Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 70054 July 8, 1986
BANCO FILIPINO, petitioner,
vs.
MONETARY BOARD, ET AL., respondents.
Ramon Quisumbing and Norberto Quisumbing and Emmanuel Pelaez for petitioner.
Inigo B. Regalado, Jr. counsel for Central Bank.
Sycip, Salazar, Feliciano & Hernandez for respondents.
R E S O L U T I O N
On November 4, 1985, Petitioner Bank filed in the instant case a "Motion to Pay Back Salaries to All BF Officers and Employees from February to August 29, 1985" in connection with its "Opposition to Respondents" Motion for Reconsideration or for Clarification of the Resolution of the Court En Banc of October 8, 1985." On November 7, 1985, this Court referred said motion to pay back salaries to Branch 136 (Judge Ricardo Francisco, presiding) of the Makati Regional Trial Court, which this Court had earlier directed under our Resolution of October 8, 1985 issued in G.R. No. 77054, to conduct hearings on the matter of the closure of petitioner Bank and its alleged pre-planned liquidation.
On January 22, 1986, said Regional Trial Court, after considering the petitioner's motion of November 4, 1985, the respondents' opposition thereto dated January 15, 1986; the petitioner's Reply dated January 16, 1986, and the respondents' Rejoinder dated January 20, 1986, issued an order directing the respondents herein "to pay all officers and employees of petitioner their back salaries and wages corresponding to the period from February to August 29, 1985."
On February 4, 1986, respondents herein filed with this Court an "Appeal from, or Petition to Set Aside, order to Pay Back Salaries dated 22 January 1986" praying for the reversal and setting aside of the aforestated trial court's Order dated January 22, 1986. This was formally opposed by Petitioner when it filed its "Answer to Appeal (re: back salaries)" on February 26, 1986. A month later, on March 26, 1986, respondents filed their "Reply to the Answer" which petitioner traversed in a "Rejoinder to the Reply" dated April 2, 1986.
In a normal situation, no controversy would be expected in the matter of the payment of said back salaries because in the instant case, the party praying for the same is the employer Bank. The attendant circumstances here present have, however, created a peculiar situation. There is resistance to the claim because the management of the assets of the Bank has been transferred to the Respondents' Receiver who perceived that the directive to pay back salaries after closure of the Bank would be dissipation of the banks' assets to the prejudice of its various creditors.
There is, however, in this case a significant matter that deserves consideration of this Court and which must be viewed from the stand-point of equity. What stands out is that, regardless of whether the employees of Banco Filipino worked or not after January 25, 1985, there is the uncontested manifestation found in BF's Answer to the Appeal, dated February 26, 1986 (Vol. IV of Case Records) that:
2. In the fact the receiver/liquidator Carlota Valenzuela had paid Union employees of petitioner BF back salaries for no work from January 25, 1985 up to June, 1985. .. (Emphasis supplied)
All employees, thereto, of petitioner Banco Filipino who have not yet received their back salaries corresponding to the period from January 25, 1985 up to June, 1985 manifestly deserve and ought to be similarly paid by the respondent Monetary Board. It is but fair that the issue whether or not the employees of petitioner Bank had actually worked during said period should now be discounted considering this voluntary act of respondent Monetary Board which would remove by estoppel any impediment to the receipt by all bank employees of their back salaries from January 25, 1985 up to June, 1985, assuming that some of them have not yet received the same.
As the remaining period from June, 1985 to August, 1985, involves but a minimal period only of two (2) months, and considering the unfortunate plight of the numerous employees who now invoke the symphathetic concern of this Court, and inasmuch as the appealed Order for the payment of back salaries is only for a limited period or up to August, 1985, the appealed order of November 7, 1985 may be sustained.
