Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 143483 January 31, 2002
REPUBLIC OF THE PHILIPPINES represented by the REGISTER OF DEEDS OF PASAY
CITY, petitioner,
vs.
COURT OF APPEALS (SPECIAL FORMER 3RD DIVISION) AND AMADA H. SOLANO,
assisted by her husband ROMEO SOLANO, respondents.
BELLOSILLO , J.:
This petition for certiorari seeks to nullify two (2) Resolutions of the Court of Appeals
dated 12 November 1998 and 4 May 2000 giving due course to the petition for
annulment of judgment filed by private respondent Amada H. Solano on 3 February 1997
and denying petitioner's motion for reconsideration.
For more than three (3) decades (from 1952 to 1985) private respondent Amada Solano
served as the all-around personal domestic helper of the late Elizabeth Hankins, a widow
and a French national. During Ms. Hankins' lifetime and most especially during the
waning years of her life, respondent Solano was her faithful girl Friday and a constant
companion since no close relative was available to tend to her needs.
In recognition of Solano's faithful and dedicated service, Ms. Hankins executed in her
favor two (2) deeds of donation involving two (2) parcels of land covered by TCT Nos.
7807 and 7808 of the Registry of Deeds. Private respondent alleged that she misplaced
the deeds of donation and were nowhere to be found.
While the deeds of donation were missing, the Republic filed a petition for the escheat of
the estate of Elizabeth Hankins before the Regional Trial Court of Pasay City.
1
During the
proceedings, a motion for intervention was filed by Romeo Solano, spouse of private
respondent, and one Gaudencio Regosa, but on 24 June 1987 the motion was denied by
the trial court for the reason that "they miserably failed to show valid claim or right to
the properties in question."
2
Since it was established that there were no known heirs and
persons entitled to the properties of decedent Hankins, the lower court escheated the
estate of the decedent in favor of petitioner Republic of the Philippines.
By virtue of the decision of the trial court, the Registry of Deeds of Pasay City cancelled
TCT Nos. 7807 and 7808 and issued new ones, TCT Nos. 129551 and 129552, both in the
name of Pasay City.
In the meantime, private respondent claimed that she accidentally found the deeds of
donation she had been looking for a long time. In view of this development, respondent
Amada Solano filed on 28 January 1997 a petition before the Court of Appeals for the
annulment of the lower court's decision alleging, among other, that
3
-
13.1. The deceased Elizabeth Hankins having donated the subject properties to
the petitioner in 1983 (for TCT No. 7807) and 1984 (for TCT No. 7808), these
properties did not and could not form part of her estate when she died on
September 20, 1985. Consequently, they could not validly be escheated to the
Pasay City Government;
13.2. Even assuming arguendo that the properties could be subject of escheat
proceedings, the decision is still legally infirm for escheating the properties to
an entity, the Pasay City Government, which is not authorized by law to be the
recipient thereof. The property should have been escheated in favor of the
Republic of the Philippines under Rule 91, Section 1 of the New Rules of Court x
x x x
On 17 March 1997 the Office of the Solicitor General representing public respondents
RTC and the Register of Deeds (herein petitioner) filed an answer setting forth their
affirmative defenses, to wit: (a) lack of jurisdiction over the nature of the action; and, (b)
the cause of action was barred by the statute of limitations.
Finding no cogent reason to justify the dismissal of the petition for annulment, the Court
of Appeals issued on 12 November 1998 the first of its assailed Resolutions giving due
course to the petition for annulment of judgment and setting the date for trial on the
merits. In upholding the theory of respondent Solano, the Appeals Court ruled that -
Herein petitioner invokes lack of jurisdiction over the subject matter on the
part of respondent RTC to entertain the escheat proceedings x x x because the
parcels of land have been earlier donated to herein petitioner in 1983 and 1984
prior to the death of said Hankins; and therefore, respondent court could not
have ordered the escheat of said properties in favor of the Republic of the
Philippines, assign them to respondent Pasay City government, order the
cancellation of the old titles in the name of Hankins and order the properties
registered in the name of respondent Pasay City x x x x The 1997 Rules of Civil
Procedure specifically laid down the grounds of annulment filed before this
Court, to wit: extrinsic fraud and lack of jurisdiction. Jurisdiction over the
subject matter is conferred by law and this jurisdiction is determined by the
allegations of the complaint. It is axiomatic that the averments of the complaint
determine the nature of the action and consequently the jurisdiction of the
courts. Thus whether or not the properties in question are no longer part of the
estate of the deceased Hankins at the time of her death; and, whether or not the
alleged donations are valid are issues in the present petition for annulment
which can be resolved only after a full blown trial x x x x
It is for the same reason that respondents espousal of the statute of limitations
against herein petition for annulment cannot prosper at this stage of the
proceedings. Indeed, Section 4, Rule 91 of the Revised Rules of Court expressly
provides that a person entitled to the estate must file his claim with the court a
quo within five (5) years from the date of said judgment. However, it is clear to
this Court that herein petitioner is not claiming anything from the estate of the
deceased at the time of her death on September 20, 1985; rather she is claiming
that the subject parcels of land should not have been included as part of the
estate of the said decedent as she is the owner thereof by virtue of the deeds of
donation in her favor.
In effect, herein petitioner, who alleges to be in possession of the premises in
question, is claiming ownership of the properties in question and the
consequent reconveyance thereof in her favor which cause of action prescribes
ten (10) years after the issuance of title in favor of respondent Pasay City on
August 7, 1990. Herein petition was seasonably filed on February 3, 1997 under
Article 1144, to wit:
Art. 1144. The following actions must be brought within ten years
from the time the right of action accrues: (1) Upon a written contract;
(2) Upon an obligation created by law; (3) Upon a judgment.
And Article 1456, to wit:
Art. 1456. If property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust
for the benefit of the person from whom the property comes.
4

In its Resolution of 4 May 2000 the Court of Appeals denied the motion for
reconsideration filed by public respondents Register of Deeds of Pasay City and the
Presiding judge of the lower court and set the trial on the merits for June 15 and 16,
2000.
