Title
Banco Filipino Savings and Mortgage Bank vs. Bangko Sentral ng Pilipinas
Case
G.R. No. 200678
Decision Date
Jun 4, 2018
Banco Filipino, under receivership, sued BSP for damages without PDIC's authorization. SC ruled it lacked capacity to sue independently and upheld CA's jurisdiction over quasi-judicial agencies, dismissing the case.
closed bank
receivership
dismissal of case
A

Case Summary (G.R. No. 200678)

Factual Background

Banco Filipino Savings and Mortgage Bank was ordered closed and placed under receivership in earlier proceedings that culminated in a 1991 Supreme Court decision directing reorganization and resumption of business under Central Bank supervision. Thereafter Banco Filipino sought to resume operations, submitted successive business plans, and negotiated with Bangko Sentral ng Pilipinas and the Monetary Board for financial assistance and regulatory relief including a P25,000,000,000 financial assistance package subject to terms and conditions. One condition required withdrawal and dismissal with prejudice of all pending cases filed by Banco Filipino against Bangko Sentral and the Monetary Board and execution of quitclaims by its principal stockholders and officers. Banco Filipino resisted that condition and filed a Petition for Certiorari and Mandamus with prayer for injunctive relief in the Regional Trial Court, Makati City, Branch 66, docketed as Civil Case No. 10-1042, assailing the alleged coercive inclusion of the withdrawal condition in Monetary Board Resolution No. 1668.

Trial Court Proceedings

The trial court issued a temporary restraining order on October 28, 2010 enjoining respondents from acts calculated to coerce Banco Filipino into dropping suits or waiving future claims and set the petition for preliminary mandatory injunction. Respondents filed a Motion to Dismiss ad cautelam and thereafter filed special civil actions in the Court of Appeals contesting the trial court's jurisdiction. The trial court denied respondents’ motion to dismiss on November 17, 2010 and later issued a writ of preliminary injunction on November 18, 2010.

Proceedings in the Court of Appeals

Respondents brought petitions for certiorari in the Court of Appeals challenging the trial court’s orders. The Court of Appeals granted a writ of preliminary injunction on February 14, 2011 enjoining the trial court from further proceedings pending resolution of the petitions. The Court of Appeals denied petitioner’s motion for consolidation and, in a July 28, 2011 Decision in CA‑G.R. SP No. 116905, annulled the trial court’s November 17, 2010 Order and dismissed Civil Case No. 10-1042 for lack of jurisdiction. The Court of Appeals held that special civil actions against quasi-judicial agencies are cognizable only by the Court of Appeals and found that the trial court had gravely abused its discretion in asserting jurisdiction. Petitioner’s motion for reconsideration was denied by the Court of Appeals in a February 16, 2012 Resolution.

Issues Presented to the Supreme Court

The parties framed multiple issues, but the Court identified three principal questions: (1) whether trial courts have jurisdiction to entertain petitions for certiorari against acts and omissions of the Monetary Board; (2) whether respondents should have filed a motion for reconsideration of the trial court’s denial of their motion to dismiss before seeking relief in the Court of Appeals; and (3) whether the trial court validly acquired jurisdiction over respondents. The Court treated as threshold the question whether petitioner, as a closed bank under receivership, had the legal capacity to file the Petition for Review without joining its statutory receiver, the Philippine Deposit Insurance Corporation (PDIC).

Petitioner’s Contentions

Banco Filipino maintained that it had authority to file the Petition because the Court of Appeals in CA‑G.R. SP No. 118599 had issued a January 27, 2012 Decision finding its closure and receivership illegal, a decision which petitioner argued permitted it to sue without PDIC’s authorization. Petitioner argued that nothing in the PDIC Charter or Republic Act No. 7653 precluded its Board of Directors from suing on its behalf and alleged a conflict of interest in requiring PDIC’s consent because PDIC was appointed receiver by the Monetary Board. Petitioner further contended that the trial court acquired jurisdiction because respondents voluntarily appeared in the preliminary hearing and received copies of the petition, and it invoked a Court of Appeals precedent, Merchants Rural Bank of Talavera v. Monetary Board, to support trial court jurisdiction over such special civil actions.

