People v.

Estrada part 2

Third the effect of the enactment of R.A. No. 9160.[17] The Sandiganbayan said that
the absolute prohibition in R.A. No. 9160 against the use of anonymous accounts,
accounts under fictitious names, and all other similar accounts, is a legislative
acknowledgment that a gaping hole previously existed in our laws that allowed
depositors to hide their true identities. The Sandiganbayan noted that the
prohibition was lifted from Bangko Sentral ng Pilipinas (BSP) Circular No. 251 dated
July 7, 2000 another confirmation that the opening of a numbered trust account was
perfectly legal when it was opened on February 4, 2000.

The Sandiganbayan ruled that the provisions of CA No. 142, as interpreted in Ursua,
must necessarily be harmonized with the provisions of R.A. No.1405 and R.A. No.
9160 under the principle that every statute should be construed in a way that will
harmonize it with existing laws. A reasonable scrutiny, the Sandiganbayan said, of all
these laws in relation to the present case, led it to conclude that the use of an alias
within the context of a bank transaction (specifically, the opening of a numbered
account made before bank officers) is protected by the secrecy provisions of R.A. No.
1405, and is thus outside the coverage of CA No. 142 until the passage into law of
R.A. No. 9160.

Decision

The enactment of R.A. No.9160, on the other hand, is a significant development only
because it clearly manifests that prior to its enactment, numbered accounts or
anonymous accounts were permitted banking transactions, whether they be allowed
by law or by a mere banking regulation. To be sure, an indictment against Estrada
using this relatively recent law cannot be maintained without violating the
constitutional prohibition on the enactment and use of ex post facto laws.
Philippine Deposit Insurance Corporation vs. Citibank
GR NO.170290 April 11, 2012Mendoza, J.:

FACTS: Petitioner Philippine Deposit Insurance Corporation (PDIC) is a government

instrumentality created by virtue of Republic Act (R.A.) No. 3591, as amended by R.A.
No.9302.Respondent Citibank, N.A. (Citibank) is a banking corporation while
respondent Bank of America, S.T. & N.A. (BA) is a national banking association, both
of which are duly organized and existing under the laws of the United States of
America and duly licensed to do business in the Philippines, with offices in Makati
City.

In 1977, PDIC conducted an examination of the books of account of Citibank. It

discovered that Citibank, in the course of its banking business, from September 30,
1974 to June 30, 1977, received from its head office and other foreign branches a
total of P11,923,163,908.00 in dollars, covered by Certificates of Dollar Time Deposit
that were interest-bearing with corresponding maturity dates. These funds, which
were lodged in the books of Citibank under the account “Their Account-Head
Office/Branches-Foreign Currency,” were not reported to PDIC as deposit liabilities
that were subject to assessment for insurance. As such, in a letter dated March 16,
1978, PDIC assessed Citibank for deficiency in the sum of P1,595,081.96.

Similarly, sometime in 1979, PDIC examined the books of accounts of BA which

revealed that from September 30, 1976 to June 30, 1978, BA received from its head
office and its other foreign branches a total of P629,311,869.10 in dollars, covered by
Certificates of Dollar Time Deposit that were interest-bearing with corresponding
maturity dates and lodged in their books under the account “Due to Head
Office/Branches.” Because BA also excluded these from its deposit liabilities, PDIC
wrote to BA on October 9, 1979, seeking the remittance of P109,264.83 representing
deficiency premium assessments for dollar deposits.

Believing that litigation would inevitably arise from this dispute, Citibank and BA each
filed a petition for declaratory relief before the Court of First Instance (now the
Regional Trial Court) of Rizal on July 19, 1979 and December 11, 1979, respectively. In
their petitions, Citibank and BA sought a declaratory judgment stating that the
money placements they received from their head office and other foreign branches
were not deposits and did not give rise to insurable deposit liabilities under Sections
3 and 4 of R.A.No. 3591 (the PDIC Charter) and, as a consequence, the deficiency
assessments made by PDIC were improper and erroneous. The cases were then
consolidated.
On June 29, 1998, the Regional Trial Court, Branch 163, PasigCity (RTC) promulgated
its Decision in favor of Citibank and BA. Aggrieved, PDIC appealedto the CA which
affirmed the ruling of the RTC in its October 27, 2005 Decision. Hence, thispetition.

ISSUE:

Whether or not a branch of a bank has a separate legal Personality.

