Sunday, March 24, 2013

Can depositors still get back funds in accounts dormant for 16 years?

Can depositors still get back funds in accounts dormant for 16 years?

By BERTENI "TOTO" CATALUÑA CAUSING
Author of the book entitled "Simplified Libel Law in the Philippines"


The author fights for free press and true people's justice system.


This is a beautiful question.

I think I answered this beautifully as well.

To those who are minded to read, I offer this good read about my legal proposition to a seemingly difficult issue, that is an actual case.

In brief, this is the fact:

1. The depositors have deposits in pesos and dollar (millions) in a bank;

2. The depositors went to the USA and came back only after 16 years to claim the deposits;

3. The bank refused;

4. The reasons given by the bank is that under the law on retention, the banks are allowed to remove from their records of deposits all accounts that have been dormant for at least 10 years;

5. The depositors filed a complaint for the recovery of the sum of money before the RTC of Quezon City;

6. The bank filed a motion to dismiss;

7. The first reason cited by the bank is that prescription of 10 years for actions based on contract had already elapsed, upon the the insistence that the 10-year period must begin to run from the last time the depositors transacted a deposit or withdrawal from the bank;

8. The second reason cited by the bank is that laches (sleeping on the right) has set in to prohibit the depositor to recover;

9. The depositors inquired from the bank and its personnel said initially that their deposits must have already been escheated, because the law on escheat requires that accounts that are dormant for at least ten (10) years must be submitted to the Bureau of Treasury for the escheat proceedings (escheat means as a legal process by which the State confiscates deposit accounts with banks that are dormant for at least ten years);

10. The depositors inquired from the Bureau of Treasury and the legal department of the bureau certified that not one deposit account of the depositors has been forwarded by the bank for escheat purposes;

Decide on the issue of whether or not the depositors are still entitled to get their deposits back.

My legal proposition is that the depositors can still get back.

Reasons are:  

(1) The period of prescription stopped or tolled when the depositors went to the United States because Article 1108 of the Civil Code stops the running of the period of prescription if the person is absent in the Philippines and has not appointed a manager or an administrator;

(2) There was no laches because the three of the four elements do not exist: (a) that there is no delay to speak of because the bank did not notify the depositors that their accounts were about to be escheated or removed from the records as it is required by the law on escheat and retention as well as the Constitution that any depositor is entitled to notice before condemnation of their deposits; that there is also no delay to speak of because the bank actually did not initiate the escheat proceedings so that in not initiating the escheat proceedings the bank intended to assume the duty of a negotiorum gestor taking the role of an officious manager taking care of the funds; that there is also no delay to speak of because Article 1108 of the Civil Code exempted them from being tolled by actual dates of delay; (b) that the bank will not suffer any damage anyway because the money being claimed belongs to the depositors anyway, and doing otherwise will profit the bank at the expense of another and this is against the law on unjust enrichment; (c) that the bank cannot expect that the depositors will not run after them considering the huge amounts in millions of pesos and of dollars.

For detailed reasoning, you may read the Memorandum I filed with the Court of Appeals posted below:




Republic of the Philippines
Court of Appeals
Manila


CITIBANK, N.A. – Philippine Branch,
                                      Petitioner,


          - versus -                       CA G.R. No. 125232
                                                (From CIVIL CASE NO. Q-11-69130)

SPS. LOPE Q. PASCUAL and
CASIMIRA C. PASCUAL,
                                      Respondents.
x---------------------------------------------x



MEMORANDUM



          Respondents LOPE Q. PASCUAL and CASIMIRA C. PASCUAL, by the undersigned counsel, respectfully file this Memorandum.



The Timeliness



          On 7 March 2013 the law firm received a copy of the resolution requiring parties to submit respective memoranda in fifteen (15) days.

          On 22 March 2013, the fifteenth (15th) day from the day of receipt of that resolution, the law firm filed a motion for extension of time of another fifteen (15) days to file the memorandum and at the same time submitting the compliance with the requirement to submit a proof of the receipt of the respondent’s comment.

          Today, 25 March 2013, the memorandum was completed and the same is hereby submitted.

The Parties


          The petitioner is Citibank, N.A.—Philippine Branch, the defendant in Civil Case No. Q-11-69130, a banking institution duly licensed to conduct business in the Philippines, with principal office located at Citibank Tower, 8741 Paseo de Roxas, Makati, Metro Manila, Philippines.

          It can be served notices and other processes at its counsel’s address.

          Named by the petitioner as the public respondent is Honorable Luisito G. Cortez, presiding judge of Branch 84 of the Regional Trial Court of Quezon City, where he may be served notices and other processes.

