CBBL v. BFSMB

Central Bank Board of Liquidators Vs. Banco Filipino Savings and Mortgage Bank

G.R. No. 173399

February 21, 2017

FACTS

The following are the pertinent facts of the case as gathered from its records.6 On 14 February 1963, the MB of the then CB issued MB Resolution No. 223 allowing respondent Banco Filipino to operate as a savings bank. Respondent began formal operations on 9 July 1964. However, on 27 July 1984, the CB issued MB Resolution No. 955 placing Banco Filipino under conservatorship after granting the latter's loan applications worth billions of pesos. Respondent bank filed with the RTC Makati a Complaint against the CB for the annulment of MB Resolution No. 955. The case was docketed as Civil Case No. 8108 and raffled to Judge Ricardo Francisco of Branch 136.

Thereafter, on 25 January 1985, the CB issued MB Resolution No. 75 ordering the closure of Banco Filipino and placing the latter under receivership. The Resolution stated that since respondent had been found to be insolvent, the latter was forbidden to continue doing business to prevent further losses to its depositors and creditors. The Resolution further provided for the takeover of the assets and liabilities of Banco Filipino for the benefit of its depositors and creditors, as well as for the termination of its conservatorship. On 2 February 1985, Banco Filipino filed a Complaint with the RTC Makati against the MB, assailing the latter's act of placing the bank under receivership. The case was docketed as Civil Case No. 9675 and raffled to Judge Zoilo Aguinaldo of Branch 143. Because of its impending closure,14 Banco Filipino filed with the CA a Petition for Certiorari and Mandamus on 28 February 1985, seeking the annulment of MB Resolution No. 75 on the ground of grave abuse of discretion in the issuance of the Resolution.15 The Petition eventually reached the Supreme Court, where it was docketed as G.R. No. 70054.

On 22 March 1985, the CB issued another Resolution placing Banco Filipino under liquidation. Respondent then filed another Complaint with the RTC Makati to question the propriety of the liquidation.16 The case was docketed as Civil Case No. 10183 and raffled to Judge Fernando Agdamag of Branch 138. Meanwhile, this Court in G.R. No. 70054 promulgated on 29 August 1985 a Resolution directing, among others, the consolidation in Branch 136 of the RTC Makati of the following cases: (1) Civil Case No. 8108, the case for the annulment of the conservatorship order; (2) Civil Case No. 9675, the case seeking to annul the receivership order; and (3) Civil Case No. 10183, the case seeking to annul the order for the liquidation of the bank. On 11 December 1991, this Court, in an En Banc Decision penned by Associate Justice Leo D. Medialdea, nullified MB Resolution No. 75 and ordered the CB and its MB to reorganize the bank and allow it to resume business.

On 6 July 1993, during the pendency of the three consolidated cases, Republic Act (R.A.) No. 7653, or the New Central Bank Act of 1993, took effect. Under the new law, the CB was abolished and, in its stead, the BSP was created. The new law also created the CB-BOL for the purpose of administering and liquidating the CB's assets and liabilities, not all of which had been transferred to the BSP. Pursuant to the Decision of this Court in G.R. No. 70054, the BSP reopened Banco Filipino and allowed it to resume business on 1 July 1994.22

On 29 May 1995, pursuant to the recent development, Banco Filipino filed a Motion to Admit Attached Amended/Supplemental Complaint in the three consolidated cases — Civil Case Nos. 8108, 9675, and 10183 —before the RTC. In its Amended/Supplemental Complaint, respondent bank sought to substitute the CB-BOL for the defunct CB and its MB. Respondent also aimed to recover at least P18 billion in actual damages, litigation expenses, attorney's fees, interests, and costs of suit against petitioner and individuals who had allegedly acted with malice and evident bad faith m placing the bank under conservatorship and eventually closing it down in 1985.

