THIRD DIVISION
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UNITED COCONUT PLANTERS BANK, JERONIMO U. KILAYKO,
LORENZO V. TAN, ENRIQUE L. GANA, JAIME W. JACINTO and EMILY R. LAZARO, petitioners, - versus - E. GANZON, INC., Respondent. x - - - - - - - - - - - - - - - - - - - - - x E. GANZON, INC., petitioner, - versus - UNITED COCONUT PLANTERS BANK, JAIME
W. JACINTO and EMILY R. LAZARO, Respondents. |
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G.R. No. 168859 G.R.
No. 168897 Present: YNARES-SANTIAGO,
J., Chairperson, CHICO-NAZARIO, VELASCO, JR., NACHURA, and PERALTA, JJ. Promulgated: June 30, 2009 |
x- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
CHICO-NAZARIO, J.:
These
are two consolidated[1]
Petitions for Review on Certiorari
under Rule 45 of the 1997 Revised Rules of Civil Procedure.
United Coconut Planters Bank (UCPB)
is a universal bank duly organized and existing under Philippine Laws. In G.R.
No. 168859, UCPB and its corporate officers, i.e., Jeronimo U. Kilayko, Lorenzo V. Tan, Enrique L. Gana, Jaime
W. Jacinto and Emily R. Lazaro (UCPB, et
al.) seek the reversal and setting aside of the Decision[2]
dated 14 October 2004 and Resolution[3]
dated 7 July 2005 of the Court of Appeals in CA-G.R. SP No. 81385 and the
affirmation, instead, of the letter-decision[4]
dated 16 September 2003 of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP).
The Court of Appeals, in its assailed Decision, set aside the aforesaid
letter-decision of the BSP Monetary Board and remanded the case to the latter
for further proceedings; and in its questioned Resolution, denied for lack of
merit the Motion for Reconsideration of UCPB, et al., as well as the Partial Motion for Reconsideration of E.
Ganzon, Inc. (EGI).
On the other hand, EGI is a
corporation duly organized and existing under Philippine laws and engaged in
real estate construction and development business. In G.R.
No. 168897, EGI prays for this Court to review the same Decision dated 14
October 2004 and Resolution dated 7 July 2005 of the Court of Appeals in
CA-G.R. SP No. 81385, and to order the appellate court to (1) act on its
findings in the case instead of remanding the same to the BSP Monetary Board
for further proceedings; (2) direct the BSP Monetary Board to impose the
applicable administrative sanctions upon UCPB, et al.; and (3) to amend its assailed Decision and Resolution by
deleting therefrom the statements requiring the BSP Monetary Board to
scrutinize and dig deeper into the acts of UCPB, et al., and to determine if, indeed, there were irregular and
unsound practices in its business dealings with EGI.
The
factual antecedents of these consolidated petitions are as follows:
Beginning
1995 to 1998, EGI availed itself of credit facilities from UCPB to finance its
business expansion. To secure said
credit facilities, EGI mortgaged to UCPB its condominium unit inventories in
Initially, EGI was able to make
periodic amortization payments of its loans to UCPB. When the negative effects of the Asian
economic crisis on the property development sector finally caught up with the
corporation in the middle of 1998, EGI started defaulting in its payment of
amortizations, thus, making all of its obligations due and demandable. Subsequently, EGI was declared in default by
UCPB in its letters dated
In 1999, EGI and UCPB explored the possibility
of using the mortgaged condominium unit inventories of EGI in P915,838,822.50,
inclusive of all interest, charges and fees.
UCPB, through its corporate officers, assured EGI that the said amount
already represented the total loan obligations of EGI to UCPB.
On P904,491,052.00.
According
to the MOA and its amendments, titles to the properties of EGI shall be
transferred to UCPB by the following modes: (1) foreclosure of mortgage; (2) dacion en pago; (3) creation of a
holding company; and (4) use of other alternatives as may be deemed appropriate
by UCPB.
UCPB
proceeded to foreclose some of the properties of EGI listed in the MOA. Per the Certificate of Sale[9]
dated P723,592,000.00, less than the
value of the properties of EGI stipulated in its amended MOA with UCPB.
UCPB
applied the entire foreclosure proceeds of P723,592,000.00 to the
principal amount of the loan obligations of EGI, pursuant to BSP Circular No.
239,[10]
which provided that partial property payments shall first be applied to the
principal. After deducting the said
amount from the total loan obligations of EGI, there was still an unpaid
balance of P192,246,822.50.
On P166,127,369.50,
were transferred by way of dacion en pago
to UCPB. However, during the signing of
the transaction papers for the dacion en
pago, EGI Senior Vice-President, Architect Grace S. Layug (Layug), noticed
that said papers stated that the remaining loan balance of EGI in the amount of
P192,246,822.50 had increased to P226,963,905.50. The increase was allegedly due to the
addition of the transaction costs amounting to P34,717,083.00. EGI complained to UCPB about the increase,
yet UCPB did not take any action on the matter.
This
prompted EGI President Engineer Eulalio Ganzon (Ganzon) and Senior
Vice-President Layug to review their files to verify the figures on the loan
obligations of EGI as computed by UCPB.