          The Court is hereby informed that Judge Cortez has already ordered the re-raffle of the case before the RTC because the petitioner sought the same after the failed judicial dispute resolution proceedings.

          The private respondents are Lope Q. Pascual and Casimira C. Pascual, residents of No. 2 Mt. Everest St., Filinvest I, Batasan Hills, Quezon City.  They can be served with notices and other processes at its new counsel of record, Atty. Berteni Cataluña Causing, at the address written below.


The Material Antecedents


          The private respondents filed their complaint on 18 April 2011 at the RTC of Quezon City.

          The complaint basically states that the private respondents opened several accounts with the petitioner bank in 1984. 

In 1994, the private respondents left for the United States of America (USA).
         
          The private respondents returned to the Philippines in 2010 and wrote a letter dated 10 February 2010 to the petitioner bank demanding for the return of their deposits in various accounts as well as the accrued interest.

          The petitioner did not heed the demand.

          From the time the private respondents left the Philippines until 10 February 2010, they never had transacted with the petitioner bank in so far as their various accounts are concerned.

          The complaint of the private respondents prayed for the following:

a.      Directing  defendant to pay the amount of P5,921,944.29 representing the total monetary claim plus accrued interest under the law;

b.      Finding defendant liable in the amount of One Hundred Thousand Pesos (P100,000.00) representing moral damages in favor of the plaintiffs;

c.       Assessing defendant the amount of Fifty Thousand Pesos (P50,000.00) representing exemplary damages in favor of the plaintiffs;

d.     Ordering defendant to indemnify plaintiffs with the sum of One Hundred thousand Pesos (P100,000.00) for and as attorney’s fees and the further sum of Four Thousand Pesos (P4,000.00) per hearing as appearance fees; and

e.      For defendant to pay the costs of the suit.

          On 9 June 2011, the petitioner filed a motion to dismiss, alleging the following grounds:

a.  The Complaint asserting the claim, as regards alleged Account No. 00837070, Account No. 760072 and Investment in LCTP, states no cause of action against Citibank N.A.

b.      The claim of the plaintiffs is barred by laches;

c.       The cause of action of the plaintiffs is barred by prescription.


On 1 July 2011, the private respondents filed their comment or opposition dated 20 June 2011.

On 1 December 2011 the court a quo denied the motion to dismiss, a copy of which the petitioner alleged it received on 28 December 2011.

In denying the motion to dismiss, the court a quo reasoned out as follows:
After a judicious evaluation of the instant complaint as well as the annexes appended thereto, the Court, without prejudging the merits of this case, finds a cause of action against the defendant although the issue on whether or not such cause of action is impressed with merit can only be determined by conducting a full blown trial for being evidentiary in nature.

In the case of Soloil, Inc.vs. Philippine Coconut Authority [G.R. No. 174806, August 11, 2010] it was held that –

Rule 2 of the Rules of Court defines a cause of action as:

“Sec. 2. Cause of action, defined. – A cause of action is the act or omission by which a party violates a right of another.

“The essential elements of a cause of action are: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief.

Anent the first element, the Court finds that herein plaintiffs have a right to demand from the defendant the payment of their monetary claims representing their peso and dollar deposits therein. As it is, the plaintiffs have the corresponding passbooks and statements of accounts to establish their monetary claims against the defendant.  It is now for the defendant to present its evidence in order to disprove such claims by the plaintiffs, thus the necessity of a full-blown trial.

In the case of China Banking Corporation versus Honorable Court of Appeals and Armed Forces and Police Savings and Loan Association, Inc. (AFPSLAI) [G.R.  No. 153267, June 23, 2005], the Supreme Court had the occasion to discuss when a cause of action accrues for the purposes of determining whether or not prescription has already set in –

“Well settled is the rule that since a cause of action requires, as essential elements, not only a legal right of the plaintiff and a correlative duty of the defendant but also ‘an act or omission of the defendant in violation of said legal right,,’ the cause of action does not accrue until the party obligated refuses, expressly or impliedly, to comply with its duty.

“Otherwise stated, a cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff.

“It bears stressing that it is only when the last element occurs that a cause of action arises. Accordingly, a cause of action on a written contract accrues only when an actual breach or violation thereof occurs.

“Applying the foregoing principle to the instant case, we rule that private respondent’s cause of action accrued only on July 20, 1995, when its demand for payment of the Home Notes was refused by petitioner.  It was only at that time, and not before that, when the written contract was breached and private respondent could properly file an action in court.

“The cause of action cannot be said to accrue on the uniform maturity date of the Home Notes as petitioner posits because at that point, the third essential element of a cause of action, namely, an act or omission on the part of petitioner violative of the right of private respondent or constituting a breach of the obligation of petitioner to private respondent, had not yet occurred.”

