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Tan vs.

City of Davao

FACTS:

Dominga Garcia left in the Philippines a lot in Davao City which was registered in her
name when she went to China in 1923 with her family. In 1955, she died intestate.
Domingas adoptive parent, Cornelia Pizarro died in May 1936. In 1948, her nephew,
Ramon Pizarro, occupied a part of Domingas property and collected rentals
therefrom. Another nephew, Segundo Reyes, informed the Solicitor General about the
property. On Sept. 12, 1962, the City of Davao filed a petition in the CFI of Davao to
declare Dominga Garcias land escheated in its favor. Ramon contended that the
subject property was left to him by Dominga and that the City of Davao had no
personality to file escheat petition because only the Republic of the Philippines
through the Sol Gen can file an escheat petition. CFI ruled in favor of Davao City.
Pending appeal in CA, Ramon died. Luis Tan who was alleging to be the son of
Dominga filed a motion for intervention in CA. CA affirmed lower courts decision.
Hence, the appeal.

ISSUE:

WON Davao City had personality to file the escheat petition.

RULING:

The SC affirmed CAs decision.

The SC stated that with respect to the argument that only the Republic of the
Philippines, represented by the Solicitor-General, may file the escheat petition under
Section 1, Rule 91 of the Revised (1964) Rules of Court, the Appellate Court
correctly ruled that the case did not come under Rule 91 because the petition was filed
on September 12,1962, when the applicable rule was still Rule 92 of the 1940 Rules
of Court which provided:

Sec. 1. When and by whom,petition filed.When a person dies intestate, seized of
real or personal property in the Philippines, leaving no heirs or person by law entitled
to the same, the municipality or city where the deceased last resided, if he resided in
the Philippines, or the municipality or city in which he had estate if he resided out of
the Philippines, may file a petition in the court of first instance of the province setting
forth the facts, and praying that the estate of the deceased be declared escheated.

Rule 91 of the Revised rules of Court, which provides that only the Republic of the
Philippines, through the Solicitor General, may commence escheat proceedings, did
not take effect until January 1, 1964.

Therefore, it is apparent that the City of Davao had personality to file the escheat
petition because the applicable and the law in force at the time such petition was filed
was the 1964 Rules of Court vesting on Municipalities and Cities the authority to file
said petition.


RCBC vs. Hi Tri Development Corp.

FACTS:

Bakunawa spouses are owners of 6 parcels of land. Sometime in 1990, Teresita
Millan offered to buy the said lots with a promise that she will take care of the
clearing of preliminary obstacles to effect completion of the sale/ Millan however
failed to comply with the condition. Consequently, spouses Bakunawa rescinded the
sale and filed a complaint against Millan to return the TCTs and ordered Millan to
receive a Managers check of P1,019,514.29 for the down payment made by the latter.
Millan refused to accept the down payment. As a result, the spouses took out a
Managers check from RCBC in the amount of the down payment (yung
P1,019,514.29) payable to Millans company (Rosmil).During the pendency of the
case and without the knowledge of Hi Tri or the Bakunawa spouses, RCBC reported
P1,019,514.29 credit existing in favor of Rosmil to Bureau of treasury as among its
UNCLAIMED BALANCES. The OSG then filed in the RTC for escheat proceedings.
Bakunawa and Millan decided to settle amicably but when Bakunawa inquired from
RCBC the availability of the P1,019,514.29, the amount was already subject for
escheat proceedings. Hence, respondents conteded an ongoing dispute and that theed
that said amount was subject to an ongoing dispute. Moreover, they sought to be
included as party defendants. RTC ruled that the amount be subjected to escheat
proceedings. CA reversed on the ground that the failure of the bank to notify the
respondents deprived them of their opportunity to intervene in the escheat
proceedings.

ISSUE:

WON the amount in dispute may be escheated by the Republic.

RULING:

SC ruled in favor of the respondents. The SC stated that Escheat proceedings refer to
the judicial process in which the state, by virtue of its sovereignty, steps in and claims
abandoned, left vacant, or unclaimed property, without there being an interested
person having a legal claim thereto.

In the case of dormant accounts, the state inquires
into the status, custody, and ownership of the unclaimed balance to determine whether
the inactivity was brought about by the fact of death or absence of or abandonment by
the depositor.

If after the proceedings the property remains without a lawful owner
interested to claim it, the property shall be reverted to the state to forestall an open
invitation to self-service by the first comers. However, if interested parties have come
forward and lain claim to the property, the courts shall determine whether the credit or
deposit should pass to the claimants or be forfeited in favor of the state.

We
emphasize that escheat is not a proceeding to penalize depositors for failing to deposit
to or withdraw from their accounts. It is a proceeding whereby the state compels the
surrender to it of unclaimed deposit balances when there is substantial ground for a
belief that they have been abandoned, forgotten, or without an owner.

