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

Ancillary writs such as TROs and WPIs are mere incidents of the main action and become moot upon final disposal of that main action, and a petition filed on behalf of a bank under receivership without authorization from the PDIC is not deemed filed and confers no jurisdiction on the court, while a certiorari petition assailing the acts of a quasi-judicial agency is cognizable only by the Court of Appeals, not the RTC.

Banco Filipino is a juridical entity authorized to operate as a banking institution, ordered closed on January 25, 1985, until the Supreme Court declared the closure tainted with grave abuse of discretion in its December 11, 1991 Decision. Respondent Bangko Sentral ng Pilipinas is the central monetary authority under Republic Act No. 7653 (New Central Bank Act), exercising regulatory powers over banks through the Monetary Board, including the power to place banks under receivership and impose administrative sanctions. The dispute arose from prolonged negotiations between the parties over Banco Filipino's request for a ₱25,000,000,000.00 financial assistance and regulatory reliefs package, which Bangko Sentral approved subject to the condition that Banco Filipino withdraw or dismiss with prejudice all pending cases against it and execute quitclaims waiving future claims.

Banco Filipino Savings and Mortgage Bank is a juridical entity authorized to operate as a banking institution. It was ordered closed on January 25, 1985, until the Supreme Court, in its December 11, 1991 Decision in Banco Filipino Savings & Mortgage Bank vs. Monetary Board and Central Bank of the Philippines, declared the closure tainted with grave abuse of discretion and directed the Central Bank and the Monetary Board to reorganize the bank and allow it to resume business under their comptrollership. On November 6, 1993, pursuant to that Decision, the Monetary Board issued Resolution No. 427 allowing Banco Filipino to resume operations.

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, by letter dated November 21, 2003, informed the bank that it must first comply with conditions imposed by RA 7653 and 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 adjudicated by the Supreme Court. Bangko Sentral responded that the plan could not be acted upon because it was neither confirmed nor approved by Banco Filipino's Board of Directors.

On July 8, 2004, Banco Filipino filed a Petition for Revival of Judgment before the RTC of Makati, Branch 62, 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 others a ₱25,000,000,000.00 income enhancement loan. Unable to reach an agreement, the parties constituted an Ad Hoc Committee that produced an Alternative Business Plan, which Banco Filipino accepted subject to Monetary Board approval.

By letter dated December 4, 2009, Bangko Sentral informed Banco Filipino that the Monetary Board issued Resolution No. 1668 granting the ₱25,000,000,000.00 Financial Assistance and Regulatory Reliefs, subject to certain terms and conditions. Among these was the withdrawal or dismissal with prejudice of all pending cases filed by Banco Filipino against Bangko Sentral and its officials, the execution of quitclaims, and commitments by the bank's principal stockholders, Board of Directors, and officers not to revive or refile similar cases. Banco Filipino sought reconsideration of these terms by letter dated January 20, 2010, noting that the salient features of the Alternative Business Plan had been materially modified. By letter dated April 8, 2010, the bank informed Bangko Sentral that it was constrained to accept the "unilaterally whittled down version" of the package but asserted that it did not agree with the condition to dismiss and withdraw its cases, which would require separate discussion.

Bangko Sentral, by letter dated April 19, 2010, expressed surprise at the bank's hesitation, stating that the withdrawal condition had been discussed from the start of negotiations. Banco Filipino replied by letter dated June 21, 2010, maintaining that it had never accepted the withdrawal condition in prior negotiations but was willing to discuss it as a separate matter. On August 10, 2010, Bangko Sentral and the Monetary Board, through private counsel CVC Law, informed Banco Filipino that its rejection of portions of Resolution No. 1668 constituted a failure to reach a mutually acceptable settlement, rendering the Resolution legally unenforceable. Banco Filipino questioned the legality of referring the matter to private counsel in letters dated August 13, September 22, and September 28, 2010, and reiterated that the terms were not meant to settle its ₱18,800,000,000.00 damage claim.

On October 20, 2010, Banco Filipino filed a Petition for Certiorari and Mandamus with prayer for TRO and WPI before the RTC of Makati, Branch 66, docketed as Civil Case No. 10-1042, alleging that respondents committed grave abuse of discretion in conditioning approval of the business plan on the withdrawal of cases and waiver of future claims. The RTC granted the TRO on October 28, 2010, and the WPI on November 18, 2010, mandating respondents to implement the approved business plan and enjoining them from enforcing coercive regulatory measures. Meanwhile, on March 17, 2011, the Monetary Board issued Resolution No. 372.A, placing Banco Filipino under receivership and designating the PDIC as receiver, after determining the bank's inability to continue operating with safety to its depositors and creditors. The CA, in its October 3, 2011 Decision, reversed and set aside the RTC's TRO and WPI, annulling the RTC orders and directing the trial court to dismiss the case for lack of jurisdiction. Banco Filipino's motion for reconsideration was denied by the CA on February 14, 2012, prompting the instant petition filed with the Supreme Court on April 10, 2012.