Petitioner BF and its stockholders have long put on record their consent to this patment of back salaries of its separated officers and employees. It is also averred that BF intends to reopen its bank and branches, and the payment of back salaries to its employees, no less would help in the preservation of its personnel which is the bank's most important assest, apart from doing justice to those aggrieved employees. It is mentioned that the Central Bank Liquidator has now more than a billion pesos in cash of Banco Filipino since it continued to receive payments from BF borrowers some P1.5 million a day. It is also said that with the deposits of petitioner BF with the Bank of PI, there is money sufficient to allow the withdrawal of the sums needed to pay the salaries of the employees who have been now out of work for over a year. Apparently, no substantial prejudice for the payment of the distressed employees of the bank for only a specified limited period until the other issues in the consolidated consideration.
WHEREFORE, ruling that the Order of November 7, 1985 of Judge Ricardo Francisco, granting salary to the officers and employees of Banco Filipino for the period from February, 1985 to August 29, 1985, may now be deemed moot and academic insofar as it relates to the period from January 25, 1985 to June, 1985 up to August, 1985, covers but a minimal span of two (2) months, the Court RESOLVES, for the reasons of equity, to allow the aforestated Order to remain undisturbed and to DISMISS the appeal therefrom. This Order is immediately held executory.
Gutierrez Jr., J., took no part.
G.R. No. 70054 July 8, 1986
BANCO FILIPINO vs. MONETARY BOARD
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 70054 July 8, 1986
BANCO FILIPINO, petitioner,
vs.
MONETARY BOARD, ET AL., respondents.
R E S O L U T I O N
Subject of this "Petition to Set Aside Order to Produce Documents dated 17 February 1986" is the Order of Branch 136, Regional Trial Court, Makati, granting the motion of the petitioner herein, based on Section 1, Rule 27, of the Rules of Court, for the production, inspection, and copying of certain papers and records which are claimed as needed by the Petitioner Bank for the preparation of its comments, objections, and exceptions to the Conservator's report dated January 8, 1985, and Receiver's Report dated March 19, 1985. The documents now asked to be produced, inspected, and copied are the following:
(1) Copies of tapes and transcripts of the Monetary Board (MB) deliberations on the closure of Banco Filipino (BF) and its meeting on July 27, 1984, and March 22, 1985;
(2) Copies of the letter and reports of first conservator, Mr. Basilio Estanislao, to the MB and to Central Bank Governor Jose Fernandez;
(3) Papers showing computations of all the interests and penalties charged by the CB against BF;
(4) Schedule of recommended valuation of reserves per Mr. Tiaoqui's report dated March 19, 1985;
(5) Adjustment per Annex "C" of Mr. Tiaoqui's report;
(6) Annexes"A","B",and"C"of the joint report of Mr. Tiaoqui, Mr. Aurellano, and Mrs. Valenzuela;
(7) Schedule of devaluation of CB premises of Paseo de Roxas of same report;
(8) Schedule of BF's realizable assets from P5,159.44 B to P3,909.23 B as of January 25, 1985;
(9) Documents listed in BF's letter to Mrs. Carlota Valenzuela dated October 25, 1985.
In issuing the challenged order, the court below took the view that the Supreme Court's resolution referring to it the matters relative to the bank's closure does not preclude the petitioner from availing of this mode of discovery as an additional means of preparing for the hearing. It considered the documents sought to be produced as not privileged because these constitute or contain evidence material to the issues into by the Court. These materials are said to comprise of records of the administrative proceedings conducted by respondent's officials and representatives from the inception of and preparation of the challenged reports and the resolution placing petitioner under receivership and thereafter under liquidation as it is the regularity and impartiality of these administrative proceedings which are being assailed by the petitioner, the trial court saw no reason why said documents should be thus concealed from it.
