Banco Filipino Savings and Mortgage Bank v. Bangko Sentral ng Pilipinas

A bank ordered closed and placed under receivership may sue and be sued only through its receiver, the Philippine Deposit Insurance Corporation; any action filed by the closed bank without its receiver may be dismissed, and petitions for certiorari against the Monetary Board, a quasi-judicial agency, are cognizable only by the Court of Appeals.

Banco Filipino Savings and Mortgage Bank was a thrift bank ordered closed and placed under receivership by the Monetary Board. In a 1991 decision, the Supreme Court declared the closure void and directed the reorganization and resumption of business of Banco Filipino under the comptrollership of the Central Bank and the Monetary Board. Congress enacted Republic Act No. 7653 (the New Central Bank Act) in 1993, establishing the Bangko Sentral ng Pilipinas as the new monetary authority and designating the PDIC as receiver of closed banks. Banco Filipino subsequently sought financial assistance from Bangko Sentral to address heavy withdrawals, leading to prolonged negotiations over a business plan and a ₱25,000,000,000.00 financial assistance package conditioned on the withdrawal of all pending cases against Bangko Sentral.

On December 11, 1991, the Supreme Court promulgated its decision in Banco Filipino Savings & Mortgage Bank vs. Monetary Board and Central Bank of the Philippines, declaring void the Monetary Board's order for closure and receivership of Banco Filipino and directing the Central Bank and the Monetary Board to reorganize the bank and allow it to resume business under comptrollership. On November 6, 1993, pursuant to that decision, the Monetary Board issued Resolution No. 427 allowing Banco Filipino to resume operations. Congress had enacted Republic Act No. 7653 on June 14, 1993, establishing the Bangko Sentral ng Pilipinas as the new monetary authority.

In 2002, Banco Filipino suffered heavy withdrawals and sought financial assistance from Bangko Sentral. In a letter dated October 9, 2003, the bank requested more than ₱3,000,000,000.00 in emergency loans and credit easement terms. Bangko Sentral responded on November 21, 2003, requiring Banco Filipino to comply with conditions under Republic Act No. 7653 and to submit a rehabilitation plan before financial assistance could be extended. Banco Filipino submitted its Long-Term Business Plan on April 14, 2004, also asserting that it was still awaiting payment of ₱18,800,000,000.00 in damage claims previously decided by the Supreme Court. Bangko Sentral informed the bank that the plan could not be acted upon because it was neither confirmed nor approved by the bank's Board of Directors.

On July 8, 2004, Banco Filipino filed a Petition for Revival of Judgment before the RTC of Makati, docketed as Civil Case No. 04-823, to compel Bangko Sentral to approve its business plan. During the pendency of that petition, the parties entered into negotiations resulting in seven revisions of the business plan. On April 8, 2009, Banco Filipino submitted its 8th Revised Business Plan, requesting, among other things, a ₱25,000,000,000.00 income enhancement loan. Unable to reach agreement, the parties constituted an Ad Hoc Committee that produced an Alternative Business Plan accepted by Banco Filipino but subject to Monetary Board approval.

In a letter dated December 4, 2009, Bangko Sentral informed Banco Filipino that the Monetary Board issued Resolution No. 1668 granting the request for ₱25,000,000,000.00 in financial assistance and regulatory reliefs, subject to certain conditions. Among these was the withdrawal or dismissal with prejudice of all pending cases filed by Banco Filipino against Bangko Sentral and its officials, as well as the execution of quitclaims and commitments by the bank's principal stockholders, directors, and officers not to revive or refile similar cases. Banco Filipino requested reconsideration of these terms on January 20, 2010, but by April 8, 2010, informed Bangko Sentral that it was constrained to accept a "unilaterally whittled down version" of the package while asserting that it did not agree with the condition to dismiss its cases. Bangko Sentral expressed surprise at this hesitation on April 19, 2010, stating the condition had been discussed from the start. Through a series of letters from June to September 2010, the parties continued to dispute the legality of Bangko Sentral's referral of the matter to private counsel and the enforceability of Resolution No. 1668, with Bangko Sentral ultimately treating Banco Filipino's rejection of certain terms as a failure to reach a mutually acceptable settlement.

