THIRD DIVISION.
.
PHILIPPINE DEPOSIT
INSURANCE CORPORATION,
Petitioner,
G.R.
No.
126911
April 30, 2003
-versus-
THE
HONORABLE
COURT
OF APPEALS AND JOSE ABAD,LEONOR ABAD, SABINA
ABAD, JOSEPHINE "JOSIE" BEATA ABAD-ORLINA,CECILIA ABAD, PIO
ABAD, DOMINIC ABAD AND TEODORA ABAD,
Respondents. |
D E C I S I O N
CARPIO-MORALES,
J.:chanroblesvirtuallawlibrary
The present Petition for
Review assails the Decision of the Court of Appeals affirming that of
the
Regional Trial Court of Iloilo City, Branch 30, finding Petitioner
Philippine
Deposit Insurance Corporation (PDIC) liable, as statutory insurer, for
the value of 20 Golden Time Deposits belonging to Respondents Jose
Abad,
Leonor Abad, Sabina Abad, Josephine "Josie" Beata Abad-Orlina, Cecilia
Abad, Pio Abad, Dominic Abad, and Teodora Abad at the Manila Banking
Corporation
(MBC), Iloilo Branch.chanrobles virtuallaw libraryred
Prior to May 22, 1997,
respondents had, individually or jointly with each other, 71
certificates
of time deposits denominated as "Golden Time Deposits" (GTD) with an
aggregate
face value of P1,115,889.96.[1]chanrobles virtuallaw libraryred
On May 22, 1987, a Friday,
the Monetary Board (MB) of the Central Bank of the Philippines, now
Bangko
Sentral ng Pilipinas, issued Resolution 505[2]
prohibiting MBC to do business in the Philippines, and placing its
assets
and affairs under receivership. The Resolution, however, was not served
on MBC until Tuesday the following week, or on May 26, 1987, when the
designated
Receiver took over.[3]chanrobles virtuallaw libraryred
On May 25, 1987, the
next banking day following the issuance of the MB Resolution,
respondent
Jose Abad was at the MBC at 9:00 a.m. for the purpose of
pre-terminating
the 71 aforementioned GTDs and re-depositing the fund represented
thereby
into 28 new GTDs in denominations of P40,000.00 or less under the names
of herein respondents individually or jointly with each other.[4]
Of the 28 new GTDs, Jose Abad pre-terminated 8 and withdrew the value
thereof
in the total amount of P320,000.00.[5]chanrobles virtuallaw libraryred
Respondents thereafter
filed their claims with the PDIC for the payment of the remaining 20
insured
GTDs.[6]chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
On February 11, 1988,
PDIC paid respondents the value of 3 claims in the total amount of
P120,000.00.
PDIC, however, withheld payment of the 17 remaining claims after
Washington
Solidum, Deputy Receiver of MBC-Iloilo, submitted a report to the PDIC[7]
that there was massive conversion and substitution of trust and deposit
accounts on May 25, 1987 at MBC-Iloilo.[8]
The pertinent portions of the report stated:chanrobles virtuallaw libraryred
x
x xchanrobles virtuallaw libraryred
On May 25, 1987 (Monday)
or a day prior to the official announcement and take-over by CB of the
assets and liabilities of The Manila Banking Corporation, the Iloilo
Branch
was found to have recorded an unusually heavy movements in terms of
volume
and amount for all types of deposits and trust accounts. It appears
that
the impending receivership of TMBC was somehow already known to many
depositors
on account of the massive withdrawals paid on this day which
practically
wiped out the branch’s entire cash position.chanrobles virtuallaw libraryred
x
x xchanrobles virtuallaw libraryred
The intention was to
maximize the availment of PDIC coverage limited to P40,000 by spreading
out big accounts to as many certificates under various nominees.[9]chanrobles virtuallaw libraryred
x
x xchanrobles virtuallaw libraryred
Because of the report,
PDIC entertained serious reservation in recognizing respondents’ GTDs
as
deposit liabilities of MBC-Iloilo. Thus, on August 30, 1991, it filed a
petition for declaratory relief against respondents with the Regional
Trial
Court (RTC) of Iloilo City, for a judicial declaration determination of
the insurability of respondents’ GTDs at MBC-Iloilo.[10]chanrobles virtuallaw libraryred
In their Answer filed
on October 24, 1991 and Amended Answer[11]
filed on January 9, 1992, respondents set up a counterclaim against
PDIC
whereby they asked for payment of their insured deposits.[12]chanrobles virtuallaw libraryred
In its Decision of February
22, 1994,[13]
Branch 30 of the Iloilo RTC declared the 20 GTDs of respondents to be
deposit
liabilities of MBC, hence, are liabilities of PDIC as statutory
insurer.
