I.

II.

Title:

Koruga v. Arcenas
G.R. 168332/16903, 19 June 2009

Doctrine
Banking business is subject to regulation under the police power of the state because of its
nature and relation to the fiscal affairs of the people and the revenues of the state. Banks
are affected with public interest since they receive funds from the general public through
deposits. It is the Governments responsibility to see to it that the financial interests of
those who deal with banks are protected.

CA Arcenas application for preliminary injunction. Granted, necessary in order not

to render ineffectual whatever final resolution CA may render in this case after
petitioners posted a bond for 500, 000.00Php

SC Koruga filed petition for certiorari. Ground: CA gave due course to Arcenas
petition when it issued preliminary injunction. Koruga prayed that CA be retrain from
implementing said resolution. Arcenas alleged that the verification nd certification
against forum shopping was not executed in the manner prescribed by Phil. Laws
since it was only a facsimile, that Koruga never asked for a reconsideration of the CA
Resolution and that petition may have already been moot and academic since the CA
Decision which denied their Petition held that the RTC did not commit grave abuse of
discretion and ordered it to proceed with the hearing.

Meanwhile SC issued a resolution granting the prayer for TRO, enjoining the RTC
Makati fr. Proceeding with the hearing. Koruga filed for petition to lift the TRO but
was denied.

In this country that task is delegated to BSP. It authorized to administer the monetary,
banking, and credit system of the Philippines. It is further authorized to take the necessary
steps against any banking institution if its continued operation would cause prejudice to its
depositors, creditors and the general public as well.
The law vests in the BSP the supervision over operations and activities of banks. It is wellsettled in both law and jurisprudence that the Central Monetary Authority, through the
Monetary Board, is vested with exclusive authority to assess, evaluate and determine the
condition of any bank.

G.R. No. 169053

Arcenas filed for Petition for Certiorari with SC to set aside the CA Decision, which
denied their petiotion having found no grave abuse of discretion on the part of the
RTC Makati. CA said that the orders were interlocutory and may only be assailed by
certiorari or phobition when the court acted w/o or in excess of jurisdiction or with
grave abuse of discretion. They anchored their prayer stating that, summons were
improperly served hence the court did not acquire jurisdiction over them, that another
case is pending before the Monetary Board of BSP involving the same parties which
constituted forum-shopping and that jurisdiction over the subject matter is vested
with the BSP.

The courts jurisdiction could only have been invoked after the Monetary Board had taken
action on the matter and only on the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as to amount to lack or excess of
jurisdiction.
III.

Facts
G.R. No. 168332

Koruga is a minority stockholder of Banco Filipino Savings. Koruga filed a

complaint with RTC Makati wherein she alleged that the Board of Directors of Banco
Filipino violated the Corporation Code which prohibits self-dealing and conflicts of
interest when it granted and approved loans to 6 dummy borrower corporations which
had no financial capacity to justify such loans; for approving and accepting dacion en
pago which resulted to diminished future cumulative income by the Bank and decline
its liquidity position; for giving favorable treatment to Borrower corporation to which
some or most of them had interest therein and for omitting to perform their functions
and duties the misappropriation of almost 1.6 Billion Pesos.

Koruga alleged that she was also denied of her right to inspect the bank records
despite repeated written demands.

Arcenas raised the issue of RTCs lack of jurisdiction to take cognizance of the case
and filed their Manifestation and Motion seeking the dismissal of the intra-corporate
case on the ff. grounds: (1) lack of jurisdiction over the subject matter (2) lack of
jurisdiction over the persons of the defendants (3) forum shopping (4) for being a
nuisance/harassment suit.

RTC Denied their Manifestation and Motion. Motion to dismiss is prohibited

pleading under Interim Rules for which reason no favorable consideration to the
Manifestation and Motion. No merit on the claim that the case is a
nuisance/harassment suit. Motion for recon denied.

CA Arcenas filed petition for certiorari. CA then issued a 60-day TRO enjoing RTC
from further proceeding in the case.

RTC set the case for pre-trial since the TRO already expired.

IV.
V.

Issues
(1) Whether the RTC has jurisdiction to take cognizance of Korugas complaint. (NO)
Held
It is the BSP that has jurisdiction over the case.
Acts complained of pertain to the conduct of Banco Filipinos banking business. Banking
business is subject to regulation under the police power of the state because of its nature
and relation to the fiscal affairs of the people and the revenues of the state. Banks are
affected with public interest since they receive funds from the general public through
deposits. It is the Governments responsibility to see to it that the financial interests of
those who deal with banks are protected.
In this country that task is delegated to BSP. It authorized to administer the monetary,
banking, and credit system of the Philippines. It is further authorized to take the necessary
steps against any banking institution if its continued operation would cause prejudice to its
depositors, creditors and the general public as well.
The law vests in the BSP the supervision over operations and activities of banks. The New
Central Bank Act provides:
Section 25. Supervision and Examination. - The Bangko Sentral shall have supervision
over, and conduct periodic or special examinations of, banking institutions and quasibanks, including their subsidiaries and affiliates engaged in allied activities.

Whether the loans are covered by the prohibition on self-dealing is a matter for the BSP to
determine. These are not ordinary intra-corporate matters; rather, they involve banking
activities which are, by law, regulated and supervised by the BSP. It is well-settled in both
law and jurisprudence that the Central Monetary Authority, through the Monetary Board,
is vested with exclusive authority to assess, evaluate and determine the condition of any
bank.
The courts jurisdiction could only have been invoked after the Monetary Board had taken
action on the matter and only on the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as to amount to lack or excess of
jurisdiction.

Furthermore, another reason why Korugas complaint wont prosper is that, under Sec. 30
of the New Central Bank Act, petition for certiorari may only be filed by stockholders
representing the majority of the capital stock. Koruga is merely a minority stockholder of
Banco Filipino, she has no standing to question the Monetary Boards action.
Petition dismissed, the TRO issued is made permanent, the case before RTC Makati is
dismissed.