On October 20, 2010, Banco Filipino filed a Petition for Certiorari and Mandamus with prayer for a temporary restraining order and writ of preliminary injunction before RTC, Branch 66, Makati City, docketed as Civil Case No. 10-1042, assailing the alleged arbitrary, capricious, and illegal acts of Bangko Sentral and the Monetary Board in coercing the bank to withdraw all pending suits in exchange for approval of its business plan. The trial court granted the temporary restraining order on October 28, 2010. On the same day, summons was served on Bangko Sentral through a staff member of the Office of the Governor. Bangko Sentral and the Monetary Board filed a Motion to Dismiss Ad Cautelam on October 27, 2010, questioning the trial court's jurisdiction. The trial court denied the motion on November 17, 2010, finding that the acts complained of pertained to regulatory functions, that due process was satisfied, and that there was no litis pendentia or forum shopping. The trial court issued a writ of preliminary injunction on November 18, 2010.

Bangko Sentral and the Monetary Board elevated the matter to the Court of Appeals through two petitions for certiorari, docketed as CA-G.R. SP No. 116627 and CA-G.R. SP No. 116905. The Court of Appeals granted the application for a preliminary injunction on February 14, 2011, enjoining further trial court proceedings. On July 28, 2011, the Court of Appeals rendered its decision in CA-G.R. SP No. 116905, annulling the trial court's November 17, 2010 Order and dismissing Civil Case No. 10-1042 for lack of jurisdiction, holding that special civil actions against quasi-judicial agencies are cognizable only by the Court of Appeals. Banco Filipino's motion for reconsideration was denied on February 16, 2012. Banco Filipino filed the present petition before the Supreme Court on April 10, 2012. Meanwhile, on March 17, 2011, Banco Filipino had been placed under receivership by the PDIC.

• Capacity to Sue: Petitioner maintained that it had authority to file the petition because the Court of Appeals had, in its January 27, 2012 Decision in CA-G.R. SP No. 118599, found the closure and receivership to have been illegal, making it absurd and unjust to dismiss the petition for lack of PDIC authority. Petitioner pointed out that nothing in the PDIC Charter or Republic Act No. 7653 precludes its Board of Directors from suing on its behalf, and that an obvious conflict of interest existed in requiring it to seek PDIC's authority given that PDIC was under the control of the Monetary Board.
• Trial Court Jurisdiction: Petitioner argued that the trial court had jurisdiction over the special civil action against respondents, citing the Court of Appeals' 2006 decision in Merchants Rural Bank of Talavera vs. Monetary Board.
• Acquisition of Jurisdiction over Respondents: Petitioner asserted that the trial court acquired jurisdiction over respondents because they participated in the summary hearing, questioned the service of the petition on October 21, 2010 but never questioned the service of summons on October 28, 2010 until filing their petition with the Court of Appeals, and that their private counsel was present during the raffle and assisted respondents' general counsel in receiving copies of the petition.
• Procedural Lapse by Respondents: Petitioner contended that the Court of Appeals should have dismissed outright respondents' petition for certiorari for maliciously omitting the handwritten letter dated October 21, 2010 of respondents' general counsel, and that respondents failed to file a motion for reconsideration before the trial court before filing their petition with the Court of Appeals.

• Lack of Capacity to Sue: Respondents countered that the petition should be dismissed outright for being filed without PDIC's authority, asserting that petitioner was placed under receivership on March 17, 2011, and that both the PDIC Charter and Republic Act No. 7653 categorically vest the authority to file suits or retain counsels for closed banks in the receiver, rendering the verification and certification of non-forum shopping signed by petitioner's Executive Committee without legal effect.
• Trial Court Jurisdiction: Respondents argued that the Court of Appeals did not err in finding that the trial court had no jurisdiction, citing the Supreme Court's rulings in United Coconut Planters Bank vs. E. Ganzon, Inc. and National Water Resources Board vs. A. L. Ang Network, which categorically stated that special civil cases filed against quasi-judicial agencies must be filed before the Court of Appeals. They contended that Merchants Rural Bank of Talavera was never upheld by the Supreme Court.
• Estoppel: Respondents contended that petitioner should be estopped from raising the issue of jurisdiction because during the pendency of the case, on March 21, 2011 and November 20, 2011, it filed two separate petitions for certiorari against the Monetary Board directly before the Court of Appeals.
• No Valid Service of Summons: Respondents maintained that the trial court did not acquire jurisdiction over them because there was no valid service of summons, arguing that their voluntary appearance in the summary hearing was special and limited to raising jurisdictional issues, and that service of summons on a staff member of the Office of the Governor General was not equivalent to service on the Governor General.
• Justification for Skipping Motion for Reconsideration: Respondents asserted that their filing of the petition before the Court of Appeals without a prior motion for reconsideration was justified by exceptional circumstances, including the trial court's lack of jurisdiction, the fact that the issues had already been raised and passed upon by the trial court, prejudice to government interest from delay, and denied due process due to improper service of summons.

