Banking: PDIC vs AQUERO

FACTS: - PDIC seeks the reversal of CA’s decision affirming the RTC’s decision that PDIC is
liable for the value of 13certificate of time deposit (CTD) in the possession of Aquero et al. -
Sept 22, 1983, Aquero et al invested in money marker placements with Premier Financing
Corp (PFC) the sum of P10k each with an issued by PFC a promissory notes and checks.
Same day, Cataoco, for and behalf of Aquero et al, went to PFC to encash the promissory
notes and checks, but PFC referred him to Regent Savings Bank (RSB). - RSB, instead of
paying the promissory notes and checks, upon agreement with Cataoco, issued 13 CTDs
inclusive, each stating, among others that, the same certifies that 1) the bearer thereof has
deposited with RSB the sum of P10k; 2) the certificate shall bear 14% interest per annum; 3)
the certificate is insured upto P15k with PDIC; and 4) the maturity date thereof is on Nov 3,
1983. - On Nov 3, 1983, Cotaoco went to RSB to encash the CTDs. But the RSB’s Vice Pres
Damian requested Cotaoco for a deferment or an extension. Despite of the extension which
Cotaoco agreed, RSB, still failed to pay the value of CTDs. - June 15, 1984, the Monetary
Board of Central Bank suspends the RSB’s operation. Eventually, the records of RSB were
secured and its deposit liabilities were eventually determined. - Dec. 7, 1984, the Monetary
Board liquidated the RSB, a masterlist or inventory of assets and liabilities were prepared.
But the CTDs of Aquero et al were not included because the CTDs are not funded by the PFC
or duly recorded as liabilities of RSB.

ISSUE: WON PDIC can be held liable for the value of the CTDs.

HELD: NO. The liability of PDIC for insured deposit is statutory under RA 3591 where such
liability rests upon the existence of deposits with the insured bank. In order that the claim
for deposit insurance with PDIC may prosper, the law requires that the corresponding
deposit be placed in the insured bank. RA 3591, Sec 10(a), emphasized that whenever an
insured bank shall have been closed on account of insolvency, payment of the insured
deposit in such bank shall be made by the corp. as soon as possible. Likewise, RA 3591, Sec.
3(f) defined “deposit” as the unpaid balance of money or its equivalent received by a bank in
the usual course of business and for which it has given or is obliged to give credit to a
commercial, checking, savings, time or thrift account which is evidenced by passbook,
check, and/or CTDs, printed or issued.... Moreover, the evidences presented that RSB
received no money for the CTDs. These are 1) RSB did not received money or its equivalent
when it issued CTDs because the check issued by PFC bounced for insufficiency of funds, 2)
on the records, TRBs check dated Sept 22, 1983 covering the amount of P125, 846. 07 were
issued by PFC, at the back of the check, it wrote, “refer ti drawer”, indicating that the
drawer bank (TRB) referred to pay the value presented by the said bank. Thus, by reason of
the check’s dishonor, RSB cancelled the corresponding as an evidence by RSB’s ticket dated
Nov 4, 1983. Therefore, RSB received no money for the CTDs. Accordingly, PDIC cannot be
held liable for the value if the CTDs held by RSB.