The Supreme Court ruled that a petition to revive a judgment ordering the reorganization of Banco Filipino Savings and Mortgage Bank (BFSMB) was filed beyond the prescriptive period. Moreover, the Court found that the Bangko Sentral ng Pilipinas (BSP) had already performed its obligations under the original judgment by allowing BFSMB to resume business. This decision underscores the importance of adhering to statutory deadlines for enforcing judgments and recognizes the BSP’s discretion in managing banking reorganizations.

Banco Filipino’s Second Chance: Did BSP Fulfill Its Promise?

The legal saga began with the Central Bank of the Philippines (CB) ordering the closure of Banco Filipino Savings and Mortgage Bank (BFSMB) in 1985 due to insolvency. BFSMB challenged this closure, and in 1991, the Supreme Court ordered the CB to reorganize BFSMB and allow it to resume business. However, BFSMB later claimed that the CB and its successor, Bangko Sentral ng Pilipinas (BSP), failed to fully comply with this order, prompting BFSMB to file a petition for revival of judgment in 2004.

At the heart of the case was the question of whether the BSP was obligated to provide further assistance to BFSMB beyond allowing it to reopen. BFSMB argued that the BSP needed to restore its branch network and provide financial support similar to that given to other banks. The BSP countered that it had already fulfilled its obligations by permitting BFSMB to resume operations and that the petition for revival of judgment was filed beyond the prescriptive period.

The Supreme Court sided with the BSP, emphasizing the importance of adhering to the statute of limitations for enforcing judgments. According to Section 6, Rule 39 of the Rules of Court, a judgment may be executed on motion within five years from the date of its entry. After this period, and before it is barred by the statute of limitations, a judgment may be enforced by action. The court also cited Articles 1144 and 1152 of the Civil Code, which state that actions upon a judgment must be brought within ten years from the time the judgment became final.

Article 1144. The following actions must be brought within ten years from the time the right of action accrues:

(3) Upon judgment.

Article 1152. The period for prescription of actions to demand the fulfillment of obligation declared by a judgment commences from the time the judgment became final.

In this case, the Court emphasized that the petition for revival was filed more than 12 years after the original judgment became final. The Court also rejected BFSMB’s argument that the passage of Republic Act No. 7653, which established the BSP, tolled the period of prescription. The Court explained that the law clearly identified the entities responsible for the assets and liabilities of the CB, eliminating any uncertainty about whom BFSMB should pursue.

Furthermore, the Court found that even if the petition had been filed on time, the BSP had already performed its obligations under the original judgment. The Court noted that the 1991 decision directed the CB-MB to reorganize BFSMB and allow it to resume business under the comptrollership of the CB-MB. The Supreme Court also said that those terms were implemented subject to the condition that the bank be able to continue in business with safety to its creditors, depositors and the general public.

The Court highlighted that BFSMB had reopened and resumed business in 1994 under the BSP’s comptrollership. This comptrollership lasted until January 2000, when the BSP and BFSMB entered into a Memorandum of Agreement. It was also noted that:

WHEREAS, on December 6, 1993, the BANGKO SENTRAL, through its Monetary Board, complied with the decision of the Supreme Court by authorizing BANCO FILIPINO to resume business under BANGKO SENTRAL comptrollership, and that on July 1, 1994, BANCO FILIPINO re-opened its doors to the public and has, since then, been publicly and actively engaged in the banking business[.]

This statement, made in the agreement between the parties, underscored that the BSP had already complied with the original court order. The Supreme Court emphasized that an action for revival of judgment cannot modify, alter, or reverse the original judgment, which is already final and executory. Thus, the Court held that BFSMB’s claims for additional financial assistance and branch restoration went beyond the scope of the original judgment.

The Court also addressed the discretion of the BSP in managing banking reorganizations. It noted that the original decision left the finer details of the reorganization and the conditions thereof to the sound discretion of the CB-MB, now the BSP-MB. This recognition acknowledged the BSP’s statutory authority to determine the conditions under which a bank may resume business. The Court emphasized that the BSP must have sufficient independence and latitude to carry out its mandate of maintaining price stability and promoting monetary stability.

Finally, the Supreme Court addressed the procedural issue of the conflicting decisions in the Court of Appeals. It reminded the Court of Appeals and the parties of the mandatory policy of consolidating cases involving the same set of facts, issues, and parties. The Court also emphasized the responsibility of attorneys to promptly notify the courts of any related cases and to move for consolidation.

The principle against forum shopping seeks to prevent conflicting decisions. The Supreme Court stressed that the rendition of two diametrically opposed decisions by the Court of Appeals could have been prevented by consolidating the two petitions for certiorari.

FAQs

What was the key issue in this case?	The key issue was whether Banco Filipino’s petition to revive a judgment against Bangko Sentral ng Pilipinas was filed within the prescriptive period and whether BSP had already fulfilled its obligations under the original judgment.
What is a petition for revival of judgment?	A petition for revival of judgment is a legal action taken to enforce a judgment that can no longer be enforced by mere motion because the period for execution has lapsed. It seeks to restore the judgment’s enforceability.
What is the prescriptive period for reviving a judgment in the Philippines?	In the Philippines, an action to revive a judgment must be filed within ten years from the date the judgment became final and executory, as stated in Article 1144 of the Civil Code.
Did the creation of BSP affect the prescriptive period to enforce the original judgment?	No, the Supreme Court ruled that the creation of BSP did not create uncertainty about whom to enforce the judgment against, as Republic Act No. 7653 clearly identified BSP as the successor to the Central Bank’s powers and functions.
What did the Supreme Court say about the BSP’s discretion?	The Court affirmed that the BSP has the discretion to determine the conditions under which a bank may resume business. They also stated that this should include latitude to ensure price stability and promote monetary stability
What was the effect of the Memorandum of Agreement between BSP and Banco Filipino?	The Memorandum of Agreement was key as the representatives from BFSMB stated that the Supreme Court ruling had already been implemented. The said agreement also lifted BSP’s comptrollership over Banco Filipino
What does it mean for an obligation to be ‘extinguished by performance’?	An obligation is extinguished by performance when the party obligated fulfills the terms of the obligation completely and satisfactorily. After this performance, the obligation no longer exists
Why did the Supreme Court emphasize the rule against forum shopping?	The Supreme Court emphasized the rule against forum shopping because the Court of Appeals issued conflicting decisions on the same case. Consolidation of similar cases should be automatic in future

In conclusion, the Supreme Court’s decision in this case clarifies the importance of adhering to the statute of limitations for reviving judgments and affirms the BSP’s discretion in managing banking reorganizations. The ruling provides valuable guidance for parties seeking to enforce judgments and for regulatory bodies overseeing financial institutions.

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Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: BANGKO SENTRAL NG PILIPINAS VS. BANCO FILIPINO SAVINGS, G.R. No. 178696, July 30, 2018