Case Summary (G.R. No. 264919-21)
Petitioner and Respondents
- Petitioner: Manuel M. Serrano.
- Respondents: Central Bank of the Philippines; Overseas Bank of Manila; OBM stockholders as listed above.
Key Dates
- October 13 & December 12, 1966: Serrano makes two one-year time deposits (totaling ₱150,000) with OBM at 6% interest.
- March 6, 1967: Concepcion Maneja (wife of Felixberto Serrano) places a ₱200,000 time deposit at 6½% with OBM.
- August 31, 1968: Maneja assigns her ₱200,000 deposit to Manuel Serrano.
- December 1967–March 1968: Multiple demands for encashment go unhonored by OBM.
- October 4, 1968: Supreme Court denies Serrano’s motion to intervene in G.R. No. L-29352.
- October 4, 1971 (final March 3, 1972): Decision in G.R. No. L-29352 annuls Central Bank resolutions against OBM.
- February 14, 1980: Present petition dismissed by the Supreme Court.
Applicable Law
- 1973 Philippine Constitution (in force at the time of decision)
- Republic Act No. 265, Section 29 (liquidation proceedings)
- Civil Code of the Philippines, Article 1980 (nature of deposits as loans)
- Central Bank supervisory regulations
Petition for Mandamus and Prohibition
Serrano seeks:
- Joint and solidary liability of Central Bank and OBM, plus stockholders, for ₱350,000 with interest, representing unreturned time deposits.
- A writ commanding respondents to execute documents creating a trust over certain OBM assets in favor of Serrano and other depositors.
- A permanent prohibition against any acts validating OBM’s prior mortgages or assignments of assets now claimed as collateral by Central Bank.
Factual Background
Serrano’s two time deposits and Maneja’s deposit (later assigned) matured in 1967. Despite repeated demands between December 1967 and March 1968, OBM refused payment. Serrano claims these funds were misused by OBM and that Central Bank’s inadequate supervision allowed the bank’s insolvency to prejudice depositors.
Central Bank’s Contentions
- Its mandate is general banking supervision, not continuous, minute oversight of every bank transaction.
- As of March 12, 1965, the Monetary Board restricted OBM’s operations due to reserve deficiencies; OBM never granted new loans but was not formally declared insolvent until later.
- It is not a guarantor of any bank’s solvency and has no duty to advertise remedies imposed on delinquent banks to avoid public panic.
- No constructive trust arose over assets pledged by OBM, as there was no insolvency at the time the collaterals were given.
Procedural History in Related Litigation
In G.R. No. L-29352 (Emerito M. Ramos, et al. v. Central Bank), OBM successfully prevented Central Bank from suspending its operations and ordering liquidation. Serrano’s motion to intervene in that case was denied on grounds that depositors’ claims belong before the Court of First Instance.
Court’s Analysis on Proper Remedy and Jurisdiction
- Claims for recovery of time deposits with interest and alleged damages for supervisory negligence constitute ordinary creditor actions, not suitable for original petitions for mandamus or prohibition in the Supreme Court. Those remedies require a clear, ministerial duty breached by Central Bank and no adequate alternative remedy.
- Serrano is not the proper party to challenge supervisory acts of Central Ban
Case Syllabus (G.R. No. 264919-21)
Facts
- On October 13 and December 12, 1966, Manuel M. Serrano deposited a total of ₱150,000 in one-year time deposits at 6% interest with Overseas Bank of Manila.
- On March 6, 1967, Concepcion Maneja placed a one-year time deposit of ₱200,000 at 6½% with Overseas Bank of Manila and, on August 31, 1968, assigned that deposit to Serrano.
- Despite repeated demands for payment between December 6, 1967 and March 4, 1968, the bank refused to honor the time deposit certificates.
- By Monetary Board Resolution No. 322 (March 12, 1965), Central Bank had restricted Overseas Bank’s operations—prohibiting new loans and investments—due to chronic reserve deficiencies; this restriction remained in force through 1968.
- Central Bank acknowledged its supervisory role over banks but denied any duty to guarantee bank solvency or to exercise hyper-vigilant supervision akin to watching every transaction.
Procedural History
- Serrano filed an original petition in the Supreme Court for mandamus and prohibition (with a preliminary injunction) to compel Central Bank and Overseas Bank jointly to pay ₱350,000 plus interest and to convert certain collaterals into a trust fund for depositors.
- The Court denied the ex parte application for preliminary injunction.
- Serrano sought to intervene in G.R. No. L-29352 (Emerito M. Ramos, et al. vs. Central Bank of the Philippines), which involved Overseas Bank’s challenge to Central Bank’s resolutions suspending its operations and ordering its liquidation; the Supreme Court denied his intervention on October 4, 1968.
- In G.R. No. L-29352 (decision of October 4, 1971, final March 3, 1972), the Court annulled Central Bank’s resolutions suspending and liquidating Overseas Bank and d