G.R. No.

182403               March 9, 2010 and that jurisdiction to adjudicate disputed claims against it is lodged with the
liquidation court-RTC Nasugbu.
ATTY. RESTITUTO G. CUDIAMAT, ERLINDA P. CUDIAMAT1 and CORAZON D.
CUDIAMAT, Petitioners, By Decision of January 17, 2006,5 Branch 9 of the Balayan RTC rendered judgment, in the
vs. complaint for quieting of title, in favor of the plaintiffs-herein petitioners. It ordered
BATANGAS SAVINGS AND LOAN BANK, INC., and THE REGISTER OF DEEDS, NASUGBU, respondent Register of Deeds of Nasugbu to cancel the encumbrance annotated on TCT
BATANGAS, Respondents. No. T-37889, and to cancel TCT No. T-48405 issued in the name of the bank and
reinstate the former title. It also directed the bank to return the property to petitioner
DECISION spouses Restituto and Erlinda and to pay ₱20,000 to all the petitioners to defray the
costs of suit.
CARPIO MORALES, J.:
The bank appealed to the Court of Appeals, contending, inter alia, that the Balayan RTC
had no jurisdiction over petitioners’ complaint for quieting of title.
Petitioner Atty. Restituto Cudiamat and his brother Perfecto were the registered co-
owners of a 320 square meter parcel of land (the property) in Balayan, Batangas,
covered by TCT No. T-37889 of the Register of Deeds of Nasugbu, Batangas. Restituto, By the assailed Decision of December 21, 2007,6 the appellate court, ruling in favor of
who resided in Ozamiz City with his wife, entrusted the custody of the title to who was the bank, dismissed petitioners’ complaint for quieting of title, without prejudice to the
residing in Balayan. right of petitioners to take up their claims with the Nasugbu RTC sitting as a liquidation
court.
In 1979, Perfecto, without the knowledge and consent of Restituto, obtained a loan
from respondent Batangas Savings and Loan Bank, Inc. (the bank). To secure the To the appellate court, the Balayan RTC, as a court of general jurisdiction, should have
payment of the loan, Perfecto mortgaged the property for the purpose of which he deferred to the Nasugbu RTC which sits as a liquidation court, given that the bank was
presented a Special Power of Attorney (SPA) purportedly executed by Restituto, with the already under receivership when petitioners filed the complaint for quieting of title.
marital consent of his wife-herein co-petitioner Erlinda Cudiamat.
Petitioners’ Motion for Reconsideration having been denied by the appellate court by
On June 19, 1991, Restituto was informed, via letter2 dated June 7, 1991 from the bank, Resolution of March 27, 2008, they filed the present petition for review on
that the property was foreclosed. He thus, by letter3 dated June 25, 1991, informed the certiorari.1avvphi1
bank that he had no participation in the execution of the mortgage and that he never
authorized Perfecto for the purpose. Assailing the appellate court’s ruling that the Balayan RTC had no jurisdiction over their
complaint, petitioners argue that their complaint was filed earlier than PDIC’s petition
In the meantime, Perfecto died in 1990. In 1998, as Perfecto’s widow petitioner Corazon for assistance in the liquidation; and that the bank is now estopped from questioning
was being evicted from the property, she and her co-petitioner-spouses Restituto and the jurisdiction of the Balayan RTC because it actively participated in the proceedings
Erlinda filed on August 9, 1999 before the Regional Trial Court (RTC) of Balayan a thereat.
complaint4 "for quieting of title with damages" against the bank and the Register of
Deeds of Nasugbu, docketed as Civil Case No. 3618, assailing the mortgage as being null The petition is impressed with merit.
and void as they did not authorize the encumbrance of the property.
Estoppel bars the bank from raising the issue of lack of jurisdiction of the Balayan RTC.
In its Answer to the complaint, the bank, maintaining the validity of the mortgage,
alleged that it had in fact secured a title in its name, TCT No. T-48405, after Perfecto In Lozon v. NLRC,7 the Court came up with a clear rule on when jurisdiction by estoppel
failed to redeem the mortgage; that the Balayan RTC had no jurisdiction over the case as applies and when it does not:
the bank had been placed under receivership and under liquidation by the Philippine
Deposit Insurance Corporation (PDIC); that PDIC filed before the RTC of Nasugbu a
The operation of estoppel on the question of jurisdiction seemingly depends on whether
petition for assistance in the liquidation of the bank which was docketed as SP No. 576;
the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was
tried and decided upon the theory that it had jurisdiction, the parties are not barred, on
appeal, from assailing such jurisdiction, for the same "must exist as a matter of law, and dated January 17, 2006 of the Regional Trial Court of Balayan, Batangas, Branch 9
may not be conferred by the consent of the parties or by estoppel." However, if the is REINSTATED.
lower court had jurisdiction, and the case was heard and decided upon a given theory,
such, for instance, as that the court had no jurisdiction, the party who induced it to SO ORDERED.
adopt such theory will not be permitted, on appeal, to assume an inconsistent position –
that the lower court had jurisdiction… (underscoring supplied)
CONCHITA CARPIO MORALES
Associate Justice
The ruling was echoed in Metromedia Times Corporation v. Pastorin.8
WE CONCUR:
In the present case, the Balayan RTC, sitting as a court of general jurisdiction, had
jurisdiction over the complaint for quieting of title filed by petitioners on August 9, 1999.
REYNATO S. PUNO
The Nasugbu RTC, as a liquidation court, assumed jurisdiction over the claims against
Chief Justice
the bank only on May 25, 2000, when PDIC’s petition for assistance in the liquidation
Chairperson
was raffled thereat and given due course.

