P
PHHIILLIIPPPPIINNE E DEDEPPOOSSIIT T IINNSSUURARANNCCE E CCOORRPPOORARATTIIOONN,, petitioner, vs.petitioner, vs. THE THE HONORABLE COURT OF APPEALS and JOSE ABAD, LEONOR ABAD, SABINA HONORABLE COURT OF APPEALS and JOSE ABAD, LEONOR ABAD, SABINA ABAD,
ABAD, JOSEPJOSEPHINE HINE JOSIE JOSIE BEABEATA ATA ABAD-ORLIBAD-ORLINA, NA, CECILCECILIA ABAD, IA ABAD, PIO PIO ABAABAD,D, DOMINIC ABAD, TEODORA ABAD,
DOMINIC ABAD, TEODORA ABAD, respondents.respondents. G.R. No. 126911. A!"# $%, 2%%$G.R. No. 126911. A!"# $%, 2%%$ FACTS&
FACTS&
On May 22, 1987, a Friday, the Monetary Board (MB) of the Central Bank of the On May 22, 1987, a Friday, the Monetary Board (MB) of the Central Bank of the hilippines, no! Ban"ko #entral n" ilipinas, iss$ed %esol$tion &'& prohiitin" Manila hilippines, no! Ban"ko #entral n" ilipinas, iss$ed %esol$tion &'& prohiitin" Manila Bankin" Corporation to do $siness in the hilippines, and plain" its assets and affairs Bankin" Corporation to do $siness in the hilippines, and plain" its assets and affairs $nder reeivership. *he %esol$tion, ho!ever, !as not served on MBC $ntil *$esday the $nder reeivership. *he %esol$tion, ho!ever, !as not served on MBC $ntil *$esday the follo!in" !eek, or on May 2+, 1987, !hen the desi"nated %eeiver took over.
follo!in" !eek, or on May 2+, 1987, !hen the desi"nated %eeiver took over.
On
On MaMay y 2&2&, , 19198787, , ththe e nenet t aanknkinin" " daday y fofollllo!o!inin" " ththe e isiss$s$anane e of of ththe e MBMB %esol$t
%esol$tion, respondent -ose ion, respondent -ose ad !as at ad !as at the MBC at the MBC at 9/'' a.0. for 9/'' a.0. for the p$rpose of prethe p$rpose of pre ter0
ter0inatinatin" in" the the 71 71 ololden den *i*i0e 0e 3ep3epositosits s and and redredeposepositinitin" " the the f$nd f$nd reprrepreseesentednted therey into 28 ne! *3s in deno0inations of
therey into 28 ne! *3s in deno0inations of 4','''.'' or less $nder the na0es of 4','''.'' or less $nder the na0es of herein respondents individ$ally or 5ointly !ith eah other. Of the 28 ne! *3s, -ose herein respondents individ$ally or 5ointly !ith eah other. Of the 28 ne! *3s, -ose ad
ad preter0ipreter0inated nated 8 8 and and !ithdr!ithdre! e! the the val$e val$e thereof thereof in in the the total total a0o$nta0o$nt of 62','''.''.
of 62','''.''.
%espondents thereafter filed their lai0s !ith the 3C for the pay0ent of the %espondents thereafter filed their lai0s !ith the 3C for the pay0ent of the re0ainin" 2' ins$red *3s.
re0ainin" 2' ins$red *3s.
On Fer$ary 11, 1988, 3C paid respondents the val$e of 6 lai0s in the total On Fer$ary 11, 1988, 3C paid respondents the val$e of 6 lai0s in the total a0o$nt of 12','''.''. 3C, ho!ever, !ithheld pay0ent of the 17 re0ainin" lai0s a0o$nt of 12','''.''. 3C, ho!ever, !ithheld pay0ent of the 17 re0ainin" lai0s after ashin"ton #olid$0, 3ep$ty %eeiver of MBCloilo, s$0itted a report to the after ashin"ton #olid$0, 3ep$ty %eeiver of MBCloilo, s$0itted a report to the 3C tha
3C that t there !as 0assive onversion and there !as 0assive onversion and s$stit$s$stit$tion of tion of tr$st and tr$st and deposit ao$ntdeposit ao$ntss on May 2&, 1987 at MBCloilo.
on May 2&, 1987 at MBCloilo.
