Busuego vs.

CA [304 SCRA 473 (March 11 1999)] Power of Monetory Board Facts: The 16th regular examination of the books and records of PAL Employees Savings and Loan Association (PESALA) was conducted by a team of CB Examiners. Several irregularities were found to have been committed by the PESALA officers. Hence, CB sent a letter to petitioners for them to be present at a meeting specifically for the purpose of investigating said anomalies. Petitioners did not respond. Hence, the Monetary Board adopted a resolution including the names of the officers of PESALA in the watchlist to prevent them from holding responsible positions in any institution under CB supervision. Petitioners filed a petition for injunction against the MB in order to prevent their names from being added in the said watchlist. RTC issued the TRO. The MB appealed to the CA which reversed RTC. Hence, this petition for certiorari with the SC. Petitioners contend that the MB resolution was null and void for being violative of their right to due process by imposing administrative sanctions where the MB is not vested with authority to disqualify persons from occupying positions in institutions under the supervision of CB. Issue: Whether or not the MB resolution was null and void. Held: NO. The CB, through the MB, is the government agency charged with the responsibility of administering the monetary, banking and credit system of the country and is granted the power of supervision and examination over banks and non-bank financial institutions performing quasi-banking functions of which savings and loan associations, such as PESALA, form part of. The special law governing savings and loan associations is R.A. 3779, the Savings and Loan Association Act. Said law authorizes the MB to conduct regular yearly examinations of the books and records of savings and loan associations, to suspend a savings and loan association for violation of law, to decide any controversy over the obligations and duties of directors and officers, and to take remedial measures. Hence, the CB, through the MB, is empowered to conduct investigations and examine the records of savings and loan associations. If any irregularity is discovered in the process, the MB may impose appropriate sanctions, such as suspending the offender from holding office or from being employed with the CB, or placing the names of the offenders in a watchlist.

Legacy Group ligated In the recent case of BANGKO SENTRAL NG PILIPINAS, etc., et. al. vs. HON. NINA G. ANTONIO-VALENZUELA, et. al., G.R. No. 184778, October 2, 2009, the Philippine Supreme Court, guided by the old adage that justice delayed is justice denied, rejected the writ of preliminary injunction issued by a trial court to restrain a legal action commenced by the Monetary Board against banks in Visayas and Mindanao belonging to the notorious Legacy Group which has victimized thousands of middle-class Filipino depositors and investors throughout the Philippines. 1. The requisites for preliminary injunctive relief are: (a) the invasion of right sought to be protected is material and substantial; (b) the right of the complainant is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious damage. As such, a writ of preliminary injunction may be issued only upon clear showing of an actual existing right to be protected during the pendency of the principal action. The twin requirements of a valid injunction are the existence of a right and its actual or threatened violations. Thus, to be entitled to an injunctive writ, the right to be protected and the violation against that right must be shown. 2. The issuance by the RTC of writs of preliminary injunction is an unwarranted interference with the powers of the Monetary Board (MB). Secs. 29 and 30 of RA 7653 refer to the appointment of a conservator or a receiver for a bank, which is a power of the MB for which they need the ROEs done by the supervising or examining department. The writs of preliminary injunction issued by the trial court hinder the MB from fulfilling its function under the law. The actions of the MB under Secs. 29 and 30 of RA 7653 may not be restrained or set aside by the court except on petition for certiorari on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. The writs of preliminary injunction order are precisely what cannot be done under the law by preventing the MB from taking action under either Sec. 29 or Sec. 30 of RA 7653. 3. As to the third requirement, the respondent banks have shown no necessity for the writ of preliminary injunction to prevent serious damage. The serious damage contemplated by the trial court was the possibility of the imposition of sanctions upon respondent banks, even the sanction of closure. Under the law, the sanction of closure could be imposed upon a bank by the BSP even without notice and hearing. The apparent lack of procedural due process would not result in the invalidity of action by the MB. This was the ruling in Central Bank of the Philippines v. Court of Appeals. This close now, hear later scheme is grounded on practical and legal considerations to prevent unwarranted dissipation of the banks assets and as a valid exercise of police power to protect the depositors, creditors, stockholders, and the general public. The writ of preliminary injunction cannot, thus, prevent the MB from taking action, by preventing the submission of the ROEs and worse, by preventing the MB from acting on such ROEs. 4. The trial court required the MB to respect the respondent banks right to due process by allowing the respondent banks to view the ROEs and act upon them to forestall any sanctions the MB might impose. Such procedure has no basis in law and does in fact violate the close now, hear later doctrine. We held in Rural Bank of San Miguel, Inc. v. Monetary Board, Bangko Sentral ng Pilipinas:

