In 2003, minority Banco Filipino shareholder and sister of Banco Filipino Vice Chairman Albert C. Aguirre, Ana Marie Aguirre Koruga, asked the Bangko Sentral ng Pilipinas (BSP) to investigate Banco Filipino. She claimed that Banco Filipino's management had:
- engaged in unsafe, unsound, and even fraudulent banking practices;
- engaged in self-dealing;
- violated banking laws prohibiting or limiting DOSRI transactions;
- put the bank and its depositors in jeopardy.
- On 6 June 2003, Banco Filipino commented on said letters, averring that:
- the loans granted to the Borrower Corporations were in accordance with Banco Filipino’s pursuit of its main business, which is mortgage lending.
- Banco Filipino’s DOSRI loans as of 31 October 2002 constituted 53% only of the total allowable limit as per the regulations of the BSP
- The Borrower Corporations relatively have high paid up capital and networth, and are active and operational.
- That payment of the loan by dacion en pago is generally accepted in the banking industry
In a letter dated 14 May 2003, Koruga, thru counsel, demanded to the members of the board of directors of Banco Filipino to reverse the loans and the corresponding payments thereto by dacion en pago which were extended to the following corporations: a) Glamor World, Inc.; b) Filipino Vastland, Inc.; c) Filipino Ventures Co.; d) Taurus Land, Inc.; and e) BF Homes Depot. Koruga averred that these loans, disguised as purchases of real property of Banco Filipino, were intended to accommodate Albert Aguirre, the beneficial owner of the foregoing corporations, while depriving Banco Filipino of its liquidity needs.
- Not getting any response, Kuroga, in a Letter dated 19 June 2003 tendered a final demand for the board of directors to comply with the 14 May 2003 letter within five (5) days.
- In a Letter dated 4 June 2003, the Corporate Secretary informed Plaintiff’s counsel that the request for inspection was denied after a meeting held by the executive committee. The reason cited was that Koruga used previously obtained information, directly or indirectly, for media purposes which caused abnormal withdrawal of deposits in December 2002 and continued to adversely affect the bank up to that time.
- In a Letter addressed to the board of directors dated 27 June 2003, counsel for Koruga brought to the board’s attention the letter issued by Defendant Corporate Secretary dated 4 June 2003 denying Plaintiff the right to inspect the records, and requested the members to individually confirm if they authorized Mr. Rivera’s actions and statements.
- In a Letter dated 11 June 2003, the Corporate Secretary informed Koruga that the Executive Committee did not favorably consider her notice for inspection because the pertinent records were protected under the confidentiality rules of the BSP. It was further stated that the committee took note again of the fact that Koruga improperly used previously obtained information.
- That Private Defendants engaged in unlawful self-dealing and conflicts of interest in Banco Filipino’s disguised acquisitions of unsaleable real property that unduly benefitted Defendant Aguirre, who is the beneficial owner of the corporations that were granted loan accommodations: BF Home Depot, Filipino Vastland, Glamor World, Taurus Land, Tierrasud, Pro-Managers (“Borrower/Dummy Corporations”). As the corresponding payment of these loans were effected by way of dacion en pago, Banco Filipino’s cumulative interest income was effectively diminished;
- That Private Defendants violated the right of Koruga, as stockholder, to inspect the corporate records of Banco Filipino;
- That Public Defendants have not acted on the Plaintiff’s valid , just and actionable complaint dated April 21 and 23, 2003.
Koruga then prayed for the following reliefs:
- that Banco Filipino be placed under conservatorship, and thereafter, receivership, if justified;
- that a management committee be created;
- that the loans disguised as acquisitions of unsaleable real estate be rescinded;
- that Koruga be allowed to inspect and/or copy documents relating to the subject loans;
- that the audited financial statements for the year 2002 be issued;
- that a cease and desist order be issued against Private Defendants enjoining them from further granting financial accommodations to corporations that are known to be owned or controlled by Aguirre;
- that an order be issued piercing the corporate veils created by Aguirre in setting up the 6 borrower corporations;
- that an order be issued directing Public Defendants to suspend or permanently disqualify the Private Defendants to act as bank directors/officers.
- the loan applications of the borrower corporations were subjected to extensive and rigid profile and credit investigation.
