x x x Luz [R.] Bakunawa and her husband Manuel, now deceased (“Spouses Bakunawa”) are registered owners of six (6) parcels of land covered by TCT Nos. 324985 and 324986 of the Quezon City Register of Deeds, and TCT Nos. 103724, 98827, 98828 and 98829 of the Marikina Register of Deeds. These lots were sequestered by the Presidential Commission on Good Government [(PCGG)].
Sometime in 1990, a certain Teresita Millan (“Millan”), through her representative, Jerry Montemayor, offered to buy said lots for “P6,724,085.71”, with the promise that she will take care of clearing whatever preliminary obstacles there may[]be to effect a “completion of the sale”. The Spouses Bakunawa gave to Millan the Owners Copies of said TCTs and in turn, Millan made a down[]payment of “P1,019,514.29” for the intended purchase. However, for one reason or another, Millan was not able to clear said obstacles. As a result, the Spouses Bakunawa rescinded the sale and offered to return to Millan her down[]payment of P1,019,514.29. However, Millan refused to accept back the P1,019,514.29 down[]payment. Consequently, the Spouses Bakunawa, through their company, the Hi-Tri Development Corporation (“Hi-Tri”) took out on October 28, 1991, a Managers Check from RCBC-Ermita in the amount of P1,019,514.29, payable to Millans company Rosmil Realty and Development Corporation (“Rosmil”) c/o Teresita Millan and used this as one of their basis for a complaint against Millan and Montemayor which they filed with the Regional Trial Court of Quezon City, Branch 99, docketed as Civil Case No. Q-91-10719 [in 1991], praying that:
- That the defendants Teresita Mil[l]an and Jerry Montemayor may be ordered to return to plaintiffs spouses the Owners Copies of Transfer Certificates of Title Nos. 324985, 324986, 103724, 98827, 98828 and 98829;
- That the defendant Teresita Mil[l]an be correspondingly ordered to receive the amount of One Million Nineteen Thousand Five Hundred Fourteen Pesos and Twenty Nine Centavos (P1,019,514.29);
- That the defendants be ordered to pay to plaintiffs spouses moral damages in the amount of P2,000,000.00; and
- That the defendants be ordered to pay plaintiffs attorneys fees in the amount of P50,000.00.
Being part and parcel of said complaint, and consistent with their prayer in Civil Case No. Q-91-10719 that “Teresita Mil[l]an be correspondingly ordered to receive the amount of One Million Nineteen Thousand Five Hundred Fourteen Pesos and Twenty Nine [Centavos] (“P1,019,514.29”)[”], the Spouses Bakunawa, upon advice of their counsel, retained custody of RCBC Managers Check No. ER 034469 and refrained from canceling or negotiating it.
All throughout the proceedings in Civil Case No. Q-91-10719, especially during negotiations for a possible settlement of the case, Millan was informed that the Managers Check was available for her withdrawal, she being the payee.
On January 31, 2003, during the pendency of the abovementioned case and without the knowledge of [Hi-Tri and Spouses Bakunawa], x x x RCBC reported the “P1,019,514.29-credit existing in favor of Rosmil” to the Bureau of Treasury as among its “unclaimed balances” as of January 31, 2003. Allegedly, a copy of the Sworn Statement executed by Florentino N. Mendoza, Manager and Head of RCBCs Asset Management, Disbursement & Sundry Department (“AMDSD”) was posted within the premises of RCBC-Ermita.
On December 14, 2006, x x x Republic, through the [Office of the Solicitor General (OSG)], filed with the RTC the action below for Escheat [(Civil Case No. 06-244)].
On April 30, 2008, [Spouses Bakunawa] settled amicably their dispute with Rosmil and Millan. Instead of only the amount of “P1,019,514.29”, [Spouses Bakunawa] agreed to pay Rosmil and Millan the amount of “P3,000,000.00”, [which is] inclusive [of] the amount of [“]P1,019,514.29”. But during negotiations and evidently prior to said settlement, [Manuel Bakunawa, through Hi-Tri] inquired from RCBC-Ermita the availability of the P1,019,514.29 under RCBC Managers Check No. ER 034469. [Hi-Tri and Spouses Bakunawa] were however dismayed when they were informed that the amount was already subject of the escheat proceedings before the RTC.
