Biaco - Ballesteros

MA. TERESA CHAVES BIACO, Petitioner, vs. PHILIPPINE COUNTRYSIDE RURAL BANK, Respondent.Petitioner, Ma. Teresa Chaves Biaco, seeks a review of the Decision of the Court of Appeals dated August 27, 2003, which denied her petition for annulment of judgment, and the Resolution dated December 15, 2003 which denied her motion for reconsideration

FACTS: Ernesto Biaco the husband of petitioner Ma. Teresa Chaves Biaco. While employed in the Philippine Countryside Rural Bank (PCRB) as branch manager, Ernesto obtained several loans from the respondent bank. As a security for the said loans, Ernesto executed a real estate mortgage in favor of the bank covering the parcel of land (located at Cagayan De Oro City) described in Original Certificate of Title (OCT) signed by both spouse.

When Ernesto failed to settle the above-mentioned loans on its due date, the bank demanded the payment of P1,080,676.50.The written demand, however, proved futile.As a result, bank filed a complaint for foreclosure of mortgage against the spouses Ernesto and Teresa Biaco before the RTC of Misamis Oriental. Summons was served to the spouses Biaco through Ernesto at his office.

Ernesto received the summons but for unknown reasons, he failed to file an answer. Hence, the spouses Biaco were declared in default upon motion of the respondent bank. The respondent bank was allowed to present its evidence before the court. Arturo Toring, the branch manager of the respondent bank, testified that the spouses Biaco had been obtaining loans from the bank since 1996 to 1998. All the loans for the said years were paid EXCEPT the year covering 1998. Moreover, the appraisal value of the land subject of the mortgage is only P150,000.00 as reported by the Assessor’s Office.

The court ruled in favour of the bank ordering petitioners to pay including damages what they owe to the bank and in case of non-payment within the period, the Sheriff of this Court is ordered to sell at public auction the mortgaged

On July 12, 2000, the sheriff personally served the above-mentioned judgment to Ernesto Biaco at his office at Export and Industry Bank. The spouses Biaco did not appeal from the adverse decision of

the trial court. The respondent bank ordered, of the court requiring the spouses Biaco to pay within a period of 90 days had passed. The motion for execution was granted by the trial court per Order dated October 20, 2000. Hence, the spouses’ properties were auctioned.

The sheriff executed two (2) notices of levy against properties registered under the name of petitioner Ma. Teresa Chaves Biaco. However, the notices of levy were denied registration because Ma. Teresa had already sold the two (2) properties to her daughters on April 11, 2001.

Petitioner sought the annulment of RTC’s decision contending that extrinsic fraud prevented her from participating in the judicial foreclosure proceedings. Alleging that only knew of the judgement only after the lapse of more than six (6) months after its finality. She further explained to the CA that (1) the sheriff failed to personally serve summons on petitioner; and (2) there is an existence of extrinsic fraud as the bank did not verify her signature on the mortgage or petitioner’s husband’s concealment of his knowledge of the foreclosure proceedings.

The CA ruled on the validity of the service of summons, the appellate court ruled that judicial foreclosure proceedings are actions quasi in rem. As such, jurisdiction over the person of the defendant is not essential as long as the court acquires jurisdiction over the res. Noting that the spouses Biaco were not opposing parties in the case, the Court of Appeals further ruled that the fraud committed by one against the other cannot be considered extrinsic fraud.

ISSUE: Whether or not the judgment of the trial court should be annulled.

RULING: Yes. It is admitted that the proceeding is a quasi in rem proceeding and that the presence of Teresa is not required because the trial court was able to acquire jurisdiction over the res (mortgaged property). HOWEVER, her constitutional right to due process is superior over the procedural matters mentioned. Her right to due process was violated when she did not receive summons. Teresa, as a resident respondent, who does not voluntary appear in court must be

