In Peter L. So v. Philippine Deposit Insurance Corporation, the Supreme Court clarified that the Court of Appeals, not the Regional Trial Court, holds jurisdiction over petitions for certiorari questioning the PDIC’s denial of deposit insurance claims. This ruling reinforces the PDIC’s role as a quasi-judicial agency, emphasizing the specialized nature of its functions in ensuring stability within the banking system and protecting depositors’ interests. The decision underscores the importance of adhering to the proper channels for legal recourse, ensuring that challenges to PDIC actions are addressed by the court with the specific mandate to review such matters.

Navigating Deposit Insurance Claims: Why the Court of Appeals Holds the Key

The case of Peter L. So arose after the Cooperative Rural Bank Bulacan (CRBB) closed its operations and was placed under PDIC receivership. So, a depositor with CRBB, filed an insurance claim with the PDIC, only to have it denied. The PDIC determined that So’s account was funded by proceeds from a terminated account, violating laws against splitting deposits. Aggrieved, So filed a Petition for Certiorari with the Regional Trial Court (RTC) to challenge the PDIC’s decision. The RTC dismissed the petition, citing lack of jurisdiction and stating that the proper venue for such a challenge was the Court of Appeals (CA). This dismissal prompted So to elevate the matter to the Supreme Court, questioning whether the RTC indeed had jurisdiction over his petition. The central issue before the Supreme Court was to determine the proper court to hear challenges to PDIC decisions regarding deposit insurance claims.

The Supreme Court began its analysis by examining the PDIC’s role and functions. Created under Republic Act No. 3591, the PDIC is tasked with insuring deposits in banks to protect the interests of the depositing public. This mandate includes the authority to determine the validity of deposit insurance claims. According to Section 16(a) of the PDIC Charter, as amended, the PDIC is responsible for determining insured deposits due to depositors of a closed bank upon taking over the bank. Further, Section 4(f) of the PDIC’s Charter specifies that the PDIC’s actions, such as denying a deposit insurance claim, are final and executory, subject to review only via a petition for certiorari based on grave abuse of discretion.

Given these responsibilities and powers, the Supreme Court concluded that the PDIC functions as a quasi-judicial agency. The Court cited Lintang Bedol v. Commission on Elections to define quasi-judicial power as:

Quasi-judicial or administrative adjudicatory power on the other hand is the power of the administrative agency to adjudicate the rights of persons before it. It is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.

This determination of the PDIC as a quasi-judicial body was critical in deciding which court had jurisdiction over petitions challenging its decisions. The Supreme Court then turned to Section 4, Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC, which states:

If the petition involves an act or an omission of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed with and be cognizable only by the Court of Appeals.

Based on this rule, the Court concluded that a petition for certiorari questioning the PDIC’s denial of a deposit insurance claim should be filed with the Court of Appeals, not the Regional Trial Court. This conclusion was further supported by Section 22 of the PDIC’s Charter, which explicitly states that “No court, except the Court of Appeals, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the Corporation for any action under this Act.”

Moreover, the Court highlighted the new amendment in the PDIC’s Charter under RA 10846, specifically Section 5(g) thereof, which confirms that actions taken by the PDIC under Section 5(g) are final and executory and may only be restrained or set aside by the Court of Appeals. This legislative intent underscores the specialized jurisdiction of the Court of Appeals in matters concerning PDIC’s decisions.

In summary, the Supreme Court affirmed that the PDIC’s role as a quasi-judicial agency, combined with the specific provisions of the Rules of Court and the PDIC Charter, clearly establishes the Court of Appeals as the proper venue for petitions questioning PDIC’s decisions on deposit insurance claims. This ruling ensures that challenges to PDIC actions are handled by a court with the appropriate expertise and jurisdiction, thereby promoting the stability and efficiency of the deposit insurance system.

FAQs

What was the key issue in this case?	The key issue was to determine which court, the Regional Trial Court (RTC) or the Court of Appeals (CA), has jurisdiction over petitions for certiorari questioning the Philippine Deposit Insurance Corporation’s (PDIC) denial of deposit insurance claims.
What is the PDIC’s role according to the Supreme Court?	The Supreme Court determined that the PDIC functions as a quasi-judicial agency. This means it has the power to adjudicate the rights of persons before it, investigate facts, weigh evidence, and make decisions based on its discretion in a judicial nature.
Which court should a petition for certiorari against the PDIC be filed in?	According to the Supreme Court, a petition for certiorari questioning the PDIC’s denial of a deposit insurance claim should be filed with the Court of Appeals (CA). The RTC does not have jurisdiction over such petitions.
What legal provision supports the Supreme Court’s decision?	Section 4, Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC, states that if a petition involves an act or omission of a quasi-judicial agency, it shall be filed with and be cognizable only by the Court of Appeals.
Does the PDIC Charter support the Court’s decision?	Yes, Section 22 of the PDIC Charter states that no court, except the Court of Appeals, shall issue any temporary restraining order, preliminary injunction, or preliminary mandatory injunction against the Corporation for any action under the Act.
What is the significance of PDIC’s actions being “final and executory”?	The fact that PDIC’s actions are considered final and executory means they take effect immediately, and can only be reviewed by the courts through a petition for certiorari on the ground of grave abuse of discretion.
What is deposit splitting, and why is it relevant to this case?	Deposit splitting is the practice of dividing a large deposit into multiple smaller accounts to obtain deposit insurance coverage beyond the maximum insured amount. The PDIC denied the claim because it believed Peter So’s account was a product of deposit splitting, which is prohibited by law.
What is the effect of RA 10846 on the issue of jurisdiction over PDIC decisions?	RA 10846, specifically Section 5(g), confirms that actions taken by the PDIC under Section 5(g) are final and executory, and may only be restrained or set aside by the Court of Appeals, reinforcing the CA’s jurisdiction over such matters.

The Supreme Court’s decision in Peter L. So v. Philippine Deposit Insurance Corporation clarifies the jurisdictional boundaries for challenging PDIC decisions. This ensures that legal challenges are directed to the appropriate court, promoting efficiency and expertise in resolving disputes related to deposit insurance claims. By affirming the Court of Appeals’ jurisdiction, the ruling reinforces the specialized nature of deposit insurance and the importance of adhering to established legal procedures.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Peter L. So v. PDIC, G.R. No. 230020, March 19, 2018