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.