In its effort to nullify the Resolutions herein before mentioned, petitioner points out that
the Court of Appeals committed grave abuse of discretion amounting to lack or excess of
jurisdiction (a) in denying petitioner's affirmative defenses set forth in its answer and
motion for reconsideration, and in setting the case for trial and reception of evidence;
and, (b) in giving due course to private respondent's petition for annulment of decision
despite the palpable setting-in of the 5-year statute of limitations within which to file
claims before the court a quoset forth in Rule 91 of the Revised Rules of Court and Art.
1014 of the Civil Code.
Petitioner argues that the lower court had jurisdiction when it escheated the properties
in question in favor of the city government and the filing of a petition for annulment of
judgment on the ground of subsequent discovery of the deeds of donation did not divest
the lower court of its jurisdiction on the matter. It further contends that Rule 47 of the
1997 Rules of Civil Procedure only provides for two (2) grounds for the annulment of
judgment, namely: extrinsic fraud and lack of jurisdiction. As such the discovery of the
deeds of donation seven (7) years after the finality of the escheat proceedings is an
extraneous matter which is clearly not an instance of extrinsic fraud nor a ground to oust
the lower court of its jurisdiction.
Petitioner also insists that notwithstanding the execution of the deeds of donation in
favor of private respondent, the 5-year statute of limitations within which to file claims
before the court a quo as set forth in Rule 91 of the Revised Rules of Court has set in.
The present controversy revolves around the nature of the parcels of land purportedly
donated to private respondent which will ultimately determine whether the lower court
had jurisdiction to declare the same escheated in favor of the state.
We rule for the petitioner. 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."
5
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."
6
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.,
7
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
(underscoring supplied).
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.
A judgment in escheat proceedings when rendered by a court of competent jurisdiction
is conclusive against all persons with actual or constructive notice, but not against those
who are not parties or privies thereto. As held inHamilton v. Brown,
8
"a judgment of
escheat was held conclusive upon persons notified by advertisement to all persons
interested. Absolute lack on the part of petitioners of any dishonest intent to deprive the
appellee of any right, or in any way injure him, constitutes due process of law, proper
notice having been observed." With the lapse of the 5-year period therefore, private
respondent has irretrievably lost her right to claim and the supposed "discovery of the
deeds of donation" is not enough justification to nullify the escheat judgment which has
long attained finality.
In the mind of this Court the subject properties were owned by the decedent during the
time that the escheat proceedings were being conducted and the lower court was not
divested of its jurisdiction to escheat them in favor of Pasay City notwithstanding an
allegation that they had been previously donated. We recall that a motion for
intervention was earlier denied by the escheat court for failure to show "valid claim or
right to the properties in question."
9
Where a person comes into an escheat proceeding
as a claimant, the burden is on such intervenor to establish his title to the property and
his right to intervene. A fortiori, the certificates of title covering the subject properties
were in the name of the decedent indicating that no transfer of ownership involving the
disputed properties was ever made by the deceased during her lifetime. In the absence
therefore of any clear and convincing proof showing that the subject lands had been
conveyed by Hankins to private respondent Solano, the same still remained, at least
before the escheat, part of the estate of the decedent and the lower court was right not to
assume otherwise. The Court of Appeals therefore cannot perfunctorily presuppose that
the subject properties were no longer part of the decedent's estate at the time the lower
court handed down its decision on the strength of a belated allegation that the same had
previously been disposed of by the owner. It is settled that courts decide only after a
close scrutiny of every piece of evidence and analyze each case with deliberate precision
and unadulterated thoroughness, the judgment not being diluted by speculations,
conjectures and unsubstantiated assertions.
WHEREFORE, the petition is GRANTED. The assailed Resolution of the Court of Appeals
dated 12 November 1998 giving due course to the petition for annulment of judgment,
and its Resolution dated 4 May 2000 denying petitioner's motion for reconsideration,
are SET ASIDE. The decision of the RTC-Br. 114, Pasay City, dated 27 June 1989,
is REINSTATED.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 192413 June 13, 2012
Rizal Commercial Banking Corporation, Petitioner,
vs.
Hi-Tri Development Corporation and Luz R. Bakunawa, Respondents.
D E C I S I O N
SERENO, J.:
Before the Court is a Rule 45 Petition for Review on Certiorari filed by petitioner Rizal
Commercial Banking Corporation (RCBC) against respondents Hi-Tri Development
Corporation (Hi-Tri) and Luz R. Bakunawa (Bakunawa). Petitioner seeks to appeal from
the 26 November 2009 Decision and 27 May 2010 Resolution of the Court of Appeals
(CA),
1
which reversed and set aside the 19 May 2008 Decision and 3 November 2008
Order of the Makati City Regional Trial Court (RTC) in Civil Case No. 06-244.
2
The case
before the RTC involved the Complaint for Escheat filed by the Republic of the
Philippines (Republic) pursuant to Act No. 3936, as amended by Presidential Decree No.
679 (P.D. 679), against certain deposits, credits, and unclaimed balances held by the
branches of various banks in the Philippines. The trial court declared the amounts,
subject of the special proceedings, escheated to the Republic and ordered them
deposited with the Treasurer of the Philippines (Treasurer) and credited in favor of the
Republic.
3
The assailed RTC judgments included an unclaimed balance in the amount
of P 1,019,514.29, maintained by RCBC in its Ermita Business Center branch.
We quote the narration of facts of the CA
4
as follows:
x x x Luz [R.] Bakunawa and her husband Manuel, now deceased ("Spouses Bakunawa")
are registered owners of six (6) parcels of land covered by TCT Nos. 324985 and 324986
of the Quezon City Register of Deeds, and TCT Nos. 103724, 98827, 98828 and 98829 of
the Marikina Register of Deeds. These lots were sequestered by the Presidential
Commission on Good Government [(PCGG)].