• Capacity to Sue: Whether petitioner Banco Filipino, as a closed bank under receivership, could file the Petition for Review without joining its statutory receiver, the Philippine Deposit Insurance Corporation, as a party to the case.
• Jurisdiction over Quasi-Judicial Agency: Whether trial courts have jurisdiction to take cognizance of a petition for certiorari against acts and omissions of the Monetary Board.
• Motion for Reconsideration: Whether respondents Bangko Sentral ng Pilipinas and the Monetary Board should have filed a motion for reconsideration of the trial court's denial of their motion to dismiss before filing their petition for certiorari before the Court of Appeals.
• Acquisition of Jurisdiction over Respondents: Whether the trial court validly acquired jurisdiction over respondents Bangko Sentral ng Pilipinas and the Monetary Board.

• Capacity to Sue: No. A closed bank under receivership can only sue or be sued through its receiver, the PDIC; the powers of the bank's Board of Directors and officers are suspended upon takeover, rendering the verification and certification of non-forum shopping signed by its Executive Vice Presidents ineffective.
• Jurisdiction over Quasi-Judicial Agency: No. Petitions for certiorari involving acts or omissions of a quasi-judicial agency are cognizable only by the Court of Appeals pursuant to Rule 65, Section 4 of the Rules of Court; the Monetary Board is a quasi-judicial agency.
• Motion for Reconsideration: No. Respondents were excused from filing a motion for reconsideration because the trial court's lack of jurisdiction over the subject matter constituted a recognized exception to the general rule requiring a prior motion for reconsideration.
• Acquisition of Jurisdiction over Respondents: Not addressed. The Court found sufficient basis to dismiss the petition on the ground of lack of capacity to sue and lack of trial court jurisdiction, rendering resolution of this issue unnecessary.

• Capacity to Sue: Under Republic Act No. 7653, when the Monetary Board finds a bank insolvent, it may summarily forbid the institution from doing business and designate the PDIC as receiver. Section 30 of the law directs the receiver to immediately gather and take charge of all assets and liabilities of the institution and to administer the same for the benefit of creditors, granting the receiver the general powers of a receiver under the Revised Rules of Court. Under Rule 59, Section 6, a receiver has the power to bring and defend actions in its own name. The relationship between PDIC and a closed bank is fiduciary in nature; PDIC acts not as the real party-in-interest but as a representative party, with the bank remaining the real party-in-interest. Because the receiver has the power to take charge of all assets and to institute or defend any action, only the receiver may sue and be sued on behalf of the closed bank. Petitioner's contention that it was not a closed bank at the time of filing was erroneous because the Court of Appeals' January 27, 2012 Decision finding the closure illegal was not yet final and was subsequently reversed by the November 21, 2012 Amended Decision. Petitioner's claim of conflict of interest was speculative, as it never attempted to seek PDIC's authorization; if PDIC had refused, petitioner could have made PDIC an unwilling co-petitioner under Rule 3, Section 10. Moreover, under Section 10(b) of the PDIC Charter as amended, the powers, functions, and duties of the directors, officers, and stockholders of a closed bank are suspended upon takeover, meaning the Board of Directors could not validly authorize the Executive Vice Presidents to file the suit. The petition, not having been properly verified, was considered an unsigned pleading producing no legal effect.