HELD: No. A branch has no separate legal personality. This Court is of the opinion
that thekey to the resolution of this controversy is the relationship of the Philippine
branches of Citibank and BA to their respective head offices and their other foreign
branches.

The Court begins by examining the manner by which a foreign corporation can
establish its presence in the Philippines. It may choose to incorporate its own
subsidiary as a domestic corporation, in which case such subsidiary would have its
own separate and independent legal personality to conduct business in the country.
In the alternative, it may create a branch in the Philippines, which would not be a
legally independent unit, and simply obtain a license to do business in the
Philippines.

In the case of Citibank and BA, it is apparent that they both did not incorporate a
separate domestic corporation to represent its business interests in the Philippines.
Their Philippine branches are, as the name implies, merely branches, without a
separate legal personality from their parent company, Citibank and BA. Thus, being
one and the same entity, the funds placed by the respondents in their respective
branches in the Philippines should not be treated as deposits made by third parties
subject to deposit insurance under the PDIC Charter. The purpose of the PDIC is to
protect the depositing public in the event of a bank closure. It has already been
sufficiently established by US jurisprudence and Philippine statutes that the head
office shall answer for the liabilities of its branch. Now, suppose the Philippine
branch of Citibank suddenly closes for some reason. Citibank N.A. would then be
required to answer for the deposit liabilities of Citibank Philippines. If the Court were
to adopt the posture of PDIC that the head office and the branch are two separate
entities and that the funds placed by the head office and its foreign branches with
the Philippine branch are considered deposits within the meaning of the PDIC
Charter, it would result to the incongruous situation where Citibank, as the head
office, would be placed in the ridiculous position of having to reimburse itself, as
depositor, for the losses it may incur occasioned by the closure of Citibank
Philippines. Surely our lawmakers could not have envisioned such a preposterous
circumstance when they created PDIC.

Finally, the Court agrees with the CA ruling that there is nothing in the definition of a
“bank” and a “banking institution” in Section 3(b) of the PDIC Charter which explicitly
states that the head office of a foreign bank and its other branches are separate and
distinct from their Philippine branches. There is no need to complicate the matter
when it can be solved by simple logic bolstered by law and jurisprudence. Based on
the foregoing, it is clear that the head office of a bank and its branches are
considered as one under the eyes of the law. While branches are treated as separate
business units for commercial and financial reporting purposes, in the end, the head
office remains responsible and answerable for the liabilities of its branches which are
under its supervision and control. As such, it is unreasonable for PDIC to require the
respondents, Citibank and BA, to insure the money placements made by their home
office and other branches. Deposit insurance is superfluous and entirely unnecessary
when, as in this case, the institution holding the funds and the one which made the
placements are one and the same legal entity.
Philippine Deposit Insurance Corporation vs. Court of Appeals

G.R. No. 126911 April 30, 2003 Carpio-Morales, J.:

FACTS: Prior to May 22, 1997, respondents had 71 certificates of time deposits
denominated as "Golden Time Deposits" (GTD) with an aggregate face value of
P1,115,889.96. May 22, 1987, a Friday, the Monetary Board (MB) of the Central Bank
of the Philippines, now Bangko Sentral ng Pilipinas, issued Resolution 5052
prohibiting Manila Banking Corporation to do business in the Philippines, and placing
its assets and affairs under receivership. The Resolution, however, was not served on
MBC until Tuesday the following week, or on May 26, 1987, when the designated
Receiver took over. On May25, 1987 - the next banking day following the issuance of
the MB Resolution, respondent Jose Abad was at the MBC at 9:00 a.m. for the
purpose of pre-terminating the aforementioned GTDs and re-depositing the fund
represented thereby into 28 new GTDs in denominations of P40,000.00 or less under
the names of herein respondents individually or jointly with each others Of the 28
new GTDs, Jose Abad pre-terminated 8 and withdrew the value thereof in the total
amount of P320,000.00. Respondents thereafter filed their claims with the PDIC for
the payment of the remaining 20 insured GTDs. February 11,1988, PDIC paid
respondents the value of 3 claims in the total amount of P120,000.00.PDIC, however,
withheld payment of the 17 remaining claims after Washington Solidum, Deputy
Receiver of MBC-Iloilo, submitted a report to the PDIC that there was massive
conversion and substitution of trust and deposit accounts on May 25, 1987 at
MBC-Iloilo. Because of the report, PDIC entertained serious reservation in
recognizing respondents' GTDs as deposit liabilities of MBC-Iloilo. Thus, PDIC filed a
petition for declaratory relief against respondents with the RTC of Iloilo City, for a
judicial declaration determination of the insurability of respondents' GTD sat
MBC-Iloilo. In their Answer respondents set up a counterclaim against PDIC whereby
they asked for payment of their insured deposits.

