Case Digest (G.R. No. 189571)
Facts:
The Honorable Monetary Board and Gail U. Fule, Director, Supervision and Examination Department II, and Bangko Sentral ng Pilipinas, petitioners, vs. Philippine Veterans Bank, respondent, G.R. No. 189571, January 21, 2015, the Supreme Court Third Division, Peralta, J., writing for the Court.Philippine Veterans Bank (PVB) offered pension loans to bona fide veterans or surviving spouses and salary loans to teachers and low-salaried employees pursuant to R.A. No. 3518 and R.A. No. 7169. Because many borrowers lacked real-estate collateral, PVB charged an additional fee called the Credit Redemption Fund (CRF) and established Special Trust Funds (managed by its Trust and Investment Department) where CRF collections were credited to pay outstanding obligations in case of death.
On April 30, 2002, the BSP Supervision and Examination Department II inspected PVB and found that the CRF amounted to engaging in the insurance business in violation of Section 54, R.A. No. 8791 (the General Banking Law). After correspondence, the BSP, by letter dated March 17, 2003, relayed the Insurance Commission’s opinion that the CRF was insurance and requested discontinuance; PVB stopped collecting CRF on February 24, 2004.
On September 16, 2005, the Monetary Board issued Monetary Board Resolution No. 1139 directing PVB to return CRF balances (amounting to P144,713,224.54 as of August 31, 2004) and to preserve borrower records; PVB sought reconsideration which the BSP denied on December 5, 2006. PVB then filed a Petition for Declaratory Relief in the Regional Trial Court (RTC) of Makati, Civil Case No. 07-271.
The petitioners (BSP and the Monetary Board) moved to dismiss, arguing PVB had already violated Section 54 and that declaratory relief was not the proper remedy. The RTC initially dismissed PVB’s petition in an Order dated September 24, 2007, concluding that an ordinary civil action—not declaratory relief—was the appropriate remedy because the BSP had found a violation of Section 54. A Philippine Postal Corporation certification shows the RTC order was served on PVB on October 17, 2007.
Almost a year later PVB moved to admit a motion for reconsideration asserting it received the dismissal only on September 3, 2008; the RTC accepted that motion, required petitioners to file an answer, and—after further proceedings—issued a Decision dated June 15, 2009 granting PVB’s petition for declaratory relief and declaring that PVB’s collection of the CRF was not insurance and that Monetary Board Resolution No. 1139 was null and void. Petitioners’ motion for reconsideration was denied by the RTC on August 25, 2009.
Petitioners brought a Petition for Review on Certiorari under Rule 45 to the Supreme Court, urging that (1) the Monetary Board’s resolution...(Pro-only)
Issues:
- Is a petition for declaratory relief a proper vehicle to challenge Monetary Board Resolution No. 1139 issued by the BSP Monetary Board?
- Had the RTC’s Order dated September 24, 2007 dismissing PVB’s petition become final and executory, and was it proper for the RTC to entertain PVB’s motion for reconsideration nearly a year after service?
- Did the Court decide whether PVB’s CRF scheme constituted the insurance business in violation of Section 54, R.A. No. 8791, and did the Monetary Board...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)