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[G.R. No. 168801.� August 4, 2005]

EPCIB vs. MARELLA

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated AUG 4 2005.

G.R. NO. 168801 (EQUITABLE PCI BANK, INC. vs. HON. PRESIDING JUDGE SIXTO C. MARELLA, JR., Regional Trial Court of Makati, Br. 138, ANTONIO L. GO, JOHN C.B. GO, JONATHAN C.B. GO, PETER GO PAILIAN, GENEVIEVE W.J. GO, ANTHONY F. CONWAY, CESAR BAUTISTA, ANTONIO BASILIO, MIGUEL E. ROCA, JR., RICARDO MURILLO, NILO T. DIVINA and EBC INVESTMENTS, INC. (EBCII).)

The petition at bar ^[1] cralaw with prayer for the issuance of a TRO/Writ of Preliminary Injunction prays as follows:

WHEREFORE, petitioner Equitable PCI Bank, respectfully prays for the following:

1.������ Immediately upon the filing of the instant petition, the Honorable Court issue a temporary restraining order/preliminary injunction enjoining:

(a)��������� Private respondents, namely ANTONIO L. GO, JOHN C.B. GO, JONATHAN C.B. GO, PETER GO PAILIAN, GENEVIEVE W.J. GO, ANTHONY F. CONWAY, CESAR BAUTISTA, ANTONIO BASILIO, MIGUEL E. ROCA, JR., RICARDO MURILLO and NILO T. DIVINA, from acting, claiming and/or representing themselves as members of the board of directors elected at the Santiago Hall, and/or as officers elected or appointed at the organizational meeting of said board;

(b)��������� private respondents EBCII its agents, representatives and any person acting in its behalf from voting the Disputed Shares or otherwise using them for the purpose of determining a quorum at any stockholders' meeting of EPCIB; and

(c)��������� Public respondent RTC Makati Judge Sixto Marella from further proceeding with Civil Case No. 05-594.

2.             After notice and opportunity to be heard a decision be rendered:

a.����������� Making the temporary restraining order/preliminary injunction permanent;

b.����������� Setting aside the Order dated 15 July 2005 and the Writ of Preliminary Injunction dated 18 July 2005 of public respondent Judge; and

c.����������� Declaring the Disputed Shares as treasury shares which cannot be used to establish quorum or to vote at any stockholders' meeting at EPCIB.

Other reliefs, just and equitable under the premises, are likewise prayed for.

The Court required the respondents to file their Comment to the petition within a non extendible period of five days. ^[2] cralaw Within the period or on August 2, 2005, ^[3] cralaw respondents filed the required Comments.

On August 3, 2005, petitioner filed an Urgent Motion to Resolve alleging, inter alia, the following:

1.������ Respondents have already submitted their Comment to the Petition in compliance with the Resolution of this Honorable Court dated July 26, 2001;

2.������ The petition was filed to stem a gathering tsunami that threatens to devastate the Philippine financial system. That tsunami has gained strength with the confusion and instability spawned by a bogus board that wrongly, yet stubbornly, insists in claiming control over petitioner EBCIB. Petitioner had feared that the turmoil wrought by the bogus board can lead depositors to withdraw their deposits and trigger a bank run of tsunamic proportions unparalleled in the annals of the Philippine Banking system. The basis for that fear is real. Even now, the withdrawals of big accounts by depositors have begun and can escalate to alarming proportions in the days to come. Petitioner cannot reveal the amounts of the withdrawals since this may just aggravate the already worsening situation.

3.������ Unless the confusion and brewing instability in EPCIB is arrested by a timely issuance of the Temporary Restraining Order/Preliminary injunction prayed for, the situation might deteriorate to levels that can no longer be repaired nor redressed, not even by massive intervention on the part of the Bangko Sentral ng Pilipinas.

4.������ With all due respect, it thus is imperative that the Honorable Court immediately resolve the prayer for the issuance of a Temporary Restraining Order/Preliminary Injunction contained in the petition.

