FIRST PHILIPPINE
INTERNATIONAL BANK (Formerly Producers Bank of the Philippines) and MERCURIO
RIVERA vs. CA, CARLOS EJERCITO in substitution of DEMETRIO DEMETRIA, and JOSE
JANOLO
G.R. No. 115849
January
24, 1996
J.
PANGANIBAN
FACTS: Producer Bank
of the Philippines acquired 6 parcels of land at Laguna. The property used
to be owned by BYME Investment and Development Corporation which had them
mortgaged with the bank as collateral for a loan. Demetrio Demetria and
Jose O. Janolo wanted to purchase the property and thus initiated negotiations
for that purpose.
In August 1987, Demetria
and Janolo met with Mercurio Rivera, Manager of the Property Management
Department of the Bank to discuss their plan to buy the property. Thereafter,
they had a series of letters where parties accepted the offer of Demetria and
Janolo. Later in October, the conservator of the bank (which has been placed
under conservatorship by the Central Bank since 1984) was replaced; and
subsequently the proposal of Demetria and Janolo to buy the properties was
under study pursuant to the new conservator’s mandate. After which, a series of
demands ensued.
ISSUE:
WON the conservator may revoke a perfected and enforceable contract. NO.
RULING:
Section 28-A of Republic Act No. 265 (otherwise known as the Central Bank Act)
as follows:
Section 28-A - Whenever, on the basis of a report
submitted by the appropriate supervising or examining department, the Monetary
Board finds that a bank or a non-bank financial intermediary performing
quasi-banking functions is in a state of continuing inability or unwillingness
to maintain a state of liquidity deemed adequate to protect the interest of
depositors and creditors, the Monetary Board may appoint a conservator to
take charge of the assets, liabilities, and the management of that institution,
collect all monies and debts due said institution and exercise all powers
necessary to preserve the assets of the institution, reorganize the management
thereof, and restore its viability. He shall have the power to overrule
or revoke the actions of the previous management and board of directors of
the bank or non-bank financial intermediary performing quasi-banking functions,
any provision of law to the contrary notwithstanding, and such other powers as
the Monetary Board shall deem necessary.
While
admittedly, the Central Bank law gives vast and far-reaching powers to the
conservator of a bank, it must be pointed out that such powers must be related
to the "(preservation of) the assets of the bank, (the reorganization of)
the management thereof and (the restoration of) its viability." Such
powers, enormous and extensive as they are, cannot extend to the post-facto repudiation
of perfected transactions, otherwise they would infringe against the non-impairment
clause of the Constitution.
Section
28-A merely gives the conservator power to revoke contracts that are, under
existing law, deemed to be defective. Hence, the conservator merely takes the
place of a bank's board of directors, so what the board cannot do; the
conservator cannot do either. His power is however, not unilateral as he cannot
simply repudiate valid obligations of the Bank. His authority would be only to
bring court actions to assail such contracts.
In
the case, it is not disputed that the bank was under a conservator placed by
the Central Bank of the Philippines during the time that the negotiation and
perfection of the contract of sale took place. Moreover, there was absolutely
no evidence that the Conservator, at the time the contract was perfected,
actually repudiated or overruled said contract of sale. The bank never objected
to the sale, what it unilaterally repudiated was—not the contract —but the
authority of Rivera to make a binding offer —and which unarguably came months
after the perfection of the contract.
The
conservator’s authority would be only to bring court actions to assail such
contracts —as he has already done so in the instant case. A contrary
understanding of the law would simply not be permitted by the Constitution.
Neither by common sense. To rule otherwise would be to enable a failing bank to
become solvent, at the expense of third parties, by simply getting the
conservator to unilaterally revoke all previous dealings which had one way or
another or come to be considered unfavorable to the Bank, yielding nothing to
perfected contractual rights nor vested interests of the third parties who had
dealt with the Bank.
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