In the process, they discovered the UCPB Internal Memorandum dated P226,967,194.80,
the amount which UCPB actually made known to and demanded from EGI. The figures in the “ACTUAL” column calculated
the remaining loan obligations of EGI to be only P146,849,412.58.
Consequently,
EGI wrote UCPB a letter dated 21 May 2001,[12]
which included, among other demands, the refund by UCPB to EGI of the
over-payment of P83,000,000.00;[13]
return to EGI of all the remaining Transfer Certificates of Title
(TCTs)/Condominium Certificates of Title (CCTs) in the possession of UCPB; and
cost of damage to EGI for the delay in the release of its certificates of
title.
In
response, UCPB explained[14]
that the “ACTUAL” column in its Internal Memorandum dated
Despite
the explanation of UCPB, EGI insisted that the figures appearing in the
“ACTUAL” column of the former’s Internal Memorandum dated P146,849,412.58.
EGI Senior Vice-President Layug met
with UCPB Vice-President, Jaime W. Jacinto (Jacinto) to discuss the demand of
EGI for the return of its overpayment.
UCPB Vice-President Jacinto, however, refused to concede that UCPB had
any obligation to make a refund to EGI and, instead, insisted that EGI Senior
Vice-President Layug disclose who gave her a copy of the UCPB Internal
Memorandum dated
Based
on the possession by EGI of the UCPB Internal Memorandum dated
On 5 November 2002, EGI, also on the
basis of the UCPB Internal Memorandum dated 22 February 2001, EGI filed with
the BSP an administrative complaint[18]
against UCPB, et al., for violation
of Sections 36[19] and 37,[20]
Article IV of Republic Act No. 7653,[21]
in relation to Section 55.1(a)[22]
of Republic Act No. 8791;[23]
and for the commission of irregularities and conducting business in an unsafe
or unsound manner.
In a
letter-decision[24] dated
Please be informed that the Monetary Board decided to dismiss the complaint based on the evaluation conducted by the Supervision and Examination Department I and the Office of the General Counsel and Legal Services to the effect that:
1. UCPB computed interest on the loans based on BSP rules and regulations which prohibit banks from accruing interest on loans that have become non-performing (BSP Circular No. 202). This is different from interest which may have run and accrued based on the promissory notes/loan documents from the date of default up to settlement date.
2. Fair market value of assets to be foreclosed is different from the bid price submitted during foreclosure and there is no statutory obligation for the latter to be equivalent to the former.
3. Regarding
the alleged P145,163,000.00 fabricated loan, the documents showed that there were the EGI Board Resolution
to borrow, promissory note
signed by Mr. Eulalio Ganzon, and Loan Agreement stating that the proceeds shall be used to pay outstanding
availments and interest servicing.
4. There is no finding by Supervision and Examination Department I on the alleged double charging and/or padding of transaction costs.[25]
EGI
filed a Motion for Reconsideration and a Supplemental Motion for
Reconsideration of the aforequoted letter-decision of the BSP Monetary
Board. The BSP Monetary Board denied
both motions in its letter[26]
dated
EGI
then filed a Petition for Review under Rule 43 of the 1997 Revised Rules of
Civil Procedure with the Court of Appeals raising the sole issue of “whether
the Bangko Sentral ng Pilipinas erred in dismissing the administrative
complaint filed by EGI against UCPB, et
al.” The case was docketed as
CA-G.R. SP No. 81385.
On
UCPB, et al., moved for the reconsideration of
the
In a Resolution dated
G.R. No. 168859
Aggrieved
by the
I.
THE HONORABLE
COURT OF APPEALS ACTED WITHOUT JURISDICTION AND GRAVELY ERRED IN HOLDING THAT
IT HAS APPELLATE JURISDICTION OVER DECISIONS OF THE BSP/MONETARY BOARD.
II.
THE HONORABLE
COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE BANGKO SENTRAL SUMMARILY
DISMISSED THE COMPLAINT OF [EGI].
III.
THE HONORABLE
COURT OF APPEALS GRAVELY ERRED IN DISREGARDING THE FINDINGS OF FACT OF THE
BANGKO SENTRAL AND IN HOLDING THAT [UCPB, et
al.] COMMITTED IRREGULAR AND UNSOUND BANKING PRACTICES IN THE SUBJECT
TRANSACTIONS.[27]
The
Petition is docketed as G.R. No. 168859.
UCPB, et al., aver that the Court of Appeals
has no appellate jurisdiction over decisions, orders and/or resolutions of the
BSP Monetary Board on administrative matters.
The BSP Monetary Board is not among the quasi-judicial agencies
enumerated under Rule 43 of the 1997 Revised Rules of Civil Procedure, over
which the Court of Appeals has appellate jurisdiction. Further, there is nothing in Republic Act No.
