THIRD DIVISION
G.R. No. 250440. May 12, 2021
EKISTICS PHILIPPINES, INC., Petitioner, v. BANGKO SENTRAL NG PILIPINAS, Respondent.
D E C I S I O N
DELOS SANTOS, J.:
Before the Court is a Petition for Review on Certiorari1 filed under Rule 45 of the Rules of Court seeking to set aside and annul the Second Amended Decision2 dated November 13, 2019 of the Court of Appeals (CA) in CA-G.R. SP No. 148787, which set aside the Orders dated October 17, 20163 (granting a Writ of Preliminary Injunction against the Bangko Sentral ng Pilipinas), and October 25, 20164 (reducing the amount of the injunction bond), of the Makati City Regional Trial Court (RTC), Branch 66, in Sp. Proc. No. M-7411.
WHEREFORE, premises considered, upon the filing by Petitioner-in-Intervention of a bond, in the amount of Php1,200,000,000.00 in favor of Petitioner which will answer for all the damages the latter may sustain by reason of the injunction if the Court should finally decide that the injunction Petitioner-in-Intervention was not entitled thereto, let a Writ of Preliminary Injunction be issued. Said writ shall restrain the Bangko Sentral ng Pilipinas, its agents, assignees, representatives or any person acting in behalf from continuing the public bidding, selling and disposal of the properties covered by TCT Nos. 218667, 7135, 7136, 7138 and 7139, including all acts leading to the disposal of assets it had acquired or foreclosed from Banco Filipino Savings and Mortgage Bank.Ekistics filed an Urgent Motion to Reduce Injunctive Bond,19 which the RTC granted through an Order20 dated October 25, 2016. On October 27, 2016, the RTC issued a WPI.21
Finally, let the writ be implemented by this Court's Sheriff Leodel N. Roxas.
SO ORDERED.18
WHEREFORE, premises considered, the present PETITION is hereby GRANTED. The Orders dated October 17, 2016 and October 25, 2016 issued by Hon. Joselito C. Villarosa, Presiding Judge of the RTC of Makati, Branch 66 in Case No. M-7411 are hereby ANNULLED and SET ASIDE. Accordingly, the WRIT OF PRELIMINARY INJUNCTION issued by public respondent against petitioner Bangko Sentral ng Pilipinas, its agents, assignees and representatives is hereby LIFTED. Meantime, petitioner's prayer for Writ of Preliminary Injunction is deemed mooted by this Decision.Not in conformity with the Decision of the CA, Ekistics moved for the reconsideration thereof.34 Finding merit in Ekistics' Motion for Reconsideration, the CA granted the motion and amended its Decision dated November 27, 2017. Applying the principle of judicial courtesy, the CA held that considering that the validity of the BSP Resolution which placed Banco Filipino under receivership is still pending before the Court and the legality of the Resolution ordering the liquidation of Banco Filipino is yet to be resolved by another division in the CA, it is prudent to reverse the originally issued Decision in order to prevent the proceedings before the Court and the CA becoming moot and academic.35
SO ORDERED.33
WHEREFORE, premises considered, the instant Motion for Reconsideration is hereby GRANTED. The Decision dated November 27, 2017 is hereby REVERSED and SET ASIDE. Accordingly, a new judgment is entered AFFIRMING and REINSTATING the twin Orders dated October 17, 2016 and October 25, 2016 of the Regional Trial Court of Makati City, Branch 66 in Case No. M-7411.Aggrieved, the BSP filed a Motion for Reconsideration38 seeking the reversal of the CA Amended Decision asseverating that: (a) under Section 30 of R.A. No. 7653, as amended by R.A. No. 11211, the Decision of the Monetary Board to liquidate the assets of a failing bank may not be enjoined, except through a petition for certiorari filed by shareholders holding majority of the bank's capital stocks within 10 days from notice of the Monetary Board's Order of Liquidation; and (b) even without the provisions in R.A. No. 7653, the RTC exceeded its jurisdiction in issuing the writ of injunction against the BSP because the legal requisites for the issuance of a WPI are not present in the case.