Sometime in 1990, a certain Teresita Millan ("Millan"), through her representative, Jerry
Montemayor, offered to buy said lots for "P 6,724,085.71", with the promise that she will
take care of clearing whatever preliminary obstacles there may[]be to effect a
"completion of the sale". The Spouses Bakunawa gave to Millan the Owners Copies of
said TCTs and in turn, Millan made a down[]payment of "P 1,019,514.29" for the
intended purchase. However, for one reason or another, Millan was not able to clear said
obstacles. As a result, the Spouses Bakunawa rescinded the sale and offered to return to
Millan her down[]payment of P 1,019,514.29. However, Millan refused to accept back
the P 1,019,514.29 down[]payment. Consequently, the Spouses Bakunawa, through their
company, the Hi-Tri Development Corporation ("Hi-Tri") took out on October 28, 1991, a
Managers Check from RCBC-Ermita in the amount of P 1,019,514.29, payable to Millans
company Rosmil Realty and Development Corporation ("Rosmil") c/o Teresita Millan
and used this as one of their basis for a complaint against Millan and Montemayor which
they filed with the Regional Trial Court of Quezon City, Branch 99, docketed as Civil Case
No. Q-91-10719 [in 1991], praying that:
1. That the defendants Teresita Mil[l]an and Jerry Montemayor may be ordered
to return to plaintiffs spouses the Owners Copies of Transfer Certificates of
Title Nos. 324985, 324986, 103724, 98827, 98828 and 98829;
2. That the defendant Teresita Mil[l]an be correspondingly ordered to receive
the amount of One Million Nineteen Thousand Five Hundred Fourteen Pesos
and Twenty Nine Centavos (P 1,019,514.29);
3. That the defendants be ordered to pay to plaintiffs spouses moral damages in
the amount of P2,000,000.00; and
4. That the defendants be ordered to pay plaintiffs attorneys fees in the amount
of P 50,000.00.
Being part and parcel of said complaint, and consistent with their prayer in Civil Case No.
Q-91-10719 that "Teresita Mil[l]an be correspondingly ordered to receive the amount of
One Million Nineteen Thousand Five Hundred Fourteen Pesos and Twenty Nine
[Centavos] ("P 1,019,514.29")["], the Spouses Bakunawa, upon advice of their counsel,
retained custody of RCBC Managers Check No. ER 034469 and refrained from canceling
or negotiating it.
All throughout the proceedings in Civil Case No. Q-91-10719, especially during
negotiations for a possible settlement of the case, Millan was informed that the
Managers Check was available for her withdrawal, she being the payee.
On January 31, 2003, during the pendency of the abovementioned case and without the
knowledge of [Hi-Tri and Spouses Bakunawa], x x x RCBC reported the "P 1,019,514.29-
credit existing in favor of Rosmil" to the Bureau of Treasury as among its "unclaimed
balances" as of January 31, 2003. Allegedly, a copy of the Sworn Statement executed by
Florentino N. Mendoza, Manager and Head of RCBCs Asset Management, Disbursement
& Sundry Department ("AMDSD") was posted within the premises of RCBC-Ermita.
On December 14, 2006, x x x Republic, through the [Office of the Solicitor General (OSG)],
filed with the RTC the action below for Escheat [(Civil Case No. 06-244)].
On April 30, 2008, [Spouses Bakunawa] settled amicably their dispute with Rosmil and
Millan. Instead of only the amount of "P 1,019,514.29", [Spouses Bakunawa] agreed to
pay Rosmil and Millan the amount of "P3,000,000.00", [which is] inclusive [of] the
amount of ["]P 1,019,514.29". But during negotiations and evidently prior to said
settlement, [Manuel Bakunawa, through Hi-Tri] inquired from RCBC-Ermita the
availability of the P1,019,514.29 under RCBC Managers Check No. ER 034469. [Hi-Tri
and Spouses Bakunawa] were however dismayed when they were informed that the
amount was already subject of the escheat proceedings before the RTC.
On April 17, 2008, [Manuel Bakunawa, through Hi-Tri] wrote x x x RCBC, viz:
"We understand that the deposit corresponding to the amount of Php 1,019,514.29
stated in the Managers Check is currently the subject of escheat proceedings pending
before Branch 150 of the Makati Regional Trial Court.
Please note that it was our impression that the deposit would be taken from [Hi-Tris]
RCBC bank account once an order to debit is issued upon the payees presentation of the
Managers Check. Since the payee rejected the negotiated Managers Check, presentation
of the Managers Check was never made.
Consequently, the deposit that was supposed to be allocated for the payment of the
Managers Check was supposed to remain part of the Corporation[s] RCBC bank account,
which, thereafter, continued to be actively maintained and operated. For this reason, We
hereby demand your confirmation that the amount of Php 1,019,514.29 continues to
form part of the funds in the Corporations RCBC bank account, since pay-out of said
amount was never ordered. We wish to point out that if there was any attempt on the
part of RCBC to consider the amount indicated in the Managers Check separate from the
Corporations bank account, RCBC would have issued a statement to that effect, and
repeatedly reminded the Corporation that the deposit would be considered dormant
absent any fund movement. Since the Corporation never received any statements of
account from RCBC to that effect, and more importantly, never received any single letter
from RCBC noting the absence of fund movement and advising the Corporation that the
deposit would be treated as dormant."
On April 28, 2008, [Manuel Bakunawa] sent another letter to x x x RCBC reiterating their
position as above-quoted.
In a letter dated May 19, 2008, x x x RCBC replied and informed [Hi-Tri and Spouses
Bakunawa] that:
"The Banks Ermita BC informed Hi-Tri and/or its principals regarding the inclusion of
Managers Check No. ER034469 in the escheat proceedings docketed as Civil Case No. 06-
244, as well as the status thereof, between 28 January 2008 and 1 February 2008.
x x x x x x x x x
Contrary to what Hi-Tri hopes for, the funds covered by the Managers Check No.
ER034469 does not form part of the Banks own account. By simple operation of law, the
funds covered by the managers check in issue became a deposit/credit susceptible for
inclusion in the escheat case initiated by the OSG and/or Bureau of Treasury.
x x x x x x x x x
Granting arguendo that the Bank was duty-bound to make good the check, the Banks
obligation to do so prescribed as early as October 2001."
