Case Summary (G.R. No. L-33327)
Key Dates
• March 17, 2000 – Lucia files Civil Case No. IR-3128 for annulment of extrajudicial partition, mortgage and damages before RTC-Iriga.
• January 2001 – RBCI closed and placed under PDIC receivership.
• July 29, 2003 – RTC-Iriga grants RBCI’s motion to dismiss for lack of jurisdiction in favor of the liquidation court.
• August 15, 2006 – CA modifies RTC-Iriga’s dismissal, ordering consolidation of Civil Case No. IR-3128 with Special Proceedings No. M-5290 before RTC-Makati.
• December 14, 2006 – CA denies Lucia’s motion for reconsideration.
• November 24, 2010 – Supreme Court denies petition for review on certiorari.
Applicable Law
• 1987 Philippine Constitution (judicial power; due process; equal protection)
• Rule 45, Revised Rules of Civil Procedure (petition for review on certiorari)
• Section 30, Republic Act No. 7653 (“New Central Bank Act”) – jurisdiction and procedure in liquidation of banks
• Rule 1, Section 2, Revised Rules of Court – liberal construction of consolidation rules
• Civil Code provisions on preference of creditors
Procedural Posture
Lucia sought nullification of a 1995 extrajudicial partition and mortgage executed by her children without her consent, and damages. RBCI asserted prior sale of one parcel, alleged Lucia’s knowledge and consent, and invoked foreclosure in 1999. After RBCI’s closure, PDIC took over and moved to dismiss for lack of jurisdiction in RTC-Iriga, asserting exclusive jurisdiction of RTC-Makati as liquidation court under Section 30, RA 7653. RTC-Iriga granted the motion; Lucia appealed. The CA set aside the dismissal and ordered consolidation of her case with the liquidation proceedings. Lucia petitioned for review, urging adherence of jurisdiction doctrine and improper consolidation.
Issue Presented
Whether a liquidation court can assume jurisdiction over a case whose principal relief is annulment of partition and mortgage, not merely a money claim, and whether the doctrine of adherence of jurisdiction prevents transfer of Lucia’s pending action from RTC-Iriga to the liquidation court.
Analysis on Adherence of Jurisdiction
• Doctrine: Once jurisdiction attaches and a court commences proceedings, it ordinarily retains jurisdiction to final resolution.
• Exception: Jurisdictional vesting may be ousted by subsequent, curative legislation or when specialized jurisdiction is conferred to promote orderly adjudication (Garcia v. Martinez; Manalo v. CA).
• Here, Section 30, RA 7653 is curative, consolidating all claims against an insolvent bank in a single liquidation proceeding to prevent multiplicity of suits, ensure equal treatment of creditors, and safeguard depositors.
Exclusive Jurisdiction of the Liquidation Court
• Section 30 vests the liquidation court with authority to adjudicate “disputed claims,” broadly defined to include specific performance, breach of contract, damages, and other causes of action against the insolvent bank.
• Jurisdictional transfer under Section 30 applies regardless of when the civil complaint was filed (Lipana v. Development Bank of Rizal; Morfe doctrine). Allowing separate enforcement would prejudice other creditors and defeat the statutory scheme.
Consolidation of Proceedings
• Rule 1, Section 2, Revised Rules of Court mandates liberal construction of consolidation rules to achieve just, speedy, and inexpensive determination.
• CA’s consolidation avoids conflicting judgments, multiplicity of actions, and unnecessary expenses (Vallacar Transit v
Case Syllabus (G.R. No. L-33327)
Procedural Posture
- Petition for review on certiorari under Rule 45 filed by petitioner Lucia Barrameda Vda. de Ballesteros.
- Challenged the August 15, 2006 Decision of the Court of Appeals (CA-G.R. No. 82711), which modified the Regional Trial Court of Iriga City, Branch 36 (RTC-Iriga) ruling.
- CA set aside the RTC-Iriga dismissal and ordered consolidation of Civil Case No. IR-3128 with Special Proceeding Case No. M-5290 (liquidation case) before RTC-Makati, Branch 59.
Facts
- Deceased husband Eugenio left two parcels of land (each 357 sq. m.) in San Nicolas, Baao, Camarines Sur.
- On March 6, 1995, petitioner’s children executed an extrajudicial partition and waiver allocating both parcels to Rico Ballesteros without petitioner’s knowledge or consent.
- Rico mortgaged Parcel B in favor of Rural Bank of Canaman, Inc. (RBCI); foreclosure proceedings ensued for unpaid loan.
- Petitioner, occupying Parcel B, filed on March 17, 2000 a complaint for annulment of the extrajudicial partition, mortgage, and damages with prayer for preliminary injunction, docketed as Civil Case No. IR-3128.
Answer and Counterclaim of RBCI/PDIC
- RBCI alleged that petitioner sold one parcel to Rico in 1979 representing her share.
- Claimed partition, waiver, and mortgage were executed with petitioner’s knowledge (though unsigned) and that foreclosure occurred in 1999, of which petitioner was notified.
- Pleaded attorneys’ fees as counterclaim.
- After RBCI’s closure and placement under PDIC receivership, PDIC lawyers took over the defense (February 4, 2002).
- On May 9, 2003, through PDIC, moved to dismiss for lack of jurisdiction, asserting exclusive jurisdiction of RTC-Makati as liquidation court under Section 30, R.A. 7653.
RTC-Iriga Ruling
- On July 29, 2003, RTC-Iriga granted the motion to dismiss, citing Supreme Court precedents (Ong v. C.A.; Hernandez v. Rural Bank of Lucena, Inc.) that a liquidation court has jurisdiction over all claims against a closed bank.
- Dismissed Civil Case No. IR-3128 without prejudice to petitioner’s filing before RTC-Makati, Branch 59.
- Petitioner appealed to the CA, invoking the rule on ad