G.R. No. L-23577 December 27, 1972
THE SURIGAO DEVELOPMENT BANK, ET AL., petitioners, vs. THE HON. TEOFILO B. BUSLON, ET AL., respondents.

FACTS

Petitioner Surigao Development Bank, a private development bank, was organized with half its capital subscribed by the Development Bank of the Philippines (DBP). On January 9, 1963, DBP filed a derivative suit (Manila Civil Case No. 52693) against the bank and its majority directors for accounting, restitution of an alleged shortage, and mismanagement, also praying for a receiver. The following day, January 10, 1963, respondents Central Bank and Republic of the Philippines filed a separate petition (Surigao Civil Case No. 1582) against the same bank and directors. This petition, brought under Section 34 of the Central Bank Act, alleged numerous violations of banking laws and regulations discovered through examinations, including non-cooperation with the Central Bank’s supervisory authority. The Surigao court granted the application ex parte and appointed the Superintendent of Banks as receiver pendente lite.

ISSUE

The primary issue is whether the respondent judge acted with grave abuse of discretion in granting the ex parte receivership in Civil Case No. 1582, considering the pendency of the earlier-filed Manila case (No. 52693) which also sought a receivership.

RULING

The Supreme Court ruled in the negative, finding no grave abuse of discretion. The legal logic rests on the distinction between the two cases and the statutory authority of the Central Bank. The Manila case (No. 52693) is a private derivative suit initiated by DBP as a stockholder to protect its corporate investment rights. In contrast, the Surigao case (No. 1582) is a special public statutory proceeding initiated by the Central Bank and the Republic in the exercise of the state’s police power to protect the public interest and the banking system’s integrity. The Central Bank, as the administrative agency tasked with supervising the banking system, has the explicit authority under Section 34 of Republic Act No. 265 to institute such proceedings when a bank violates laws or regulations. The appointment of the Superintendent of Banks as receiver in this public action is a provisional remedy ancillary to the state’s primary objective of compelling compliance or, if necessary, liquidating the institution. The pendency of a private stockholder’s suit does not preclude the government from exercising its separate and paramount regulatory power. The causes of action and reliefs sought, though overlapping in subject matter, arise from different juridical grounds—one from corporate fiduciary duties, the other from administrative enforcement. Therefore, the respondent judge did not act arbitrarily or whimsically in granting the receivership upon the application of the monetary authorities.