PHILIPPINE DEPOSIT INSURANCE CORPORATION, petitioner VS.

COURT OF APPEALS, ROSA AQUERO, GERARD YU, ERIC YU, MINA YU,

ELIZABETH NGKAION, MERLY CUESCANO, LETICIA TAN, FELY RUMBANA,

LORNA ACUB, represented by their Attorney-in-Fact, JOHN FRANCIS COTAOCO,

respondents. G.R. No, 118917, December 22, 1997

Facts of the Case:

Plaintiffs-appellees invested in money market placements in Premiere Financing Corporation (PFC)

with the total of P10,000,000 each. They were issued by PFC a corresponding promissory notes together
with checks. In behalf of plaintiff-appellees, John Francis Cotaoco went to the PFC on the same date to
encash the promissory notes and checks. However, the PFC referred him to the Regent Saving Bank
(RSB). The RSB issued the subject 13 certificates of time deposit instead of paying the promissory notes
and checks. Each of the said promissory notes and checks is stating that the bearer has deposited with
the RSB the sum of P10,000,000; the ertificate shall bear 14% interest per annum; the certificate is
insured up to P15,000,000 with the PDIC; and the maturity date is on November 3,1983. Cotaoco went
to the RSB to encash the said certificates on the said maturity date but the RSB still failed to pay. Instead
of paying the value of the certificates, RSB advised Cotaoco to file a claim with the PDIC. However, PDIC
refused the claims on the ground and stated that the Traders Royal Bank Check issued by PFC was
already returned by the drawee bank for having been drawn against insufficient funds. Thus, The Trial
Court rendered its decision ordering the PDIC therein to pay the plaintiffs-appellees, jointly and
severally, with the amount corresponding to the certificates of time deposit.

Issue: WON PDIC is liable for the Certificate of Time Deposits held by private respondents.

Rulingz:

No. The passage discusses the Philippine Deposit Insurance Corporation's responsibility to insure
deposits in banks. It specifies that the Corporation must pay insured deposits promptly if a bank closes
due to insolvency. The definition of a deposit is provided, encompassing various forms of money
received by a bank. The case involves certificates issued to a party that did not gain value due to a
bounced check. Evidence suggests the certificates were issued without the bank receiving any money,
thus no deposit existed as per Section 3(f) of R.A. No. 3591. Consequently, the PDIC cannot be held
liable for the value of the certificates, and the petition is granted, reversing the Court of Appeals'
decision. PDIC is relieved of any obligation to the private respondents.
**Case Digest:**

**Title:** Philippine Deposit Insurance Corporation v. Citibank, N.A. and Bank of America, S.T. & N.A.

**G.R. No.:** 170290

**Date:** April 11, 2012

**Court:** Supreme Court, Third Division

**Decision By:** Justice Mendoza

**Facts:**

The Philippine Deposit Insurance Corporation (PDIC) assessed Citibank, N.A. and Bank of America, S.T. &
N.A. for deficiency premiums on dollar deposits not reported as deposit liabilities. Citibank and BA filed
petitions for declaratory relief, asserting that these placements were not subject to deposit insurance.
The Regional Trial Court ruled in favor of Citibank and BA, stating that the funds were not assessable for
insurance purposes under the PDIC Charter. The Court of Appeals affirmed this decision.

**Issue:**

Whether the funds placed by Citibank and BA in their Philippine branches are insurable deposits under
the PDIC Charter.

**Ruling:**

No. The Supreme Court ruled that the funds placed in Philippine branches by the head offices and
foreign branches of Citibank and BA are not insurable deposits. The Court considered them as inter-
branch transactions within the same legal entity, thus not subject to deposit insurance. The Court cited
American jurisprudence and Philippine banking laws to support its decision. Furthermore, the funds
were excluded from assessment as they were payable outside the Philippines, in line with the PDIC
Charter's definition of a deposit. Therefore, the Court affirmed the lower courts' rulings in favor of
Citibank and BA, stating that the funds in question were not deposits subject to PDIC insurance.

**Case Digest:**
**Title:** 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

**Date:** April 30, 2003

**Court:** Supreme Court

**Facts:**

On May 22, 1987, the Monetary Board issued Resolution 505, prohibiting Manila Banking Corporation
(MBC) from doing business and placing it under receivership. The resolution was served on MBC on May
26, 1987. On May 25, 1987, Jose Abad pre-terminated 71 Golden Time Deposits (GTDs) at MBC and
redeposited the funds into 28 new GTDs under different names. PDIC paid respondents for 3 claims but
withheld the remaining 17 after reports of irregular transactions at MBC-Iloilo. PDIC filed a petition for
declaratory relief against respondents to determine the insurability of the GTDs.

