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PHILIPPINE DEPOSIT INSURANCE CORPORATION v. CA

FACTS:

The case involves a petition filed by the Philippine Deposit Insurance Corporation (PDIC) challenging the decision of the Court of Appeals, which affirmed the ruling of the Regional Trial Court (RTC) holding PDIC liable as the statutory insurer for the respondents' 20 Golden Time Deposits (GTDs). Prior to May 22, 1997, the respondents had 71 GTDs with a total face value of P1,115,889.96. On May 22, 1987, the Monetary Board issued a resolution prohibiting Manila Banking Corporation (MBC) from conducting business and placing its assets under receivership. However, the resolution was served to MBC on May 26, 1987. On May 25, 1987, respondent Jose Abad went to MBC to pre-terminate the 71 GTDs and deposit the funds into 28 new GTDs under the names of the respondents. Out of the 28 new GTDs, Jose Abad terminated 8 and withdrew P320,000.00. The respondents then filed their claims with PDIC for the payment of the remaining 20 insured GTDs. PDIC paid the value of 3 claims but withheld the payment of the 17 remaining claims based on a report indicating massive conversions and substitutions of trust and deposit accounts at MBC-Iloilo on May 25, 1987. PDIC filed a petition for declaratory relief against the respondents, seeking a judicial declaration of the insurability of the GTDs. The RTC held that the 20 GTDs were deposit liabilities of MBC and consequently liabilities of PDIC as the statutory insurer. The RTC ordered PDIC to pay the respondents the value of the 20 GTDs less the value of the 3 GTDs already paid, as well as legal interest on the remaining insured deposits. The Court of Appeals affirmed the RTC's decision, except for the award of legal interest. PDIC then filed a petition for review, arguing that the GTDs were merely derivatives of the respondents' previous account balances which were terminated when MBC was already in financial distress.

ISSUES:

  1. Whether the 20 Golden Time Deposits (GTDs) of the respondents are deposit liabilities of Manila Banking Corporation (MBC), and therefore, liabilities of the Philippine Deposit Insurance Corporation (PDIC) as statutory insurer.

  2. Whether PDIC should be ordered to pay the remaining 20 GTDs of the respondents.

RULING:

  1. The Court of Appeals affirmed the trial court's ruling that the 20 GTDs of the respondents are deposit liabilities of MBC and liabilities of PDIC as statutory insurer.

  2. PDIC is ordered to pay the remaining 20 GTDs of the respondents.

PRINCIPLES:

  • The Philippine Deposit Insurance Corporation (PDIC) is the statutory insurer of banks and their deposits.

  • The determination of whether a certain amount is considered a deposit liability of a bank is a question of fact.

  • A judicial declaration of rights can still entail an executory process, such as ordering the payment of a certain amount.