Perez v.

Monetary Board
Doctrine: Being an artificial person, The Central Bank is limited to its statutory
powers and the nearest power to which prosecution of violators of banking laws may
be attributed is its power to sue and be sued. But this corporate power of litigation
evidently refers to civil cases only. Violations of banking laws constitute a public
offense, the prosecution of which is a matter of public interest and hence, anyone
even private individuals can denounce such violations before the prosecuting
authorities.
Facts:
Damaso Perez, for himself and in a derivative capacity on behalf of the
Republic Bank, instituted mandamus proceedings in the Court of First Instance of
Manila against the Monetary Board, the Superintendent of Banks, the Central Bank
and the Secretary of Justice. His object was to compel these respondents to prosecute,
among others, Pablo Roman and several other Republic Bank officials for violations of
the General Banking Act and the Central Bank Act, and for falsification of public or
commercial documents in connection with certain alleged anomalous loans amounting
to P1,303,400.00 authorized by Roman and the other bank officials.
Respondents, Monetary Board, the Superintendent of Banks, the Central Bank and the
Secretary of Justice their respective answers, the propriety of mandamus. The
Secretary of Justice claimed that it was not their specific duty to prosecute the persons
denounced by Perez. The Central Bank and its respondent officials, on the other hand,
averred that they had already done their duty under the law by referring to the special
prosecutors of the Department of Justice for criminal investigation and prosecution
those cases involving the alleged anomalous loans.
Issue: Whether or not these respondents may be compelled to prosecute criminally
the alleged violators of banking laws.
Held: As for the Secretary of Justice, while he may have the power to prosecute
through the office of the Solicitor General criminal cases, yet it is settled rule
that mandamus will not lie to compel a prosecuting officer to prosecute a criminal case
in court.
Perez cannot seek by mandamus to compel respondents to prosecute criminally those
alleged violators of the banking laws. Although the Central Bank and its respondent
officials may have the duty under the Central Bank Act and the General Banking Act to
cause the prosecution of those alleged violators, yet there is nothing in said laws that
imposes a clear, specific duty on the former to do the actual prosecution of the latter.
The Central Bank is a government corporation created principally to administer the
monetary and banking system of the Republic, not a prosecution agency like the
fiscals office. Being an artificial person, The Central Bank is limited to its statutory
powers and the nearest power to which prosecution of violators of banking laws may
be attributed is its power to sue and be sued. But this corporate power of litigation
evidently refers to civil cases only. Central Bank and its officers have already done
what they can by referring the matter to the special prosecutors of the Department of
Justice for prosecution and investigation. Moreover, it is a settled rule that mandamus
will not lie to compel a prosecuting officer, like the Secretary of Justice, to prosecute a
case in court.
Violations of banking laws constitute a public offense, the prosecution of which is a
matter of public interest and hence, anyone even private individuals can denounce

such violations before the prosecuting authorities. Since Perez himself could cause the
filing of criminal complaints against those allegedly involved in the anomalous loans, if
any, then he has a plain, adequate and speedy remedy in the ordinary course of law,
which makes mandamus against respondents improper. Hence, the order of the lower
court dismissing the petition was affirmed.

First Philippine International Bank v. CA

Facts: In the course of its banking operations Producers Bank of the Philippines
acquired six parcels of land which used to be owned by BYMC Investment and
Development Corporation which was mortgaged to the bank as collateral for a loan.
Demetrio Demetria and Jose Janolo wanted to purchase the property and thus initiated
negotiations for that
purpose. They met with Mercurio Rivera, manager of the Property Management
Department of the bank, who advised them to make formal offer.
Janolo following the advice of Rivera made a formal purchase offer, through a letter,
for 3P3.5M in cash, which was counter-offered by Rivera, on behalf of the bank, to
P5.5M, in which Janolo made an amended offer of P4.250M. There was reply on Janolos
last offer, instead they met with Luis Co, Senior Vice-President of the Bank, sticked to
their counter offer of P5.5M, which Janolo et al., accepted after two days.
The bank was placed under conservatorship by CB and through a letter, Rivera
informed Demetria that their proposal to purchase the property is under study yet by
the newly created committee for submission to the Acting Consrvator.
Series of demands were made by Janolo et al for compliance by the bank with what
Janolo et al considered as perfected contract of sale which demands were refused by
the bank, and refused to receive tender of payment. Instead the land was advertised
for sale. Final demand was made in which acting conservator replied that the bank
through the acting Conservator repudiated the authority of Rivera and all his dealings
and counter-offer were unauthorized and illegal, and that there was no perfected
contract of sale as there was no meeting of minds as to the price. Hence, Janolo et al
filed a suit for specific performance against the bank.
Issue: May the conservator a perfected contract of sale entered by the bank before
the conservatorship? - NO
Held: The power of conservator, enormous and extensive as they are, cannot extend
to the post-facto repudiation of perfected transactions, otherwise they would infringe
the non-impairment clause of the Constitution. What the conservator may revoke are
contracts which are, under existing law, deemed defective- such as void, voidable,
unenforceable or rescissible. Hence, the conservator merely takes place of a banks
board of directors. What said board cannot dosuch as repudiating a contract validly
entered into under the doctrine of implied authoritythe conservator cannot do either.
Lipana vs. Development Bank of the Philippines
Doctrine: After the Monetary Board has declared that a bank is insolvent and has
ordered it to cease operations, the Board becomes the trustee of its assets for the
equal benefit of all the creditors, including depositors. To execute the judgment would