Moreover, the mere issuance of a managers check does not ipso facto work as an
automatic transfer of funds to the account of the payee. In case the procurer of the
managers or cashiers check retains custody of the instrument, does not tender it to
the intended payee, or fails to make an effective delivery, the SC finds the following
provision on undelivered instruments under the Negotiable Instruments Law
applicable:
Sec. 16. Delivery; when effectual; when presumed. Every contract on a negotiable
instrument is incomplete and revocable until delivery of the instrument for the
purpose of giving effect thereto. As between immediate parties and as regards a
remote party other than a holder in due course, the delivery, in order to be effectual,
must be made either by or under the authority of the party making, drawing,
accepting, or indorsing, as the case may be; and, in such case, the delivery may be
shown to have been conditional, or for a special purpose only, and not for the purpose
of transferring the property in the instrument. But where the instrument is in the hands
of a holder in due course, a valid delivery thereof by all parties prior to him so as to
make them liable to him is conclusively presumed. And where the instrument is no
longer in the possession of a party whose signature appears thereon, a valid and
intentional delivery by him is presumed until the contrary is proved.
The SC finally stated that since there was no delivery, presentment of the check to the
bank for payment did not occur. An order to debit the account of respondents was
never made. In fact, petitioner confirms that the Managers Check was never
negotiated or presented for payment to its Ermita Branch, and that the allocated fund
is still held by the bank. As a result, the assigned fund is deemed to remain part of the
account of Hi-Tri, which procured the Managers Check. The doctrine that the deposit
represented by a managers check automatically passes to the payee is inapplicable,
because the instrument although accepted in advance remains undelivered. Hence,
respondents should have been informed that the deposit had been left inactive for
more than 10 years, and that it may be subjected to escheat proceedings if left
unclaimed.


Republic vs.CA

FACTS:

For more than 3 decades, private respondent Amada Solano served as the all-around
domestic helper of the late Elizabeth Hankins, a widow and a French national. In
recognition of private respondents faithful service, Ms. Hankins executed in her
favor 2 deeds of donation involving 2 parcels of land. Private respondent alleged that
she misplaced the deeds of donation and nowhere to be found. While the deeds were
missing, the Republic filed a petition for the escheat of the estate of Elizabeth
Hankins before the RTC of Pasay City. Petitioner contended that the cause of action
of the respondents are barred by the statute of limitations. Lower court decided in
favor of the Republic. CA reversed. Hence, the appeal.

ISSUE:

WON the private respondents right to claim has been barred by the statute of
limitations.

RULING:

The SC ruled in favor of the petitioner.

The SC stated that Escheat is a proceeding, unlike that of succession or assignment,
whereby the state, by virtue of its sovereignty, steps in and claims the real or personal
property of a person who dies intestate leaving no heir. In the absence of a lawful
owner, a property is claimed by the state to forestall an open "invitation to self-service
by the first comers." Since escheat is one of the incidents of sovereignty, the state
may, and usually does, prescribe the conditions and limits the time within which a
claim to such property may be made. The procedure by which the escheated property
may be recovered is generally prescribed by statue, and a time limit is imposed within
which such action must be brought.
In this jurisdiction, a claimant to an escheated property must file his claim "within
five (5) years from the date of such judgment, such person shall have possession of
and title to the same, or if sold, the municipality or city shall be accountable to him
for the proceeds, after deducting the estate; but a claim not made shall be barred
forever. The 5-year period is not a device capriciously conjured by the state to
defraud any claimant; on the contrary, it is decidedly prescribed to encourage would-
be claimants to be punctilious in asserting their claims, otherwise they may lose them
forever in a final judgment.
Incidentally, the question may be asked: Does herein private respondent, not being an
heir but allegedly a donee, have the personality to be a claimant within the purview of
Sec. 4, Rule 91, of the Revised Rules of Court? In this regard, we agree with the
Solicitor General that the case of Municipal Council of San Pedro, Laguna v. Colegio
de San Jose, Inc., is applicable at least insofar as it concerns the Court's discussion on
who is an "interested party" in an escheat proceeding -
In a special proceeding for escheat under sections 750 and 751 the petitioner is not the
sole and exclusive interested party. Any person alleging to have a direct right or
interest in the property sought to be escheated is likewise an interested party and
may appear and oppose the petition for escheat. In the present case, the Colegio de
San Jose, Inc. and Carlos Young appeared alleging to have a material interest in the
Hacienda de San Pedro Tunasan; the former because it claims to be the exclusive
owner of the hacienda, and the latter because he claims to be the lessee thereof under
a contract legally entered with the former.
In the instant petition, the escheat judgment was handed down by the lower court as
early as 27 June 1989 but it was only on 28 January 1997, more or less seven (7)
years after, when private respondent decided to contest the escheat judgment in the
guise of a petition for annulment of judgment before the Court of Appeals. Obviously,
private respondent's belated assertion of her right over the escheated properties
militates against recovery.