7653 or in Republic Act No. 8791 which explicitly allows an appeal of the
decisions or orders of the BSP Monetary Board to the Court of Appeals. Resultantly, the Court of Appeals has no
power to review, much less set aside, the findings of fact of the BSP Monetary
Board as contained in its letter-decision dated
UCPB, et al. also claim that, contrary to the
ruling of the Court of Appeals, the letter-decision dated 16 September 2003 of
the BSP Monetary Board plainly reveals that the administrative complaint of EGI
against UCPB, et al. was not
summarily dismissed. The charges of EGI
against UCPB, et al. was resolved
only after the BSP Monetary Board thoroughly reviewed pertinent bank records
and studied the arguments raised by EGI in its complaint and Motion for Partial
Reconsideration. In its letter-decision
dated 16 September 2003, the BSP Monetary Board stated in no uncertain terms
that the dismissal of the complaint of EGI was based on the evaluation
conducted by its Supervision and Examination Department I and the Office of the
General Counsel and Legal Services.
Also, in its letter dated
Finally,
UCPB, et al., maintain that the
findings of fact of administrative bodies like the BSP Monetary Board are
accorded great respect, if not finality, especially if supported by substantial
evidence. Such findings are to be
respected by the courts, especially in the absence of grave abuse of discretion
or grave errors by the BSP Monetary Board.
No other office, much less an appellate tribunal, can substitute its own
findings of fact over that of the concerned administrative agency in view of
the expertise and specialized knowledge acquired by it on matters falling
within its areas of concern. UCPB, et al. insist that it is the BSP which
has the necessary expertise to draft guidelines for the evaluation of the
performance and conduct of banks.
Thus, the Court of Appeals committed grave error in disregarding the
findings of fact of the BSP Monetary Board which justified the latter’s
dismissal of the administrative complaint of EGI against UCPB, et al.
The
issue of jurisdiction of the Court of Appeals over appeals of decisions, orders
and/or resolutions of the BSP Monetary Board on administrative matters must
first be resolved, before the other issues raised herein by UCPB, et al.
Truly, there is nothing in Republic
Act No. 7653 or in Republic Act No. 8791 which explicitly allows an appeal of
the decisions of the BSP Monetary Board to the Court of Appeals. However, this shall not mean that said
decisions are beyond judicial review.
Section 9(3) of Batas Pambansa Blg.
129, otherwise known as The Judiciary Reorganization Act of 1980, as amended,
reads:
SEC. 9. Jurisdiction. – The Court of Appeals shall exercise:
x x x x
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph 4 of the fourth paragraph of Section 17 of the Judiciary Act of 1948. (Emphasis ours.)
In accordance with the afore-quoted
provision, Rule 43 of the 1997 Revised Rules of Civil Procedure, on Appeals
from the Court of Tax Appeals and Quasi-Judicial Agencies to the Court of Appeals,
defines its scope as follows:
SECTION 1. Scope. - This Rule shall apply
to appeals from judgments or final
orders of the Court of Tax Appeals and from awards, judgments, final orders
or resolutions of or authorized by any quasi-judicial agency in the exercise of
its quasi-judicial functions. Among these agencies are the Civil Service
Commission, Central Board of Assessment Appeals, Securities and Exchange
Commission, Office of the President, Land Registration Authority, Social
Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and
Technology Transfer, National Electrification Administration, Energy Regulatory
Board, National Telecommunications Commission, Department of Agrarian Reform
under Republic Act No. 6657, Government Service Insurance System, Employees
Compensation Commission, Agricultural Inventions Board, Insurance Commission,
Philippine Atomic Energy Commission, Board of Investments, Construction
Industry Arbitration Commission, and voluntary arbitrators authorized by
law. (Emphasis ours.)
A
perusal of Section 9(3) of Batas Pambansa Blg. 129, as amended, and Section 1,
Rule 43 of the 1997 Revised Rules of Civil Procedure reveals that the BSP
Monetary Board is not included among the quasi-judicial agencies explicitly
named therein, whose final judgments, orders, resolutions or awards are
appealable to the Court of Appeals. Such
omission, however, does not necessarily mean that the Court of Appeals has no
appellate jurisdiction over the judgments, orders, resolutions or awards of the
BSP Monetary Board.
It bears stressing that Section 9(3)
of Batas Pambansa Blg. 129, as amended, on the appellate jurisdiction of the
Court of Appeals, generally refers to quasi-judicial agencies,
instrumentalities, boards, or commissions.