- assuming that the loans are DOSRI loans, these are not entirely prohibited as the records show that the DOSRI loans as of 31 October 2002 constituted only 53% of the total allowable limit for DOSRI loans in accordance with the regulations of the BSP.
- Koruga’s request for inspection was justifiably denied, as Koruga used previously obtained information for media purposes that put Banco Filipino in a bad light, thus triggering massive withdrawals by the public.
- the Complaint is a nuisance or harassment suit.
- there is Forum shopping, as there is an earlier and pending complaint filed before the BSP
- the trial court does not have jurisdiction considering the nature of the reliefs sought and the defective service of summons upon the defendants;
- indispensable parties i.e. Banco Filipino, the borrower corporations, are not impleaded.
- Defendant Abad filed his Answer dated 11 September 2003. Defendant also filed his Motion for Preliminary Hearing on the Jurisdictional Mattes Raised as Grounds to Warrant Dismissal of the Complaint. Abad moved for a preliminary hearing on jurisdictional matters raised as Special and Affirmative Defenses, on the following grounds:
- That the Monetary Board of the BSP has primary jurisdiction, considering that the subject matter of the suit relates to and directly affects a banking institution and its Board of Directors/Management.
- That Koruga violated the rule against forum shopping, as the Complaint deals with matters and raises the same issues that are presently pending with the Monetary Board, pursuant to the letters dated 21 & 23 April 2003 sent by Koruga to the BSP.
- That the Complaint is a nuisance or harassment suit, considering that Koruga’s shareholdings in Banco Filipino is “di minimis” i.e., 0.0115%
- That the complaint is essentially a petition for mandamus, disguised as an intra-corporate suit, as it was prayed that the Court issue special orders directed against the Public Defendants, to act in accordance with their declared duties, authorities or prerogatives. As certain requirements for a mandamus case are not complied with, hence, the Complaint should be dismissed.
- That the Complaint suffers from a jurisdictional defect as there is non-joinder of the following indispensable parties, i.e. Banco Filipino, the Borrower Corporations, and the Monetary Board.
- That there is invalid service of summons on Defendant Abad
- Defendants Arcenas, Aguirre, Paguio and Rivera filed their Answer dated 12 September 2003. Defendants argued:
- that the Court has no jurisdiction over the persons of the Defendants as there was improper service of summonses;
- that the instant Complaint is a harassment or nuisance suit, as can be deduced from the miniscule shareholdings of Koruga;
- that there is failure to implead an indispensable party, Banco Filipino, which would be prejudiced in the event that the reliefs prayed for in the complaint are granted;
- that the grant of the loans lies within the power of the board of directors and covered by the “business judgment” rule, by reason of which the courts are not empowered to intervene;
- that the loans and the corresponding payments thereof by dacion were evaluated by the Loans Department and the approving authorities of Banco Filipino in accordance with its standard procedure and guidelines;
- that the denial to inspect corporate records was justified as Koruga improperly used previously obtained information.
- Defendants Samson and Hernandez filed their Answer Ad Cautelam (With Motion for Preliminary Hearing on Jurisdictional Matters) dated 12 September 2003. Defendants contended:
- that jurisdiction lies with the Monetary Board, considering the reliefs sought by Koruga;
- that Banco Filipino and the Borrower Corporations, being indispensable parties, were not impleaded;
- that the court has no jurisdiction over their persons as there was defective service of summonses;
- that Koruga engaged in forum shopping;
- that the Complaint is a nuisance or harassment suit;
- that the Complaint is a veiled suit for mandamus.
- Public Defendants, thru the Office of the Solicitor General, filed their Answer dated 18 September 2003. Public Defendants alleged that the Monetary Board had acted upon the complaint brought by Koruga as a Report of Examination (ROE) was prepared by the Supervision and Examination Department (SED) of the BSP. In the ROE, certain exceptions were noted, such as dacion payments and out of the ordinary expenses. Allegedly, in accordance with its established procedures, the Reply of Banco Filipino regarding the noted exceptions in the ROE is currently being awaited. Public Defendants also put up the following special and affirmative defenses:
- that only the Monetary Board can place a bank under conservatorship or receivership;
- that the case is in the nature of a mandamus suit, and the Monetary Board is being compelled to do acts which require the exercise of discretion;
- that Koruga violated the doctrine of exhaustion of administrative remedies as a complaint was filed before the regular courts without awaiting the outcome of the Complaint filed before the BSP;
- that the Monetary Board has primary jurisdiction over the case in view of its expertise or special knowledge on the monetary and banking system.