Jurisdiction (BAICOS – BALLESTEROS CASE SUMMARY) S. SANTOS 1

personally served with summons as provided under Section 6, Rule 14 of the Rules of Court. Even if the action is quasi in rem, personal service of summons is essential in order to afford her due process. The substituted service made by the sheriff at her husband’s office cannot be deemed proper service absent any explanation that efforts had been made to personally serve summons upon her but that such efforts failed. Further, the order of the trial court compelling Teresa to pay off the debt using her personal property is a judgment in personam which the court cannot do because it only acquired jurisdiction over the res and not over the person of Teresa. On the issue of extrinsic fraud, the Court of Appeals, agreeing with PCRB, is correct that there is none in the case at bar. Extrinsic fraud exists when there is a fraudulent act committed by the prevailing party outside of the trial of the case, whereby the defeated party was prevented from presenting fully his side of the case by fraud or deception practiced on him by the prevailing party. Extrinsic fraud is present where the unsuccessful party had been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent, as by keeping him away from court, a false promise of a compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority assumes to represent a party and connives at his defeat; or where the attorney regularly employed corruptly sells out his client’s interest to the other side. The above is not applicable in the case of Teresa. It was not PCRB which made any fraud. It should be noted that spouses Biaco were co-defendants in the case and shared the same interest.

WHEREFORE, the instant petition is GRANTED. The Decision dated August 27, 2003 and the Resolution dated December 15, 2003 of the Court of Appeals in CA-G.R. SP No. 67489 are SET ASIDE. The Judgment dated July 11, 2000 and Order dated February 9, 2001 of the Regional Trial Court of Cagayan de Oro City, Branch 20, are likewise SET ASIDE.


ERLINDA R. VELAYO-FONG, petitioner,vs. SPOUSES RAYMOND and MARIA HEDY VELAYO, respondents.Petition for review on certiorari

FACTS: Spouses Raymond and Maria Hedy Velayo filed a complaint for collection of sum of money against Velayo-Fong. In their complaint, Spouses Velayo alleged that Velayo-Fong was a resident of Honolulu, Hawaii, USA. Since Velayo-Fong was a non-resident and not found in the Philippines, Spouses Velayo-Fong prayed for a writ to attach Velayo-Fong's properties found in the Philippines and petitioner had filed a complaint against Raymond before the NBI, accusing him of estafa and kidnapping a minor; that petitioner and her co-defendants also requested that respondents be included in the Hold Departure List of the Bureau of Immigration and Deportation (BID) which was granted.

However, before the application for the writ can be acted upon by the RTC, Spouses Velayo filed an Urgent Motion praying that the summons be served to Velayo-Fong at her Two Condominium Suites. One at Roxas Boulevard, Pasay City and another, at Burgos Street, T. Towers Condominium, Makati. Subsequently, the RTC granted the said motion.Then, the Process Server indicated on his Officer’s Return that “after several failed attempts to serve the copy of summons and complaints issued at the given addresses of Velayo-Fong, finally, the Process Server was able to serve personally the summons together with the copy of the complaint upon Velayo-Fong, not at her two addresses but at the lobby of a hotel, right in the presence of a lobby counter personnel but Velayo-Fong refused to sign in receipt thereof.

Later, the RTC in its Order declared Velayo-Fong in default for failure to file an answer. Velayo-Fong, upon knowing the order of the RTC, filed a Motion to Set Aside Order of Default claiming that she was prevented from filing a responsive pleading and defending herself against respondents' complaint because of fraud, accident or mistake; that contrary to the Officer's Return, no summons was served upon her; that she has valid and meritorious defenses to refute respondents' material allegations.

The RTC denied the Motion and CA affirmed RTCs order.

Hence, Velayo-Fong questioned the propriety and validity of the service of summons made upon her as she did not remember having been served with summons but remembers that a man hurled some papers at her while she was entering the elevator and, not knowing what the papers were all about, she threw back the papers to the man before the elevator closed; that she has a valid and meritorious defense to refute the material allegations of respondents' complaint.

She also argued that the summons should have been served through extraterritorial service since she is a non-resident.

ISSUES: (1) Whether summons may be effected to a non resident (2) Whether there was a valid service of summons on Velayo-Fong.

