Case Digest (G.R. No. 155336)
Facts:
In Republic of the Philippines v. Security Credit and Acceptance Corporation, G.R. No. L-20583 (January 23, 1967), the Solicitor General filed an original quo warranto petition in the Supreme Court to dissolve Security Credit and Acceptance Corporation (SCAC) and oust its directors and officers—Rosendo T. Resuello (President), Pablo Tanjutco, Arturo Soriano, Ruben Beltran, Bienvenido V. Zapa, Pilar G. Resuello, Ricardo D. Balatbat, Jose R. Sebastian, and Vito Tanjutco Jr.—for conducting banking operations without a certificate of authority as required by the General Banking Act (Republic Act No. 337). SCAC’s Articles of Incorporation were registered with the SEC on March 27, 1961, and its by-laws filed on April 5, 1961. On October 11, 1961, the Legal Counsel of the Central Bank opined that SCAC was a “banking institution” under RA 337; this opinion was upheld on reconsideration. The SEC declined to register SCAC’s securities pending compliance with RA 337. Pursuant to Search WarCase Digest (G.R. No. 155336)
Facts:
- Parties and Corporate Organization
- Security Credit and Acceptance Corporation (SCAC) registered its Articles of Incorporation on March 27, 1961, and adopted by-laws on April 5, 1961.
- Named officers and directors (per petition): Rosendo T. Resuello (President & Chairman), Pablo Tanjutco (Director), Arturo Soriano (Director), Ruben Beltran (Director), Bienvenido V. Zapa (Vice-President & Director), Pilar G. Resuello (Secretary-Treasurer & Director), Ricardo D. Balatbat (Auditor & Director), Jose R. Sebastian (Legal Counsel & Director), Vito Tanjutco Jr. (Personnel Manager & Director).
- Administrative Inquiries and Opinions
- Oct. 11, 1961: Central Bank legal counsel opined SCAC is a banking institution under Republic Act No. 337; reconsideration sought Jan. 15, 1962 and denied March 16, 1962.
- March 9, 1961: SCAC applied to the SEC for securities registration; SEC referred application to the Central Bank, which advised compliance with the General Banking Act on Dec. 5, 1961.
- Investigation, Search and Seizure
- May 18, 1962: Manila Municipal Court issued Search Warrant No. A-1019; CB intelligence and MPD officers seized SCAC’s business records.
- Sep. 10, 1962: CB Intelligence Division memorandum found SCAC (a) soliciting and accepting deposits, (b) making loans, (c) exceeding charter powers, (d) unregistered securities.
- Aug. 28, 1962: Superintendent of Banks’ memorandum confirmed regular deposit-taking and lending; recommended that SCAC be declared an unauthorized banking institution and face quo warranto.
- Sep. 14, 1962: Monetary Board Resolution No. 1095 declared SCAC’s operations as unauthorized banking under Sections 2 and 6 of RA 337.
- Corporate Operations and Financial Growth
- Mar. 27, 1961–May 18, 1962: 74 branches opened; 59,463 savings accounts with total deposits of ₱1,689,136.74.
- Capital stock increased from ₱500,000 to ₱3,000,000 within one year; as of Dec. 31, 1961, reported assets ₱1,273,265.98 and loss ₱96,685.29.
- Quo Warranto Proceedings
- Dec. 6, 1962: Solicitor General filed quo warranto for SCAC’s dissolution, sought preliminary injunction and receiver.
- Aug. 20, 1963: Supreme Court appointed Central Bank Superintendent of Banks as receiver pendente lite; he assumed duties Sept. 16, 1963.
- SCAC’s answer admitted facts but challenged directors’ identity, validity of CB/SEC opinions, and the search warrant; raised affirmative defenses re: board changes, pending conversion to a mortgage bank, and Civil Case No. 52342 (declaratory relief, injunction, receiver appointment).
Issues:
- Whether SCAC’s acceptance of public deposits and lending activities constitute “banking functions” under Republic Act No. 337.
- Whether SCAC violated Sections 2 and 6 of the General Banking Act by engaging in unauthorized banking.
- Whether the willful and repeated unauthorized banking justifies dissolution of SCAC in a quo warranto proceeding.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)