FAR EAST BANK AND TRUST COMPANY, PETITIONER, VS. PHILIPPINE DEPOSIT INSURANCE CORPORATION, RESPONDENT.

Far East Bank and Trust Company versus Philippine Deposit Insurance Corporation

The Case

This is a lecture on a motion to correct judgment filed by Far East Bank and Trust Company against the Philippine Deposit Insurance Corporation, as liquidator of the Pacific Banking Corporation. The motion asks the Supreme Court to repair an omission in its own final and executory decision — the dropping of the Laoag City branch from the list of fixed assets sold. The case matters because it is a rare, clean illustration of the nunc pro tunc exception to the doctrine of immutability of judgments: a final decision may still be corrected, not to change the result, but to make the record speak the truth of what the Court had actually rendered.

Procedural History

The Regional Trial Court, sitting as liquidating court, granted Far East Bank's motion to compel the liquidator to execute the deeds of sale, holding that a contract of sale over the disputed fixed assets had been perfected. The Philippine Deposit Insurance Corporation appealed, and the Court of Appeals reversed the Regional Trial Court and set aside its orders. Far East Bank then elevated the matter to the Supreme Court by petition for review on certiorari. In its decision of July 22, 2015, the Supreme Court granted the petition, reversed the Court of Appeals, and remanded the case to the Regional Trial Court for computation of the purchase price. The Central Bank Board of Liquidators intervened, its motion for reconsideration was denied with finality, and the judgment became final and executory on October 19, 2016. Far East Bank then filed the present Motion to Correct Judgment, which the Court now resolves.

Facts

In July 1985, the Central Bank placed the Pacific Banking Corporation under receivership and invited bids for its assets and franchise. Far East Bank submitted a bid in November 1985 covering both nonfixed and fixed assets, the latter being those described in the Asian Appraisal Report of August 1984, at values subject to the discounts proposed in the bid. The Monetary Board accepted the bid. In April 1986, Far East Bank as buyer, the Pacific Banking Corporation through its liquidator, and the Central Bank executed a Memorandum of Agreement providing that the parties shall execute an absolute purchase agreement covering all the assets of the bank, with the fixed assets being those enumerated in the Asian Appraisal Report.

A Purchase Agreement followed, but it covered only the nonfixed assets. Far East Bank paid 260,000,000 pesos as additional consideration, took possession and custody of the fixed assets, opened its branches thereon, and serviced the bank's deposit liabilities. In January 1987, it wrote the liquidator to follow up on the deeds of sale. The liquidator furnished copies of the transfer certificates of title but never executed the purchase agreement over the disputed fixed assets. The Philippine Deposit Insurance Corporation then took over as liquidator and insisted that the fixed assets could be purchased only at their present, higher appraisal value, and began bidding them out to third persons.

Far East Bank moved before the liquidating court to compel execution of the deeds of sale. The Regional Trial Court granted the motion, listing ten branches including Laoag City, and ordered Far East Bank to pay the sound values in the Asian Appraisal Report. The Court of Appeals reversed, but the Supreme Court in 2015 ruled that a contract of sale had been perfected and remanded for computation of the price — yet its list named only nine branches, silently dropping Laoag City. Far East Bank now moves to correct that omission.

Issues

• Whether or not the case falls under any of the exceptions to the doctrine of immutability of judgments.
• Whether or not the inclusion of the Laoag property in the list of disputed fixed assets sold to Far East Bank would cause no prejudice to any party as to warrant modification of the dispositive portion of the judgment.

Applicable Provisions

No statute is quoted in the decision. The governing rules are doctrinal, and the Court states the exceptions to immutability as follows:

(1) the correction of clerical errors; (2) the so-called nunc pro tunc entries which cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable.

The second exception is the one the Court applies here.

The Court also adopts its own formulation of the nunc pro tunc requirement:

Parties seeking the issuance of nunc pro tunc judgments or orders must allege and prove that the court took a particular action and that the action was omitted through inadvertence. On the other hand, courts must ensure that the matters sought to be entered are supported by facts or data.

This defines the burden Far East Bank had to discharge, and the safeguard against fabricating judicial action.

Ruling

On the first issue, the Court holds that the case falls squarely under the second exception — a nunc pro tunc entry causing no prejudice to any party. Although the 2015 decision became final and executory on October 19, 2016, a study of the decision and the records reveals that the Court inadvertently omitted the Laoag property. The Court had consistently referred to the rulings of the Regional Trial Court and the Court of Appeals and to the Asian Appraisal Report, all of which included Laoag. There was actual judicial action: the Court ruled that the purchase covered the fixed assets as contained in the Asian Appraisal Report. No issue was specific to Laoag, and the Court gave no explanation for its exclusion, unlike the PBC Condominium Building, which was expressly excluded because it had been sold in a compromise agreement. The Court is merely making the record speak the truth, entering of record such judgment as had been formerly rendered but not entered as rendered.

On the second issue, the Court finds no prejudice. The Central Bank Board of Liquidators, now succeeded by the Bureau of the Treasury, itself admitted that the 2015 decision included the Laoag City branch in its tabulation of fixed assets, and the Privatization and Management Office acknowledged that Laoag City is among the properties subject of the case. The Court quotes its own governing standard:

Nunc pro tunc is a Latin phrase that means now for then. A judgment nunc pro tunc is made to enter into the record an act previously done by the court, which had been omitted either through inadvertence or mistake. It neither operates to correct judicial errors nor to supply omitted action by the court.

Because the inclusion of Laoag was actually rendered, and no party stands to be harmed, the correction is proper.

Doctrine

A final judgment is immutable and unalterable, but the rule admits exceptions: correction of clerical errors, nunc pro tunc entries causing no prejudice, void judgments, and supervening circumstances rendering execution unjust or inequitable. A nunc pro tunc judgment — Latin for now for then — does not correct judicial error or supply omitted action; it records an act the court actually performed but failed to enter through inadvertence. The movant must allege and prove that the court took the particular action and that it was omitted through inadvertence, and the court must verify the matter against the records of the case. The correction is allowed only where no party will be prejudiced.

Disposition

The Motion to Correct Judgment was granted: the Court issued a nunc pro tunc judgment adding the Laoag City branch to the list of ten fixed assets, ordered the Clerk of Court to correct the Entry of Judgment, and directed the Regional Trial Court to compute the purchase price of the Laoag City branch under the Memorandum of Agreement.

Remember This

Memorize the line: a nunc pro tunc judgment neither corrects judicial errors nor supplies omitted action — it makes the record speak the truth of what was actually rendered. Examiners use this case to test the exceptions to immutability of judgments and the requisites for a nunc pro tunc correction after finality.