Verily, the plaintiffs’ cause of action accrued only when, sometime in year 2010, they demanded for the payment of their alleged various deposits and investment with the defendant bank and the latter refused to do so. Considering that only one year has elapsed from the date of the said denial, prescription, nor laches, cannot be said to have set in.  This finding, however, is without prejudice to the evidence which the parties may adduce in the course of the proceedings.


On 12 January 2012 the petitioner claimed it filed a motion for reconsideration of the 1 December 2011 order denying the motion to dismiss.

On 6 February 2012 the petitioner claimed it received the comment of the private respondents to the motion for reconsideration.

On 12 April 2012 the court a quo issued an order denying the motion for reconsideration, which order was received by the petitioner on 9 March 2012 as claimed by the petitioner in this petition.

          In denying the motion for reconsideration, the court a quo, ruled as follows:

On the first assignment of error, defendant alleged that reliance to the China Bank case is misplaced because the factual circumstances attendant thereto are not in accord with those in this instant case.  Several cases were cited by defendant and from there reasoned that the period of prescription in this should not be reckoned from the time when plaintiffs demanded for payment of their deposits and refused by defendant bank, but from the dates of the purported transactions, as allegedly shown in the statements of accounts; that the court erred in not ruling that the action instituted by plaintiffs has already prescribed that since it is the amounts of the statements of accounts that plaintiff seek to recover, therefore, it is the dates of the statements of account that should be used to reckon prescription.

In plaintiffs’ Comment/Opposition filed on January 31, 2012 they argued that the Court has exhaustibly discussed the basis of the denial of the Motion to Dismiss; that the alleged assigned errors are mere reiterations and rehash of defendant’s position in its Motion to Dismiss; that it is a well settled rule in a long line of jurisprudence that since a cause of action requires, as essential elements, not only a legal right of the plaintiff and a correlative duty of the defendant but also an act or omission of the defendant in violation of said legal right, the cause of action does not accrue until the party obliged refuses, expressly or impliedly, to comply with its duty; that this is the situation in this case.

On the second assigned error, defendant states that it was error on the part of the Court to give credence to the Statements of Account attached to the Complaint in establishing a cause of action; that the statements of account only showed the obligation of defendant bank for the alleged accounts as of May 15, 1992 and that it did not show there are still funds in the account or that the account is even subsisting; that if at all, said documents only showed that from April to May 1992, defendant bank had an obligation to pay plaintiffs the amount stated therein.

Plaintiffs maintain that all the elements of a cause of action are present in the instant case, to wit: 1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; 2) an obligation on the part of the named defendant to respect or not to violate such right; and 3) an act or omission on the part of such defendant in violation of the plaintiff or constituting breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for damages or other appropriate relief.

Defendant, in assailing the ruling that laches had not set in, by rendering said equitable defense of laches dependent and intertwined to the defense of prescription, averred that to rule that laches does not apply because only one year had lapsed contravenes settled jurisprudence which entrenches the rule that laches is not just concerned with time, but with equity; that since this action instituted by plaintiffs has already prescribed, even assuming that it is not barred by the statute of limitations, their action should be barred by the equitable doctrine of laches.

As to the third assigned error, plaintiffs countered that laches is addressed to the sound discretion of the Court since3 it is an equitable doctrine.

Perusal of the Complaint would show that a Letter-reply dated June 7, 2010 from a certain Katherine C. Maaño from the Customer Service of defendant bank stated that accounts with credit balance which have no movement or have been inactive for at least ten years are endorsed to the Philippine Treasury through an Escheat File.  In fine, defendant bank owned up that accounts of herein plaintiffs were subjected to Escheat but it could no longer show proof if indeed the same was turned over to the Philippine Treasury since banks were allowed by law to keep records of terminated and closed accounts for only ten years.

Meanwhile, a letter dated November 3, 2010 from the Bureau of Treasury, particularly from the Office of the Chief of the Law and Litigation Division was received by plaintiff’s counsel stating that based on the records of the Bureau, the subject accounts were not forwarded to them for escheat proceedings and that said office has not received any confirmation and/or certification from defendant bank whether or not said accounts were reported to the Bureau.

Based on the allegations in the Complaint, a cause of action is present.  A cause of action is a formal statement of the operative facts that give rise to a remedial right.  The question of whether the complaint states a cause of action is determined by its averments regarding the acts committed by the defendant.  Thus, it “must contain a concise statement of the ultimate or essential facts constituting the plaintiff’s cause of action.”  Failure to make a sufficient allegation of a cause of action in the complaint “warrants its dismissal.”

