G.R. No. L-38427. March 12, 1975.
CENTRAL BANK OF THE PHILIPPINES as Liquidator of the FIDELITY SAVINGS BANK, petitioner, vs. HONORABLE JUDGE JESUS P. MORFE, as Presiding Judge of Branch XIII, Court of First Instance of Manila, Spouses AUGUSTO and ADELAIDA PADILLA and Spouses MARCELA and JOB ELIZES, respondents.

FACTS

The Monetary Board declared Fidelity Savings Bank insolvent on February 18, 1969, and the Central Bank took charge of its assets. The Board later resolved to seek judicial assistance for liquidation, with the corresponding petition filed in the Court of First Instance of Manila on January 25, 1972. Prior to this judicial liquidation but after the 1969 declaration of insolvency, the respondent spouses Elizes and Padilla separately filed complaints against the bank to recover their time deposits. They obtained final judgments in their favor in December 1972 and April 1972, respectively.
In the liquidation proceeding, the lower court, upon motion of the respondents, ordered the Central Bank as liquidator to pay these time deposits as preferred claims under Article 2244(14)(b) of the Civil Code, which grants preference to credits evidenced by a final judgment. The court directed payment if there were sufficient funds after settling credits preferred under the Central Bank Law. The Central Bank appealed, contending such post-insolvency judgments do not enjoy preference.

ISSUE

Whether final judgments for the payment of time deposits, obtained after a bank has been declared insolvent, constitute preferred claims in the bank’s liquidation.

RULING

No. The Supreme Court reversed the lower court’s orders. The legal logic is anchored on the supremacy of special laws on insolvency over the general provisions of the Civil Code. Article 2237 of the Civil Code explicitly provides that insolvency shall be governed by special laws. The Central Bank Act (Republic Act No. 265) is such a special law, establishing a specific procedure for the liquidation of insolvent banks under the control and supervision of the Monetary Board and the courts.
The Court held that upon the declaration of insolvency and the takeover by the Central Bank, the bank ceases to function in the ordinary course of business. The filing of separate suits and the obtaining of judgments after this point contravene the statutory liquidation process designed to ensure an orderly, centralized, and equitable settlement of claims for the benefit of all creditors. Allowing such judgments to gain preference via Article 2244 would undermine this process and violate the principle of equality among creditors, which is the cornerstone of insolvency proceedings. Claims must be presented in the liquidation proceeding itself, not through independent actions. Therefore, the judgments secured by the respondents, being obtained after insolvency was declared, do not enjoy any preference and must be treated as ordinary claims in the liquidation.