The Trial Court ordered petitioners to pay the balance of the deposit insurance to
respondents. The Court of Appeals affirmed the decision of the lower court.
Petitioner posits that the trial court erred in ordering it to pay the balance of the
deposit insurance to respondents, maintaining that the instant petition stemmed
from a petition for declaratory relief which does not essentially entail an executory
process, and the only relief that should have been granted by the trial court is a
declaration of the parties' rights and duties. As such, petitioner continues, no order
of payment may arise from the case as this is beyond the office of declaratory relief
proceedings.
ISSUE: Whether or not the trial court order the payment of the balance even if the
petition stemmed from a petition for declaratory relief which does not essentially
entail an executor process.

HELD:

YES. Without doubt, a petition for declaratory relief does not essentially entail an
executory process. There is nothing in its nature, however, that prohibits a counter
claim from being set-up in the same action. There is nothing in the nature of a special
civil action for declaratory relief that prescribes the filing of a counterclaim based on
the same transaction, deed or contract subject of the complaint. A special civil action
is after all not essentially different from an ordinary civil action, which is generally
governed by Rules 1to 56 of the Rules of Court, except that the former deals with a
special subject matter which makes necessary some special regulation. But the
identity between their fundamental nature is such that the same rules governing
ordinary civil suits may and do apply to special civil actions if not inconsistent with or
if they may serve to supplement the provisions of the peculiar rules governing special
laws.
Philippine Deposit Insurance Corporation vs. Court of Appeals

G.R. No. 118917 - December 22, 1997 Kapunan, J.:

FACTS: On September 22, 1983, plaintiffs-appellees invested in money market

placements with the Premiere Financing Corporation (PFC) in the sum of P10,000.00
each for which they were issued by the PFC corresponding promissory notes and
checks. On the same date (September 22, 1983), John Francis Cotaoco, for and in
behalf of plaintiffs-appellees, went to the PFC to encash the promissory notes and
checks, but the PFC referred him to the Regent Saving Bank (RSB). Instead of paying
the promissory notes and checks, the RSB, upon agreement of Cotaoco, issued the
subject 13 certificates of time deposit with Nos.09648 to 09660, inclusive, each
stating, among others, that the same certifies that the bearer thereof has deposited
with the RSB the sum of P10,000.00; that the certificate shall bear 14% interest per
annum; that the certificate is insured up toP15,000.00 with the PDIC; and that the
maturity date thereof is on November 3, 1983 (Exhs. “B”, “B-1” to “B-12”).

On the aforesaid maturity dated (November 3, 1983), Cotaoco went to the RSB to
encash the said certificates. Thereat, RSB Executive Vice President Jose M. Damian
requested Cotaoco for a deferment or an extension of a few days to enable the RSB
to raise the amount to pay for the same (Exh. “D”).

Cotaoco agreed. Despite said extension, the RSB still failed to pay the value of the
certificates. Instead, RSB advised Cotaoco to file a claimwith the PDIC. Meanwhile, on
June 15, 1984, the Monetary Board of the Central Bank issued Resolution No. 788
(Exh. ‘2’, Records, p. 159) suspending the operations of the RSB. Eventually, the
records of RSB were secured and its deposit liabilities were eventually determined.
On December 7, 1984, the Monetary Board issued Resolution No. 1496 (Exh.1’)
liquidating the RSB.

Subsequently, a master list or inventory of the RSB assets and liabilities was prepared.
However, the certificates of time deposit of plaintiffs-appellees were not included in
the list on the ground that the certificates were not funded by the PFC or duly
recorded as liabilities of RSB. On September 4, 1984, plaintiffs-appellees filed with
the PDIC their respective claims for the amount of the certificates (Exhs. “C”, “C-1”, to
“C-12”).

Sabina Yu, James Ngkaion, Elaine Ngkaion and Jeffrey Ngkaion, who have similar
claims on their certificates of time deposit with the RSB, likewise filed their claims
with the PDIC. To their dismay, PDIC refused the aforesaid claims on the ground that
the Traders Royal Bank Check No.299255 dated September 22, 1983 for the amount
of P 125,846.07 (Exh. “B”) issued by PFC for the aforementioned certificates was
returned by the drawee bank for having been drawn against insufficient funds; and
said check was not replaced by the PFC, resulting in the cancellation of the
certificates as indebtedness or liabilities of RSB. Consequently, on March 31, 1987,
private respondents filed an action for collection against PDIC, RSB and the Central
Bank. On September 14, 1987, the trial court, declared the Central Bank in default for
failing to file an answer.

