Facts:

The case involves a petition by Bangko Sentral ng Pilipinas (BSP) against Orient Commercial Banking Corporation (OCBC) and various respondents including Jose C. Go and his affiliated companies. The events leading to this petition began on February 13, 1998, when OCBC declared a bank holiday due to its inability to meet obligations to depositors, creditors, and BSP. Shortly after, on March 17, 1998, OCBC filed a petition for rehabilitation, leading to the appointment of the Philippine Deposit Insurance Corporation (PDIC) as the bank's receiver with full authority over its assets and properties, as mandated by the Monetary Board's Resolution No. 1427.

On December 17, 1999, BSP filed a complaint against the respondents before the Regional Trial Court (RTC) of Manila (Branch 12) for a sum of money, which included a preliminary attachment to secure its claims amounting to P2,301,951,042.97. The RTC issued an order granting the preliminary attachment based on the potential ris

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Facts:

Background of OCBC’s Financial Crisis and Rehabilitation

• On February 13, 1998, respondent Orient Commercial Banking Corporation (OCBC) declared a bank holiday due to its inability to pay its obligations to depositors, creditors, and Bangko Sentral ng Pilipinas (BSP).
• On March 17, 1998, OCBC filed a petition for rehabilitation with the Monetary Board. The bank was placed under receivership with the Philippine Deposit Insurance Corporation (PDIC) designated as Receiver pursuant to Monetary Board Resolution No. 1427, which transferred all assets, properties, obligations, and operations of OCBC to PDIC.

Litigation Arising from the PDIC Takeover

• Respondent Jose C. Go, the principal and major stockholder of OCBC, along with his affiliate companies, challenged PDIC’s action before the Regional Trial Court (RTC) of Manila, Branch 44 (Civil Case No. 98-91265).
• The challenged case was dismissed by the trial court, and the dismissal was subsequently appealed to the Court of Appeals (CA).
• During the pendency of Civil Case No. 98-91265, the Monetary Board issued Resolution No. 602 dated May 7, 1999, directing the Receiver to proceed with the liquidation of OCBC.
• In June 1999, PDIC instituted Special Proceeding No. 99-94328 before RTC of Manila, Branch 51, titled “In Re: Petition for Assistance in the Liquidation of Orient Commercial Banking Corporation.”

Petitioner’s Claim and the Issuance of the Writ of Preliminary Attachment

• On December 17, 1999, BSP (petitioning as petitioner) filed a complaint for a sum of money with a motion for preliminary attachment in RTC of Manila, Branch 12 (Civil Case No. 99-95993). The claim sought the recovery of:
• A deficiency obligation of approximately P1,273,959,042.97,
• An overdraft obligation of P1,028,000,000.00,
• Attorney’s fees and costs of suit.
• On January 14, 2000, the RTC of Manila, Branch 12, granted the petitioner’s motion for preliminary attachment.
• On January 19, 2000, after the petitioner posted a P50 million attachment bond issued by the Government Service Insurance System (GSIS), a writ was issued directing the attachment of the respondents’ real and personal properties up to the value of P2,301,951,042.97 (exclusive of interests and costs).

Respondents’ Challenge and CA Proceedings

• Respondents filed a petition for certiorari with the CA (CA-G.R. SP No. 60509), questioning the RTC’s orders including the writ of preliminary attachment.
• They also consolidated a motion to dismiss Civil Case No. 99-95993, which was denied by the trial court.
• On June 11, 2001, the CA rendered a decision dissolving the writ of preliminary attachment and ordered the RTC to desist from proceeding with Civil Case No. 99-95993 against all respondents except for Jose C. Go, Vicente C. Go, and George C. Go.

Petitioner’s Subsequent Actions and Motions

• Petitioner filed a Manifestation with a Motion to Admit Attached Opposition on June 6, 2001, contesting the respondents’ urgent motion for a temporary restraining order or a writ of preliminary injunction.
• On June 27, 2001, petitioner submitted a Very Urgent Manifestation emphasizing:
• The necessity for the CA decision to await finality due to the absence of the petitioner’s comment and the dismissal of massive evidence on fraud against BSP;
• Concerns regarding the adequacy of the garnished funds and the inability to satisfy taxpayer interest;
• The premature implementation of the CA decision by the respondents.
• On July 2, 2001, the CA recalled its June 11 decision, granting a ten-day period for the petitioner to file its comment.
• On July 3, 2001, BSP filed the instant petition with prayers for the issuance of a temporary restraining order, a writ of preliminary injunction, and ultimately the permanent nullification of the June 11, 2001 CA decision.

Additional Motions and the Procedural History

• Respondents moved to dismiss the petition on grounds of forum shopping and the submission of a defective certificate of non-forum shopping.
• Petitioner filed an Omnibus Motion for clarification and submitted leave to offer a comment on the motion to dismiss, leading to oppositions and replies being filed: respondents filed comments on February 22, 2002, and petitioner replied on July 2, 2002.
• On January 31, 2003, respondents filed an Urgent Motion to lift, quash, and dissolve the writ of preliminary attachment against all respondents except OCBC, with petitioner submitting its comment on May 5, 2003.

Compromise Agreement and Its Judicial Effect

• On January 5, 2004, petitioner informed this Court through a manifestation that, on December 16, 2003, the parties reached a Compromise Agreement to settle their differences.
• The Compromise Agreement, approved by the RTC of Manila, Branch 12 on December 29, 2003, provided for:
• The dismissal of nineteen pending civil cases, including CA-G.R. SP No. 60509 and Civil Case No. 99-95993.
• Settlement of OCBC’s total deficiency obligation of P2,974,903,000.00 through:
• A downpayment involving the dacion of specified real estate properties,
• Payment of the remaining balance via an amortization schedule over ten (or potentially fifteen) years with interest,
• Security arrangements including additional properties subject to existing writs of attachment.
• The judicial compromise, having judicial mandate and being sanctioned as the resolution of the controversy, acquired the force and effect of a judgment.

Resolution of the Controversy

• With the final settlement under the Compromise Agreement, the issues surrounding the propriety of the issuance of the writ of attachment and the alleged grave abuse of discretion by the CA became moot and academic.
• The petition was denied as moot and academic, and the case was remanded to the RTC of Manila, Branch 12 for the continuation and implementation of the Compromise Agreement.

Issue:

• Whether the issuance of the writ of preliminary attachment by the RTC of Manila in Civil Case No. 99-95993 was proper, given the subsequent developments in the rehabilitation and liquidation of OCBC.
• Whether the CA abused its discretion in dissolving the writ of attachment and in ordering the RTC to cease further proceedings in the contemplated civil case against most respondents.
• Whether the subsequent Compromise Agreement, which settled the parties’ differences and extinguished the disputed claims, renders the petition for review moot and academic.
• Whether the respondents’ allegations of forum shopping and the submission of a defective certificate of non-forum shopping should have led to a dismissal of the petition.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)