As defined in Section 2, Rule 2 of the Rules of Court, a cause of action is the act or omission by which a party violates the right of another.  Its essential elements are as follows:

1.      A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;

2.      An obligation on the part of the named defendant to respect or not to violate such right; and

3.      Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a br3each of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief.

It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief.  In determining whether an initiatory pleading states a cause of action, “the test is as follows: admitting the truth of the facts alleged, can the court render a valid judgment in accordance with the prayer”” To be taken into account are only the material allegations in the complaint; extraneous facts and circumstances or other matters alliunde are not considered.  The court may consider in addition to the complaint the appended annexes or documents, other pleadings of the plaintiff, or admission in the records.

Plaintiffs alleged that they have existing accounts with defendant bank.  On the other hand, defendant bank countered that since the accounts were inactive they had it endorsed to the Philippine Treasury for escheat proceedings.  The Philippine Treasury, on its part, stated that there is nothing in its records that would show said accounts were included for escheat proceedings.  There is a question here of where the money in the account could have gone to.  If it is not in the bank and not in the Treasury, then where?

The contention of defendant that the accounts were subjected to escheat proceedings is a matter of defense and the Court could not just take it at face value since the Bureau of Treasury, the agency that is supposed to receive such escheated accounts, denied it.  The Court could not as yet consider the defendant’s allegation of escheat when in the Complaint filed by plaintiffs none was had.  Thus, the assertion on the prescription of action will not lie.

The subject matter of this case is deposits of hard-earned money of the plaintiffs placed in the hands of herein defendant bank, the whereabouts of which were unknown.  The Court is hereby giving plaintiffs an opportunity to establish their claim and at the same time giving defendant bank its chance to rationalize its defense in a full blown trial.

In addition, laches is a rule of equity and applied not to penalize neglect or sleeping on one’s rights, but rather to avoid recognizing a right when to do so would result in a clearly unfair situation.  There is to be determined according to its particular circumstances.  Ultimately, the question of laches is addressed to the sound discretion of the court and, being an equitable doctrine, its application is controlled by equitable considerations.  It cannot be used to defeat justice or perpetrate fraud and injustice or bound strictly by the statute of limitations or the doctrine of laches when to be so, a manifest wrong or injustice would result.


          Unperturbed, the petitioner filed this petition, alleging that the court a quo committed grave abuse of discretion in denying its motion to dismiss and denying its motion for reconsideration taken against the order denying the motion to dismiss.

          The grounds raised by the petition are as follows:

1.     That the RTC of Quezon City acted with grave abuse of discretion in ruling that the claims of the private respondent have not yet prescribed and in applying the case laws of China Banking Corporation vs CA and AFPSLAI;

2.     That the RTC of Quezon City acted with grave abuse of discretion in ruling that the complaint established cause of action; and

3.     That the RTC acted with grave abuse of discretion in not ruling that the claims of the private respondents are already barred by laches.

          The private respondents filed their comment or opposition to the same petition and to the application for a Temporary Restraining Order (TRO) and Preliminary Injunction (PI).

          In gist, the private respondents argued that the petition failed to show any clear or unmistakable right to be protected from the continuation of the proceedings at the Regional Trial Court of Quezon City.

          Additionally, the private respondents argued that there is no urgency and that what the petitioner is complaining about are only actually matters of defenses that can only be threshed out in a full-blown trial.

          The private respondents also insisted that the complaint they filed sufficiently stated the causes of action.
                                                                  
           In arguing that the complaint stated sufficient statements of causes of action, the private respondents pointed out that the petitioner belongs to the class of debtors distinct from ordinary debtors that are not banks and that this fact does not need to be stated in the complaint.  What is actually sufficient is that it is stated as a bank.

          Thereafter, the private respondents stressed that the petitioner is engaged in a business that is clothed with public interest and subject to the laws of escheat, the laws of AMLA, the banking laws, securities law, the law on negotiurom gestio, the law on prescription of actions, the law on laches, the constitutional law on due process before confiscation of property, the law on human relations such as against abuse of right, unjust enrichment, moral, good customs and public policy, and the law on fiduciary character in certain circumstances.  These facts of the existence of these laws need not be written in the complaint.

          The private respondents also stressed that they stated in the complaint that in 1995 (should be 1994) they left for the United States of America (USA) and went back to the Philippines in 2010.  With this fact stated it calls for the application of the law on prescription that does not apply to the creditors who are absent in the Philippines and living abroad, found in Article 1108 of the Civil Code.

