July 1975 - Philippine Supreme Court Decisions/Resolutions
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G.R. No. L-38224 July 31, 1975 - CENTRAL BANK OF THE PHIL. v. COURT OF APPEALS, ET AL.:
FIRST DIVISION
[G.R. No. L-38224. July 31, 1975.]
CENTRAL BANK OF THE PHILIPPINES, Petitioner, v. COURT OF APPEALS and PABLO R. ROMAN, ET AL., ETC., Respondents.
SYNOPSIS
After a judgment pursuant to a compromise agreement was rendered in this case, the parties submitted an amendatory agreement praying that the same supersede paragraph (d) of the original compromise agreement. The Court, finding the amendatory agreement not contrary to law or to the pertinent rules and regulations, approved the same.
SYLLABUS
1. JUDGMENT; JUDGMENT BASED ON COMPROMISE; AGREEMENT; AMENDMENT OF COMPROMISE AGREEMENT WHEN NOT CONTRARY TO LAW. — A motion praying that an amendatory agreement supersede the original compromise agreements embodied in the judgment should be granted, where the same is not contrary to law, or to the pertinent rules and regulations.
R E S O L U T I O N
ESGUERRA, J.:
This case was terminated by the petitioners and respondents pursuant to the compromise agreement entered into by them on November 29, 1974, the terms and conditions of which are embodied in the Decision of December 10, 1974, based on the compromise agreement.
By motion dated January 17, 1975, the parties hereto submitted an amendatory agreement with particular reference to paragraph (g) of the original compromise agreement supersede paragraph (d) of the original compromise agreement. The amendatory agreement reads in full as follows:jgc:chanrobles.com.ph
"AMENDATORY AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:chanrob1es virtual 1aw library
This AMENDATORY AGREEMENT entered into in the City of Manila, Philippines this 16th day of July, 1975 among:chanrob1es virtual 1aw library
The CENTRAL BANK OF THE PHILIPPINES, with principal offices at Roxas Boulevard, Manila, Philippines, herein represented by its Governor, G. S. LICAROS;
WHEREAS, the principal stockholders of Republic Bank who are signatories to the aforesaid Compromise Agreement could only obtain waivers from present preferred shareholders of Republic Bank corresponding to 60.75% of the preferred stock, and said principal stockholders feel the further attempts to require small preferred shareholders numbering about 1,500 to waive their accumulated dividends will ultimately injure the public image of Republic Bank;
WHEREAS, instead of securing waivers to the other preferred shareholders corresponding to 39.25% of the preferred stock, respondent principal stockholders proposed that Republic Bank shall issue prepared shares to the Development Bank of the Philippines containing features which will protect the latter’s right from claims of existing features which will protect the latter’s right from claims of existing preferred shareholders who did not waive their accumulated dividends; however, the waivers corresponding to 60.75% of the preferred stock which already have been obtained shall remain in full force and effect.
WHEREAS, Under its Resolution No. 1245 dated June 20, 1975, the Monetary Board approved aforesaid proposal subject to certain conditions.
