G.R. No. 112830; February 1, 1996
JERRY ONG, petitioner, vs. COURT OF APPEALS and RURAL BANK OF OLONGAPO, INC., represented by its Liquidator, GUILLERMO G. REYES, JR. and Deputy Liquidator ABEL ALLANIGUE, respondents.

FACTS

Petitioner Jerry Ong filed a petition with the Regional Trial Court (RTC) of Quezon City to compel the surrender of Transfer Certificates of Title (TCT) Nos. 13769 and 13770 from the Rural Bank of Olongapo, Inc. (RBO), which was under liquidation. Ong alleged that RBO mortgaged the properties to him, he extrajudicially foreclosed the mortgages after the debtor defaulted, and a Certificate of Sale was issued in his favor. After RBO failed to redeem, Ong executed an Affidavit of Consolidation but could not register it because RBO, through its liquidators, refused to surrender the owner’s duplicate certificates of title.
Respondent RBO moved to dismiss the petition, arguing that the RTC of Quezon City lacked jurisdiction. RBO contended that, as a bank under liquidation pursuant to an order from the Monetary Board and with liquidation proceedings (Sp. Proc. No. 170-0-85) pending before the RTC of Olongapo City, the exclusive jurisdiction to adjudicate all claims, including Ong’s, vested in that designated liquidation court. The Quezon City RTC denied the motion, ruling the properties were no longer RBO assets as they were sold prior to liquidation.

ISSUE

Whether a regular court (RTC Quezon City) has jurisdiction over a petition for the surrender of certificates of title against a bank undergoing liquidation, or if such claim falls under the exclusive jurisdiction of the liquidation court.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The liquidation court has exclusive jurisdiction. Section 29 of Republic Act No. 265 (The Central Bank Act), as amended by Presidential Decree No. 1827, grants the liquidation court jurisdiction to adjudicate all disputed claims against the insolvent bank. This provision is general and unqualified, encompassing all claims, whether against the bank’s assets or for specific performance, to prevent multiplicity of suits, ensure orderly liquidation, and protect all creditors.
The legal logic is that liquidation proceedings are designed to centralize the resolution of all claims against the insolvent bank in one forum. The term “disputed claims” is not limited to claims already contested in other courts; it includes any claim that may require adjudication during liquidation. Here, Ong’s claim, while ostensibly for the surrender of titles, is intrinsically a claim against the bank that affects the totality of assets available to all creditors. Since the certificates remain registered in RBO’s name, the properties are, for purposes of the liquidation and vis-à-vis other claimants, still considered part of the bank’s estate until Ong’s claim is formally adjudicated and allowed in the liquidation proceedings. Therefore, Ong must pursue his claim in Sp. Proc. No. 170-0-85 before the RTC of Olongapo City, the proper liquidation court.