Divino vs. Hilario

FACTS:

In the CFI of Davao, Tan Kui Sing began the intestate of the deceased Tan Chay and
asked that while his properties are yet unknown, a special administrator be appointed
to represent the deceased in the appeal. The court then appointed Ang Liongto and
stated that the deceased leftP5,000 in cash in the possession of the Philippine Foreign
Trading and Co. and P390 as rents. The court then ordered that the notice of trial be
published in the newspaper but such publication was not made. After trial, the lower
court ordered that the funds be escheated in favor of the municipality of Guianga.
Petitioner however alleged that the minor nephew and niece of the deceased are
entitled to the funds as heirs.

ISSUE:

WON the subject funds may be escheated in favor of the municipality of Guianga.

RULING:

The SC decided in favor of the petitioner.

The SC said that Sections 750 and 752 of the Code of Civil Procedure, applicable to
case, provide as follows:
SEC. 750. Procedure when persons dies intestate without heirs. When a person
dies intestate, seized of real or personal by law entitled to the same, the president and
municipal council of the municipality where the deceased last resided, if he was an
inhabitant of these Islands, or of the municipality in which he had estate, if he resided
out of the Islands, may, on behalf of the municipality, file a petition with the Court of
First Instance of the province for an inquisition in the premises; the court shall
thereupon appoint a time and place of hearing, and deciding on such petition, cause a
notice thereof to be published in some newspaper of general circulation in the
province of which the deceased was last an inhabitant, if within the Philippine Islands,
and if not, in some newspaper of general circulation in the province in which he had
estate. The notice shall recite the substance of the facts and request set forth in the
petition, the time and place at which persons claiming the estate may appear and be
heard before the court, and shall be published at least six weeks successively, the last
of which publications shall be at least six weeks before the time appointed by the
court to make inquisition.
In the case under consideration, the procedure fixed by section 750 has neither been
followed nor complied with, wherefore, we hold that the respondent judge and the
Court of First Instance of Davao did not acquire jurisdiction either to take cognizance
of the escheat case or to promulgate the order of August 24, 1935, whereby the sum
of P5,000 was escheated or adjudicated the municipality of Guianga. No petition was
filed either by the required publication made which was the essential step which
should have conferred jurisdiction.
Therefore, the subject funds in this case should not be escheated in favor of the
municipality for non compliance of the requirement set by the rules.

Republic vs. PNB

FACTS:

The Republic filed before the CFI of Manila a complaint for escheat of certain
unclaimed bank deposits under the provisions of Act 3936 against several banks
including private respondent First National City Bank of New York. It is alleged that
pursuant to Sec. 2 of said Act defendant forwarded to the Treasurer of the Philippines
a statement under oath of their respective managing officials of all the credits and
deposits held by them in favor of persons to be dead or who have not made further
deposits or withdrawals during the period of 10 years or more. First National Bank
claimed that it has included in their report certain amounts which are not credits or
deposits within the contemplation of Act No. 3936. The lower court held that
managers check or cashiers check and demand drafts as those which the defendant
wants excluded from the complaint come within the purview of Act No. 3936 but not
the telegraphic transfer payment which orders are different category.

ISSUE:

WON the amounts claimed by defendant to be excluded from Act No. 3936 may be
escheated in favor of the Republic.


RULING:

The SC stated that since it is admitted that the demand drafts herein involved have not
been presented either for acceptance or for payment, the inevitable consequence is
that the appellee bank never had any chance of accepting or rejecting them. Verily,
appellee bank never became a debtor of the payee concerned and as such the aforesaid
drafts cannot be considered as credits subject to escheat within the meaning of the
law.

However, a demand draft is very different from a cashier's or manager's cheek,
contrary to appellant's pretense, for it has been held that the latter is a primary
obligation of the bank which issues it and constitutes its written promise to pay upon
demand. A cashier's check is a check of the bank's cashier on his or another bank. It is
in effect a bill of exchange drawn by a bank on itself and accepted in advance by the
act of issuance.

A demand draft is not therefore of the same category as a cashier's check which
should come within the purview of the law.

