G.R. No. 161276.

 January 31, 2005

BORLONGAN vs. REYES
THIRD DIVISION

Penned by Associate Justice Mario L. Guariña III

At bar is this petition for review on certiorari filed by petitioner Teodoro C. Borlongan, assailing
the decision dated 18 September 2003 of the Court of Appeals in CA-G.R. SP No. 72234, reversing and
setting aside the Orders dated 2 July 2002 and 30 July 2002 of the Ombudsman in OMB-ADM-0-00-0867
which respectively declared herein respondents guilty of simple neglect of duty, and denied both parties'
separate motions for reconsideration. The instant petition is hereby DENIED DUE COURSE.

Facts:
Petitioner Teodoro C. Borlongan, former president and chief executive officer of Union Bank, Inc. (UBI),
administratively charged herein respondent officials of the Bangko Sentral ng Pilipinas (BSP), for
allegedly falsifying statement of facts in the BSP Supervision and Examination Sector (SES) reports and
tendering incorrect and inaccurate reports and opinions to conjure false grounds for the closure of UBI
and Urbancorp Development Bank and placing them under receivership, to the detriment of their
shareholders, officers and employees.

The Ombudsman found respondents guilty of simple neglect of duty and imposed upon them the penalty
of one (1) month and one (1) day suspension without pay. Both parties' motions for reconsideration were
denied.

Respondents were the first to appeal via a petition for review raffled off to its 17th Division. Petitioner's
appeal landed to the 5th Division of the appellate court. Initially, petitioner filed a motion to consolidate
the two (2) cases. Later, however, he not only withdrew said motion but even vigorously opposed the
consolidation. It turned out, the two (2) divisions of the CA rendered conflicting decisions. Wherein
5th Division found respondents, including the BSP Governor, guilty of gross neglect of duty while
17th Division reversed and set aside the same assailed orders of the Ombudsman and dismissed the
administrative complaints against the herein respondents.

Petitioner filed a motion for reconsideration, imploring the 17th Division to set aside for being inconsistent
with the 5th Division. CA denied MR and in the process, castigated petitioner for his refusal to have the
two (2) cases consolidated.
Under these circumstances, without a consolidation, both divisions will have to decide their own cases,
and any resulting conflict in the decisions on similar issues of fact and law will have to be resolved
ultimately by the Supreme Court as the supreme arbiter of all justiciable controversies in this jurisdiction.

The former 5th Division of the CA amended Decision by dismissing the administrative complaint against
all the respondents therein. Petitioner elevated the same Amended Decision to this Court via a petition for
review on certiorari in G.R. No. 163765. Court denied petition for failure of the petitioner to show that a
reversible error had been committed by the appellate court".

Ruling:
In a subsequent Resolution promulgated on October 1, 2004, the Court denied petitioner's motion for
reconsideration with finality "as no substantial arguments were
UBI had since given up its status as an expanded commercial bank and reverted to an ordinary
commercial bank because it could not meet the P3.5 billion minimum capital requirement for a universal
bank. For two (2) months prior to its closure, Urban Bank had been besieged by liquidity problems, and
its declaration of a bank holiday on April 25 only confirmed its decreasing ability to meet obligations on
time.

Section 30(a) of RA 7653, otherwise known as the New Central Bank Act, is relevant. Under that law, the
Monetary Board may execute measures such those taken in this case, summarily and without need of
prior hearing. Pertinent, too, is Section 53 of Republic Act No. 8791, since it underscores the summary
character of the MB's initiative of placing a bank under receivership. It provides that in case a bank
or quasi-bank notifies the BSP or publicly announces a bank holiday, or in any manner suspends the
payment of its deposit liabilities continuously for more than 30 days, the MB may summarily and without
need of prior hearing close such banking institution and place it under receivership of the PDIC.

It is illogical to hold the respondents administratively liable for the preparation of reports that are, in their
nature, merely recommendatory and have to be acted upon by superior officials. The reports were not the
final action that creates right and duties and affects the interest and fortunes of third parties. Courts do not
interfere with any administrative measure prior to its completion or finality, and when they do, what is
actionable is not the recommendation but the decision of the official with the competence under the law to
issue it.

The subject reports are only between the Monetary Board and the BSP officials who prepared and
endorsed them and may be rejected, modified or accepted by the Monetary Board. As far as this case is
concerned, the legal obligations of diligence and good faith that BSP officials owe to the public under
Section 16 of the New Central Act start with the official acts of the Monetary Board which, rightly or
wrong, are the cause of loss or injury to third parties, not any preparatory report or recommendation.
Petition for review on certiorari must raise "only questions of law which must be distinctly set forth" in
the petition. Even then, the review sought will be denied if the questions raised are "too unsubstantial to
require consideration" or if the Court is not convinced of the existence of "special and important reasons"
to warrant review, of which none exists in this case.