TERESITA J. LEONARDO-DE CASTRO LUCAS P. BERSAMIN

While it is well-settled that lack of jurisdiction on the subject matter can be raised at any
Associate Justice Associate Justice
time and is not lost by estoppel by laches, the present case is an exception. To compel
petitioners to re-file and relitigate their claims before the Nasugbu RTC when the parties
had already been given the opportunity to present their respective evidence in a full-
MARTIN S. VILLARAMA, JR.
blown trial before the Balayan RTC which had, in fact, decided petitioners’ complaint
Associate Justice
(about two years before the appellate court rendered the assailed decision) would be an
exercise in futility and would unjustly burden petitioners.
CERTIFICATION
9
The Court, in Valenzuela v. Court of Appeals,  held that as a general rule, if there is a
judicial liquidation of an insolvent bank, all claims against the bank should be filed in the Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in
liquidation proceeding. The Court in Valenzuela, however, after considering the the above decision had been reached in consultation before the case was assigned to
circumstances attendant to the case, held that the general rule should not be applied if the writer of the opinion of the Court’s Division.
to order the aggrieved party to refile or relitigate its case before the litigation court
would be "an exercise in futility." Among the circumstances the Court considered in that REYNATO S. PUNO
case is the fact that the claimants were poor and the disputed parcel of land was their Chief Justice
only property, and the parties’ claims and defenses were properly ventilated in and
considered by the judicial court.

In the present case, the Court finds that analogous considerations exist to warrant the
application of Valenzuela. Petitioner Restituto was 78 years old at the time the petition
was filed in this Court, and his co-petitioner-wife Erlinda died10 during the pendency of
the case. And, except for co-petitioner Corazon, Restituto is a resident of Ozamis City. To
compel him to appear and relitigate the case in the liquidation court-Nasugbu RTC when
the issues to be raised before it are the same as those already exhaustively passed upon
and decided by the Balayan RTC would be superfluous.

WHEREFORE, the petition is GRANTED. The Decision of December 21, 2007 and
Resolution dated March 27, 2008 of the Court of Appeals are SET ASIDE. The Decision