The Court of Appeals has restrained the Bangko Sentral ng Pilipinas from bidding out, selling and disposing of the assets of the defunct Banco Filipino Savings and Mortgage Bank.
In a six-page resolution, CA’s Former Fifteenth Division through Associate Justice Edwin Sorongon reversed and set aside its earlier decision issued Nov. 27, 2017 which lifted the writ of preliminary injunction issued by the Regional Trial Court of Makati City enjoining the Bangko Sentral ng Pilipinas from disposing of the assets of the bank.
Instead, the appellate court granted the motion for reconsideration filed by Ekistics Philippines, Inc., a stockholder of Banco Filipino, seeking the reversal of its Nov. 27, 2017 ruling and to reinstate the orders of the Makati RTC issued on Oct. 17, 2016 and Oct. 25, 2016.
The CA sided with Ekistics that the BSP should be enjoined from disposing of Banco Filipino’s assets until the question on the propriety of its closure and liquidation has been resolved with finality.
The appellate court ruled that the validity of BSP resolution which placed Banco Filipino under receivership is still pending appeal before the Supreme Court.
Besides, the CA noted that the legality of the resolution which ordered the liquidation of Banco Filipino is yet to be resolved by another division of the CA.
“Based on these circumstances, it is not difficult to see that the implementation of our assailed decision might put to naught the appeal thus filed since it would effectively render a favorable resolution in these cases moot and academic,” the CA said.
The appellate court also said that it should extend judicial courtesy on the case pending before the SC and another division of the CA in order not to render moot and academic the said cases.
“It is significant to note that public respondent granted private respondent motion to suspend proceedings pending resolution of its appeal before the higher courts. This was the obtaining factual milieu when BSP posted its Invitation to Bid for sale of certain properties, which included those Banco Filipino,” the CA said.
“Certainly, we cannot countenance the said act of BSP as it not only interfered with but also undermined the exclusive jurisdiction of the liquidation court to adjudicate claims against Banco Filipino…Considering the aforesaid reasons, we deem that the most prudent course of action is to reverse our assailed decision in order not to render the proceedings before the SC and this Court moot and academic.”
Associate Justices Ricardo Rosario and Maria Filomena Singh concurred with the ruling.
Court records showed Banco Filipino was incorporated on June 25, 1964 with a term of 50 years or until June 25, 2014.
It was closed in 1985 but was reopened nine years later after the SC declared the closure illegal and directed the BSP to allow the bank to resume its business operations.
But, on March 17, 2011, the Monetary Board of the BSP placed Banco Filipino under receivership of the Philippine Deposit Insurance Corporation (PDIC) and then ordered its liquidation on October 27, 2011 after determining that it cannot continue its business without involving probable losses to its depositors and creditors.
However, the trial court suspended the bank’s liquidation proceedings upon a petition filed by some of its stockholders.
While the liquidation proceedings were suspended, BSP published in its website an invitation to bid for the sale of certain properties, which included those of Banco Filipino.
Ekistics then sought the trial court’s issuance of a writ of an injunction against the BSP’s move which it granted in an order issued on October 17, 2016.
However, in its Nov. 2017 decision, the CA held that the trial court committed grave abuse of discretion in issuing the injunction considering that the requisites for its issuance were not present.
The CA explained that Ekistics has no clear and unmistakable right since its claim to the corporate property of Banco Filipino as a stockholder is “inchoate.”
According to the CA, the right of a stockholder to his share in the corporate property is “merely inchoate because it is contingent on the presence of remaining assets after the corporation has settled all debts and liabilities upon its liquidation.”
The appellate court also said there can be no distribution of assets among the stockholders without first paying corporate creditors in view of the trust fund doctrine which provides that “the capital stock, property and other assets of a corporation are regarded as equity in trust for the payment of corporate creditors.”