Department of Rural Banks and Savings and Loan Association

November 25, 1982 Department of Rural Banks and Savings and Loan Association Central Bank of the Philippines Manila Attention : Ms . Gloria N . Abutal Gentlemen: This has reference to your letter, dated November 8, 1982, seeking information on the queries posed therein. It appears that Earnshaw Docks Savings and Loan Association and U.S. Tobacco Employees Savings and Loan Association are under receivership by the Central Bank, the management of the business and assets of which were taken over by the CB pursuant to Monetary Board Resolutions No. 194, dated January 25, 1980, and No. 2128, dated November 3, 1977 ,respectively. The majority of the members of these associations have been separated from the company and their whereabouts unknown. Your query is whether in the dissolution of these savings and loan associations you could forego with the formal amendment of their articles of incorporation shortening their respective term of existence. If so, how to go about the dissolution of these associations, inquiring further about the requirements to be submitted to this Commission to have them dissolved in accordance with law. Considering that the respective members of Earnshaw Dock Saving and Loan Association and U.S. Tobacco Employees Savings and Loan Association have several membership from the association and their whereabouts unknown, voluntary dissolution under Section 120 of the Corporation Code of the Philippines cannot be pursued for said method of dissolution requires the approval of two-thirds (2/3) of the members and majority of the directors. Accordingly, you may forego the practice of amending the articles of incorporation of these associations shortening their corporate terms. Furthermore, savings and loan associations are governed by special law, R.A. #3779, an act providing for the regulation of the organization and operations of savings and loan associations. It is an established rule in the construction of statutes that a subsequent act, treating a subject in general terms and not expressly contradicting the provisions of a prior special statute, is not to be considered as intended to affect the more particular and specific provisions of the earlier act, unless it is absolutely necessary so to construe it in order to give its words any meaning at all. (Francisco, Statutory Construction, p. 278). Section 27 of R.A. #3779, otherwise known as the Savings and Loan Association Act, which provides thus: "The Monetary Board may retain possession of the property, business and assets of an association until the association resumes business with the consent of and subject to the conditions imposed by the Monetary Board, or until its affairs are liquidated; in case of liquidation, the Monetary Board shall be governed by the provisions of the Central Bank Act for liquidation of banks ." (Emphasis supplied) Corollary thereto, Section 29 of R.A. #265 (Central Bank Act), provides thus: LexLib "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. The Monetary Board shall designate an official of the Central Bank as liquidator who shall take over the functions of the receiver previously appointed by the Monetary Board under this Section. The liquidator shall, with all convenient speed, convert the assets of the banking institution to money or sell, assign or otherwise dispose of the same to creditors and other parties for the purpose of paying the debts of such bank and he may, in the name of the banking institution, institute such actions as may be necessary in the appropriate court to collect and recover accounts and assets of the banking institution. The provisions of any law to the contrary notwithstanding, the actions of the Monetary Board under this Section and the second paragraph of Section 34 of this Act shall be final and executory, and can be set aside by the court only if there is convincing proof that the action is plainly arbitrary and made in bad faith. No restraining order or injunction shall be issued by the court enjoining the Central Bank from implementing its action under this Section and the second paragraph of Section 34 of this Act, unless there is a convincing proof that the action of the Monetary Board is plainly arbitrary and made in bad faith and the petitioner or plaintiff files with the clerk or judge of the court in which the action is pending, a bond executed in favor of the Central Bank, in an amount to be fixed by the court. The restraining order or injunction shall be refused, or if granted, shall be dissolved upon filing by the Central Bank of a bond, which shall be in the form of cash or Central Bank Cashier's Check, in an amount twice the amount of the bond of the petitioner or plaintiff, conditioned that it will pay the damages which the petitioner or plaintiff may suffer by the refusal or the dissolution of the injunction. The provisions of Rule 58 of the New Rules of Court insofar as they are applicable and not inconsistent with the provisions of this Section shall govern the issuance and dissolution of the restraining order or injunction contemplated in this Section." prcd In view thereof, the Commission deems it unnecessary to answer your other queries. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Associate Commissioner