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Rosal Homeowners consist mainly of occupants of a land in Bacolod City. Petitioners were among the actual
occupants of the said land. They occupied the land by mere tolerance before the land was acquired by the
Philippines Commercial International Bank.

To evade eviction, the occupants organized themselves into an association the Rosal Homeowners
Association (RHAI). Through this, they acquired the land from the PCIB. To be able to acquire the full benefits from
the Community Mortgage Program (CMP), the National Home Mortgage Finance Corporation required the RHAI
members to sign the lease agreement and maintain their membership in good standing as provided in the RHAI By-
Laws. However, the petitioners refused to sign and also failed to attend regular meetings and pay their membership
as required by the By-Laws. As a result, the RHAI approved of a resolution to evict and recover the land that the
petitioners possess. However, they ignored the demand of the RHAI which prompted RHAI to file an action for
recovery of possession of the said land before the RTC.

**THE PETITIONERS argued that they cannot be ejected because they were entitled to own the land and
that they have been occupying it before RHAI’s acquisition of the title. Also, that they were being ejected to
accommodate other persons who are not qualified beneficiaries of the CMP.**

RTC ruled in favor of RHAI stating that the petitioners were already non-members because they were
expelled from the RHAI, they did not qualify as beneficiaries because they did not sign the Lease Agreement as
required by the NHMFC hence they had no more right to remain on the land. Arroyo then appealed to the CA stating
that they were denied due process. However, The CA affirmed the RTC decision stating that they were not denied the
right to procedural due process as they were given opportunity to present evidence but just failed to do so.

Hence, the petition. They argue that the records does not show any evidence that indicated the initiation
proceedings against them, and that they were not informed by the RHAI that they had been expelled from the RHAI.

RHAI contends that the question is a question of fact which was properly disposed of by the RTC and the
CA where they found that the petitioners were deemed expelled from their membership for non-compliance with the
rules and regu (non payment of fees). The evidence show that their expulsion was valid when they refused to comply
with the By-Laws.

ISSUE: W/N the Petitioners were denied their right to due process

HELD: NO. The pet were accorded a fair trial in the RTC. They were represented by a counsel who was able to
cross-examine witnesses, they were given ample opportunity to present evidence to show they were not expelled and
to present witnesses however, they did not. Petitioners, when they chose not to present evidence, cannot complain of
denial of due process. As long as the parties are given the opportunity to be heard before judgment is rendered, the
demands of due process are sufficiently met.

** The counsel told the court that there may be conflict of interest, he was given time to file a manifestation whether
he’ll continue or not but it lapsed and failed to do so. Howvever, when the court rendered its decision, the petitioners
did not even bother to seek for reconsideration. It is rather unfortunate that defendants-appellants’ counsel neglected
his duties to the latter. Be that as it may, the negligence of counsel binds the client**

The court also held that the petitioners were able to seek reconsideration and avail of their right to appeal to
the CA. Having been able to appeal, move for reconsideration, the petitioners cannot claim denial of due process.
The essence of due process is the opportunity to be heard. What the law prohibits is not the absence of previous
notice but the absolute absence thereof and the lack of opportunity to be heard

The records of this case disclose that there was a board resolution issued for the expulsion of the defaulting
members of RHAI. They were duly informed that they were already expelled as members of the association through
notices sent to them. These notices, however, were refused to be received by petitioners. RHAI, being an
association, failing to obey the rules and regulations in the By-Laws by failing to pay membership fees, and refusing
to sign the Lease Agreement, they were expelled.


Petitioner Vivas and his principals acquired the controlling interest in Rural Bank Faire (RBFI), a bank whose
corporate life has already expired. BSP authorized the extension of the bank’s corporate life for another 50 years and
was later renamed to EuroCredit Community Bank (ECBI).

Pursuant to RA 7653, The New Central Bank Act, the Integrated Supervision Department (ISD) of BSP
conducted a general examination on ECBI where Vivas was appraised of the findings during the examination.

In 2008. The examiners cancelled the rediscounting line of the bank which Vivas appealed. The Monetary
board (MB) then issued a resolution which placed ECBI under Prompt Corrective Action because of negative capitals,
unsound activities etc. In the same year, BSP gave ECBI a copy of the report of the examination and directed the
bank to take appropriate action.

Vivas then moved for a recon on the resolution of the MB on the grounds of non-observance of due process
and arbitrariness but was denied. Vivas was invited to discuss the matters pertaining to the resolution before being
recommended to the MB but due to postponements by Vivas, it never prospered.

ECBI asked for a deferment of the due examination but was denied hence, a general examination was again
conducted. Therafter, the MB issued a resolution which placed ECBI under receivership.

