Koruga vs. ArcenAS

The Monetary Board of the Bangko Sentral ng Pilipinas has exclusive jurisdiction to appoint a receiver for a bank and to determine whether a bank is conducting business in an unsafe or unsound manner; the Regional Trial Court has no jurisdiction to entertain complaints for receivership of banks or to adjudicate matters involving the examination and supervision of banking activities, as these powers are vested exclusively by law in the BSP.

The dispute stems from allegations by Ana Maria A. Koruga, a minority stockholder of Banco Filipino Savings and Mortgage Bank, that the bank's directors engaged in unsafe, unsound, and fraudulent banking practices, including self-dealing, conflicts of interest, and misappropriation of funds. Koruga sought the appointment of a receiver and the creation of a management committee. The case presents a conflict between the general jurisdiction of regular courts over intra-corporate controversies under the Corporation Code and the specialized regulatory jurisdiction of the BSP over banking institutions under the New Central Bank Act and the General Banking Law of 2000.

• Ana Maria A. Koruga is a minority stockholder of Banco Filipino Savings and Mortgage Bank.
• On August 20, 2003, Koruga filed a complaint before the RTC of Makati City against the Board of Directors of Banco Filipino and members of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP).
• The complaint alleged violations of Sections 31 to 34 of the Corporation Code (prohibiting self-dealing and conflicts of interest), including engaging in unsafe and fraudulent banking practices, granting loans to dummy borrower corporations, accepting dacion en pago (payment in property instead of cash), and misappropriating approximately ₱1.6 billion in bank funds.
• Koruga also invoked her right as a stockholder to inspect corporate records under Sections 74 and 75 of the Corporation Code, alleging refusal by the bank despite written demands.
• She prayed for the appointment of a receiver and the creation of a management committee pursuant to Rule 59 of the Rules of Civil Procedure, the Securities Regulation Code (R.A. No. 8799), the Interim Rules of Procedure Governing Intra-Corporate Controversies, the General Banking Law of 2000, and the New Central Bank Act.
• Prior to filing the complaint, Koruga wrote to the Monetary Board on April 21, 2003, requesting investigation and preventive suspension of the directors for violations of banking laws.
• The BSP, through its Supervision and Examination Department, had been examining Banco Filipino's activities and had issued a Report of Examination (ROE) in October 2002 noting questionable transactions, and required the bank to submit explanations.
• Defendants Arcenas, et al. raised defenses including lack of jurisdiction over the subject matter and persons, forum-shopping, and that the suit was a nuisance/harassment suit.
• The RTC denied the defendants' motion to dismiss, ruling that preliminary hearing on affirmative defenses was proscribed by the Interim Rules on Intra-Corporate Controversies.
• The CA initially issued a TRO and preliminary injunction against the RTC proceedings, but later denied the petition of Arcenas, et al., finding no grave abuse of discretion and remanding the case to the RTC.

• Koruga (in G.R. No. 168332): The CA effectively gave due course to Arcenas, et al.'s petition by issuing a writ of preliminary injunction without factual or legal basis; the CA Resolution should be annulled and the injunction made permanent against the CA.
• Arcenas, et al. (in G.R. No. 169053): The CA erred in finding no grave abuse of discretion by the RTC; the RTC lacked jurisdiction over the subject matter as jurisdiction over banking matters is vested in the BSP; the case constitutes forum-shopping as a similar case was pending before the Monetary Board; the case is a nuisance or harassment suit; there was improper service of summons; the RTC orders were interlocutory and should not be subject to certiorari except for grave abuse of discretion.

• Arcenas, et al. (in G.R. No. 168332): Koruga's petition should be dismissed for defective Verification and Certification Against Forum-Shopping (facsimile only, not authenticated); failure to file a Motion for Reconsideration before certiorari; the petition was rendered moot by the CA's July 20, 2005 Decision dissolving the injunction.
• Koruga (in G.R. No. 169053): The CA correctly found no grave abuse of discretion by the RTC; the issues raised were factual and evidentiary, not proper for Rule 45; the BSP's jurisdiction is not exclusive over all corporate matters involving banks, especially those involving intra-corporate conflicts and violations of the Corporation Code.

• Procedural Issues:
  • Whether the petition in G.R. No. 168332 should be dismissed due to defective verification and certification against forum-shopping (facsimile copy).
  • Whether the petition in G.R. No. 168332 should be dismissed for failure to file a motion for reconsideration before resorting to certiorari.
  • Whether the petition in G.R. No. 168332 has become moot and academic in view of the CA's July 20, 2005 Decision.
• Substantive Issues:
  • Whether the RTC has jurisdiction over the complaint for receivership and examination of banking activities, or if jurisdiction is exclusively vested in the BSP/Monetary Board.
  • Whether the provisions of the Corporation Code on self-dealing and intra-corporate controversies apply suppletorily to banking institutions, or if the New Central Bank Act and General Banking Law exclusively govern such matters.
  • Whether a minority stockholder has standing to file a petition for certiorari against actions of the Monetary Board under Section 30 of the New Central Bank Act.

