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    PDIC Vs CA 2003 (D)

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    Angelic Archer
    1) Respondents had certificates of time deposits (GTDs) with Manila Banking Corporation (MBC) totaling over P1 million. On May 22, 1987, the Monetary Board issued a resolution prohibiting MBC from doing business and placing it under receivership. 2) On May 25, 1987, before the receiver took over, respondent Jose Abad went to MBC and pre-terminated the GTDs, re-depositing the funds into 28 new smaller GTDs totaling under P40,000 each to maximize deposit insurance coverage. 3) PDIC denied claims on 17 of the GTDs, arguing the transactions were irregular and not in the ordinary course of business

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    PDIC Vs CA 2003 (D)

    Uploaded by

    Angelic Archer
    410 views2 pages
    1) Respondents had certificates of time deposits (GTDs) with Manila Banking Corporation (MBC) totaling over P1 million. On May 22, 1987, the Monetary Board issued a resolution prohibiting MBC from doing business and placing it under receivership. 2) On May 25, 1987, before the receiver took over, respondent Jose Abad went to MBC and pre-terminated the GTDs, re-depositing the funds into 28 new smaller GTDs totaling under P40,000 each to maximize deposit insurance coverage. 3) PDIC denied claims on 17 of the GTDs, arguing the transactions were irregular and not in the ordinary course of business

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    PDIC vs CA 2003 [d]

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    1) Respondents had certificates of time deposits (GTDs) with Manila Banking Corporation (MBC) totaling over P1 million. On May 22, 1987, the Monetary Board issued a resolution prohibiting MBC from doing business and placing it under receivership. 2) On May 25, 1987, before the receiver took over, respondent Jose Abad went to MBC and pre-terminated the GTDs, re-depositing the funds into 28 new smaller GTDs totaling under P40,000 each to maximize deposit insurance coverage. 3) PDIC denied claims on 17 of the GTDs, arguing the transactions were irregular and not in the ordinary course of business

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    © All Rights Reserved
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    410 views2 pages

    PDIC Vs CA 2003 (D)

    Uploaded by

    Angelic Archer
    1) Respondents had certificates of time deposits (GTDs) with Manila Banking Corporation (MBC) totaling over P1 million. On May 22, 1987, the Monetary Board issued a resolution prohibiting MBC from doing business and placing it under receivership. 2) On May 25, 1987, before the receiver took over, respondent Jose Abad went to MBC and pre-terminated the GTDs, re-depositing the funds into 28 new smaller GTDs totaling under P40,000 each to maximize deposit insurance coverage. 3) PDIC denied claims on 17 of the GTDs, arguing the transactions were irregular and not in the ordinary course of business

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    of 2

    BANKING LAWS - Digest (Finals)

    Philippine Deposit Insurance


    Corporation, petitioner, vs. The
    Honorable Court of Appeals and
    Jose Abad, Leonor Abad, Sabina
    Abad, Josephine "Josie" Beata
    Abad-Orlina, Cecilia Abad, Pio
    Abad, Dominic Abad, Teodora
    Abad, respondents.
    G.R. No. 126911 | 2003-04-30
    Facts:

    Prior
    to
    May
    22,
    1997,
    respondents had 71 certificates
    of time deposits denominated as
    "Golden Time Deposits" (GTD)
    with an aggregate face value of
    P1,115,889.96. [individually or jointly
    with each other]
    On May 22, 1987, a Friday, the
    Monetary
    Board
    (MB)
    issued
    Resolution 505
    prohibiting
    Manila
    Banking
    Corporation [MBC] to do business in
    the Philippines, and
    - placing its assets and affairs under
    receivership
    The Resolution was not served on
    MBC until Tuesday the following week
    [May 26, 1987], when the designated
    Receiver took over
    On May 25, 1987, the next banking
    day following the issuance of the MB
    Resolution,
    - respondent Jose Abad was at the
    MBC at 9:00 a.m.
    - for the purpose of:
    1] pre-terminating the 71 GTDs and
    2] re-depositing the fund represented
    thereby into 28 new GTDs in
    denominations of P40,000.00 or less
    under
    the
    names
    of
    herein
    respondents individually or jointly
    with each other