Respondents Monetary Board and Central Bank take exception to the said order and pray in their petition before this Court for the reversal and setting aside of the same. The grounds recited in support of their petition are the following:
(1) The ratiocination of the trial court is wholly in error because the proceedings before it do not at all deal with either the administrative proceedings conducted by the respondents or the regularity and impartiality of the CB actions on BF; it does so simply upon the charge that no "hearing" was given BF prior to those actions of closure and liquidation. However, no such prior hearing had been called as none is required by the law and by the Supreme Court decisions in force to this date (Rural Bank of Lucena, Inc. vs. Arca, 15 SCRA 66, and Rural Bank of Bato vs. IAC, G.R. 65642, Oct. 15, 1984).
(2) The tapes and transcripts of the Monetary Board deliberations are confidential pursuant to Sections 13 and 15 of the Central Bank Act.
Sec. 13. Withdrawal of persons having a personal interest. Whenever any member attending a meeting of the Monetary Board has a material personal interest, directly or indirectly, in the discussion or resolution of any given matter, said member shall not participate in the discussion or resolution of the matter and must retire from the meeting during the deliberation thereon. The subject matter, when resolved, and the fact that a member had a personal interest in it, shall be made available to the public. The minutes of the meeting shall note the withdrawal of the member concerned. (As amended by PD No. 1827).
Sec. 15. Responsibility. — Any member of the Monetary Board or officer or employee of the Central Bank who wilfully violates this Act or who is guilty of gross negligence in the performance of his duties shall be held liable for any loss or injury suffered by the Bank as a result of such violation or negligence. Similar responsibility shall apply to the disclosure of any information of a confidential nature about the discussion or resolutions of the Monetary Board, except as required in Section 13 of this Act, or about the operations of the Bank, and to the use of such information for personal gain or to the detriment of the Government, the Bank or third parties. (As amended by Presidential Decree No. 72). (Italics supplied).
(3) The Monetary Board deliberations were necessarily held subsequent t the submission of the CB reports. They did not enter into the making of those reports and can have no materiality to any question of fact that may be raised in relation to their contents.
On April 16, 1986, Petitioner Banco Filipino filed its Comment on Respondent's petition to set aside the order for the production of the documents. In said pleading, the petitioner bank assails the respondent's petition on the following grounds:
(1) There is no reason why Banco Filipino should not be furnished the documents, particularly Nos. 3 to 9 of its motion, when these are merely attachments to the Supervision and Examination Sector, Dept. It (SES) Reports, copies of which were given to it pursuant to a Supreme Court order.
(2) The Supreme Court in its referral of October 8, 1985 to the RTC Makati intended full evidence taking of the proceeding for judicial review of administrative action filed with the Supreme Court, the trial court being better equipped for evidence taking.
(3) The respondents cannot claim privilege in refusing to produce the Central Bank records because it is based only on the generalized interest in confidentiality. Petitioner cites as a precedent the doctrine established in the case of U.S. vs. Nixon, 418 U.S. 683, 713, which states that "when the ground for asserting privilege as to subpoenaed materials sought for use in a criminal case is based only on the generalized interest in confidentiality, it cannot prevail over the fundamental demands of due process of law."
(4) The requested documents and records of the Central Bank are material and relevant because BF is entitled to prove from the CB records (a) that Governor Fernandez closed BF without a MB resolution and without examiner's reports on the financial position of BF; (b) that a MB resolution was later made to legalize the BF closure but it had no supporting examiner's report; (c) that the earlier reports did not satisfy respondent Governor Fernandez and he ordered the examiners and the conservator, Gilberto Teodoro, to "improve" them; and (d) that the reports were then fabricated.
Petitioner adds that what respondents fear is disclosure of their proceedings because petitioner has accused the CB governor of (a) covering 51% of its stockholding, (b) encashing BF securities in trickles as fuel a run, (c) appointing a conservator when the President ordered the MB to grant petitioner a P 3 Billion credit line, (d) replacing Estanislao with Gilberto Teodoro when the former wanted to resume normal operations of BF, and (e) changing the conservatorship to receivership when it appointed Carlota Valenzuela as receiver again without hearing.