The case, however, is different with regard to telegraphic payment order. It is said that
as the transaction is for the establishment of a telegraphic or cable transfer the
agreement to remit creates a contractual obligation as has been termed a purchase and
sale transaction. The purchaser of a telegraphic transfer upon making payment
completes the transaction insofar as he is concerned, though insofar as the remitting
bank is concerned the contract is executory until the credit is established. The SC
agreed with the following comment the Solicitor General: "This is so because the
drawer bank was already paid the value of the telegraphic transfer payment order. In
the particular cases under consideration it appears in the books of the defendant bank
that the amounts represented by the telegraphic payment orders appear in the names
of the respective payees. If the latter choose to demand payment of their telegraphic
transfers at the time the same was received by the defendant bank, there could be no
question that this bank would have to pay them. Now, the question is, if the payees
decide to have their money remain for sometime in the defendant bank, can the latter
maintain that the ownership of said telegraphic payment orders is now with the
drawer bank? The latter was already paid the value of the telegraphic payment orders
otherwise it would not have transmitted the same to the defendant bank. Hence, it is
absurd to say that the drawer banks are still the owners of said telegraphic payment
orders."

Therefore the items representing telegraphic transfer orders shpuld be escheated in
favor of the Republic.


Republic vs CFI of Manila

FACTS:

Pursuant to Uncalimed Balance Law (ACT No. 3936) private respondent forwarded
to the Treasurer of the Phils separate statements under oath by their respective
managing officers of all deposits and credits held by them in favor, or in the names of
such depositors or creditors known to be dead, or who have not been heard from, or
who have not made further deposits or withdrawals during the preceding ten years or
more. Upon receipt of these sworn statements, the Treasurer of the Philippines caused
the same to be published in two newspapers of general circulation. The Republic then
instituted before the CFI of Manila a complaint for escheat against private respondent.
The lower court decided in favor of respondent.

ISSUES:

Whether or not Pres. Roxas Rural Bank is a real party in interest in the escheat
proceedings

Whether or not Section 2(b), Rule 4 of the Revised Rules of Court on venue, likewise,
governs escheat proceedings instituted by the Republic in the Court of First Instance
of Manila.

RULING:

The SC denied the petition and stated that Section 3 of Act No. 3936 provides that
Whenever the Attorney General shall be informed of such unclaimed balances, he
shall commence an action or actions in the name of the People of the Philippines in
the Court of First Instance of the province where the bank is located, in which shall be
joined as parties the bank and such creditors or depositors. All or any member of such
creditors or depositors or banks, may be included in one action.

A "real party in interest" has been defined as the party who would be benefitted or
injured by the judgment of the suit or the party entitled to avail of the suit. There can
be no doubt that private respondent bank falls under this definition for the escheat of
the dormant deposits in favor of the government would necessarily deprive said bank
of the use of such deposits. It is in this sense that it stands to be "injured by the
judgment of the suit;" and it is for this reason that Section 3 of Act No. 3936
specifically provides that the bank shall be joined as a party in the action for escheat.

As to the second issue, suffice it to say that Section 2(b) of Rule 4 of the Revised
Rules of Court cannot govern escheat proceedings principally because said section
refers to personal actions. Escheat proceedings are actions in rem which must be
brought in the province or city where the rem in this case the dormant deposits, is
located.
Hence, the petition filed by the Republic must fail.

Mabanag vs Registry of Deeds of QC

FACTS:

The Coronels executed a document of receipt of down payment in favor of private
respondent Ramona Alcaraz upon the receipt of P50,000 as a down payment for the
sale of their inherited house and lot in QC. It was agreed upon that the Coronels
would execute a deed of absolute sale immediately upon the transfer of the TCT to the
name of the Coronels because the same was still named to their father. However, the
Coronels sold the said property to herein petitioner for a higher price than that of
Ramona. As a result, respondents filed a case for specific performance and caused the
annotation of lis pendens over the property. RTC ruled in favor of respondents and
cancelled the TCT in the name of petitioner. CA affirmed. Hence, the appeal.

ISSUE:
WON the CA erred in sustaining the registration by the Registrar of Deeds of the deed
of absolute sale despite the lack of indication of the citizenship of the buyer of the
subject property.

RULING:

SC denied the petition.

The SC said that it should also be pointed out that the petitioner was not the proper
party to challenge Ramonas qualifications to acquire land.

Under Section 7, Batas Pambansa Blg. 185, the Solicitor General or his
representative shall institute escheat proceedings against its violators. Although the
law does not categorically state that only the Government, through the Solicitor
General, may attack the title of an alien transferee of land, it is nonetheless correct to
hold that only the Government, through the Solicitor General, has the personality to
file a case challenging the capacity of a person to acquire or to own land based on
non-citizenship. This limitation is based on the fact that the violation is committed
against the State, not against any individual; and that in the event that the transferee is
adjudged to be not a Filipino citizen, the affected property reverts to the State, not to
the previous owner or any other individual.

Herein, even assuming that Ramona was legally disqualified from owning the
subject property, the decision that voids or annuls their right of ownership over the
subject land will not inure to the benefit of the petitioner. Instead, the subject property
will be escheated in favor of the State in accordance with Batas Pambansa Blg. 185.

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