NOW, THEREFORE, for and in consideration of the foregoing premises, the CENTRAL BANK OF THE PHILIPPINES, the REPUBLIC BANK, the respondent SHAREHOLDERS in G.R. No. L-38224, and the REPUBLIC OF THE PHILIPPINES, throughout the SECRETARY OF FINANCE, have agreed as follows:chanrob1es virtual 1aw library
(a) To revise condition (d) of their Compromise Agreement dated November 29, 1974 which was approved by the Supreme Court on December 10, 1974, so as to read as follows:chanrob1es virtual 1aw library
‘(d) It is further agreed that present stockholders of Republic Bank holding preferred shares CORRESPONDING TO AT LEAST SIXTY PER CENT (60%) OUTSTANDING PREFERRED SHARES shall waive all dividends that have accumulated, vested and become due on such preferred shares up to such time that the Development Bank of the Philippines shall have acquired ten per cent (10%) cumulative preferred shares of stock of Republic Bank as stipulated under sub paragraph (i) hereof;
‘FOR PURPOSES OF PROTECTING THE INVESTMENT OF DEVELOPMENT BANK OF THE PHILIPPINES WITH REPUBLIC BANK AGAINST CLAIMS OF EXISTING PREFERRED SHAREHOLDERS OF THE LATTER, WHOSE ACCUMULATED DIVIDENDS ARE NOT WAIVED, THE PREFERRED SHARES WHICH SHALL BE ISSUED BY REPUBLIC BANK TO DEVELOPMENT BANK OF THE PHILIPPINES SHALL BE SUPERIOR TO THE RIGHTS OF THE EXISTING PREFERRED SHARES AND THAT HOLDERS OF THESE NEW PREFERRED SHARES SHALL HAVE THE RIGHT TO RECEIVE A QUARTERLY DIVIDEND OF 2-1/2%, CUMULATIVE, OUT OF THE NET PROFITS OF THE CORPORATION AVAILABLE FOR DIVIDENDS UNDER EXISTING LAWS AND REGULATIONS, IN PREFERENCE OVER THOSE DIVIDENDS WHICH HAVE ACCUMULATED AND HAVE ACCRUED BUT WHICH ARE UNPAID, ON ALL PREVIOUSLY ISSUED OR MAY HEREINAFTER BE ISSUED, SHARES OF STOCK OF THE BANK, WHETHER PREFERRED OR COMMON. THIS IS IN ADDITION TO THE OTHER FEATURES OF THE PREFERRED SHARES AS AUTHORIZED BY THE STOCKHOLDERS IN THE MEETING OF SEPTEMBER 14, 1974, WHICH ARE CONVERTIBILITY TO COMMON STOCK AFTER 7-1/2 YEARS FROM DATE OF ISSUE AND PREFERENCE AS TO DISTRIBUTION OF ASSETS UPON DISSOLUTION AND LIQUIDATION;
‘ALL WAIVERS WHICH, AS OF DATE OF APPROVAL OF THIS AMENDATORY AGREEMENT BY THE SUPREME COURT HAVE BEEN EFFECTED IN COMPLIANCE WITH THE FIRST PARAGRAPH HEREOF SHALL REMAIN IN FULL FORCE AND EFFECT;’
(b) All other terms and conditions of the Compromise Agreement dated November 29, 1974 approved by the Supreme Court shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands on the date and at the place first hereinabove written.
CENTRAL BANK OF THE PHILIPPINES REPUBLIC BANK
Petitioner Respondent
By: By:chanrob1es virtual 1aw library
(S/) G. S. LICAROS (S/) PABLO R. ROMAN
(T/) G. S. LICAROS (T/) PABLO R. ROMAN
Governor President
REPUBLIC OF THE PHILIPPINES
By : (S/) PABLO R. ROMAN
(S/) CESAR VIRATA (T/) PABLO R. ROMAN
(T/) CESAR VIRATA Respondent, Stockholder and
Secretary of Finance as Representative of majority
stockholders of Republic
Bank
Assisted by:chanrob1es virtual 1aw library
(S/) VICTORIA B. ROMAN
ESTELITO P. MENDOZA (T/) VICTORIA B. ROMAN
Solicitor General Respondent
(S/) REYNATO S. PUNO (S/) LUCILA R. REYES
(T/) REYNATO S. PUNO (T/) LUCILA R. REYES
Assistant Solicitor General Respondent
(S/) F. E. EVANGELISTA (S/) LOURDES R. ABELLO
(T/) F. E. EVANGELISTA (T/) LOURDES R. ABELLO
Director, CB Legal Department Respondent
(S/) ARACELI R. MATHAY
(T/) ARACELI R. MATHAY
Respondent
Assisted by:chanrob1es virtual 1aw library
NORBERTO J. QUISUMBING
by:chanrob1es virtual 1aw library
(S/) NORBERTO J. QUISUMBING JR.