RULING: Under Sec. 17, Rule 14, when the defendant is a non-resident and he is not found in the country, summons may be served extraterritorially. This kind of service of summons applies only where the action is in rem because in in remand quasi in rem actions, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res.

a. Where the action is in personam and when the defendant is a non-resident, personal service of summons within the state is essential to the acquisition of jurisdiction over the person. This cannot be done, however, if the defendant is not physically present in the country, and thus, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him.

b. In the present case, Spouses Velayo's cause of action and their prayer that actual and moral damages, plus attorney's fees, be awarded in their favor affect the parties alone, not the whole world. Any judgment therein is binding only upon the parties properly impleaded. Thus, it is an action in personam. As such, personal service of summons upon the defendants is essential


in order for the court to acquire jurisdiction over their persons.c. Although in the complaint, Velayo-Fong was alleged to be a non-resident who is not found in the Philippines for which reason the Spouses first prayed that a writ of preliminary attachment be issued against her properties within the Philippines to confer jurisdiction upon the RTC. However, the spouses did not pursue its application for said writ when Velayo-Fong was subsequently found physically present in the Philippines and personal service of summons was effected on her.

2. YES. A process server's certificate of service is prima facie evidence of the facts as set out in the certificate. Between the claims of non-receipt of summons by a party against the assertion of an official whose duty is to send notices, the latter assertion is secured by the presumption that official duty has been regularly performed.

To overcome the presumption of regularity of performance of official functions in favor of such Officer's Return, the evidence against it must be clear and convincing.

In this case, Velayo-Fong failed to come forward with the requisite quantum of proof to the contrary, the presumption of regularity of performance on the part of the process server stands.

NOTES:The party seeking to have the order of default lifted must first show that her failure to file an answer or any other responsive pleading was due to fraud, accident, mistake, or excusable neglect and then she must show that she has a valid and meritorious defense.

In this case, petitioner failed to show that her failure to file an answer was due to fraud, accident, mistake or excusable neglect. Except for her bare unsupported allegation that the summons were only thrown to her at the elevator, petitioner did not present any competent evidence to justify the setting aside of the order of default.

She must also show that she has a meritorious defense or that something would be gained by having the order of default set aside.

In the present case, petitioner contented herself with stating in her affidavit of merit that

the cases against respondent Raymond were filed at the instance of her father.41 Such allegation is a conclusion rather than a statement of facts showing a meritorious defense. The affidavit failed to controvert the facts alleged by the respondents. Petitioner has not shown that she has a meritorious defense.

Velayo-Fong failed to show that her failure file an answer was not due to fraud, accident, mistake, or excusable neglect; and that she had a valid and meritorious defense, there is no merit to her prayer for a liberal interpretation of procedural rules.

Thus, since petitioner failed to show that her failure file an answer was not due to fraud, accident, mistake, or excusable neglect; and that she had a valid and meritorious defense, there is no merit to her prayer for a liberal interpretation of procedural rules.

WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.


RE: Essence of Court’s Adjudicatory Powers

HEIRS OF SPOUSES CRISPULO FERRER and ENGRACIA PUHAWAN, represented by ROMEO F. GAZA as Attorney-in-Fact, petitioners, vs. THE HONORABLE COURT OF APPEALS, NATIONAL POWER CORPORATION, GUIDO ALFREDO DELGADO, FERNANDO ROXAS, ALBERTO PANGCOG, SAMUEL PIEDAD, GREGORIO ALVAREZ, RAFAEL LAGOS, AUGUSTO GO, NAPOLEON EUFEMIO, MELITO SALAZAR, VIRGILIO ODI and MEHOLK SADAIN, respondents.

FACTS: The present case arose from an injunction suit filed by the petitioners against respondent National Power Corporation (Napocor). Petitioners sought to enjoin Napocor from selling the Caliraya Hydroelectric Power Plant, as they claimed ownership over portions of the land where the power plant stood, specifically Lot 1873 and Lot 72.8 Additionally, the petitioners demanded payment of damages from Napocor as rentals for the use and occupation of the lots since 1936 – the year Napocor first occupied the lot and began construction of the power plant.

Napocor denied the petitioners’ allegations and claimed it acquired portions of Lot 18739 through purchase from the petitioners’ half sister, Oliva Ferrer. The sale was evidenced by two deeds.

The petitioners opposed Napocor’s claims and contended that the sale of portions of Lot 1873 between Napocor and Oliva Ferrer was void. They alleged that Oliva Ferrer was a co-heir who owned, the sale to Napocor of an area in excess of this amount without authority from the other co-owners was, according to the petitioners, void.

On March 15, 2000, the RTC issued a decision, dismissing the petitioners’ action for injunction and damages after finding their claims over Lot 1873 and Lot 72 insufficient.