• Jurisdiction over Quasi-Judicial Agency: Pursuant to Article XII, Section 20 of the Constitution, Congress constituted Bangko Sentral as an independent central monetary authority vested with quasi-judicial powers exercised through the Monetary Board. The Monetary Board is a quasi-judicial agency with power to issue subpoenas, administer oaths, impose fines and sanctions, and issue cease and desist orders. Section 37 of Republic Act No. 7653 explicitly provides that the Monetary Board exercises discretion in determining whether administrative sanctions should be imposed on banks, necessarily implying investigation or hearing. Rule 65, Section 4 of the Rules of Court categorically provides that petitions for certiorari involving acts or omissions of a quasi-judicial agency "shall be filed in and cognizable only by the Court of Appeals." A Court of Appeals decision, no matter how persuasive, does not function as stare decisis and cannot amend the Rules of Court, so petitioner's reliance on Merchants Rural Bank of Talavera was misplaced. The Court of Appeals correctly dismissed the case before the RTC.

• Motion for Reconsideration: The general rule is that a motion for reconsideration is a sine qua non condition for the filing of a petition for certiorari, the purpose being to grant the lower court an opportunity to correct any actual or perceived error. However, recognized exceptions exist, including where the order is a patent nullity, as where the court a quo had no jurisdiction. Because the trial court had no jurisdiction over the petition filed by Banco Filipino against respondents—a jurisdictional defect properly asserted by respondents before the Court of Appeals—respondents were excused from filing the requisite motion for reconsideration.

• Closed Bank Under Receivership — Capacity to Sue — A bank ordered closed and placed under receivership retains its juridical personality but may sue and be sued only through its statutory receiver, the PDIC. Upon takeover, the powers, functions, and duties of the bank's directors, officers, and stockholders are suspended. Any pleading filed on behalf of the closed bank without the receiver's authority is considered an unsigned pleading and produces no legal effect. The receiver acts as a representative party in a fiduciary capacity, while the bank remains the real party-in-interest. If the receiver refuses to authorize a suit, the bank may make the receiver an unwilling co-petitioner under Rule 3, Section 10 of the Rules of Court.

• Jurisdiction over Certiorari Against Quasi-Judicial Agencies — Unless otherwise provided by law or the Rules of Court, petitions for certiorari involving acts or omissions of a quasi-judicial agency shall be filed in and cognizable only by the Court of Appeals. The Monetary Board of the Bangko Sentral ng Pilipinas is a quasi-judicial agency exercising quasi-judicial functions through its power to investigate, hold hearings, impose sanctions, and issue cease and desist orders. A Court of Appeals decision does not constitute stare decisis and cannot amend the Rules of Court.

• Motion for Reconsideration as Sine Qua Non for Certiorari — A motion for reconsideration is generally a condition precedent for filing a petition for certiorari, designed to afford the lower court an opportunity to correct actual or perceived errors. Recognized exceptions include: (a) where the order is a patent nullity, as where the court a quo had no jurisdiction; (b) where the questions raised have been duly raised and passed upon by the lower court; (c) where urgent necessity exists and delay would prejudice government interests or where the subject matter is perishable; (d) where a motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is extreme urgency; (f) where relief from an order of arrest is urgent in a criminal case; (g) where proceedings are a nullity for lack of due process; (h) where proceedings were ex parte; and (i) where the issue is purely one of law or public interest is involved.

• "A bank which has been ordered closed by the Bangko Sentral ng Pilipinas (Bangko Sentral) is placed under the receivership of the Philippine Deposit Insurance Corporation. As a consequence of the receivership, the closed bank may sue and be sued only through its receiver, the Philippine Deposit Insurance Corporation. Any action filed by the closed bank without its receiver may be dismissed." — This is the opening pronouncement of the decision, stating the controlling rule on the capacity of a closed bank to sue through its receiver.

• "Considering that the receiver has the power to take charge of all the assets of the closed bank and to institute for or defend any action against it, only the receiver, in its fiduciary capacity, may sue and be sued on behalf of the closed bank." — This passage articulates the rationale for the receiver's exclusive authority to represent the closed bank in legal proceedings, grounded in the fiduciary relationship created by statute.

• "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." — This verbatim quotation of Rule 65, Section 4 of the Rules of Court is the textual basis for the ruling that the RTC lacked jurisdiction over the certiorari petition against the Monetary Board.

• "When petitioner was placed under receivership, the powers of its Board of Directors and its officers were suspended. Thus, its Board of Directors could not have validly authorized its Executive Vice Presidents to file the suit on its behalf. The Petition, not having been properly verified, is considered an unsigned pleading." — This passage explains the consequence of receivership on the bank's internal governance and the fatal procedural defect in the petition.

