Case Summary (G.R. No. 168859)
Mortgage Settlement and Discrepancy
UCPB foreclosed certain properties, yielding ₱723.6 million applied to principal per BSP Circular No. 239, leaving ₱192.2 million unpaid. On 8 May 2001, EGI transferred additional properties valued at ₱166.1 million by dacion en pago. EGI discovered UCPB internal memo (22 February 2001) showing two debt figures: “ACTUAL” ₱146.8 million versus “DISCLOSED” ₱226.9 million, the latter being the amount demanded. EGI demanded refund of an alleged ₱83 million overpayment and return of title certificates. UCPB explained difference as non-accrual of non-performing loan interest per BSP rules (Circular No. 202).
Administrative Complaint and BSP Letter-Decision
On 5 November 2002 EGI filed with the BSP an administrative complaint against UCPB and its officers for violation of Sections 36 and 37, Article IV of RA 7653 (criminal and administrative sanctions for banking law violations) and Section 55.1(a) of RA 8791 (false entries). By letter-decision (16 September 2003), the Monetary Board dismissed the complaint, relying on evaluations that UCPB’s interest computation, foreclosure pricing, and loan documentation complied with BSP rules. Motions for reconsideration were denied (8 December 2003).
Court of Appeals Proceedings
EGI filed a Rule 43 Petition for Review with the Court of Appeals (CA-G.R. SP No. 81385) challenging the BSP dismissal. On 14 October 2004 the CA set aside the BSP letter-decision and remanded for further proceedings, finding summary dismissal without full inquiry. Motions for reconsideration by UCPB et al. and by EGI were denied (7 July 2005).
Issues on Appellate Jurisdiction
UCPB et al. argued that the CA lacked appellate jurisdiction over BSP Monetary Board decisions, as BSP is not among enumerated quasi-judicial bodies in Rule 43 or Batas Pambansa 129. They also contended the BSP did not summarily dismiss the complaint and its factual findings deserved finality absent grave abuse.
Jurisdictional Analysis and Affirmation
The Supreme Court held that the BSP Monetary Board is a quasi-judicial body entitled to CA appellate review under Section 9(3), Batas Pambansa 129 and Rule 43’s broad reference to quasi-judicial agencies. The enumeration of specific agencies is non-exclusive. BSP Circular No. 477 series 2005 expressly allows Rule 43 appeals from Monetary Board resolutions in administrative cases. Salud v. Central Bank is distinguishable as it involved insolvency orders under the old Central Bank Act, which were final unless arbitrary. Under RA 7653, BSP orders are subject to judicial review by certiorari for excess or grave abuse, and Rule 43 provides the proper appeal route to the CA.
BSP’s Summary Dismissal Critique
The Court agreed with the CA that the BSP’s letter-decision was conclusory and failed to address core issues: the dual debt figures and non-disclosure; foreclosure below MOA-agreed values; and suspicious loan origination practices. The BSP did not analyze the MOA, its amendments, or the internal memo. Its four‐point rationale lacked evidentiary underpinning and ignored EGI’s primary evidence, constituting a summary dismissal unworthy of final disposition.
Application of Substantial Evidence Standard
Administrative findings unsupported by
...continue readingCase Syllabus (G.R. No. 168859)
Facts of the Case
- From 1995 to 1998, E. Ganzon, Inc. (EGI) obtained credit facilities from United Coconut Planters Bank (UCPB), secured by EGI’s condominium unit inventories in Rufino Plaza, Manila.
- Periodic amortizations were initially paid until the 1998 Asian economic crisis led EGI into default, prompting UCPB to declare all obligations due and demandable by letters dated 2 October 1998 and 16 February 1999.
- UCPB ceased sending monthly statements, and in late 1998 EGI and UCPB executed a Memorandum of Agreement (MOA) fixing outstanding obligations at ₱915,838,822.50.
- An amendment on 18 January 2000 adjusted the valuation of properties to ₱904,491,052.00, and provided for transfer by foreclosure, dacion en pago, holding company creation, or other alternatives.
- UCPB foreclosed some units, yielding proceeds of ₱723,592,000.00, applied to principal under BSP Circular No. 239, leaving a balance of ₱192,246,822.50.
- On 8 May 2001, EGI transferred additional units valued at ₱166,127,369.50 by dacion en pago but discovered in UCPB’s Internal Memorandum (22 Feb 2001) a discrepancy between the “DISCLOSED TO EGI” balance (₱226,967,194.80) and the “ACTUAL” balance (₱146,849,412.58).
- EGI demanded refund of overpayment (~₱83 million), return of titles, and damages for delayed release; UCPB explained the figures based on non-accrual of interest on non-performing loans under BSP Circular No. 202 and Manual of Regulations for Banks.
Administrative Complaint Before the BSP Monetary Board
- On 5 November 2002, EGI filed an administrative complaint with the BSP Monetary Board alleging:
- Violations of Sections 36 and 37, Article IV of Republic Act No. 7653 (The New Central Bank Act).
- Violation of Section 55.1(a) of Republic Act No. 8791 (The General Banking Law of 2000).
- Commission of irregularities and unsafe or unsound banking practices by UCPB and its officers.
BSP Monetary Board Letter-Decision and Resolution
- In a letter-decision dated 16 September 2003, the Monetary Board, upon evaluations by its Supervision and Examination Department I and Office of the General Counsel, dismissed EGI’s complaint, concluding that:
- UCPB’s interest computations complied with BSP rules on non-performing loans.
- Foreclosure bid prices need not equal fair market value.
- Documentary evidence disproved a fabricated ₱145,163,000 loan.
- No finding of double charging or padded transaction costs.
- On 8 December 2003, the Monetary Board denied EGI’s motions for reconsideration for lack of new evidence.