The use of the word “including” in the said provision, prior to the
naming of several quasi-judicial agencies, necessarily conveys the very idea of
non-exclusivity of the enumeration. The
principle of expressio unius est exclusio
alterius does not apply where other circumstances indicate that the
enumeration was not intended to be exclusive, or where the enumeration is by
way of example only.[28]
Similarly, Section 1, Rule 43 of the
1997 Revised Rules of Civil Procedure merely mentions several quasi-judicial
agencies without exclusivity in its
phraseology.[29] The enumeration of the agencies therein
mentioned is not exclusive.[30] The introductory phrase “[a]mong these
agencies are” preceding the enumeration of specific quasi-judicial agencies
only highlights the fact that the list is not meant to be exclusive or
conclusive. Further, the overture
stresses and acknowledges the existence
of other quasi-judicial agencies not included in the enumeration but should be
deemed included.[31]
A quasi-judicial agency or body is an
organ of government other than a court and other than a legislature, which
affects the rights of private parties through either adjudication or
rule-making.[32] The very definition of an administrative
agency includes its being vested with quasi-judicial powers. The ever increasing variety of powers and
functions given to administrative agencies recognizes the need for the active
intervention of administrative agencies in matters calling for technical
knowledge and speed in countless controversies which cannot possibly be handled
by regular courts.[33] A "quasi-judicial function" is a
term which applies to the action, discretion, etc., of public administrative
officers or bodies, who are required to investigate facts, or ascertain the
existence of facts, hold hearings, and draw conclusions from them, as a basis
for their official action and to exercise discretion of a judicial nature.[34]
Undoubtedly, the BSP Monetary Board
is a quasi-judicial agency exercising quasi-judicial powers or functions. As aptly observed by the Court of Appeals,
the BSP Monetary Board is an independent central monetary authority and a body
corporate with fiscal and administrative autonomy, mandated to provide policy
directions in the areas of money, banking and credit.[35] It has power to issue subpoena, to sue for
contempt those refusing to obey the subpoena without justifiable reason,[36]
to administer oaths and compel presentation of books, records and others,
needed in its examination,[37]
to impose fines and other sanctions and to issue cease and desist order.[38] Section
37 of Republic Act No. 7653,[39]
in particular, explicitly provides that the BSP Monetary Board shall exercise
its discretion in determining whether administrative sanctions should be
imposed on banks and quasi-banks, which necessarily implies that the BSP
Monetary Board must conduct some form of investigation or hearing regarding the
same.
Having established that the BSP
Monetary Board is indeed a quasi-judicial body exercising quasi-judicial
functions; then as such, it is one of those quasi-judicial agencies, though not
specifically mentioned in Section 9(3) of Batas Pambansa Blg. 129, as amended,
and Section 1, Rule 43 of the 1997 Revised Rules of Civil Procedure, are deemed
included therein. Therefore, the Court
of Appeals has appellate jurisdiction over final judgments, orders, resolutions
or awards of the BSP Monetary Board on administrative complaints against banks
and quasi-banks, which the former acquires through the filing by the aggrieved
party of a Petition for Review under Rule 43 of the 1997 Revised Rules of Civil
Procedure.
As a
futile effort of UCPB, et al. to
convince this Court that the Court of Appeals has no appellate jurisdiction
over the final judgments, orders, resolutions or awards of the BSP Monetary
Board, it cited Salud v. Central Bank of the
Philippines.[40]
The
invocation of UCPB, et al. of Salud is evidently misplaced.
The
present case involves a decision of the BSP Monetary Board as regards an
administrative complaint against a bank and its corporate officers for the
alleged violation of Sections 36 and 37, Article IV of Republic Act No. 7653,
in relation to Section 55.1(a) of Republic Act No. 8791, and for the commission
of irregularity and unsafe or unsound banking practice. There is nothing in the aforesaid laws
which state that the final judgments, orders, resolutions or awards of the BSP
Monetary Board on administrative complaints against banks or quasi-banks shall
be final and executory and beyond the subject of judicial review. Without being explicitly excepted or
exempted, the final judgments, orders, resolutions or awards of the BSP
Monetary Board are among those appealable to the Court of Appeals by way of
Petition for Review, as provided in Section 9(3) of Batas Pambansa Blg. 129, as
amended, and Section 1, Rule 43 of the 1997 Revised Rules of Civil
Procedure.
Although in Salud,
this Court declared that the Intermediate Appellate Court (now Court of
Appeals) has no appellate jurisdiction over resolutions or orders of the
Monetary Board of the Central Bank of the Philippines (CBP, now BSP), because
no law prescribes any mode of appeal therefrom, the factual settings of the
said case are totally different from the one presently before us. Salud
involved a resolution issued by the Monetary Board, pursuant to Section
29 of Republic Act No. 265, otherwise known as the old Central Bank Act,
forbidding banking institutions to do business on account of a "condition
of insolvency" or because "its continuance in business would involve
probable loss to depositors or creditors;" or appointing a receiver to
take charge of the assets and liabilities of the bank; or determining whether
the banking institutions should be rehabilitated or liquidated, and if in the
latter case, appointing a liquidator towards this end. The said Section 29 of the old Central Bank
Act was explicit that the determination by the Monetary Board of whether
a banking institution is insolvent, or should be rehabilitated or
liquidated, is final and executory. However, said determination could be set
aside by the trial court if there was convincing proof that the Monetary Board
acted arbitrarily or in bad faith. Under
the circumstances obtaining in Salud,
it is apparent that our ruling therein is limited to cases of insolvency, and
not to all cases cognizable by the Monetary Board.
At any
rate, under the new law, i.e., Section
30 of Republic Act No. 7653, otherwise known as The New Central Bank Act, which
took effect on 3 July 1993, the order of the BSP Monetary Board, even regarding
the liquidation of a bank, can be questioned via a Petition for Certiorari before a court when the same was issued in excess
of jurisdiction or with such grave abuse of discretion as to amount to lack or
excess of jurisdiction. The court
referred to therein can be construed to mean the Court of Appeals because it is
in the said court where a Petition for Certiorari can be
filed following the hierarchy of courts.
