FIRST DIVISION
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BANGKO SENTRAL NG PILIPINAS, Petitioner, - versus - ORIENT COMMERCIAL
BANKING CORPORATION, JOSE C. GO, GEORGE C. GO, VICENTE C. GO, GOTESCO
PROPERTIES, INC., GO TONG ELECTRICAL SUPPLY INC., EVER EMPORIUM, INC., EVER
GOTESCO RESOURCES AND HOLDINGS INC., GOTESCO
TYAN MING DEVELOPMENT INC., EVERCREST CEBU GOLF CLUB AND RESORTS, INC., NASUGBU RESORTS
INC., GMCC UNITED DEVELOPMENT CORP., GULOD RESORT, INC., OK STAR, EVER PLAZA,
INC. AND EVER ELECTRICAL MFG., INC., Respondents. |
G.R. No. 148483 Present: CORONA,
C.J., Chairperson, LEONARDO-DE
CASTRO, BERSAMIN, DEL
CASTILLO, and VILLARAMA,
JR., JJ. Promulgated: June
29, 2011 |
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RESOLUTION
VILLARAMA, JR., J.:
The
present petition although captioned as one for certiorari is hereby treated as
a petition for review on certiorari under Rule 45, with prayer for
issuance of temporary restraining order and writ of preliminary
injunction. It seeks to annul and set
aside the June 11, 2001 Decision[1]
of the Court of Appeals (CA) in CA-G.R. SP No. 60509. The CA nullified the writs of preliminary
attachment issued by the Regional Trial Court (RTC) of Manila, Branch
Briefly,
the facts as set forth in the CA Decision:
On
February 13, 1998, herein respondent Orient Commercial Banking Corporation
(OCBC) declared a bank holiday on account of its inability to pay all its
obligations to depositors, creditors and petitioner Bangko Sentral ng
Pilipinas (BSP).
On
March 17, 1998, OCBC filed a petition for rehabilitation with the Monetary
Board. The bank was placed under receivership and the Philippine Deposit
Insurance Corporation (PDIC) was designated as Receiver. Pursuant to the Monetary Boards Resolution
No. 1427, PDIC took over all the assets, properties, obligations and operations
of OCBC. Respondent Jose C. Go, the
principal and biggest stockholder of OCBC, with his affiliate companies
(respondent corporations), challenged the said action of the PDIC before the
RTC of Manila, Branch 44 (Civil Case No. 98-91265). Said case was dismissed and
the dismissal was appealed to the CA.
During
the pendency of Civil Case No. 98-91265, the Monetary Board adopted Resolution
No. 602 dated May 7, 1999 directing the Receiver to proceed with the
liquidation of OCBC. In June, 1999, the
PDIC instituted Special Proceeding No. 99-94328 before the RTC of Manila,
Branch 51 entitled In Re: Petition for Assistance in the Liquidation of Orient
Commercial Banking Corporation, Philippine Deposit Insurance Corporation, Petitioner.
On
December 17, 1999, petitioner filed in the RTC of Manila (Branch 12) a
complaint for sum of money with preliminary attachment (Civil Case No.
99-95993) against the respondents seeking to recover deficiency obligation owed
by OCBC which then stood at P1,273,959,042.97 with interest at 8.894
% per annum, overdraft obligation of P1,028,000,000.00,
attorneys fees and costs of suit.
On
January 14, 2000, the RTC of Manila, Branch 12 issued an Order[2]
in Civil Case No. 99-95993 granting petitioners motion for preliminary
attachment. On January 19, 2000,
following the posting by petitioner of P50 million attachment bond
issued by the Government Service Insurance System (GSIS), the corresponding
writ was issued ordering the Deputy Sheriffs to attach the real and personal
properties of respondents to the value of petitioners demand in the amount of P2,301,951,042.97,
exclusive of interests and costs, as security for the said claim.[3]
Respondents
filed with the CA a petition for certiorari questioning the aforesaid orders
(CA-G.R. SP No. 60509). They also filed a consolidated motion to dismiss Civil
Case No. 99-95993, which the trial court denied.[4]
On
June 1, 2001, respondents filed an Urgent Motion to Resolve and/or to Issue a
Temporary Restraining Order or a Writ of Preliminary Injunction. On June 11,
2001, the CA rendered the assailed decision dissolving the writ of attachment
and ordering the RTC to desist from proceeding with Civil Case No. 99-95993 as
against the respondents except Jose C. Go, Vicente C. Go and George C. Go. It appears, however, that a Manifestation
with Motion to Admit Attached Opposition (to the Urgent Motion to Resolve and
Issue a Temporary Restraining Order)[5]
was filed by petitioner on June 6, 2001.
