Credit Transactions

T3 | AY2013-2014
Case # 2
Topic: Concept of Credit
REPUBLIC OF THE PHILIPPINES vs.
PHILIPPINE NATIONAL BANK, ET AL., defendants,
THE FIRST NATIONAL CITY BANK OF NEW YORK, defendant-appellee.
Facts:
The Republic of the Philippines filed on September 2, !"# before the Court of First $nstance of
%anila a complaint for escheat of certain unclaimed ban& deposits balances under the provisions
of 'ct (o. )")* a+ainst several ban&s, amon+ them the First (ational Cit, -an& of (e. /or&.
$t is alle+ed that pursuant to Section 2 of said 'ct defendant ban&s for.arded to the Treasurer
of the Philippines a statement under oath of their respective mana+in+ officials of all the credits
and deposits held b, them in favor of persons &no.n to be dead or .ho have not made further
deposits or .ithdra.als durin+ the period of !0 ,ears or more.
1herefore, it is pra,ed that said credits and deposits be escheated to the Republic of the
Philippines b, orderin+ defendant ban&s to deposit them to its credit .ith the Treasurer of the
Philippines.
$n its ans.er the First (ational Cit, -an& of (e. /or& claims that it has inadvertentl, included
in said report certain items amountin+ to P!2,2".2" .hich, properl, spea&in+, are not credits
or deposits .ithin the contemplation of 'ct (o. )")*. 3ence, it pra,ed that said items be not
included in the claim of plaintiff.
Topic $ssue: 1hat is the concept of credit4
5ecision:
The term 6credit6 in its usual meanin+ is a sum credited on the boo&s of a compan, to a person
.ho appears to be entitled to it.
$t presupposes a creditor-debtor relationship, and ma, be said to impl, abilit,, b, reason of
propert, or estates, to ma&e a promised pa,ment
$t is the correlative to debt or indebtedness, and that .hich is due to an, person, a
distin+uished from that .hich he o.es
The same is true .ith the term 6deposits6 in ban&s .here the relationship created bet.een the
depositor and the ban& is that of creditor and debtor
%ain Case $ssue: : 5o demand draft and tele+raphic orders come .ithin the meanin+ of the term
6credits6 or 6deposits6 emplo,ed in the la.4
5ecision:
' demand draft is ver, different from a cashier7s or mana+er7s chee&, contrar, to appellant7s
pretense, for it has been held that the latter is a primar, obli+ation of the ban& .hich issues it
and constitutes its .ritten promise to pa, upon demand.
' cashier7s chec& issued b, a ban&, ho.ever, is not an ordinar, draft. The latter is a bill of
e8chan+e pa,able demand. $t is an order upon a third part, purportin+ to dra.n upon a deposit
of funds.
' cashier7s chec& issued on re9uest of a depositor is the substantial e9uivalent of a certified
chec& and the deposit represented b, the chec& passes to the credit of the chec&holder, .ho is
thereafter a depositor to that amount
' cashier7s chec&, bein+ merel, a bill of e8chan+e dra.n b, a ban& on itself, and accepted in
advance b, the act of issuance, is not sub:ect to countermand b, the pa,ee after indorsement,
and has the same le+al effects as a certificate deposit or a certified chec&
' demand draft is not therefore of the same cate+or, as a cashier7s chec& .hich should come
.ithin the purvie. of the la..
For tele+raphic transfer pa,ment, the dra.er ban& .as alread, paid the value of the tele+raphic
transfer pa,ment order. $n the particular cases under consideration it appears in the boo&s of
the defendant ban& that the amounts represented b, the tele+raphic pa,ment orders appear in
the names of the respective pa,ees. $f the latter choose to demand pa,ment of their tele+raphic
Credit Transactions
T3 | AY2013-2014
transfers at the time the same .as ;.ere< received b, the defendant ban&, there could be no
9uestion that this ban& .ould have to pa, them.
Tele+raphic transfer pa,ment orders should be escheated in favor of the Republic of the
Philippines.