Be
Bea$a$se se of of ththe e rerepoport, rt, 33C C enentertertaitained ned seseriorio$s $s rereserservavatiotion n in in rereoo"ni"niiin"n" respondents *3s as deposit liailities of MBCloilo. *h$s, on $"$st 6', 1991, it filed respondents *3s as deposit liailities of MBCloilo. *h$s, on $"$st 6', 1991, it filed a petition for
a petition for delaradelaratory relief a"ainst respondents !ith the tory relief a"ainst respondents !ith the %e"iona%e"ional *rial Co$rt (%*C)l *rial Co$rt (%*C) of loilo City, for a 5$diial delaration deter0ination of the ins$raility of respondents of loilo City, for a 5$diial delaration deter0ination of the ins$raility of respondents *3s at MBCloilo.
*3s at MBCloilo.
n its 3eision of Fer$ary 22, 1994, Branh 6' of the loilo %*C delared the 2' n its 3eision of Fer$ary 22, 1994, Branh 6' of the loilo %*C delared the 2' *3s of respondents to e deposit liailities of MBC, hene, are liailities of 3C as *3s of respondents to e deposit liailities of MBC, hene, are liailities of 3C as stat$tory ins$rer.
On appeal, the Co$rt of ppeals, y the assailed 3eision of Otoer 21, 199+, affir0ed the trial o$rts: deision eept as to the a!ard of le"al interest !hih it deleted.
;ene, this petition.
CONTENTIONS OF THE PETITIONER&
3C is liale only for deposits reeived y a ank in the $s$al o$rse of $siness. MBC !as prohiited fro0 doin" f$rther $siness y MB %esol$tion &'& as of May 22, 1987, all transations s$se<$ent to s$h date !ere not done in the $s$al o$rse of $siness. nd that the transations that !as arried o$t d$rin" May 2& 1987 !ere so 0assive, irre"$lar, that s$h transations !ere not 0ade in the $s$al o$rse of $siness and therefore, 3C annot e 0ade liale for the *3s 0entioned.
etitioner f$rther posits that there !as no onsideration for the 2' *3s s$5et of respondents lai0.
etitioner theories that after MBC had eha$sted its ash and o$ld no lon"er s$stain f$rther !ithdra!al transations, it instead iss$ed ne! *3s as pay0ent for the preter0inated *3s of respondents to 0ake s$re that all the ne!lyiss$ed *3s have fae a0o$nts !hih are !ithin the stat$tory overa"e of deposit ins$rane.
etitioner onl$des that sine no ash !as "iven y respondents and none !as reeived y MBC !hen the ne! *3s !ere transated, there !as no onsideration therefor and, th$s, they !ere not validly transated in the $s$al o$rse of $siness and no liaility for deposit ins$rane !as reated.
ISSUE&
s Me0orand$0 iss$ed y the Monetary Board indin" $pon its iss$ane or is it $pon servie of the sa0e to the ank.
RULING&
hile the MB iss$ed %esol$tion &'& on May 22, 1987, a opy thereof !as served on MBC only on May 2+, 1987. MBC and its lients o$ld e "iven the enefit of the do$t that they !ere not a!are that the MB resol$tion had een passed, "iven the neessity of onfidentiality of plain" a ankin" instit$tion $nder reeivership.
*he evident i0pliation of the la!, therefore, is that the appoint0ent of a reeiver 0ay e 0ade y the Monetary Board !itho$t notie and hearin" $t its ation is s$5et to 5$diial in<$iry to ins$re the protetion of the ankin" instit$tion. #tated other!ise, d$e proess does not neessarily re<$ire a prior hearin"= a hearin" or an opport$nity to
e heard 0ay e subsequent to the los$re. One an 5$st i0a"ine the dire onse<$enes of a prior hearin"/ ank r$ns !o$ld e the order of the day, res$ltin" in pani and hysteria. n the proess, fort$nes 0ay e !iped o$t, and disill$sion0ent !ill r$n the "a0$t of the entire ankin" o00$nity.
Mere on5et$res that MBC had at$al kno!led"e of its i0pendin" los$re do not s$ffie. *he MB resol$tion o$ld not th$s have n$llified respondents transations !hih o$rred prior to May 2+, 1987.
