Rural bank of San Miguel Inc vs MB, BSP, PDIC

Petitioner rural bank was a domestic corporation engaged in banking which established 15 branches in
bulacan. Petitioner Soriano was a majority stockholder of its outstanding shares of stock.

Year 2000, MB being the governing board of the BSP, issued a resolution which prohibits petitioner bank
from doing business in the Philippines and placed it under receivership. MB designated PDIC as the
receiver. The monitoring report showed that petitioner is unable to pay its liabilities as they become due
in the ordinary course of business and it cannot continue its business without involving probable loss to
its creditors and depositors. Further, the bank was also informed with regard the need to infuse
additional capital to place the bank in a solvent condition and was given due time to comply—but to no
avail.

Hence, petitioner filed a petition for review under the RTC of Malolos to nullify the MB resolution. To no
avail, it filed a petition for review before the CA. CA observed that the BSP made several adjustment for
petitioner in connection with its clearing facility as Land bank of the Philippines warrants its termination.
The remaining money of petitioner was utilized to pay corporations owned by Soriano and other
petitioner’s officers. Petitioner also declared a bank holiday including its 15 branches. BSP was alarmed
of such unilateral declaration of bank holiday. Hence, it wanted to examine the books and records of
petitioner.

In the petition filed by petitioner in the CA, it claimed that the MB committed grave abuse of discretion
in issuing the resolution placing it under receivership. Nevertheless, MB passed a resolution ordering
PDIC to proceed with the liquidation of petitioner. Hence, the present petition.

ISSUE: Whether or not the BSP committed grave abuse of discretion in ordering petitioner’s liquidation;
and whether or not section 30 of NCBA requires a current and complete examination of the bank before
it can be closed and placed under receivership

under section 30 of the NCBA with regard placing it under receivership or liquidation, upon report of the
head of the supervising or examining department—the MB finds that a bank or quasi-bank:

a. Unable to pay its liabilities as they become due in the ordinary course of business;
b. Insufficiency of realizable assets as determined by the BSP to meet its liabilities;
c. Cannot continue business without involving probable loss to its depositors or creditors;
d. Wilfully violated cease and desist order under section 37 that has become final.

Monetary board may summarily and without need for prior hearing forbid the institution from doing
business in the Philippines and designate PDIC as the receiver.

HELD: petitioner’s contention has no merit. SC ruled that petitioner’s cited law was the old law requiring
an examination. In the present law, RA 7653 only requires a report of the head of supervising and
examining department. SC ruled that the word of the law is clear—verba legis should be applicable. The
law is clear, to protect public interest--- prior notice and hearing are no longer required before a bank
can be closed.
SC made it clear that what was being raised here as grave abuse of discretion is the non-observance of
examination and not the conclusion made by the BSP.

SC ruled that the MB had sufficient basis to order the closure of petitioner. The report of the supervising
department is clear that petitioner was unable to pay its liabilities as they became due in the ordinary
course of trade or business and that it could not continue its business without involving probable loss to
its creditors and depositors. Hence, MB and the BSP complied with the requirements of RA 7653. Hence,
petition denied.
BANCO FILIPINO SAVINGS AND MORTGAGE BANK VS YBANEZ ET AL

Facts: Respondent Ybanez et al obtained a loan secured by a DEED OF REAL ESTATE MORTGAGE from
petitioner bank. The loan was used for the construction of a commercial building in Cebu. The said loan
was amended by increasing it to another 1 million. It was again increased to 1.225 million with 21%
interest per annum. However, year 1989 onwards—respondent did not pay. Respondents justified their
non-payment stating that petitioner bank had ceased operation as it was placed under liquidation by the
CB.

Through respondent’s attorney—it requested to return the mortgaged property but petitioner denied
the request. Hence, a notice of extra judicial sale was sent to respondent. Nevertheless, respondents
filed a suit for injunction, accounting, and damages as there was no factual basis for the foreclosure
proceedings since the loan had already been paid.

The lower court ruled petitioner to render a correct accounting and to elimate the interest when it was
closed and to reduce the interest from 21 to 17%. The CA dismissed the petition for review due to lack
of merit.

Issue: Whether or not the interest was usurious; and whether or not the debt is demandable despite the
temporary closure of petitioner.

Held: SC held that the CBP circular did not amend nor repeal the usury law—it merely suspends such.
Only a law can repeal another law. The surcharge was declared void as being violative of the 21% ceiling.
Hence, the SC ruled that the monthly amortization should subsist and only the 3% surcharge is void.

Hence, petition dismissed.