WITH OUR AGREEMENT:chanrob1es virtual 1aw library
(S/) JOSE A. ROJAS
(T/) JOSE A. ROJAS
As stockholder and representative of majority
stockholders of Republic Bank"
After considering the above-quoted amendatory agreement and finding the same not contrary to the law, or to the pertinent rules and regulations, the same is hereby approved and the parties (petitioner and respondents herein) are enjoined to strictly comply with the terms and conditions thereof.
SO ORDERED.
Castro (Chairman), Makasiar, Muñoz Palma and Martin, JJ., concur.
By motion dated January 17, 1975, the parties hereto submitted an amendatory agreement with particular reference to paragraph (g) of the original compromise agreement supersede paragraph (d) of the original compromise agreement. The amendatory agreement reads in full as follows:jgc:chanrobles.com.ph
"AMENDATORY AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:chanrob1es virtual 1aw library
This AMENDATORY AGREEMENT entered into in the City of Manila, Philippines this 16th day of July, 1975 among:chanrob1es virtual 1aw library
The CENTRAL BANK OF THE PHILIPPINES, with principal offices at Roxas Boulevard, Manila, Philippines, herein represented by its Governor, G. S. LICAROS;
WHEREAS, the principal stockholders of Republic Bank who are signatories to the aforesaid Compromise Agreement could only obtain waivers from present preferred shareholders of Republic Bank corresponding to 60.75% of the preferred stock, and said principal stockholders feel the further attempts to require small preferred shareholders numbering about 1,500 to waive their accumulated dividends will ultimately injure the public image of Republic Bank;
WHEREAS, instead of securing waivers to the other preferred shareholders corresponding to 39.25% of the preferred stock, respondent principal stockholders proposed that Republic Bank shall issue prepared shares to the Development Bank of the Philippines containing features which will protect the latter’s right from claims of existing features which will protect the latter’s right from claims of existing preferred shareholders who did not waive their accumulated dividends; however, the waivers corresponding to 60.75% of the preferred stock which already have been obtained shall remain in full force and effect.
WHEREAS, Under its Resolution No. 1245 dated June 20, 1975, the Monetary Board approved aforesaid proposal subject to certain conditions.
NOW, THEREFORE, for and in consideration of the foregoing premises, the CENTRAL BANK OF THE PHILIPPINES, the REPUBLIC BANK, the respondent SHAREHOLDERS in G.R. No. L-38224, and the REPUBLIC OF THE PHILIPPINES, throughout the SECRETARY OF FINANCE, have agreed as follows:chanrob1es virtual 1aw library
(a) To revise condition (d) of their Compromise Agreement dated November 29, 1974 which was approved by the Supreme Court on December 10, 1974, so as to read as follows:chanrob1es virtual 1aw library
‘(d) It is further agreed that present stockholders of Republic Bank holding preferred shares CORRESPONDING TO AT LEAST SIXTY PER CENT (60%) OUTSTANDING PREFERRED SHARES shall waive all dividends that have accumulated, vested and become due on such preferred shares up to such time that the Development Bank of the Philippines shall have acquired ten per cent (10%) cumulative preferred shares of stock of Republic Bank as stipulated under sub paragraph (i) hereof;