*hat no at$al 0oney in ills and>or oins !as handed y respondents to MBC does not 0ean that the transations on the ne! *3s did not involve 0oney and that there !as no onsideration therefor. For the o$tstandin" alane of respondents 71 *3s in MBC prior to May 2+, 1987 in the a0o$nt of 1,11&,889.1& as earlier 0entioned !as redeposited y respondents $nder 28 ne! *3s. d0ittedly, MBC had 2,841,711.9' ash on hand 0ore than do$le the o$tstandin" alane of respondents 71 *3s at the start of the ankin" day on May 2&, 1987. #ine respondent -ose ad !as at MBC soon after it opened at 9/'' a.0. of that day, petitioner sho$ld not pres$0e that MBC had no ash to over the ne! *3s of respondents and onl$de that there !as no onsideration for said *3s.
etitioner havin" failed to overo0e the pres$0ption that the ordinary o$rse of $siness !as follo!ed, this Co$rt finds that the 28 ne! *3s !ere deposited in the $s$al o$rse of $siness of MBC.
PHILIPPINE DEPOSIT INSURANCE CORPORATION 'PDIC(, etitioner, vs. PHILIPPINE COUNTR)SIDE RURAL BAN*, INC., RURAL BAN* OF CARMEN 'CEBU(, INC., BAN* OF EAST ASIA 'MINGLANILLA, CEBU(, INC., and PILIPINO RURAL BAN* 'CEBU(, INC., %espondents. G.R. No. 1+6$ Jana!/ 2, 2%11
FACTS&
On May 2&, 2''&, the 3C Board adopted another resol$tion, %esol$tion ?o. 2''&'&'&+, approvin" the ond$t of an investi"ation on C%B ased on a Co0plaintffidavit filed y a orporate depositor, the hilippine #hool of @ntreprene$rship and Mana"e0ent.
On -$ne 6, 2''&, in aordane !ith the t!o 3C Board resol$tions, then 3C resident and Chief @e$tive Offier %iardo M. *an iss$ed the ?otie of nvesti"ation to the resident or *he ;i"hest %ankin" Offier of C%B.
n the o$rse of its investi"ation, C%B !as fo$nd to have "ranted loans to ertain individ$als, !hih !ere settled y !ay of dacion of properties. *hese properties, ho!ever, had already een previo$sly forelosed and onsolidated $nder the na0es of %B, B@ and %BC.
On -$ne 1&, 2''&, 3C iss$ed si0ilar noties of investi"ation to %B and B@. *he noties stated that the investi"ation !as to e ond$ted p$rs$ant to #etion 9 (1) of the 3C Charter and $pon a$thority of 3C Board %esol$tion ?o. 2''&'6 '62 a$thoriin" the t!elve (12) na0ed representatives of 3C to ond$t the investi"ation.*he notie of investi"ation !as served on %B the net day, -$ne 1+, 2''&.
%B and B@ ref$sed entry to their ank pre0ises and aess to their reords and do$0ents y the 3C nvesti"ation *ea0, $pon advie of their respetive o$nsels. On -$ne 1+ and 17, 2''&, tty. Aitoria . ?oel sent letters to the 3C infor0in" it of her le"al advie to C%B and B@ not to s$0it to 3C investi"ation on the "ro$nd that its investi"atory po!er p$rs$ant to #etion 9(1) of %.. ?o. 6&91, as a0ended, annot e differentiated fro0 the ea0ination po!ers aorded to 3C $nder #etion 8, para"raph 8 of the sa0e la!, $nder !hih, prior approval fro0 the Monetary Board is re<$ired.
On -$ne 17, 2''&, 3C eneral Co$nsel %o0eo M. Mendoa sent a reply to tty. ?oel statin" that 3C:s investi"ation po!er, as distin"$ished fro0 the
ea0ination po!er of the 3C $nder #etion 8 of the sa0e la!, does not need prior approval of the Monetary Board. 3C then $r"ed %B and B@ not to i0pede the ond$t of 3C:s investi"ation as the sa0e onstit$tes a violation of the 3C Charter for !hih %B and B@ 0ay e held ri0inally and>or ad0inistratively liale.
