G.R. No. 118917 - December 22, 1997 Philippine Deposit Insurance Corporation vs. Court of Appeals

G.R. No.
118917 - December 22, 1997 On September 14, 1987, the trial court, declared the
Philippine Deposit Insurance Corporation vs. Court of Central Bank in default for failing to file an answer.
Appeals On May 29, 1989, the trial court rendered its decision
ordering the defendants therein to pay plaintiffs, jointly and
FACTS: severally, the amount corresponding to the latter’s
On September 22, 1983, plaintiffs-appellees invested in certificates of time deposit.
money market placements with the Premiere Financing Both PDIC and RSB appealed.
Corporation (PFC) in the sum of P10,000.00 each for
which they were issued by the PFC corresponding ISSUE:
promissory notes and checks. On the same date Whether or not PDIC can be held liable for value of the
(September 22, 1983), John Francis Cotaoco, for and in certificates of time deposit held by the petitioners.
behalf of plaintiffs-appellees, went to the PFC to encash
the promissory notes and checks, but the PFC referred him HELD:
to the Regent Saving Bank (RSB). Instead of paying the NO.
promissory notes and checks, the RSB, upon agreement of
Cotaoco, issued the subject 13 certificates of time deposit Whenever an insured bank shall have been closed on
with Nos. 09648 to 09660, inclusive, each stating, among account of insolvency, payment of the insured deposits in
others, that the same certifies that the bearer thereof has such bank shall be made by the Corporation as soon as
deposited with the RSB the sum of P10,000.00; that the possible. The term “deposit” means the unpaid balance of
certificate shall bear 14% interest per annum; that the money or its equivalent received by a bank in the usual
certificate is insured up toP15,000.00 with the PDIC; and course of business and for which it has given or is obliged
that the maturity date thereof is on November 3, 1983 to give credit to a commercial, checking, savings, time or
(Exhs. “B”, “B-1” to “B-12”). thrift account or which is evidence by passbook, check
and/or certificate of deposit printed or issued in accordance
On the aforesaid maturity dated (November 3, 1983), with Central Bank rules and regulations and other
Cotaoco went to the RSB to encash the said certificates. applicable laws, together with such other obligations of a
Thereat, RSB Executive Vice President Jose M. Damian bank which, consistent with banking usage and practices,
requested Cotaoco for a deferment or an extension of a the Board of Directors shall determine and prescribe by
few days to enable the RSB to raise the amount to pay for regulations to be deposit liabilities of the Bank. These
the same (Exh. “D”). Cotaoco agreed. Despite said pieces of evidence convincingly show that the subject
extension, the RSB still failed to pay the value of the CTDs were indeed issued without RSB receiving any
certificates. Instead, RSB advised Cotaoco to file a claim money therefor. No deposit, as defined in Section 3 (f) of
with the PDIC. R.A. No. 3591, therefore came into existence. Accordingly,
petitioner PDIC cannot be held liable for value of the
Meanwhile, on June 15, 1984, the Monetary Board of the certificates of time deposit held by private respondents.
Central Bank issued Resolution No. 788 (Exh. ‘2’, Records,
p. 159) suspending the operations of the RSB. Eventually,
the records of RSB were secured and its deposit liabilities
were eventually determined. On December 7, 1984, the
Monetary Board issued Resolution No. 1496 (Exh. ‘1’)
liquidating the RSB. Subsequently, a masterlist or
inventory of the RSB assets and liabilities was prepared.
However, the certificates of time deposit of plaintiffs-
appellees were not included in the list on the ground that
the certificates were not funded by the PFC or duly
recorded as liabilities of RSB.
On September 4, 1984, plaintiffs-appellees filed with the

PDIC their respective claims for the amount of the
certificates (Exhs. “C”, “C-1”, to “C-12”). Sabina Yu, James
Ngkaion, Elaine Ngkaion and Jeffrey Ngkaion, who have
similar claims on their certificates of time deposit with the
RSB, likewise filed their claims with the PDIC. To their
dismay, PDIC refused the aforesaid claims on the ground
that the Traders Royal Bank Check No. 299255 dated
September 22, 1983 for the amount of P125,846.07 (Exh.
“B”) issued by PFC for the aforementioned certificates was
returned by the drawee bank for having been drawn
against insufficient funds; and said check was not replaced
by the PFC, resulting in the cancellation of the certificates
as indebtedness or liabilities of RSB.
Consequently, on March 31, 1987, private respondents
filed an action for collection against PDIC, RSB and the
Central Bank.

G.R. No. 118917 - December 22, 1997 Philippine Deposit Insurance Corporation vs. Court of Appeals

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G.R. No. 118917 - December 22, 1997 Philippine Deposit Insurance Corporation vs. Court of Appeals

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On September 4, 1984, plaintiffs-appellees filed with the

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