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Republic of The Philippines vs. Philippine National Bank G.R. No. L-16106 December 30, 1961

This document summarizes a court case from 1961 regarding whether certain bank deposits and credits fell under an escheat law. Specifically, it discusses whether demand drafts held by the First National City Bank of New York for over 10 years without activity could be claimed by the Republic of the Philippines under the law. The court ultimately ruled that the demand drafts did not create a creditor-debtor relationship between the bank and payee and were not considered "credits" under the law since they were never presented for acceptance or payment by the bank. Therefore, the demand drafts were not subject to escheat in favor of the Republic.

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Joanne besoy
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35 views2 pages

Republic of The Philippines vs. Philippine National Bank G.R. No. L-16106 December 30, 1961

This document summarizes a court case from 1961 regarding whether certain bank deposits and credits fell under an escheat law. Specifically, it discusses whether demand drafts held by the First National City Bank of New York for over 10 years without activity could be claimed by the Republic of the Philippines under the law. The court ultimately ruled that the demand drafts did not create a creditor-debtor relationship between the bank and payee and were not considered "credits" under the law since they were never presented for acceptance or payment by the bank. Therefore, the demand drafts were not subject to escheat in favor of the Republic.

Uploaded by

Joanne besoy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BESOY, JOANNE G.

REPUBLIC OF THE PHILIPPINES vs. PHILIPPINE NATIONAL BANK


G.R. No. L-16106; December 30, 1961

Facts:
The Republic of the Philippines filed a complaint for escheat before the CFI of Manila of certain
unclaimed bank deposits balances under the provisions of Act No. 3936 against several banks, one of
them is the First National City Bank of New York.

It is prayed that all the credits and deposits held by the defendant banks in favor of persons
known to be dead or who have not made further deposits or withdrawals during the period of 10 years
or more be escheated to the Republic of the Philippines by ordering defendant banks to deposit them to
its credit with the Treasurer of the Philippines.

The First National City Bank of New York argued that it has accidentally included in its report
certain items amounting to P18,589.89 which are not credits or deposits within the contemplation of
Act No. 3936 which it prayed that said items be excluded in the claim of plaintiff.

The court a quo rendered judgment holding that cashier's is or manager's checks and demand
drafts as those which defendant wants excluded from the complaint come within the purview of Act No.
3936. However, upon filling Motion for Reconsideration, the court a quo changed its view and held that
even said demand drafts do not come within the scope of said Act and so amended its decision
accordingly.

Issue:

Whether the demand drafts come within the meaning of the term "credits" or "deposits" and create a
creditor-debtor relationship between drawee and the payee.

Held:

No, a demand draft is a bill of exchange payable on demand, a bill of exchange within the
meaning of our Negotiable Instruments Law does not operate as an assignment of funds in the hands of
the drawee who is not liable on the instrument until he accepts. This means that in order that a drawee
may be liable on the draft and then become obligated to the payee, it is required that he first accepts
the draft.

Our law requires that when pertaining to drafts or bills of exchange there is need that they be
presented either for acceptance or for payment within a reasonable time after their issuance or after
their last negotiation thereof as the case may be.
Failure to present will discharge the drawer from liability or to the extent of the loss caused by
the delay. Since it is admitted that the demand drafts involved have not been presented either for
acceptance or for payment, the consequence is that the appellee bank never had any chance of
accepting or rejecting them.

Appellee bank never became a debtor of the payee concerned and as such the aforesaid drafts
cannot be considered as credits subject to escheat within the meaning of the law. The case, however, is
different with regard to telegraphic payment orders which the court ruled that it should be escheated in
favor of the Republic of the Philippines.

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