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[G.R. No. 109585. July 11, 2001]
SUAREZ AGRO-INDUSTRIAL AND DEVELOPMENT CORPORATION vs. PHILIPPINE VETERANS BANK.
THIRD DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated JUL 11 2001.
G.R. No. 109585(Suarez Agro-Industrial and Development Corporation vs. Philippine Veterans Bank .)
The present Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks the annulment of the March 22, 1993 resolution of the Court of Appeals in CA-GR CV No. 32229 which, on reconsideration, overturned its earlier decision and ruled thus:
"WHEREFORE, IN THE LIGHT OF THE FOREGOING, [respondent's] Motion for Reconsideration is GRANTED, and the decision appealed from is hereby SET ASIDE and ANNULLED."
The facts of this case, in a nutshell, are as follows:
In 1980, petitioner applied for and was granted by the respondent a bank guarantee to the Central Bank for a dollar swap facility in the amount of US$3 million over a period of five (5) years. To secure the guarantee, petitioner mortgaged to respondent three parcels of land with improvements, two ice plants and ten heavy duty equipment including their accessories. It was granted releases on a staggered basis within the period 1980-1981 in the total amount of Pl5,250,000.00 which was equivalent to US$2 million at the exchange rate then prevailing.
However, in April 1981, respondent refused to release the remaining US$1 million loan accommodation unless petitioner assigned its leasehold rights over a 120-hectare fishpond. Petitioner allegedly complied but respondent still failed and refused to release the loan balance despite written demands. Petitioner was thus forced to borrow from other sources. Consequently, it instituted a complaint against respondent, claiming lost profits of P43,354,516, and interests of P18,650,830.83 and penalties of P87,000 for loans secured from other financing companies and banks.
Respondent contends that the approved loan accommodation of petitioner was correspondingly reduced precisely because its collaterals were insufficient to secure the entire amount of the loan.
The Regional Trial Court of Makati, Branch 134 (Makati court) rendered its decision on January 15, 1991, ordering respondent to pay petitioner P20 million as unrealized profits, Pl0 million as interests and penalties as well as ordering petitioner to pay respondent P15,250,000 representing the peso equivalent of the US$2 million loan released.
In its assailed Resolution, the CA held that the Makati court had no jurisdiction over the case as it involved a bank under liquidation and liquidation proceedings had then begun in another court (Regional Trial Court of Manila, Branch 39 [Manila Court]). The CA also held that the gross incompetence and neglect of respondent's former counsel denied respondent of due process.
Petitioner now alleges that the CA committed reversible errors in (1) nullifying the lower court decision on the ground of gross negligence of respondent's former counsel; and (2) not finding that respondent was estopped from attacking the jurisdiction of the Makati court.
The petition has no merit.
We concur with the CA that there was a pattern of gross incompetence and neglect on the part of the bank's former counsel which rendered its defense illusory. Atty. Vicente Pascual utterly failed to present testimonial or documentary evidence to show the insufficiency of the value of the mortgaged property of petitioner so as to adequately secure its loan. He also failed to rebut petitioner's averments and claims. The scanty two-page memorandum he submitted to the Makati court failed to raise any valid legal argument for respondent.
While, as a general rule, the negligence of counsel binds the client, the Court recognizes exceptions, such as in cases where the reckless or gross negligence of counsel deprives the client of due process of law, when its application will result in outright deprivation of the clients liberty or property, or where the interest of justice so require. 1 Apex Mining, Inc. v. Court of Appeals, 319 SCRA 456, 465-466 (1999).
Where counsel is guilty of gross ignorance, negligence and dereliction of duty, the client is deprived of his day in court and the judgment may be set aside on such ground. 2 Ibid.Such is the case in the present controversy.
With respect to the issue on jurisdiction, the Court agrees with the appellate court that respondent was not in estoppel in raising it.
One of our fundamental precepts is that jurisdiction over a cause of action is conferred by law. Section 29 of Republic Act 265 (The Central Bank Act), as amended by Presidential Decree 1007, provides that jurisdiction over all disputed claims against a bank under receivership and liquidation is vested on the liquidation court. It reads:
"xxx��� xxx����� xxx
"If the Monetary Board shall determine and confirm within the said period that the banking institution is insolvent or cannot resume business with safety to its depositors, creditors, and the general public, it shall, if the public interest requires, order its liquidation, indicate the manner of its liquidation and approve a liquidation plan. The Central Bank shall, by the Solicitor General, file a petition in the Court of First Instance reciting the proceedings which have been taken and praying the assistance of the court in the liquidation of the banking institution. The court shall have jurisdiction in the same proceedings to adjudicate disputed claims against the bank and enforce individual liabilities of the stockholders and do all that is necessary to preserve the assets of the banking institution and to implement the liquidation plan approved by the Monetary Board. x x x."
At the time petitioner's complaint was instituted, liquidation proceedings were already being undertaken in the Manila court. Hence, petitioner's claims should have been brought before the latter court. Considerations of convenience and practicality and the avoidance of multiplicity of suits require that jurisdiction over all such claims vest in one court; otherwise, it would be too burdensome for the liquidator to appear before several courts to litigate claims against the insolvent bank. 3 Star Forwarders, Inc. v. Navarro, 191 SCRA 403, 409-410 (1990).
Since jurisdiction is conferred by law, it cannot be acquired through, or waived by any act or omission of the parties. 4 Pangilinan v. Court of Appeals, 321 SCRA 51, 59 (1999).Estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action. 5 Union Motors Corp. v. NLRC, 314 SCRA 531, 541 (1999).
WHEREFORE, the Petition is hereby DENIED, and the assailed Resolution AFFIRMED. SO ORDERED.
Very truly yours,
JULIETA Y. CARREON
Clerk of Court
(Sgd.) LUCITA ABJELINA-SORIANO
Asst. Clerk of Court
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