- Koruga filed a Request for Admission and Interrogatories dated 18 September 2003, directed to Defendants Abad, Samson, Hernandez, Dupasquier, San Lim, & Buenaventura.
- Koruga filed a Motion for Production of Documents dated 24 September 2003. The following documents are sought to be produced or allowed to be examined/copied:
- Those relating to loans granted by Banco Filipino to the Borrower Corporations
- Those relating to the Credit Initiation Process for the Borrower Companies
- Those relating to the Loan Processing conducted for the loans applied for by the Borrower Companies.
- Those relating to the Loan Account Management and Administration of the Borrowing Companies
- Those relating to the Substitution of Collateral proposed for the security of the loans released in favor of the Borrower Companies
- Those relating to the Remedial Management Efforts made and/or proposed for the loans released in favor of the Borrower Companies
- Those relating to the payment through dacion en pago proposed and/or accepted by Banco Filipino for the loans released in favor of the Borrower Companies
- Those relating to the Payment of the loans made by the Borrower Companies through dacion en pago.
- Those relating to the financial standing and/or liquidity of Banco Filipino
- Memorandum of Agreement between the BSP and Banco Filipino concerning the extinguishment of payment of Banco Filipino’s obligations to the BSP
- Those relating to the Liquidity Assistance provided by the BSP to Banco Filipino in the year 2002
- Letter dated 06 June 2003, issued by Banco Filipino’s EVP/Corporate Secretary to BSP Director Candon B. Guerrero.
- Interrogatories dated 24 September 2003 were served upon Defendants Arcenas, Aguirre, Samson, Paguio, Banzon, Abad, Hernandez, and Rivera, wherein information as to the property of Banco Filipino Head Office located at 101 Paseo de Roxas corner de la Rosa Street, Legaspi Village, Makati City, was sought for. Interrogatories dated 29 September 2003 seeking the same information were served upon Defendants Tiu, San Lim, & Dupasquier.
- Koruga filed a Manifestation and Motion Ad Cautelam dated 29 September 2003 stating that the Interrogatories dated 24 September 2003 were served upon the Defendants and that such service is without prejudice to the Motion to Declare Defendants in Default dated 18 September 2003, as the Answer dated 12 September 2003 was not verified and there was no showing that Defendants Arcenas, Paguio and Rivera were authorized by Defendant Aguirre to represent him in the case
Koruga made a Request for Subpoena Duces Tecum dated 30 September 2003 for Jason Martinez, a reporter of “Biznews Financial Gazette” to appear at the hearing on 10 October 2003 and to produce the Report of Examiners (ROE) of the BSP concerning Banco Filipino.
- Defendants Arcenas, Aguirre, Paguio and Rivera filed a Motion to Quash Subpoena dated 6 October 2003, contending that a subpoena cannot be used for discovery, and that the issuance of a subpoena duces tecum is an exercise of jurisdiction by the court, which it does not have in the first place.
- Defendants Arcenas, Aguirre, Paguio, and Rivera filed their Opposition to Motion for Production of Documents dated 30 September 2003. Defendants argued that discovery was premature as the court had to resolve first the issues pertaining to its jurisdiction and the Complaint’s susceptibility to dismissal.
- Defendants Arcenas, Aguirre, Paguio, and Rivera filed their Opposition to Motion to Declare Defendants in Default dated 30 September 2003, alleging that they had not been properly served with summons. Hence, the reglementary period for filing an Answer did not yet commenced against them.
- Defendants Samson and Hernandez filed their Motion to Quash Subpoena and Opposition (To: Motion for Production of Documents addressed to public defendants) dated 1 October 2003. Defendants argued that the jurisdictional objections raised in their Answer Ad Cautelam must first be resolved, and that the production of the subject documents is prohibited by law by reason of the sensitive nature of information relating to banks.