Moreover, the
appellate jurisdiction of the Court of Appeals over the final judgments, orders,
resolutions or awards of the BSP Monetary
Board in administrative cases involving directors and officers of banks,
quasi-banks, and trust entities, is affirmed in BSP Circular No. 477, Series of
2005. The said BSP Circular expressly
provides that the resolution rendered by the BSP Monetary Board in
administrative cases may be appealed to the Court of Appeals within the period
and the manner provided under Rule 43 of the 1997 Revised Rules of Civil
Procedure.
With all
the foregoing, it cannot now be questioned that the Court of Appeals has
appellate jurisdiction over the final judgments, orders, resolutions or awards
rendered by the BSP Monetary Board in administrative cases against banks and
their directors and officers, such as UCPB, et al.
The
Court then proceeds to resolve the issue of whether the Court of Appeals erred
in holding that the BSP Monetary Board summarily dismissed the administrative
complaint of EGI against UCPB, et al.
After a
meticulous scrutiny of the 16 September 2003 letter-decision of the BSP
Monetary Board, this Court rules in the negative and affirms the finding of the
Court of Appeals that the BSP Monetary Board did, indeed, summarily dismiss
administrative complaint of EGI against UCPB, et al., for violation of Sections 36 and 37, Article IV of Republic
Act No. 7653, in relation to Section 55.1(a) of Republic Act No. 8791, and for
the commission of irregularity and unsafe or unsound banking practice.
Given
the gravity and seriousness of the charges of EGI against UCPB, et al., the sweeping statement of the
BSP Monetary Board that it was inclined to dismiss the complaint of EGI based
on the evaluation made by its Supervision and Examination Department I and
Office of the General Counsel and Legal Services, is simply insufficient and
unsatisfactory. Worse, the BSP Monetary
Board merely presented the following conclusions without bothering to explain
its bases for the same: (1) UCPB computed interest on loans based on BSP rules
and regulations which prohibit banks from accruing interest on loans that have
become non-performing (BSP Circular No. 202); (2) fair market value of assets
to be foreclosed is different from the bid price submitted during foreclosure
and there is no statutory obligation for the latter to be equivalent to the
former; (3) regarding the alleged P145,163,000.00 fabricated loan, the
documents showed that there were the EGI Board resolution to borrow, promissory
note signed by Mr. Eulalio Ganzon, and Loan Agreement stating the proceeds
shall be used to pay outstanding availments and interest servicing; and (4)
there is no finding by Supervision and Examination Department I on the alleged
double charging and/or padding of transaction costs.
Further,
in resolving the matter before it, the BSP Monetary Board never considered the
UCPB Internal Memorandum dated
The BSP Monetary Board similarly
failed to clarify whether UCPB can foreclose the mortgaged properties of EGI in
amounts that were less than the values of the said properties as determined and
stipulated by EGI and UCPB in their amended MOA. The Court once more agrees in the ruling of
the Court of Appeals that the MOA entered into by EGI and UCPB serves as a
contract between them, and it is the law that should govern their relationship,
which neither of the parties can simply abrogate, violate, or disregard. Unfortunately, the BSP Monetary Board never
even referred to the MOA executed by the parties in its letter-decision dated
Moreover, the BSP Monetary Board
found that the P145,163,000.00 loan of EGI from UCPB was not fabricated
based on several documents. However,
there is absolute lack of explanation by the BSP Monetary Board as to why said
documents deserved more weight vis-ŕ-vis
evidence of EGI of suspicious circumstances surrounding the said loan, such as
UCPB granting EGI said loan even when the latter was already in default on its
prior loan obligations, and without requiring additional security, detailed
business plan, and financial projections from EGI.
The
disregard by BSP Monetary Board of all the foregoing facts and issues in its
letter-decision dated
Finally, there is no merit in the assertion of
UCPB, et al. that the Court of Appeals erred in disregarding the
findings of fact of the BSP Monetary Board in the absence of grave abuse of
discretion or lack of basis for the same.
Although,
as a general rule, findings of facts of an administrative agency, which has
acquired expertise in the particular field of its endeavor, are accorded great
weight on appeal, such rule cannot be applied with respect to the assailed
findings of the BSP Monetary Board in this case. Rather, what applies is the
recognized exception that if such findings are not supported by substantial
evidence, the Court can make its own independent evaluation of the facts.[41]
The standard of substantial evidence
required in administrative proceedings is more than a mere scintilla. It means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. While rules of evidence prevailing in courts
of law and equity shall not be controlling, the obvious purpose being to free
administrative boards from the compulsion of technical rules so that the mere
admission of matter which would be deemed incompetent in judicial proceedings would
not invalidate the administrative order, this assurance of a desirable
flexibility in administrative procedure does not go so far as to justify orders
without basis in evidence having rational probative force.[42]
It cannot be convincingly said herein
that the factual findings of the BSP Monetary Board in its letter-decision
dated 16 September 2003 was supported by substantial evidence since (1) most of
the findings were not supported by references to specific evidence; and (2) the
findings were made without consideration of the primary evidence presented by
EGI (i.e., the MOA and its amendments and the UCPB Internal Memorandum
dated 22 February 2001).
