Perez vs. Monetary Board

Mandamus will not lie to compel the Central Bank or its officials to actually prosecute alleged violators of banking laws, their statutory duty being merely to cause prosecution by referral to proper prosecuting authorities, nor will mandamus lie to compel the Secretary of Justice to prosecute criminal cases.

Damaso P. Perez was a stockholder of Republic Bank who sued both for himself and in a derivative capacity on behalf of the bank. The respondents — the Monetary Board, the Superintendent of Banks, the Central Bank of the Philippines, and the Secretary of Justice — are the bodies tasked under the Central Bank Act and the General Banking Act with administering the monetary and banking system. Pablo Roman and his family were the controlling stockholders of Republic Bank. The dispute centered on alleged anomalous loans amounting to ₱1,303,400.00 authorized by Roman and other bank officials, which petitioner sought to have criminally prosecuted through mandamus.

On June 23, 1962, Damaso P. Perez, for himself and in a derivative capacity on behalf of Republic Bank, instituted mandamus proceedings in the Court of First Instance of Manila against the Monetary Board, the Superintendent of Banks, the Central Bank of the Philippines, and the Secretary of Justice. His object was to compel these respondents to prosecute, among others, Pablo Roman and several other Republic Bank officials for violations of the General Banking Act (specifically Sections 76-78 and 83 thereof) and the Central Bank Act, and for falsification of public or commercial documents in connection with alleged anomalous loans amounting to ₱1,303,400.00 authorized by Roman and the other bank officials.

Respondents assailed the propriety of mandamus in their respective answers. The Secretary of Justice claimed that it was not their specific duty to prosecute the persons denounced by Perez. The Central Bank and its respondent officials averred that they had already done their duty under the law by referring to the special prosecutors of the Department of Justice for criminal investigation and prosecution those cases involving the alleged anomalous loans. On July 10, 1962, respondents moved for the dismissal of the petition for lack of cause of action, but the lower court denied the motion.

Subsequently, the incumbent directors of the Republic Bank Board filed a motion to intervene, which the lower court approved despite petitioners' opposition. On January 20, 1964, the Monetary Board passed Resolution No. 81 granting Republic Bank's request for credit accommodations to cover unusual deposit withdrawals during the ongoing investigation, conditioned upon the execution by the management and controlling stockholders of a voting trust agreement in favor of a Board of Trustees chosen with Central Bank approval. Pursuant to this resolution, Pablo Roman and his family, as controlling stockholders, executed a voting trust agreement in favor of a board of trustees composed of former Chief Justice Ricardo Paras, Hon. Miguel Cuaderno, and Mr. Felix de la Costa. This agreement was superseded on March 13, 1964 by another one with the Philippine National Bank as trustee.

In view of these developments, the intervenors filed a motion to dismiss claiming that the ouster of Pablo Roman and his family from the management of Republic Bank through the voting trust agreement rendered the mandamus case moot and academic. Respondents also filed a motion to dismiss, again raising the impropriety of mandamus. The lower court granted both motions and dismissed the case, prompting this appeal. Petitioners contended that the ouster of Roman had not altered or rendered moot the issues, and that mandamus lay to compel respondents to prosecute.

• Propriety of Mandamus: Petitioners argued that the remedy of mandamus lies to compel respondents to prosecute Pablo Roman and other alleged violators of banking laws, asserting that their petition stated a cause of action for mandamus.
• Mootness: Petitioners contended that the ouster of Pablo Roman from Republic Bank's management and control had not altered or rendered moot the issues in the case.
• Estoppel of the Lower Court: Petitioners insisted that the impropriety of mandamus could no longer be raised before the lower court a second time, since it had already been invoked in a previous motion to dismiss which was denied.

• Secretary of Justice — No Specific Duty to Prosecute: Respondent Secretary of Justice claimed that it was not their specific duty to prosecute the persons denounced by Perez.
• Central Bank — Duty Already Performed: Respondent Central Bank and its officials averred that they had already done their duty under the law by referring the cases involving the alleged anomalous loans to the special prosecutors of the Department of Justice for criminal investigation and prosecution.
• Intervenors — Mootness: Intervenors-appellees argued that the ouster of Pablo Roman and his family from management of Republic Bank through the voting trust agreement rendered the mandamus case moot and academic.

• Propriety of Mandamus: Whether mandamus lies to compel the Central Bank, its officials, and the Secretary of Justice to criminally prosecute alleged violators of banking laws.
• Re-litigation of Previously Denied Ground: Whether the lower court was estopped from reconsidering the propriety of mandamus after previously denying a motion to dismiss on the same ground.