          The private respondents also argued that the petitioner did not inform the private respondents that the petitioner listed their deposit accounts as escheated or that the petitioner submitted to the Treasurer of the Philippines affidavits of escheatable accounts.  On this, the private respondents argued that the law on escheat need not be stated in the complaint.  What is important is that the private respondents stated in the complaint that they received a letter telling them that the accounts were escheated, and that they inquired from the Treasurer of the Philippines about their accounts and that the Treasurer of the Philippines wrote back that the petitioner has not submit any account of the private respondents for the purposes of escheat proceedings.

The private respondents also argued that since there is no evidence that their accounts were submitted for escheat proceedings, it necessarily follows that the petitioner assumed to perform an obligation under the law on negotiorum gestio to take care of the property of the absent private respondents who had been in the US and who had not appointed any administrator.

The negotiorum gestor has the obligation to return the property when the owner shows up.  In this case, the petitioner refused the demand of the private respondents to return to them the deposits in pesos and dollars along with accrued interests.

When the petitioner refused the demand of the private respondents, the petitioner unjustly enriched itself at the expense of the private respondents.

As such, the private respondents argued the complaint sufficiently stated their causes of action and the petitioner has no right to stop the proceedings of the court a quo.

The petitioner submitted a strongly-worded Reply to the comment and the private respondents submitted the corresponding Rejoinder.

In the same Rejoinder, the private respondents reiterated their positions stated in the Comment and asserted that the private respondents did not raise new matters as these are matters of law that are deemed written in the complaint.

In the same Rejoinder, the private respondents stated as follows:

These “new matters” are actually not new; these are more of matters of law that must be considered.

        To stress the points, let the following discussions be stated:

a.      Failure to notify the private respondents to their last known address is a matter of due process rights prior to condemnation.  In all walks of life, even if not asserted, this must be respected.  It becomes deemed written in every contract, every court decision or order process or procedure.

b.    The duty of a negotiorum gestio is also deemed written in every contract of the nature such as the subject matter at hand.  Every time any person is circumstanced to see an absent person, the former is obliged to take care of the property left without any administrator.  This is a direct contravention of the position of the petitioners that laches and prescription have set in against the private respondents.  Being the law, it is deemed written in order not to defeat the private respondents’ just claims and not to enrich the petitioner at the expense of the private respondents.

c.  No one is allowed to enrich itself at the expense of another.  This is a universal principle deemed written at every contract, order or decision.  It must be observed. 

Now, being matters of law, they are deemed to have been included when the court a quo issued its resolution and orders rejecting the motion to dismiss.

More importantly, these matters raised by the private respondents can be invoked as some of the justifications why the court a quo did not commit grave abuse of discretion amounting to lack or excess of jurisdiction.


          In the same Rejoinder, the private respondents also confronted head on the arguments raised by the petitioner against these “new matters,” to wit:

            Now, confronting head on the arguments raised by the petitioner, it is stated:

1.      It is unfortunate for the petitioner to state that the accounts were not improperly archived or escheated just because of its argument that the accounts claimed by the private respondents have already been legitimately closed or terminated.

Let it be stated in the beginning, the law imposed on banks to retain records and this pertains only to retention of records up to five (5) years.

Now relief from the duty to retain records in five years does not include the privileged to be from the obligation as to what to do with the monies of the depositors concerned.  It does not confer on banks that privilege to tear in the paper shredders all those monies of the depositors or throw these monies of the depositors to the trash can.

Surely, the banks have the obligations under the law on escheat to comply with respecting the monies that have remained dormant.  While the banks can be freed from the obligation to retain records of the relationship between the banks and the depositors as depositors, the banks have the obligation to do due diligence as to how to keep the monies as a matter of obligation under the law on good faith, the law on abuse of right under Article 19 of the Civil Code and other human relation laws, and the law on escheat.

Ironically, the petitioner is now stating the Anti-Money Laundering Act that requires the establishment and record of the true identity of its clients based on official documents.   With respect to the private respondents as it depositors, it obviously did not even comply with this command when the AMLA became effective in the year 2001.   The petitioner did not even have evidence in its motion to dismiss that it required the respondents to comply with this law’s requirement of records and identity establishment.

So that it is amusing for the petitioner now to insist that the deposits of the private respondents have already been terminated and no longer existing in its accounts.  Despite this insistence, the petitioner NEVER GAVE AN EXPLANATION HOW THE ACCOUNTS NO LONGER EXIST.

Now, by invoking the defense that the accounts of the private respondents no longer exists the petitioner is now joining the issue and this can only be threshed out in the full-blown trial. This is a piece of evidence against its claim that the instant complaint before the court a quo should be dismissed.