- Koruga filed her Consolidated Comment/Opposition (to Motions for Preliminary Hearing dated 08, 11 and 12 September 2003) dated 2 October 2003, wherein she argued that the preliminary hearing on Special and Affirmative defenses prayed for by Defendants Banzon, Abad, Samson, and Hernandez is in the nature of a Motion to Dismiss which is a prohibited pleading under the Intra-Corporate Rules.
- Public Defendants filed their Opposition to Motion for Production (Re Report of Examination) dated 2 October 2003, wherein they averred that the copies of the ROE has already been transmitted to the Corporate Secretary of Banco Filipino, and that accordingly, the request for its production should be directed to the authorized repository of the Bank’s records, communications and correspondences, and not to Public Defendants. Public Defendants also alleged that the ROE is confidential in nature.
- Defendant Tiu filed his Answer with Compulsory Counterclaims dated 5 October 2003, wherein he alleged that he had voiced his opposition to the payment of the loans by way of dacion en pago, especially when the corporations involved are perceived to be sister companies. As to the violation of Koruga’s right to inspection, Tiu countered that he was not a member of the Executive Committee that denied the request.
- Koruga served Interrogatories dated 6 October 2003 upon the Public Defendants.
- Defendants Samson and Hernandez filed their Objections (To: Request for Admission and Interrogatories) dated 6 October 2003, wherein the Defendants questioned the court’s jurisdiction and pointed out that the Complaint’s susceptibility to dismissal. Defendants also alleged that the admissions sought are prohibited by law.
- Defendants Samson and Hernandez filed their Reply (Re: Motion for Preliminary Hearing on Jurisdictional Matters) dated 8 October 2003, wherein they attempted to persuade the court to frontally meet the alleged jurisdictional issues pending before it.
- Koruga filed her Plaintiff’s Reply to Public Defendants’/Monetary Board’s “Opposition to Motion for Production (Re: Report of Examination)” dated 02 October 2003 dated 9 October 2003, wherein she argued that the subject documents are covered by the right of the people to information for these are official records or paper pertaining to official acts.
- Koruga filed her Reply to “Opposition” filed by Private Defendants Samson and Hernandez Re: Production of ROE dated 9 October 2003.
- Defendants Arcenas, Aguirre, Paguio, and Rivera filed their Opposition to Motion for Production of Documents dated 9 October 2003, wherein they contended that before any discovery may be undertaken the issues raised in their Answer must first be resolved, that Koruga’s resort to discovery is premature, and that the motion seeking production of documents is tantamount to a fishing expedition.
- Defendants Aguirre, Arcenas, Paguio, and Rivera filed their Opposition to Motion Ad Cautelam (To Serve Interrogatories) dated 9 October 2003. Defendants once again pointed out the alleged that the court lack jurisdiction over their persons by reason of the defective service of summonses.
- Defendant Dupasquier filed his Answer dated 9 October 2003. Dupasquier argued that the court failed to acquire jurisdiction over his person as summons was defectively served; that plaintiff engaged in forum shopping; and that the documents sought to be discovered are immaterial or irrelevant.
- Defendant Tommy Pea San Lim filed his Answer dated 9 October 2003, wherein he alleged that he is not one of the erring directors referred to in the Complaint as he either registered his objections to, or abstained from voting on, the corporate acts complained of.
- Koruga filed a Motion for Production of Documents dated 13 October 2003. Such request for production of documents directed to Defendants Dupasquier, San Lim and Tiu. Interrogatories dated 13 October 2003 were also served on the same Defendants.
- Public Defendants filed their Comment/Opposition to Motion for Production of Documents dated 13 October 2003, wherein they alleged that they have no custody of the subject documents or that the documents are confidential.
- Defendants Arcenas, Aguirre, Paguio, and Rivera filed their Comment on/Opposition to Plaintiff’s Latest Motion for Production of Documents dated October 15 2003, wherein Defendants averred once again that before any discovery may be undertaken it was expedient upon the trial court to resolve the issues that were raised in their Answer.
- Defendant Banzon filed his Objection to Interrogatories dated 15 October 2003, wherein he averred that the interrogatories are premature, as there is still one pending incident yet to be resolved by the trial court, at least insofar as he is concerned, i.e. the Motion to Set Case for Preliminary Hearing on the Special and Affirmative Defenses.