• Propriety of Mandamus: No. The Central Bank's statutory duty is merely to "cause prosecution" by referral to proper authorities, not to conduct actual prosecution itself; and mandamus will not lie to compel a prosecuting officer to prosecute a criminal case.
• Re-litigation of Previously Denied Ground: No. The lower court's prior order denying the motion to dismiss was purely interlocutory and remained subject to alteration before final judgment on the merits.

• Propriety of Mandamus: Although the Central Bank and its officials may have a duty under the Central Bank Act and the General Banking Act to "cause the prosecution" of alleged violators, nothing in those laws imposes a clear, specific duty on them to "do the actual prosecution." The Central Bank is a government corporation created principally to administer the monetary and banking system, not a prosecution agency. As an artificial person, it is limited to its statutory powers, and the nearest power to prosecution is its power to sue and be sued, which refers only to civil cases. The Central Bank had already referred the cases to the Department of Justice's special prosecutors, fulfilling its statutory duty; to conduct the actual prosecution itself would be ultra vires. As for the Secretary of Justice, while he may have the power to prosecute through the Office of the Solicitor General, settled doctrine provides that mandamus will not lie to compel a prosecuting officer to prosecute a criminal case. Moreover, violations of banking laws constitute public offenses prosecutable as matters of public interest, and anyone — even private individuals — can denounce such violations before the prosecuting authorities. Since Perez himself could file criminal complaints against those allegedly involved, he had a plain, adequate, and speedy remedy in the ordinary course of law, rendering mandamus improper.
• Re-litigation of Previously Denied Ground: The lower court's former order denying the motion to dismiss was purely interlocutory and thus remained constantly subject to alteration, modification, or reversal before rendition of final judgment on the merits. The lower court was not estopped from changing its opinion while it still had jurisdiction to do so, especially on the same ground of lack of cause of action previously raised.

• Mandamus to compel criminal prosecution — Mandamus will not lie to compel a prosecuting officer to prosecute a criminal case in court. This settled rule was applied to bar petitioner's attempt to force the Secretary of Justice to prosecute. The doctrine extends to the Central Bank, whose statutory duty is merely to "cause" prosecution by referral to proper authorities, not to conduct it directly. The distinction between the duty to "cause prosecution" and the duty to "actually prosecute" is the critical determinant of mandamus availability.
• Interlocutory orders subject to reconsideration — A purely interlocutory order remains constantly subject to alteration, modification, or reversal by the court before rendition of final judgment on the merits. The court is not estopped from changing its position on the same ground raised in a previously denied motion, so long as jurisdiction has not been lost and final judgment has not been rendered.

• "Although the Central Bank and its respondent officials may have the duty under the Central Bank Act and the General Banking Act to cause the prosecution of those alleged violators, yet We find nothing in said laws that imposes a clear, specific duty on the former to do the actual prosecution of the latter." — This passage articulates the ratio decidendi: the distinction between the duty to "cause prosecution" and the duty to "actually prosecute," which is the key to the ruling that mandamus does not lie.
• "The lower court was not estopped from changing its opinion while it was under its jurisdiction to do so and on the same ground of lack of cause of action raised before, because the former order was purely interlocutory and thus remained constantly subject to alteration, modification or reversal by it before the rendition of final judgment on its merits." — This defines the doctrine on interlocutory orders and their susceptibility to reconsideration before final judgment.
• "For respondents to do the actual prosecuting themselves, as petitioners would have it, would be tantamount to an ultra vires act already." — This establishes that the Central Bank's referral of cases to the Department of Justice exhausted its statutory authority, and direct prosecution would exceed its corporate powers.

• People vs. Tan, L-9275, June 30, 1960 — Cited to support the proposition that the Central Bank is not a prosecution agency, reinforcing the distinction between its administrative mandate and prosecutorial functions.
• Gonzales vs. Court of First Instance, 63 Phil. 846 — Cited as controlling authority for the settled rule that mandamus will not lie to compel a prosecuting officer to prosecute a criminal case in court.
• Dimaunahan vs. Hon. Aranas, 74 Phil. 455 — Cited for the same proposition regarding the unavailability of mandamus to compel criminal prosecution.

• Section 2, Republic Act 265 (Central Bank Act) — Cited to establish that the Central Bank is a government corporation created principally to administer the monetary and banking system, not a prosecution agency.
• Section 4, Republic Act 265 (Central Bank Act) — Cited for the Central Bank's power to sue and be sued, which the Court clarified refers only to civil cases and does not extend to criminal prosecution.
• Sections 76-78 and 83, General Banking Act — The provisions allegedly violated by Pablo Roman and other Republic Bank officials, which petitioner sought to have enforced through mandamus.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, and Castro, JJ., concur.