Villanueva vs CA
Topic: Receivership and Liquidation
Summary:
Doctrine:
Facts:
- Spouses Celestino Villanueva and Petitioner Miguela Villanueva
owned two lots in Muntinlupa. Miguela sought the help of Jose
Viudez, the Officer-in-Charge of Philippine Veterans Bank-
Makati,to obtain a loan. Miguela therefore surrendered the title of
the lots as collaterals.
- Viudez and one Andres Sebastian swayed Miguela Villanueva to
execute a deed of sale covering the two lots to facilitate a bigger
loan. Miguela, however, never got the loan.
- Upon inquiry from the Registry of Deeds, it was discovered that the
titles were canceled and issued to Jose Viudez, and later issued to
Andres Sebastian, until finally issued in the name of PVB after the
lots were foreclosed for failure to pay the loan granted to
Sebastian.
- Miguela sought to repurchase the lots from PVB after being
informed that they were about to be sold at auction. Negotiations,
however, were stalled by the filing of liquidation proceedings
against PVB in August 1985.
- Note: PVB was placed under receivership pursuant to MB
Resolution No. 334 dated 3 April 1985
- As to the claim of Respondent Ildefenso Ong, he offered to
purchase the lots acquired by PVB in October 1984. He deposited
the sum of 10,000 as downpayment.
- While Ong was still abroad, PVB approved his offer on 23
November 1984 with the condition that the purchase price be paid
by him in cash within 15 days from receipt of approval of the offer.
- Upon his return in April 1985, Ong followed up on the status of his
offer and came to know of the approval. He expressed in writing
his readiness to pay the balance but received no response. On 26
May 1987, Ong paid the balance of the purchase price of lots which
was received by a PVB employee conditioned upon approval by the
Central Bank.
- Ong demanded for a deed of conveyance but this went unheeded.
On 23 October 1987, he filed an action for specific performance
against the CB. This was eventually transferred to the liquidation
Court.
- On 26 July 1989, Miguela filed a claim with the liquidation court
asking that the lots be excluded from the assets of PVB and
conveyed back to her.
- TC held that Ong failed to pay the balance within the prescribed 15
day period and allowed Miguela to repurchase the lots.
- CA reversed and held that Ong’s failure to pay the balance was
excusable because PVB did not notify him of the approval nor reply
to his letters thereafter. It also held that Miguela should be
estopped from recovering her share for being a co-participant in
the scheme of Viudez and Sebastian.
- Hence, this appeal.
Issue:
- Whether Miguela Villanueva has a better right than Ong
to purchase from the PVB the two parcels of land - YES
The insolvency of a bank and the consequent appointment of a receiver
restrict the bank's capacity to act, especially in relation to its property,
Applying Article 1323 of the Civil Code, Ong's offer to purchase the subject
lots became ineffective because the PVB became insolvent before the
bank's acceptance of the offer came to his knowledge. Hence, the
purported contract of sale between them did not reach the stage of
perfection. Corollarily, he cannot invoke the resolution of the bank
approving his bid as basis for his alleged right to buy the disputed
properties.
PVB was placed under receivership pursuant to the MB Resolution of 3 April
1985 after a finding that it was insolvent, illiquid, and could not operate
profitably, and that its continuance in business would involve probable loss
to its depositors and creditors. The PVB was then prohibited from doing
business in the Philippines, and the receiver appointed was directed to
"immediately take charge of its assets and liabilities, as expeditiously as
possible collect and gather all the assets and administer the same for the The assets of an institution under receivership or liquidation shall be deemed
benefit of its creditors, exercising all the powers necessary for these in custodia legis in the hands of the receiver or liquidator and shall, from the
purposes. moment of such receivership or liquidation, be exemp from any order of
garnishment, levy, attachment, or execution.
Under Article 1323 of the Civil Code, an offer becomes ineffective upon the
death, civil interdiction, insanity, or insolvency of either party before
acceptance is conveyed.

It has been said that where upon the insolvency of a bank a receiver therefor
is appointed, the assets of the bank pass beyond its control into the
possession and control of the receiver whose duty it is to administer the
assets for the benefit of the creditors of the bank Thus, the appointment of
a receiver operates to suspend the authority of the bank and of its directors
and officers over its property and effects, such authority being reposed in
the receiver, and in this respect, the receivership is equivalent to an
injunction to restrain the bank officers from intermeddling with the
property of the bank in any way

Section 29 of the Central Bank Act, as amended, provides thus:

Sec. 29. Proceedings upon insolvency. — Whenever, upon examination by

the head of the appropriate supervising or examining department or his
examiners or agents into the condition of any bank or non-bank financial
intermediary performing quasi-banking functions, it shall be disclosed that
the condition of the same is one of insolvency, or that its continuance in
business would involve probable loss to its depositors or creditors, shall be
the duty of the department head concerned forthwith, in writing, to inform
the Monetary Board of the facts. The Board may, upon finding the
statements of the department head to be true, forbid the institution to do
business in the Philippines and designate an official of the Central Bank or a
person of recognized competence in banking or finance as receiver to
immediately take charge of its assets and liabilities, as expeditiously as
possible collect and gather all the assets and administer the same for the
benefit of its creditors . . . exercising all the powers necessary for these
purposes. . . .

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