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RURAL BANK OF BUHI VS.

CA
procedural due process

Buhi Bank was a rural bank. Its books were examined by the Rural Banks division of the Central Bank
However, it refused to be examined. As a consequence, its financial assistance was suspended
Later, a general examination of the banks affairs and operations were again conducted.
The rural banks division found out massive irregularities in the operations, giving out loans to unknown and fictitious
borrowers, and sums amounting to millions past due to the Central Bank. There were also promissory notes rediscounted
with the Central Bank for cash.
As a result, the Buhi Bank became insolvent.
The division chief, Odra, recommended that Buhi be placed under receivership.
Thus, the Monetary Board adopted a Resolution # 583, placing the bank under receivership. Odra, the division chief, was
made the receiver.
Odra thus implemented the resolution, authorizing deputies to take control and possession of Buhis assets and liabilities.
Del Rosario, the Buhi Bank Manager, filed an injunction against the receiver, arguing that the resolution violated the Rural
Banks Act and constitutes gadalej. The bank claims that there was a violation of due process. They claim that the bank was
not given the chance to deny and disprove the claim of insolvency or the other grounds and that it was hastily put under
receivership.
Later on, the Central Bank Monetary Board ordered the liquidation of the Bank.
The judge ruled in favor of the Bank and issued a writ of execution.
The CA however restrained the enforcement of execution, citing that the Judge did not follow the orders, and thus required
the Bank to yield to the CB.

ISSUE: Was due process observed?


SC: YES. CLOSURE VALID.
Under Sec 29 of the RA 265, on proceedings regarding insolvency, there is NO REQUIREMENT that a hearing be first conducted
before a bank may be placed under receivership. The law explicitly provides that the Monetary Board can IMMEDIATELY forbid a
banking institution from doing business and IMMEDIATELY appoint a receiver when: 1) there has been an examination by CB,
b) a report to the CB, and c) prima facie showing that the bank is insolvent.
As to the claim that the RA 265 violates due process, the claim is untenable. The law could not have intended to disregard the
constitutional requirement of due process when it conferred power to place rural banks under receivership.
The closure and liquidation of the bank is considered an exercise of POLICE POWER. It maybe subject to judicial inquiry and
could be set aside if found to be capricious, discriminatory, whimsical, arbitrary, etc. The appointment of a receiver may be
made by the Monetary Board, WITHOUT NOTICE AND HEARING, but subject to the JUDICIAL INQUIRY, to insure protection of
the banking institution.
Due process does NOT necessarily require a PRIOR HEARING. A hearing or an OPPORTUNITY TO BE HEARD may be made
SUBSEQUENT to the closure. One could just imagine the dire consequences of a prior hearing: bank runs would happen,
resulting in panic and hysteria. In that way, fortunes will be wiped out, and disillusionment will run the gamut of the entire
banking industry.
There is no question that the action of the MB may be subject to judicial review. Courts may interfere with the MBs exercise of
discretion. Here, the RTC has jurisdiction to adjudicate the question of whether the MB acted in bad faith when it directed the
dissolution of Buhi Bank.

Facts: Ang Tibay was a manufacturer of rubber slippers.


There was a shortage of leather soles, and it was necessary to temporarily lay off members of the National Labor Union.
According to the Union however, this was merely a scheme to systematically terminate the employees from work, and that the
shortage of soles is unsupported. It claims that Ang Tibay is guilty of ULP because the owner, Teodoro, is discriminating against
the National Labor Union, and unjustly favoring the National WorkersBrotherhood, which was allegedly sympathetic to the
employer.
The petitioner, Ang Tibay, has filed an opposition both to the motionfor reconsideration of the respondent Court
of Industrial Relations and to the motion for new trial of the respondent National Labor Union, Inc.
Issue: Whether or not special courts like Court of IndustrialRelations should observe due process.

