GR L 14271; (March, 1960) (Digest)
G.R. No. L-14271; April 29, 1960
THE YEK TONG LIN FIRE AND MARINE INSURANCE CO., LTD., plaintiff-appellant, vs. PHILIPPINE NATIONAL BANK, defendant-appellee.
FACTS
Prior to the war, the estate of Santos Chua Hong was under administration. The appellant (Yek Tong Lin Fire and Marine Insurance Co., Ltd.) had a claim against the estate. In May 1942, during the Japanese occupation, the appellant and the estate’s administratrix agreed to settle the claim for P2,000. To facilitate payment, the estate sold a property to Judge Arsenio Santos. The intestate court authorized the sale and directed that the P2,000 from the proceeds be deposited in trust for the appellant. Judge Santos issued a check for P2,000 drawn against his pre-war current account with the Philippine National Bank (PNB). The appellant’s counsel received the check, opened a savings account with PNB, and deposited the check. After liberation, the appellant attempted to withdraw the P2,000, but PNB refused, citing Executive Order No. 49 (dated June 6, 1945), which declared deposits made during the enemy occupation invalid. The Municipal Court of Manila initially dismissed the complaint, and the Court of First Instance of Manila affirmed the dismissal on May 16, 1958.
ISSUE
Whether the Philippine National Bank is obligated to pay the appellant the P2,000 deposited during the enemy occupation, or whether the deposit is null and void under Section 2 of Executive Order No. 49.
RULING
The Supreme Court affirmed the lower court’s decision, holding that the deposit is null and void under Executive Order No. 49. The Court ruled that the presentation of Judge Santos’s check to PNB during the occupation and its credit to the appellant’s counsel’s savings account constituted a deposit made during the enemy occupation. This act was tantamount to payment of the check as if currency had been paid over the counter and immediately redeposited. The Court rejected the appellant’s argument that the deposit involved Philippine currency from a pre-war account, noting it was a matter of public knowledge that Japanese currency was in circulation during the occupation. Thus, the deposit falls within the purview of Section 2 of Executive Order No. 49. The appeal was dismissed, with costs against the appellant.