(Emphases, citations, and annotations were omitted.)
The RTC Ruling
The escheat proceedings before the Makati City RTC continued. On 19 May 2008, the trial
court rendered its assailed Decision declaring the deposits, credits, and unclaimed
balances subject of Civil Case No. 06-244 escheated to the Republic. Among those
included in the order of forfeiture was the amount of P 1,019,514.29 held by RCBC as
allocated funds intended for the payment of the Managers Check issued in favor of
Rosmil. The trial court ordered the deposit of the escheated balances with the Treasurer
and credited in favor of the Republic. Respondents claim that they were not able to
participate in the trial, as they were not informed of the ongoing escheat proceedings.
Consequently, respondents filed an Omnibus Motion dated 11 June 2008, seeking the
partial reconsideration of the RTC Decision insofar as it escheated the fund allocated for
the payment of the Managers Check. They asked that they be included as party-
defendants or, in the alternative, allowed to intervene in the case and their motion
considered as an answer-in-intervention. Respondents argued that they had meritorious
grounds to ask reconsideration of the Decision or, alternatively, to seek intervention in
the case. They alleged that the deposit was subject of an ongoing dispute (Civil Case No.
Q-91-10719) between them and Rosmil since 1991, and that they were interested
parties to that case.
5

On 3 November 2008, the RTC issued an Order denying the motion of respondents. The
trial court explained that the Republic had proven compliance with the requirements of
publication and notice, which served as notice to all those who may be affected and
prejudiced by the Complaint for Escheat. The RTC also found that the motion failed to
point out the findings and conclusions that were not supported by the law or the
evidence presented, as required by Rule 37 of the Rules of Court. Finally, it ruled that the
alternative prayer to intervene was filed out of time.
The CA Ruling
On 26 November 2009, the CA issued its assailed Decision reversing the 19 May 2008
Decision and 3 November 2008 Order of the RTC. According to the appellate
court,
6
RCBC failed to prove that the latter had communicated with the purchaser of the
Managers Check (Hi-Tri and/or Spouses Bakunawa) or the designated payee (Rosmil)
immediately before the bank filed its Sworn Statement on the dormant accounts held
therein. The CA ruled that the banks failure to notify respondents deprived them of an
opportunity to intervene in the escheat proceedings and to present evidence to
substantiate their claim, in violation of their right to due process. Furthermore, the CA
pronounced that the Makati City RTC Clerk of Court failed to issue individual notices
directed to all persons claiming interest in the unclaimed balances, as well as to require
them to appear after publication and show cause why the unclaimed balances should not
be deposited with the Treasurer of the Philippines. It explained that the jurisdictional
requirement of individual notice by personal service was distinct from the requirement
of notice by publication. Consequently, the CA held that the Decision and Order of the
RTC were void for want of jurisdiction.
Issue
After a perusal of the arguments presented by the parties, we cull the main issues as
follows:
I. Whether the Decision and Order of the RTC were void for failure to send
separate notices to respondents by personal service
II. Whether petitioner had the obligation to notify respondents immediately
before it filed its Sworn Statement with the Treasurer
III. Whether or not the allocated funds may be escheated in favor of the
Republic
Discussion
Petitioner bank assails
7
the CA judgments insofar as they ruled that notice by personal
service upon respondents is a jurisdictional requirement in escheat proceedings.
Petitioner contends that respondents were not the owners of the unclaimed balances
and were thus not entitled to notice from the RTC Clerk of Court. It hinges its claim on
the theory that the funds represented by the Managers Check were deemed transferred
to the credit of the payee or holder upon its issuance.
We quote the pertinent provision of Act No. 3936, as amended, on the rule on service of
processes, to wit:
Sec. 3. Whenever the Solicitor General shall be informed of such unclaimed balances, he
shall commence an action or actions in the name of the People of the Republic of the
Philippines in the Court of First Instance of the province or city where the bank, building
and loan association or trust corporation is located, in which shall be joined as parties
the bank, building and loan association or trust corporation and all such creditors or
depositors. All or any of such creditors or depositors or banks, building and loan
association or trust corporations may be included in one action. Service of process in
such action or actions shall be made by delivery of a copy of the complaint and summons
to the president, cashier, or managing officer of each defendant bank, building and loan
association or trust corporation and by publication of a copy of such summons in a
newspaper of general circulation, either in English, in Filipino, or in a local dialect,
published in the locality where the bank, building and loan association or trust
corporation is situated, if there be any, and in case there is none, in the City of Manila, at
such time as the court may order. Upon the trial, the court must hear all parties who have
appeared therein, and if it be determined that such unclaimed balances in any defendant
bank, building and loan association or trust corporation are unclaimed as hereinbefore
stated, then the court shall render judgment in favor of the Government of the Republic
of the Philippines, declaring that said unclaimed balances have escheated to the
Government of the Republic of the Philippines and commanding said bank, building and
loan association or trust corporation to forthwith deposit the same with the Treasurer of
the Philippines to credit of the Government of the Republic of the Philippines to be used
as the National Assembly may direct.
At the time of issuing summons in the action above provided for, the clerk of court shall
also issue a notice signed by him, giving the title and number of said action, and referring
to the complaint therein, and directed to all persons, other than those named as
defendants therein, claiming any interest in any unclaimed balance mentioned in said
complaint, and requiring them to appear within sixty days after the publication or first
publication, if there are several, of such summons, and show cause, if they have any, why
the unclaimed balances involved in said action should not be deposited with the
Treasurer of the Philippines as in this Act provided and notifying them that if they do not
appear and show cause, the Government of the Republic of the Philippines will apply to
the court for the relief demanded in the complaint. A copy of said notice shall be attached
to, and published with the copy of, said summons required to be published as above, and
at the end of the copy of such notice so published, there shall be a statement of the date
of publication, or first publication, if there are several, of said summons and notice. Any
person interested may appear in said action and become a party thereto. Upon the
publication or the completion of the publication, if there are several, of the summons and
notice, and the service of the summons on the defendant banks, building and loan
associations or trust corporations, the court shall have full and complete jurisdiction in
the Republic of the Philippines over the said unclaimed balances and over the persons
having or claiming any interest in the said unclaimed balances, or any of them, and shall
have full and complete jurisdiction to hear and determine the issues herein, and render
the appropriate judgment thereon. (Emphasis supplied.)