The trial court ruled that the petitioners failed to present convincing proof of their claim of

ownership of Lot 1873; other than the Bureau of Lands certificate, which by itself was not a proof of ownership, the petitioners had nothing to support their claim. In contrast, Napocor was able to present two deeds of sale. The RTC also took cognizance of the fact that Napocor has been in possession of Lot 1873 and constructed numerous structures thereon since 1936. Thus, it found it ridiculous for petitioners or their predecessors not to raise a restraining hand or shout of protest during Napocor’s long occupation and use of the lot.

As for Lot 72, the RTC found that the certificate of title covering the lot contained an entry dated May 20, 1940, referring to an instrument dated April 22, 1940, by virtue of which the heirs of Bernabe Puhawan (which included Engracia Puhawan, one of the petitioners’ predecessors) granted Napocor a right of way over the lot. The entry was further classified as a waterway, an intake road, and a right of way, making the easement a legal encumbrance under the Property Registration Decree.

The petitioners assailed the RTC decision through a petition for certiorari (RULE 65) filed with the CA. The CA found no reason to reverse the trial court’s decision and accordingly affirmed.

The Court found that the petitioners, by resorting to a certiorari petition, erred in choosing the legal remedy against the CA rulings. We noted that the errors the petitioners raised were errors of law rather than errors of jurisdiction, since "[t]he gist of [the] petitioners’ objections to the CA ruling was the appellate court’s failure to appreciate their arguments and evidence in support of their claims, but this does not amount to an error of jurisdiction. A certiorari writ will not be issued to cure errors by the lower court in its appreciation of the evidence, its conclusions anchored on the said findings, and its conclusions of law. As long as the court acts within its jurisdiction, any alleged errors committed in the exercise of its discretion will amount to nothing more than mere errors of judgment, correctible by an appeal x x x [by] certiorari filed under Rule 45 [of the Rules of Court]." We considered the resort to a certiorari petition under Rule 65 as a disingenuous move to circumvent the rule on the period for filing an appeal by certiorari under Rule 45 which allows only 15 days from notice of the judgment appealed from to file an appeal. As the


petition was filed 38 days after receipt of the assailed CA resolution denying the motion for reconsideration, the petitioners used the certiorari petition as a substitute for the lost appeal, a move the Court has consistently reproved.

Despite these procedural lapses, the Court nevertheless reviewed the merits of the petitioners’ case, but as the RTC and the CA did, found nothing to support the petitioners’ claims. In seeking to enjoin Napocor from selling Lot 1873 and to claim damages for the use and occupation thereof, the petitioners relied on their claim of ownership which they contended was sufficiently proved by (1) the certification from the Bureau of Lands showing that their predecessor, Crispulo Ferrer, was a survey claimant, and (2) the OCTs covering the lot in the name of co-petitioner Emiliano Ferrer. We rejected these claims by ruling that:

The Bureau of Lands Certification did not adequately establish their right to Lot 1873. All that the Certification proved was that Crispulo Ferrer was a survey claimant. The purpose of a survey plan is simply to identify and delineate the extent of the land. A survey plan, even if approved by the Bureau of Lands, is not a proof of ownership of the land covered by the plan. We further ruled that any objection the petitioners might have against the sale of Lot 1873 between Napocor and Oliva Ferrer has already been barred by the principle of laches. We explained:

From 1936 when Napocor began construction of the power plant up to 1997 when the action for injunction and damages was instituted, the petitioners made no move to assert their claim over Lot 1873; for 61 long years, the petitioners have slept on their rights, but now ironically demand vigilance on the Court’s part to protect their rights.

As for Lot 72, we declared that: [T]he CA correctly pointed out that the petitioners never took any issue with the RTC’s ruling concerning the parties’ rights over [this lot]; the petitioners devoted most of their time discussing their claims over Lot 1873. At any rate, the parties’ rights with respect to these lots [this lot] have been carefully considered and resolved by the RTC and CA, and we agree with their findings and conclusions [that Napocor’s easement rights over Lot 72 subsists].24

Insisting that they have a rightful claim over Lot 1873 and Lot 72, the petitioners now request leave to file a second motion for reconsideration.

Petitioners’ Second Motion for Reconsideration

The petitioners insist that they have a better claim than Napocor over Lot 1873 and Lot 72. Believing that they have a strong and meritorious case against Napocor, the petitioners contend that the interest of justice should override the application of procedural rules and the principle of laches.