SO ORDERED.37
WHEREFORE, the Motion for Reconsideration of the Bangko Sentral ng Pilipinas is GRANTED. This Court's Amended Decision dated 27 July 2018, is REVERSED and SET ASIDE and this Court's original Decision, dated 27 November 2017, setting aside the Orders of the trial court, dated 17 October 2016 (granting a writ of preliminary injunction against the Bangko Sentral ng Pilipinas), and 25 October 2016 (reducing the amount of injunction bond) is REINSTATED. The Petition-in-Intervention filed by Ekistics Phils., Inc. in the court a quo is DISMISSED.Undaunted, Ekistics elevated the case before the Court via the present Petition for Review on Certiorari questioning the validity of the Second Amended Decision dated November 13, 2019 of the CA. Hereunder are the assigned errors submitted by Ekistics for the Court's resolution, viz.:
SO ORDERED.42
THE [CA] ERRED IN RULING THAT THE RTC HAS NO JURISDICTION OVER THE PETITION-IN-INTERVENTION FILED BY PETITIONER AND IN DISMISSING SAID PETITION-IN-INTERVENTION BECAUSE:
1. THE ISSUE ON THE RTC'S JURISDICTION OVER THE PETITION-IN-INTERVENTION FILED BY PETITIONER IS BARRED BY [RES JUDICATA]. 2. THE CAUSE OF ACTION IN RESPONDENT BSP'S PETITION FOR [CERTIORARI] WITH THE CA IS LIMITED TO THE NULLIFICATION OF THE ORDERS DATED OCTOBER 17, 2016 AND OCTOBER 25, 2016 OF THE RTC, WHICH GRANTED PETITIONER'S APPLICATION FOR WRIT OF PRELIMINARY INJUNCTION AND ITS URGENT MOTION TO REDUCE INJUNCTIVE BOND. THE PROPRIETY OF THE PETITION-IN-INTERVENTION WAS NOT AMONG THE ISSUES RAISED BY BSP, AND THE DISMISSAL THEREOF WAS NOT AMONG THE RELIEFS SOUGHT FOR IN BSP'S PETITION FOR [CERTIORARI] WITH THE CA.
THE [CA] ERRED IN RULING THAT THE RTC EXCEEDED ITS JURISDICTION IN ISSUING THE INJUNCTION AGAINST THE BSP.
[1.] THE REQUISITES FOR THE ISSUANCE OF WRIT OF PRELIMINARY INJUNCTION ARE PRESENT IN THIS CASE. [2.] THE PRINCIPLE OF JUDICIAL COURTESY APPLIES IN THIS CASE.43
(a) | Whether the CA erred in ruling that the RTC had no jurisdiction over the Petition-in-Intervention filed by Ekistics; |
(b) | Whether the lifting of the WPI issued by the RTC against BSP was valid; and |
(c) | Whether judicial courtesy applies in the present case. |
Section 30. Proceedings in Receivership and Liquidation. - Whenever, upon report of the head of the supervising or examining department, the Monetary Board finds that a bank or quasi-bank:In relation thereto, Section 4, Rule 65 of the Rules of Court provides that petitions for certiorari involving acts or omissions of quasi-judicial bodies, like the Monetary Board, shall be filed in and cognizable only by the CA.59
(a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That this shall not include inability to pay caused by extraordinary demands induced by financial panic in the banking community;
(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or
(c) cannot continue in business without involving probable losses to its depositors or creditors; or
(d) has willfully violated a cease and desist order under Section 37 that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily and without need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation as receiver of the banking institution.
For a quasi-bank, any person of recognized competence in banking or finance may be designed as receiver.
The receiver shall immediately gather and take charge of all the assets and liabilities of the institution, administer the same for the benefit of its creditors, and exercise the general powers of a receiver under the Revised Rules of Court but shall not, with the exception of administrative expenditures, pay or commit any act that will involve the transfer or disposition of any asset of the institution: Provided, That the receiver may deposit or place the funds of the institution in non-speculative investments. The receiver shall determine as soon as possible, but not later than ninety (90) days from take over, whether the institution may be rehabilitated or otherwise placed in such a condition so that it may be permitted to resume business with safety to its depositors and creditors and the general public: Provided, That any determination for the resumption of business of the institution shall be subject to prior approval of the Monetary Board.
If the receiver determines that the institution cannot be rehabilitated or permitted to resume business in accordance with the next preceding paragraph, the Monetary Board shall notify in writing the board of directors of its findings and direct the receiver to proceed with the liquidation of the institution. The receiver shall:
(1) file [ex parte] with the proper regional trial court, and without requirement of prior notice or any other action, a petition for assistance in the liquidation of the institution pursuant to a liquidation plan adopted by the Philippine Deposit Insurance Corporation for general application to all closed banks. In case of quasi-banks, the liquidation plan shall be adopted by the Monetary Board. Upon acquiring jurisdiction, the court shall, upon motion by the receiver after due notice, adjudicate disputed claims against the institution, assist the enforcement of individual liabilities of the stockholders, directors and officers, and decide on other issues as may be material to implement the liquidation plan adopted. The receiver shall pay the cost of the proceedings from the assets of the institution.