On May 13, 1986, Respondent Monetary Board filed their Reply to Petitioner Bank's Comment dated April 15, 1986. Respondents argue that:
(1) The case of U.S. vs. Nixon and the other decisions cited by petitioner are inapplicable because-
a) The authorities cited refer only to a claim of privilege based only on the generalized interest of confidentiality or on an executive privilege that is merely presumptive. On the other hand, the so-called MB deliberations are privileged communications pursuant to Section 21, Rule 130 of the Rules of Court because statements and opinions expressed in the deliberation of the members of the MB are specifically vested with confidentiality under Secs. 13 and 15 of the Central Bank Act. The "public interest" requirement for non-disclosure is evident from the fact that the statute punishes any disclosure of such deliberations.
b) Petitioner has not in the least shown any relevance or need to produce the alleged MB deliberations. What petitioner intends to prove are not "issues" raised in the pleadings of the main petition.
(2) Petitioner is interested, not in discovering evidence, but in practicing oppression by the forced publication of the MB members' confidential statements at board meetings.
(3) The so-called deliberations of the Monetary Board are in truth merely the individual statements and expressions of opinion of its members. They are not statements or opinions that can be imputed to the board itself or to the Central Bank. The transcripts of stenographic notes on the deliberations of the MB are not official records of the CB; they are taken merely to assist the Secretary of the MB in the preparation of the minutes of the meetings. And as advertedly also, the tape recordings are not available as these are used over and over again.
The motion for the production of the subject documents was filed by petitioner pursuant to Section 1, Rule 27, of the Rules of Court. It has been held that "a party is ordinarily entitled to the production of books, documents and papers which are material and relevant to the establishment of his cause of action or defense" (General Electric Co. vs. Superior Court in and for Alameda County, 45 C. 2d 879, cited in Martin, Rules of Court, 3rd edition, Vol. 2, p. 104). "The test to be applied by the trial judge in determining the relevancy of documents and the sufficiency of their description is one of reasonableness and practicability" (Line Corp. of the Philippines vs. Moran, 59 Phil. 176, 180). "On the ground of public policy, the rules providing for production and inspection of books and papers do not authorize the production or inspection of privileged matter, that is, books, papers which because of their confidential and privileged character could not be received in evidence" (27) CJS 224). "In passing on a motion for discovery of documents, the courts should be liberal in determining whether or not documents are relevant to the subject matter of action" (Hercules Powder Co. vs. Haas Co., U.S. Dist. Ct. Oct. 26, 1944, 9 Fed. Rules Service, 659, cited in Moran, Comments on the Rules of Court, 1979 Ed. Vol. 2, p. 102). Likewise, "any statute declaring in general terms that official records are confidential should be liberally construed, to have an implied exception for disclosure when needed in a court of justice" (Wigmore on Evidence, Vol. VIII, p. 801, citing the case of Marbury vs. Madison, 1 Cr. 137,143).
In the light of the jurisprudence above-cited, this Court holds that no grave abuse of discretion was committed by the court below in granting petitioner's motion for the production of the documents enumerated herein. We accept the view taken by the court below that the documents are not privileged and that these constitute or contain evidence material to the issues being inquired into by the Court.
With respect to Items Nos. 3 to 9, these are the annexes to the Supervision and Examination Sector, Dept. II (SES) Reports submitted to the Central Bank and Monetary Board which were taken into consideration by said respondents in closing petitioner bank. A copy of the SES Reports was furnished to the petitioner. We, therefore, fail to see any proper reason why the annexes thereto should be withheld. Petitioner cannot adequately study and properly analyze the report without the corresponding annexes. Pertinent and relevant, these could be useful and even necessary to the preparation by petitioner of its comment, objections and exceptions to the Conservator's reports and receiver's reports.
Regarding copies of the letter and reports of first Conservator, Mr. Basilio Estanislao, to the Monetary Board and to Central Bank Governor Fernandez (Item No. 2) these appear relevant as petitioner has asserted that the above-named Conservator had in fact wanted to resume normal operations of Banco Filipino but then he was thereafter replaced by Mr. Gilberto Teodoro. The letter and reports could be favorable or adverse to the case of petitioner but whatever the result may be, petitioner should be allowed to photocopy the same.