unduly deplete the assets of respondent bank to the obvious prejudice of other
depositors and creditors.
Facts: Petitioners opened and maintained both time and savings deposits with the
respondent Development Bank of Rizal. When some of the time deposit certificates
matured, petitioners were not able to cash them but instead were issued a managers
check which was dishonored upon presentment. Demands for the payment of both
time and savings deposits have failed. Hence, petitioners filed with the RTC a
collection suit with prayer for issuance of a writ of preliminary attachment which was
granted by the court. The RTC rendered judgment in favor of petitioners. Meanwhile,
the Monetary Board placed the respondent bank under receivership. Subsequently, the
motion for execution pending appeal filed by petitioners was granted by the court but
was also stayed by the trial judge. The motion filed by petitioners to lift the stay order
having been denied, this petition was filed.
Issue: Can a final and executory judgment against an insolvent bank be stayed? - YES
Held: In the instant case, the stay of the execution of judgment is warranted by the
fact that respondent bank was placed under receivership. To execute the judgment
would unduly deplete the assets of respondent bank to the obvious prejudice of other
depositors and creditors, since, as aptly stated in Central Bank of the Philippines vs.
Morfe (63 SCRA 114), after the Monetary Board has declared that a bank is insolvent
and has ordered it to cease operations, the Board becomes the trustee of its assets for
the equal benefit of all the creditors, including depositors. The assets of the insolvent
banking institution are held in trust for the equal benefit of all creditors, and after its
insolvency, one cannot obtain an advantage or a preference over another by an
attachment, execution or otherwise.
After the Monetary Board has declared that a bank is insolvent and has ordered it to
cease operations, the Board becomes the trustee of its assets for the equal benefit of
all the creditors, including depositors. The assets of the insolvent banking institution
are held in trust for the equal benefit of all creditors, and after its insolvency, one
cannot obtain an advantage or a preference over another by an attachment, execution
or otherwise. To execute the judgment would unduly deplete the assets of respondent
bank to the obvious prejudice of other depositors and creditors.
Miranda vs. Philippine Deposit Insurance Corporation
Doctrine: Solidary liability cannot attach to the BSP, in its capacity as government
regulator of banks, and the PDIC as statutory receiver under R.A. No. 7653, because
they are the principal government agencies mandated by law to determine the
financial viability of banks and quasi-banks, and facilitate receivership and liquidation
of closed financial institutions, upon a factual determination of the latters insolvency.
Facts: Leticia G. Miranda (Miranda) was a depositor of Prime Savings Bank. She
withdrew substantial amounts from her account, but instead of cash she opted to be
issued a crossed cashiers check in the sum of P2,500,000 and cashiers check in the
amount of P3,002,000. Petitioner deposited the two checks into her account in another
bank on the same day, however, Bangko Sentral ng Pilipinas (BSP) suspended the
clearing privileges of Prime Savings Bank effective 2:00 p.m. of June 3, 1999. The two
checks of petitioner were returned to her unpaid. Subsequently, Prime Savings Bank
declared a bank holiday. The BSP placed Prime Savings Bank under the receivership of
the Philippine Deposit Insurance Corporation (PDIC).

