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"
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| 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.
(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
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