Hence, insofar as banks are concerned, service of processes is made by delivery of a copy
of the complaint and summons upon the president, cashier, or managing officer of the
defendant bank.
8
On the other hand, as to depositors or other claimants of the unclaimed
balances, service is made by publication of a copy of the summons in a newspaper of
general circulation in the locality where the institution is situated.
9
A notice about the
forthcoming escheat proceedings must also be issued and published, directing and
requiring all persons who may claim any interest in the unclaimed balances to appear
before the court and show cause why the dormant accounts should not be deposited
with the Treasurer.
Accordingly, the CA committed reversible error when it ruled that the issuance of
individual notices upon respondents was a jurisdictional requirement, and that failure to
effect personal service on them rendered the Decision and the Order of the RTC void for
want of jurisdiction. Escheat proceedings are actions in rem,
10
whereby an action is
brought against the thing itself instead of the person.
11
Thus, an action may be instituted
and carried to judgment without personal service upon the depositors or other
claimants.
12
Jurisdiction is secured by the power of the court over the
res.
13
Consequently, a judgment of escheat is conclusive upon persons notified by
advertisement, as publication is considered a general and constructive notice to all
persons interested.
14

Nevertheless, we find sufficient grounds to affirm the CA on the exclusion of the funds
allocated for the payment of the Managers Check in the escheat proceedings.
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.
15
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.
16
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."
17
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.
18
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.
19

Act No. 3936, as amended, outlines the proper procedure to be followed by banks and
other similar institutions in filing a sworn statement with the Treasurer concerning
dormant accounts:
Sec. 2. Immediately after the taking effect of this Act and within the month of January of
every odd year, all banks, building and loan associations, and trust corporations shall
forward to the Treasurer of the Philippines a statement, under oath, of their respective
managing officers, of all credits and deposits held by them in favor of persons known to
be dead, or who have not made further deposits or withdrawals during the preceding ten
years or more, arranged in alphabetical order according to the names of creditors and
depositors, and showing:
(a) The names and last known place of residence or post office addresses of the
persons in whose favor such unclaimed balances stand;
(b) The amount and the date of the outstanding unclaimed balance and
whether the same is in money or in security, and if the latter, the nature of the
same;
(c) The date when the person in whose favor the unclaimed balance stands
died, if known, or the date when he made his last deposit or withdrawal; and
(d) The interest due on such unclaimed balance, if any, and the amount thereof.
A copy of the above sworn statement shall be posted in a conspicuous place in the
premises of the bank, building and loan association, or trust corporation concerned for at
least sixty days from the date of filing thereof: Provided, That immediately before filing
the above sworn statement, the bank, building and loan association, and trust
corporation shall communicate with the person in whose favor the unclaimed balance
stands at his last known place of residence or post office address.
It shall be the duty of the Treasurer of the Philippines to inform the Solicitor General
from time to time the existence of unclaimed balances held by banks, building and loan
associations, and trust corporations. (Emphasis supplied.)
As seen in the afore-quoted provision, the law sets a detailed system for notifying
depositors of unclaimed balances. This notification is meant to inform them that their
deposit could be escheated if left unclaimed. Accordingly, before filing a sworn
statement, banks and other similar institutions are under obligation to communicate
with owners of dormant accounts. The purpose of this initial notice is for a bank to
determine whether an inactive account has indeed been unclaimed, abandoned,
forgotten, or left without an owner. If the depositor simply does not wish to touch the
funds in the meantime, but still asserts ownership and dominion over the dormant
account, then the bank is no longer obligated to include the account in its sworn
statement.
20
It is not the intent of the law to force depositors into unnecessary litigation
and defense of their rights, as the state is only interested in escheating balances that
have been abandoned and left without an owner.
In case the bank complies with the provisions of the law and the unclaimed balances are
eventually escheated to the Republic, the bank "shall not thereafter be liable to any
person for the same and any action which may be brought by any person against in any
bank xxx for unclaimed balances so deposited xxx shall be defended by the Solicitor
General without cost to such bank."
21
Otherwise, should it fail to comply with the legally
outlined procedure to the prejudice of the depositor, the bank may not raise the defense
provided under Section 5 of Act No. 3936, as amended.
Petitioner asserts
22
that the CA committed a reversible error when it required RCBC to
send prior notices to respondents about the forthcoming escheat proceedings involving
the funds allocated for the payment of the Managers Check. It explains that, pursuant to
the law, only those "whose favor such unclaimed balances stand" are entitled to receive
notices. Petitioner argues that, since the funds represented by the Managers Check were
deemed transferred to the credit of the payee upon issuance of the check, the proper
party entitled to the notices was the payee Rosmil and not respondents. Petitioner
then contends that, in any event, it is not liable for failing to send a separate notice to the
payee, because it did not have the address of Rosmil. Petitioner avers that it was not
under any obligation to record the address of the payee of a Managers Check.
In contrast, respondents Hi-Tri and Bakunawa allege
23
that they have a legal interest in
the fund allocated for the payment of the Managers Check. They reason that, since the
funds were part of the Compromise Agreement between respondents and Rosmil in a
separate civil case, the approval and eventual execution of the agreement effectively
reverted the fund to the credit of respondents. Respondents further posit that their
ownership of the funds was evidenced by their continued custody of the Managers
Check.
An ordinary check refers to a bill of exchange drawn by a depositor (drawer) on a bank
(drawee),
24
requesting the latter to pay a person named therein (payee) or to the order
of the payee or to the bearer, a named sum of money.
