The Honorable Monetary Board v Philippine Veterans Bank GR 189571 (Jan
21, 2015)
1. The Philippine Veterans Bank, pursuant to its mandate to provide financial
assistance to veterans and teachers under Republic Acts 3518 and 7169,
established pension loans for bona fide veterans and beneficiaries, as well as
salary loan products for teachers. As these clientele do not have security
other than their continuing good health or employment, to secure their
loans, the PVB devised a program by charging a premium, a higher fee
known as Credit Redemption Fund (CRF) from the borrowers. Special
Trust Funds were established by PVB for the loans of its clientele and in
case of death of the borrower, the fees charged from him and credited to the
trust funds will be used to fully pay the loan.
2. Bangko Sentral ng Pilipinas found that PVB’s collection of the CRF
violated Section 54 of Republic Act No. 8791 which prohibited banks from
directly engaging in insurance business as insurer. Thus, it wrote the PVB to
inform it that CRF is a form of insurance, based on opinion by the Insurance
Commission and should be discontinued. PVB then stopped collecting the
fees.
3. The Monetary Board issued MB Resolution No. 1139 directing the PVB’s
Trust and Investment Department to return to the borrowers all the balances
of the CRF; and to preserve the records of borrowers who were deducted
CRF pending resolution of ruling of the Office of the General Counsel of
the BSP. The BSP denied PVB’s request for reconsideration, hence it filed a
petition for declamatory relief before the RTC of Makati City.
4. The Monetary Board moved to dismiss the petition, citing that the petition
should not prosper because of the prior breach of PVB by Section 54 of RA
8791. The RTC dismissed the petition for declaratory relief, ruling that the
issue of whether or not PVB violated Section 54 of Republic Act 8791
should be resolved in an ordinary civil action, not a declaratory relief.
5. Almost year later, it filed a Motion to Admit Motion for Reconsideration,
stating that it did not receive a copy of the order until September 3, 2008,
which the Monetary Board opposed, alleging that per certification by the
Philippine Postal Corporation, the order was served on respondent on
October 17, 2007.
6. The RTC ruling on the motion for reconsideration, reversed itself and ruled
that the collection of the CRF by PVB did not constitute engaging in the
issuance business as an insurer, hence not a violation of Section 54 of RA
8791. Accordingly, it declared MB Resolution No. 1189 null and void. Its
motion for reconsideration denied, it filed before the Supreme Court a
petition for review on certiorari to contest the RTC decision, on the issue of
whether or not the petition for declaratory relief is proper.
ISSUE: Was the petition for declaratory relief proper?
HELD:
 Declaratory relief is an action by any person interested in a deed, will,
contract or other written instrument, executive order or resolution, to
determine any question of construction or validity arising from the
instrument, executive order or regulation, or statute; and for a declaration of
his rights and duties thereunder. The only issue that may be raised in such a
petition is the question of construction or validity of provisions in an
instrument or statute
 In CJH Development Corporation v. Bureau of Internal Revenue, the SC
that in the same manner that court decisions cannot be the proper
subjects of a petition for declaratory relief, decisions of quasi-judicial
agencies cannot be subjects of a petition for declaratory relief for the
simple reason that if a party is not agreeable to a decision either on
questions of law or of fact, it may avail of the various remedies
provided by the Rules of Court.
 In this case, the decision of the BSP Monetary Board cannot be a proper
subject matter for a petition for declaratory relief. The BSP Monetary Board
is a quasi-judicial agency and the MB resolution it issued was in its exercise
of quasi-judicial powers or functions.
o The authority of the petitioners to issue the questioned MB
Resolution emanated from its powers under Section 37 of RA No.
7653 and Section 66 of RA No. 8791 to impose, at its discretion,
administrative sanctions, upon any bank for violation of any
banking law.
o The nature of the BSP Monetary Board as a quasi-judicial agency,
and the character of its determination of whether or not appropriate
sanctions may be imposed upon erring banks, as an exercise of
quasi-judicial function
 A quasi-judicial agency or body is an organ of government other than a
court and other than a legislature, which affects the rights of private parties
through either adjudication or rule making. The very definition of an
administrative agency includes its being vested with quasi-judicial powers.
o It recognizes the need for the active intervention of administrative
agencies in matters calling for technical knowledge and speed in
countless controversies, which cannot possibly be handled by
regular courts.
 A “quasi-judicial function” is a term which applies to the action, discretion,
etc. of public administrative officers or bodies, who are required to
investigate facts, or ascertain the existence of facts, hold hearings, and draw
conclusions from them, as a basis for their official action and to exercise
discretion of a judicial nature.
 Lastly, also worth noting is the fact that the court a quo’s Order dated
September 24, 2007, which dismissed respondent’s petition for declaratory
relief, had long become final and executory.
o To recall, said Order was duly served on and received by
respondent on October 17, 2007, as evidenced by the Certification
issued by the Philippine Postal Corporation. Almost a year later,
however, or on October 15, 2008, respondent moved for
reconsideration of the court a quo’s Order of dismissal, claiming it
received a copy of said Order only on September 3, 2008.
o Thus, respondent’s self-serving claim should not have prevailed
over the Certification issued by the Philippine Postal Corporation.
It was error for the trial court to entertain it for the second time
despite the lapse of almost a year before respondent filed its
motion for reconsideration against said Order.