G.R. No. 78223 - Heirs of Guballa, Sr. vs. Court of Appeals

MaxBank was incorporated and licensed as a thrift bank by the BSP in February 2006.
The Monetary Board initiated MaxBank to Prompt Corrective Action (PCA) status on March 6, 2008 due to management and other supervisory concerns.
MaxBank failed PCA in July 2014 as it did not meet minimum capital requirements.
MaxBank was re-initiated to PCA in October 2014 after acquisition by the Numoni Group but the latter failed to infuse additional capital.
Numoni Group divested 52% ownership to Oppacher Group, which also failed to meet capital requirements.
In 2017, Oppacher Group agreed to sell 100% of MaxBank’s stock to three newly incorporated shell companies: Unicorn Wing Investments Limited, Century Merit Global Limited, and DLO Holdings Philippines Inc. (third-party investors).
On November 16, 2017, the Monetary Board approved share transfer to said investors and conversion of the banking license to a regular thrift bank.

BSP conducted regular examinations from December 2017 to January 2018, finding critically deficient capital and multiple other risks (credit, liquidity, operational, compliance, market, strategic, and reputation risks).
MaxBank was directed to comply with outstanding commitments and strengthen risk management.
BSP conducted another examination from February to April 2019 to evaluate compliance, verify financial data, assess risk management and oversight.
BSP issued Advanced Report of Examination Findings in March and April 2019, discussed in an exit conference with MaxBank.
MaxBank submitted multiple replies and supplemental justifications, which BSP evaluated.

On October 10, 2019, Monetary Board issued Resolution No. 1569 confirming unsafe and unsound practices by MaxBank.
On November 7, 2019, Monetary Board issued Resolution No. 1704.C prohibiting MaxBank from doing business and designated PDIC as receiver.
BSP denied MaxBank's requests for hearing, access to report of examination, and supporting documents on November 8, 2019.
BSP revoked prior approval of share transfer to third-party investors on November 8, 2019.
Petitioner Aguilar, MaxBank’s strategic business director and later president/CEO, sought reconsideration and opportunity to be heard multiple times but was denied.

Aguilar filed a petition for mandamus with preliminary injunction at the Court of Appeals on February 5, 2020, seeking compliance with laws, due process, and financial information.
Respondents BSP, Monetary Board, and PDIC opposed on grounds of proper procedure, jurisdiction, and evidence of MaxBank’s unsound condition.
On September 3, 2020, the Court of Appeals denied the petition for mandamus citing procedural and substantive infirmities, holding: aggrieved party must be majority stockholders filing certiorari within 10 days; Aguilar lacked legal standing; due process was observed; and mandamus was the wrong remedy.
Aguilar’s motion for reconsideration was denied on November 24, 2020.
Aguilar filed the present Petition for Review on Certiorari before the Supreme Court.

Section 30 of Republic Act No. 7653 is unconstitutional for limiting manner, party, and period to challenge bank closure, encroaching the Supreme Court’s rule-making powers.
The 10-day period to file certiorari is too short, especially after closure when officers lose access to records.
Due process violations include lack of hearing before closure and denial of copy of BSP’s Report of Examination.
Alleged misrepresentations and faulty assumptions in BSP’s Report of Examination and outdated financial data used.
Claimed solvency shown in more recent financial statements and positive net income figures in 2019.
Demand for BSP to comply with Section 9 of Republic Act No. 7906 to address capital deficiency before closure.

Petition is procedurally defective; mandamus is not a proper remedy to question bank closure, certiorari is.
Aguilar lacked legal standing as nominal shareholder and former officer.
The Monetary Board acted within its jurisdiction based on substantial evidence of financial and operational deficiencies.
Due process was observed; prior hearing is not required before a closure order under Section 30.
Section 30 is constitutional and consistent with police power and public interest in regulation of banks.
Bank closure based on repeated losses, insufficient capital, unsafe banking practices, and management failures.
BSP’s authority to close banks to protect depositors and maintain stability is final and only subject to judicial review on limited grounds.

Whether the Court of Appeals correctly dismissed the petition for mandamus for being the wrong remedy.
Whether petitioner has legal standing to question MaxBank’s closure under Section 30 of Republic Act No. 7653, as amended, and if not, whether Section 30 is constitutional.
Whether petitioner was denied due process, including applicability of Section 37 of Republic Act No. 7653 and entitlement to a copy of the Report of Examination.
Whether MaxBank’s closure had factual and legal basis.