The Supreme Court decision promulgated on December 4, 2023 but was released only last week, ordering Gov. Gwen Garcia to pay a private loan with Hongkong and Shanghai Banking Corporation (HSBC), may no longer be enforced.
“We respect the Supreme Court, but unfortunately the decision could no longer be implemented. The petition filed by HSBC was dead on arrival. There’s nothing more to implement,” Atty. Alex Avisado Jr. told Cebu media during a press conference at the Capitol.
Atty. Avisado is Gov. Gwen’s private counsel for the case. He, with four other lawyers, joined the media conference virtually via Zoom from his Gana Atienza Avisado Law Offices in Makati City.
The lawyer, quoting the SC decision, said the court judgment ordering Gov. Gwen to pay HSBC the loan contracted in her private capacity in 1996 — long before she became Cebu Governor —became “final and executory” on February 25, 2013.
However, HSBC failed to execute the judgment after five years, and so it filed with the Regional Trial Court (RTC) Taguig on February 28, 2023 an action to revive judgment — exactly 10 years and 3 days since the court judgment attained finality.
RTC Taguig dismissed the action to revive judgment for having been filed out of time, since the law (Rule 39, Section 6 of the Rules of Court) bars the implementation of a final judgment after the winning party fails to implement it after 10 years.
The RTC ruled that the action is now barred by prescription.
The ruling, Atty. Avisado said, was elevated by HSBC to the Court of Appeals where it is now pending.
“Kaya if you ask us now, what will happen to the SC decision na pinapa-implement against Gov. Garcia? It is our respectful position that there is nothing more to implement because HSBC slept on its rights. Nakatulog sila for the last 10 years. Lumagpas ng 3 days yung tulog nila. By the time they woke up, nag-prescribe na yung kaso. Hindi na pweding i-enforce ang decision ng Supreme Court,” the lawyer added.
1996 LOAN WITH HSBC
It was in 1996 when Gov. Gwen, still a private citizen, borrowed US$900,000 from HSBC to purchase a cargo barge for her Ormoc-based business GGC Enterprises.
To secure the payment, she executed (with the consent of her then husband) a real estate mortgage covering two parcels of land with an aggregate area of 20 hectares which were then appraised by an independent third party at P30 million, more than enough to cover the debt.
In 1996, the peso-dollar exchange was only P26.21 for every dollar, so that Citizen Gwen’s debt with HSBC was only P23.5 million.
On top of that, she also had a US$200,000 deposit at HSBC, so that in truth, she only had US$700,000 uncovered debt with the bank.
The Governor said GGC Enterprises had a hard time paying the debt when the Asian Financial Crisis struck in July 1997 and interest rates shot up to as high as 40%, making it impossible for GGC Enterprises to fulfill its obligations without draining its working capital.
For reference, in December 1997, the peso-dollar exchange rate was already P37 for every dollar, making an 11-peso jump from 1996 when the loan was contracted.
She said HSBC refused to sit down with her and work out a solution but instead attached her US$200,000 deposit with the bank.
She then offered for the bank to foreclose on its mortgaged parcels of land, but it refused.
“Had they (HSBC) foreclosed on the collaterals, had they accepted or renegotiated on the payments, had they become reasonable in accepting terms that would not be so onerous, had they not become greedy that instead 700,000 US dollars, hinabol, ginawang 2.8 million US dollars, baka hindi nangyari ito. We would have settled on a more reasonable terms,” Atty. Avisado said.
The lawyer said they will file a manifestation with the Supreme Court to inform the High Court that instead of awaiting the SC resolution on the matter, HSBC took another route and filed an action to revive judgment with the RTC, and that by their own acts, HSBC are now bound not to the decision of the Supreme Court but to their action with the RTC Taguig and now with the Court of Appeals.
“Wala nang mare-remand sa kaso na ito because HSBC is bound by the appeal that they filed sa Court of Appeals. Meron bang threat ngayon kay Gov. Garcia na mag-implement, execute ng Supreme Court decision? Ang answer is none, zero,” the lawyer added. | IPA