It accordingly disposed as follows:chanrobles virtuallaw libraryred
WHEREFORE,
premises considered, judgment is hereby rendered:
chanrobles virtuallaw libraryred
1. Declaring the 28
GTDs of the Abads which were issued by the TMBC-Iloilo on May 25, 1987
as deposits or deposit liabilities of the bank as the term is defined
under
Section 3 (f) of R.A. No. 3591, as amended;chanrobles virtuallaw libraryred
2. Declaring PDIC,
being
the statutory insurer of bank deposits, liable to the Abads for the
value
of the remaining 20 GTDs, the other 8 having been paid already by
TMBC-Iloilo
on May 25, 1987;chanrobles virtuallaw libraryred
3. Ordering PDIC
to
pay the Abads the value of said 20 GTDs less the value of 3 GTDs it
paid
on February 11, 1988, and the amounts it may have paid the Abads
pursuant
to the Order of this Court dated September 8, 1992;chanrobles virtuallaw libraryred
4. Ordering PDIC
to
pay immediately the Abads the balance of its admitted liability as
contained
in the aforesaid Order of September 8, 1992, should there be any,
subject
to liquidation when this case shall have been finally decide; andchanrobles virtuallaw libraryred
5. Ordering PDIC
to
pay legal interest on the remaining insured deposits of the Abads from
February 11, 1988 until they are fully paid.
SO ORDERED.
On appeal, the Court of
Appeals, by the assailed Decision of October 21, 1996,[14]
affirmed the trial court’s decision except as to the award of legal
interest
which it deleted.chanrobles virtuallaw libraryred
Hence, PDIC’s present
Petition for Review which sets forth this lone assignment of error:chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
The honorable court
of appeals erred in affirming the holding of the trial court that the
amount
represented in the faces of the so called "golden time deposits" were
insured
deposits even as they were mere derivatives of respondents’ previous
account
balances which were pre-terminated/terminated at the time the Manila
Banking
Corporation was already in serious financial distress.chanrobles virtuallaw libraryred
In its supplement to
the petition, PDIC adds the following assignment of error:
chanrobles virtuallaw libraryred
The honorable court
of appeals erred in affirming the holding of the trial court ordering
petitioner
to pay respondents’ claims for payment of insured deposits for the
reason
that an action for declaratory relief does not essentially entail an
executory
process as the only relief that should have been granted by the trial
court
is a declaration of the rights and duties of Petitioner under R.A.
3591,
as amended, particularly section 3(f) thereof as considered against the
surrounding circumstances of the matter in issue sought to be construed
without prejudice to other matters that need to be considered by
petitioner
in the processing of respondents’ claims.chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
Under its charter,[15]
PDIC (hereafter petitioner) is liable only for deposits received by a
bank
"in the usual course of business."[16]
Being of the firm conviction that, as the reported May 25, 1987 bank
transactions
were so massive, hence, irregular, petitioner essentially seeks a
judicial
declaration that such transactions were not made "in the usual course
of
business" and, therefore, it cannot be made liable for deposits subject
thereof.[17]chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
Petitioner points that
as MBC was prohibited from doing further business by MB Resolution 505
as of May 22, 1987, all transactions subsequent to such date were not
done
"in the usual course of business."chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
Petitioner further
posits that there was no consideration for the 20 GTDs subject of
respondents’
claim. In support of this submission, it states that prior to
March
25, 1987, when the 20 GTDs were made, MBC had been experiencing
liquidity
problems, e.g., at the start of banking operations on March 25, 1987,
it
had only P2,841,711.90 cash on hand and at the end of the day it was
left
with P27,805.81 consisting mostly of mutilated bills and coins.[18]
Hence, even if respondents had wanted to convert the face amounts of
the
GTDs to cash, MBC could not have complied with it.chanrobles virtuallaw libraryred
Petitioner theorizes
that after MBC had exhausted its cash and could no longer sustain
further
withdrawal transactions, it instead issued new GTDs as "payment" for
the
pre-terminated GTDs of respondents to make sure that all the
newly-issued
GTDs have face amounts which are within the statutory coverage of
deposit
insurance.chanrobles virtuallaw libraryred
Petitioner concludes
that since no cash was given by respondents and none was received by
MBC
when the new GTDs were transacted, there was no consideration therefor
and, thus, they were not validly transacted "in the usual course of
business"
and no liability for deposit insurance was created.[19]
chanrobles virtuallaw libraryred
Petitioner’s position
does not persuade.chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
While the MB issued
Resolution 505 on May 22, 1987, a copy thereof was served on MBC only
on
May 26, 1987. MBC and its clients could be given the benefit of
the
doubt that they were not aware that the MB resolution had been passed,
given the necessity of confidentiality of placing a banking institution
under receivership.[20]chanrobles virtuallaw libraryred
The evident implication
of the law, therefore, is that the appointment of a receiver may be
made
by the Monetary Board without notice and hearing but its action is
subject
to judicial inquiry to insure the protection of the banking
institution.