Vivas argues that the resolution was tainted with arbitrariness and bad faith, and that ECBI did not commit
any financial fraud and, hence, its placement under receivership was unwarranted and improper. Also, that ECBI was
placed under receivership without due and prior hearing. He invoked Sec 11 RA 7353 which states that BSP may
take over the management of a rural bank AFTER due hearing; and that since RA 7353 is a special law, it should
prevail over RA 7653 which is a general law.

ISSUE: W/N ECBI was denied its due process

HELD: NO. It appears on record that ECBI was given every opportunity to be heard and improve on its financial
standing, the findings were dicussed with Vivas, and ECBI was heard for its motion for recon. Hence, cannot claim
that it was deprived of its right.

Also, THE COURT in several cases upheld the MB to take over banks w/o need for prior hearing. The MB,
under R.A. No. 7653, has been invested with more power of closure and placement of a bank under receivership for
insolvency or illiquidity, or because the bank’s continuance in business would probably result in the loss to depositors
or creditors.

The doctrine of “close now hear later” is founded on practical and legal considerations to obviate
unwarranted dissipation of the bank’s assets and as a valid exercise of police power to protect the depositors,
creditors, stockholders, and the general public. Swift, actions must be taken against financially distressed and
mismanaged banks by the govt to prevent loss of public faith in the banking system.

In the case at bar, the findings of the examination showed the inability of EBI to pay its liabilities, and its
continued operation would result in additional losses which is prejudicial to the depositors and creditors hence the MB
was forced to place ECBI under receivership.



Garcia vs Molina20 Aug 2010

Facts: Respondents Molina and Velasco, both Attorney V of the GSIS, received two separate Memoranda from the
President and General Manager of GSIS charging them with grave misconduct for allegedly helping protests, leading
the protests, and continually doing so despite warnings.

Considering the gravity of the charges, they were preventively suspended by Garcia. However, respondents
denied the charges. They argued that Garcia was in bad faith in charging them falsely, that the preventive suspension
lacks factual and legal basis, and that they opposed Garcia acting as complainant, prosecutor and judge.
**The respondents then filed with the Civil Service Commission to lift the Suspension arguing that Garcia
cannot act as complainant, prosecutor and judge at the same time hence they wanted to transfer investigation to the
CSC. The transfer however, failed.

The GSIS hearing officer directed the petitioners to submit to the jurisdiction of the investigating committee
and required them to appear at the hearing. However, respondents sought the annulment of Garcia’s order to submit
to the jurisdiction of the GSIS Committee in the CA. The CA rendered a decision in favor of the respondents which
stated that the charges against the respondents were void for not having a preliminary investigation.

ISSUE: W/N the respondents were denied their due process

HELD: YES. ****Under PD 807, heads of departments are given the authority to investigate and decide matters
involving disciplinary actions against employees under their jurisdiction.*** In RA 8291, the President and General
manager may discipline their employees but it must be in accordance with Civil Service rules and regulations.

The Uniform Rules on Admin Cases in the Civil Service states that in issuing a formal charge against an
employee it must:

1. There must be a complaint in writing and sworn to by the complainant. However, in cases initiated by the
proper disciplining authority, the complaint need not be under oath.
2. The disciplining authority shall require the person complained to submit a comment under oath.
3. There must be a preliminary investigation; examination of records submitted by both parties, and opportunity
to submit affidavits and counter affidavits.
4. Investigation report will be submitted to the disciplining authority.
5. Formal charge if a prima facie case is established.

A preliminary investigation is done proper to the issuance of the formal charge and a comment is required. In the
case at bar, the formal charges were issued after the sole determination by Garcia as the disciplining authority that
there was a prima facie case against the respondents. The filing by petitioner of formal charges against the
respondents without preliminary investigation is a violation of their due process. **The court held that he should have
required the respondents to explain why no disciplinary action should take place hence Garcia would have properly
evaluated both sides.

Not even the fact that the charges against them are serious and evidence of their guilt is strong can compensate
for the procedural shortcut undertaken by Garcia. Hence, the formal charges are void ab initio.

In particular, due process in administrative proceedings has been recognized to include the following: (1) the
right to actual or constructive notice to the institution of proceedings which may affect a respondent's legal rights; (2)
a real opportunity to be heard personally or with the assistance of counsel, to present witnesses and evidence in
one's favor, and to defend one's rights; (3) a tribunal vested with competent jurisdiction and so constituted as to afford
a person charged administratively a reasonable guarantee of honesty as well as impartiality; and (4) a finding by said
tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the
records or made known to the parties affected.