• Grave Abuse of Discretion: Petitioner alleged that respondents committed grave abuse of discretion in requiring it to withdraw its cases and waive all future claims as a condition to the approval of its business plan, rendering the condition illegal and void.
• Entitlement to Writs: Petitioner prayed for the issuance of a writ of certiorari finding grave abuse of discretion amounting to lack or excess of jurisdiction, a writ of mandamus compelling Bangko Sentral and the Monetary Board to approve and implement its business plan and release the financial assistance and regulatory reliefs package, and a TRO and WPI restraining respondents from acts inimical to the business plan, from withdrawing its approval, and from enforcing coercive regulatory measures.
• Propriety of TRO and WPI: Petitioner sought reversal of the CA's October 3, 2011 Decision and February 14, 2012 Resolution, praying that the writ of injunction issued by the trial court remain in force and effect.

• Lack of Jurisdiction: Respondents assailed the RTC's jurisdiction over the subject matter and over the persons of Bangko Sentral and the Monetary Board, filing a Motion to Dismiss Ad Cautelam on these grounds.
• Void Issuance of TRO and WPI: Respondents argued before the CA that the TRO was issued without jurisdiction, there being no valid service of summons on respondents, and that the issuance violated the New Central Bank Act and public policy.
• No Clear Legal Right: Respondents contended that Banco Filipino failed to show a clear legal right to the writs or that it would suffer grave and irreparable injury if the writs were not issued.

• Mootness: Whether the petition has been rendered moot and academic by the final and executory Decision in G.R. No. 200678 disposing of the main action in Civil Case No. 10-1042.
• PDIC Authorization: Whether the petition was properly filed on behalf of Banco Filipino, a bank under PDIC receivership, without securing authorization from the PDIC.
• Jurisdiction over Subject Matter: Whether the RTC had jurisdiction over the petition for certiorari and mandamus filed against Bangko Sentral and the Monetary Board, which are quasi-judicial agencies.
• Propriety of Ancillary Writs: Whether the issuance of the TRO and WPI by the RTC was proper.

• Mootness: Yes, the petition is moot and academic. The main action in Civil Case No. 10-1042 was already disposed of by the final and executory Decision in G.R. No. 200678, and ancillary writs cannot survive the resolution of the main case of which they are incidents.
• PDIC Authorization: No. The petition was not deemed filed because no PDIC authorization was secured or shown, and the powers of Banco Filipino's Board of Directors were suspended upon PDIC takeover as receiver.
• Jurisdiction over Subject Matter: No. The RTC lacked jurisdiction over the certiorari petition because the Monetary Board is a quasi-judicial agency, and under Rule 65, Section 4, such petitions are cognizable only by the Court of Appeals.
• Propriety of Ancillary Writs: The TRO and WPI were void for want of jurisdiction, as they were issued by a court lacking jurisdiction over the main case, and the void nature of all proceedings extends to ancillary writs.

• Mootness: TROs and WPIs are provisional injunctive reliefs that are ancillary to a main action or proceeding; they are mere incidents in and dependent upon the result of the main action. Their office is limited to preserving the status quo until the merits of the case can be heard. The existence of a main action is a condition sine qua non before a TRO or WPI may lie. Any preliminary writ cannot survive the resolution of the main case because an ancillary writ loses its force and effect after the decision in the main petition. When a main action is dismissed, any provisional remedy is dissolved. In this case, the Court's Decision in G.R. No. 200678 (the MTD Case) already disposed of the main action in Civil Case No. 10-1042, denying Banco Filipino's petition and finding that the CA did not err in dismissing the case before the trial court for lack of jurisdiction. That Decision became final and executory and was entered in the Book of Entries of Judgments on April 8, 2019. There being no actual substantial relief to which the parties would be entitled even if the petition were granted, the petition was dismissed for being moot and academic.