- Defendant Banzon filed his Motion to Suspend Proceedings dated 16 October 2003, in view of the several pending incidents before the court, i.e. Koruga’s Motion for the Production of Documents, Motion to Declare Defendants in Default, and Interrogatories; and the Defendants’ Motions to Set Case for Preliminary Hearing. Banzon also submitted that the issue of whether the case is a harassment or nuisance suit must first be threshed out by the court.
- Public Defendants filed their Consolidated Opposition and Motion to Quash (Re Requests for Admissions and Interrogatories) dated 20 October 2003, wherein they argued that the subject documents are confidential and that the Monetary Board is the one vested with jurisdiction over the subject matter of the Complaint. Public Defendants also averred that they were currently looking into the alleged irregularities complained of.
- Defendant Tiu filed her Consolidated Objections/Comments and/or Opposition to Interrogatories and Motion for Production of Documents dated 23 October 2003.
- Defendant Dupasquier filed his Comment and/or Opposition (To Plaintiff’s Request for Written Interrogatories dated 13 October 2003) with Motion to Strike (Plaintiff’s Pre-mature and Improper Request for Written Interrogatories dated 13 October 2003) dated 24 October 2003. Dupasquier argued that the legal issues raised in his Answer should be resolved first before discovery requests are granted, and that the matters sought to be discovered are privileged in nature.
- Koruga filed her Plaintiff’s Consolidated Reply to the Respective Oppositions of Defendants to Plaintiff’s Resort to Various Modes of Discovery dated 21 November 2003, wherein she argued:
- that the BSP has no jurisdiction to adjudicate rights of stockholders;
- that the BSP is not empowered to grant the following reliefs prayed for in the Complaint: a) to award damages, b) to pierce the corporate veils of the Borrower Corporations, and c) to require restitution;
- that service of summonses at the principal office of Banco Filipino was proper, considering that the Defendants were being sued in their respective capacities as directors and/or officers;
- that Banco Filipino need not be impleaded as an indispensable party, as only the acts of the Private Defendants are complained of under the Intra-Corporate Rules;
- that the Borrower Corporations need not be impleaded, as no injury would be caused if the Court would grant Koruga’s prayer of “mutual restitution between Banco Filipino and the Borrower Corporations;
- that the Complaint does not present a nuisance or harassment suit, as there is a bona fide intra-corporate controversy, with Koruga being prevented from exercising her right as a stockholder to inspect the corporate books and records of Banco Filipino;
- that Koruga, as a stockholder, is entitled to examine the Report of Examination transmitted to Banco Filipino, which forms part of its “corporate books and records”
- that the Defendants’ claim of confidentiality are bare and sweeping.
Defendant Banzon filed his Manifestation (to Plaintiff’s Consolidated Reply) dated 10 December 2003, wherein he reiterated the following arguments: a) that there was defective service of summons; b) that Banco Filipino is an indispensable party and therefore should have been impleaded; c) that the instant case is a nuisance suit and should be dismissed. Defendant thus prayed that Koruga’s resort to various modes of discovery be denied and that the pending issue of whether the Complaint is a nuisance suit be resolved first before the trial court further proceed with the case.
- Koruga filed Counter-Manifestation to Banzon’s “Manifestation” (dated 10 December 2003) dated 19 January 2004.
- that the corporate veils of the additional 5 borrower companies be pierced;
- that the approval and restructuring of the loans of the five additional borrower companies and the waiver of penalties, interests and charges be declared as violations of banking laws against self-dealing and self-interest;
- that Aguirre be directed to reimburse the amounts released in connection with the restructuring of the loans, and the waiver of penalties, interests and charges;
- that Mr. Aguirre be disqualified from further acting as a director of Banco Filipino.
Defendants Banzon and Montano filed their Opposition (To Motion to Admit Supplemental Complaint) dated 8 March 2004, wherein they argued that Koruga’s motion should be denied because the questioned transactions purportedly happened years before the filing of the Complaint.
On 30 March 2004, Koruga filed a Motion for Leave to Withdraw Supplemental Complaint, manifesting therein that the allegations in the Supplemental Complaint are now intended to be treated as evidentiary matters in support of the allegations set forth in the main Complaint.