It is well-settled that the closure of a bank may be considered as an exercise of police power. The action of the MB on this matter is final and executory. Such exercise may nonetheless be subject to judicial inquiry and can be set aside if found to be in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. 5. The respondent banks cannotthrough seeking a writ of preliminary injunction by appealing to lack of due process, in a roundabout manner prevent their closure by the MB. Their remedy, as stated, is a subsequent one, which will determine whether the closure of the bank was attended by grave abuse of discretion. Judicial review enters the picture only after the MB has taken action; it cannot prevent such action by the MB. The threat of the imposition of sanctions, even that of closure, does not violate their right to due process, and cannot be the basis for a writ of preliminary injunction. 6. The close now, hear later doctrine has already been justified as a measure for the protection of the public interest. Swift action is called for on the part of the BSP when it finds that a bank is in dire straits. Unless adequate and determined efforts are taken by the government against distressed and mismanaged banks, public faith in the banking system is certain to deteriorate to the prejudice of the national economy itself, not to mention the losses suffered by the bank depositors, creditors, and stockholders, who all deserve the protection of the government. 7. The respondent banks have failed to show their entitlement to the writ of preliminary injunction. It must be emphasized that an application for injunctive relief is construed strictly against the pleader. The respondent banks cannot rely on a simple appeal to procedural due process to prove entitlement. The requirements for the issuance of the writ have not been proved. No invasion of the rights of respondent banks has been shown, nor is their right to copies of the ROEs clear and unmistakable. There is also no necessity for the writ to prevent serious damage. Indeed the issuance of the writ of preliminary injunction tramples upon the powers of the MB and prevents it from fulfilling its functions. There is no right that the writ of preliminary injunction would protect in this particular case. In the absence of a clear legal right, the issuance of the injunctive writ constitutes grave abuse of discretion. In the absence of proof of a legal right and the injury sustained by the plaintiff, an order for the issuance of a writ of preliminary injunction will be nullified. 8. Courts are hereby reminded to take greater care in issuing injunctive relief to litigants, that it would not violate any law. The grant of a preliminary injunction in a case rests on the sound discretion of the court with the caveat that it should be made with great caution. Thus, the issuance of the writ of preliminary injunction must have basis in and be in accordance with law. All told, while the grant or denial of an injunction generally rests on the sound discretion of the lower court, this Court may and should intervene in a clear case of abuse.

Banco Filipino Savings and Mortgage Bank vs. Central Bank G.R. No. 70054, December 11, 1911 Facts: Petitioners Top Management Programs Corporation and Pilar DevelopmentCorporation are corporations engaged in the business of developing residentialsubdivisions.Top Management and Pilar Development obtained several loans fromBanco Filipino all secured by real estate mortgage in their various properties inCavite. The Monetary Board issued a resolution finding Banco Filipino insolvent andplacing it under receivership. Subsequently, the Monetary Board issued anotherresolution placing the bank under liquidation and designated a liquidator. By virtueof her authority as liquidator, Valenzuela appointed the law firm of Sycip, Salazar, etal. to represent Banco Filipino in all litigations.Banco Filipino filed the petition for certiorari questioning the validity of theresolutions issued by the Monetary Board authorizing the receivership andliquidation of Banco Filipino.A temporary restraining order was issued enjoining therespondents from executing further acts of liquidation of the bank. However, actsand other transactions pertaining to normal operations of a bank are not enjoined.Subsequently, Top Management and Pilar Development failed to pay theirloans on the due date. Hence, the law firm of Sycip, Salazar, et al. acting as counselfor Banco Filipino under authority of the liquidator, applied for extra-judicialforeclosure of the mortgage over Top Management and Pilar Developmentsproperties. Thus, the Ex-Officio Sheriff of the Regional Trial Court of Cavite issued anotice of extra-judicial foreclosure sale of the properties. Top Management and PilarDevelopment filed 2 separate petitions for injunction and prohibition with therespondent appellate court seeking to enjoin the Regional Trial Court of Cavite, theex-officio sheriff of said court and Sycip, Salazar, et al. from proceeding withforeclosure sale which were subsequently dismissed by the court. Hence thispetition Issue: Whether or not the liquidator has the authority to prosecute as well as todefend suits and to foreclose mortgages for and behalf of the bank while the issueon the validity of the receivership and liquidation is still pending resolution Manalo vs. Court of AppealsG.R. No. 141297, October 8, 2001 Facts: S. Villanueva Enterprises, represented by its president, Therese VillanuevaVargas, obtained a loan of three million pesos and one million pesos from therespondent PAIC Savings and Mortgage Bank and the Philippine AmericanInvestments Corporation (PAIC), respectively. To secure payment of both debts,Vargas executed in favor of the respondent and PAIC a joint first mortgage over twoparcels of land registered under her name. One of the lots is the subject of thepresent case. S. Villanueva Enterprises failed to settle its loan obligation.Accordingly, respondent instituted extrajudicial foreclosure proceedings over themortgaged lots and acquired the same as the highest bidder. After the lapse of oneyear, title was consolidated in respondent's name for failure of Vargas to redeem.Subsequently, Central Bank of the Philippines filed a petition for assistance inthe liquidation of the respondent PAIC with the Regional Trial Court. After a fewyears, respondent petitioned the Regional Trial Court of Pasay City for the issuanceof a writ of possession for the subject property. However, during the pendency of civil case for the issuance of a writ of possession, Vargas executed a deed of absolute sale selling, transferring, and conveying

ownership of the disputed lot infavor of a certain Armando Angsico. Notwithstanding this sale, Vargas, stillrepresenting herself to be the lawful owner of the property, leased the same topetitioner Domingo R. Manalo. Later, Armando Angsico, as buyer of the property,assigned his rights therein to petitioner. The court subsequently issued the writ of possession but VillanuevaEnterprises and Vargas moved for its quashal. Petitioner, on the strength of thelease contract and deed of assignment made in his favor, submitted a permission tofile an ex-parte motion to intervene. Both motions were denied by the court. Courtof Appeals upheld the order of the lower court. Hence this petition. Issue: Whether or not the jurisdiction for the issuance of the writ of possession filedby the respondent bank is vested solely on the liquidation court