G.R. No. 81846




Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 81846 March 10, 1988 (CENTRAL BANK, ET AL., vs. COURT OF APPEALS, ET AL.) Pursuant to its authority under the Central Bank Act, the Monetary Board of the Central Bank adopted on May 22,1987, Resolution No. 505(i) placing the Manila Banking Corporation (Manila Bank) under receivership after finding that the had bank had become insolvent. On May 29, 1987, Manila Bank filed in the regional trial court of Manila a complaint to set aside the resolution and secured on July 14, 1987, after hearing, a writ of preliminary injunction against its enforcement upon posting by the plaintiff of a bond in the sum of P10,000,000.00. On July 16,1987, the Central Bank moved for the lifting of the injunction, posting a counterbond of P20,000,000.00 in accordance with Section 29 of the Central Bank Act. The motion was denied, prompting the Central Bank to elevate the matter to the Court of Appeals, where the trial court was sustained by a 3-2 vote of the special ninth division. The Central Bank then came to this Court on certiorari under Rule 65' to challenge the decision of the Court of Appeals as tainted with grave abuse of discretion. We reverse. The applicable law is Section 29 which clearly expresses the mandate and intention of the legislature. The language is plain and unequivocal, leaving no doubt that the court is under obligation . to dissolve the injunction once the counterbond in the required amount is posted. Commenting on injunctions in general under Rule 58 of the Rules of Court, Chief Justice Moran observed that "a wide latitude is given by this provision to the trial judge to grant, refuse, continue, modify or dissolve the injunction as justice may require."1 By contrast, Section 29 of the Central Bank Act grants no similar discretion, being cast in a quite different and peremptory tenor, thus: SEC. 29. ... The restraining order or injunction shall be refused or if granted, shall be dissolved upon filing by the Central Bank of a bond, which shall be in the form of cash or Central Bank cashier's check, in an amount twice the amount of the bond of the petitioner or plaintiff conditioned that it will pay the damages which the petitioner or plaintiff may suffer by the refusal or the dissolution of the injunction. ... . It is axiomatic that the word "shall" imports a mandatory sense as distinguished from the discretion that is allowed by use of the word "may."2 Although this is not an absolute rule, the exception does not apply in the case at bar in view of the urgency of the measure contemplated in Section 29 and the adverse consequences that are sure to follow if the injunction is not lifted and the bank is allowed to reopen. After its earlier closure had been announced to the public, its depositors will be frantically pounding at its doors to recover their money. A bank run is inevitable. The old management will be reinstated to pursue the policies that made the bank insolvent in the first place. The purpose of the receivership will be frustrated. It is clearly for the purpose of guarding against such eventualities that the law makes it obligatory upon the court to dissolve the injunction once the required counterbond is posted by the Central Bank, as was done in this case. Parenthetically, it may not be amiss to note at note point that, as Manila Bank has itself admitted, it received, before it was closed, emergency loans from the Central Bank in the sum of P6.2 billion. Even this astronomical amount was insufficient. There is here no derogation of judicial power, considering the imperative reasons for the provision. Neither is due process violated for there are urgent situations, such as the one before us, where notice and hearing may be validly dispensed with. 3 It should also be stressed that at the time the above-cited provision was incorporated in the Central Bank Act in 1976,4 the procedural rules promulgated by the Supreme Court could be repealed, altered or supplemented by the Congress under Article X, Section 5(5), of the 1973 Constitution. The private respondent's claim of arbitrariness in the adoption of the resolution in question is not for the Court to decide as it is not a trier of facts. This is a matter to be resolved by the court a quo in the light of the evidence to be adduced by the parties during the trial on the merits of this case. Suffice it now for the Court to reiterate that the factual findings of administrative agencies in their areas of expertise are entitled to great respect as long as they are based on substantial evidence.5 While this does not mean that these findings may not be rejected by the courts if found to be arbitrary or oppressive, such a step should be taken with the utmost caution and only on the basis of the strongest and most convincing proof .6 WHEREFORE, the petition is GRANTED, without prejudice to the writing of an extended opinion, the Decision of February 5, 1988, promulgated by the respondent court, and the Orders of the trial court dated July 14, 1987, and July 27, 1987, are SET ASIDE. The writ of preliminary injunction dated July 14, 1987, is DISSOLVED. The temporary restraining order issued by this Court on February 16, 1988, is made PERMANENT This resolution is immediately executory. Paras, Feliciano and Padilla, JJ., took no part. Footnotes 1 Moran, Rules of Court, Vol. III, p. 90,1980 ed. 2 Buzabal v. Salvador, 84 SCRA 176 citing Dizon v. Encarnacion 9 SCRA 714. 3 Ynot v. Intermediate Appellate Court, 148 SCRA 659; Suntay v. People, 101 Phil. 833 17 C.J. 1224. 4 P.D. 1007, Sec. 1, Sept. 22, 1976. 5 Police Commission v. Lood, 127 SCRA 757; Rosario Bros., Inc. v. Ople, 131 SCRA 72; Ignacio v. C.A., 96 SCRA 648; Alba Patio de Makati v. Alba Patio de Makati Employees Association, 128 SCRA 253. 6 Manuel v. Villena, 37 SCRA 745; Ozaeta v. Oil Industry Commission, 49 SCRA 409; Del Mar v. Philippine Veterans Adm., 51 SCRA 340; Imbong v. Mendoza, 55 SCRA 95. The Lawphil Project - Arellano Law Foundation