Vivas vs Monetary Board (Under Non-Deligability of Legislative Power)
Petitioner is Alfredo Vivas, on behalf of the shareholders of EUROCREDIT COMMUNITY BAN, !hile res"ondents are B#P Monetar$ Board and the PDIC %P& De"osit Ins'ran(e Cor")
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This This is a "etition "etition for for "rohib "rohibiti ition on !ith !ith "ra$er "ra$er for iss'a iss'an(e n(e of stat stat's 's 'o ante ante order order or !rit of "reli- in.'n(tion orderin/ res"ondents res"ondents to desist fro- (losin/ the E'roCredit Co--'nit$ Ban0 In(1 and fro- "'rs'in/ the o re(eivershi" thereof2 and to restore the -n/t and o"eration thereof to E'roCredit3s E'roCredit3s BoD and o4(ers o The R'ral R'ral Ban0 Ban0 of 5ar 5are, e, In(1 In(1 %RB5I) %RB5I) !as a ban0in/ ban0in/ instit' instit'tion tion !ith !ith (or"ora (or"orate te e6isten e6isten(e (e that e6"ired in 78891 Petitio Petitioner ner Vivas Vivas and and "rin(i"a "rin(i"als ls a('ir a('ired ed the (ontr (ontrollin ollin/ / instere insterest st of RB5I RB5I in 788: A ne! -ana/ -ana/e-e e-ent nt !as !as "'t in "la( "la(e, e, and B#P B#P iss'e iss'ed d a (ert1 (ert1 of a'thori a'thorit$ t$ e6ten e6tendin din/ / its (or"orate life to 98 -ore $rs and a""roved its (han/e of (or"orate na-e to E'roCredit E'roCredit Co--'nit$ Ban0 In( %ECBI) P'rs'an P'rs'antt to the the Ne! Central Central Ban0 A(t %RA %RA ;:9<), ;:9<), the Inte/rat Inte/rated ed #'"ervi #'"ervision sion De"art-ent II (ISD II) of the B#P (ond'(ted a /eneral e6a-ination on ECBI ECBI s'b-i s'b-itted tted its its (o--ents (o--ents to to the (onsol (onsolidat idated ed =ndin/s =ndin/s and and ris0 ris0 asset asset (lassi= (lassi=(ati (ation on of the B#P In 788>, 788>, B#P3s B#P3s De"ar De"art-e t-ent nt of ?oans ?oans !ent to ECBI ECBI and (an(ell (an(elled ed the redis redis(o' (o'nti ntin/ n/ line of the ban0 Moneta Monetar$ r$ Board Board iss'ed iss'ed Reso Resol't l'tion ion No1 No1 @799 "la(in/ "la(in/ ECBI ECBI 'nder Pro-" Pro-"tt Corre Corre(ti (tive ve A(tion %PCA) d'e to the follo!in/ =ndin/s d'rin/ the /eneral e6a-ination* e6a-ination* ne/ative ne/ative (a"ital of @1:; @1:; -illion -illion and (a"ital ade'a($ ade'a($ ratio ratio of ne/ative ne/ative o @>172 CAME? %Ca"ital Asset Mana/e-ent Earnin/s ?i'idit$) (o-"osite ratin/ of 7 o and Mana/e-ent (o-"onent ratin/ of @ serio's s'"ervisor$ (on(erns on 'nsafe and 'nso'nd a(tivities o B#P B# P also also 'es 'esti tion ons s !h$ !h$ ECBI ECBI esta establ blis ishe hed d s'b+o s'b+o4( 4(es es and and tran transf sfer errred -a.o -a.ori rit$ t$ of R5BI3s shares shares !itho't see0in/ a""roval of the MB in violation of Man'al of Re/'lation Re/'lation for Ban0s %MORB) ECBI ECBI vio viola late ted d the the (eas (ease e and and desi desist st ord order er Vivas Vivas -oved -oved for for re(ons re(onsider ideration ation of Resol' Resol'tion tion No1 No1 @799 @799 befor before e MB on /ro'nds /ro'nds of non+ observan(e of d'e "ro(ess and arbitrariness1 MB iss'ed iss'ed Reso Reso No1 No1 >7< a""r a""rovin/ ovin/ the iss'an iss'an(e (e of a (eas (ease e and desis desistt order order en.oin en.oinin/ in/ ECBI ECBI frofro- "'rs'i "'rs'in/ n/ a(ts a(ts and and trans transa(t a(tion ions s (onsid (onsider ered ed 'nso'n 'nso'ndF' dF'nsa nsafe fe b'sine b'siness ss "ra(ti(es and those (onstit'tin/ fra'd or -i/ht res'lt to dissi"ation of its assets MB "la(e "la(ed d ECBI ECBI 'nder 'nder re(e re(eiv iver ersh shi" i" in its Reso Reso No1 7;:, 7;:, and and Vivas ivas -oved -oved for the re(onsideration of the reso Vivas vas (onte ontend nds s tha that ECBI3s "la(e-ent 'nder re(eivershi" is 'n!arranted sin(e it did not (o--it o an$ =nan(ial fra'd
