Case Summary (G.R. No. 195341)
Background of the Case
Elizabeth Sia maintained two accounts with Orient Commercial Banking Corporation, one of which was a joint "and/or" account with her father, See Sia. When the bank closed, there were uninsured deposits of over P5 million. Allied Bank assumed these liabilities with the help of the Philippine Deposit Insurance Corporation (PDIC). Subsequently, Elizabeth was authorized by her father to claim these deposits. They executed a Deed of Assignment in which a portion of the claims was assigned to Allied Bank with stipulations on payment. However, after Elizabeth’s father died, Allied Bank froze the account upon receiving notice from the heirs, prompting Elizabeth to file a suit for specific performance, breach of contract, and damages.
Proceedings and Decisions
The Regional Trial Court (RTC) ruled in favor of Elizabeth, highlighting that the account was under her name alone and directing Allied Bank to release the funds. The Court of Appeals (CA) affirmed this but reduced the damages awarded, recognizing that while the money in the account was derived from both Elizabeth and her father's contributions, the account was strictly in Elizabeth's name.
Legal Issues
The primary legal issue centered on whether Allied Bank had the legal basis to temporarily freeze the account upon knowledge of See Sia's death. Allied Bank contended that the funds in the account belonged partly to See and, thus, had proper grounds to act on the withdrawal request based on estate tax considerations.
Court Analysis
The Supreme Court noted that resolution of the case involved a question of law rather than fact, as underlying facts were not disputed. The bank's authority to freeze the account was established under R.A. No. 8424. The Court stated that a bank must refrain from allowing withdrawals upon knowledge of a depositor's death to ensure estate tax obligations are met. Thi
...continue readingCase Syllabus (G.R. No. 195341)
Case Background
- This case involves a petition for review on certiorari under Rule 45 of the Rules of Court.
- The petitioner is Allied Banking Corporation (now Philippine National Bank), and the respondent is Elizabeth Sia.
- The case seeks to reverse the Decision dated December 16, 2009, and the Resolution dated January 12, 2011, of the Court of Appeals (CA) which affirmed with modifications the ruling of the Regional Trial Court (RTC) of Cebu City in Civil Case No. CEB-26049.
Facts of the Case
- Elizabeth Sia maintained two accounts with the now-defunct Orient Commercial Banking Corporation (Orient Bank), with a total uninsured deposit amounting to P5,228,883.71 at the time of the bank's closure on October 15, 1998.
- Allied Bank assumed the uninsured deposit liabilities of Orient Bank with assistance from the Philippine Insurance Deposit Corporation (PDIC).
- On December 13, 1999, a Special Power of Attorney (SPA) was executed by See Sia, granting Elizabeth the authority to claim payment from the PDIC related to one of the Orient Bank accounts.
- Elizabeth and Allied Bank signed a Deed of Assignment, assigning a portion of the deposits to Allied Bank, with payment terms specified.
- Allied Bank opened a savings account (SA No. 0570231382) in Elizabeth's name for the purpose of receiving payments from the Deed of Assignment.
Events Following the Death of See Sia
- See Sia died on May 4, 2000, and Allied Bank was informed of his death through a letter from attorney Rolando M.