MIRANDA v.

PDIC, BSP, PRIME SAVINGS BANK,

GR NO. 169334, SEPTEMBER 8, 2006

FACTS:

In this case, herein petitioner Ms. Leticia Miranda was a former depositor of Prime Savings
Bank (PSB), one of herein respondents. On June 3, 1999, Ms. Miranda withdrew large amounts
from her account in Prime Savings but instead of receiving cash, she preferred to be issued a
crossed cashier’s check1. Ms. Miranda then purchased and was subsequently issued two
crossed cashier’s checks, both totalling to P5,502,000.00. On the same day, she deposited
these checks unto her account with another bank. Incidentally, however, the Banko Sentral ng
Pilipinas (BSP) suspended the clearing privileges of PSB effective June 3, 1999, and,
consequently, the two crossed cashier checks were returned to Ms. Miranda unpaid. On June 4,
1993, PSB then declared a bank holiday2, and on January 7, 2000, it was placed by the BSP
under Philippine Deposit Insurance Corporation (PDIC) receivership.

Petitioner Miranda then filed a civil action for sum of money against PSB, PDIC, and BSP before
the Regional Trial Court (RTC). The RTC ruled in favour of petitioner and found PSB, PDIC, and
BSP solidarily liable for the payment of P5,502,000.00 to petitioner. Upon appeal, however, the
Court of Appeals (CA) reversed RTC’s decision, dismissing the case against PDIC and BSP,
without prejudice to the filing of the case against PSB in the proper liquidation court.

Petitioner’s Motion for Reconsideration was denied, hence, this instant petition.

ISSUES:

1. Whether the two crossed cashier’s checks operate as an assignment of funds in favour
of petitioner;
2. Whether petitioner’s claim is a “disputed claim” as defined in the Central Bank Act, and
should be under the jurisdiction of the liquidation court; and
3. Whether respondents PSB, PDIC, and BSP are solidarily liable to the petitioner.

RULING AND RATIO DECIDENDI:

1. No, the issuance of the two (2) crossed cashier’s checks did not constitute an
assignment of funds. This is because PSB was already insolvent at the time it issued the
said checks; it no longer had the funds, therefore, no assignment can be made thereof.

1A crossed check is one which is crossed with two parallel lines on the top-left hand corner which signifies that it may
only be deposited directly into a bank account and, thus, cannot be immediately cashed by a bank or by any other
credit institution. A cashier’s check is one issued by a bank on its own funds, thereby guaranteeing its payment.
2
A bank holiday is a business day on which physical branches of banks are closed due to several valid reasons.
 2. Yes, the claim is a “disputed claim”3 and is under the jurisdiction of the liquidation court
and not under the regular courts.

The claim of the petitioner involves the payment of the two crossed cashier’s checks
issued by PSB and were dishonored on account of the latter’s closure. This claim falls
under the definition of a “disputed claim”, as it is against the assets of the insolvent bank.

Further, the said issuance created a debtor-creditor relationship between PSB and the
Petitioner. Hence, this claim should be lodged in the liquidation proceedings with the
liquidation court and not with the regular court.

Regular courts do not have jurisdiction over actions filed by claimants against an
insolvent bank, unless there is a clear showing that the action taken by the BSP, through
the Monetary Board in the closure of financial institutions was in excess of jurisdiction, or
with grave abuse of discretion.

3. No, PDIC, and BSP, are not solidarily liable with PSB to the petitioner; only PSB is liable
to the Petitioner. First, PDIC and/or BSP were not parties to the issuance of the checks;
second, PDIC and BSP only acted accordingly to the mandate of the law as government
agencies tasked to determined the financial viability of the banks and quasi-banks, and
facilitate receivership and liquidation of closed financial institutions, and lastly, these
government agencies did not act in abuse of their authority. Hence, PDCI and BSP
cannot be held liable.

*On the sole and primary liability of PSB (rules on the element of fraud):

- In the absence of fraud on the part of the bank: the purchase of the cashier’s check
creates a debtor-creditor relationship between the purchaser and the bank. In effect, the
holder of said check is not entitled to a preference over general creditors in the assets of
the bank which issued the check when it fails before payment of the check;

-In the presence of fraud: where a cashier’s check is purchased from a bank at a time
when it is insolvent, as its officers know or are bound to know by the exercise of
reasonable diligence, it has been held that the purchase is entitled to a preference in the
assets of the bank on its liquidation before the check is paid.

In the case at bar, PSB’s officers knew that the bank was experiencing dire financial straits.
Hence, it could not have issued petitioner’s checks in good faith. Thus, fraud was evident in the
said issuance and PSB should be held liable therefore.

3
“Disputed claims” refer to all claims, whether they be against the assets of the insolvent bank, for specific
performance, breach of contract, damages, or whatever.
The present petition is DENIED; the CA Decision is upheld with the modification that petitioner
is entitled to a preference in the assets of PSB in its liquidation proceedings.

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