On May 29, 1989, the trial court rendered its decision ordering the defendants
therein to pay plaintiffs, jointly and severally, the amount corresponding to the
latter’s certificates of time deposit. Both PDIC and RSB appealed.

ISSUE: Whether or not PDIC can be held liable for value of the certificates of time
deposit held by the petitioners.

HELD: NO. Whenever an insured bank shall have been closed on account of
insolvency, payment of the insured deposits in such bank shall be made by the
Corporation as soon as possible.

The term “deposit” means 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 or which is evidence
by passbook, check and/or certificate of deposit printed or issued in accordance with
Central Bank rules and regulations and other applicable laws, together with such
other obligations of a bank which, consistent with banking usage and practices, the
Board of Directors shall determine and prescribe by regulations to be deposit
liabilities of the Bank. These pieces of evidence convincingly show that the subject
CTDs were indeed issued without RSB receiving any money therefor. No deposit, as
defined in Section 3 (f) of R.A. No. 3591, therefore came into existence. Accordingly,
petitioner PDIC cannot be held liable for value of the certificates of time deposit held
by private respondents.
PDIC vs Philippine Countryside Rural Bank

Facts: On March 9, 2005, the Board of Directors of the PDIC adopted Resolution No.
2005-03-032 approving the conduct of an investigation, on the basis of the Reports
of Examination of the Bangko Sentral ng Pilipinas (BSP) on ten (10) banks, four (4) of
which are respondents in this petition for review. the PDIC Board adopted another
resolution, Resolution No. 2005-05-056, 4 approving the conduct of an investigation
on PCRBI based on a Complaint-Affidavit filed by a corporate depositor, the
Philippine School of Entrepreneurship and Management.

According to PDIC, in the course of its investigation, PCRBI was found to have granted
loans to certain individuals, which were settled by way of dacion of properties. These
properties, however, had already been previously foreclosed and consolidated under
the names of PRBI, BEAI and RBCI Subsequently, PRBI and BEAI refused entry to their
bank premises and access to their records and documents by the PDIC Investigation
Team, upon advice of their respective counsels.

Atty. Victoria G. Noel sent letters to the PDIC informing it of her legal advice to PCRBI
and BEAI not to submit to PDIC investigation on the ground that its investigatory
power pursuant to Section 9(b-1) of R.A. No. 3591, cannot be differentiated from the
examination powers accorded to PDIC under Section 8, paragraph 8 of the same law,
under which, prior approval from the Monetary Board is required. Thereafter, the
Banks received a letter, dated July 8, 2005, from the PDIC General Counsel reiterating
its position that prior Monetary Board approval was not a pre-requisite to PDIC’s
exercise of its investigative power.

Issue: Whether the Court of Appeals-Cebu erred in finding that prior approval of the
Monetary Board of the Bangko Sentral ng Pilipinas is necessary before the PDIC may
conduct an investigation of respondent banks.

Held: NO. After an evaluation of the respective positions of the parties, the Court is
of the view that the Monetary Board approval is not required for PDIC to conduct an
investigation on the Banks. However, while "examination" connotes a mere generic
perusal or inspection, "investigation" refers to a more intensive scrutiny for a more
specific fact-finding purpose. The latter term is also usually associated with
proceedings conducted prior to criminal prosecution. the process of examination
covers a wider scope than that of investigation. Examination involves an evaluation
of the current status of a bank and determines its compliance with the set standards
regarding solvency, liquidity, asset valuation, operations, systems, management, and
compliance with banking laws, rules and regulations.

Investigation, on the other hand, is conducted based on specific findings of certain

acts or omissions which are subject of a complaint or a Final Report of Examination.
An examination entails a review of essentially all the functions and facets of a bank
and its operation. It necessitates poring through voluminous documents, and
requires a detailed evaluation thereof.

Such a process then involves an intrusion into a bank's records. In contrast, although
it also involves a detailed evaluation, an investigation centers on specific acts or
omissions and, thus, requires a less invasive assessment. To reiterate, an examination
of banks requires the prior consent of the Monetary Board, whereas an investigation
based on an examination report, does not.