without or in excess of jurisdiction or with grave legislation, modifies the law on the Secrecy of Bank
abuse of discretion amounting to lack of Deposits (R.A. 1405) and places the office of the
jurisdiction, respondents order dated September 7, Ombudsman in the same footing as the courts of law in
1998 in OMB-0-97-0411, In Re: Motion to Cite this regard.[2]
Lourdes T. Marquez for indirect contempt, received
by counsel of September 9, 1998, and their order
The basis of the Ombudsman in ordering an in
dated October 14, 1998, denying Marquezs motion
camera inspection of the accounts is a trail of managers
for reconsideration dated September 10, 1998,
checks purchased by one George Trivinio, a respondent
received by counsel on October 20, 1998.
in OMB-0-97-0411, pending with the office of the
Ombudsman.
b. Prohibit respondents from implementing their
order dated October 14, 1998, in proceeding with It would appear that Mr. George Trivinio, purchased
the hearing of the motion to cite Marquez for fifty one (51) Managers Checks (MCs) for a total amount
indirect contempt, through the issuance by this of P272.1 Million at Traders Royal Bank, United Nations
Court of a temporary restraining order and/or Avenue branch, on May 2 and 3, 1995. Out of the 51
preliminary injunction.[1] MCs, eleven (11) MCs