‘FOR PURPOSES OF PROTECTING THE INVESTMENT OF DEVELOPMENT BANK OF THE PHILIPPINES WITH REPUBLIC BANK AGAINST CLAIMS OF EXISTING PREFERRED SHAREHOLDERS OF THE LATTER, WHOSE ACCUMULATED DIVIDENDS ARE NOT WAIVED, THE PREFERRED SHARES WHICH SHALL BE ISSUED BY REPUBLIC BANK TO DEVELOPMENT BANK OF THE PHILIPPINES SHALL BE SUPERIOR TO THE RIGHTS OF THE EXISTING PREFERRED SHARES AND THAT HOLDERS OF THESE NEW PREFERRED SHARES SHALL HAVE THE RIGHT TO RECEIVE A QUARTERLY DIVIDEND OF 2-1/2%, CUMULATIVE, OUT OF THE NET PROFITS OF THE CORPORATION AVAILABLE FOR DIVIDENDS UNDER EXISTING LAWS AND REGULATIONS, IN PREFERENCE OVER THOSE DIVIDENDS WHICH HAVE ACCUMULATED AND HAVE ACCRUED BUT WHICH ARE UNPAID, ON ALL PREVIOUSLY ISSUED OR MAY HEREINAFTER BE ISSUED, SHARES OF STOCK OF THE BANK, WHETHER PREFERRED OR COMMON. THIS IS IN ADDITION TO THE OTHER FEATURES OF THE PREFERRED SHARES AS AUTHORIZED BY THE STOCKHOLDERS IN THE MEETING OF SEPTEMBER 14, 1974, WHICH ARE CONVERTIBILITY TO COMMON STOCK AFTER 7-1/2 YEARS FROM DATE OF ISSUE AND PREFERENCE AS TO DISTRIBUTION OF ASSETS UPON DISSOLUTION AND LIQUIDATION;
‘ALL WAIVERS WHICH, AS OF DATE OF APPROVAL OF THIS AMENDATORY AGREEMENT BY THE SUPREME COURT HAVE BEEN EFFECTED IN COMPLIANCE WITH THE FIRST PARAGRAPH HEREOF SHALL REMAIN IN FULL FORCE AND EFFECT;’
(b) All other terms and conditions of the Compromise Agreement dated November 29, 1974 approved by the Supreme Court shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands on the date and at the place first hereinabove written.
CENTRAL BANK OF THE PHILIPPINES REPUBLIC BANK
Petitioner Respondent
By: By:chanrob1es virtual 1aw library
(S/) G. S. LICAROS (S/) PABLO R. ROMAN
(T/) G. S. LICAROS (T/) PABLO R. ROMAN
Governor President
REPUBLIC OF THE PHILIPPINES
By : (S/) PABLO R. ROMAN
(S/) CESAR VIRATA (T/) PABLO R. ROMAN
(T/) CESAR VIRATA Respondent, Stockholder and
Secretary of Finance as Representative of majority
stockholders of Republic
Bank
Assisted by:chanrob1es virtual 1aw library
(S/) VICTORIA B. ROMAN
ESTELITO P. MENDOZA (T/) VICTORIA B. ROMAN
Solicitor General Respondent
(S/) REYNATO S. PUNO (S/) LUCILA R. REYES
(T/) REYNATO S. PUNO (T/) LUCILA R. REYES
Assistant Solicitor General Respondent
(S/) F. E. EVANGELISTA (S/) LOURDES R. ABELLO
(T/) F. E. EVANGELISTA (T/) LOURDES R. ABELLO
Director, CB Legal Department Respondent
(S/) ARACELI R. MATHAY
(T/) ARACELI R. MATHAY
Respondent
Assisted by:chanrob1es virtual 1aw library
NORBERTO J. QUISUMBING
by:chanrob1es virtual 1aw library
(S/) NORBERTO J. QUISUMBING JR.
WITH OUR AGREEMENT:chanrob1es virtual 1aw library
(S/) JOSE A. ROJAS
(T/) JOSE A. ROJAS
As stockholder and representative of majority
stockholders of Republic Bank"
After considering the above-quoted amendatory agreement and finding the same not contrary to the law, or to the pertinent rules and regulations, the same is hereby approved and the parties (petitioner and respondents herein) are enjoined to strictly comply with the terms and conditions thereof.
SO ORDERED.
Castro (Chairman), Makasiar, Muñoz Palma and Martin, JJ., concur.