Domingo Manalo

v.
Court of Appeals
G.R. No. 141297
October 8, 2001

Facts:

Villanueva Enterprises represented by its president, Therese Villanueva Vargas,

mortgaged certain properties to PAIC Savings and Mortgage Bank and the Philippine American
Investment Corporation which was subsequently foreclosed for failure to pay. Because Vargas
was unable to redeem the property, she offered to repurchase the same through its then
liquidator, the Central Bank as it was placed under liquidation. The negotiations failed, so Vargas
filed a case annulling the foreclosure sale, to no avail. Despite such, Vargas sold and leased the
subject properties to another person who subsequently assigned such rights to Manalo even
when it no longer owned the same. As the annulment case had attained finality the bank then
under liquidation, was granted a writ of possession to take over the properties. The writ was
questioned by Manalo on the ground that the court that issued the writ had no jurisdiction to do
so, because the liquidation court should have issued the same considering that the bank was
undergoing liquidation. Hence, this petition.

Issue: Whether or not the regular court has jurisdiction to issue the writ of possession granted to
a bank undergoing liquidation.

Ruling:

Petitioner apparently failed to appreciate the correct meaning and import of the law. The
legal provision only finds operation in cases where there are claims against an insolvent bank. In
fine, the exclusive jurisdiction of the liquidation court pertains only to the adjudication of claims
against the bank. It does not cover the reverse situation where it is the bank which files a claim
against another person or legal entity. The Petition for the Issuance of a Writ of Possession in
Civil Case No. 9011 is not in the nature of a disputed claim against the bank. On the contrary, it
is an action instituted by the respondent bank itself for the preservation of its asset and
protection of its property. It was filed upon the instance of the respondent's liquidator in order
to take possession of a tract of land over which it has ownership claims. Furthermore, the bank
cannot be considered “dead” for a bank which had been ordered closed by the monetary board
retains its juridical personality which can sue and be sued through its liquidator. The only
limitation being that the prosecution or defense of the action must be done through the
liquidator. Otherwise, no suit for or against an insolvent entity would prosper. In such situation,
banks in liquidation would lose what justly belongs to them through a mere technicality.