(2) convert the assets of the institutions to money, dispose of the same to creditors and other parties, for the purpose of paying the debts of such institution in accordance with the rules on concurrence and preference of credit under the Civil Code of the Philippines and he may, in the name of the institution, and with the assistance of counsel as he may retain, institute such actions as may be necessary to collect and recover accounts and assets of, or defend any action against, the institution. The assets of an institution under receivership or liquidation shall be deemed in [custodia legis] in the hands of the receiver and shall, from the moment the institution was placed under such receivership or liquidation, be exempt from any order of garnishment, levy, attachment, or execution.
The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and executory, and may not be restrained or set aside by the court except on petition for [certiorari] on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. The petition for certiorari may only be filed by the stockholders of record representing the majority of the capital stock within ten (10) days from receipt by the board of directors of the institution of the order directing receivership, liquidation or conservatorship.
The designation of a conservator under Section 29 of this Act or the appointment of a receiver under this section shall be vested exclusively with the Monetary Board. Furthermore, the designation of a conservator is not a precondition to the designation of a receiver. (Emphases and underscoring supplied)
Section 4. When and where petition filed. –The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said motion.Applying the foregoing, in order to validly question the action of the Monetary Board regarding matters of liquidation, the majority stockholders-of-record of the ailing bank must file the petition for certiorari before the CA. Truly, herein petitioner Ekistics cannot get around the rules and underhandedly use the petition-in-intervention to restrain a final and executory order of the Monetary Bank directing the liquidation of Banco Filipino. Assuming Ekistics filed a petition for certiorari, it still has no legal standing to file the same considering it is a stockholder-of-record merely holding a minority share. As the rules clearly provide, only majority stockholders-of-record are allowed to file the petition for certiorari.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these Rules, the petition shall be filed in and cognizable only by the Court of Appeals. (Emphasis and underscoring supplied)
Jurisprudence has also set forth additional requisite before an injunctive writ, whether prohibitory or mandatory, may be issued:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.60
The issuance of an injunctive writ is considered an extraordinary or transcendent remedy and a strong arm of equity.62 As such, the power to issue a writ is done with utmost caution, prudence and deliberation, and exercised reasonably and sparingly only in exceptional circumstances.63
(1) The applicant must have a clear and unmistakable right to be protected, that is a right in esse; (2) There is a material and substantial invasion of such right; (3) There is an urgent need for the writ to prevent irreparable injury to the applicant; and (4) No other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury.61
In seeking injunction, Ekistics raised the specter of injury to itself that might arise from the sale of Banco Filipino's assets to pay its creditors and depositors. Perhaps, to a stockholder like Ekistics, the payment of creditors and depositors ahead of the return of its investment is an injury or a pecuniary loss. However, as the Supreme Court emphasized in BPI vs. Hon. Hontanosas, such fear of potential loss of possession and ownership, or the possibility of legal suits in the future does not constitute the requisite irreparable injury that warrants the issuance of the writ of injunction. Ultimately, a bank's primary responsibility is to its depositors and creditors, who have a preference over the stockholders of the bank in the liquidation and distribution of its assets.Truly, the risk of having to relitigate the recovery of the properties which are sold in the public auction is not the irreparable injury contemplated by the rules. It bears emphasizing that when a bank is declared by the Monetary Board to be insolvent, the assets are held in trust for the equal benefit of all depositors and creditors.71 Otherwise stated, the main purpose thereof is to protect the interests of the creditors and depositors of the bank. The Court concurs with the CA that the restraining order on the public auction and the disposal of the assets of Banco Filipino did more harm than good because it delayed the payment of Banco Filipino's creditors and depositors.
In any event, a stockholder, like Ekistics, is bound by the value of the corporation's assets and/or shares of stock at the time of liquidation, only after all creditors and obligations have been paid. A stockholder cannot avoid the payment of just debts to creditors or the return of the money of depositors on the ground that there might be nothing left after such payment. Such is the risk that every stockholder accepts when investing in a bank; it is not an inquiry that may be prevented through injunction."70
(3) On the assetsFrom the foregoing, all collaterals used to secure loans which were granted by the BSP are not included in those assets deemed in custodia legis in the hands of the receiver. The properties disposed of through public auction were collaterals that were used to secure loans from the BSP. Indubitably, these properties are beyond the jurisdiction of the liquidation court since these are not deemed placed in custodia legis. To reiterate, even if the order of liquidation is either affirmed or reversed, the BSP, as a mortgagee, has a right to dispose foreclosed properties, but limited to those which were used to secure loans obtained from it in accordance to Section 13(e)(3) of R.A. No. 3591, as amended.
