G.R. No. 172983 - Far East Bank and Trust Co. vs. Philippine Deposit Insurance Corp.

On July 5, 1985, the Central Bank of the Philippines (Central Bank) placed Pacific Banking Corporation (PBC) under receivership by Monetary Board Resolution No. 699.
On October 28, 1985, the Central Bank invited banks to submit proposals to purchase PBC’s assets and assume equivalent liabilities.
Far East Bank and Trust Company (FEBTC) submitted its bid on November 14, 1985, covering both fixed and non-fixed assets described in the Asian Appraisal Report dated August 1984, subject to valuation discounts.
The Asian Appraisal Report itemized fixed assets located in various cities, indicating their cost of reproduction and sound values, which were the basis of FEBTC’s bid.
On November 22, 1985, the Monetary Board accepted FEBTC’s bid as the most advantageous.

On April 16, 1986, FEBTC (buyer), PBC (seller), and the Central Bank executed a Memorandum of Agreement (MOA). PBC was represented by Liquidator Renan V. Santos.
Section 1 of the MOA mandated that an absolute purchase agreement covering all PBC assets would be executed.
Section 3(a) covered non-fixed assets; Section 3(c) defined fixed assets per the Asian Appraisal Report.
Section 1(a)(vii) excluded assets submitted as collaterals with the Central Bank from the purchase.
In line with the MOA, the parties executed a Purchase Agreement (PA), which covered only non-fixed assets but acknowledged other assets may be purchased within ninety days from its effectivity date.
The PA was approved by the Monetary Board and the Regional Trial Court (RTC) as the liquidating court in late 1986.

FEBTC paid an additional consideration of P260,000,000.00 and took possession of the fixed assets, operating PBC branches on these properties.
FEBTC requested execution of deeds of sale over fixed assets but Liquidator Santos failed to comply.
When the Philippine Deposit Insurance Corporation (PDIC) replaced Liquidator Santos, it demanded purchase of the fixed assets at a higher appraisal value and began bidding the assets to third parties.
This prompted FEBTC to file a motion before the RTC to compel execution of deeds of sale over disputed fixed assets and applied for a preliminary injunction and temporary restraining order (TRO).

The RTC issued a TRO to restrain PDIC from selling the fixed assets but later denied FEBTC’s motion for preliminary injunction and declared the TRO dissolved, ruling the fixed assets were collateral and excluded from purchase under the MOA.
The Court of Appeals (CA) and subsequently the Supreme Court affirmed this denial at the preliminary injunction stage.
After trial on the merits, the RTC reversed its earlier stance, ruled there was a perfected contract of sale including fixed assets, ordered PDIC to execute deeds of sale, and directed FEBTC to pay according to the Asian Appraisal sound values.
The CA reversed the RTC’s decision on the merits, holding the PA as the final and exclusive contract, which excluded the fixed assets, and affirmed their exclusion as collateral.

Central Bank Board of Liquidators (CB-BOL) was allowed to intervene as a necessary party, claiming assignment of the disputed properties.
FEBTC filed a petition for review on certiorari before the Supreme Court, challenging the CA ruling and asserting the existence of a perfected contract covering fixed assets as per the MOA.

Whether or not a perfected contract of sale existed between FEBTC and PBC, covering the disputed fixed assets listed in the Asian Appraisal Report.
Whether the Purchase Agreement (PA) was the final and exclusive contract superseding the Memorandum of Agreement (MOA) regarding the sale of fixed assets.
Whether the disputed fixed assets had been submitted as collaterals to the Central Bank and thus excluded from FEBTC’s purchase.
Whether the PDIC, as Liquidator, may be compelled to execute deeds of sale over the disputed fixed assets in favor of FEBTC.