The Supreme Court has granted Far East Bank and Trust Company's Motion to Correct Judgment and issued a nunc pro tunc judgment to include the Laoag property in the list of Pacific Banking Corporation (PBC) fixed assets that were sold to the bank. The Court found that its July 22, 2015 Decision inadvertently omitted the Laoag branch from the list of disputed assets.
The Case
On July 5, 1985, the Central Bank of the Philippines placed PBC under receivership through Monetary Board Resolution No. 699. The Central Bank invited banks to bid for PBC's assets and franchise and the assumption of PBC's liabilities.
On November 14, 1985, Far East Bank and Trust Company submitted its bid covering both PBC's nonfixed and fixed assets and the assumption of PBC's liabilities. The fixed assets were those described in the Asian Appraisal Report of August 1, 1984 and August 9, 1984. The bank proposed to purchase the assets at a price equivalent to the values indicated in the report, subject to proposed discounts.
On November 22, 1985, the Monetary Board accepted the bank's bid. On April 16, 1986, the bank as buyer, PBC as seller, and the Central Bank entered into a Memorandum of Agreement (MOA). PBC was represented by its liquidator, Renan V. Santos, who was then the special assistant to the Central Bank governor.
The parties later executed a Purchase Agreement. This covered only the nonfixed assets and did not include the fixed assets agreed upon under the MOA, though the parties acknowledged that other assets not yet covered could be purchased within a period of 90 days from the effectivity date. The Monetary Board approved the Purchase Agreement on October 24, 1986, and the Regional Trial Court, as liquidating court, approved it on December 18, 1986.
According to the bank, it complied with its obligations, including paying PHP 260,000,000.00 as additional consideration, and took possession of the fixed assets, opening its branches there. Liquidator Santos furnished the bank with copies of the transfer certificates of title but failed to execute the purchase agreement covering the disputed fixed assets. The Philippine Deposit Insurance Commission (PDIC) later took over as the new PBC liquidator, with President Vitaliano Nañagas II replacing Santos. Nañagas informed the bank that the fixed assets could be purchased only at their present appraisal value, which was much higher than their sound value, and started the sale of the assets to third persons.
The bank then moved before the Regional Trial Court to compel the liquidator to execute the implementing deeds of sale. On February 26, 1997, the Regional Trial Court concluded there was a perfected contract of sale of the disputed fixed assets under both the MOA and the Purchase Agreement, and its list included the Laoag City branch.
The Issue
The question before the Court was whether Far East Bank and Trust Company was entitled to a nunc pro tunc judgment because the Court's July 22, 2015 Decision inadvertently omitted the Laoag property from the list of disputed fixed assets sold to the bank.
The Ruling
The Court granted the motion. It ruled: "FOR THESE REASONS, the Motion to Co1Tect Judgment is GRANTED. The July 22, 2015 Decision of the Supreme Court in G.R. No. 172983 is AFFIRMED WITH MODIFICATION."
The Court issued a nunc pro tunc judgment so the dispositive portion of the July 22, 2015 Decision would correctly reflect the Laoag property. The corrected dispositive portion granted Far East Bank and Trust Company's petition, reversed the May 31, 2006 Decision of the Court of Appeals in CA-G.R. C.V. No. 56624, and remanded the case to the Regional Trial Court, Branch 31, Manila, to compute the purchase price under Sections 3(c) and 10(b) of the MOA. The Court also ordered the Clerk of Court to correct the Entry of Judgment dated October 19, 2016, and directed the Regional Trial Court to compute the purchase price of the Laoag City Branch.
By the Numbers
- G.R. No. 172983
- July 5, 1985 — Central Bank placed PBC under receivership
- November 14, 1985 — Bank submitted its bid
- April 16, 1986 — MOA executed
- December 18, 1986 — Regional Trial Court approved the Purchase Agreement
- July 22, 2015 — Supreme Court Decision
- October 19, 2016 — Decision became final and executory
- PHP 260,000,000.00 — additional consideration paid by the bank
- Laoag City branch — Cost of Reproduction PHP 1,781,000; Sound Value PHP 1,293,000
The Court's Reasoning
The Court found that although its July 22, 2015 Decision had become final and executory on October 19, 2016, a study of the Decision and case records revealed the Laoag property was inadvertently omitted from the list of disputed assets sold to the bank. The Court noted it had consistently referred to the decisions of the Court of Appeals and the Regional Trial Court and to the Asian Appraisal Report, all of which included the Laoag property.
The Court explained there was judicial action showing its intention to include the property, as it ruled that the bank's purchase covered the fixed assets contained in the Asian Appraisal Report. Unlike the PBC Condominium Building, which the Court explained was excluded because it had been sold in a court-approved compromise agreement, there was no issue specific to the Laoag property to justify its exclusion, and the Court gave no explanation for leaving it off the list.
The Court added that no party would be prejudiced by the inclusion. Respondent-intervenor CB-BOL, now succeeded by the Bureau of the Treasury, admitted the Laoag City Branch was included in the Court's tabulation, and the Privatization and Management Office acknowledged the branch was among the properties subject of the case. The Court said it was merely making the record speak the truth, and that petitioner was entitled to a nunc pro tunc judgment.
Source: Supreme Court Resolution in G.R. No. 172983.
This report summarizes a public Supreme Court decision and is not legal advice.