Upon service of notice of closure as provided in Section 14 of this Act, all the assets of the closed bank shall [be] deemed in custodia legis in the hands of the receiver, and as such, these assets may not be subject to attachment, garnishment, execution, levy or any other court processes. A judge, officer of the court or any person who shall issue, order, process or cause the issuance or implementation of the garnishment order, levy, attachment or execution, shall be liable under Section 27 of this Act: Provided, however, That collaterals securing the loans and advances granted by the Bangko Sentral ng Pilipinas shall not be included in the assets of the closed bank for distribution to other creditors: Provided, further, That the proceeds in excess of the amount secured shall be returned by the Bangko Sentral ng Pilipinas to the receiver. (Emphases and underscoring supplied)
Endnotes:
* Designated as additional member in lieu of Associate Justice Jhosep Y. Lopez per Raffle dated May 12, 2021.
1 Rollo, pp. 24-63.
2 Id. at 65-77; penned by Associate Justice Ricardo R. Rosario (now a Member of the Court), with Associate Justices Jane Aurora C. Lantion, Jhosep Y. Lopez (now a Member of the Court), and Maria Filomena D. Singh, concurring; Associate Justice Edwin D. Sorongon interposed his dissent.
3 Id. at 122-124.
4 Id. at 126.
5 The New Central Bank Act.
6 Rollo, p. 129.
7 Id. at 110.
8 Id. at 204.
9 Supra note 7.
10 Rollo, pp. 747-760.
11 Not attached to the rollo.
12 Rollo, pp. 291-299.
13 Id. at 333-339.
14 Id. at 111.
15 Id. at 341-344.
16 Id. at 123.
17 Id. at 122-124.
18 Id. at 124.
19 Id. at 463-467.
20 Supra note 4.
21 Rollo, p. 33.
22 Id. at 504.
23 Id. at 516-519.
24 Id. at 33; 469-503.
25 Id. at 654-736.
26 Id. at 658.
27 Id. at 35.
28 Id. at 1114-1117.
29 Id. at 116.
30 Id. at 117.
31 Id. at 119.
32 Id. at 109-121.
33 Id. at 120.
34 Id. at 1174-1186.
35 Id. at 105-106.
36 Id. at 103-108.
37 Id. at 108.
38 Id. at 1272-1310.
39 Supra note 2.
40 Rollo, pp. 67 and 69.
41 Id. at 70.
42 Id. at 76.
43 Id. at 41.
44 Id. at 43-47.
45 Id. at 48.
46 Id. at 57.
47 Id. at 1368-1467.
48 Id. at 1391.
49 Id. at 1396-1398.
50 Id. at 1399.
51 Id. at 1429.
52 (1) When the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. (Prudential Bank v. Rapanot, 803 Phil. 294, 306 [2017]).
53 Heirs of Elliot v. Corcuera, G.R. No. 233767, August 27, 2020.
54 Spouses Rosario v. Alvar, 817 Phil. 994, 1004-1005 (2017).
55 Rollo, pp. 90-93.
56 Domagas v. Jensen, 489 Phil. 631, 641 (2005).
57 Frias v. Alcayde, 826 Phil. 713, 729 (2018).
58 Rollo, p. 70.
59 Banco Filipino Savings and Mortgage Bank v. Bangko Sentral ng Pilipinas, 832 Phil. 27, 58 (2018).
60 RULES OF COURT, Rule 58, Sec. 3.
61 Bicol Medical Center v. Botor, 819 Phil. 447, 458 (2017).
62 Bank of the Philippine Islands v. Hontanosas, Jr., 737 Phil. 38, 53 (2014).
63 See Evy Construction and Development Corporation v. Valiant Roll Forming Sales Corporation, 820 Phil. 123, 135 (2017).
64 Lim v. BPI Agricultural Development Bank, 628 Phil. 601, 607 (2010).
65 Olalia v. Hizon, 274 Phil. 66, 72 (1991).
66 Rollo, pp. 51-52.
67 Tumagan v. Kairuz, G.R. No. 198124, September 12, 2018.
68 Asia's Emerging Dragon Corporation v. Department of Trade and Communication, 572 Phil. 523, 528 (2008).
69 Cayabyab v. Dimson, 813 Phil. 492, 502 (2017).
70 Rollo, pp. 74-75.
71 Vda. de Ballesteros v. Rural Bank of Canaman, Inc., 650 Phil. 476, 487 (2010).
72 Evy Construction and Development Corp. v. Valiant Roll Forming Sales Corp., 820 Phil. 123, 141 (2017).
73 Oca v. Custodio, G.R. No. 199825, 814 Phil. 641, 675 (2017).
74 Go-Yu v. Yu, G.R. No. 230443, April 3, 2019.
75 An Act Establishing the Philippine Deposit Insurance Corporation, Defining its Powers and Duties and for Other Purposes.
76 An Act Enhancing the Resolution and Liquidation Framework for Banks, Amending for the Purpose Republic Act No. 3591, as Amended, and Other Related Laws.cralawredlibrary