Now, it is incorrect for the petitioner to claim shield behind the cloak of claimed presumption that the ordinary course of business has been followed.  They are claiming that there was the presumption that the ordinary course of business has been followed when this presumption has been rebutted with the documentary evidence consisting of certificates from duly-constituted offices showing that the petitioner did not perform at least some of the procedures to be following in conducting the business of banking.   The certificate shows that the petitioner never performed the initial act required in escheat proceedings.  So, the presumption in its favor is now rebutted.   And for it to say that it was otherwise needs a full-blown trial.

And when it claims that the burden of proof of existence of the accounts lies on the private respondents, then it necessarily follows that the petitioner is incorrect in insisting for the dismissal of the case for lack of jurisdiction, prescription and laches.  For the petitioner to claim defenses of laches and prescription this presupposes the existence of the accounts and that these accounts already prescribed.

However, the petitioner forgot that the matter of whether prescription or laches has set in is itself a matter that must be proved first and it can only be threshed out in a full-blown trial.  As such, it is very clear that the court a quo did not commit any grave abuse of discretion in denying its motion to dismiss.

Now, the petitioner makes another inconsistent claim that the private respondents failed to state their causes of action.  For one, it is sufficient that the private respondents stated in the complaint they are depositors.  As to what would be the effects of all other incidents as depositors, these are not necessary to stated in the complaint.  The claim that there is such periodic examination of bank accounts and transactions conducted by the Bangko Sentral ng Pilipinas is only a matter of defense.

2.      It is unfortunate for the petitioner to take its cake and eat it too as to the issue of negotiorum gestio.

The petitioner is claiming that negotiorum gestio applies only in the absence of the contract and that it does not apply to it because there was that contract of loan, as a relationship between the bank and the depositor.

Simply stating, if the petitioner is claiming it no longer has obligations after the expiration of the retention of records period, then by law the contract of loan between the bank and the depositors ceases to exist.  When the contract ceases to exist and still the bank keeps hold of the monies of the depositor, then the law on negotiorum gestio takes over.

To analyze, the requisites of negotiorum gestio exist.

First, it is very clear that the bank assumed voluntarily the agency or management of the funds of the private respondents when it did not follow the law on escheat and when it kept the funds of the private respondents.

Second, the fact that the private respondents have not shown up is in itself a clear neglect or abandonment.

Third, there was no authority given for the bank to keep and manage the funds because the authority given was limited only to that of the depositor-bank relationship that was presumed to have been ceased by the law on retention and escheat.

Fourth, the petitioner bank must be presumed at first to have assumed the funds of the private respondents in good faith, and it is not immaterial when the gestor would later appropriate the funds and make a claim against the private respondents.

So that it is very clear that these requisites existed.

3.      The principle of unjust enrichment must remain a binding principle.

It is sad for the petitioner to claim reliance on the case University of the Philippines vs. Philab Industries, 482 Phil. 693 (2004) and yet it does not apply it correctly.

In this case, it is very clear that the petitioner is illegally and unlawfully withholding the funds of the private respondents.  The fact that it did not notify the private respondents that the law on escheat was set to apply and the fact that there is no record that the petitioner indeed comply with the law on escheat are in themselves sufficient as proofs that the petitioner UNLAWFULL and ILLEGALLY appropriated for itself the funds of the private respondents.

Res ipsa loquitor provides the proof that the petitioner knowingly received something of value from the private respondents.  There were these deposits made and these are proven by the bank books and others that the petitioner issued.  Then there is no proof that the petitioner followed the rule on escheat or no proof that the petitioner notified the private respondents in their last known address about the impending loss of their funds.  These are more than sufficient to constitute as unequivocal evidence that the petitioner knowingly received something of value.

Following the University of the Philippines case, it is also very clear that: (a) the petitioner has been enriched by millions of pesos of funds of the private respondents; (b) the private respondents suffered losses in the amount of those deposited and the interest earned until such day when the contract of loan was deemed ceased by law; (c) that for the petitioner to appropriate the said funds of the private respondents was without just or legal ground because it did not even inform the private respondents of the impending danger to their funds and did not even comply with the law on escheat; and (d) that after the law may have ceased the contract of loan by reason of long absence, the private respondents have had no more other actions based on contract, quasi-contract, crime or quasi-delict.



The Issue

         
          The private respondents submit one issue: Whether or not the public respondent Regional Trial Court of Quezon City, Branch 84, committed grave abuse of discretion in denying the Motion to Dismiss and in denying the Motion for Reconsideration taken from the same Motion to Dismiss.



The Conclusion


          As shown by the discussions below, the Regional Trial Court of Quezon City, Branch 84, did not commit grave abuse of discretion.

          Ergo, this petition must be dismissed.
         

The Discussions


          It is very clear that the public respondent correctly ruled in denying the motion to dismiss and in denying the motion for reconsideration taken against the motion to dismiss.

