PHILIPPINE DEPOSIT INSURANCE CORPORATION, COMPLAINANT, VS. JUDGE WINLOVE M. DUMAYAS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF MAKATI CITY, BRANCH 59.

Ruling

Accordingly, the MB passed Resolution No. 64 [8] on 20 January 2005, directing PDIC to proceed with the liquidation of UDB. The PDIC then filed before the RTC of Makati City a Petition for Assistance in the Liquidation of UDB, [9] which was raffled to Judge Dumayas. Later, Judge Dumayas issued an Order [10] dated 06 July 2005, giving due course to the petition, constituting his court as a liquidation court, and directing the creditors of UDB to file their claims either with the Deputy Liquidator or directly with the PDIC. In the course of the proceedings, the PDIC filed a Motion for Approval of the Project for Distribution (POD) of the Assets of UDB, [11] stating that all depositors and creditors of UDB, except itself and PLOT, shall be paid in cash because there were sufficient funds on hand. On 19 March 2007, Judge Dumayas issued an Order, [12] approving the POD. Meanwhile, the oppositors filed a series of motions in an attempt to suspend or stop the liquidation of UDB. These motions were denied by Judge Dumayas in the Orders dated 14 January 2009, [13] 03 May 2011 [14] and 16 May 2011. [15] Thereafter, Yuseco filed a Motion for Reconsideration [16] of the Orders dated 03 May 2011 and 16 May 2011, relying on the case of Banco Filipino Savings and Mortgage Bank v. The Monetary Board , [17] which was decided under the auspices of Section 29 [18] of RA No. 265 or the old Central Bank Act. Yuseco argued that the MB acted with arbitrariness and bad faith in ordering the closure of UDB without first fully complying with the mandatory requirements of RA No. 265. On 25 August 2011, Judge Dumayas issued an Order, [19] partially granting Yuseco's motion, setting aside the Order dated 03 May 2011, and directing the PDIC to cease and desist from further liquidating the UDB. The Order read in part: The blatant disregard by the Monetary Board of the proper compliance with the said mandatory requirements, gives authority for this court to set aside the decision of the Monetary Board, it appearing that the latter's action is plainly arbitrary and made in bad faith. xxx The courts may interfere with the discretion of the Central Bank. Where the CB engaged to support the distressed bank in exchange for control of its management and additional mortgages in its favor, then courts may interfere with the CB's exercise of discretion in determining whether or not a distressed bank shall be supported or liquidated. Discretion has its limits and has never been held to include arbitrariness, discrimination or bad faith. Finally, the healthy financial position of UDB was admitted by Atty. Gilroy V. Billones, petitioner's counsel. This admission is duly supported by the Bank's Statement of Affairs as of June 2002, wherein it is reflected that the bank's combined capital assets is more than sufficient to answer for all the bank's liabilities. xxx WHEREFORE, premise[s] considered, the Oppositor's Motion for Reconsideration of the Order of the Court dated May 3, 2011 [,] deny