• PDIC Authorization: When a bank is ordered closed and placed under receivership of the PDIC by the Monetary Board, the PDIC is mandated to proceed with takeover and liquidation, gathering and taking charge of all assets and liabilities, administering them for the benefit of creditors, and exercising the general powers of a receiver. Under Section 10(b) of RA 9302, effective immediately upon takeover as receiver, the powers, functions, and duties of the directors, officers, and stockholders of the closed bank are suspended. The PDIC, as statutory receiver and fiduciary of the closed bank's properties, is authorized to bring suits to enforce liabilities and recoveries of the closed bank. A closed bank under receivership can only sue or be sued through its receiver, the PDIC. In the MTD Case, the Court held that PDIC should have been joined or, at the very least, its authorization to file suit should have been secured; the bank's executive vice presidents could not have been validly authorized by the Board of Directors, whose powers were suspended. In the instant case, Banco Filipino was placed under PDIC receivership on March 17, 2011, and the petition was filed on April 10, 2012. A perusal of the records revealed no PDIC authority for the filing, and the verification and certification of non-forum shopping were signed by the same executive vice presidents whose authority sprang from the suspended Board. An unauthorized complaint does not produce any legal effect, and the Court did not acquire jurisdiction over the case.

• Jurisdiction over Subject Matter: Under Section 4, Rule 65 of the Rules of Court, petitions for certiorari, prohibition, or mandamus involving the acts or omissions of a quasi-judicial agency shall be filed in and are cognizable only by the Court of Appeals, unless otherwise provided by law or the Rules of Court. The Monetary Board of Bangko Sentral has been recognized as a quasi-judicial agency exercising quasi-judicial functions. Banco Filipino's petition for certiorari and mandamus should therefore have been filed before the CA, not the RTC. It is the duty of the court to dismiss an action whenever it appears that it has no jurisdiction over the subject matter. Jurisdiction is the power and authority of a court to hear, try, and decide a case; proceedings before a court without jurisdiction, including its decisions, are null and void. When a court lacks jurisdiction, it lacks authority over the whole case and all its aspects.

• Propriety of Ancillary Writs: The court's lack of jurisdiction extends to ancillary writs, such as a preliminary injunction, which exist only as an incident to an independent action. A trial court with no jurisdiction over the petition filed therein is likewise devoid of any authority to act on the application for a WPI contained in the same petition. Applying this principle, the RTC lacked jurisdiction over Civil Case No. 10-1042, and the void nature of all proceedings arising therefrom extends to the issuance of any ancillary writs, including the TRO and WPI. Even assuming arguendo that the petition had not been rendered moot, it should still be dismissed since the TRO and WPI issued by the trial court are void for want of jurisdiction.

• Ancillary Nature of TROs and WPIs — TROs and WPIs are provisional injunctive reliefs permitted only in connection with or as ancillary to a main action or proceeding pending in court. Their office is limited to preserving the status quo until the action can be fully decided. The existence of a main action or proceeding is a condition sine qua non before a TRO or WPI may lie. An ancillary writ loses its force and effect after the decision in the main petition; when the main action is dismissed, any provisional remedy is dissolved. In this case, because the main action in Civil Case No. 10-1042 was finally disposed of in G.R. No. 200678, any disposition on the propriety of the TRO and WPI served no practical purpose and was rendered moot and academic.

• Bank Under Receivership Sues Only Through PDIC — When a bank is placed under PDIC receivership by the Monetary Board, the powers, functions, and duties of the bank's directors, officers, and stockholders are suspended upon takeover. The PDIC, as statutory receiver and fiduciary, controls and administers the affairs of the closed bank and is authorized to bring suits on its behalf. A closed bank can only sue or be sued through its receiver. A petition filed on behalf of a bank under receivership that is neither filed through nor authorized by the PDIC is not deemed filed and produces no legal effect, and the court does not acquire jurisdiction. At the very least, the bank should have shown that it attempted to seek PDIC authorization; if PDIC refused, the bank could have made PDIC an unwilling co-petitioner under Rule 3, Section 10.

• Jurisdiction over Quasi-Judicial Agencies — Under Section 4, Rule 65 of the Rules of Court, petitions for certiorari, prohibition, or mandamus involving the acts or omissions of a quasi-judicial agency are cognizable only by the Court of Appeals, unless otherwise provided by law or the Rules of Court. The Monetary Board of Bangko Sentral is a quasi-judicial agency exercising quasi-judicial functions. A certiorari petition against the Monetary Board filed before the RTC is jurisdictionally infirm, and all proceedings, including ancillary writs issued therein, are void.

• "TROs and WPIs 'constitute temporary measures availed of during the pendency of the action' and are 'preservative remedies for the protection of substantive rights' of the parties. They are ancillary because 'they are mere incidents in and are dependent upon the result of the main action.'" — This passage articulates the fundamental rationale for the mootness ruling: ancillary writs are dependent on the main action and cannot survive its disposition.