**Issue:**

WON the Memorandum issued by the Monetary Board binding upon issuance or upon service to the
bank.

**Rulingz:**

No. The appointment of a receiver by the Monetary Board can be made without prior notice or hearing,
but its action is subject to judicial inquiry. Due process doesn't always require a prior hearing. The
closure of a bank without prior notice prevents bank runs and panic. The transactions made by
respondents prior to May 26, 1987, were not nullified by the MB resolution. The transactions involving
new GTDs constituted valid deposits in the usual course of business, as evidenced by MBC's cash on
hand. Therefore, the court finds that PDIC failed to prove that the transactions were not made in the
usual course of business, and thus, the GTDs are insurable deposit liabilities of MBC.
G.R. No. 234616; June 20, 2018 PHILIPPINE DEPOSIT INSURANCE CORPORATIONvs.MANU GIDWANI
VELASCO JR.,J.:

FACTS:

Respondent Manu, along with his wife Champa Gidwani and 86 others, claimed ownership of 471
deposit accounts with Legacy Banks. They received checks worth P98,733,690.21 from PDIC, but instead
of depositing them individually, they credited the amount to a single account owned by Manu. PDIC
discovered this during check clearance. Further investigation revealed that the Gidwani spouses and the
86 individuals, with the help of RCBC, deceived PDIC into issuing the checks. PDIC argues that the 86
individuals are not entitled to the insurance proceeds as they are not the true owners of the accounts;
rather, the Gidwani spouses are.

LEGAL ISSUES: Whether or not, the entitlement of the proceeds of the deposit insurance is based on the
number of bank accounts of the petitioner and 86 individuals.

RULINGS: NO. Pursuant to theRA 3591, Section 4(g) of the Philippine Deposit Insurance Corporation
(PDIC) Charter, the amount due to any depositor for deposits in an insured bank net of any obligation of
the depositor to the insured bank as of the date of closure, but not to exceed Two hundred fifty
thousand pesos (P250,000.00). Such net amount shall be determined according to such regulations as
the Board of Directors may prescribe.In determining such amount due to any depositor, there shall
beadded together all deposits in the bank maintained in the same right and capacity for his benefit
either in his own name or in the name of others. A joint account regardless of whether the conjunction
“and,” “or,” “and/or” is used, shall be insured separately from any individually-owned deposit
account.The provisions of any law to the contrary notwithstanding,no owner/holder of any negotiable
certificate of deposit shall be recognized as a depositor entitled to the rights provided in this Act unless
his name is registered as owner/holder thereof in the books of the issuing bank. (As amended by R.A.
9302, 12 August 2004) Therefore, the entitlement of a deposit insurance is not based on the number of
bankaccounts, but on the number of beneficial owners.

SPOUSES KISHORE LADHO CHUGANI AND PRISHA KISHORE CHUGANI, ET AL., PETITIONERS, V.
PHILIPPINE DEPOSIT INSURANCE CORPORATION, RESPONDENT. [ G.R. No. 230037. March 19, 2018 ]

FACTS:

Spouses Kishore Ladho Chugani and Prisha Kishore Chugani opened Time Deposit Accounts with Rural
Bank of Mawab (Davao), Inc. (RBMI) after being invited by its President. They conducted transactions
and received Certificates of Time Deposits (CTDs) as proof. However, RBMI was later placed under
receivership, prompting the petitioners to claim insurance for their deposits from the Philippine Deposit
Insurance Corporation (PDIC). PDIC denied their claims, alleging fraudulence and issuing replicas of
unissued CTDs.
The petitioners' request for reconsideration was rejected by PDIC, leading them to file a Petition for
Certiorari with the Regional Trial Court (RTC). However, the RTC dismissed their petitions for lack of
jurisdiction. The Court of Appeals (CA) upheld this decision, stating that challenges to PDIC's decisions
must be brought before it through a Petition for Certiorari.

The petitioners appealed to the Supreme Court, questioning the CA's ruling on RTC jurisdiction and
PDIC's denial of their insurance claim.

**ISSUE:**

Whether the RTC has jurisdiction over the Petitions for Certiorari filed by the petitioners.

**RULING:**

No.

