Where to File Certiorari Against PDIC Decisions on Deposit Insurance Claims

The Supreme Court's ruling in Spouses Chugani v. Philippine Deposit Insurance Corporation (G.R. No. 230037, March 19, 2018) clarifies two important points for depositors and their counsel: first, which court has jurisdiction over petitions questioning PDIC decisions on deposit insurance claims, and second, what constitutes an insurable deposit under the PDIC Charter.

The case arose when depositors filed claims with the PDIC after Rural Bank of Mawab (Davao), Inc. was placed under receivership and closed. The PDIC denied their claims, prompting the depositors to file a Petition for Certiorari under Rule 65 before the Regional Trial Court (RTC), which dismissed the petition for lack of jurisdiction. The Court of Appeals (CA) affirmed, and the depositors elevated the matter to the Supreme Court.

The Facts of the Case

The depositors opened time deposit accounts with the rural bank through inter-branch deposits to the bank's accounts maintained in Metrobank and China Bank. Certificates of Time Deposit (CTDs) and official receipts were issued to them. When the bank was closed, the depositors filed claims for deposit insurance.

The PDIC denied the claims on three grounds: (1) the deposit accounts were not part of the bank's outstanding deposit liabilities based on bank records; (2) the CTDs were fraudulent—mere replicas of unissued CTDs in the bank's inventory; and (3) the amounts deposited were credited to the personal account of the bank president, not to the bank itself.

The Issue: Which Court Has Jurisdiction?

The central question was whether the RTC or the CA has jurisdiction over a petition for certiorari questioning a PDIC decision denying a deposit insurance claim.

The Supreme Court ruled that the PDIC exercises a quasi-judicial function when it grants or denies deposit insurance claims. This is evident from the PDIC Charter, which provides that PDIC actions on claims are final and executory and may only be set aside through a petition for certiorari on grounds of grave abuse of discretion.

Under Section 4, Rule 65 of the Rules of Court, petitions for certiorari involving the acts or omissions of a quasi-judicial agency are cognizable by the Court of Appeals. The RTC, therefore, had no jurisdiction over the depositors' petition.

The Court further noted that Republic Act No. 10846, which enhanced the resolution and liquidation framework for banks, expressly settled the matter: PDIC actions may only be restrained or set aside by the Court of Appeals upon a petition for certiorari filed within thirty (30) days from notice of denial of the claim.

What Makes a Deposit Insurable?

Even if the petition had been treated as properly filed before the CA, the Court found it without merit. The PDIC did not commit grave abuse of discretion in denying the claims.

Under Section 4(f) of R.A. No. 3591, as amended by R.A. No. 9576, a "deposit" refers to the unpaid balance of money received by a bank in the usual course of business and for which it has given or is obliged to give credit to a deposit account. PDIC Regulatory Issuance No. 2011-02 further requires that a legitimate deposit must be: (1) received by the bank as a deposit in the usual course of business; (2) recorded in the bank's books as such; and (3) opened in accordance with BSP and PDIC requirements.

Here, the money was credited to the bank president's personal account, not recorded as a bank liability, and the CTDs were not validly issued. The depositors' practice of opening time deposits through inter-branch deposits could hardly be considered the ordinary course of business. The PDIC's denial was therefore validly grounded on facts, law, and regulations.

Practical Takeaways

• File certiorari petitions against PDIC decisions with the Court of Appeals, not the RTC. The 30-day period to file runs from notice of denial of the claim.
• Verify that a deposit is recorded in the bank's books as a liability before relying on it for insurance coverage. Deposits credited to a bank officer's personal account are not insurable.
• Be wary of unusual deposit arrangements, such as inter-branch deposits to a bank's accounts with other banks, which may fall outside the usual course of business.
• CTDs must be validly issued by the bank. Replicas of unissued certificates in the bank's inventory will not support an insurance claim.
• Act promptly: the remedy against a PDIC denial is a petition for certiorari on grounds of grave abuse of discretion, not an ordinary appeal.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.