G.R. No. 154470-71 - Bank of Commerce vs. Planters Development Bank

The Rizal Commercial Banking Corporation (RCBC) originally owned several Central Bank (CB) bills and transferred them to the Bank of Commerce (BOC) through a detached assignment.

On April 15, 1994, in a transaction initially intended for the sale of Treasury Bills by the PDB, the bank delivered the seven CB bills instead, supported by a security delivery receipt indicating a “substitution in lieu” of Treasury Bills.

Despite delivering the bills to the BOC, the PDB retained the detached assignments, creating ambiguity as to its intent to transfer title.

On April 20, 1994, the BOC reportedly “sold back” three of the seven CB bills, which were then transferred via Bancapital Development Corporation (Bancap) and eventually reacquired by the BOC.

The remaining four CB bills went through a series of transfers—involving Capital One Equities Corporation, All-Asia Capital and Trust Corporation, and a return to the RCBC—eventually resulting in one CB bill being purchased by the BOC after payment difficulties arose with the BSP.

On April 19, 1994, RCBC, as the registered owner, sold two CB bills with a total face value of ₱20 million to the PDB, supported by another detached assignment.

These two bills were subsequently transferred from the PDB to Bancap, sold to Al-Amanah Islamic Investment Bank of the Philippines, and ultimately acquired by the BOC.

On June 30, 1994, upon learning of the multiple transfers, the PDB informed the BSP of its claim over the CB bills based on the detached assignments, requesting that the BSP annotate its claim in its books.

BSP’s officer-in-charge denied the request, citing regulatory requirements under CB Circular No. 28 that mandated the presentation of the physical bond for any registered transfer.

Subsequent communications between the PDB and BSP clarified that the PDB’s intent was only to place the BSP on notice that possession of the bills did not equate to bona fide holder status.

The PDB filed separate petitions for mandamus, prohibition, and injunction with prayers for preliminary remedies, aiming to compel the BSP to record its claim and prevent payment to presenters of the CB bills.

In response, the BOC asserted that both the April 15 and April 19 transactions were valid contracts of sale that had transferred title in good faith and for value.

The BSP argued that the PDB had not secured a valid assignment recorded in its books and further submitted an alternative interpleader suit to resolve conflicting claims among the various parties.

Escrow agreements were entered into by the BOC and PDB to deposit the maturity proceeds of the CB bills pending resolution, following a motion granted by the Regional Trial Court (RTC) to interplead the conflicting claimants.

The RTC eventually dismissed the PDB’s petition as well as certain counterclaims on jurisdictional grounds, prompting separate petitions for review by the BOC and BSP.

Whether the subject CB bills, being certificates of indebtedness issued by the Central Bank (now the BSP), should be governed by CB Circular No. 28 or by the later CB Circular No. 769‑80.
Whether the alleged fraudulent assignment of the CB bills triggers the BSP’s quasi‑judicial authority to adjudicate conflicting claims of ownership and entitlement to the maturity proceeds.
Whether jurisdiction to determine the rightful owner of the disputed CB bills lies with the BSP (as an administrative agency with limited quasi‑judicial powers) or with the RTC (as a court of general jurisdiction).
Whether the doctrine of primary jurisdiction applies in a case where significant technical and regulatory issues are involved, and if its application would preclude the RTC’s intervention.
Whether the remedy of interpleader, as invoked by the BSP, is proper in resolving the conflicting claims among the PDB, BOC, and other claimants regarding the proceeds of the CB bills.