*he Banks, thro$"h o$nsel, so$"ht f$rther larifiation fro0 3C on its so$re of a$thority to ond$t the i0pendin" investi"ations and re<$ested that 3C refrain fro0 proeedin" !ith the investi"ations. *he Banks !rote to the Monetary Board re<$estin" a larifiation on the para0eters of 3C:s po!er of investi"ation>ea0ination over the Banks and for an iss$ane of a diretive to 3C not to p$rs$e the investi"ations pendin" the re<$ested larifiation.
On -$ne 28, 2''&, %B and B@ a"ain reeived letters fro0 3C, !hih appeared to e final de0ands on the0 to allo! its investi"ation. *he 3C eneral Co$nsel reiterates its position that prior Monetary Board approval !as not a pre re<$isite to 3C:s eerise of its investi"ative po!er.
*he Banks then filed a Petition for Declaratory Relief with a Prayer for the Issuance of a TRO and/or Writ of Preliminary Injunction (RTC Petition efore the %e"ional *rial Co$rt of Makati. n the %*C etition, the Banks prayed for a 5$d"0ent interpretin" #etion 9(1) of the 3C Charter, as a0ended, to re<$ire prior Monetary Board approval efore 3C o$ld eerise its investi"ation>ea0ination po!er over the Banks.
*he Banks !ithdre! their appliation for a te0porary restrainin" order (TRO). *h$s, the Banks instit$ted a petition for in5$ntion !ith appliation for *%O and>or reli0inary n5$ntion (CManila petition) efore the Co$rt of ppealsManila.
On Marh 14, 2''+, the Banks filed their Petition for Injunction with Prayer for Preliminary Injunction (C!"Cebu Petition !ith the Co$rt of ppealsCe$ (C!"Cebu.
On Marh 1&, 2''+, the CCe$ iss$ed a resol$tion "rantin" the Bank:s appliation for a *%O. *his en5oined the 3C, its representatives or a"ents or any other persons or a"eny assistin" the0 or atin" for and in their ehalf fro0 ond$tin" ea0inations>investi"ations on the Banks: head and ranh offies !itho$t se$rin" the re<$isite approval fro0 the Monetary Board of B#.
On #epte0er 18, 2''+, after oth parties had s$0itted their respetive 0e0oranda, the CCe$ rendered a deision "rantin" the !rit of preli0inary in5$tion.
3C 0oved for reonsideration $t it !as denied in a resol$tion dated -an$ary 2&, 2''7.
;ene, this petition. ISSUES&
hether prior approval of the Monetary Board of the Ban"ko #entral n" ilipinas is neessary efore the 3C 0ay ond$t an investi"ation of respondent anks.
hether the po!er of the 3C to ond$t investi"ation the sa0e as its po!er of ea0ination.
RULING&
*he Co$rt is of the vie! that the Monetary Board approval is not re<$ired for 3C to ond$t an investi"ation on the Banks.
#etion 9(1) of the 3C Charter provides that the 3C Board shall have the po!er to/
(1) *he investi"ators appointed y the Board of 3iretors shall have the po!er on ehalf of the Corporation to ond$t investi"ations on fra$ds, irre"$larities and ano0alies o00itted in anks, ased on reports of ea0ination ond$ted y the Corporation and #an$%o &entral n$ Pili'inas or o0plaints fro0 depositors or fro0 other "overn0ent a"eny. @ah s$h investi"ator shall have the po!er to ad0inister oaths, and to ea0ine and take and preserve the testi0ony of any person relatin" to the s$5et of investi"ation. (!s added by R! )*+,- ., !u$ust ,++
s stated aove, the harter e0po!ers the 3C to ond$t an investi"ation of a ank and to appoint ea0iners !ho shall have the po!er to ea0ine any ins$red ank. #$h investi"ators are a$thoried to ond$t investi"ations on fra$ds, irre"$larities and ano0alies o00itted in anks, ased on an ea0ination ond$ted y the 3C and the B# or on o0plaints fro0 depositors or fro0 other "overn0ent a"enies.
*he distintion et!een the po!er to investi"ate and the po!er to ea0ine is e0phasied y the eistene of t!o separate sets of r$les "overnin" the proed$re in the ond$t of investi"ation and ea0ination. %e"$latory ss$ane (RI ?o. 2''&'2 or the 3C Rules on 0act"0indin$ In1esti$ation of 0raud- Irre$ularities and !nomalies Committed in #an%s overs the proed$ral re<$ire0ents of the eerise of the 3C:s
po!er of investi"ation. On the other hand, % ?o. 2''9'& sets forth the "$idelines for the ond$t of the po!er of ea0ination.