The petition at bar and the Comments raise important questions that need to be resolved by this Court. Among them are: (1) the alleged grave abuse of discretion amounting to lack of jurisdiction committed by respondent judge Sixto C. Marella, Jr. in issuing the Order dated July 15, 2005 and the writ of preliminary injunction dated July 18, 2005 in Civil Case No. 05-610. ^[4] cralaw The July 18, 2005 Order states: ". . . let writ of preliminary mandatory injunction issue directing the defendant ^[5] cralaw to allow EBC Investments, Inc. to attend and participate in the meeting of stockholders of EPCI Bank on July 19, 2005 and any adjournment thereof, to vote the 78,807,089 common stocks (inclusive of 68,072,760 shares lodged with Philippine Central Depository Inc., under PCIB Securities Inc.) and to count the votes it may cast." It is alleged and contended by petitioner that an earlier case, Civil Case No. 05-594 has been filed by GSIS against EPCIB and EBCII with the RTC also of Makati, Br. 61 presided by the Honorable Romeo F. Barza. The complaint alleged that (a) the EBCII shareholding in EPCIB are treasury shares and prays that (b) the voting of said treasury shares be barred. On July 15, 2005, Judge Barza issued the following Order ". . . accordingly, conditioned upon plaintiff GSIS' posting of a bond in the amount of ONE MILLION (P1,000,000.00) PESOS to the effect that plaintiff will pay to the defendants damages which they may sustain by reason of the temporary restraining order if the Court should finally decide that the plaintiff was not entitled thereto, defendants, their respective Boards of Directors and Corporate Secretaries and/or any of their agents and representatives or any other person acting under their authority are hereby enjoined from voting or allowing the voting of the Subject Shares and desist from including the Subject Shares in the Outstanding Capital Stock entitled to vote and in the determination of quorum, at the Annual Stockholders' Meeting of defendant EPCIB, or performing any acts recognizing the voting rights of the Subject Shares and other acts in connection thereto, which would have the effect of diluting the voting rights of the other shareholders in defendant EPCIB." There are, therefore, two conflicting Orders issued by two courts belonging to the same level and their validity need to be passed upon by this Court; (2) the validity of the July 15 and 18, 2005 Orders of respondent Judge Marella is critical to the regularity of the election of the members of the Board of Directors of petitioner bank led by the private respondents belonging to the Go family; (3) the nature of treasury shares of stocks and the rights appertaining thereto are also central to the dispute between and among the parties; (4) the legal dispute has resulted in two Boards of Director claiming legitimacy and the right to manage the petitioner bank; (5) this conflicting claims to legitimacy has allegedly caused confusion among the depositors, employees, creditors and shareholders of the petitioner bank as well as the public; (6) the said conflict and confusion have allegedly resulted in "withdrawals of big accounts by depositors" of petitioner bank and ". . .the situation might deteriorates to levels can no longer be repaired nor redressed, not even by massive intervention on the part of the Bangko Sentral ng Pilipinas"; (7) petitioner bank is the third largest bank in the country with assets worth about Php309,874,088,000.00 and allegedly, any threat of its collapse will affect the stability of the banking system and worsen our financial crisis; and (8) the GSIS and the SSS have invested Php 16 billion in petitioner bank and their loss will prejudice 1.5 million members of the GSIS and 25 million members of the SSS.

In light of the foregoing considerations, the Court resolves to issue a temporary restraining order enjoining: (a) the public respondent judge, Sixto C. Marella, Jr. from proceeding with Civil Case No. 05-610; and (b) the private respondents, Antonio Go, John C.B. Go, Jonathan C.B. Go, Peter Go Pailian, Genevieve W.J. Go, Anthony F. Conway, Cesar Bautista, Antonio Basilio, Miguel E. Roca, Jr., Ricardo Murillo and Nilo T. Divina from acting or representing themselves as members of the Board of Directors of the petitioner bank, until further orders from this Court. A bond of P500,000.00 in cash or surety issued by a reputable surety company of indubitable solvency and with terms and conditions acceptable to this Court shall be filed by petitioner within 72 hours from notice hereof, otherwise, the temporary restraining order herein issued shall be rendered of no force and effect.

The Court further orders the hearing of the petition on Tuesday, 09 August 2005 at 11:00 A.M.

Very truly yours,

(Sgd.) MA. LUISA D. VILLARAMA

Acting Clerk of Court

TEMPORARY RESTRAINING ORDER

EQUITABLE PCI BANK, INC., petitioner, vs. HON. SIXTO C. MARELLA, JR., Presiding Judge, RTC, Branch 138, Makati City, ANTONIO L. GO, JOHN C.B. GO, JONATHAN C.B. GO, PETER GO PAILIAN, GENENIEVE W.J. GO, ANTHONY F. CONWAY, CESAR BAUTISTA, ANTONIO BASILIO, MIGUEL E. ROCA, JR., RICARDO MURILLO, NILO T. DIVINA and EBC INVESTMENTS, INC., respondents.