PDIC Vs CA, Et. Al.

PHILIPPINE DEPOSIT INSURANCE CORPORATION, petitioner,
vs.
COURT OF APPEALS, ROSA AQUERO, GERARD YU, ERIC YU, MINA YU, ELIZABETH NGKAION, MERLY
CUESCANO, LETICIA TAN, FELY RUMBANA, LORNA ACUB, represented by their Attorney-in-Fact, JOHN
FRANCIS COTAOCO, respondents.
G.R. No. 118917, December 22, 1997
Petitioner Philippine Deposit Insurance Corporation (PDIC) seeks the reversal of the decision of the Court of
Appeals affirming with modification the decision of the Regional Trial Court holding petitioner liable for the
value of thirteen (13) certificates of time deposit (CTDs) in the possession of private respondents.
FACTS: Plaintiffs-appellees invested in money market placements with the Premiere Financing Corporation
(PFC) in the sum of P10,000.00 each for which they were issued by the PFC corresponding promissory notes
and checks. On the same date John Francis Cotaoco, for and in behalf of plaintiffs-appellees, went to the
PFC to encash the promissory notes and checks, but the PFC referred him to the Regent Saving Bank (RSB).
Instead of paying the promissory notes and checks, the RSB, upon agreement of Cotaoco, issued the
subject 13 certificates of time deposit each stating, among others, that the same certifies that the bearer
thereof has deposited with the RSB the sum of P10,000.00; that the certificate shall bear 14% interest per
annum; that the certificate is insured up to P15,000.00 with the PDIC; and that the maturity date thereof is
on November 3, 1983.
On the aforesaid maturity dated (November 3, 1983), Cotaoco went to the RSB to encash the said
certificates. Thereat, RSB Executive Vice President Jose M. Damian requested Cotaoco for a deferment or
an extension of a few days to enable the RSB to raise the amount to pay for the same. Cotaoco agreed.
Despite said extension, the RSB still failed to pay the value of the certificates. Instead, RSB advised Cotaoco
to file a claim with the PDIC.
Consequently, private respondents filed an action for collection against PDIC, RSB and the Central Bank.
The trial court rendered its decision ordering the PDIC to pay plaintiffs, jointly and severally, the amount
corresponding to the latter's certificates of time deposit.
Both PDIC and RSB appealed. It was dismissed by CA.
ISSUE: Whether or not PDIC is liable for the Certificate of Time Deposits held by private respondents.
RULING. No.
In order that a claim for deposit insurance with the PDIC may prosper, the law requires that a
corresponding deposit be placed in the insured bank.
A deposit as defined in Section 3(f) of R.A. No. 3591, may be constituted only if money or the equivalent of
money is received by a bank:
Sec. 3. As used in this Act —
(f) The term "deposit" means the unpaid balance of money or its equivalent received by a bank in
the usual course of business and for which it has given or is obliged to give credit to a commercial,
checking, savings, time or thrift account or which is evidenced by passbook, check and/or
certificate of deposit printed or issued in accordance with Central Bank rules and regulations and
other applicable laws, together with such other obligations of a bank which, consistent with
banking usage and practices, the Board of Directors shall determine and prescribe by regulations
to be deposit liabilities of the Bank . . . . (Emphasis ours.)
RSB Deputy Liquidator, testified that RSB received three (3) checks in consideration for the issuance of
several CTDs, including the ones in dispute. The first two checks "made good in the clearing" while the third
was returned for being "drawn against insufficient funds."
At the back of said check are the words "Refer to Drawer," 17 indicating that the drawee bank (Traders
Royal Bank) refused to pay the value represented by said check. By reason of the check's dishonor, RSB
cancelled the corresponding as evidence by an RSB "ticket".
These pieces of evidence convincingly show that the subject CTDs were indeed issued without RSB
receiving any money therefor. No deposit, as defined in Section 3 (f) of R.A. No. 3591, therefore came into
existence. Accordingly, petitioner PDIC cannot be held liable for value of the certificates of time deposit
held by private respondents.
The petition is hereby GRANTED and the decision of the Court of Appeals REVERSED. PDIC is absolved from
any liability to private respondents.

PDIC Vs CA, Et. Al.

Uploaded by

Copyright:

Available Formats

PDIC Vs CA, Et. Al.

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PDIC Vs CA, Et. Al.

Uploaded by

Copyright:

Available Formats

PHILIPPINE DEPOSIT INSURANCE CORPORATION, petitioner,

Both PDIC and RSB appealed. It was dismissed by CA.

Sec. 3. As used in this Act —

You might also like