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FACTS:
First Phil Intl Bank (FPIB) which has been in conservatorship since 1984, is the owner of 6
parcels of land. The bank had an agreement with Demetrio and Janolo for the two to purchase
the parcels of land for P5.5 million. The said agreement was made by Demetria and Janolo with
the Bank’s manager, Rivera.
Later, the bank, through its new conservator, Encarnacion, sought the repudiation of the
agreement as it alleged that Rivera was not authorized to enter into such an agreement, hence
there was no valid contract of sale.
Subsequently, Demetria and Janolo sued FPIB. The RTC ruled in favor of Demetria.
CA affirmed the RTC decision that there was a perfected contract of sale between plaintiffs and
the bank
ISSUES:
Can the conservator revoke the contract ?
ANSWER:
No. Sec 28-A merely gives the conservator power to revoke the contracts that are, under
the existing law, deemed to be defective, i.e. void, voidable, unenforceable or rescissible.
Hence, the conservator merely takes the place of a bank’s board of directors. What the
board cannot do—such as repudiating a contract it validly entered into under the doctrine
of implied authority—the conservator cannot do either. His power is not unilateral and he
cannot simply repudiate valid obligations of the Bank. His authority would be only to bring
court actions to assail such contracts. A contrary understanding of the law would not simply
be permitted by the Constitution. To rule otherwise would be to enable a failing bank to
become solvent, at the expense of third parties, by simply getting the conservator to
unilaterally revoke all previous dealings with the which had become one way or another
come to be considered unfavorable to the Bank, yielding nothing to perfected contractual
rights nor vested interests of the third who had dealt with the Bank.
PHILIPPINE VETERANS BANK V. COURT OF APPEALS, 317 SCRA 510 (1999)
FACTS:
In 1983, Phil Veterans Bank (PVB) was placed under receivership by BSP by virtue of a resolution issued by
the Monetary Board. Petitioner bank was subsequently placed under liquidation in 1985.
Consequently, the bank’s employees including private respondent Molina were terminated from work and
given their respective separation pay and other benefits.
To assist in the liquidation, Molina and other former employees of PVB were rehired.
Molina filed an action against petitioner bank’s liquidation team arguing that he was entitled an increase
in his salary by virtue of Work Order 1 (P17 increase in the daily wage in 1990) and Work Order 2 (P12
increase in 1991)
Petitioner bank argued that when it was placed under liquidation, it lost its juridical personality, as such it
could no longer enter into contracts or transact business, since all its assets and liabilities were turned
over to the Central Bank. Since Molina’s complaint pertained to acts committed during the liquidation, the
substitution of PVB as party-respondent was erroneous