*he definitions provided $nder the t!o afore0entioned re"$latory iss$anes el$idate on the distintion et!een the po!er of ea0ination and the po!er of investi"ation. #etion 2 of % ?o. 2''&'2 states that its overa"e shall e appliale to all fatfindin" investi"ations on fra$d, irre"$larities and>or ano0alies o00itted in anks that are ond$ted y 3C ased on/ aD o0plaints fro0 depositors or other "overn0ent a"enies= and>or D final reports of ea0inations of anks ond$ted y the Ban"ko #entral n" ilipinas and>or 3C.
*he sa0e iss$ane states that the Final %eport of @a0ination is one of the three prere<$isites to the ond$t of an investi"ation, in addition to the a$thoriation of the 3C Board and a o0plaint. -$taposin" this provision !ith #etion 9(1) of the 3C Charter, sine an ea0ination is epliitly 0ade the asis of a fatfindin" ea0ination, then learly ea0ination and investi"ation are t!o different proeedin"s. t !o$ld ovio$sly defy lo"i to 0ake the res$lt of an investi"ation the asis of the sa0e proeedin". *h$s, % ?o. 2''&'2 defines an investi"ation as a fatfindin" ea0ination, st$dy or in<$iry for deter0inin" !hether the alle"ations in a o0plaint or findin"s in a final report of ea0ination 0ay properly e the s$5et of an ad0inistrative, ri0inal or ivil ation.
@a0ination involves an eval$ation of the $rrent stat$s of a ank and deter0ines its o0pliane !ith the set standards re"ardin" solveny, li<$idity, asset val$ation, operations, syste0s, 0ana"e0ent, and o0pliane !ith ankin" la!s, r$les and re"$lations.
nvesti"ation, on the other hand, is ond$ted ased on speifi findin"s of ertain ats or o0issions !hih are s$5et of a o0plaint or a Final %eport of @a0ination.
Clearly, investi"ation does not involve a "eneral eval$ation of the stat$s of a ank. n investi"ation eroes in on speifi ats and o0issions $novered via an ea0ination, or !hih are ited in a o0plaint.
n ea0ination entails a revie! of essentially all the f$ntions and faets of a ank and its operation. t neessitates porin" thro$"h vol$0ino$s do$0ents, and re<$ires a detailed eval$ation thereof. #$h a proess then involves an intr$sion into a ank:s reords.
n ontrast, altho$"h it also involves a detailed eval$ation, an investi"ation enters on speifi ats of o0issions and, th$s, re<$ires a less invasive assess0ent.
*he pratial 5$stifiation for not re<$irin" the Monetary Board approval to ond$t an investi"ation of anks is the ad0inistrative h$rdles and paper!ork it entails, and the orrespondent ti0e to o0plete those additional steps or re<$ire0ents. s in other types of investi"ation, ti0e is al!ays of essene, and it is pr$dent to epedite the proeedin"s if an a$rate onl$sion is to e arrived at, as an investi"ation is only as preise as the evidene on !hih it is ased. *he pro0ptness !ith !hih s$h evidene is "athered is al!ays of $t0ost i0portane ea$se evidene, do$0entary evidene in parti$lar, is re0arkaly f$n"ile. 3C investi"ation is ond$ted to deter0ineeD !hether the alle"ations in a o0plaint or findin"s in a final report of ea0ination 0ay properly e the s$5et of an ad0inistrative, ri0inal or ivil ation. n other !ords, an
investi"ation is ased on reports of ea0ination and an ea0ination is ond$ted !ith prior Monetary Board approval. *herefore, it !o$ld e $nneessary to se$re a separate approval for the ond$t of an investi"ation. #$h !o$ld 0erely prolon" the proess and provide $nsr$p$lo$s individ$als the opport$nity to over their traks.
ndeed, !hile in a literary sense, the t!o ter0s 0ay e $sed interhan"ealy, $nder the 3C Charter, ea0ination and investi"ation refer to t!o different proesses. *o reiterate, an ea0ination of anks re<$ires the prior onsent of the Monetary Board, !hereas an investi"ation ased on an ea0ination report, does not.
