SECOND DIVISION

[G.R. No. 172983. August 13, 2014.]

FAR EAST BANK AND TRUST COMPANY , petitioner, vs.

PHILIPPINE DEPOSIT INSURANCE CORPORATION, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated 13
August 2014 which reads as follows:
G.R. No. 172983 — FAR EAST BANK AND TRUST COMPANY v. PHILIPPINE
DEPOSIT INSURANCE CORPORATION.
The Case
We resolve the Motion for Leave to Admit the Opposition with the attached
Opposition filed by the Far East Bank and Trust Company (FEBTC) before this
Court.
The Central Bank Board of Liquidators (board) placed the Pacific Banking
Corporation (PBC) under liquidation after the declaration of its insolvency. During
the liquidation, the FEBTC, the PBC, and the Central Bank executed a
Memorandum of Agreement (MOA) for the purchase of the PBC's fixed and non-
fixed assets. They also executed a Purchase Agreement (PA) for the sale of the
PBC's non-fixed assets to the FEBTC.
The FEBTC took possession of ten (10) PBC branches (subject properties) that
were classified as fixed assets. The Philippine Deposit Insurance Corporation
(PDIC), which took over as the PBC's liquidator, started to bid out the sale of the
subject properties to other entities. Thus, the FEBTC filed a motion to compel the
PDIC to execute deeds of sale over the subject properties in its favor.
In an order dated February 26, 1997, the Regional Trial Court (RTC) ruled in
favor of the FEBTC and held that there was a perfected sale of the subject
properties between the PBC and the FEBTC. Section 3 (c) of the MOA expressly
states that the FEBTC shall purchase all the PBC's fixed assets as described in the
Asian Appraisal Report; the Report includes the appraisal of the subject
properties. The RTC also denied the PDIC's motion for reconsideration in a
resolution dated May 21, 1997.
In a decision dated May 31, 2006, the Court of Appeals (CA) reversed the RTC
rulings. The CA held that the MOA expressly excluded the PBC's collaterals to the
Central Bank in the sale transaction. The CA found that the collaterals included
the subject properties.
The Intervention
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 The Intervention
On July 21, 2006, the FEBTC filed a Rule 45 petition before the Court assailing
the CA ruling. On November 22, 2013, the board filed a motion for leave to
intervene in the case (with motion for extension to file memorandum-in-
intervention). The board alleged that it already owns the subject properties by
virtue of the Deed of Assignment dated May 6, 2009 that the PBC executed in its
favor. The PBC assigned the subject properties to the board as payment for its
outstanding loans with the then Central Bank.
The FEBTC opposed the board's intervention and argued that the board had
waived its right to intervene in the case since it did not participate in the
proceedings before the lower courts. The FEBTC emphasized that the board was
the PBC's former liquidator and was a party to the MOA and the PA.
The Court's Ruling
We treat the Opposition as Comment as this was filed in compliance with the
Court's Resolution of March 26, 2014.
Under Section 1, Rule 19 of the Rules of Court, a motion to intervene shall be
entertained when two requisites are present: (1) the movant-intervenor shows
that he has a substantial right or interest in the case; and (2) this substantial
right or interest cannot be adequately pursued and protected in another
proceeding. To warrant an intervention, the interest must involve the matter in
litigation and is of such direct character that the intervenor will either gain or
lose by the effect of the judgment. 1
The board is a necessary party in the case since it is the transferee of the
properties in litigation. A necessary party is one who is not indispensable but
who ought to be joined as a party if complete relief is to be accorded as to those
already parties, or for a complete determination or settlement of the claim
subject of the action. 2 Moreover, since this case arose from the liquidation
proceedings before the trial court, it is only proper that the Court adjudicates
on who — between the FEBTC (the alleged purchaser) and the Central Bank (the
creditor and the PBC's former liquidator) — has the superior right over the
subject properties. AEIHaS

The board's non-participation in the proceedings before the lower courts is

justified. The board had no standing to intervene on this matter until the
execution of the Deed of Assignment on May 6, 2009 — a supervening fact that
arose during the pendency of this case before the Court. As an exception to
Section 2, Rule 14 of the Rules of Court, the Court may allow the board's
intervention in this case in the interest of and for the orderly administration of
justice. 3
WHEREFORE, premises considered, we resolve to GRANT the intervention
prayed for.
SO ORDERED.
Very truly yours,

(SGD.) MA. LOURDES C. PERFECTO

Division Clerk of Court
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 Footnotes
1. Bon-Mar Realty and Sport Corporation v. Spouses Nicanor and Esther de Guzman,
et al., 585 Phil. 725, 726, 737-738 (2008).
2. RULES OF COURT, Rule 3, Section 8.

3. Rodriguez v. Court of Appeals , G.R. No. 184589, June 13, 2013.

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