Even
then, the Court of Appeals stopped short of categorically ruling that UCPB, et al. committed irregularities, or
unsound or unsafe banking practice in its transactions with EGI. What the Court of Appeals positively
pronounced was that the BSP Monetary Board failed to give the necessary
consideration to the administrative complaint of EGI, summarily dismissing the
same in its
G.R. No. 168897
Also
unsatisfied with the Decision dated
I. The Honorable Court of Appeals does have appellate jurisdiction over decisions, orders, and resolutions of the BSP/Monetary Board.
II. The Honorable Court of Appeals was correct in FINDING that the [BSP] summarily dismissed the complaint of EGI.
III. Whether or not the Honorable Court of Appeals committed patent, grave, and reversible error when it remanded the case to the [BSP] for further proceedings instead of acting upon its findings as narrated in its Decision.
IV. Whether or not the Honorable Court of Appeals committed patent, grave, and reversible error in not directing the [BSP] to impose the appropriate penalties against [UCPB, et al.].[43]
The
Petition is docketed as G.R. No. 168897.
Since
the first two “issues” have already been addressed by this Court in its
previous discussion herein on G.R. No. 168859, we now proceed to resolve the
next two issues raised by EGI in its Petition in G.R. No. 168897.
EGI
avers that the Court of Appeals committed reversible error when it remanded the
case to the BSP for further proceedings instead of directing the BSP to impose
the applicable sanctions on UCPB, et al. EGI reasons that the appellate court, in its
Decision dated
The
Court reiterates that the Court of Appeals did not yet make conclusive findings
in its Decision dated
By
remanding the case to the BSP Monetary Board, the Court of Appeals only acted
in accordance with Republic Act No. 7653 and Republic Act No. 8791, which
tasked the BSP, through the Monetary Board, to determine whether a particular
act or omission, which is not otherwise prohibited by any law, rule or
regulation affecting banks, quasi-banks or trust entities, may be deemed as
conducting business in an unsafe or unsound manner. Also, the BSP Monetary Board is the proper
body to impose the necessary administrative sanctions for the erring bank and
its directors or officers.
The
Court of Appeals did not deem it appropriate, on appeal, to outright reverse
the judgment of the BSP Monetary Board.
The Court of Appeals held that the BSP Monetary Board did not have
sufficient basis for dismissing the administrative complaint of EGI in its 16
September 2003 letter-decision; yet, the appellate court likewise did not find
enough evidence on record to already resolve the administrative complaint in
favor of EGI and against UCPB, et al.,
precisely the reason why it still remanded the case to the BSP Monetary Board
for further proceedings. The Court of
Appeals never meant to give EGI an assurance of a favorable judgment; it only
ensured that the BSP Monetary Board shall accord all parties concerned to equal
opportunity for presentation and consideration of their allegations, arguments,
and evidence. While the speedy
disposition of cases is a constitutionally mandated right, the paramount duty
of the courts, as well as quasi-judicial bodies, is to render justice by
following the basic rules and principles of due process and fair play.
WHEREFORE, premises considered, the
Petition for Review on Certiorari of
United Coconut Planters Bank, Jeronimo U. Kilayko, Lorenzo V. Tan, Enrique L.
Gana, Jaime W. Jacinto and Emily R. Lazaro, in G.R. No. 168859; as well as the
Petition for Review on Certiorari of
E. Ganzon, Inc. in G.R. No. 168897, are hereby DENIED. The Decision dated
SO ORDERED.
|
|
MINITA V. CHICO-NAZARIOAssociate Justice |
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] These
two Petitions were consolidated per Resolution dated
[2] Penned
by Associate Justice Lucenito N. Tagle with Associate Justices Eloy R. Bello,
Jr. and Regalado
[3] Penned
by Associate Justice Lucenito N. Tagle with Associate Justices Rosmari D.
Carandang and Estela Perlas M. Bernabe, concurring, rollo (G.R. No. 168859), pp. 26-29.
[4] Signed
by Juan de Zuńiga, Jr., BSP’s Assistant Governor and General Counsel, and Ma.
Corazon J. Guerrero, BSP’s Supervision and Examination Department; rollo (G.R. No. 168859), pp. 339-340.
[5] Rollo (G.R. No. 168859), p. 342.
[6]
[7]
[8]
[9]
[10] Amendments
to the Manual of Regulations and the Manual of Accounts for Banks and for
Non-Bank Financial Institutions, Series of 2000; id. at 217-221.
[11] Rollo (G.R. No. 168859), pp. 376-380.
[12]
[13] Based
on EGI’s letter dated P83M as indicated in UCPB’s own
documents. The said P83M is
composed of the following: 1) remaining principal balance of P41,605,981.73;
2) accrued interest receivable of P2,436,457.00; and 3) P38,963,060.51. Thus, when it transferred to UCPB via dacion en pago some of its
properties in the P166,127,369.50, it overpaid UCPB in the amount of P83M.