In support of their claim over Lot 1873, the petitioners reiterate the same allegations and arguments they raised before the RTC and the CA (specifically, the Bureau of Lands certificate in Crispulo Ferrer’s name). They also contend that they have acquired ownership over Lot 1873 through prescription, as their predecessors have taken possession of and occupied the lot since 1916. By the time Napocor purportedly purchased the lot from Oliva Ferrer in 1940 and 1948, the petitioners have already acquired ownership over Lot 1873 through extraordinary acquisitive prescription for over 30 years under Article 1137 of the Civil Code.Second Petition for review denied.

ISSUE: Whether the petitioners have better right over the properties in question

RULING: NO.RATIONALE: First, The Court shall not entertain a second motion for reconsideration, and any exception to this rule can only be granted in the higher interest of justice by the Court en banc upon a vote of at least two-thirds of its actual membership. There is reconsideration “in the higher interest of justice” when the assailed decision is not only legally erroneous, but is likewise patently unjust and potentially capable of causing unwarranted and irremediable injury or damage to the parties. A second motion for reconsideration can only be entertained before the ruling sought to be reconsidered becomes final by operation of law or by the Court’s declaration. In the Division, a vote of three Members shall be required to elevate a second motion for reconsideration to the Court En Banc. Aside from meeting the voting requirements, a movant is


required by the IRSC to substantially show that a reconsideration of the Court’s ruling is necessary in the higher interest of justice, which standard is satisfied upon proving that the assailed ruling is both (1) legally erroneous and (2) patently unjust and potentially capable of causing unwarranted and irremediable injury or damage to the parties.

Second, The petitioners insist that the Bureau of Lands certificate, stating that their predecessor Crispulo Ferrer was a survey claimant of the property covered by Cadastral Survey No. 90 of Lumban, Laguna, sufficiently establishes their claim over Lot 1873, despite our consistent ruling that the certificate is no proof of title of ownership over the property. A survey made in a cadastral proceeding merely identifies each lot preparatory to a judicial proceeding for adjudication of title to any of the lands upon claim of interested parties. The purpose of a survey plan is simply to identify and delineate the extent of the land. It is not a proof of ownership of the land covered by the plan.

The application of the principle of laches requires the presence of the following elements—all of which are present in this case: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complainant seeks a remedy; (2) delay in asserting the complainant’s right, the complainant having had knowledge or notice, of defendant’s conduct and having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred.

AND LASTLY, The essence of the Court’s adjudicatory function is to apply the law to facts, as supported by the evidence and the records. The petitioners have already exhausted all possible legal arguments and, as we have discussed, none of which are compelling enough to require reconsideration of our past ruling. To be sure, repetitive filing of legally useless submissions cannot pressure this Court into taking another look at an unmeritorious case; they can only increase the petitioners’ legal expenses, as in this case, where we are ordering the payment of

double costs for the act of unnecessarily and stubbornly wasting the Court’s time.


RE: Adherence to Jurisdiction: Exceptions

LUCIA BARRAMEDA VDA. DE BALLESTEROS, petitioner, vs. RURAL BANK OF CANAMAN, INC., represented by its Liquidator, THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, respondent.This is a petition for review on certiorari

FACTS: It appears from the records that on March 17, 2000, petitioner Lucia Barrameda Vda. De Ballesteros (Lucia) filed a complaint for Annulment of Deed of Extrajudicial Partition, Deed of Mortgage and Damages with prayer for Preliminary Injunction against her children, Roy, Rito, Amy, Arabel, Rico, Abe, Ponce Rex and Adden, all surnamed Ballesteros, and the Rural Bank of Canaman, Inc., Baao Branch (RBCI) before the RTC-Iriga.

In her complaint, Lucia alleged that her deceased husband, Eugenio, left two (2) parcels of land located in San Nicolas, Baao, Camarines Sur ,mon March 6, 1995, without her knowledge and consent, her children executed a deed of extrajudicial partition and waiver of the estate of her husband wherein all the heirs, including Lucia, agreed to allot the two parcels to Rico Ballesteros (Rico); that, still, without her knowledge and consent, Rico mortgaged Parcel B of the estate in favor of RBCI which mortgage was being foreclosed for failure to settle the loan secured by the lot; and that Lucia was occupying Parcel B and had no other place to live. She prayed that the deed of extrajudicial partition and waiver, and the subsequent mortgage in favor of RBCI be declared null and void having been executed without her knowledge and consent. She also prayed for damages.