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that B#P sho'ld have ta0en over the -ana/e-ent of and e6tended loans to a =nan(iall$ distrained ban0 li0e ECBI "'rs'ant to RA ;<9< %refer to f'll te6t for the "rovision) and that B#P3s "o!er is li-ited to -ana/e-ent ta0e+over and s'"ervision of ban0s, not re(eivershi" B#P (o--itted GAD !hen it a""lied #e(tion <8 of R1A1 No1 ;:9< %Ne! Central Ban0 A(t) instead of a s"e(i=( la! #e(tion @@ and @ of R'ral Ban0 A(t of @HH71
Issues* @1 FN B#P (o--itted /rave ab'se of dis(retion in a""l$in/ the /eneral la! e-bodied in the Ne! Central Ban0 A(t as o""osed to a s"e(i=( la! e-bodied in R'ral Ban0 A(t of @HH7 71 FN Ne! Central Ban03s A(t "rovision on re(eivershi" !as e6e('ted b$ B#P !ith -anifest arbitrariness and bad faith <1 FN the "o!er dele/ated to B#P to "la(e r'ral ban0s 'nder re(eivershi" is 'n(onstit'tional for bein/ an 'nd'e dele/ation of le/islative "o!er be(a'se B#P is /iven 'nbridled "o!er to (lose and "la(e 'nder re(eivershi" a ha"less r'ral ban0 instead of aidin/ its =nan(ial needs1 Ruling* @1 No1 There is no (onJi(t !hi(h !o'ld (all for the a""li(ation of the do(trine that a s"e(ial la! sho'ld "revail over a /eneral la!1 It -'st be e-"hasiKed that R1A 1No1 ;:9< is a later la! and 'nder said a(t, the "o!er of the MB over ban0s, in(l'din/ r'ral ban0s, !as in(reased and e6"anded1 71 No1 The Co'rt, in several (ases, '"held the "o!er of the MB to ta0eover ban0s without need for prior hearing. It is not ne(essar$ inas-'(h as the la! entr'sts to the MB the a""re(iation and deter-ination of !hether an$ or all of the stat'tor$ /ro'nds for the (los're and re(eivershi" of the errin/ ban0 are "resent1 The Co'rt reiterated the do(trine of (lose no!, hear later, statin/ that it !as .'sti=ed as a -eas're for the "rote(tion of the "'bli( interest1 In li/ht of the (ir('-stan(es obtainin/ in this (ase, the a""li(ation of the (orre(tive -eas'res en'n(iated in #e(tion <8 of R1A1 No1 ;:9< !as "ro"er and .'sti=ed1 Mana/e-ent ta0e+over 'nder #e(tion @@ of R1A1 No1 ;<9< !as no lon/er feasible (onsiderin/ the =nan(ial 'a/-ire that en/'lfed ECBI sho!in/ serio's (onditions of insolven($ and illi'idit$1 Besides, "la(in/ ECBI 'nder re(eivershi" !o'ld eLe(tivel$ "'t a sto" to the f'rther drainin/ of its assets1 In fa(t, it a""ears fro- all over the re(ords that ECBI !as /iven ever$ o""ort'nit$ to be heard and i-"rove on its =nan(ial standin/1 <1 No1 5irst, Vivas -ade a (ollateral atta(0 on the (onstit'tionalit$ of RA No1 ;:9<1 A (ollateral atta(0 on a "res'-abl$ valid la! is not "er-issible1 Unless a la! or r'le is ann'lled in a dire(t "ro(eedin/, the le/al "res'-"tion of its validit$ stands1 Be that as it -a$, there is no violation of the non+dele/ation of le/islative "o!er1 The rationale for the (onstit'tional "ros(ri"tion is that le/islative dis(retion as to the s'bstantive (ontents of the la! (annot be dele/ated1 hat (an be dele/ated is the dis(retion to deter-ine how the la! -a$ be enfor(ed, not what the la! shall be be(a'se the latter is the "rero/ative of the le/islat're1 In this (ase, 'nder the t!o tests, there !as no 'nd'e dele/ation of le/islative a'thorit$ in the iss'an(e of R1A1 No1 ;:9<1 It "assed the s'4(ient standard test be(a'se it sets forth ade'ate /'idelines or li-itations in the la! to -a" o't the bo'ndaries of the dele/ate3s a'thorit$1 It also "assed the (o-"leteness test be(a'se
the la! is (o-"lete !hen it leaves the hand of the le/islat're and the dele/ate onl$ has to enfor(e it1 The le/islat're has (learl$ s"elled o't the reasonable "ara-eters of the "o!er entr'sted to the MB and assi/ned to it onl$ the -anner of enfor(in/ said "o!er1 In other !ords, the MB !as /iven a !ide dis(retion and latit'de onl$ as to ho! the la! sho'ld be i-"le-ented in order to attain its ob.e(tive of "rote(tin/ the interest of the "'bli(, the ban0in/ ind'str$ and the e(ono-$1