• Banco Filipino Savings & Mortgage Bank vs. Monetary Board and Central Bank of the Philippines, 281 Phil. 847 (1991) — The prior Supreme Court decision declaring void the Monetary Board's closure and receivership order, directing reorganization and resumption of business. Serves as the historical backdrop for the present dispute.
• Hernandez vs. Rural Bank of Lucena, 171 Phil. 70 (1978) — Established the principle that an insolvent bank under liquidation could not sue or be sued except through its liquidator. Followed as foundational authority for the rule on receiver representation.
• Manalo vs. Court of Appeals, 419 Phil. 215 (2001) — Reiterated that a bank ordered closed retains juridical personality but can sue and be sued only through its liquidator. Followed as reinforcing precedent.
• Balayan Bay Rural Bank vs. National Livelihood Development Corporation, 770 Phil. 30 (2015) — Explained that PDIC, as fiduciary of a closed bank, prosecutes or defends cases as a representative party while the bank remains the real party-in-interest. Followed as the leading authority on PDIC's role as representative party.
• United Coconut Planters Bank vs. E. Ganzon, Inc., 609 Phil. 104 (2009) — Defined quasi-judicial agencies and confirmed that the BSP Monetary Board is a quasi-judicial agency exercising quasi-judicial powers. Followed as controlling authority on the Monetary Board's quasi-judicial character.
• Vivas vs. Monetary Board and Philippine Deposit Insurance Corporation, 716 Phil. 132 (2013) — Held that the proper remedy to question a resolution of the Monetary Board is through a petition for certiorari filed with the Court of Appeals. Followed as directly on point.
• Estate of Salvador Serra Serra vs. Primitivo Hernaez, 503 Phil. 736 (2005) — Established that a motion for reconsideration is a sine qua non condition for filing a petition for certiorari, with recognized exceptions. Followed for the general rule and its exceptions.

• Article XII, Section 20, 1987 Constitution — Mandates the establishment of an independent central monetary authority with power to provide policy direction in money, banking, and credit and to supervise and regulate banks. Applied as the constitutional basis for Bangko Sentral's existence and quasi-judicial powers.
• Section 30, Republic Act No. 7653 (New Central Bank Act) — Authorizes the Monetary Board to forbid an insolvent bank from doing business and designate PDIC as receiver; directs the receiver to gather and take charge of all assets and liabilities, administer them for the benefit of creditors, and institute or defend actions in the name of the institution. Applied as the statutory basis for PDIC's exclusive authority to represent a closed bank in legal proceedings.
• Section 10(b), Republic Act No. 9302 (amending Republic Act No. 3591, the PDIC Charter) — Provides that upon takeover as receiver, the powers, functions, and duties of the directors, officers, and stockholders of the closed bank are suspended. Applied to invalidate the Board of Directors' authorization of the Executive Vice Presidents to sign the verification and certification of non-forum shopping.
• Section 10(c), Republic Act No. 9302 (amending Republic Act No. 3591) — Grants PDIC, as receiver, the power to bring suits to enforce liabilities to or recoveries of the closed bank, retain private counsels, and exercise powers inherent and necessary for the effective discharge of its duties. Applied to confirm PDIC's statutory authority over litigation involving the closed bank.
• Rule 65, Section 4, Rules of Court — Provides that petitions for certiorari involving acts or omissions of a quasi-judicial agency shall be filed in and cognizable only by the Court of Appeals. Applied to hold that the RTC lacked jurisdiction over the certiorari petition against the Monetary Board.
• Rule 59, Section 6, Rules of Court — Grants a receiver the power to bring and defend actions in its own name. Applied as the procedural basis for PDIC's authority to institute actions for the closed bank.
• Rule 3, Section 10, Rules of Court — Allows an unwilling co-plaintiff to be made a defendant if consent to join as plaintiff cannot be obtained. Noted as an available remedy had Banco Filipino sought PDIC's authorization and been refused.
• Rule 7, Section 4, Rules of Court — Provides that a pleading required to be verified which lacks proper verification shall be treated as an unsigned pleading. Applied to treat the petition as an unsigned pleading due to the invalid verification.

Velasco, Jr., (Chairperson), Bersamin, Martires, and Gesmundo, JJ., concurred.