25
The issuance of the check does
not of itself operate as an assignment of any part of the funds in the bank to the credit of
the drawer.
26
Here, the bank becomes liable only after it accepts or certifies the
check.
27
After the check is accepted for payment, the bank would then debit the amount
to be paid to the holder of the check from the account of the depositor-drawer.
There are checks of a special type called managers or cashiers checks. These are bills of
exchange drawn by the banks manager or cashier, in the name of the bank, against the
bank itself.
28
Typically, a managers or a cashiers check is procured from the bank by
allocating a particular amount of funds to be debited from the depositors account or by
directly paying or depositing to the bank the value of the check to be drawn. Since the
bank issues the check in its name, with itself as the drawee, the check is deemed
accepted in advance.
29
Ordinarily, the check becomes the primary obligation of the
issuing bank and constitutes its written promise to pay upon demand.
30

Nevertheless, 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, we find the following provision on
undelivered instruments under the Negotiable Instruments Law applicable:
31

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. (Emphasis supplied.)
Petitioner acknowledges that the Managers Check was procured by respondents, and
that the amount to be paid for the check would be sourced from the deposit account of
Hi-Tri.
32
When Rosmil did not accept the Managers Check offered by respondents, the
latter retained custody of the instrument instead of cancelling it. As the Managers Check
neither went to the hands of Rosmil nor was it further negotiated to other persons, the
instrument remained undelivered. Petitioner does not dispute the fact that respondents
retained custody of the instrument.
33

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.
34
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.1wphi1
After a careful review of the RTC records, we find that it is no longer necessary to
remand the case for hearing to determine whether the claim of respondents was valid.
There was no contention that they were the procurers of the Managers Check. It is
undisputed that there was no effective delivery of the check, rendering the instrument
incomplete. In addition, we have already settled that respondents retained ownership of
the funds. As it is obvious from their foregoing actions that they have not abandoned
their claim over the fund, we rule that the allocated deposit, subject of the Managers
Check, should be excluded from the escheat proceedings. We reiterate our
pronouncement that the objective of escheat proceedings is state forfeiture of unclaimed
balances. We further note that there is nothing in the records that would show that the
OSG appealed the assailed CA judgments. We take this failure to appeal as an indication
of disinterest in pursuing the escheat proceedings in favor of the Republic.
WHEREFORE the Petition is DENIED. The 26 November 2009 Decision and 27 May 2010
Resolution of the Court of Appeals in CA-G.R. SP No. 107261 are hereby AFFIRMED.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-45460 February 25, 1938
THE MUNICIPAL COUNCIL OF SAN PEDRO, LAGUNA, ET AL., applicants-appellants,
vs.
COLEGIO DE SAN JOSE, INC., ET AL., oppositors-appellees.
Juan S. Rustia for appellants.
Araneta, Zaragoza and Araneta for appellee Colegio de San Jose, Inc.
Francisco Alfonso for appellee Young.
IMPERIAL, J.:
This is an appeal from the order of the Court of First Instance of Laguna of October 29,
1936, which denied the applicants motion questioning the appearance and intervention
in the case of the oppositors Colegio de San Jose and Carlos Young, and from the
resolution of the 30th of the same month which denied the petition for escheat filed by
the said petitioners, with the costs against the latter.
This case was commenced in the said by a petition filed by the petitioners in behalf of the
municipality of San Pedro, Province of Laguna, wherein they claim the Hacienda de San
Pedro Tunasa by the right of escheat. The Colegio de San Jose, Inc., appeared specially
and assailed the petition upon the grounds that the court has no jurisdiction to take
cognizance and decide the case and that the petition does not allege sufficient facts to
entitle the applicants to the remedy prayed for; and asked that the petition be finally
dismissed. Carlos Young intervened and filed a motion asking for the dismissal or the
petition upon the ground that the Code of Civil Procedure, under which the same was
filed, is not applicable because it was not yet in force when the original owner of the
hacienda died, which was in April, 1596, and that the petition was irregularly docketed
as the applicants had paid at the docket fees which the clerk of court should collect.
Subsequently the attorneys for both parties filed another motions of minor importance,
almost all of which contains the arguments advanced in support of their contentions. On
October 29, 1936, the court overruled the objection to the appearance and intervention
in the case by the Colegio de San Jose and Carlos Young, entering the order which is one
of those appealed from. And on the 30th of the same moth the court entered the
resolution, also appealed from, dismissing the petition for escheat, with the costs to the
petitioners.
The petitioners attribute to the court the following errors: "(1) In overruling the
objection of the appellant of September 2, 1936, and in not excluding the appellees
Carlos Young and Colegio de San Jose, Inc., from these proceedings. (2) In sustaining
definitely the appellees' petitions to dismiss, without previous hearing and in derogation
of the right to amend in any case. (3) In improperly and unseasonably taking judicial
notice of certain facts in other judicial records to reinforce the appealed resolutions, and
in erroneously distorting those facts judicially taken notice of. (4) In holding that the
municipality of San Jose has neither right standing to file a petition for escheat; that the
petition does not state facts sufficient a cause of action and that the same does not lie,
and that the Court of First Instance of Laguna is without jurisdiction to take cognizance
of and decide said petition. (5) In finally dismissing the petition upon the dilatory
exceptions thereto, and the ordering the payment of costs when no hearing has yet taken
place."
1. The sworn petition which gave rise to the proceeding is based upon the provisions of
section 750 and 751 of the Code of Civil Procedure, the English text of which
reads:1vvphl.nt
SEC. 750. Procedure when person dies intestate without heirs. When a person
dies intestate, seized of real or personal property in the Philippines Islands,
leaving no heir or person 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, the file a
petition with the Court of First Instance of the province for an inquisition in the
premises; the court shall there upon appoint a time and place of hearing, and
deciding on such petition, and 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 Philippines Island, and if not, 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 publication shall be at least six weeks before the time appointed by the
court to make inquisition.
