"The chief justice has hardly warmed his seat."
"The chief justice has hardly warmed his seat."
It has only been a few months since Justice Lucas Bersamin assumed the post of Chief Justice of the Supreme Court. He has hardly warmed up his seat when he finds himself facing what could be his biggest test so far.
This is related to a decision he penned a year and a half ago. The case involves United Coconut Planters Bank over a loan secured by Felix Chua of the Lucena Bus Terminal .
Court records show that in July 1998, Chua and his company, who were in default of their loan obligations to UCPB, pleaded for the bank not to foreclose the secured properties and asked to restructure their loans. On March 21, 2000, he, the Lucena Bus Terminal and the UCPB signed a memorandum of agreement (MOA) to restructure their admitted loan obligations of P204 million.
Now, to partially satisfy their obligations, Chua “dacioned” new properties which were part of a joint venture project with his partner Jose Go. This reduced Chua’s obligation and that of the bus terminal to UCPB to the extent of P103 million only under the agreement.
Under the restructuring agreements, Chua expressly agreed that the value of dacioned properties (including Revere belonging to Go) will be applied to the aggregate debts of Chua, the bus terminal and Jose Go, who was also in default of his loan obligations to the bank. These documents were later on ignored by the SC in its decision.
Felix Chua defaulted again on the restructuring and never paid UCPB the remaining balance of his obligation which includes an obligation to issue shares of stock of the bus terminal company to UCPB in the amount of P68 million. To prevent the bank from foreclosing on the securities, Chua filed the instant case against the bank.
Chua claimed fraud on the part of the bank but UCPB pointed out that during the restructuring, Chua was assisted by the firm Castillo Laman Tan Pantaleon & San Jose, adding that it was even Chua’s lawyers who drafted and reviewed the agreements.
A coconut farmers’ group refuted Chua’s claim, saying it’s impossible for UCPB to be liable to pay Felix Chua P430 million when the subject matter of the case is Chua’s restructured loan to the bank amounting only to P204 million, which Chua did not pay in full.
The farmers’ group also questions why the SC is asking the UCPB to pay interest to Felix Chua in the amount of P200 million when the bank never borrowed money from Chua and the dacioned properties remained in physical possession of the businessman. Chua, under the memorandum of agreement, has the perpetual right to repurchase, right of first refusal and right to develop the dacioned properties from UCPB.
Take note that the coconut farmers have so much at stake here as they own 74 percent of the bank.
Earlier this year, in a January 10, 2019 letter to the SC Chief Justice and Associate Justices, former UCPB board member and stockholder Dr. Jesus Lim Arranza asked the High Tribunal to conduct an investigation on certain issues surrounding the August 16, 2017 SC Third Division decision on the Felix Chua-UCPB case.
Arranza pointed out that four members of the Supreme Court’s Third Division — composed of five Associate Justices and then headed by Associate Justice Lucas Bersamin—were appointed only two or three days before it promulgated the decision on the Felix Chua-UCPB case.
Bersamin is now the Chief Justice.
Justice Benjamin Caguioa was designated as an additional member of the Third Division only on August 14, 2017 or two days before the said Third Division decision dated August 16, 2017. However, this decision indicates that Justice Caguioa did not sign the same as he was on leave at the time of promulgation.
Justice Noel Tijam was also designated as an additional member of the Third Division only on August 14, 2017, or two days before the promulgation of the ruling.
Justice Samuel Martirez was designated as member of the Third Division only on August 13, 2017, or three days before the decision dated August 16, 2017. And Justice Alexander Gesmundo was designated as member of the Third Division only on August 14, 2017, or two days before the decision.
Arranza’s letter asked the Supreme Court to investigate certain issues surrounding the August 16, 2017 Third Division Decision on the Felix Chua vs. UCPB case, if only to find the answers to his questions such as:
Could Justices Gesmundo, Martirez and Tijam have adequately studied the case which consisted of around 2,000 pages only in a period of two or three days before the ruling dated August 16, 2017 was promulgated?
Was a report made by the Writer of the Decision and sent to the members of the Third Division in accordance with the Supreme Court Internal Rules?
Was the case calendared for deliberation by the Third Division after such Report, if any, was sent to its members, in accordance with the Supreme Court’s Internal Rules?
And why was there haste in promulgating the decision dated August 16, 2017 when three justices came on board only two or three days earlier and one justice was even on leave?
As what Arranza pointed out in his letter, the SC decision on the UCPB-Chua case has parallelism on an administrative case decided years back, where the Supreme Court removed a Court of Appeals Justice and even forfeited all his retirement benefits for making it appear that actual deliberations were conducted before the drafting of the decision of the Court of Appeals on a case involving Meralco.
As such, UCPB reportedly asked the SC to elevate its Motion for Reconsideration still pending at the Third Division to the En Banc. Bersamin, the ponente of August 15, 2017 decision, has yet to act on the bank’s request after a lapse of more than a year.
Two former chief justices have been removed from office due to simple issues of incorrect filing and non-filing of their statements of assets, liabilities and net worth (although the first one is highly contestable as it is a correctable offense). How does the gravity of case fare compared to the two, if proven that just like that of the CA Associate Justice deciding on the Meralco case, there was no actual deliberation that took place?
Bersamin has to come out clean on this one.