Respondents’ Contentions

Respondents asserted that the Petition must be dismissed because Banco Filipino had been placed under receivership and, under Republic Act No. 7653 and the PDIC Charter, only the receiver may sue or be sued on behalf of a closed bank. They argued that the verification and certification of non‑forum shopping signed by petitioner’s Executive Committee was ineffective because the powers of the bank’s Board and officers were suspended upon takeover by PDIC. Respondents further maintained that the Court of Appeals correctly ruled that the Regional Trial Court lacked jurisdiction over petitions challenging acts or omissions of the Monetary Board, and that their voluntary appearance in the trial court was limited and did not constitute waiver of jurisdictional objections. Respondents defended their direct resort to the Court of Appeals without first filing a motion for reconsideration before the trial court on the ground that the trial court lacked jurisdiction and that exceptional circumstances excused the usual requirement.

Legal Issue Addressed First: Capacity to Sue of a Closed Bank Under Receivership

The Court reviewed statutory framework and authorities and held that a bank ordered closed and placed under receivership may sue and be sued only through its receiver, the Philippine Deposit Insurance Corporation. The Court examined Section 30 of Republic Act No. 7653, the old Central Bank Act provisions, and Rule 59, Section 6 of the Rules of Court, and concluded that the receiver’s powers to take charge of assets and liabilities, to institute or defend actions in the name of the institution, and to exercise general powers of a receiver establish a fiduciary relationship requiring PDIC’s participation. The Court relied on precedent such as Hernandez v. Rural Bank of Lucena, Manalo v. Court of Appeals, and Balayan Bay Rural Bank v. National Livelihood Development Corporation to state that the receiver prosecutes or defends actions as representative party while the bank remains the real party in interest.

Application of Receivership Doctrine to Banco Filipino’s Petition

The Court found that petitioner could not legitimately rely on a non‑final Court of Appeals January 27, 2012 Decision to assert it was no longer a closed bank when it filed the Petition on April 10, 2012, since that decision was subject to timely motion for reconsideration and was later reversed on November 21, 2012. The Court concluded that petitioner did not attempt to obtain PDIC’s authorization to file suit and that, in any event, the PDIC would have had an essential role in evaluating the Business Plan because PDIC must conserve assets for depositors and creditors. The Court further held that petitioner’s verification and certification of non‑forum shopping, signed by its Executive Vice Presidents pursuant to a purported Board authorization, was invalid once PDIC took over because Section 10(b) of the PDIC Charter suspends the powers of the directors and officers of the closed bank. The Court treated the defective verification as rendering the Petition an unsigned and unauthorized pleading and therefore void for lack of capacity to sue.

Jurisdictional Rule on Special Civil Actions Against Quasi‑Judicial Agencies

Separately and alternatively, the Court addressed the jurisdictional rule that petitions for certiorari involving acts or omissions of quasi‑judicial agencies are cognizable only by the Court of Appeals, citing Rule 65, Section 4 and relevant precedents including United Coconut Planters Bank v. E. Ganzon, Inc. and Vivas v. Monetary Board. The Court observed that the Monetary Board is a quasi‑judicial agency when it exercises adjudicatory powers and that Rule 65 expressly channels such petitions to the Court of Appeals. The Court held that the Court of Appeals therefore did not err in dismissing the action before the Regional Trial Court for lack of jurisdiction.

Motion for Reconsideration Requirement and Exceptions

The Court discussed the doctrine that a motion for reconsideration is generally a condition precedent to filing a petition for certiorari, as articulated in Estate of Salvador Serra Serra and related labor jurisprudence, but recognized exceptions where interlocutory relief may proceed without such motion. The Court concluded that respondents were excused from the motion for reconsideration requirement because they properly raised the trial court’s lack of jurisdiction before the Court of Appeals, an issue that rendered the trial court’s orders a patent nullity for want of jurisdiction and thus justified immediate resort to the a

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