The Supreme Court ruled that the RTC lacked jurisdiction over the Petitions for Certiorari questioning
PDIC's denial of deposit insurance claims. PDIC, as a quasi-judicial agency, has the authority to grant or
deny such claims. Any challenge to PDIC's decisions must be through a Petition for Certiorari filed with
the Court of Appeals, within thirty days from notice of denial. The CA's decision affirming the RTC's lack
of jurisdiction is upheld.

Moreover, the Supreme Court found no grave abuse of discretion on PDIC's part in denying petitioners'
claims, as the denial was based on valid grounds supported by facts, law, and regulations. Therefore, the
petition was denied, and the CA's decision was affirmed.

Landbank of the Philippines v. Polillo Paradise Island Corporation, G.R. No. 211537, December 10, 2019

**Facts:**

Polillo Paradise Island Corporation obtained a loan from Landbank of the Philippines (LBP), secured by
mortgaging two parcels of land. Despite restructurings, Polillo failed to pay its loan, leading to LBP filing
for extrajudicial foreclosure. LBP emerged as the highest bidder at the foreclosure sale, and the
properties were transferred to LBP's name. Later, Polillo filed for corporate rehabilitation, citing financial
difficulties. The Regional Trial Court (RTC) initially dismissed the petition but later granted it, issuing a
Commencement/Suspension Order. LBP opposed, arguing it was no longer a creditor due to the
foreclosure sale. The RTC denied LBP's opposition, stating that the commencement date of the
rehabilitation proceedings preceded the foreclosure sale.
Issue: Whether or not the Commencement Order issued by the RTC has the effect of rendering void the
foreclosure sale of the subject properties and the effects thereof.

**Held:**

No. Corporate rehabilitation aims to restore a debtor to solvency and operation. The effects of the
Commencement Order start from the date of the filing of the petition for rehabilitation. In this case, the
petition was filed on October 18, 2012. Despite the earlier preparation, the actual filing date determines
the commencement date. As the foreclosure sale occurred before the commencement date, its effects
are valid. Thus, LBP is no longer considered a creditor of Polillo.

**Case Digest:**

**Title:** Far East Bank and Trust Company v. Union Bank of the Philippines [now substituted by Bayan
Delinquent Loan Recovery 1 (SPV-AMC), Inc.]

**G.R. No.:** 196637

**Date:** June 03, 2019

**Court:** First Division

**Facts:**

Far East Bank and Trust Company (FEBTC) filed a case against Union Bank of the Philippines (Union Bank)
in the Regional Trial Court (RTC) of Pasig City, alleging fraudulent sale of properties. Union Bank had filed
several suits against EYCO Group of Companies (EYCO) and its stockholders, including the Yutingcos,
breaking away from a consortium of creditors convened to address EYCO's financial issues. FEBTC
alleged that Union Bank's actions were aimed at preventing EYCO's creditors from collecting their debts.
The Securities and Exchange Commission (SEC) intervened, issuing orders related to EYCO's
rehabilitation, suspension of payments, and liquidation.

**Issue:**

Whether the RTC correctly dismissed the case based on the grounds of litis pendentia.

**Ruling:**
Yes. The RTC correctly dismissed the case on the grounds of litis pendentia. The SEC had already
acquired jurisdiction over matters related to EYCO's rehabilitation and suspension of payments. Union
Bank, by participating in the proceedings before the SEC, had submitted itself to the jurisdiction of the
SEC. Therefore, the RTC ruled that litis pendentia existed, and the case was properly dismissed. The
Court of Appeals affirmed the RTC's decision.

PHILIPPINE WIRELESS, INC. AND REPUBLIC TELECOMMUNICATIONS, INC., PETITIONERS, VS. OPTIMUM
DEVELOPMENT BANK (FORMERLY CAPITOL DEVELOPMENT BANK), RESPONDENT. - [ G.R. No. 208251,
November 10, 2020 ]

**FACTS:**

- In 1997, Philippine Wireless, Inc. (PWI) entered into a Credit Agreement with Capitol Development
Bank (Capitol).

- Despite several extensions, PWI and Republic Telecommunications, Inc. (RETELCO) failed to pay their
outstanding obligations to Capitol, amounting to ₱24,669,709.40 as of July 10, 1998.

- Capitol filed a Complaint for collection of a sum of money against PWI and RETELCO in the Regional
Trial Court (RTC) of Pasig.

- RTC Pasig granted the Complaint, and PWI and RETELCO appealed.

- While the appeal was pending, PWI and RETELCO filed for corporate rehabilitation in the RTC of
Makati.

- The rehabilitation court issued a Stay Order on August 24, 2009.