On April 17, 2008, [Manuel Bakunawa, through Hi-Tri] wrote x x x RCBC, viz:“We understand that the deposit corresponding to the amount of Php 1,019,514.29 stated in the Managers Check is currently the subject of escheat proceedings pending before Branch 150 of the Makati Regional Trial Court.On April 28, 2008, [Manuel Bakunawa] sent another letter to x x x RCBC reiterating their position as above-quoted.
Please note that it was our impression that the deposit would be taken from [Hi-Tris] RCBC bank account once an order to debit is issued upon the payees presentation of the Managers Check. Since the payee rejected the negotiated Managers Check, presentation of the Managers Check was never made.
Consequently, the deposit that was supposed to be allocated for the payment of the Managers Check was supposed to remain part of the Corporation[s] RCBC bank account, which, thereafter, continued to be actively maintained and operated. For this reason, We hereby demand your confirmation that the amount of Php 1,019,514.29 continues to form part of the funds in the Corporations RCBC bank account, since pay-out of said amount was never ordered. We wish to point out that if there was any attempt on the part of RCBC to consider the amount indicated in the Managers Check separate from the Corporations bank account, RCBC would have issued a statement to that effect, and repeatedly reminded the Corporation that the deposit would be considered dormant absent any fund movement. Since the Corporation never received any statements of account from RCBC to that effect, and more importantly, never received any single letter from RCBC noting the absence of fund movement and advising the Corporation that the deposit would be treated as dormant.”
In a letter dated May 19, 2008, x x x RCBC replied and informed [Hi-Tri and Spouses Bakunawa] that:(Emphases, citations, and annotations were omitted.)
“The Banks Ermita BC informed Hi-Tri and/or its principals regarding the inclusion of Managers Check No. ER034469 in the escheat proceedings docketed as Civil Case No. 06-244, as well as the status thereof, between 28 January 2008 and 1 February 2008.xxx xxx xxx
Contrary to what Hi-Tri hopes for, the funds covered by the Managers Check No. ER034469 does not form part of the Banks own account. By simple operation of law, the funds covered by the managers check in issue became a deposit/credit susceptible for inclusion in the escheat case initiated by the OSG and/or Bureau of Treasury.xxx xxx xxx
Granting arguendo that the Bank was duty-bound to make good the check, the Banks obligation to do so prescribed as early as October 2001.”
Sec. 3. Whenever the Solicitor General shall be informed of such unclaimed balances, he shall commence an action or actions in the name of the People of the Republic of the Philippines in the Court of First Instance of the province or city where the bank, building and loan association or trust corporation is located, in which shall be joined as parties the bank, building and loan association or trust corporation and all such creditors or depositors. All or any of such creditors or depositors or banks, building and loan association or trust corporations may be included in one action. Service of process in such action or actions shall be made by delivery of a copy of the complaint and summons to the president, cashier, or managing officer of each defendant bank, building and loan association or trust corporation and by publication of a copy of such summons in a newspaper of general circulation, either in English, in Filipino, or in a local dialect, published in the locality where the bank, building and loan association or trust corporation is situated, if there be any, and in case there is none, in the City of Manila, at such time as the court may order. Upon the trial, the court must hear all parties who have appeared therein, and if it be determined that such unclaimed balances in any defendant bank, building and loan association or trust corporation are unclaimed as hereinbefore stated, then the court shall render judgment in favor of the Government of the Republic of the Philippines, declaring that said unclaimed balances have escheated to the Government of the Republic of the Philippines and commanding said bank, building and loan association or trust corporation to forthwith deposit the same with the Treasurer of the Philippines to credit of the Government of the Republic of the Philippines to be used as the National Assembly may direct.