On
June 27, 2001, petitioner filed a Very Urgent Manifestation[6]
stating that: (1) the June 11, 2001 decision had to await finality as it was
rendered without requiring the petitioner to file its comment, and because the
complaint was dismissed despite massive evidence presented before the trial
court on the participation of respondents in the commission of fraud against
BSP; (2) of the total outstanding amount of P2,301,959,042.97 being
collected by petitioner from the respondents, only P200 million was
garnished and it is doubtful if the taxpayers interest can be satisfied there
being no assets that can be found in the name of respondents and no assets of
OCBC were levied or garnished; and (3) petitioner had filed a Vigorous
Opposition before the trial court as the respondents are prematurely
implementing the CA decision, even as the petitioner still can elevate the case
to this Court.
On
July 2, 2001, the CA recalled its June 11, 2001 decision and granted a ten-day
period for petitioner to file its comment.
The ponente likewise inhibited
himself from the case.[7]
On
July 3, 2001, BSP filed the instant petition with the following prayer:
WHEREFORE, it is respectfully prayed that this
Honorable Court:
1. Give due course to this petition.
2. Upon its
filing and, before the application for the issuance of a writ of preliminary
injunction is heard, order the issuance of a temporary restraining order
immediately restraining the respondents from proceeding in any manner with the
enforcement of the assailed decision [dated] June 11,
3. After
hearing the application, order the issuance of a writ of preliminary injunction
restraining the respondents from proceeding in any manner with the enforcement
of the assailed decision June 11,
4. After
hearing the instant case on its merits, order that the writ of preliminary
injunction be made permanent, nullifying the assailed decision [dated] June 11,
Respondents moved to dismiss the
petition on grounds of forum shopping and submission of a defective certificate
of non-forum shopping. Subsequently, petitioner filed an Omnibus Motion for
clarification and for leave of court to admit comment on the motion to dismiss,
to which the respondents filed their opposition. On February 22, 2002, respondents Comment was
filed and petitioner filed its Reply on July 2, 2002. On January 31, 2003, respondents filed an
Urgent Motion to Lift, Quash and Dissolve the Writ of Preliminary Attachment
Against the Properties of the Respondents Except Orient Commercial Banking Corporation. Petitioner filed its comment on the said
motion on May 5, 2003.[9]
On January 5, 2004, petitioner filed
a manifestation informing this Court that on December 16, 2003, the parties
have agreed to settle their differences and executed a Compromise Agreement,
which was approved by the RTC of Manila, Branch 12 on December 29, 2003. Attached to the said manifestation is the
motion to approve judgment based on compromise agreement and the trial courts
Order approving the same.[10]
Under the Compromise Agreement, the
parties agreed to cause the dismissal of nineteen (19) pending civil cases in
various courts, including the present case before this Court, CA-G.R. SP No.
60509 and Civil Case No. 95-P2,974,903,000.00). Said outstanding indebtedness of OCBC is to
be settled in the following manner:
A.
A downpayment
shall be made by the defendants through the DACION of certain real estate
properties more particularly described in Annex B hereof.
a i) The
parties shall execute separate DEEDS OF DACION over the real estate properties
described in Annex B upon the execution of the Agreement;
a ii) All
Capital Gains Tax on the properties for DACION shall be payable by the
defendants but Documentary Stamp Tax, Transfer Tax and all registration fees on
the DACION shall for the account of plaintiff.
B.
The balance
remaining after the DACION of the real estate properties shall be paid by the defendants
within a period of ten (10) years but extendible for another five (5) years
provided that the defendants shall religiously comply with the amortization
schedule (Annex C hereof) for a continuous period of two (2) years from date
of first amortization.
b i) The foregoing outstanding balance shall be
charged interest at 91-day T-bill rate upon execution of this Compromise
Agreement repriced every three (3) months for a period of 10 years and payable
monthly in arrears.