- Despite the Stay Order, CA directed the resumption of the appellate proceedings for the collection
case.

- CA affirmed the RTC's decision.

- PWI and RETELCO argue that the stay order should suspend all actions for claims against them,
including the appellate proceedings.

- Optimum (formerly Capitol) contends that the stay order only pertains to the enforcement of claims,
not their determination.

- PWI and RETELCO claim that the stay order covers all claims of a pecuniary nature, including the
present collection case.
ISSUE:
Whether or not the appellate
proceedings assailing the
money judgment the RTC of
Pasig
rendered in a collection case
against PWI and RETELCO
may be suspended by a stay
order
issued in a petition for
rehabilitation PWI and
RETELCO initiated after the
decision on the
collection case was appealed.
ISSUE: Whether or not the appellate proceedings assailing the money judgment the RTC of
Pasigrendered in a collection case against PWI and RETELCO may be suspended by a stay orderissued in
a petition for rehabilitation PWI and RETELCO initiated after the decision on thecollection case was
appealed.
RULING:

No.

The collection case against PWI and RETELCO can proceed despite the rehabilitation court's stay order.
The objective of rehabilitation is to restore viability and repay creditors, but this doesn't hinder
necessary legal actions to preserve claims. The stay order suspends enforcement of money judgments,
not other creditor actions. The Court of Appeals rightly allowed the appellate proceedings to proceed
under FRIA Rules.

**Case Digest: G.R. No. 188146**

**PILIPINAS SHELL PETROLEUM CORPORATION, Petitioner**

vs.

**ROYAL FERRY SERVICES, INC., Respondent**

**FACTS:**

Royal Ferry Services Inc. (Royal Ferry), a corporation organized under Philippine law, filed a Petition for
Voluntary Insolvency before the Regional Trial Court of Manila, alleging serious business losses and
heavy debts. Despite having its principal place of business stated in its Articles of Incorporation as
Makati City, Royal Ferry's actual office was located in Manila. Pilipinas Shell Petroleum Corporation
(Pilipinas Shell), one of Royal Ferry's creditors, objected to the venue, arguing that the petition should
have been filed in Makati City instead. Pilipinas Shell contended that Royal Ferry's residence was
determined by its Articles of Incorporation and that changing its office location did not affect its legal
residence.

**ISSUE:**

Whether the Petition for Insolvency was properly filed before the Regional Trial Court of Manila.

**RULING:**

Yes. The Supreme Court upheld the jurisdiction of the Regional Trial Court of Manila over Royal Ferry's
Petition for Voluntary Insolvency. It ruled that the residence of a corporation, for the purpose of venue
in insolvency proceedings, should be determined by its actual principal office. Even though Royal Ferry's
Articles of Incorporation indicated its principal office as Makati City, the Court considered Manila as its
residence since its actual office was located there for six months before filing the petition. The Court
emphasized that in insolvency proceedings, the law prioritizes the accurate location of the debtor's
activities, and legal fiction must give way to fact. The Court also rejected the argument that Makati and
Manila should be treated as one region for venue purposes, affirming that they are distinct venues
under the law. Therefore, the Petition for Insolvency was properly filed in Manila, and the jurisdiction of
the Regional Trial Court of Manila was upheld.

Victorio-Aquino vs. Pacific Plans, G.R. No. 193108, December 10, 2014

FACTS:

Respondent Pacific Plans, Inc. (now "APEC") sells pre-need and educational plans, including traditional
open-ended educational plans (PEPTrads). Petitioner holds two units of PEPTrads. APEC filed for
Corporate Rehabilitation in April 2005 due to anticipated inability to fulfill obligations to planholders.
The Rehabilitation Court issued a Stay Order, suspending payments and appointing a receiver. APEC
proposed a rehabilitation plan, including a "Swap" allowing planholders to exit PEPTrads with favorable
terms. An Alternative Rehabilitation Plan was submitted and approved, but due to currency
appreciation, a Modified Rehabilitation Plan was later proposed.

ISSUE: Whether or not the Rehabilitation Court has the authority to sanction a rehabilitation plan, or the
modification thereof, even when the essential feature of the plan involves forcing creditors to reduce
their claims against respondent.

HELD: YES.The Court upheld the “cram-down” power of the Rehabilitation Court pursuant to Sec. 23 of
FRIA which states that the court mayapprovea rehabilitation plan over the opposition of creditors,
holding a majority of the total liabilities of the debtor if, in its judgment, the rehabilitation of the debtor
is feasible and the opposition of the creditors is manifestly unreasonable.