Cu v. Small Business Guarantee
REITERATIONFacts
The Antecedents: The Small Business Guarantee and Finance Corporation (SBGFC), a government financial institution, extended an Omnibus Credit Line Agreement to Golden 7 Bank (G7 Bank) for an initial amount of P35,000,000.00, later increased to P90,000,000.00. Petitioners Allan S. Cu and Norma B. Cueto, along with Fidel L. Cu and Lucia C. Pascual, were authorized signatories. G7 Bank made several drawdowns, issuing 103 postdated Land Bank of the Philippines (LBP) checks, 35 of which were subsequently prosecuted. These checks were dishonored by LBP Makati due to 'Account Closed.' On July 31, 2008, the Bangko Sentral ng Pilipinas (BSP) prohibited G7 Bank from doing business, placed it under receivership, and designated the Philippine Deposit Insurance Corporation (PDIC) as receiver, who took over assets on August 1, 2008, closing all accounts, including the LBP account. SBGFC subsequently filed B.P. 22 complaints against the officers. Procedural History: Petitioners filed an Omnibus Motion in the Metropolitan Trial Court (MeTC) Makati seeking probable cause determination, dismissal on jurisdictional grounds, deferral due to a prejudicial question, and a finding of lack of probable cause. On August 9, 2010, the MeTC dismissed the cases against petitioners and Pascual, deeming it impossible to fund post-receivership checks. The Regional Trial Court (RTC) Makati Branch 138 affirmed this decision on September 12, 2011, and denied reconsideration on January 31, 2012. SBGFC appealed to the Court of Appeals (CA), which initially dismissed the appeal for lack of authority without the Office of the Solicitor General (OSG). Following SBGFC's motion for reconsideration and OSG ratification, the CA granted the motion via an Amended Decision on September 22, 2014, reversing the RTC and MeTC, annulling the dismissals, and ordering reinstatement. The CA held that B.P. 22 is not a 'claim' under P.D. 902-A and that the receivership did not interfere with criminal prosecution. The CA denied further reconsideration on May 20, 2015. The Petition: Petitioners sought review from the Supreme Court, arguing that SBGFC lacked the authority to appeal without the OSG, that the second element of B.P. 22 (knowledge of insufficiency) was absent, and that the receivership suspended all claims, rendering funding impossible. The OSG countered by asserting the validity of the ratification, arguing that the MeTC erred in entertaining the omnibus motion under Summary Procedure Rules, and that there was no excuse from liability.
Issue(s)
Whether SBGFC, as private complainant, could validly appeal the dismissal of B.P. 22 cases via OSG ratification. Whether petitioners, as G7 Bank officers, are criminally liable under B.P. 22 for dishonored checks post-BSP receivership of the bank. Whether MeTC properly dismissed cases despite Rules on Summary Procedure AND whether petitioners had knowledge of insufficiency or ability to fund the checks.
Ruling
The petition is GRANTED. The CA Amended Decision (September 22, 2014) and Resolution (May 20, 2015) in CA-G.R. CR No. 34738 are REVERSED and SET ASIDE. The MeTC Branch 64 and RTC Branch 138 decisions/orders are REINSTATED.
Ratio Decidendi
On SBGFC's Authority to Appeal: The CA correctly gave due course after OSG ratification, as OSG may adopt private complainant's petition in criminal appeals, but this does not alter the merits favoring petitioners. The Court notes OSG's explicit prayer ratifying SBGFC's petition 'for the People,' aligning with jurisprudence allowing such in substantial justice cases, though procedural rules are not suspended lightly. However, the petition's merit on substantive grounds overrides, reinstating dismissals. On Criminal Liability under B.P. 22 Post-Receivership: All claims against a closed bank under Section 30, R.A. No. 7653, must be filed with the liquidation court, as assets are in custodia legis from closure, exempt from execution; B.P. 22 claims are no exception to avoid preferential treatment. BSP's July 31, 2008 resolution placed G7 Bank under PDIC receivership, closing accounts; postdated checks presented in October 2008 were legally impossible to fund, suspending obligations like a suspensive condition per Gidwani v. People (suspension precedes presentment). Stare decisis from G.R. No. 211222 binds: officers cease authority post-closure; creditor SBGFC acted in bad faith depositing known-unfundable checks; exact amount due is contingent on PDIC distribution plan under Civil Code concurrence/preference rules. MeTC correctly dismissed, as no knowledge of insufficiency or failure to fund within 5 days when impossible; RTC affirmed properly. CA erred analogizing P.D. 902-A rehabilitation (non-applicable to banks), as B.P. 22 prosecution cannot bypass liquidation, preventing absurdity of escaping liability via corporate closure. Petitioners' lack of control post-receivership negates B.P. 22 elements; civil claims remain viable in liquidation court. On Propriety of Dismissal and Knowledge of Insufficiency: MeTC correctly dismissed, as no knowledge of insufficiency or failure to fund within 5 days when impossible; RTC affirmed properly.
Main Doctrine
When a bank is placed under receivership and liquidation by the Bangko Sentral ng Pilipinas (BSP) pursuant to Section 30 of R.A. No. 7653, its assets are deemed in custodia legis, exempt from garnishment, levy, attachment, or execution, and all claims against it, including those evidenced by dishonored checks, must be filed exclusively with the liquidation court for adjudication under the rules on concurrence and preference of credits. Officers of the closed bank cannot be held criminally liable under B.P. 22 for issuing checks that are dishonored due to 'Account Closed' after the bank's closure, as it becomes legally impossible to fund such checks post-receivership, suspending the demandability of the underlying obligation. The BSP's closure order operates as a suspensive condition, halting the birth or enforceability of payment obligations until liquidation determines the exact amount due, preventing premature demands by creditors who deposit checks knowing the bank's accounts are closed by the Philippine Deposit Insurance Corporation (PDIC). Criminal prosecution for B.P. 22 cannot circumvent the liquidation process, as allowing it would grant preferential treatment to check-holding creditors, undermining the equitable distribution policy for all bank creditors. This ruling applies by analogy cases like Gidwani v. People, where SEC suspension orders similarly excuse liability, and is binding via stare decisis in substantially identical facts involving the same bank and officers.