Title
Bangko Sentral ng Pilipinas vs. Banco Filipino Savings and Mortgage Bank
Case
G.R. No. 196580
Decision Date
Jun 10, 2020
Banco Filipino challenged Central Bank's conservatorship, closure, and liquidation orders, but SC ruled against due to improper remedy, defective verification, and forum-shopping issues.
civil actions
closure and liquidation
legal battle

Case Summary (G.R. No. 196580)

Factual Background

Banco Filipino initiated three separate civil actions contesting the conservatorship, closure and liquidation decreed by the Monetary Board of the then Central Bank: Civil Case No. 8108 (filed August 6, 1984), Civil Case No. 9675 (filed February 2, 1985) and Civil Case No. 10183 (filed June 3, 1985). The Court consolidated related proceedings in G.R. No. 70054 with the RTC, Branch 136. Banco Filipino later filed an Amended/Supplemental Complaint in 1995 claiming damages and substituting the Central Bank Board of Liquidators (CB-BOL) for the Central Bank, and on September 18, 2003 it filed a Second Amended/Supplemental Complaint that sought to implead BSP-MB as additional defendants.

Trial Court Proceedings

The RTC granted admission of the 2003 Second Amended/Supplemental Complaint over the objections of CB-BOL by Order of January 27, 2004. BSP-MB appeared specially and moved to dismiss the Second Amended/Supplemental Complaint on grounds including prescription, waiver, and defective service. On June 30, 2006, the RTC dismissed the Second Amended/Supplemental Complaint with prejudice as to BSP-MB on the grounds of prescription, estoppel and the separate personality of the Central Bank and BSP. Banco Filipino’s Motion for Reconsideration was denied on September 20, 2006. The RTC disapproved Banco Filipino’s Notice of Appeal by Order dated December 4, 2006 and again by the Order of March 21, 2007.

Procedural Posture in the Courts of Appeal

Two appeals to the CA produced different outcomes. In CA-G.R. SP No. 86697, the CA (17th Division) dated January 27, 2006 affirmed the RTC’s admission of the Second Amended/Supplemental Complaint and held that BSP-MB may be impleaded as successor-in-interest under R.A. No. 7653, a decision later affirmed by this Court in a December 8, 2008 Resolution then subject to a pending motion for reconsideration. In CA-G.R. SP No. 98734, the CA (Special 3rd Division) entertained Banco Filipino’s petition for certiorari and mandamus and, in a Decision dated November 25, 2010, reversed and set aside the RTC Orders of December 4, 2006 and March 21, 2007, concluding that the RTC erred in disapproving Banco Filipino’s Notice of Appeal and invoking the doctrine of non-interference to avoid conflict with the earlier CA ruling.

Issues Presented

The petition before this Court presented principally whether the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it disapproved Banco Filipino’s Notice of Appeal from the dismissal of the Second Amended/Supplemental Complaint as to BSP-MB; whether the proper remedy was appeal or a special civil action for certiorari under Rule 65 given Section 1(g), Rule 41; whether a record on appeal was required under Section 2(a), Rule 41; and whether Banco Filipino’s petition to the CA was dismissible for defective verification and certification against forum-shopping.

Parties’ Contentions

BSP-MB argued that the RTC correctly disapproved the Notice of Appeal because Section 1(f) and (g), Rule 41, bar appeals from orders disposing of claims against one or more among several parties while the main case remains pending, such that the proper remedy is certiorari under Rule 65. BSP-MB further contended that, even if appeal were proper, Banco Filipino failed to perfect an appeal by neglecting to file a record on appeal where required. BSP-MB also asserted that Banco Filipino’s petition before the CA was fatally defective because the verification and certification against forum-shopping were signed by persons without demonstrated authority from the board of directors. Banco Filipino maintained that the dismissal as to BSP-MB was appealable and that its remedial steps sufficed.

Ruling of the Supreme Court

The Court granted the petition of BSP-MB, reversed and set aside the CA Decision dated November 25, 2010 and the April 1, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 98734, and held that the CA (Special 3rd Division) gravely erred in concluding that the RTC abused its discretion in disapproving Banco Filipino’s Notice of Appeal. The Court further held that the CA erred in applying the doctrine of non-interference in that instance. The Court also found that Banco Filipino failed to show substantial compliance with the requirements for verification and certification against forum-shopping, and that the appellate court should have dismissed the petition on that ground.

Legal Basis and Reasoning

The Court identified Section 1, Rule 41, as the controlling rule on appeals from RTC decisions and emphasized exception (g) which precludes appeal from a judgment or final order for or against one or more of several parties while the main case remains pending, unless the trial court allows an appeal therefrom. The Court applied its own precedent that where an order dismisses the action as to one among several defendants while the case against others continues, the proper remedy is a petition for certiorari under Rule 65, citing Jan-Dec Construction Corp. v. Court of Appeals and other precedents. The Court explained that the RTC’s June 30, 2006 Order terminating proceedings against BSP-MB fell within exception (g) and that Banco Filipino’s Notice of Appeal was therefore an improper remedy. The Court rejected BSP-MB’s contention that a record on appeal was required, invoking Section 2(a), Rule 41, which limits records on appeal to special proceedings and specified categories of multiple appeals; the consolidated cases did not fall within those categories. On the doctrine of non-interference, the Court clarified that the CA (Special 3rd Division) misapplied the doctrine in concluding that the RTC’s refusal to allow a notice of appeal contradicted the CA (17th Division) decision admitting the Second Amended/Supplemental Complaint. The Court held there was no inconsistency because the admission preceded and was properly subject to adjudication on the merits, and the dismissal as to BSP-MB did not disturb the CA (17th Division)’s ruling. Finally, the Court addressed verif

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms