Petitioner spouses contracted a monetary loan with herein respondent bank secured by a REM executed on their lot. Respondent bank then went bankrupt and was placed under receivership/liquidation by the Central Bank. Sometime after, respondent bank sent a demand letter for the amount of the insurance premiums advanced by it over the mortgaged property of petitioners. More than 14 years from the time the loan became due and demandable, respondent bank moved for the extrajudicial foreclosure of the mortgaged property and was sold to it as being the lone bidder. Petitioners moved to declare the foreclosure null and void contending that the respondent bank being placed under receivership did not interrupt the running of the prescriptive period. RTC ruled in favor of respondents.
(1) Whether or not foreclosure of mortgage is included in the acts prohibited during receivership/liquidation proceedings.
(2) Whether or not the period within which the respondent bank was placed under receivership and liquidation proceedings interrupted the running of the prescriptive period in bringing actions.
(1) While it is true that foreclosure falls within the broad definition of “doing business,” it should not be considered included, however, in the acts prohibited whenever banks are “prohibited from doing business” during receivership and liquidation proceedings. This is consistent with the purpose of receivership proceedings, i.e., to receive collectibles and preserve the assets of the bank in substitution of its former management, and prevent the dissipation of its assets to the detriment of the creditors of the bank.
There is also no truth to respondent’s claim that it could not continue doing business from the time it was under receivership. As correctly pointed out by petitioner, respondent was even able to send petitioners a demand letter, through Francisco Go, for the insurance premiums advanced by respondent bank over the mortgaged property of petitioners. How it could send a demand letter on unpaid insurance premiums and not foreclose the mortgage during the time it was “prohibited from doing business” was not adequately explained by respondent.
(2) A close scrutiny of the Provident case shows that the Court arrived at said conclusion, which is an exception to the general rule, due to the peculiar circumstances of Provident Savings Bank at the time. The Superintendent of Banks, which was instructed to take charge of the assets of the bank in the name of the Monetary Board, had no power to act as a receiver of the bank and carry out the obligations specified in Sec. 29 of the Central Bank Act.
In this case, it is not disputed that Philippine Veterans Bank was placed under receivership by the Monetary Board of the Central Bank pursuant to Section 29 of the Central Bank Act on insolvency of banks. Unlike Provident Savings Bank, there was no legal prohibition imposed upon herein respondent to deter its receiver and liquidator from performing their obligations under the law. Thus, the ruling laid down in the Provident case cannot apply in the case at bar.
(In contrast to Provident Savings Bank v. CA, this is the General Rule)