• "A bank under receivership can only sue or be sued through its receiver, the PDIC. Thus, a petition filed on behalf of a bank under receivership that is neither filed through nor authorized by the PDIC must be dismissed for want of jurisdiction." — This is the canonical formulation of the rule on the legal capacity of a bank under receivership to sue, directly applied to dismiss the petition.

• "The court's lack of jurisdiction likewise extends to ancillary writs, such as a preliminary injunction, which exist only as an incident to an independent action. A trial court with no jurisdiction over the petition filed therein is likewise devoid of any authority to act on the application for the issuance of a WPI contained in the same petition." — This passage establishes the principle that jurisdictional defects pervade all aspects of a case, including provisional remedies, rendering ancillary writs void when the main case was filed before a court lacking subject-matter jurisdiction.

• Banco Filipino Savings and Mortgage Bank vs. Bangko Sentral ng Pilipinas, 832 Phil. 27 (2018) (G.R. No. 200678, the MTD Case) — Controlling precedent. The Court's final and executory Decision in this related case disposed of the main action in Civil Case No. 10-1042 by denying Banco Filipino's petition and upholding the CA's dismissal for lack of RTC jurisdiction. It also established that a bank under PDIC receivership can only sue through the PDIC, and that the bank's executive vice presidents could not have been validly authorized by the suspended Board of Directors.

• City of Manila vs. Grecia-Cuerdo, 726 Phil. 9 (2014) — Followed. The Court dismissed a Rule 65 petition involving only the propriety of a WPI in view of the trial court's final and executory Decision disposing of the main case, holding that the WPI was merely an incident rendered moot by disposition of the main action.

• Balayan Bay Rural Bank, Inc. vs. National Livelihood Development Corp., 770 Phil. 30 (2015) — Followed. Held that the PDIC, as fiduciary of the properties of a closed bank, may prosecute or defend cases by or against the bank as a representative party, and that actions should be brought for or against the closed bank through the statutory receiver.

• Tamondong vs. Court of Appeals, 486 Phil. 729 (2004) — Cited for the proposition that an unauthorized complaint does not produce any legal effect, supporting the dismissal for lack of PDIC authorization.

• BF Homes, Inc. vs. Manila Electric Co., 651 Phil. 211 (2010) — Cited for the principle that a court's lack of jurisdiction over a petition extends to ancillary writs contained in the same petition.

• Section 4, Rule 65, Rules of Court — Provides that petitions for certiorari, prohibition, or mandamus involving the acts or omissions of a quasi-judicial agency shall be filed in and are cognizable only by the Court of Appeals, unless otherwise provided by law or the Rules. Applied to hold that the RTC lacked jurisdiction over Banco Filipino's certiorari petition against the Monetary Board, a quasi-judicial agency.

• Sections 1, 2, and 5, Rule 58, Rules of Court — Define and describe the circumstances under which a TRO and WPI may be granted, all assuming the prior existence of a main action or proceeding. Cited to support the ancillary character of these writs and the mootness ruling.

• Section 2, Rule 9, Rules of Court — Provides that a court shall dismiss an action whenever it appears that it has no jurisdiction over the subject matter. Applied to support the dismissal of the case before the RTC.

• Section 10, Rule 3, Rules of Court — Allows the joinder of an unwilling party as a co-petitioner or respondent. Cited in the MTD Case as a remedy available to Banco Filipino had PDIC refused to authorize the suit.

• Section 30, New Central Bank Act (RA 7653) — Governs proceedings in receivership and liquidation, providing that the receiver shall immediately gather and take charge of all assets and liabilities of the institution and administer the same for the benefit of creditors. Cited to establish PDIC's statutory role as receiver.

• Section 10(b), RA 9302, amending Section 9-A, RA 3591 — 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 hold that the Board of Directors could not have validly authorized the executive vice presidents to file the petition.

• Section 10(c), RA 9302, amending Section 9-A, RA 3591 — Empowers the PDIC, as receiver, to bring suits to enforce liabilities or recoveries of the closed bank, hire or retain private counsels, and exercise such other powers as are inherent and necessary for the effective discharge of its duties. Cited to establish that only the PDIC may sue on behalf of the closed bank.

• Section 12(a), RA 3591, as amended by Section 25, RA 10846 — Provides that whenever a bank is ordered closed by the Monetary Board, the PDIC shall be designated as receiver and shall proceed with takeover and liquidation, and that banks closed by the Monetary Board shall no longer be rehabilitated.

Leonen (Chairperson), Inting, Delos Santos, and J. Lopez, JJ., concurred.