FIRSTDIVISION

IN RE: PETITION FOR

ASSISTANCE
IN
THE
LIQUIDATION
OF
INTERCITY SAVINGS AND
LOANBANK,INC.

G.R.No.181556

Present:

PUNO,C.J.,Chairperson,
CARPIOMORALES,
LEONARDODECASTRO,
BERSAMIN,and
VILLARAMA,JR.,JJ.

Promulgated:
December14,2009

PHILIPPINE
DEPOSIT
INSURANCECORPORATION,
Petitioner,

versus

STOCKHOLDERS
OF
INTERCITY SAVINGS AND
LOANBANK,INC.,
Respondents.
xx

DECISION

CARPIOMORALES,J.:

TheCentralBankofthePhilippines,nowknownasBangkoSentralngPilipinas,filedonJune17,1987with
theRegionalTrialCourt(RTC)ofMakatiaPetitionforAssistanceintheLiquidationofIntercitySavingsand
LoanBank,Inc.(IntercityBank)allegingthat,interalia,saidbankwasalreadyinsolventanditscontinuancein
[1]
businesswouldinvolveprobablelosstodepositors,creditorsandthegeneralpublic.

[2]
Finding the petition sufficient in form and substance, the trial court gave it due course. Petitioner
PhilippineDepositInsuranceCorporation(PDIC)waseventuallysubstitutedasthethereinpetitioner,liquidator
[3]
ofIntercityBank.
[4]
Inthemeantime,RepublicActNo.9302(RA9302) wasenacted,Section12ofwhichprovides:

SECTION12.Beforeanydistributionoftheassetsoftheclosedbankinaccordancewiththepreferences
established by law, the Corporation shall periodically charge against said assets reasonable receivership expenses

andsubjecttoapprovalbythepropercourt,reasonableliquidationexpenses,ithasincurredaspartofthecostof
receivership/liquidationproceedingsandcollectpaymentthereforfromavailableassets.
Afterthepaymentofallliabilitiesandclaimsagainsttheclosedbank,theCorporationshallpayany
surplus dividends at the legal rate of interest, from date of takeover to date of distribution, to creditors and
claimantsoftheclosedbankinaccordancewithlegalprioritybeforedistributiontotheshareholdersoftheclosed
bank.(emphasissupplied)

Relyingthereon,PDICfiledonAugust8,2005aMotionforApprovaloftheFinalDistributionofAssetsand
[5]
TerminationoftheLiquidationProceedings, prayingthatanOrderbeissuedfor:

1.Thereimbursementoftheliquidationfeesandexpensesincurredand/oradvancedbyhereinpetitioner,PDIC,in
theamountofP3,795,096.05

2.TheprovisionofP700,000.00forfutureexpensesintheimplementationofthisdistributionandthewindingup
oftheliquidationofIntercitySavingsandLoanBank,Inc.

3.ThewriteoffofassetsinthetotalamountofP8,270,789.99,assetforthinpar.2.1hereof

4.ThewriteoffofliabilitiesinthetotalamountofP1,562,185.35,assetforthinpar.8hereof

5.TheFinalProjectofDistributionofIntercitySavingsandLoanBankassetforthinAnnexQhereof

6. Authorizing petitioner to hold as trustee the liquidating and surplus dividends allocated in the project of
distributionforcreditorswhoshallhaveaperiodofthree(3)yearsfromdateoflastnoticewithinwhichtoclaim
payment therefor. After the lapse of said period, unclaimed payments shall be escheated to the Republic of the
PhilippinesinaccordancewithRule91oftheRulesofCourt

7. Authorizing the disposal of all the pertinent bank records in accordance with applicable laws, rules and
regulationsafterthelapseofone(1)yearfromtheapprovaloftheinstantMotion.

[6]
By Order of July 5, 2006, Branch 134 of the Makati RTC granted the motion except the abovequoted
paragraphs5and6ofitsprayer,respectivelyprayingfortheapprovaloftheFinalProjectofDistributionand
for authority for PDIC to hold as trustee the liquidating and surplus dividends allocated . . . for creditors of
IntercityBank.

Ingrantingthemotion,thetrialcourtresolvedinthenegativethesoleissueofwhetherSection12ofRA
9302shouldbeappliedretroactivelyinordertoentitleIntercityBankcreditorstosurplusdividends,itotherwise
holding that to so resolve would run counter to prevailing jurisprudence and unduly prejudice Intercity Bank
shareholders,thecreditorshavingbeenpaidtheirprincipalclaimin2002orbeforethepassageofRA9302in
2004.

[7]
PDICappealedtotheCourtofAppeals beforewhichrespondentStockholdersofIntercityBank(the
Stockholders)movedtodismisstheappeal,arguingprincipallythattheproperrecourseshouldbetothisCourt
[8]
throughapetitionforreviewoncertiorarisincethequestioninvolvedwaspurelyoneoflaw.

[9]
By Resolution of October 17, 2007, the appellate court dismissed the appeal, sustaining in the main the
positionoftheStockholders.Its Motion for Reconsideration having been denied by Resolution dated January
[10]
24,2008,
PDICfiledthepresentPetitionforReviewonCertiorari.

