The Market Monitor Minding the Nation's Business
The Bangko Sentral ng Pilipinas (BSP or Bangko Sentral) scored a victory in a long legal battle as the Supreme Court (SC) ruled in its favor in its case against Orient Commercial Banking Corp. (OCBC), Jose C. Go and corporations connected with him—Gotesco Properties Inc.; Go Tong Electrical Supply Inc.; Ever Emporium Inc.; Ever Gotesco Resources and Holdings Inc.; Gotesco Tyan Ming Development Inc.; Evercrest Cebu Golf Club; Nasugbu Resorts Inc.; GMCC United Development Corp.; and Gulod Resort Inc.
In the decision written by Justice Lucas P. Bersamin, the Supreme Court’s First Division denied the petition for review or certiorari filed by Jose C. Go, et al. It instead affirmed the challenged decision of the Court of Appeals that upheld the Regional Trial Court’s (RTC) ruling allowing the Bangko Sentral to levy on execution the properties indicated in the parties’ court-approved compromise agreement.
The compromise agreement was entered into between the Bangko Sentral and OCBC in December 2003, or four years after the BSP filed a collection case against OCBC, et al. for failure to pay loans and overdraft obligations amounting to P3.35 billion (P2.30 billion after applying proceeds of foreclosure sale of mortgaged properties). The defendants committed to pay their obligations amounting to P2.97 billion within a 10-year period, extendable for another five years, subject to the attachment of real properties such as Evercrest Golf Club Resort, Inc. (Ever Crest) and Mega Heights, Inc. as security for the faithful payment of their obligation.
However, the Go family, and other defendant corporations, reneged on their commitment and the obligation remained unpaid for nearly five years after its judicial approval.
The BSP thus sought the enforcement of the agreement and the Motion for Execution was granted by the court. The properties of Ever Crest and Mega Heights were accordingly levied upon by the sheriff. Thereafter, Ever Crest, Jose C. Go and his affiliate companies filed, in August 2009, a review case with the Court of Appeals to enjoin the enforcement of the Writ of Execution.
In the meantime, the public auction of Ever Crest proceeded with the Bangko Sentral submitting the winning bid. Following legal procedures, new transfer certificates of title (TCTs) in the name of the BSP were issued by the Register of Deeds and with its issuance, the Court of Appeals dismissed the petition for injunction on December 20, 2011, since the issue had become academic.
In upholding the decision of the Court of Appeals, the Supreme Court in G.R. No. 202262 ruled that the petitioners are stopped by deed by virtue of the execution of the compromise agreement.
According to the Supreme Court, the petitioners were the ones who offered the properties of Ever Crest to Bangko Sentral, and who had also given assurance that all the legalities and formalities for that purpose had been obtained, and that they should not now be allowed to escape or to evade their responsibilities under the compromise agreement just to prevent the levy on execution of Ever Crest’s properties.
The Supreme Court further ruled that “the petitioners, as well as Ever Crest and Mega Heights, were contractually prohibited from challenging the levy on the assets of Ever Crest.”