CENTRAL BANK OF THE PHILIPPINES, PETITIONER, VS. HON. JUDGE CONRADO M. VASQUEZ, JUDGE, COURT OF FIRST INSTANCE OF MANILA, THE SHERIFF OF MANILA, AND BANK OF ASIA, RESPONDENTS.

In the complaint dated April
22, 1971 filed with respondent court by respondent Bank of Asia as
plaintiff against petitioner as defendant, respondent bank prayed for relief, pendente lite and
upon the merits, as follows:

“WHEREFORE, it is respectfully prayed of this Honorable Court
(1) that pending hearing on the plaintiff’s petition for preliminary
injunction, a restraining order be issued enjoining and prohibiting the
defendant from enforcing its threatened suspension of the plaintiff’s
foreign exchange operations; (2) that upon notice and hearing, and upon the
filing of a bond which may be required by this Honorable Court, a writ of
preliminary injunction be is­sued enjoining and prohibiting the defendant from
enforc­ing its threatened suspension of the foreign exchange operations of the
plaintiff until further orders; and (3) that after hearing on the merits of
the case, the defendant’s de­mand upon the plaintiff for the surrender of
its net foreign exchange holdings as of February 21, 1970 be declared to be
without legal basis and that the preliminary injunction be made
permanent.”^[1]

Respondent court, in its order dated May 24, 1971, ordered, upon the filing of a
P20,000-bond, the issuance of a writ of preliminary injunction restraining
petitioner Central Bank “from enforcing its threatened suspension
of the plaintiff’s foreign exchange operations.” The writ was actually
issued on May 26, 1971.  Respondent court, noting that “the is­sues
in this case are already joined and that said issues are mainly, if not
solely, questions of law” set the pre-trial and trial of the case on June 7, 1971.

Upon the filing of the present petition for certiorari and
prohibition with preliminary injunction, the Court issued on June 4, 1971 its temporary restraining
order enjoining respondent court and its sheriff from carrying out, executing
or implementing respondent court’s said order and writ of preliminary
injunction in the case below.

Per Resolution No. 906 dated June 6, 1971 of the petitioner’s Monetary Board, served on
respondent bank on June 9, 1971,
the said board “directed the suspension of the foreign exchange operations
of (respondent) bank, as an authorized agent of the Central Bank.”^[2]

Following clarification of the issues at bar at the hearing of
the case on June 30, 1971, respondent bank formally proposed to deposit with
petitioner “(its) uncontroverted exchange
profits from its foreign exchange holdings as of February 21, 1970.  The deposit is to be made subject to the
outcome of the litigation between the parties with the res­pondent bank
undertaking to pay any additional amount that may be adjudged against it and on
the condition that said deposit will be returned in the event the Court should
finally decide that the Central Bank is not entitled to the exchange profits.”^[3]

After hearing the contrary claim of petitioner, the Court issued
its Resolution of August 26, 1971, resolving to lift its temporary restraining
order of June 4, 1971 against respondent court’s questioned (and now moot)
order and writ of preliminary injunction of May 24, and May 26, 1971:

“x x x x effective upon respondent bank’s depositing with
petitioner the uncontroverted amount of P787,088.77
(in cash) and delivering in pledge to petitioner, Central Bank Certificates of
Indebtedness only with a total face value of P2,176,987.47 (repre­senting the
balance of the entire amount of P2,964,076.24 claimed by petitioner as the
revaluation profits realized on respondent bank’s foreign exchange holdings as
of February 21, 1970, computed on the basis of the guiding rates of August 11,
1971 [per Annex B, petitioner’s com­ment] that would stand as security for the
payment of such balance, if it should be finally adjudicated that res­pondent
is liable therefor.”

Petitioner Central Bank has now filed its Manifestation and
Motion of September 7, 1971, stating:

“1.  That the Monetary Board of petitioner Central
Bank has duly noted the Resolution of this Honorable Court of August 26, 1971,
lifting the temporary restrain­ing order issued by this Court on June 4, 1971,
upon de­positing by respondent of P787,088.77 in cash and in delivering in
pledge to petitioner Certificates of Indebtedness in the total face value of
P2,176,987.47; accordingly, the Central Bank has lifted its resolution
suspending the fo­reign exchange operations of the Bank of Asia.”

