FOR stonewalling government claims against confiscated Marcos millions for more than 20 years, the Traders Royal Bank (substituted by Royal Traders Holding Co., Inc. or RTHCI), has been slapped a P25 million judgment by the Sandiganbayan.
In a 12-page resolution dated December 16, 2021, the anti-graft court’s Second Division granted the Republic’s motion for partial reconsideration asking for payment of exemplary damages on the ground that the bank intentionally blocked satisfaction of the judgment won by the government in 1992 at the United States District Court of Hawaii.
Associate Justice and Second Division Chair Oscar C. Herrera Jr. penned the ruling, with Associate Justices Michael Frederick L. Musngi and Bayani H. Jacinto concurring.
The US court’s judgment covered 21 peso-denominated bank certificates with a total combined value of P96.03 million issued from 1974 to 1978, and three dollar-denominated bank certificates worth a total of $5.435 million.
However, at current values the amount involved could exceed P1 billion since the Sandiganbayan also imposed a 12 percent yearly interest to be computed starting February 1993 until fully paid.
The bank certificates that were the subject of the case were discovered by US Customs authorities hidden among the “numerous crates of boxes, suitcases, bags, etc. containing jewelry, money, documents and other properties” brought by the Marcos family when they fled the country and landed in Honolulu, Hawaii on February 26, 1986.
In 1991, former First Lady Imelda Marcos, acting as official representative of her family and the estate of her late husband who died in in 1989, signed the “Settlement Agreement and Partial Release of Claims, the Conveyance Grant and Bill of Sale, and the Waiver and Release of Claims and Assignment of Interest” with the Presidential Commission on Good Government (PCGG).
Through the deal, Mrs. Marcos surrendered to the Philippine government her family’s interest over all the assets confiscated by the US Customs in exchange for the dismissal of legal actions brought by the Republic against the Marcoses.
However, when the PCGG presented the bank certificates to the TRB on February 26, 1993, the bank refused to pay both the peso and dollar-denominated values, claiming the obligations had been paid.
“For almost 24 years now, defendant RTHCI has consistently refused to pay the plaintiff’s valid claim by falsely asserting that the plaintiff has no cause of action against it and that the obligation sought to be enforced by the plaintiff have all been paid,” the Sandiganbayan said.
While resisting the enforcement of the Hawaii Court’s judgment, the Sandiganbayan said TRB also tried to wiggle out of its obligation by selling its assets and liabilities to Bank of Commerce in 2001 through a “purchase and sale agreement (PSA),” terminated its banking business, and changed its corporate name to Royal Traders Holding Co. Inc.
However, the sale agreement expressly excluded the claims of the Republic of the Philippines in a move that the court found malicious.
“The Court holds that defendant RTHCI’s unjustified refusal to pay the plaintiff’s valid claims for a period of 24 years, in falsely claiming that the obligations have been paid, and in entering into a PSA with Bancom …are clear indicias of bad faith,” the Sandiganbayan noted.
“The Court rules that RTHCI has acted in a wanton, fraudulent, and malevolent manner for which it is liable to pay exemplary damages to the plaintiff,” the anti-graft court added.
However, it struck down additional claims by the government for award of attorney’s fees and the transfer in its favor of 278,488 shares of TRB stocks that were registered in the name of the Royal Bank of Canada, citing the lack of evidence showing that these were being held in the interest of the Marcos family.
