Scribd Logo
Upload

Welcome to Scribd!

  • 13 views

    Fidelity Savings Bank v. Cenzon

    Uploaded by

    Luigi Macababbad
    Fidelity Savings and Mortgage Bank was declared insolvent by the Monetary Board in 1969 and ordered to cease operations. Spouses Santiago had deposited 100,000 pesos with Fidelity Savings. The Philippine Deposit Insurance Corporation paid them 10,000 pesos, leaving a 90,000 peso balance. The Spouses filed a case against Fidelity Savings seeking the 90,000 balance plus interest, damages, and fees. The Supreme Court ruled that Fidelity Savings did not have to pay interest accrued or damages since it was not operational after being ordered closed, and the proper action was for the Spouses to file a claim in the bank's liquidation proceedings.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Fidelity Savings Bank v. Cenzon

    Uploaded by

    Luigi Macababbad
    13 views2 pages
    Fidelity Savings and Mortgage Bank was declared insolvent by the Monetary Board in 1969 and ordered to cease operations. Spouses Santiago had deposited 100,000 pesos with Fidelity Savings. The Philippine Deposit Insurance Corporation paid them 10,000 pesos, leaving a 90,000 peso balance. The Spouses filed a case against Fidelity Savings seeking the 90,000 balance plus interest, damages, and fees. The Supreme Court ruled that Fidelity Savings did not have to pay interest accrued or damages since it was not operational after being ordered closed, and the proper action was for the Spouses to file a claim in the bank's liquidation proceedings.

    Original Title

    1. Fidelity Savings Bank v. Cenzon

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Fidelity Savings and Mortgage Bank was declared insolvent by the Monetary Board in 1969 and ordered to cease operations. Spouses Santiago had deposited 100,000 pesos with Fidelity Savings. The Philippine Deposit Insurance Corporation paid them 10,000 pesos, leaving a 90,000 peso balance. The Spouses filed a case against Fidelity Savings seeking the 90,000 balance plus interest, damages, and fees. The Supreme Court ruled that Fidelity Savings did not have to pay interest accrued or damages since it was not operational after being ordered closed, and the proper action was for the Spouses to file a claim in the bank's liquidation proceedings.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    13 views2 pages

    Fidelity Savings Bank v. Cenzon

    Uploaded by

    Luigi Macababbad
    Fidelity Savings and Mortgage Bank was declared insolvent by the Monetary Board in 1969 and ordered to cease operations. Spouses Santiago had deposited 100,000 pesos with Fidelity Savings. The Philippine Deposit Insurance Corporation paid them 10,000 pesos, leaving a 90,000 peso balance. The Spouses filed a case against Fidelity Savings seeking the 90,000 balance plus interest, damages, and fees. The Supreme Court ruled that Fidelity Savings did not have to pay interest accrued or damages since it was not operational after being ordered closed, and the proper action was for the Spouses to file a claim in the bank's liquidation proceedings.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Fidelity Savings and Mortgage Bank v.

    Cenzon
    April 5, 1990
    Topic: Regular Banking Unit/Bank Proper

    FACTS
    1. Spouses Timoteo and Olimpia Santiago (Sps. Santiago)
    deposited a total of 100,000 pesos with Petitioner Fidelity
    Savings and Mortgage Bank (Fidelity Savings):
    a. May 16, 1968: 50,000 pesos under Savings Account
    No. 160536
    b. July 6, 1968: 50,000 pesos under Cert. of Time
    Deposit No. 0210
    2. February 18, 1969: The Monetary Board, as per reports,
    found that Fidelity Savings is insolvent
    a. Thus, it issued Resolution No. 350 deciding to:
    i. Forbid Fidelity Savings from doing business
    in the Philippines
    ii. Instruct Acting Superintendent of Banks to
    Take Change of the Bank’s Assets
    3. Superintendent of banks took charge of the assets of
    Fidelity Savings
    4. October 10, 1969: Phil. Deposit Insurance Commission
    paid Sps. Santiago 10,000 pesos for their 100,000 deposit
    with Fidelity Savings. This left a balance of 90,000 pesos
    5. December 9, 1969: Monetary Board issued Resolution No.
    2124 directing the liquidation of the affairs of Fidelity
    Savings
    a. Up to present, liquidation proceedings has not yet
    been terminated
    6. Thus, Sps. Santiago, after sending demand letters to
    Fidelity Savings, filed an action for a sum of money against
    Fidelity Savings with CFI Manila
    7. CFI Manila ruled in favor of Sps. Santiago, ordering
    Fidelity Savings to pay:
    a. 90,000 with interest
    b. 30,000 exemplary damages
    c. 10,000 attorney’s fees
    8. Hence, this petition by Fidelity Savings

    ISSUE/HELD
    W/N Fidelity Savings may be adjudged to pay interest on unpaid
    balances, exemplary damages, and attorney’s fees - NO

    As to the interest
    Concept/Doctrine
    1. A banking institution which has been declared insolvent
    and subsequently ordered closed by the Central Bank of
    the Philippines cannot be held liable to pay interest on
    bank deposits which accrued during the period when
    the bank is actually closed and non-operational
    a. Rationale: Overseas Bank of Manila v. CA, what
    enables a bank to pay stipulated interest on money
    deposited with it are the other aspects of its
    operation where it is able to generate funds to cover
    the payment of such interest. Without said
    operations generating income, it cannot fulfill its
    obligation to pay stipulated interest
    In this case
    1. Fidelity Savings shall not be liable for interest on bank
    deposits which accrued from the time it was prohibited by
    the Central Bank to continue with its banking operations, or
    when Resolution No. 350 to that effect was issued on
    February 18, 1969.

    As to the damages
    Concept
    1. In the absence of fraud, bad faith, malice or wanton
    attitude, petitioner bank may not be held responsible for
    damages which may be reasonably attributed to the non-
    performance of the obligation
    In this case
    1. There was no fraud or bad faith on the part of Fidelity
    Savings in accepting the deposits of private respondents
    2. The demand to pay the deposits was made and Civil Case
    No. 84800 was filed in the trial court several months after
    its insolvency and after Central Bank had ordered
    petitioner's closure
    a. By that time, petitioner bank was no longer in a
    position to comply with its obligations to its
    creditors, including Sps. Santiago
    3. Moreover, it was also not proven that Fidelity Savings
    actually engaged in anomalous real estate transactions
    4. Proper remedy of Sps. Santiago: file claim in liquidation
    proceedings

    You might also like