Bangko Sentral ng Pilipinas v. Orient Commercial Banking Corporation
REITERATIONFacts
The Antecedents: On February 13, 1998, Orient Commercial Banking Corporation (OCBC) declared a bank holiday due to its inability to pay obligations. Subsequently, OCBC was placed under receivership by the Monetary Board, with the Philippine Deposit Insurance Corporation (PDIC) designated as Receiver. Respondent Jose C. Go and affiliate companies challenged this action, but the case was dismissed. The Monetary Board later directed the liquidation of OCBC, and PDIC initiated special proceedings for its liquidation. Procedural History: On December 17, 1999, Bangko Sentral ng Pilipinas (BSP) filed a complaint for sum of money with preliminary attachment against respondents, seeking to recover a deficiency obligation of OCBC amounting to ₱1,273,959,042.97, plus interest and other charges. The Regional Trial Court (RTC) of Manila, Branch 12, granted the preliminary attachment. Respondents filed a petition for certiorari with the Court of Appeals (CA), questioning the RTC's orders. The CA, in its June 11, 2001 Decision, nullified the writ of attachment and ordered the dismissal of the amended complaint against some respondents. BSP filed a manifestation and motion, highlighting the alleged fraud against BSP and the doubt in recovering the taxpayers' interest. The CA recalled its decision and granted BSP a period to file a comment. The ponente inhibited himself. The Petition: BSP filed the instant petition for review on certiorari, seeking to annul the CA's June 11, 2001 Decision and praying for a temporary restraining order and writ of preliminary injunction to prevent the enforcement of the CA decision. Subsequently, the parties executed a Compromise Agreement on December 16, 2003, which was approved by the RTC of Manila, Branch 12, on December 29, 2003. Under the agreement, respondents agreed to pay a total deficiency obligation of ₱2,974,903,000.00 through dacion en pago and subsequent amortizations, and the parties agreed to cause the dismissal of pending cases, including the present one.
Issue(s)
Whether the issues raised in the petition regarding the propriety of the writ of attachment and the CA's reversal of the RTC orders have become moot and academic due to the parties' compromise agreement. Whether the Compromise Agreement, having been judicially approved, has the force and effect of a judgment.
Ruling
The petition is DENIED for being moot and academic. The case is REMANDED to the Regional Trial Court of Manila, Branch 12 for continuation of proceedings to implement the Compromise Agreement.
Ratio Decidendi
On the issue of mootness due to the Compromise Agreement: The Supreme Court held that the execution of a Compromise Agreement, which was judicially approved, renders the issues concerning the propriety of the writ of attachment and the alleged grave abuse of discretion by the appellate court moot and academic. A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events, so that a declaration thereon would be of no practical use or value. In this instance, the parties have settled their differences, and the terms of their agreement are to be implemented by the trial court. Therefore, any ruling on the original issues would no longer provide any substantial relief. On the force and effect of a judicial compromise: The Court reiterated that a compromise agreement intended to resolve a matter already under litigation is a judicial compromise. Having judicial mandate and entered as its determination of the controversy, such judicial compromise has the force and effect of a judgment. It transcends its identity as a mere contract between the parties, as it becomes a judgment that is subject to execution in accordance with the Rules of Court. This principle underscores why the subsequent execution of the compromise agreement effectively resolved the underlying dispute and rendered the original petition moot.
Main Doctrine
A case becomes moot and academic when, due to supervening events, it ceases to present a justiciable controversy, rendering any declaration thereon of no practical use or value. A judicial compromise, once approved by the court, has the force and effect of a judgment and is subject to execution.