G.R. No. 66102-04 - Philippine Rabbit Bus Lines, Inc. vs. Intermediate Appellate Court

The Republic of the Philippines filed a complaint for escheat on September 25, 1957, before the Court of First Instance of Manila, invoking the provisions of Act No. 3936.
The complaint alleged that certain unclaimed bank deposit balances were subject to escheat after being dormant for ten years or more.
Several banks, including the First National City Bank of New York (FNCB), were named defendants.

Plaintiff asserted that, pursuant to Section 2 of Act No. 3936, defendant banks submitted statements under oath listing credits and deposits held in favor of persons known to be dead or inactive for at least ten years.
The Republic prayed that these unclaimed credits and deposits be escheated and deposited in the government's account with the Treasurer of the Philippines.

The First National City Bank of New York admitted that some accounts such as savings deposits, pre-war inactive accounts, and sundry accounts totaling over ₱100,000 were dormant and subject to escheat.
However, the bank claimed certain items listed in the report were not credits or deposits as contemplated under Act No. 3936 and should not be included in the plaintiff’s claim.
Specifically, the bank sought exclusion of cashier's or manager's checks, demand drafts, and telegraphic transfer payment orders.

The trial court initially ruled that cashier's or manager's checks and demand drafts fell within the purview of Act No. 3936, but telegraphic transfer payment orders did not.
Consequently, the complaint was dismissed with respect to the telegraphic transfer payment orders.
Upon a motion to reconsider by the defendant bank, the trial court reversed its decision and held that even demand drafts were not subject to escheat under the law and amended its judgment accordingly.
The Republic of the Philippines appealed this amendment.

Section 1 defines "unclaimed balances" to include credits or deposits of money, bullion, securities, or other evidences of indebtedness held by banks in favor of persons unheard from for ten years or more.
Such unclaimed balances and their proceeds should be deposited with the Insular Treasurer to the credit of the government.

Whether demand drafts and telegraphic transfer payment orders constitute "credits" or "deposits" subject to escheat under Act No. 3936.
Whether cashier's or manager's checks fall within the meaning of unclaimed balances as defined by the statute.
Whether the respondent bank became the debtor of the payees or holders of the contested instruments, thereby creating a creditor-debtor relationship covered by the law.