Thru an Order dated 19 August 2004, the Court denied the two Motions for Preliminary Hearing separately filed by: a) Defendant Abad, and b) Defendants Samson and Fernandez. Said motions asked the court to conduct preliminary hearings on the affirmative defenses raised in their respective Answers. The trial court found merit in Koruga’s argument that the conduct of such a preliminary hearing is tantamount to filing a motion to dismiss, which is prohibited under the Interim Rules of Procedure Governing Intra-corporate Disputes.
- Defendants Samson and Hernandez filed their Motion for Reconsideration (Re: Order dated 19 August 2004) dated 15 September 2004.
- In an Order dated 18 October 2004, the trial court denied Defendant Arcenas, Aguirre, Paguio, and Rivera’s Manifestation and Motion, and deferred resolution of the affirmative defenses raised by the Defendants. The trial court reasoned that if a preliminary hearing on the affirmative defenses would be conducted, it is as if a Motion to Dismiss was filed, which is a prohibited pleading under the Interim Rules of Procedure on Intra-corporate Controversies.
- Defendants Arcenas, Aguirre, Paguio, and Rivera filed a Motion for Reconsideration (of the Order dated 18 October 2004) dated 9 November 2004. Defendants argued that although a motion to dismiss is a prohibited pleading, there is no prohibition in the Interim Rules for the trial court to resolve grounds for a motion to dismiss pleaded in their Answer. Hence, the Court may rule on such grounds.
In an Order dated 11 November 2004, the trial court rescheduled the pre-trial conference to 14 December 2004.
- Thru a Constancia dated 14 December 2004, the trial court reset the pre-trial conference to January 27 and February 10, 2005
- On 6 December 2004, Koruga filed a Manifestation that said Joint Reiteration is a disguised Motion for Reconsideration which is prohibited under the Interim Rules.
In an Order dated 18 January 2005, the trial court denied the Motion for Reconsideration of Defendants Samson and Hernandez, subject of which is the Order dated 19 August 2004. The court noted that the grounds relied upon by Defendants revolves around the propriety of conducting a preliminary hearing prior to the pre-trial conference. The court then declared once again that when a preliminary hearing is conducted, it is as if a motion to dismiss was filed, and such motion is prohibited under the Interim Rules.
In an Order dated 18 January 2005, the trial court denied Defendant Banzon and Montano’s prayer to set the case for preliminary hearing on the affirmative defenses set forth in their Answers ad Cautelam.
In an Order dated 18 January 2005, the trial court deferred action on Koruga’s Motion for Production of Document until after the pre-trial conference.
In an Order dated 18 January 2005, the trial court denied Koruga’s Motion to Declare Defendants in Default.
Defendants filed a Manifestation and Motion dated 4 March 2005 stating that they have a pending application for a Writ of Preliminary Injunction with the Court of Appeals.
Koruga, thru counsel, wrote a letter to the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC) dated 23 May 2005, pointing out the failure of Banco Filipino to submit its annual audited financial statements and to hold its annual stockholders’ meeting for the last three years. The PSE, in its letter dated 6 June 2005, informed Koruga that it already issued an indefinite trading suspension on the shares of Banco Filipino on 20 December 2002, pending clarification on the implementation of a previous board and stockholders’ resolution on its capital increase through a rights issuance. The SEC, on its part, stated that:
- it has imposed an aggregate penalty of P324,024.78 on Banco Filipino for its failure to file its 2002 and 2003 annual reports.
- Banco Filipino paid the same amount on 12 November 2003 and on 13 July 2004, but still failed to submit said reports.
- For such failure, a show cause letter was sent to Banco Filipino on 6 May 2005.
- Banco Filipino’s secondary license could not be suspended since its equity shares were exempt securities under Section 5 of the Revised Securities Act.
- other administrative actions against Banco Filipino are being considered
- Thru a Notice dated 13 October 2005, the trial court reset the pre-trial to 1 December 2005.