The trial court, through an Order dated 29 March 1996, granted the Motion to Admit filed by Banco Filipino and accordingly admitted the latter's Amended/Supplemental Complaint. Consequently, the CB-BOL was substituted for the defunct CB in respondent's civil cases, which are still pending with the RTC. On 25 September 2003, or more than 10 years from the enactment of R.A. 7653, Banco Filipino again filed a Motion to Admit Second Amended/Supplemental Complaint in the consolidated civil cases before the RTC. In that Second Amended/Supplemental Comp1aint, respondent sought to include the BSP and its MB — "the purported successor-in-interest of the old CB" — as additional defendants based on the latter's alleged acts or omissions as follows:

1. The BSP and the MB refused to grant Banco Filipino a universal banking license, unless it complied with their stringent conditions intended to further deplete its resources, contrary to the provisions of the Memorandum of Agreement the parties entered into on 20 December 1999.

2. The BSP and the MB engaged in a smear campaign against Banco Filipino intended to undermine the trust and confidence of its depositors and the public in general.30]

3. With the objective of gaining control of respondent bank, the BSP disqualified a member of the former's board of directors.

4. The BSP and its MB conspired with a group of minority stockholders of Banco Filipino to institute a case against respondent and thereby place it under a state of receivership or conservatorship or under a management committee.

5. The demands of Banco Filipino for an out-of-court settlement of its damage claims against the BSP have gone unheeded and have resulted in burgeoning litigation expenses and other damages, for which respondent continues to suffer as a result of prolonged litigation.

Banco Filipino claimed that the BSP employed "coercive measures" that forced respondent to enter into a Memorandum of Agreement (MOA) regarding the collection of advances extended to the latter by the defunct CB. In addition, respondent also alleged that its present dealings with the BSP and the MB have become increasingly difficult, especially in obtaining favorable actions on its requests and other official dealings. Banco Filipino's Motion to Admit its Second Amended/Supplemental Complaint was opposed by the CB-BOL based on the following grounds:

1. Banco Filipino's Second Amended/Supplemental Complaint was not supported by a board resolution that authorized it to file the amended or supplemental complaint.
2. The second supplemental complaint raised new and independent causes of action against a new party - the BSP - which was not an original party.
3. The second supplemental complaint was violative of the rule on the joinder of causes of action, because it alleged those that did not arise from the same contract, transaction or relation between the parties - as opposed to those alleged in the complaint sought to be amended or supplemented - and differed from the causes of action cited in the original Complaint.
4. The admission of the second supplemental complaint would expand the scope of the dispute in the consolidated civil cases to include new causes of action against new parties like the BSP, resulting in a delay in the resolution of the cases.

ISSUE

The crucial issue to be resolved here is whether the RTC erred in admitting Banco Filipino's Second Amended/Supplemental Complaint in the consolidated civil cases before it.

HED

It must be noted at this point that the BSP and its MB are not yet required to answer the RTC Complaint, as the issue of their addition as parties is yet to be settled. Nevertheless, whether or not the BSP and its MB are transferees or successors-in-interest of the CB and its MB, the former's addition or substitution as parties to this case must comply with the correct procedure and form prescribed by law. As mentioned at the outset, the Court will confine its ruling on this Petition to procedural issues pertaining to the propriety of the admission of the Second Amended/Supplemental Complaint. We will not address the issues raised by petitioner with regard the findings of the trial and the appellate court that the BSP is the successor-in-interest of the defunct CB65 and is considered a transferee pendente lite66 in the civil cases. These findings relate to the BSP's potential liability for the causes of action alleged in the original Complaint. At issue here is Banco Filipino's attempt, through the Second Amended/Supplemental Complaint, to hold the BSP and its MB liable for causes of action that arose in 1994. Respondent is not without any relief. If the RTC finds that the BSP was indeed a transferee pendente lite, the failure to implead it would not prevent the trial court from holding the BSP liable, should liability now attach for acts alleged in the original Complaint.

RULING

WHEREFORE, the Petition of the CB-BOL is GRANTED, and the Decision of the Court of Appeals dated 27 January 2006 and Resolution dated 27 June 2006 in CA-G.R. SP No. 86697 are hereby REVERSED and SET ASIDE.