Stated otherwise, due process does not necessarily require a prior
hearing;
a hearing or an opportunity to be heard may be subsequent to the
closure.
One can just imagine the dire consequences of a prior hearing:
bank
runs would be the order of the day, resulting in panic and
hysteria.
In the process, fortunes may be wiped out, and disillusionment will run
the gamut of the entire banking community. (Underlining supplied)[21]chanrobles virtuallaw libraryred
Mere conjectures that
MBC had actual knowledge of its impending closure do not suffice.
The MB resolution could not thus have nullified respondents’
transactions
which occurred prior to May 26, 1987.chanrobles virtuallaw libraryred
That no actual money
in bills and/or coins was handed by respondents to MBC does not mean
that
the transactions on the new GTDs did not involve money and that there
was
no consideration therefor. For the outstanding balance of
respondents’
71 GTDs in MBC prior to May 26, 1987[22]
in the amount of P1,115,889.15 as earlier mentioned was re-deposited by
respondents under 28 new GTDs. Admittedly, MBC had P2,841,711.90
cash on hand - more than double the outstanding balance of respondent’s
71 GTDs - at the start of the banking day on May 25, 1987. Since
respondent Jose Abad was at MBC soon after it opened at 9:00 a.m. of
that
day, petitioner should not presume that MBC had no cash to cover the
new
GTDs of respondents and conclude that there was no consideration for
said
GTDs.chanrobles virtuallaw libraryred
Petitioner having failed
to overcome the presumption that the ordinary course of business was
followed,[23]this
Court finds that the 28 new GTDs were deposited "in the usual course of
business" of MBC.chanrobles virtuallaw libraryred
In its second assignment
of error, petitioner posits that the trial court erred in ordering it
to
pay the balance of the deposit insurance to respondents, maintaining
that
the instant petition stemmed from a petition for declaratory relief
which
does not essentially entail an executory process, and the only relief
that
should have been granted by the trial court is a declaration of the
parties’
rights and duties. As such, petitioner continues, no order of payment
may
arise from the case as this is beyond the office of declaratory relief
proceedings.[24]chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
Without doubt, a
petition
for declaratory relief does not essentially entail an executory
process.
There is nothing in its nature, however, that prohibits a counterclaim
from being set-up in the same action.[25]chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
Now, there is nothing
in thee nature of a special civil action for declaratory relief that
proscribes
the filing of a counterclaim based on the same transaction, deed or
contract
subject of the complaint. A special civil action is after all not
essentially different from an ordinary civil action, which is generally
governed by Rules 1 to 56 of the Rules of Court, except that the former
deals with a special subject matter which makes necessary some special
regulation. But the identity between their fundamental nature is
such that the same rules governing ordinary civil suits may and
do
apply to special civil actions if not inconsistent with or if they may
serve to supplement the provisions of the peculiar rules governing
special
civil actions.[26]chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
Petitioner additionally
submits that the issue of determining the amount of deposit insurance
due
respondents was never tried on the merits since the trial dwelt only on
the "determination of the viability or validity of the deposits" and no
evidence on record sustains the holding that the amount of deposit due
respondents had been finally determined.[27]
This issue was not raised in the court a quo, however, hence, it cannot
be raised for the first time in the petition at bar.[28]
chanrobles virtuallaw libraryred
Finally, petitioner
faults respondents for availing of the statutory limits of the PDIC
law,
presupposing that, based on the conduct of respondent Jose Abad on
March
25, 1987, he and his co-respondents "somehow knew" of the impending
closure
of MBC. Petitioner ascribes bad faith to respondent Jose
Abad
in transacting the questioned deposits, and seeks to disqualify him
from
availing the benefits under the law.[29]chanrobles virtuallaw libraryred
Good faith is presumed.