• Procedural:
  • The objection regarding the facsimile verification was cured by Koruga's subsequent submission of the original duly notarized and authenticated copy, thus the defect was satisfactorily resolved.
  • The failure to file a motion for reconsideration was not fatal as the petition raised pure questions of law regarding jurisdiction.
  • The petition in G.R. No. 168332 was dismissed as moot and academic because the writ of preliminary injunction being questioned had already been effectively dissolved by the CA's July 20, 2005 Decision remanding the case to the RTC.
• Substantive:
  • The RTC has no jurisdiction over the subject matter of the case. The BSP, through the Monetary Board, has exclusive jurisdiction over proceedings for receivership of banks under Section 30 of the New Central Bank Act (R.A. No. 7653).
  • The acts complained of (unsafe/unsound banking practices, self-dealing in loans, dacion en pago) pertain to the conduct of banking business, which is subject to the regulatory and supervisory powers of the BSP under the New Central Bank Act and the General Banking Law of 2000 (R.A. No. 8791).
  • The principle of generalia specialibus non derogant applies: the New Central Bank Act (special law) prevails over the Corporation Code (general law) regarding banking institutions. The Interim Rules on Intra-Corporate Controversies and Rule 59 on Receivership do not apply suppletorily to banks when the New Central Bank Act provides specific and exclusive procedures.
  • Section 30 of the New Central Bank Act explicitly states that the appointment of a receiver is vested "exclusively" with the Monetary Board, and such actions are final and executory except upon petition for certiorari filed by stockholders representing the majority of the capital stock.
  • Koruga, as a minority stockholder, lacks standing to question the Monetary Board's actions under Section 30.
  • The CA erred in upholding the RTC's jurisdiction and remanding the case. The RTC's refusal to dismiss the case for lack of jurisdiction constituted grave abuse of discretion.
  • The Temporary Restraining Order issued by the Supreme Court on March 13, 2006, was made permanent, and Civil Case No. 03-985 before the RTC was dismissed.

• Generalia Specialibus Non Derogant — A general law does not nullify a specific or special law. The Court applied this principle to hold that the New Central Bank Act (special law governing banks) prevails over the Corporation Code (general law governing all corporations) regarding matters of receivership and supervision of banking activities, excluding the suppletory application of general corporate and procedural laws.
• Exclusive Jurisdiction of the Monetary Board — Under Section 30 of the New Central Bank Act, the Monetary Board has exclusive authority to appoint a receiver for a bank and to determine whether a bank is conducting business in an unsafe or unsound manner; this jurisdiction is exclusive and summary, and actions taken are final and executory subject only to certiorari on grounds of grave abuse of discretion.
• Police Power over Banking — Banks are affected with public interest and their business is subject to reasonable regulation under the state's police power to protect depositors, creditors, and the general public, delegated to the BSP.
• Standing to Sue (Stockholders' Majority Rule) — Under Section 30 of the New Central Bank Act, only stockholders of record representing the majority of the capital stock have standing to file a petition for certiorari against the Monetary Board's order directing receivership, liquidation, or conservatorship.

• "Crystal clear in Section 30 is the provision that says the 'appointment of a receiver under this section shall be vested exclusively with the Monetary Board.' The term 'exclusively' connotes that only the Monetary Board can resolve the issue of whether a bank is to be placed under receivership and, upon an affirmative finding, it also has authority to appoint a receiver."
• "The Corporation Code, however, is a general law applying to all types of corporations, while the New Central Bank Act regulates specifically banks and other financial institutions, including the dissolution and liquidation thereof. As between a general and special law, the latter shall prevail – generalia specialibus non derogant."
• "It is well-settled in both law and jurisprudence that the Central Monetary Authority, through the Monetary Board, is vested with exclusive authority to assess, evaluate and determine the condition of any bank, and finding such condition to be one of insolvency, or that its continuance in business would involve a probable loss to its depositors or creditors, forbid bank or non-bank financial institution to do business in the Philippines; and shall designate an official of the BSP or other competent person as receiver to immediately take charge of its assets and liabilities."

• Central Bank of the Philippines v. Court of Appeals, G.R. No. 88353, May 8, 1992 — Cited for the principle that the Central Monetary Authority has exclusive authority to assess and determine the condition of any bank and to appoint a receiver.
• Miranda v. Philippine Deposit Insurance Corporation, G.R. No. 169334, September 8, 2006 — Cited for the same principle regarding the Monetary Board's exclusive authority.
• In Re: Petition for Assistance in the Liquidation of the Rural Bank of Bokod (Benguet), Inc., PDIC v. Bureau of Internal Revenue, G.R. No. 158261, December 18, 2006 — Cited for the principle that the Corporation Code is a general law while the New Central Bank Act is a special law, and the latter prevails.
• Prime White Cement Corporation v. Honorable Intermediate Appellate Court, G.R. No. 68555, March 19, 1993 — Cited in the context of defining "self-dealing directors" under the Corporation Code.

• Section 30 of R.A. No. 7653 (The New Central Bank Act) — Vests exclusive jurisdiction in the Monetary Board over receivership and liquidation of banks; specifies that only majority stockholders may file certiorari.
• Section 29 of R.A. No. 7653 (The New Central Bank Act) — Provides for the appointment of a conservator for banks.
• Section 37 of R.A. No. 7653 (The New Central Bank Act) — Provides for administrative sanctions on banks and quasi-banks.
• Section 36 of R.A. No. 8791 (The General Banking Law of 2000) — Restrictions on bank exposure to directors, officers, stockholders and their related interests.
• Section 56 of R.A. No. 8791 (The General Banking Law of 2000) — Defines conducting business in an unsafe or unsound manner.
• Sections 31 to 34 of Batas Pambansa Blg. 68 (The Corporation Code) — Provisions on liability of directors, self-dealing, contracts between corporations with interlocking directors, and disloyalty; held inapplicable to the extent they conflict with banking laws.
• Rule 59 of the 1997 Rules of Civil Procedure — Receivership; held inapplicable to bank receivership which is governed by the New Central Bank Act.
• A.M. No. 01-2-04-SC (Interim Rules of Procedure Governing Intra-Corporate Controversies) — Held inapplicable to bank receivership proceedings which are exclusively within the BSP's jurisdiction.