Petitioner submits accordingly that “the lower Court’s writ
of preliminary injunction dated May 26, 1971 has become functus
officio;” and prays of the Court “to set aside the lower court’s writ
of preliminary in­junction dated May 26, 1971, without prejudice to further
proceedings on the merits of the case below.”

The Court, in its above-quoted Resolution of August 26, 1971 directed respondent court to
“proceed to the prompt trial and resolution of the case before it.”
With petitioner’s lifting of its suspension of the respondent bank’s foreign
exchange operations by virtue of the Court’s said Resolution, respondent court
is no longer faced with any issue as to the “threatened suspension of
plaintiff’s foreign exchange operations.” Respondent court is now called
upon to determine the issue submitted by respondent bank under item 3 of the
above-quoted prayer of its complaint, viz,
whether petitioner Central Bank’s demand for it to surrender its February 21,
1970 net foreign exchange holdings is “without legal basis”, more
specifically, whether respondent bank is liable for the amount claimed by
petitioner as revaluation profits due from respondent bank and if so, the
amount of such liability, payment of which is secured by the cash and
securities deposited and pledged by respondent with petitioner pursuant to the
Court’s said Resolution of August 26, 1971.

Respondent Bank of Asia, in its opposition
dated September 30, 1971,
concedes that

“3.  The Bank of Asia has deposited with the
Central Bank cash and securities equivalent to the amount claimed by the latter
as the revaluation profits to which it is entitled from the respondent bank;
its collection of the revaluation profits is assured in the event it is finally
decided that it is entitled to such revaluation profits; and it will not be
necessary for the Central Bank to resort to suspension of the foreign exchange
operations of the respondent bank in order to enforce collection of the alleged
revaluation profits;”^[4]

but nevertheless opposes petitioner’s
motion on the implausible ground that “4. 
There is no need to set aside the writ of preliminary injunc­tion,
unless the Central Bank intends to commit the acts enjoined by the writ.

It is quite clear, from the foregoing, that respondent court’s
questioned writ of preliminary injunction has been set aside for all legal
effects and purposes and has become functus
officio, since there is no longer any “threatened suspension of
plaintiff’s foreign exchange opera­tions” to enjoin; and that the present
case for annulment of said order and writ of preliminary injunction as having
been issued without jurisdiction or with grave abuse of discretion has,
therefore, become moot.  And the Court is
no longer called upon to rule on the validity of petitioner’s Monetary Board
resolution suspending respondent bank’s foreign exchange opera­tions, (sought
to be enjoined by respondent court and permitted by this Court with the
issuance of its restraining order of June 4, 1971), since the said board has lifted
such suspension, pursuant to the Court’s resolution of August 26, 1971.

The suggestion made that this Court should leave the way clear to
respondent court to rule on the questioned power of the Central Bank to suspend
by resolution of its Monetary Board the foreign exchange operations of
respondent bank as an authorized agent of the Central Bank would not be in
accord with the well established principle that “courts exist to decide
actual controversies, and do not give opinions on abstract propositions and
moot cases”^[5]
and that “it is a rule of almost universal application that courts of
justice, constituted to pass upon substantial rights, will not con­sider
questions in which no actual interests are involved; they decline juris­diction
of moot cases.”^[6]

Any judgment on the merits that respondent court may render in
the case below on the issue of respondent bank’s liability for revalua­tion
profits to petitioner Central Bank and the amount thereof may not be reviewed
in the present special civil action but would have to be the sub­ject of a
separate appeal taken in due course by the party not satisfied therewith.

ACCORDINGLY, the Court resolved to order the dismissal of
the present case.

Zaldivar, Villamor,
and Makasiar,
JJ., concur.

Concepcion, C.J., in the result.

Barredo J., concurs in a separate opin ion.

Reyes, Makalintal, Ruiz Castro, and Fernando, JJ., concur in the separate opinion of J. Barredo.

^[1]
Complaint in Civil Case No. 82955 of the Court of First Instance of Manila,
entitled “Bank of Asia, plaintiff vs. Central Bank of the Phil.,
defendant,” Annex P, petition; emphasis furnished.

^[2]
Rollo, p. 264.

^[3]
Respondent’s memo of July 10, 1971.

^[4]
Emphasis furnished.

^[5]
I Moran’s Rules of Court, 1970 Ed., p. 4; see Garron
vs. Arca, 88 Phil. 490.

^[6]
In re Estate of Ceballos, 12 Phil. 271.

Clean
Clean

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