[14] This
was the explanation given by UCPB, et al.
when they were confronted as regards the discrepancy
appearing in its Internal Memorandum with a “DISCLOSED TO EGI” and “ACTUAL” columns. But, there was no mention if this explanation
was made through a letter sent to
EGI or it is just done verbally.
[15] Rollo (G.R. No. 168859), pp. 212-213.
[16] Policies
on the Non-Performing Loans and Restructured Loans of Banks; id. at 209-211.
[17] The
case was filed before the Office of the Prosecutor of Makati City but it was
dismissed. UCPB, et al. then filed a Petition for Review before the Department of
Justice (DOJ), but the DOJ similarly
dismissed the same in its Resolution dated
[18]
[19] Section
36. Proceedings Upon Violation of
This Act and Other Banking Laws, Rules, Regulations, Orders or Instructions. — Whenever a bank or quasi-bank,
or whenever any person or entity
willfully violates this Act or other pertinent banking laws being enforced or
implemented by the Bangko
Sentral or any order, instruction, rule or regulation issued by the Monetary
Board, the person or persons
responsible for such violation shall unless otherwise provided in this Act be
punished by a fine of not less
than Fifty thousand pesos (P50,000) nor more than Two hundred thousand
pesos (P200,000) or by
imprisonment of not less than two (2) years nor more than ten (10) years, or
both, at the discretion of the
court.
Whenever a bank or quasi-bank persists in carrying on
its business in an unlawful or unsafe
manner, the Board may, without prejudice to the penalties provided in the
preceding paragraph of this
section and the administrative sanctions provided in Section 37 of this Act,
take action under Section 30 of
this Act.
[20] Section
37. Administrative Sanctions on
Banks and Quasi-banks. — Without prejudice to the criminal
sanctions against the culpable persons provided in Sections 34, 35, and 36 of
this Act, the Monetary Board may, at its discretion, impose upon any bank or
quasi-bank, their directors and/or officers, for any willful violation of its
charter or by-laws, willful delay in the submission of reports or publications
thereof as required by law, rules and regulations; any refusal to permit
examination into the affairs of the institution; any willful making of a false
or misleading statement to the Board or the appropriate supervising and
examining department or its examiners; any willful failure or refusal to comply
with, or violation of, any banking law or any order, instruction or regulation
issued by the Monetary Board, or any order, instruction or ruling by the
Governor; or any commission of irregularities, and/or conducting business in an
unsafe or unsound manner as may be determined by the Monetary Board, the
following administrative sanctions, whenever applicable:
(a) fines in
amounts as may be determined by the Monetary Board to be appropriate, but in no
case to exceed Thirty thousand pesos (P30,000) a day for each violation,
taking into consideration the attendant circumstances, such as the nature and
gravity of the violation or irregularity and the size of the bank or
quasi-bank;
(b) suspension of rediscounting
privileges or access to Bangko Sentral credit facilities;
(c) suspension
of lending or foreign exchange operations or authority to accept new deposits
or make new investments;
(d) suspension of interbank clearing
privileges; and/or
(e) revocation of quasi-banking
license.
Resignation or
termination from office shall not exempt such director or officer from
administrative or criminal sanctions.
The Monetary
Board may, whenever warranted by circumstances, preventively suspend any
director or officer of a bank or quasi-bank pending an investigation: Provided,
That should the case be not finally decided by the Bangko Sentral within a
period of one hundred twenty (120) days after the date of suspension, said
director or officer shall be reinstated in his position: Provided, further,
That when the delay in the disposition of the case is due to the fault,
negligence or petition of the director or officer, the period of delay shall
not be counted in computing the period of suspension herein provided.
The above administrative sanctions
need not be applied in the order of their severity.
Whether or not
there is an administrative proceeding, if the institution and/or the directors
and/or officers concerned continue with or otherwise persist in the commission
of the indicated practice or violation, the Monetary Board may issue an order
requiring the institution and/or the directors and/or officers concerned to
cease and desist from the indicated practice or violation, and may further order
that immediate action be taken to correct the conditions resulting from such
practice or violation. The cease and desist order shall be immediately
effective upon service on the respondents.
The respondents
shall be afforded an opportunity to defend their action in a hearing before the
Monetary Board or any committee chaired by any Monetary Board member created
for the purpose, upon request made by the respondents within five (5) days from
their receipt of the order. If no such hearing is requested within said period,
the order shall be final. If a hearing is conducted, all issues shall be
determined on the basis of records, after which the Monetary Board may either
reconsider or make final its order.
The Governor
is hereby authorized, at his discretion, to impose upon banking institutions,
for any failure to comply with the requirements of law, Monetary Board
regulations and policies, and/or instructions issued by the Monetary Board or
by the Governor, fines not in excess of Ten thousand pesos (P10,000) a
day for each violation, the imposition of which shall be final and executory
until reversed, modified or lifted by the Monetary Board on appeal.
[21] Known
as “The New Central Bank Act.”