Petitioner filed a civil action for sum of money in the Regional Trial Court to recover the
funds from her unpaid checks against Prime Savings Bank, PDIC and the BSP. The court
rendered judgment against defendants and ordered them to pay the plaintiff. On
appeal, the Court of Appeals reversed the trial court and ruled in favor of the PDIC and
BSP, dismissing the case against them, without prejudice to the right of petitioner to
file her claim before the court designated to adjudicate on claims against Prime
Savings Bank. Petitioners motion for reconsideration was denied. Hence, this petition.
Issue:

Whether or not the PDIC are solidarily liable to pay the petitioner.

Held: Only Prime Savings Bank that is liable to pay for the amount of the two
cashiers checks. Solidary liability cannot attach to the BSP, in its capacity as
government regulator of banks, and the PDIC as statutory receiver under R.A. No.
7653, because they are the principal government agencies mandated by law to
determine the financial viability of banks and quasi-banks, and facilitate receivership
and liquidation of closed financial institutions, upon a factual determination of the
latters insolvency. However, in a situation involving the element of fraud, where a
cashiers check is purchased from a bank at a time when it is insolvent, as its officers
know or are bound to know by the exercise of reasonable diligence, it has been held
that the purchase is entitled to a preference in the assets of the bank on its liquidation
before the check is paid. Hence, the CA decision is affirmed with modification that the
claim of petitioner Miranda is entitled to preference in the assets of PSB in its
liquidation.
IN RE: PETITION FOR ASSISTANCE IN THE LIQUIDATION OF THE RURAL BANK OF BOKOD
Doctrine: The receiver shall immediately gather and take charge of all the assets and
liabilities of the institution, administer the same for the benefit of its creditors, and
exercise the general powers of a receiver under the Revised Rules of Court but shall
not, with the exception of administrative expenditures, pay or commit any act that will
involve the transfer or disposition of any asset of the institution
Facts: Rural Bank of Bokod (Benguet), Inc. (RBBI) conducted a special examination of
RBBI was conducted by the Supervision and Examination Sector (SES) Department III
of what is now the Bangko Sentral ng Pilipinas (BSP),4 wherein various loan
irregularities were uncovered. In a letter, dated 20 May 1986, the SES Department III
required the RBBI management to infuse fresh capital into the bank, within 30 days
from date of the advice, and to correct all the exceptions noted. However, up to the
termination of the subsequent general examination conducted by the SES Department
III, no concrete action was taken by the RBBI management. A memorandum and
report, dated 28 August 1990, were submitted by the Director of the SES Department
III concluding that the RBBI remained in insolvent financial condition and it can no
longer safely resume business with the depositors, creditors, and the general public.
BSP liquidator of RBBI caused the filing with the RTC of a Petition for Assistance in the
Liquidation of RBBI, the Monetary Board transferred to herein petitioner Philippine
Deposit Insurance Corporation (PDIC) the receivership/liquidation of RBBI.The
respondent Bureau of Internal Revenue (BIR), through Atty. Justo Reginaldo,
manifested that PDIC should secure a tax clearance certificate from the appropriate
BIR Regional Office, pursuant to Section 52(C) of Republic Act No. 842. PDIC argues
that the closure of banks under Section 30 of the New Central Bank Act is summary in