SEC. 751. Decree of the court in such case. If, at the time appointed for the
that purpose, the court that the person died intestate, seized of real or personal
property in the Islands, leaving no heirs or person entitled to the same and no
sufficient cause is shown to the contrary, the court shall order and decree that
the estate of the deceased in these Islands, after the payment of just debts and
charges, shall escheat; and shall assign the personal estate to the municipality
where he was last an inhabitant in the Islands, and the real estate to the
municipality in which the same is situated. If he never was a inhabitant of the
Islands, the whole estate may be assigned to the several municipalities where
the same is located. Such estate shall be for the use of schools in the
municipalities, respectively, and shall be managed and disposed or by the
municipal council like other property appropriated to the use of schools.
Accordingly to the first of the said sections, the essential facts which should be alleged in
the petition, which are jurisdiction because they confer jurisdiction upon the Court of
First Instance, are: That a person has died intestate or without leaving any will; that he
has left real or personal property; that he was the owner thereof; that he has not left any
heir or person who is by law entitled to the property; and that the one who applies for
the escheat is the municipality where deceased had his last residence, or in case should
have no residence in the country, the municipality where the property is situated.
The following section provides that after the publications and trial, if the court finds that
the deceased is in fact the owner of real and personal property situated in the country
and has not left any heirs or other person entitled thereto, it may order, after the
payments of debts and other legal expenses, the escheat, and in such case it shall
adjudicate the personal property to the municipality where the deceased had his last
place of residence and the real property to the municipality or municipalities where they
are situated.
Escheat, under sections 750 and 751, is a proceeding whereby the real and personal
property of a deceased person become the property of the State upon his death without
leaving any will or legal heirs (21 C.J., sec. 1, p. 848; American L. & T. Co. vs. Grand River
Co., 159 Fed., 775; In re Miner, 143 Cal., 194; Johnston vs. Spicer 107 N.Y., 185; Wright vs.
Methodist Episcopal Church, Hoffm. [N.Y.], 201; In re Linton's, 198 Pa., 438; State vs.
Goldberg, 113 Tenn., 298). It is not an ordinary action contemplated by section 1 of the
Code of Civil Procedure, but a special proceeding in accordance with the said section and
Chapter XXXIX, Part II, of the same Code. The proceeding, as provided by section 750,
should be commenced by petition and not by complaint.
In a special proceeding for escheat under section 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 and interest and necessary 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 Tunasa; and the former because it claims to be the exclusive owner of the
hacienda, and the latter because he claim to be the lessee thereof under a contract
legality entered with the former. In view of these allegations it is erroneous to hold that
the said parties are without right either to appear in case or to substantiate their
respective alleged right. This unfavorably resolves the petitioners' first assignment of
error.
2. The final dismissal of the petition for escheat decreed by the court is assigned by the
petitioners as the second error committed by it upon the contention that the demurrer,
to which amount the motions for dismissal, is not a pleading authorized by law in this
kind of proceeding and because, in any event, the court should have given them an
opportunity to amend the petition.
Chapter XXXIX of the Code of Civil Procedure, relative to the escheat of properties, does
not in fact authorize the filing of a demurrer to the petition presented for that purpose,
and section 91 and 99 permitting the interposition of demurrers to the complaint and
answer, respectively, are not applicable to special proceedings. But is no reason of a
procedure nature which prevents the filing of a motion to dismiss based upon any of the
grounds provided by law for a demurrer to a complaint. In such case, the motion to
dismiss pays the role of a demurrer and the court should resolve the legal question
raised therein. When, for instance, a petition for escheat does not state facts which
entitle the petitioner to the remedy prayed from and even admitting them hypothetically
it is clear that there are nor grounds for the court to proceed to the inquisition provided
by law, we see no reason to disallow an interest party from filing a motion to dismiss the
petition which is untenable from all standpoints. And when the motion to dismiss is
entertained upon this ground, the petition may be dismissed unconditionally and the
petitioner is not entitled, as in the case of a demurrer, to be afforded an opportunity to
amend his petition.
3. The petitioners assign as third error the judicial notice which the court took of the
complaint filed in civil case No. 6790, docketed and pending in the same court, wherein
the petitioner recognized the personality Colegio de San Jose, Inc., and Carlos Young and
the latters' interest in said action of interpleader and in the Hacienda de San Pedro
Tunasan which is the same subject matter of the instant proceedings.
In general, courts are not authorized to take judicial notice, in the adjudication of cases
pending before them, of the contents of the records of the other cases, even when such
cases have been tried or are pending in the same court, and notwithstanding the fact that
both cases may have been heard or are actually pending before the same judge. (U.S. vs.
Claveria, 29 Phil., 527.) The rule is squarely applicable to the present case, wherefore, we
hold that the assignment of error is tenable.
4. In the appealed resolution the court held that the municipality of San Pedro,
represented by the petitioners, has no personality to institute the petition for escheat
that the latter does not state sufficient facts, and that the court is without jurisdiction
either to take cognizance of the proceeding or to grant the remedy sought. These legal
conclusions are the subject matter of the fourth assignment of error.
According to the allegations of the petition, the petitioners base their right to the escheat
upon the fact that the temporal properties of the Father of the Society of Jesus, among
them, the Hacienda de San Pedro Tunasan, were confiscated by order of the King of Spain
and passed from then on the Crown of Spain. The following allegations of the petition are
important and specific and clearly the theory maintained by the petitioners: "11. As a
result of the perpetual expulsion of the Jesuits in their dominions, the King also decreed
the confiscation of all their properties, estate, rents, foundation, etc., in favor of the
Crown of Spain, and the order of the King was thus complied with here in the Philippines.