Held: Yes. The Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and Commonwealth Act
No. 103 requires it to act according to justice and equity and substantial merits of the case, without regard to technicalities or
legal evidence but may inform its mind in such manner as it may deem just and equitable.
There are cardinal primary rights which must be respected even in proceedings of this character. The first of these rights is the
right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in
support thereof. Not only must the party be given an opportunity to present his case and to adduce evidence tending to
establish the rights which he asserts but the tribunal must consider the evidence presented. While the duty to deliberate does
not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having
something to support its decision. Not only must there be some evidence to support a finding or conclusion, but the evidence
must be substantial. The decision must be rendered on the evidence presented at the hearing, or at least contained in the record
and disclosed to the parties affected. The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving
at a decision. The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that
the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance
of this duty is inseparable from the authority conferred upon it.
DOMINGO V. OFFICE OF THE OMBUDSMAN
G.R. NO. 176127, JANUARY 30 2009
FACTS: A complaint for malversation, falsification of public document, dishonesty and grave misconduct was filed against
Barangay Chairman Domingo by Sangguniang Kabataan officials Paguio, Esguerra and Neil Patrick H. Celis (NPH yes, NPH
talaga, wait for it..)
NPH et al. alleged that: In 2003, Domingo gave a false statement in his Justification supporting the 2003 Barangay Budget and
Expenditures. The Justification provides that his barangay had no incumbent SK officials at that time contrary to the fact that
NPH et al. are duly elected and incumbent SK officials of the barangay.
Domingo asserted that all financial transactions of the barangay, particularly the expenditures, were supported by pertinent
documents and properly liquidated. He also questioned the authenticity of the Justification and that his signature therein was
forged.
The ombudsman rendered judgment finding Domingo guilty of violation of Section 4(b) of the Code of Conduct and Ethical
Standards for Public Officials and Employees (Code of Conduct) 1 and was suspended for 6 months. Domingo was also held
administratively liable for the irregular submission of a falsified instrument to the Manila Barangay Bureau in connection with
his barangays 2003 budget.
However, the charge of misappropriation was dismissed for being premature since the audit of the subject barangay transaction
had not been concluded by the Office of the City Auditor. The OMB also dismissed the charge of falsification of public document
on the ground that questions pertaining to the authenticity of a signature in a document necessitate judicial determination.
Domingo filed an MR. The OMB reiterated that Domingo was not made administratively liable for falsification but for the
submission of the Justification. The OMB held that being the Chief Executive Officer of the barangay, Domingo assumes full
responsibility on the propriety of all documents submitted in support of the proposed budget. The CA affirmed the decision of
the OMB.
Domingos position:
(1) One cannot be indicted for the submission of a document which he himself has repudiated (main argument).
(2) He cannot be held administratively liable for any act beyond his control and knowledge under the Code of Conduct. The act
for which he was indicted is clearly beyond his knowledge and control. He could not have possibly falsified his own signature. If
he was responsible for the insertion of the Justification, he could have put his genuine signature instead of falsifying it.
(3) He has no access or control over the submission of documents relative to the release of funds for specific projects, as the
responsibility rests either with the Barangay Secretary or Treasurer.
(4) The 6 month suspension is excessive in view of the fact that no undue injury or damage is done to the cause of public
service, or to NPH et al. themselves.
OMBs position:
(1) The submission of a Justification which contains a false declaration runs afoul of the conduct a public servant must exhibit
at all times (highest sense of honesty and integrity).
(2) The penalty is also in accordance with the Code of Conduct.

ISSUE: Whether or not Domingos right to due process was violated.


HELD: YES. The due process requirement mandates that every accused be appraised of the nature and cause of the charge
against him, and the evidence in support thereof be shown or made available to him so that he can meet the charge with
traversing or exculpatory evidence. A cursory reading of the complaint does not reveal that Domingo was charged with violation
of Sec. 4(b) of the Code of Conduct. Likewise, in the OMBs Evaluation Report, the charges indicated were for malversation,
falsification, dishonesty and grave misconduct
ISSUE: Whether or not Domingo should be made administratively liable.
HELD: NO. There is no substantial evidence establishing his culpability. Domingo had a hand in the preparation and submission
of the documents in support of the 2003 budget, such as the budget proposal, barangay development plan etc. However, in all
these documents, the existence of the SK was recognized and corresponding allocations were made for it. With these attestations
on Domingos part, there is no reason for him to issue the questioned Justification and attest to the non-existence of these SK
officials.
The sole evidence relied upon by the OMB in holding petitioner liable is the undated Justification. The handwritten entry "Copy
Budget 2004" appears to be a clerical error because the Justification was ostensibly made in connection with the 2003 budget.
The OMB stated that "the fact of whether or not the Justification was intended for 2003 or 2004 budget is immaterial as the
irregularity of its entry in the records of the barangay bureau was the issue. However, its entry into the barangay records was in
itself questionable.
In both cases, the submission of the Justification cannot be logically pinpointed to Domingo. If the Justification was intended for
2003, there would have been a gross inconsistency between the Justification and the documents relating to the 2003 budget
submitted by Domingo. Likewise, if the Justification was intended for 2004, NPH et al. should have presented the 2004 budget
since the burden is on them to prove the charges against Domingo. They failed to do so.
The 2003 budget contained an appropriation item for the SK. Thus, if at all, the Justification is a stray and aberrant document
which could not have emanated from petitioner.
Furthermore the IRR of the Code of Conduct does not provide that failure to observe the norms of conduct is a ground for
administrative liability. The rules specificially mention at least 23 acts or omissions as grounds for administrative disciplinary
action. Failure to abide by the norms of conduct under Section 4(b) is not one of them.
RULING: The Supreme Court ruled that the taking should not be reckoned as of 1947, and that just compensation should not
be determined on the basis of the value of the property as of that year.
The requisites for taking are:
1. The expropriator must enter a private property;
2. The entry must be for more than a momentary period;
3. It must be under warrant or color of authorities;
4. The property must be devoted for public use or otherwise informally appropriated or injuriously affected; and
5. The utilization of the property for public use must be such a way as to oust the owner and deprive him of beneficial
enjoyment of the property.
Only requisites 1, 3, and 4 were present. It is clear, therefore, that the "taking" of Catellvi's property for purposes of eminent
domain cannot be considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee
thereof.
Under Sec. 4, Rule 67 of the Rules of Court, just compensation is to be determined as of the date of the filing of the complaint.
The Supreme Court has ruled that when the taking of the property sought to be expropriated coincides with the commencement
of the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the just
compensation should be determined as of the date of the filing of the complaint.
In the instant case, it is undisputed that the Republic was placed in possession of the Castellvi property, by authority of court,
on August 10, 1959. The taking of the Castellvi property for the purposes of determining the just compensation to be paid
must, therefore, be reckoned as of June 26, 1959 when the complaint for eminent domain was filed.