nature and procurement of tax clearance as required under Section 52(C) of the Tax
Code of 1997 is not a condition precedent.
Issue: Whether or not a bank ordered closed and placed under receivership by the
Monetary Board of the BSP still needs to secure a tax clearance certificate
Held: Section 52(C) of the Tax Code of 1997 and the BIR-SEC Regulations No. 1
regulate the relations only as between the SEC and the BIR, making a certificate of tax
clearance a prior requirement before the SEC could approve the dissolution of a
corporation. In Spec. Proc. No. 91-SP-0060 pending before the RTC, RBBI was placed
under receivership and ordered liquidated by the BSP, not the SEC; and the SEC is not
even a party in the said case, although the BIR is. This Court cannot find any basis to
extend the SEC requirements for dissolution of a corporation to the liquidation
proceedings of RBBI before the RTC when the SEC is not even involved therein.
The receiver shall immediately gather and take charge of all the assets and liabilities
of the institution, administer the same for the benefit of its creditors, and exercise the
general powers of a receiver under the Revised Rules of Court but shall not, with the
exception of administrative expenditures, pay or commit any act that will involve the
transfer or disposition of any asset of the institution: Provided, That the receiver may
deposit or place the funds of the institution in non-speculative investments. The
receiver shall determine as soon as possible, but not later than ninety (90) days from
take over, whether the institution may be rehabilitated or otherwise placed in such a
condition that it may be permitted to resume business with safety to its depositors and
creditors and the general public: Provided, That any determination for the resumption
of business of the institution shall be subject to prior approval of the Monetary Board.
BSP v. Sally Go
FACTS: Petitioner, the BSB Group, Inc., is a duly organized domestic corporation presided by its
herein representative, Ricardo Bangayan (Bangayan). Respondent Sally Go, alternatively referred
to as Sally Sia Go and Sally Go-Bangayan, is Bangayan's wife, who was employed in the company
as a cashier, and was engaged, among others, to receive and account for the payments made by
the various customers of the company.
In 2002, Bangayan filed with the Manila Prosecutor's Office a complaint for estafaand/or qualified
theft against respondent, alleging that several checks representing the aggregate amount of
P1,534,135.50 issued by the company's customers in payment of their obligation were, instead of
being turned over to the company's coffers, indorsed by respondent who deposited the same to her
personal banking account maintained at Security Bank and Trust Company (Security Bank) in
Divisoria, Manila Branch. Upon a finding that the evidence adduced was uncontroverted, the
assistant city prosecutor recommended the filing of the Information for qualified theft against
respondent.
Accordingly, respondent was charged before the Regional Trial Court of Manila. She was found
guilty; that in the commission of the said offense, said accused acted with grave abuse of
confidence, being then employed as cashier by said complainant at the time of the commission of
the said offense and as such she was entrusted with the said amount of money.

Respondent entered a negative plea when arraigned. The trial ensued. On the premise that
respondent had allegedly encashed the subject checks and deposited the corresponding amounts
thereof to her personal banking account.
Petitioner, opposing respondent's move, argued for the relevancy of the Metrobank account on the
ground that the complaint-affidavit showed that there were two checks which respondent allegedly
deposited in an account with the said bank. To this, respondent filed a supplemental motion to
quash, invoking the absolutely confidential nature of the Metrobank account under the provisions of
Republic Act(R.A.) No. 1405. The trial court did not sustain respondent; hence, it denied the motion
to quash for lack of merit.
Meanwhile, the prosecution was able to present in court the testimony of Elena Marasigan
(Marasigan), the representative of Security Bank. In a nutshell ,Marasigans testimony sought to
prove that between 1988 and 1989, respondent ,while engaged as cashier at the BSB Group, Inc.,
was able to run away with the checks issued to the company by its customers, endorse the same,
and credit the corresponding amounts to her personal deposit account with Security Bank. In the
course of the testimony, the subject checks were presented to Marasigan for identification and
marking as the same checks received by respondent, endorsed, and then deposited in her
personal account with Security Bank. CA affirmed RTCs decision.
ISSUE: Whether or not there is no difference between cash and check for purposes of prosecuting
respondent for theft of cash.

HELD: In theft, the act of unlawful taking connotes deprivation of personal property of one by
another with intent to gain, and it is immaterial that the offender is able or unable to freely dispose
of the property stolen because the deprivation relative to the offended party has already ensued
from such act of execution. The allegation of theft of money, hence, necessitates that evidence
presented must have a tendency to prove that the offender has unlawfully taken money belonging
to another. Interestingly, petitioner has taken pains in attempting to draw a connection between the
evidence subject of the instant review, and the allegation of theft in the Information by claiming that
respondent had fraudulently deposited the checks in her own name. But this line of argument
works more prejudice than favor, because it in effect, seeks to establish the commission, not of
theft, but rather of some other crime probably estafa.
Moreover, that there is no difference between cash and check is true in other instances. In estafa
by conversion, for instance, whether the thing converted is cash or check, is immaterial in relation
to the formal allegation in an information for that offense; a check, after all, while not regarded as
legal tender, is normally accepted under commercial usage as a substitute for cash, and the credit
it represents instated monetary value is properly capable of appropriation. And it is in this respect
that what the offender does with the check subsequent to the act of unlawfully taking it becomes
material inasmuch as this offense is a continuing one. In other words, in pursuing a case for this
offense, the prosecution may establish its cause by the presentation of the checks involved. These
checks would then constitute the best evidence to establish their contents and to prove the

elemental act of conversion in support of the proposition that the offender has indeed indorsed the
same in his own name.