Abacus Real Estate Development Center v. Manila Banking Corporation
REITERATIONFacts
1. The Antecedents: Respondent Manila Banking Corporation (Manila Bank) owned a parcel of land in Makati City where it began constructing a 14-storey building. Due to financial difficulties, the bank was unable to complete the construction. In May 1987, the Central Bank ordered the closure of Manila Bank and placed it under receivership. Subsequently, in November 1988, the Central Bank ordered the liquidation of Manila Bank, designating a liquidator who was later amended to a statutory receiver. In an effort to salvage the bank's investment, the bank's acting president, Vicente G. Puyat, sought investors. On August 18, 1989, a group of investors, represented by Calixto Y. Laureano (the Laureano group), offered to lease the building for ten years and advance the cost of completion, with the option to purchase the property. An arrangement was made for the property to be leased to Manila Equities Corporation (MEQCO), a subsidiary of Manila Bank, which would then sublease it to the Laureano group. The Laureano group formed petitioner Abacus Real Estate Development Center, Inc. (Abacus) for this purpose. The Laureano group later assigned its rights, including the exclusive option to purchase, to Benjamin Bitanga. 2. Procedural History: Abacus sent a letter to Manila Bank in September 1994 expressing its intent to exercise the exclusive option to purchase, but Manila Bank refused. Consequently, Abacus filed a complaint for specific performance and damages against Manila Bank and/or the Estate of Vicente G. Puyat before the Regional Trial Court (RTC) of Makati City. The RTC initially dismissed the case against the Estate of Vicente G. Puyat but denied the motion to dismiss filed by Manila Bank. After summary judgment proceedings, the RTC rendered a decision on May 27, 1999, ordering Manila Bank to sell the land and building to Abacus for P150,000,000.00 and to pay attorney's fees. Manila Bank filed a motion for reconsideration, which was denied by the RTC on August 17, 1999. Manila Bank then appealed to the Court of Appeals (CA), docketed as CA-G.R. CV No. 64877. The CA, in a decision dated May 26, 2003, reversed the RTC's decision. Abacus filed a motion for reconsideration, which the CA denied in a resolution dated February 17, 2004. 3. The Petition: Petitioner Abacus Real Estate Development Center, Inc. filed this petition for review on certiorari under Rule 45 of the Rules of Court to set aside the decision of the Court of Appeals dated May 26, 2003, and its resolution dated February 17, 2004. Abacus argues that the Court of Appeals erred in reversing the trial court's decision, which had ordered Manila Bank to sell the property to Abacus. The core issues raised are whether Manila Bank's appeal to the Court of Appeals was filed on time and whether Abacus acquired the right to purchase the lot and building. Abacus contends that Manila Bank's appeal was filed out of time, while Manila Bank asserts it was filed within the reglementary period. Furthermore, Abacus maintains that the exclusive option to purchase was valid and binding, whereas Manila Bank argues that its acting president lacked the authority to grant such an option due to the bank being under receivership, and that the receiver's alleged ratification was also invalid as it exceeded the receiver's administrative powers.
Issue(s)
Whether or not respondent bank’s appeal to the Court of Appeals was filed on time. Whether or not petitioner Abacus has acquired the right to purchase the lot and building in question.
Ruling
The petition is denied, and the challenged issuances of the Court of Appeals are affirmed. The Court ruled in favor of respondent Manila Bank on both issues.
Ratio Decidendi
On the timeliness of the appeal: The Court affirmed the appellate court's finding that Manila Bank's appeal was filed on time. Petitioner Abacus argued that Manila Bank filed its motion for reconsideration on the last day of the period to appeal, thus shortening the appeal period. However, respondent Manila Bank presented evidence, including registry receipts and a manifestation filed with the RTC, indicating that its motion for reconsideration was mailed on July 6, 1999, two days before the deadline. The Court gave weight to the handwritten annotations on the motion for reconsideration and the registry return cards, which supported the claim of mailing on July 6, 1999. The Court reiterated that findings of fact by the Court of Appeals are generally binding upon it, absent compelling reasons, and no such exceptions were present in this case. Since Manila Bank received the denial of its motion for reconsideration on August 23, 1999, it had until August 25, 1999, to file its notice of appeal, which it did. Therefore, the appeal was perfected within the reglementary period. On whether petitioner Abacus acquired the right to purchase: The Court ruled that petitioner Abacus did not acquire the right to purchase the lot and building. It was undisputed that Manila Bank was under receivership when its acting president, Vicente G. Puyat, granted the exclusive option to purchase. The Court held that officers of a bank under receivership are divested of authority over the bank's property, as such authority is reposed in the receiver. The appointment of a receiver suspends the authority of bank officers over its property. Therefore, Vicente G. Puyat was without authority to grant the exclusive option to purchase, rendering it unenforceable against Manila Bank. The Court further addressed Abacus' claim that the option was ratified by the receiver, Atty. Renan Santos. Citing Section 29 of the Central Bank Act (R.A. No. 265), as amended, the Court emphasized that a receiver's duty is to administer the assets for the benefit of creditors. Granting an exclusive option to purchase is an act of strict ownership and disposition, not an act of administration. Thus, even if Atty. Santos had verbally approved it, such approval would be without force and effect as it exceeded the receiver's powers. The Court also noted that Section 30 of the New Central Bank Act (R.A. No. 7653) explicitly prohibits receivers from paying or committing any act that will involve the transfer or disposition of any asset, except for administrative expenditures.
Main Doctrine
A bank officer, including the acting president, is divested of authority to transact business concerning the bank's assets once the bank is placed under receivership. Furthermore, a bank receiver's authority is limited to administering the assets for the benefit of creditors and does not include acts of strict ownership such as granting or approving an exclusive option to purchase, which constitutes disposition of property.