As to the tapes and transcripts of the Monetary Board deliberations on the closure of Banco Filipino and its meetings on July 27, 1984, and March 22, 1985, (Item No. 1), respondents contend that "it is obvious from the requirement (Sections 13 and 15 of the Central Bank Act) that the subject matter (of the deliberations), when resolved. . . shall be made available to the public but the deliberations themselves are not open to disclosure but are to be kept in confidence." This Court, however, sees it in a different light. The deliberations may be confidential but not necessarily absolute and privileged. There is no specific provision in the Central Bank Act, even in Sections 13 and 15 thereof, which prohibits absolutely the courts from conducting an inquiry on said deliberations when these are relevant or material to a matter subject of a suit pending before it. The disclosure is here not intended to obtain information for personal gain. There is no indication that such disclosure would cause detriment to the government, to the bank or to third parties. Significantly, it is the bank itself here that is interested in obtaining what it considers as information useful and indispensably needed by it to support its position in the matter being inquired to by the court below.
On the other hand, respondents cite Section 21, Rule 130, Rules of Court which states:
Section 21. Privileged Communications. The following persons cannot testify as to matters learned in confidence in the following cases:
xxx xxx xxx
(e) A public officer cannot be examined during his term of office or afterwards, as to communications made to him in official confidence, when the court finds that the public interest would suffer by disclosure.
But this privilege, as this Court notes, is intended not for the protection of public officers but for the protection of public interest (Vogel vs. Gruaz 110 U.S. 311 cited in Moran, Comments on the Rules of Court, 1980 Ed. Vol. 5, p. 211). Where there is no public interest that would be prejudiced, this invoked rule will not be applicable.
The rule that a public officer cannot be examined as to communications made to him in official confidence does not apply when there is nothing to show that the public interest would suffer by the disclosure question. ... ,( Agnew vs. Agnew,'52 SD 472, cited in Martin Rules of Court of the Philippines, Third Edition, Vol. 5, p. 199).
In the case at bar, the respondents have not established that public interest would suffer by the disclosure of the papers and documents sought by petitioner. Considering that petitioner bank was already closed as of January 25, 1985, any disclosure of the aforementioned letters, reports, and transcripts at this time pose no danger or peril to our economy. Neither will it trigger any bank run nor compromise state secrets. Respondent's reason for their resistance to the order of production are tenuous and specious. If the respondents public officials acted rightfully and prudently in the performance of their duties, there should be nothing at all that would provoke fear of disclosure
On the contrary, public interests will be best served by the disclosure of the documents. Not only the banks and its employees but also its numerous depositors and creditors are entitled to be informed as to whether or not there was a valid and legal justification for the petitioner's bank closure. It will be well to consider that—
Public interest means more than a mere curiosity; it means something in which the public, the community at large, has some pecuniary interest by which their legal rights or liabilities are affected (State vs. Crocket, 206, p. 816 cited in Words and Phrases, Vol. 35, p. 229).
IN VIEW OF ALL THE FOREGOING, the order to produce documents dated February 17, 1986 issued by the court below in S.C.- G.R. No. 70054, is hereby affirmed, except as to the copies of the tapes relative to the Monetary Board deliberations on the closure of Banco Filipino on January 25, 1985 and its meetings on July 27, 1984, and March 22, 1985 and only if such tapes are actually no longer available taking into account respondent Monetary Board's manifestations that the tape recording of the deliberations of that Board are, for purposes of economy, used over and over again inasmuch as these tapes are not required to be kept or stored. (See Respondent's Reply, dated May 12, 1986; Rollo, Vol. IV, pp. 1288-1289).
SO ORDERED.
Gutierrez, Jr., J., took no part.
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