At the time of issuing summons in the action above provided for, the clerk of court shall also issue a notice signed by him, giving the title and number of said action, and referring to the complaint therein, and directed to all persons, other than those named as defendants therein, claiming any interest in any unclaimed balance mentioned in said complaint, and requiring them to appear within sixty days after the publication or first publication, if there are several, of such summons, and show cause, if they have any, why the unclaimed balances involved in said action should not be deposited with the Treasurer of the Philippines as in this Act provided and notifying them that if they do not appear and show cause, the Government of the Republic of the Philippines will apply to the court for the relief demanded in the complaint. A copy of said notice shall be attached to, and published with the copy of, said summons required to be published as above, and at the end of the copy of such notice so published, there shall be a statement of the date of publication, or first publication, if there are several, of said summons and notice. Any person interested may appear in said action and become a party thereto. Upon the publication or the completion of the publication, if there are several, of the summons and notice, and the service of the summons on the defendant banks, building and loan associations or trust corporations, the court shall have full and complete jurisdiction in the Republic of the Philippines over the said unclaimed balances and over the persons having or claiming any interest in the said unclaimed balances, or any of them, and shall have full and complete jurisdiction to hear and determine the issues herein, and render the appropriate judgment thereon. (Emphasis supplied.)
Sec. 2. Immediately after the taking effect of this Act and within the month of January of every odd year, all banks, building and loan associations, and trust corporations shall forward to the Treasurer of the Philippines a statement, under oath, of their respective managing officers, of all credits and deposits held by them in favor of persons known to be dead, or who have not made further deposits or withdrawals during the preceding ten years or more, arranged in alphabetical order according to the names of creditors and depositors, and showing:
(a) The names and last known place of residence or post office addresses of the persons in whose favor such unclaimed balances stand;
(b) The amount and the date of the outstanding unclaimed balance and whether the same is in money or in security, and if the latter, the nature of the same; (c) The date when the person in whose favor the unclaimed balance stands died, if known, or the date when he made his last deposit or withdrawal; and (d) The interest due on such unclaimed balance, if any, and the amount thereof.
A copy of the above sworn statement shall be posted in a conspicuous place in the premises of the bank, building and loan association, or trust corporation concerned for at least sixty days from the date of filing thereof: Provided, That immediately before filing the above sworn statement, the bank, building and loan association, and trust corporation shall communicate with the person in whose favor the unclaimed balance stands at his last known place of residence or post office address.
It shall be the duty of the Treasurer of the Philippines to inform the Solicitor General from time to time the existence of unclaimed balances held by banks, building and loan associations, and trust corporations. (Emphasis supplied.)
Sec. 16. Delivery; when effectual; when presumed. - Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting, or indorsing, as the case may be; and, in such case, the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument. But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed. And where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved. (Emphasis supplied.)
Endnotes:
1 The Decision and Resolution in CA-G.R. SP No. 107261 were penned by CA Associate Justice Vicente S.E. Veloso and concurred in by Associate Justices Andres B. Reyes, Jr. and Marlene Gonzales-Sison.
2 The Decision and Order in Civil Case No. 06-244 (for Escheat) was penned by Judge Elmo M. Alameda.
3 CA Decision at 1-2 (Hi-Tri Development Corporation v. Republic of the Philippines, CA-G.R. SP No. 107261, 26 November 2009), rollo, pp. 61-62; RTC Decision at the 18th to the 19th pp. (unpaged) (Republic of the Philippines v. Allied Banking Corporation, Civil Case No. 06-244, 19 May 2008), rollo, pp. 210-211.
4 CA Decision at 2-7, supra, rollo, pp. 62-67.
5 Omnibus Motion at 3-7 (Republic of the Philippines v. Allied Banking Corporation, Civil Case No. 06-244, decided on 19 May 2008), rollo, pp. 217-221. See also RTC Judgment (Bakunawa v. Milan, Civil Case No. Q-91-10719, 17 June 2008), rollo, pp. 287-289.