[22] Section
55. Prohibited Transactions.
—
55.1. No director, officer, employee,
or agent of any bank shall —
(a) Make false
entries in any bank report or statement or participate in any fraudulent
transaction, thereby affecting the financial interest of, or causing damage to,
the
bank or any person;
[23] Otherwise
known as “The General Banking Law of 2000.”
[24] Rollo (G.R. No. 168859), pp. 290-291.
[25]
[26]
[27]
[28] Binay v. Sandiganbayan, 374 Phil. 413,
440-441 (1999).
[29] Land Bank of the
[30] Sy v. Commission on Settlement of Land
Problems, 417 Phil. 378, 393-394 (2001).
[31] Metro Construction, Inc. v. Chatham
Properties, Inc., 418 Phil. 176, 203 (2001).
[32] The Presidential Anti-Dollar Salting Task
Force v. Court of Appeals, G.R. No. 83578, 16 March 1989, 171 SCRA 348,
360.
[33] Tropical Homes, Inc. v. National Housing
Authority, G.R. No. L-48672,
[34] Villarosa v. Commission on Elections,
377 Phil. 497, 506-507 (1999).
[35] Section
3, Chapter 1, Article 1, Republic Act No. 7653.
[36] Section
23, Chapter 1, Article IV, Republic Act No. 7653.
[37] Section
25, Chapter 1, Article IV, Republic Act No. 7653.
[38] Sections
36 and 37, Chapter 1, Article IV, Republic Act No. 7653.
[39] Section 37. Administrative Sanctions on Banks and
Quasi-banks. — Without prejudice to the criminal sanctions against
the culpable persons provided in Sections 34, 35, and 36 of this Act, the
Monetary Board may, at its discretion, impose upon any bank or quasi-bank,
their directors and/or officers, for any willful violation of its charter or
by-laws, willful delay in the submission of reports or publications thereof as
required by law, rules and regulations; any refusal to permit examination into
the affairs of the institution; any willful making of a false or misleading
statement to the Board or the appropriate supervising and examining department
or its examiners; any willful failure or refusal to comply with, or violation
of, any banking law or any order, instruction or regulation issued by the
Monetary Board, or any order, instruction or ruling by the Governor; or any
commission of irregularities, and/or conducting business in an unsafe or
unsound manner as may be determined by the Monetary Board, the following
administrative sanctions, whenever applicable:
(a) fines in
amounts as may be determined by the Monetary Board to be appropriate, but in no
case to exceed Thirty thousand pesos (P30,000) a day for each violation,
taking into consideration the attendant circumstances, such as the nature and
gravity of the violation or irregularity and the size of the bank or
quasi-bank;
(b) suspension of rediscounting
privileges or access to Bangko Sentral credit facilities;
(c) suspension
of lending or foreign exchange operations or authority to accept new deposits
or make new investments;
(d) suspension of interbank clearing
privileges; and/or
(e) revocation of quasi-banking
license.
Resignation or
termination from office shall not exempt such director or officer from
administrative or criminal sanctions.
The Monetary
Board may, whenever warranted by circumstances, preventively suspend any
director or officer of a bank or quasi-bank pending an investigation: Provided,
That should the case be not finally decided by the Bangko Sentral within a period
of one hundred twenty (120) days after the date of suspension, said director or
officer shall be reinstated in his position: Provided, further, That when the
delay in the disposition of the case is due to the fault, negligence or
petition of the director or officer, the period of delay shall not be counted
in computing the period of suspension herein provided.
The above administrative sanctions
need not be applied in the order of their severity.
Whether or not
there is an administrative proceeding, if the institution and/or the directors
and/or officers concerned continue with or otherwise persist in the commission
of the indicated practice or violation, the Monetary Board may issue an order
requiring the institution and/or the directors and/or officers concerned to
cease and desist from the indicated practice or violation, and may further
order that immediate action be taken to correct the conditions resulting from
such practice or violation. The cease and desist order shall be immediately
effective upon service on the respondents.
The respondents
shall be afforded an opportunity to defend their action in a hearing before the
Monetary Board or any committee chaired by any Monetary Board member created
for the purpose, upon request made by the respondents within five (5) days from
their receipt of the order. If no such hearing is requested within said period,
the order shall be final. If a hearing is conducted, all issues shall be
determined on the basis of records, after which the Monetary Board may either
reconsider or make final its order.
The Governor
is hereby authorized, at his discretion, to impose upon banking institutions,
for any failure to comply with the requirements of law, Monetary Board
regulations and policies, and/or instructions issued by the Monetary Board or
by the Governor, fines not in excess of Ten thousand pesos (P10,000) a
day for each violation, the imposition of which shall be final and executory
until reversed, modified or lifted by the Monetary Board on appeal.
[40] 227
Phil. 551 (1986).
[41] Pepsi-Cola Distributors of the Philippines, Inc. v.
National Labor Relations Commission, 338 Phil. 773, 780-781 (1997).
[42] Spouses Boyboy v. Atty. Yabut, Jr., 449 Phil. 664,
670 (2003).
[43] Rollo (G.R. No. 168897), p. 1013.