C. Additional Properties for Execution
c i) To ensure payment of the monthly amortizations due under this
Compromise Agreement, defendants Ever Crest Golf Club Resort, Inc. and Mega
Heights, Inc. have agreed to have its real properties with improvements covered
by TCT Nos. T-68963, T-68964, T-68966 and TDs ARPN-AA-17023-00582 and
AA-17023-0058 shall be subject of existing writ of attachment to secure the
faithful payment of the outstanding obligation herein mentioned, until such
obligation shall have been fully paid by defendants to plaintiff.
c ii) That all the corporate approvals for the
execution of this Compromise Agreement by Ever Crest Golf Club Resort, Inc. and
Mega Heights, Inc. consisting of stockholders resolution and Board of Directors
approval have already been obtained at the time of the execution of this
Agreement.
c iii) Failure
on the part of the defendants to fully settle their outstanding obligations and
to comply with any of the terms of this Compromise Agreement shall entitle the
plaintiff to immediately ask for a Writ of Execution against all assets of the
Ever Crest Golf Club Resort, Inc. and Mega Heights, Inc. now or hereafter arising
from the signing of this Compromise Agreement.
x x x x
III. FUNDS UNDER GARNISHMENT
III i) The
parties agreed that the existing funds under garnishment with Land Bank of the
Philippines and PCI-Equitable Bank shall be subject of the following disposition:
(a)
75% of the total
garnished amounts shall be released to defendants net of reimbursement for the
expenses incurred by plaintiff involving the prosecution of this case with
RTC-Manila, Branch 12 prior to the execution date of this Compromise Agreement.
(b)
25% of the total
garnished amounts shall be paid and applied to defendants amortizations per
Annex C.
III ii) Insofar
as the garnishments on the rentals and
all other income or revenues on the malls owned and operated by the defendants,
the same shall continue to guarantee the stipulated amortization due from the
defendants per the amortization schedule.[11]
A
compromise agreement intended to resolve a matter already under litigation is a
judicial compromise. Having judicial
mandate and entered as its determination of the controversy, such judicial
compromise has the force and effect of a judgment. It transcends its identity as a mere contract
between the parties, as it becomes a judgment that is subject to execution in
accordance with the Rules of Court.[12]
With
the final settlement of the claims of petitioner against herein respondents,
the issues raised in the present petition regarding the propriety of the
issuance of writ of attachment by the trial court and the grave abuse of
discretion allegedly committed by the appellate court in reversing the orders of
the trial court, have now become moot and academic. A moot
and academic case is one that ceases to present a justiciable controversy by
virtue of supervening events, so that a declaration thereon would be of no
practical use or value.[13]
In such cases, there is no actual substantial relief to which
petitioner would be entitled to and which would be negated by the dismissal of
the petition.[14]
WHEREFORE, the petition is DENIED for being moot and academic. The case is hereby REMANDED to the Regional Trial Court of Manila, Branch 12 for
continuation of proceedings to implement the Compromise Agreement in Civil Case
No. 99-95993 dated December 22, 2003 approved by said court on December 29,
2003.
No
costs.
SO ORDERED.
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MARTIN S. VILLARAMA, JR. Associate Justice |
WE
CONCUR: RENATO C. CORONA Chief Justice Chairperson |
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TERESITA J. LEONARDO-DE CASTRO Associate Justice |
LUCAS P. BERSAMIN Associate Justice |
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MARIANO C. DEL
CASTILLO Associate Justice |
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C E R T I F I C A T I O N
Pursuant to Section
13, Article VIII of the 1987 Constitution, I certify that the
conclusions in the above Resolution had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.
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RENATO
C. CORONA Chief Justice |
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[1] Rollo (Vol. I), pp. 78-117. Penned by Associate Justice Bienvenido L. Reyes with Associate Justices Eubulo G. Verzola and Jose L. Sabio, Jr. concurring.
[2] CA rollo, pp. 419-426. Penned by Judge (now Associate Justice of the Court of Appeals) Rosmari D. Carandang.
[3] Id. at 427-429.
[4] Id. at 477-489.
[5] Id. at 575-585.
[6] Id. at 601-614.
[7] Id. at 618-622.
[8] Rollo (Vol. I), pp. 63-64.
[9] Id. at 1060-1071,1083-1103, 1153-1178,1215-1231, 1433-1453 and Rollo (Vol. II), pp. 1479-1501.
[10] Rollo (Vol. II), pp. 1745-1761 and 1779-1780.
[11] Id. at 1754-1755 and 1757.
[12] Raola v. Raola, G.R. No. 185095, July 31, 2009, 594 SCRA 788, 794.
[13] See Lacson v. MJ Lacson Development Company, Inc., G.R. No. 168840, December 8, 2010, p. 10, citing Integrated Bar of the Philippines v. Atienza, G.R. No. 175241, February 24, 2010, 613 SCRA 510, 522-523.
[14] Chuidian v. Sandiganbayan, G.R. Nos. 156383 & 160723, July 31, 2006, 497 SCRA 327, 344.