6 CA Decision at 14-16, supra note 3, rollo, pp. 74-76.
7 Petition for Review on Certiorari of RCBC at 41-49, rollo, pp. 43-51.
8 Act No. 3936, as amended by P.D. 679, Sec. 3; see also Security Savings Bank v. State of California, 263 U.S. 282 (1923).
9 Id.
10 Republic v. Court of First Instance, 247-A Phil. 85 (1988).
11 See Ramos v. Ramos, G.R. No. 144294, 11 March 2003, 399 SCRA 43.
12 See Grey v. De la Cruz, 17 Phil. 49 (1910).
13 Id.
14 Id. (citing Hamilton v. Brown, 161 U.S. 256 (1896)).
15 BLACK’S LAW DICTIONARY 545 (6th ed. 1990); Act No. 3936, as amended by P.D. 679, Secs. 1 and 3. See generally Republic v. Court of Appeals, 426 Phil. 177 (2002) and Roth v. Delano, 338 U.S. 226 (1949).
16 See Act No. 3936, as amended by P.D. 679, Sec. 1 and Security Savings Bank v. State of California, supra note 8. See generally Roth v. Delano, supra.
17 Republic v. Court of Appeals, supra note 15, at 183-184.
18 See generally Roth v. Delano, supra note 15.
19 See also Anderson National Bank v. Luckett, 321 U.S. 233 (1944), cited in American Express Travel Related Services Co., Inc. v. Kentucky, 641 F.3d 685 (6th Circ. 2011) (U.S.).
20 See generally Security Savings Bank v. State of California, supra note 8.
21 Act No. 3936, as amended by P.D. 679 (1975), Sec. 5.
22 Petition for Review on Certiorari of RCBC at 41-49, rollo, pp. 43-51.
23 Comment of Respondents at 7-8, rollo, pp. 651-652.
24 Act No. 2031 (1911), otherwise known as the Negotiable Instruments Law, Sec. 185.
25 Moran v. Court of Appeals, G.R. No. 105836, 7 March 1994, 230 SCRA 799.
26 Act No. 2031 (1911), otherwise known as the Negotiable Instruments Law, Sec. 189.
27 Id. at Sec. 127.
28 Bank of the Philippine Islands v. Roxas, G.R. No. 157833, 15 October 2007, 536 SCRA 168; International Corporate Bank v. Gueco, 404 Phil. 353 (2001).
29 International Corporate Bank v. Gueco, supra.
30 Id.; Republic v. Philippine National Bank, 113 Phil. 828 (1961). A managers or a cashiers check may be treated as a promissory note and is the substantial equivalent of a certified check (Id.; Equitable PCI Bank v. Ong, 533 Phil. 415 (2006); New Pacific Timber & Supply Co., Inc. v. Seneris, 189 Phil. 517 (1980)). Certification signifies that the instrument was drawn upon sufficient funds; that funds have been set apart or assigned for the satisfaction of the check in favor of the payee; and that the funds shall be so applied when the check is presented for payment (Id.). Here, the deposit represented by the check is transferred from the credit of the maker to that of the payee or holder (Id.). Thus, to all intents and purposes, the payee or holder becomes the depositor of the drawee bank, with rights and duties of one in that situation (Id.).
31 Act No. 2031 (1911). See also Malloy v. Smith, 265 Md. 460, 290 A.2d 486, 57 A.L.R.3d 1076 (Md. Ct. App. 1972)(U.S.) (citing Pikeville Nat. Bank & Trust Co. v. Shirley, 281 Ky. 150, 135 S.W.2d 426 (Ky Ct. App. 1939)(U.S.))
32 Petition for Review on Certiorari of RCBC at 27-29, rollo, pp. 29-31.
33 Id. at 53, rollo, p. 55.
34 Letter of RCBC to Hi-Tri at 2, Petition for Review on Certiorari of RCBC, Annex “N,” rollo, p. 180.