- Defendants Arcenas, Aguirre, Paguio, and Rivera filed their Opposition to First Motion for Separate Judgment dated 30 January 2006, arguing therein that rendition of a separate judgment will not be proper as Defendants’ evidence relating to the issue of the release of the audited financial statements still has to be presented to the court. Defendants also argued that it is Banco Filipino, which was not even impleaded in the Complaint, that has the obligation under the Manual of Regulations for Banks and the General banking Law, to submit the audited financial statements to the BSP, and not the Defendants as members of the Board of Directors, as Banco Filipino has a separate juridical personality.
- Defendants Banzon, Montano, and Abad filed their Opposition to Plaintiff’s First Motion for Separate Judgment [Dated January 11, 2006], dated 3 February 2006. Defendants argued that:
- such motion was premature and improper, as a summary judgment is only possible after the pre-trial stage;
- that a genuine issue exists as to obviate rendition of a summary judgment;
- that Koruga has no cause of action, as Banco Filipino’s obligation to submit audited financial statements pertains to the BSP, and not to Koruga;
- that the obligation to submit audited financial statements rests on Banco Filipino, and not on Defendants, who are only directors and officers of Banco Filipino.
On 26 January 2006, Koruga filed a Second Motion for Separate Judgment regarding the issue of her right to inspect and/or reproduce the corporate records of Banco Filipino. Koruga averred that the Defendants’ refusal to allow inspection and reproduction as premised on the allegation that she improperly used previously acquired information, is unsubstantiated. Koruga cited the case of Gokongwei vs. Securities and Exchange Commission (GR No. L-45911, April 11, 1979), where the Supreme Court held that the burden of proof to show that inspection is improper rests on the corporation. Koruga then prayed that a partial judgment be rendered ordering Private Defendants to permit her to inspect and copy all documents relating to any loans or collateral pertinent to the 6 borrower corporations.
- Defendants Arcenas, Aguirre, Paguio and Rivera filed their Opposition to Second Motion for Separate Judgment 31 January 2006, arguing that a summary judgment will not be proper as it is premature, considering that the Court still had to evaluate Defendants’ evidence as to their allegation that Koruga’s improper used previously obtained information. Defendants also averred that they have evidence to substantiate such claim.
- Defendants Banzon, Montano and Abad filed their Opposition to Plaintiff’s Second Motion for Separate Judgment [Dated January 11, 2006], dated 3 February 2006, arguing therein that rendition of a partial judgment is appropriate only after the pre-trial stage. Defendants also contended that a genuine issue exists to preclude rendition of a summary judgment, as Koruga’s right to inspect the corporate records of Banco Filipino was vehemently disputed by the Defendants as reflected in their Pre-trial Briefs and their declarations in the Pre-trial conferences. Defendants posited that such issue should be threshed out in a full-blown trial.
- the two motions for separate judgment are prohibited pleadings under A.M. No. 01-2-04-SC.
- the two motions merge into one the supposed separate personalities of Banco Filipino, which is not even impleaded in the Complaint, and its directors/officers
- there cannot be a separate judgment as there is a genuine issue
- By reason of her miniscule shareholdings, Koruga’s right to inspection was justifiably denied in accordance with the case of Gonzales vs. Philippine National Bank (G.R. No. L-33320, May 30, 1983 [122 SCRA 489]), wherein the Supreme Court emphasized that those invoking inspection rights must be acting in good faith and for a legitimate purpose.
In their Counter-Motion, Defendants asked the Court to first resolve the multiple jurisdictional defects in the Complaint, which are the proper subjects of a separate judgment as these only involve questions of law.
- Defendants Banzon, Montano, and Abad filed their Opposition to: Plaintiff’s Motion [Dated February 27, 2006] dated 2 March 2006, pointing out that Koruga failed to state the purpose, the grounds relied upon, and the relevancy for the intended deposition taking.
- Defendants Arcenas, Aguirre, Paguio and Rivera filed their Opposition to Motion (Dated February, 2006) dated 8 March 2006. Defendants argued that the contemplated deposition taking is not sanctioned by the Rules of Court, as deposition is a pretrial discovery device by which one party asks oral questions of the other party or of a witness of the other party. Defendants pointed out that the witnesses are that of the plaintiff, Koruga, and neither the adverse parties to the plaintiff nor witnesses of her adverse party. Defendants added that the presentation of testimonial evidence shall be done in open court. Defendants also complained about the expenses and other difficulties that their counsel will incur to travel to the US if the deposition would be push sanctioned.