PDICcontendsthattheappellatecourtdisregardedtheissueofthetrialcourtsdisapprovalofthepaymentof
additional liquidating dividends to Intercity Bank creditors, which involved a question of fact that entailed a
reviewoftheevidencethattheprayerforsurplusdividendsinvolvedanotherquestionoffactastheremustfirst
beafactualfindingthatallclaimsagainstIntercityBankhavebeenpaidandthattherehavingbeenpreviously
approved but unclaimed liquidating dividends, the denial of its prayer for appointment as trustee therefor
[11]
resultedinananomaloussituationwherenoonehastheauthoritytohandlethemuntiltheyareclaimed.

TheStockholders,fortheirpart,maintainthatonlyaquestionoflawwasbroughttotheappellatecourt,
thepartieshavingstipulatedinthetrialcourtthatthesoleissuefordeterminationwaswhetherRA9302maybe
applied retroactively that the payment of additional liquidating dividends should be deemed approved since
they never opposed it and the trial court specifically disapproved only the payment of surplus dividends and
[12]
thatinanyevent,RA9302cannotbegivenretroactiveeffectabsentaprovisionthereinprovidingforit.

Thepetitionlacksmerit.

Indeed,PDICsappealtotheappellatecourtraisedtheloneissueofwhetherSection12ofRA9302may
be applied retroactively in order to award surplus dividends to Intercity Bank creditors, which was, as stated
above,whatthepartieshadstipulateduponasthesolelegalissueinPDICsMotionforApprovaloftheFinal
DistributionofAssetsandTerminationoftheLiquidationProceedings.

Whether a statute has retroactive effect is undeniably a pure question of law. PDIC should thus have
directlyappealedtothisCourtbyfilingapetitionforreviewoncertiorariunderRule45,notanordinaryappeal
withtheappellatecourtunderRule41.Theappellatecourtdidnoterr,thus,inholdingthatPDICavailedofthe
[13]
wrongmodeofappeal.

Intheinterestofjustice,however,andinordertowritefinistothiscontroversy,theCourtrelaxestherulesand
[14]
decidesthepetitiononthemerits.

A perusal of RA 9302 shows that nothing indeed therein authorizes its retroactive application. In fact, its
effectivityclauseindicatesaclearlegislativeintenttothecontrary:

Section28.EffectivityClause.ThisActshalltakeeffectfifteen(15)daysfollowingthecompletionofits
publicationintheOfficialGazetteorintwo(2)newspapersofgeneralcirculation.(emphasissupplied)

Statutesareprospectiveandnotretroactiveintheiroperation,theybeingtheformulationofrulesforthe
future,notthepast.Hence,thelegalmaximlexdefuturo,judexdepraeteritothelawprovidesforthefuture,
thejudgeforthepast,whichisarticulatedinArticle4oftheCivilCode:Lawsshallhavenoretroactiveeffect,
unlessthecontraryisprovided.Thereasonfortheruleisthetendencyofretroactivelegislationtobeunjustand
[15]
oppressiveonaccountofitsliabilitytounsettlevestedrightsordisturbthelegaleffectofpriortransactions.

En passant, PDICs citation of foreign jurisprudence that supports the award of surplus dividends is
unavailing. Resort to foreign jurisprudence is proper only if no local law or jurisprudence exists to settle the
[16]
controversy.Andeventhen,itisonlypersuasive.

WHEREFORE,thepetitionisDENIED.

SOORDERED.

CONCHITACARPIOMORALES
AssociateJustice

WECONCUR:

REYNATOS.PUNO
ChiefJustice
Chairperson

TERESITAJ.LEONARDODECASTRO

LUCASP.BERSAMIN
AssociateJustice

AssociateJustice

MARTINS.VILLARAMA,JR.

AssociateJustice

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitution,Icertifythattheconclusionsintheabovedecisionhad
beenreachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourtsDivision.

REYNATOS.PUNO
ChiefJustice

[1]
Records,pp.17.
[2]
Id.at22.
[3]
Id.at84.
[4]

ANACTAMENDINGREPUBLICACTNO.3591,ASAMENDED,OTHERWISEKNOWNASTHECHARTEROFTHE
PHILIPPINEDEPOSITINSURANCECORPORATIONANDFOROTHERPURPOSESAPPROVEDONJULY27,2004.

[5]
Records,pp.304314.
[6]
Id.at432435.
[7]
Id.at441,451.
[8]
CArollo,pp.1217.
[9]
PennedbyAssociateJusticeRicardoR.Rosario,withtheconcurrenceofAssociateJusticesRebeccaDeGuiaSalvadorandMagdangalM.DeLeonid.
at8696.
[10]
Id.at146147.

[11]
VidePetition,rollo,pp.336.
[12]
VideComment,id.at241256.
[13]
QuezonCityv.ABSCBNBroadcastingCorporation,G.R.No.166408,October6,2008,567SCRA496,507.
[14]
VideMunicipalityofPaterosv.CourtofAppeals,G.R.No.157714,June16,2009.
[15]
Curatav.PhilippinePortsAuthority,G.R.Nos.15421112,June22,2009.
[16]
VidePhilippineAirlines,Inc.v.CourtofAppeals,G.R.No.54470,May8,1990,185SCRA110,121.