ALFEO D. VIVAS, ON HIS BEHALF AND ON BEHALF OF THE SHAREHOLDERS OF EUROCREDIT COMMUNITY BANK, PETITIONER, BANK, PETITIONER, vs. THE MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS AND THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, RESPONDENTS. CORPORATION, RESPONDENTS. G.R. No. 191424
Augu! ", 2#1$
Mendoza, J.
Digested by: Reyvi Dominguez Topic: Close no !e"# l"te# sc!eme
$%CTS: T!e Ru#"l &"n' o( $"i#e, Inco#po#"ted )R&$I* "s " duly #egiste#ed #u#"l b"n'ing institution. Reco#d s!os t!"t t!e co#po#"te li(e o( R&$I e+pi#ed on "y -, /001.Notit!st"nding, petitione# %l(eo D. 2iv"s )2iv"s* "nd !is p#incip"ls "c3ui#ed t!e cont#olling inte#est in R&$I. %t t!e initi"tive o( 2iv"s "nd t!e ne m"n"gement te"m, "n inte#n"l "udit "s conducted on R&$I "nd #esults t!e#eo( !ig!lig!ted t!e dism"l ope#"tion o( t!e #u#"l b"n'. T!e#e"(te#, t!e &"ng'o Sent#"l ng Pilipin"s )&SP* issued t!e Ce#ti(ic"te o( %ut!o#ity e+tending t!e co#po#"te li(e o( R&$I (o# "not!e# (i(ty )10* ye"#s. T!e &SP "lso "pp#oved t!e c!"nge o( its co#po#"te n"me to Eu#oC#edit Community &"n', Inco#po#"ted, "s ell "s t!e inc#e"se in t!e numbe# o( t!e membe#s o( its &OD, (#om (ive to eleven. Pu#su"nt to Section /4 o( Republic %ct )R.%.* No. 561-, ot!e#ise 'non "s T!e Ne Cent#"l &"n' %ct, t!e Integ#"ted Supe#vision Dep"#tment II )ISD II* o( t!e &SP conducted " gene#"l e+"min"tion on EC&I. T!e e+"mine#s (#om t!e Dep"#tment o( 7o"ns "nd C#edit o( t!e &SP "##ived "t t!e EC&I "nd c"ncelled t!e #ediscounting line o( t!e b"n'. 2iv"s "ppe"led t!e c"ncell"tion to &SP. 2iv"s moved (o# " #econside#"tion o( Resolution No. /11 on t!e g#ounds o( non8 obse#v"nce o( due p#ocess "nd "#bit#"#iness. T!e ISD II, on seve#"l inst"nces, !"d invited t!e &OD o( EC&I to discuss m"tte#s pe#t"ining to t!e pl"cement o( t!e b"n' unde# PC% (#"meo#' "nd ot!e# supe#viso#y conce#ns be(o#e m"'ing t!e "pp#op#i"te #ecommend"tions to t!e &. T!e p#oposed meeting, !oeve#, did not m"te#i"lize due to postponements soug!t by 2iv"s. %lso, t!e sc!eduled gene#"l e+"min"tion o( t!e boo's, #eco#ds "nd gene#"l condition o( EC&I it! t!e cut8o(( d"te o( Decembe# -, /004, did not pus! t!#oug!. %cco#ding to 2iv"s, EC&I "s'ed (o# t!e de(e#ment o( t!e e+"min"tion pending #esolution o( its "ppe"l be(o#e t!e &. 2iv"s believed t!"t !e "s being t#e"ted un("i#ly bec"use t!e lette# lette# o( "ut!o#ity to e+"mine e+"mine "llegedly "llegedly cont"ined cont"ined " cl"use cl"use !ic! !ic! pe#t"ined pe#t"ined to t!e %nti8one %nti8oney y 7"unde#ing 7"unde#ing 7" "nd t!e &"n' Sec#ecy %ct. T!e &, on t!e ot!e# !"nd, posited t!"t EC&I un9ustly #e(used to "llo t!e &SP e+"mine#s (#om e+"mining "nd inspecting its boo's "nd #eco#ds, in viol"tion o( Sections /1 "nd - o( R.%. No. 561-. On t!e b"sis o( t!e e+"min"tion (indings "s #epo#ted by t!e Integ#"ted Supe#vision Dep"#tment )ISD* II, in its memo#"ndum, !ic! (indings s!oed t!"t t!e Eu#oc#edit Community &"n', Inc. ; " Ru#"l &"n' )Eu#oc#edit &"n'* )"* is un"ble to p"y its li"bilities "s t!ey become due in t!e o#din"#y cou#se o( business< )b* !"s insu((icient #e"liz"ble "ssets to meet li"bilities< )c* c"nnot continue in business it!out involving p#ob"ble losses to its deposito#s "nd c#edito#s< "nd )d* !"s ill(ully viol"ted " ce"se "nd desist o#de# o( t!e onet"#y &o"#d (o# "cts o# t#"ns"ctions !ic! "#e conside#ed uns"(e "nd unsound b"n'ing p#"ctices "nd ot!e# "cts o# t#"ns"ctions constituting (#"ud o# dissip"tion o( t!e "ssets o( t!e institution, "nd conside#ing t!e ("ilu#e o( t!e &o"#d o( Di#ecto#s=m"n"gement o( Eu#oc#edit &"n' to #esto#e t!e b"n'>s (in"nci"l !e"lt! "nd vi"bility despite conside#"ble time given to "dd#ess t!e b"n'>s (in"nci"l p#oblems, "nd t!"t t!e b"n' !"d been "cco#ded due p#ocess, t!e &o"#d, in "cco#d"nce it! Section -0 o( Republic %ct No. 561- )T!e Ne Cent#"l &"n' %ct*, "pp#oved t!e #ecommend"tion o( ISD II "s (ollos: To p#o!ibit t!e Eu#oc#edit &"n' (#om doing business in t!e P!ilippines "nd to pl"ce its "ssets "nd "(("i#s unde# #eceive#s!ip< "nd To design"te t!e P!ilippine Deposit Insu#"nce Co#po#"tion "s Receive# o( t!e b"n'. ISS?ES: @!et!e @!et!e## o# not onet" onet"#y #y &o"#d &o"#d is "ut!o# "ut!o#ize ized d to p#o!ib p#o!ibit it Eu#oC# Eu#oC#edi editt Commun Community ity &"n', &"n', Inco#p Inco#po#" o#"ted ted (#om (#om continuing its b"n'ing business "nd (o# pl"cing it unde# #eceive#s!ip.