In its Answer, RBCI claimed that in 1979, Lucia sold one of the two parcels to Rico which

represented her share in the estate of her husband. The extrajudicial partition, waiver and mortgage were all executed with the knowledge and consent of Lucia although she was not able to sign the document. RBCI further claimed that Parcel B had already been foreclosed way back in 1999 which fact was known to Lucia through the auctioning notary public.

The case was then set for pre-trial conference. During the pre-trial, RBCI’s counsel filed a motion to withdraw after being informed that Philippine Deposit Insurance Corporation (PDIC) would handle the case as RBCI had already been closed and placed under the receivership of the PDIC. Consequently, on February 4, 2002, the lawyers of PDIC took over the case of RBCI.

On May 9, 2003, RBCI, through PDIC, filed a motion to dismiss on the ground that the RTC-Iriga has no jurisdiction over the subject matter of the action. RBCI stated that pursuant to Section 30, Republic Act No. 7653 (RA No. 7653), otherwise known as the "New Central Bank Act," the RTC-Makati, already constituted itself, per its Order dated August 10, 2001, as the liquidation court to assist PDIC in undertaking the liquidation of RBCI. Thus, it fell within the exclusive jurisdiction of such liquidation court. Lucia opposed the motion.

On July 29, 2003, the RTC-Iriga issued an order granting the Motion to Dismiss.

Thereafter, Lucia appealed the RTC ruling to the CA on the ground that the RTC-Iriga erred in dismissing the case because it had jurisdiction over Civil Case under the rule on adherence of jurisdiction.

Hence the CA ordered the consolidation of said case with the liquidation case docketed as Special Proceeding thereof stating thatThe consolidation is desirable in order to prevent confusion, to avoid multiplicity of suits and to save unnecessary cost and expense. Needless to add, this procedure is well in accord with the principle that the rules of procedure shall be liberally construed in order to promote their object and to assist the parties in obtaining just, speedy and inexpensive determination of every action and proceeding (Vallacar Transit, Inc. v. Yap, 126 SCRA 500 [1983]; Suntay v. Aguiluz, 209 SCRA 500 [1992] citing Ramos v. Ebarle, 182 SCRA 245 [1990]). It would be more in keeping with the demands of


equity if the cases are simply ordered consolidated. Pursuant to Section 2, Rule 1, Revised Rules of Court, the rules on consolidation should be liberally construed to achieve the object of the parties in obtaining just, speedy and inexpensive determination of their cases (Allied Banking Corporation v. Court of Appeals, 259 SCRA 371 [1996]). …

Lucia filed a motion for reconsideration but it was denied by the CA. Hence, the present petition for review on certiorari anchored on the following grounds:

(I) The CA erred in ruling that RTC of Iriga does not have the jurisdiction over the civil case upholdin the doctrine of adherence as a principle. (II) Erred in ruling the consolidation of the civil cases and its liquidation

ISSUE: WON RTC Iriga has jurisdiction over the civil case

RULING: NO. The Court recognizes the doctrine on adherence of jurisdiction. Lucia, however, must be reminded that such principle is not without exceptions. It is well to quote the ruling of the CA on this matter, thus: This Court is neither unmindful nor unaware of the doctrine on the adherence of jurisdiction. However, the rule on adherence of jurisdiction is not absolute and has exceptions. One of the exceptions is that when the change in jurisdiction is curative in character.

Moreover, it is clear, therefore, that the liquidation court has jurisdiction over all claims, including that of Lucia against the insolvent bank. As declared in Miranda v. Philippine Deposit Insurance Corporation, 501 SCRA 288 (2006), regular courts do not have jurisdiction over actions filed by claimants against an insolvent bank, unless there is a clear showing that the action taken by the BSP, through the Monetary Board, in the closure of financial institutions was in excess of jurisdiction, or with grave abuse of discretion. The same is not obtaining in this present case.

Lucia’s complaint falls within the purview of a disputed claim in contemplation of Section 30 of R.A. 7653 (The New Central Bank Act); the jurisdiction should be lodged with the liquidation court.

WHEREFORE, the petition is DENIED.


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Biaco - Ballesteros