Rural Bank of San Miguel vs. Monetary Board Case Digest G.R. No. 150886 February 16, 2007

Rural Bank of San Miguel vs. Monetary Board Case Digest 

G.R. No. 150886 ; February 16, 2007

DOCTRINE/S:

Banking Law

a) Report is the only thing necessary to place a bank under receivership or liquidation. (Section 30 of RA 7653)

- Examination, which was the requirement under the RA 265, is already repealed by RA 7653

Statutory Construction

a) Plain meaning rule (verba legis)

-A rule in statutory construction that means where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.

- This rule rests on the valid presumption that the words employed by the legislature in a statute correctly express its intention or will and preclude the court from construing it differently. The legislature is presumed to know the meaning of the words, to have used words advisedly, and to have expressed its intent by use of such words as are found in the statute. Verba legis non est recedendum, or from the words of a statute there should be no departure.

b) Exception to the “Plain Meaning Rule”

- Court may consider the spirit and reason of the statute, where a literal meaning would lead to absurdity, contradiction, injustice, or would defeat the clear purpose of the lawmakers

FACTS: Petitioner bank was prohibited by the Monetray Board (MB) from doing business in the Philippines and was placed under receivership with PDIC, as its receiver, on the basis of reports prepared by the PDIC.  This was done by MB through a Resolution.  On the basis of another set of reports prepared by PDIC stating that RBSM could not resume business with sufficient assurance of protecting the interest of its depositors, creditors and the general public, the MB passed a Resolution directing PDIC to proceed with the liquidation of the bank under Section 30 of RA 7653. Hence, petitioner files this instant petition for review on certiorari of a decision and resolution of the CA.

ISSUE/S: WON Section 30 of RA 7653 require a current and complete examination of the bank before it can be closed and placed under receivership.

HELD: NO. Section 30 of RA 7653 provides that “upon report of the head of the supervising or examining department” the Monetary Board may place a bank under receivership or liquidation. Hence, RA 7653 only requires a "report” of the head of the supervising or examining department". Examination is no longer needed. The Bank’s reliance on Section 29 of the old law (RA 265), which required examination, is misplaced since such law has been repealed by the current RA 7653 (The New Central Bank).

Furthermore, to make the meaning of “report” as “examination” would be wrong since it is an established rule in statutory construction that where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation (plain meaning rule or verba legis). The word "report" has a definite and unambiguous meaning which is clearly different from "examination." A report, as a noun, may be defined as "something that gives information" or "a usually detailed account or statement.” On the other hand, an examination is "a search, investigation or scrutiny." Hence it is it clear that RA 7653 no longer requires that an examination be made before the MB can issue a closure order