GR L 44932; (April, 1988) (Digest)
G.R. No. L-44932. April 15, 1988.
JOSE CARANDANG and BENITA CARANDANG, petitioners, vs. COURT OF APPEALS, RURAL BANK OF LUCENA, INC., APRONIANO MLS. MAGSINO, CENTRAL BANK OF THE PHILIPPINES, HONESTO O. FRANCISCO, and CARLOTA P. VALENZUEIA, respondents.
FACTS
The Rural Bank of Lucena was ordered liquidated by the Central Bank. During liquidation, an asset listed was a loan secured by a real estate mortgage allegedly executed by petitioners Jose and Benita Carandang over their land in San Pablo City. The Central Bank, as liquidator, sought to foreclose on the property. The Carandangs filed a complaint with the Court of First Instance (CFI) of Laguna for the nullification of the promissory note and mortgage deed, claiming these documents were forgeries, and secured a restraining order against the foreclosure sale.
The CFI of Laguna initially ruled in favor of the Carandangs, declaring the documents null and void. However, upon a motion for reconsideration by the Central Bank, a different judge of the same CFI set aside the decision and dismissed the case for lack of jurisdiction. The court held that exclusive jurisdiction over matters concerning the bank’s assets lay with the Manila CFI presiding over the liquidation proceedings. The Court of Appeals affirmed the dismissal on jurisdictional grounds, while itself agreeing with the factual finding that the documents were indeed forgeries.
ISSUE
Whether the Court of First Instance of Laguna had jurisdiction over the petitioners’ action for the nullification of a forged promissory note and real estate mortgage involving a property within its territory, despite the pendency of liquidation proceedings over the creditor bank in another court.
RULING
Yes, the CFI of Laguna had jurisdiction. The Supreme Court clarified the nature of the action. An action for the annulment of a real estate mortgage and the underlying debt is a personal action. However, the pivotal factor was the finding, affirmed by the Court of Appeals, that the promissory note and mortgage were forgeries. This finding meant that the bank never acquired any valid lien or interest in the subject property. Consequently, the property was never a legitimate asset of the insolvent bank to be administered by the liquidation court.
The liquidation court’s jurisdiction under Presidential Decree No. 72 extends only to the actual assets of the bank. Since the mortgage was declared void ab initio, the petitioners’ land did not form part of the bank’s estate. Therefore, the property was not in custodia legis of the Manila liquidation court. The CFI of Laguna, as the court where the property was situated, properly exercised jurisdiction over an action seeking to remove a cloud on the title to that property. The Supreme Court reversed the dismissal and reinstated the declaration that the documents were null and void.