    Of the 28 new GTDs, Jose Abad


    - pre-terminated 8 and
    - withdrew the value thereof in the
    total amount of P320,000.00
    Respondents thereafter filed their
    claims with the PDIC
    - for the payment of the remaining
    20 insured GTDs
    On February 11, 1988, PDIC paid
    respondents the value of 3 claims in
    the total amount of P120,000.00
    PDIC, however, withheld payment
    of the 17 remaining claims after
    Washington
    Solidum,
    Deputy
    Receiver of MBC-Iloilo, submitted a
    report to the PDIC
    - that there was massive conversion
    and substitution of trust and deposit
    accounts on May 25, 1987 at MBCIloilo
    The pertinent portions of the report
    stated:
    On May 25, 1987 (Monday) or a day
    prior to the official announcement
    and take-over by CB of the assets
    and liabilities of The Manila Banking
    Corporation,
    - the Iloilo Branch was found to have
    recorded
    an
    unusually
    heavy
    movements in terms of volume and
    amount for all types of deposits and
    trust accounts.
    It appears that the impending
    receivership of TMBC was somehow
    already known to many depositors
    on
    account
    of
    the
    massive
    withdrawals paid on this day which
    practically wiped out the branch's
    entire cash position. . .
    xxx
    . . . The intention was to maximize
    the availment of PDIC coverage

    limited to P40, 000 by spreading out


    big accounts to as many certificates
    under various nominees. . . .
    xxx
    Because
    of the
    report,
    PDIC
    entertained serious reservation
    - in recognizing respondents' GTDs as
    deposit liabilities of MBC-Iloilo.
    Thus, on August 30, 1991, it filed a
    petition for declaratory relief against
    respondents for a judicial declaration
    determination of the insurability of
    respondents' GTDs at MBC-Iloilo.
    Petitioner points that under its
    charter,PDIC is liable only for
    deposits received by a bank "in the
    usual course of business."
    Since May 25, 1987 bank
    transactions were so massive, hence,
    irregular such transactions were not
    made "in the usual course of
    business"; thus, it cannot be made
    liable for deposits subject thereof,
    and
    Since MBC was prohibited from
    doing further business by MB
    Resolution 505 as of May 22, 1987,
    all transactions subsequent to such
    date were not done "in the usual
    course of business."
    In their Answer, respondents set
    up a counterclaim against PDIC
    whereby they asked for payment of
    their insured deposits
    Issue:
    1] W/N PDIC should deny the claims
    on the ground that the transactions
    were not done in the ordinary course
    of business
    2] W/N trial court erred in ordering
    PDIC to pay the balance of the
    deposit insurance to respondents,

    maintaining that the instant petition


    stemmed
    from
    a
    petition
    for
    declaratory relief which does not
    essentially
    entail
    an
    executory
    process
    Held:
    1] NO
    While the MB issued Resolution 505
    on May 22, 1987, a copy thereof was
    served on MBC only on May 26,
    1987.
    MBC and its clients could be given
    the benefit of the doubt that they
    were not aware that the MB
    resolution had been passed, given
    the necessity of confidentiality of
    placing a banking institution under
    receivership.
    Mere conjectures [assumptions]
    that MBC had actual knowledge of its
    impending closure do not suffice.
    The MB resolution could not thus
    have
    nullified
    respondents'
    transactions which occurred prior to
    May 26, 1987.
    2] NO
    Without doubt, a petition for
    declaratory relief does not essentially
    entail an executory process.
    There is nothing in its nature,
    however, that prohibits a counter
    claim from being set-up in the same
    action.
    There is nothing in the nature of a
    special civil action for declaratory
    relief that prescribes the filing of a
    counterclaim based on the same
    transaction, deed or contract subject
    of the complaint.
    A special civil action is after all
    not essentially different from an
    ordinary civil action, which is

    generally governed by Rules 1 to 56


    of the Rules of Court,
    - except that the former deals with a
    special subject matter which makes
    necessary some special regulation
    But the identity between their
    fundamental nature is such that the
    same rules governing ordinary civil
    suits may and do apply to special
    civil actions if not inconsistent with
    or if they may serve to supplement
    the provisions of the peculiar rules
    governing special laws.

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