          If at all, the most that the petitioner can claim is error of judgment and it is not equivalent to grave abuse of discretion.  The error must be patent and palpable before it can be considered as grave abuse of discretion.


Correct is the ruling that the complaint
states sufficient causes of action


          The ultimate facts needed to establish the right of the private respondents to be refunded of their deposits in pesos and dollars are as follows:

1.     The ultimate facts to establish the right to be refunded of the deposits in various accounts with the petitioner:

a.     That the private respondents have opened and maintained deposit accounts with the petitioner;

b.    That the private respondents left the Philippines in 1994 and returned in 2010;

c.      That there is the law on escheat that requires banks to submit affidavits of escheatable accounts for all accounts that have had no movements for at least ten (10) years;

d.    That there is the law on retention by the banks of the records of accounts;

e.     That there have been no notices sent to the last known address of the private respondents informing them that their accounts would be escheated or removed from the records retained by the petitioner as a bank;

2.     That the ultimate facts to establish the obligation on the part of the petitioner to respect that right of the private respondents are as follows:

a.     That it did not submit affidavits of escheated accounts of the private respondents to the Treasury of the Philippines, which fact is supported by the letter of the legal division of the Bureau of Treasury;

b.    That it did not send a notice to the private respondents that their accounts with the petitioner shall be released to escheat;

c.      That it did not send a notice to the private respondent that the records of their accounts shall no longer be retained;

d.    That it is a fact that the private respondents had been absent in the Philippines for at about sixteen (16) years;

e.     That there is a law, Article 1108, that states that prescription does not run against those absent in the Philippines, which fact of the existence of the law needs not to be stated in the complaint;

f.       That there is a law on negotiorum gestio that created the obligation of fidelity and due diligence for the one actually holding the property of the absent owner, which fact of the existence of the law needs not to be stated in the complaint;

3.     That the ultimate fact establishing the act or omission violating the right of the private respondents are as follows:

a.     That the private respondents wrote the petitioner to give back their deposits in pesos and dollars; and

b.    That the petitioner refused to heed the demand.


Cause of action
has not prescribed
is also correct


The ruling of the public respondent that the cause of action of the private respondents have not yet prescribed because the point of reckoning must be from the day the petitioner violated the right of the private respondents.

The day the petitioner violated the right of the private respondents for their deposits to be given to them was on the day the petitioner denied or refused to heed the demand of the private respondents for the bank to give to them their deposits in pesos and dollars.

The day the petitioner violated the right of the private respondents occurred days after the petitioner received the February 10, 2010 demand letter of the private respondents.

It was an obligation of the petitioner under the laws and the Constitution to give notice of the impending escheat and removal from the records.  The corresponding right of action under the law is demandable within ten (10) years through the court if the petitioner refused to heed the demand to give back the deposits.

Since the only about a year had passed before the private respondents filed the case before the court a quo. So that the action has not yet prescribed.


RTC is correct in ruling
that laches has not set in


          The court a quo is correct that laches has not set in to seize the right of the private respondents.

          The court a quo cited the fact that the petitioner’s representative wrote the private respondents that their deposits in pesos and dollars had been escheated.

          Then the court a quo cited the letter of the legal department of the Bureau of Treasury to the private respondents informing them that their accounts had never been submitted by the petitioner for escheat proceedings.

          So that if the petitioner did not submit the deposits to the Bureau of Treasury for escheat proceedings, it means that the petitioner assumed the duties of the gestor to manage the funds with the due diligence of a good father.

          While the court a quo did not state the law on negotiorum gestio, the reasoning jibes with it as it asked: that if the deposits are not with the petitioner and not with the Bureau of Treasury, where is the money?

          Still, it is very clear that there is no laches that has seized the right of the private respondents.

          This is analyzed with more clarity by taking each element of laches in seriatim.

          The settled four (4) elements of laches[1] are as follows:

(1) conduct on the part of the defendant or one under whom he claims, giving rise to the situation of which complaint is made and for which the complainant seeks a remedy;

(2) delay in asserting the complainant's right, the complainant having had knowledge or notice of defendant's conduct and having been afforded an opportunity to institute a suit;

(3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his claim; and

(4) injury or prejudice to the defendant in the event relief accorded to the complainant, or the suit is not held barred.

          First element exists:

          In this case, the conduct of the defendant that gave rise to the situation from which the complaint is filed and for which the private respondents as the complainants seek a remedy is the conduct of the petitioner in refusing to heed the demand of the private respondents. 

So that, the first element exists.


          The second element does not exist:
         
          Now, it is very clear that the second element does not exist.

          There is no delay in asserting the complainant’s right. 

The first reason is that the private respondents did not have any knowledge or notice of the petitioner’s conduct.

