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  • A-17 Overseas Bank

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    attyalan
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    This case involves a private respondent who opened a 1-year time deposit of P80,000 with 6% annual interest at Overseas Bank. Due to financial distress, the bank was unable to pay the interest or return the deposit. The respondent sued. The bank argued it could not pay due to insolvency and obligations to other depositors. The court ruled the respondent was not entitled to interest during the period the bank was closed by authority of the Central Bank, nor attorney's fees, as the bank's non-payment was due to Central Bank restrictions, not willful refusal.

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    Overseas Bank v. Cordero

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    This case involves a private respondent who opened a 1-year time deposit of P80,000 with 6% annual interest at Overseas Bank. Due to financial distress, the bank was unable to pay the interest or return the deposit. The respondent sued. The bank argued it could not pay due to insolvency and obligations to other depositors. The court ruled the respondent was not entitled to interest during the period the bank was closed by authority of the Central Bank, nor attorney's fees, as the bank's non-payment was due to Central Bank restrictions, not willful refusal.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    13 views2 pages

    A-17 Overseas Bank

    Uploaded by

    attyalan
    This case involves a private respondent who opened a 1-year time deposit of P80,000 with 6% annual interest at Overseas Bank. Due to financial distress, the bank was unable to pay the interest or return the deposit. The respondent sued. The bank argued it could not pay due to insolvency and obligations to other depositors. The court ruled the respondent was not entitled to interest during the period the bank was closed by authority of the Central Bank, nor attorney's fees, as the bank's non-payment was due to Central Bank restrictions, not willful refusal.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    A-17

    Overseas Bank v. Cordero (1982)

    1956

    Payment of Interest Not due when operation of a bank is suspended by authority, Central Bank

    Private respondent opened a 1-year time deposit with petitioner bank amounting to P80,000, with interest of 6% p.a. Due to its distressed financial condition, the bank was unable to pay. Cordero instituted an action before the CFI Manila. Petitioner raised the defenses of insolvency and prejudice to other depositors. The lower court, and the Court of Appeals, ruled in favor of Cordero. Hence, the instant petition for review on certiorari. Certain supervening events rendered the issue moot and academic. Respondents brother and attorney-infact sent a letter to the Commercial Bank of Manila (petitioners successor-in-interest), acknowledging receipt of P10,000, and another manifestation for P73,840, with waiver of damages. Upon further examination, it was found that the respondents brother has no SPA. Respondents brother submitted the SPA, with explanatory comment that the waiver applies only to third party claims, suits and damages, not to interest

    WON respondent is entitled to (1) interest on his time deposit during the period that petitioner was closed and (2) attorneys fee

    NO The obligation to pay interest on the deposit CEASES THE MOMENT THE OPERATION OF THE BANK IS COMPLETELY SUSPENDED by the Central Bank. Neither can respondent Cordero recover attorneys fees. Petitioners refusal to pay was not due to a willful and dishonest refusal to comply with its obligation but to restrictions imposed by Central Bank.

    and attorneys fees.

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