R?7INA: T!e Cou#t !"s t"'en t!is into "ccount, but it "ppe"#s (#om "ll ove# t!e #eco#ds t!"t EC&I "s given eve#y oppo#tunity to be !e"#d "nd imp#ove on its (in"nci"l st"nding. T!e #eco#ds disclose t!"t &SP o((ici"ls "nd e+"mine#s met it! t!e #ep#esent"tives o( EC&I, including 2iv"s, "nd discussed t!ei# (indings. T!e#e e#e "lso #eminde#s t!"t EC&I submit its (in"nci"l "udit #epo#ts (o# t!e ye"#s /005 "nd /004 it! " "#ning t!"t ("ilu#e to submit t!em "nd " #itten e+pl"n"tion o( suc! omission s!"ll #esult in t!e imposition o( " monet"#y pen"lty. o#e impo#t"ntly, EC&I "s !e"#d on its motion (o# #econside#"tion. $o# ("ilu#e o( EC&I to comply, t!e & c"me out it! Resolution No. 14 denying its #e3uest (o# #econside#"tion o( Resolution No. 5/6. B"ving been !e"#d on its motion (o# #econside#"tion, EC&I c"nnot cl"im t!"t it "s dep#ived o( its #ig!t unde# t!e Ru#"l &"n' %ct. T!e close no, !e"# l"te# doct#ine !"s "l#e"dy been 9usti(ied "s " me"su#e (o# t!e p#otection o( t!e public inte#est. Si(t "ction is c"lled (o# on t!e p"#t o( t!e &SP !en it (inds t!"t " b"n' is in di#e st#"its. ?nless "de3u"te "nd dete#mined e((o#ts "#e t"'en by t!e gove#nment "g"inst dist#essed "nd mism"n"ged b"n's, public ("it! in t!e b"n'ing system is ce#t"in to dete#io#"te to t!e p#e9udice o( t!e n"tion"l economy itsel(, not to mention t!e losses su((e#ed by t!e b"n' deposito#s, c#edito#s, "nd stoc'!olde#s, !o "ll dese#ve t!e p#otection o( t!e gove#nment. T!e doct#ine is (ounded on p#"ctic"l "nd leg"l conside#"tions to obvi"te un"##"nted dissip"tion o( t!e b"n'>s "ssets "nd "s " v"lid e+e#cise o( police poe# to p#otect t!e deposito#s, c#edito#s, stoc'!olde#s, "nd t!e gene#"l public. Si(t, "de3u"te "nd dete#mined "ctions must be t"'en "g"inst (in"nci"lly dist#essed "nd mism"n"ged b"n's by gove#nment "gencies lest t!e public ("it! in t!e b"n'ing system dete#io#"te to t!e p#e9udice o( t!e n"tion"l economy. %cco#dingly, t!e & c"n immedi"tely implement its #esolution p#o!ibiting " b"n'ing institution to do business in t!e P!ilippines "nd, t!e#e"(te#, "ppoint t!e PDIC "s #eceive#. T!e p#ocedu#e (o# t!e involunt"#y closu#e o( " b"n' is summ"#y "nd e+peditious in n"tu#e. Suc! "ction o( t!e & s!"ll be (in"l "nd e+ecuto#y, but m"y be l"te# sub9ected to " 9udici"l sc#utiny vi" " petition (o# ce#tio#"#i to be (iled by t!e stoc'!olde#s o( #eco#d o( t!e b"n' #ep#esenting " m"9o#ity o( t!e c"pit"l stoc'. Obviously, t!is p#ocedu#e is designed to p#otect t!e inte#est o( "ll conce#ned t!"t is, t!e deposito#s, c#edito#s "nd stoc'!olde#s, t!e b"n' itsel( "nd t!e gene#"l public. T!e p#otection "((o#ded public inte#est "##"nts t!e e+e#cise o( " summ"#y closu#e. On top o( t!ese, it "s (ound t!"t EC&I !"d ill(ully viol"ted t!e ce"se8"nd8desist o#de# o( t!e & issued in its une /, /00 Resolution, "nd !"d dis#eg"#ded t!e &SP #ules "nd di#ectives. $o# s"id #e"sons, t!e & "s (o#ced to issue t!e "ss"iled Resolution No. /56 pl"cing EC&I unde# #eceive#s!ip. In "ddition, t!e & st#essed t!"t it "cco#ded EC&I "mple time "nd oppo#tunity to "dd#ess its monet"#y p#oblem "nd to #esto#e "nd imp#ove its (in"nci"l !e"lt! "nd vi"bility but it ("iled to do so.