This, petitioner failed to overcome since it offered mere presumptions
as evidence of bad faith.chanrobles virtuallaw libraryred
WHEREFORE, the assailed
decision of the Court of Appeals is hereby AFFIRMED.chanrobles virtuallaw libraryred
SO ORDERED.chanrobles virtuallaw libraryred
Puno, J., (Chairman),
Panganiban, Sandoval-Gutierrez, and Corona, JJ., concur.chan
robles virtual law library
____________________________
Endnotes:
[1]
Records at 210-211.chanrobles virtuallaw libraryred
[2]
Id. at 208-209.chanrobles virtuallaw libraryred
[3]
Rollo at 13.chanrobles virtuallaw libraryred
[4]
Id. at 12.chanrobles virtuallaw libraryred
[5]
Ibid.chanrobles virtuallaw libraryred
[6]
Id. at 13.chanrobles virtuallaw libraryred
[7]
Records at 214-218; Exhibit "D."chanrobles virtuallaw libraryred
[8]
Rollo at 23.chanrobles virtuallaw libraryred
[9]
Records at 214-215.chanrobles virtuallaw libraryred
[10]
Rollo at 13-14.chanrobles virtuallaw libraryred
[11]
Records at 26-31.chanrobles virtuallaw libraryred
[12]
Records at 100-101.chanrobles virtuallaw libraryred
[13]
Rollo at 22-34.chanrobles virtuallaw libraryred
[14]
Id. at 37-44.chanrobles virtuallaw libraryred
[15]
RA 3591, as amended.chanrobles virtuallaw libraryred
[16]
Section 3, R.A. 3591, provides: "(f) The term "deposit" means the
unpaid
balance of money or its equivalent received by a bank in the usual
course
of business and for which it has given or is obliged to give credit to
a commercial, checking, savings, time or thrift account or which is
evidenced
by its certificate of deposit, and trust funds held by such bank
whether
retained or deposited in any department of such bank or deposited in
another
bank, together with such other obligations of a bank as the Board of
Directors
shall find and shall prescribe by regulations to be deposit liabilities
of the Bank x x x"chanrobles virtuallaw libraryred
[17]
Records at 8-9.chanrobles virtuallaw libraryred
[18]
Rollo at 17-18; Records at 59.chanrobles virtuallaw libraryred
[19]
Rollo at 18, 122-123.chanrobles virtuallaw libraryred
[20]
Vide Rural Bank of Buhi v. Court of Appe als, 162 SCRA 288 (1988).
[21]
Ibid at 303.chanrobles virtuallaw libraryred
[22]
Rollo at 18, 122-123.chanrobles virtuallaw libraryred
[23]
Section 3(q), Rule 131, Rules of Court.chanrobles virtuallaw libraryred
[24]
Rollo at 82, 125.chanrobles virtuallaw libraryred
[25]
Visayan Packing Corp., 155 SCRA 542 (1987).chanrobles virtuallaw libraryred
[26]
Id. at 546.chanrobles virtuallaw libraryred
[27]
Supplement to Petition for Review and Reply to Respondents’ Comment,
Rollo
at 82-83 & 108, respectively.chanrobles virtuallaw libraryred
[28]
Philippine Basketball Association v. Court of Appeals, 337 SCRA 358,
370
(2000) citing Ruby Industrial Corporation v. Court of Appeals, 284 SCRA
445; Salao v. Court of Appeals, 284 SCRA 493; Heirs of Pascasio Uriarte
v. Court of Appeals, 284 SCRA 511.chanrobles virtuallaw libraryred
[29]
CA Rollo at 49-51.chanrobles virtuallaw libraryred
|