- Defendants Samson and Hernandez filed their Opposition (Re: Plaintiff’s Motion dated 27 February 2006) dated 10 March 2006, averring that before Koruga could file further motions or ask for further reliefs, their Consolidated Opposition (Re: Plaintiff’s Motion for Separate Judgment) with Counter-Motion for Separate Judgment on Separate Judgment on Prejudicial Issues Raised in the Answer should be resolved first, as the pending incidents of the case are already piling up. Defendants also brought to the attention of the court the two petitions pending with the Supreme Court and thus asked for the trial court’s deference to proceed with the case.
- has no jurisdiction over the subject matter, which jurisdiction is vested by law in the Bangko Sentral ng Pilipinas (BSP);
- has no jurisdiction over the persons of the defendants on account of the improper and invalid service of the summons;
- committed grave abuse of discretion in refusing to resolve the questions raised against his jurisdiction and insisting to proceed instead to conduct a pre-trial conference in said case;
- committed grave abuse of discretion in refusing to dismiss the case on the indubitable grounds of litis pendentia and forum shopping;
- committed grave abuse of discretion in finding, without any elaboration whatsoever, no merit to the claim that the instant case is a nuisance or harassment suit.
- that Petitioners failed to establish a right that is entitled to protection by a Writ of Preliminary Injunction
- that the trial court did not act with grave abuse of discretion when it assumed jurisdiction over the case and issued the October 18, 2004 and Januray 18, 2005 Orders;
- that the Petitioners still have the statutory remedy of appeal
- that there will be no irreparable injury to Private Respondents.
- On 20 July 2005, the Court of Appeals promulgated its Decision in CA-G.R. SP No. 88422. The Court found that respondent judge did not commit grave abuse of discretion in issuing the assailed Order dated 18 October 2004, and thus remanded the case to the court a quo for further proceedings. The Court of Appeals ratiocinated that under the Interim Rules, a Motion to dismiss is a prohibited pleading, and a preliminary hearing on the grounds therefore alleged as defenses in a defendant’s answer would be a convenient way to circumvent this explicit prohibition under the Interim Rules. The Court further stated that while grounds for a motion to dismiss under the Rules of Court may be included as defenses in a defendant’s answer, the Interim rules, unlike the Rules of Court, does not provide that a preliminary hearing may be had thereon. With the conduct of a preliminary hearing not being a matter of right but rather subject to the discretion of the court, respondent judge had no duty to conduct a preliminary hearing on petitioners’ ground for dismissal.
- the Court of Appeals effectively arrogated unto itself the authority to determine the merits of Private Respondent’s Grounds for Dismissal in obvious disregard of the trial court’s original and exclusive jurisdiction over the issues;
- It issued the assailed Resolution despite the fact that the Petition filed by the Private Respondents was fatally flawed, as an order denying a motion to dismiss being interlocutory and is not subject to appeal and is immune to an extraordinary petition for certiorari;
- It issued the 18 April 2005 Order without stating the right to be protected, even if Private Respondents did not show or prove the existence of a right which may be protected by injunctive relief.
- Arcenas, Aguirre, Paguio, and Rivera filed their Comment on the Petition dated 17 August 2005.
- Banzon and Montano filed their Comment dated 27 January 2006, averring that Koruga’s petition is now moot and academic in view of the Court of Appeal’s Decision in CA-G.R. SP No. 88422 which dissolved the writ of preliminary injunction.
- Koruga filed her Reply (to the Comment of Banzon and Montano) dated 20 June 2006.
- Koruga filed her Comment with Ad Cautelam Motion for Time to File Extended Comment dated 17 August 2005.
- Koruga filed her Extended Comment dated 19 December 2005.
- Banzon and Montano filed their Opposition to Extended Comment dated 20 January 2006.
- Arcenas, et al. filed their Comment on Ana Maria A. Koruga’s Motion for Reconsideration dated 26 October 2009.
- Banzon, Montano and Abad filed their Comment on the Motion for Reconsideration dated 3 November 2009
- Thru a Resolution dated 18 November 2009, the Supreme Court denied Koruga’s motion.