The petitioner did not submit the deposits of the private respondents to the Bureau of Treasury for the escheat proceedings.  The petitioner did not notify the private respondents that it submitted the deposits to the Bureau of Treasury. 

In fact, the petitioner did not submit the deposits to escheat.  Obviously, the vileness is apparent: to profit at the expense of the depositors and the State should have had the right to escheat the private respondents’ funds.  The petitioner chose not to submit the funds to the State and never informed the private respondents. If the private complainants chose to be silent, the petitioner will be enriched at the expense of the private respondents by deceiving also the State at the same time.

The private respondents as depositors are entitled to sit idly by until there is a notice from the petitioner that it submitted their deposits to the Bureau of Treasury for escheat proceedings.

Further, the fact of lack of notice that their funds may have already been submitted for escheat proceedings entitled the private respondents to believe in good faith that the petitioner acted as officious manager under the law on negotiorum gestio that their absence in the Philippines would never cause them harm.

Also, the petitioner never informed the private respondents to act on to activate the dormant accounts or it will remove their deposits from the records of the bank.

Moreover, the private respondents as being absent in the Philippines are entitled to the right that prescription had not run against them while they were in the United States for 16 years.  This right is found in Article 1108 of the Civil Code of the Philippines.  So that, there is no delay to speak of in so far as prescription is concerned.  When they left the Philippines in 1994, there was no any issue on prescription.


Third element does not exist:


The third element of laches obviously does not exist. 

It can never be said that the petitioner did not have knowledge that the private respondents would assert their right upon which they now base their claims for deposits.

The fact that amounts involved are so substantial and not just in a few thousands of pesos, the petitioner should be expecting that the private respondents would run after it.

Imagine, for the petitioner just to seize the millions of pesos and dollars of the private respondents is revolting to conscience.

This is elementary not to be known by a banker.


Fourth element does not exist, too:


The fourth element does not exist because there is no damage on the part of the petitioner when the claims of the private respondents are given.

There can be no damage because it is the money of the private respondents anyway.

The private respondents are only asking for their money and nothing more, except for the just demands on interest for forbearance or otherwise for the use of the money of the private respondents, except for moral damages that are only meant to restore the private respondents from their damage to their former status, except for exemplary damage because the arrogance must not be allowed for the public good, and except for attorney’s fees because the petitioner must shoulder the lawyer’s fees of the private respondents who were compelled by the petitioner to engage the services of the counsel.


Correct in ruling that
prescription has not set in


          The RTC of Quezon City is also correct in ruling that prescription has not set in.

          As explained above, Article 1108 of the Civil Code tolled the running of the prescription against the private respondents.

          To be clear, let Article 1108 be quoted, to wit:

Art. 1108. Prescription, both acquisitive and extinctive, runs against:

(1) Minors and other incapacitated persons who have parents, guardians or other legal representatives;

(2) Absentees who have administrators, either appointed by them before their disappearance, or appointed by the courts;

(3) Persons living abroad, who have managers or administrators;

(4) Juridical persons, except the State and its subdivisions.

Persons who are disqualified from administering their property have a right to claim damages from their legal representatives whose negligence has been the cause of prescription. (1932a)


          It is undisputed that the private respondents were living abroad for 16 years, from 1994 to 2010.

          It is also undisputed that they had no administrators or managers to take care of their concerns with respect to the deposits.

          Thus, it is also undisputed that the private respondents are entitled to the benefits of Article 1108 of the Civil Code of the Philippines.

                                                         
The Prayer



WHEREFORE, it is respectfully prayed of the Honorable Court to deny the prayer for TRO/WPI and dismiss the instant petition. 

Respectfully submitted, March 25, 2013, Manila.

RENTA PE CAUSING SABARRE CASTRO & ASSOCIATES
Unit 1, 2368 JB Roxas St. corner Leon Guinto St., Malate, Manila
Emails: totocausing@yahoo.com, berteni.causing@gmail.com; Telephone No.: +632-3105521

By:


BERTENI CATALUÑA CAUSING
IBP No. 876498 / Manila IV / 10-01-2013
PTR No. 1435314 / Manila / 10-01-2013
Roll No. 60944 / MCLE No. IV -0007338 / 08-10-2012


Cc:

ATTY. GLENN CARMPATANA, Sycip Salazar Hernandez and Gatmaytan, 4th Floor, Keppel Center, Cardinal Rosales Ave. corner Samar Loop 600, Business Park, Cebu


Explanation


          Far distance and lack of manpower compelled the service of this memorandum by registered mails.



BERTENI CATALUÑA CAUSING


[1] Antonio R. Agra, et al vs Philippine National Bank, G.R. No. 133317, June 29, 1999
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