The Hacienda de San Pedro Tunasa from then on passed to the Crown of Spain under the
administration and management on its respective here, the Governor-General of the
Philippines Islands. 12. As a result of the war between Spain and the United States, the
latter acquired by way of transfer, all the properties of the Crown of Spain in the
Philippines, under articles III and VIII of the Treaty of Peace entered into in Paris on
December 10, 1989, and among which properties was included the Hacienda de San
Pedro Tunasan. 13. That the said hacienda thereafter passed to the Government of the
Philippines Islands by virtue of the Act of the United States Congress of July 1, 1992
(Philippine Bill), by mere administration for the benefit of the inhabitant of the
Philippines; and there after, under the Tydings-McDuffie law approved by the same
Congress on March 24, 1934, section 5, the United States, in turn, have ceded to the
Commonwealth of the Philippines, upon its inauguration, all the properties, estate, etc.,
ceded by Spain to the United States as above stated, among them being the Hacienda de
San Pedro Tunasan. Said Commonwealth was inaugurated on November 15, 1935."
If the hacienda de San Pedro Tunasan,, which is the only property sought to be escheated
and adjudicated to the municipality of San Pedro, has already passed to the ownership of
the Commonwealth of the Philippines, it is evident that the petitioners cannot claim that
the same be escheated to the said municipality, because it is no longer the case of real
property owned by a deceased person who has not left any heirs or person who may
legality claim it, these being the conditions required by section 750 and without which a
petition for escheat should not lie from the moment the hacienda was confiscated by the
Kingdom of Spain, the same ceased to be the property of the children of Esteban
Rodriguez de Figueroa, the Colegio de San Jose or the Jesuit Father, and became the
property of the Commonwealth of the Philippines by virtue of the transfer under the
Treaty of Paris, alleged in the petition. If the municipality of San Pedro believes that it
has some other right to the hacienda, distinct from the escheat relied upon in its petition
which gave rise to this proceeding, it should bring the proper action, but it cannot avail
itself successfully of the remedy provided by section 750 of the Code of Civil Procedure.
We, therefore, hold that the court did not commit the error assigned in ruling that the
petition does not allege sufficient facts justifying the escheat of the hacienda in favor of
the municipality of San Pedro and in finally dismissing the same. Having reached this
conclusion we do not believe it necessary to go into further considerations regarding the
personality of the municipality of San Pedro and the court's lack of jurisdiction.
5. The last assignment of error does not require any further consideration. The questions
raised therein have already been passed upon in the preceding considerations, with the
exception of the order to pay costs. With respect thereto, there is no reason why they
should not be taxed against the petitioners, they being defeated party (section 487, Code
of Civil Procedure). That no trial was had is not a bar to the imposition of costs under the
provisions of section 492.
For the foregoing reasons, the appealed order and resolution are affirmed, with the costs
of this instance against the petitioners and appellants. So ordered.

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-30381 August 30, 1988
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
COURT OF FIRST INSTANCE OF MANILA, BRANCH XIII, HON. JESUS P. MORFE,
PRESIDING JUDGE, AND PRES. ROXAS RURAL BANK INC., respondents.
The Solicitor General for petitioner.
Leonardo De Ocampo, Jr. and Alfredo Arungayan Jr., for private respondent.

FERNAN, C.J.:
The instant appeal by certiorari seeks (1) to annul and set aside the Orders dated
October 26,1968 and March 1, 1969 of the then Court of First Instance (CFI) of Manila,
Branch XIII in Civil Case No. 73707 entitled "Republic of the Philippines, Plaintiff, versus
Bank of America, et al., Defendants," which orders respectively dismissed herein
petitioner's complaint for escheat as against private respondent Pres. Roxas Rural Bank
for improper venue and denied petitioner's motion for reconsideration of such dismissal
order; and (2) the reinstatement of the aforesaid against private respondent.
The antecedents are as follows:
Pursuant to Section 2 of Act No. 3936, otherwise known as the Unclaimed Balance Law,
some 31 banks including herein private respondent Pres. Roxas Rural Bank forwarded to
the Treasurer of the Philippines in January of 1968 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. In the sworn statement submitted by private respondent Bank, only two
(2) names appeared: Jesus Ydirin with a balance of P126.54 and Leonora Trumpeta with
a deposit of P62.91.
Upon receipt of these sworn statements, the Treasurer of the Philippines caused the
same to be published in the February 25, March 3 and March 10, 1968 issues of the
"Philippines Herald", an English newspaper, and the"El Debate", a Spanish newspaper,
both of general circulation in the Philippines.
Thereafter, or on July 25, 1968, the Republic of the Philippines instituted before the CFI
of Manila a complaint for escheat against the aforesaid 31 banks, including herein private
respondent. Likewise named defendants therein were the individual depositors and/or
creditors reported in the sworn statements and listed in Annex "A" of the complaint.
Summonses were accordingly issued to defendant banks and the creditors/depositors
requiring them to file severally their answers to the complaint within 60 days after the
first publication of the summons with notice that should they fail to file their answers,
plaintiff would take judgment against them by default. The aforesaid complaint, list of
depositors-creditors (Annex "A"of the complaint), summons and notice were duly
published in the August 25, September 1, and September 8, 1968 issues of the
"Philippines Herald" and "El Debate."
On October 5,1968, private respondent Bank filed before the CFI a motion to dismiss the
complaint as against it on the ground of improper venue. Opposed by the petitioner, the
motion to dismiss was granted in the first assailed Order. Its motion for reconsideration
of said dismissal order having been denied in the second assailed order, petitioner
interposed the instant appeal on pure questions of law, to wit:
a. Whether or not Pres. Roxas Rural Bank is a real party in interest in the escheat
proceedings or in Civil Case No. 73707 of the Court of First Instance of Manila.
b. Whether or not venue of action in Civil Case No. 73707 has been properly laid in the
City of Manila, since all defendant banks, wherever they may be found, could be included
in one single action, pursuant to the provisions of Act No. 3936.
c. 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.
It is petitioner's contention that private respondent bank, being a mere nominal party,
could not file a motion to dismiss on the ground of improper venue, the real party in
interest being the depositors themselves; that the avowed purpose of Act No. 3936 is to
benefit the government by escheating unto itself dormant bank deposits and that this
purpose will be defeated if escheat proceedings will have to be instituted in each and
every province or city where a bank is located because of the publication expense; that
the convenience or inconvenience of the depositors is not the determining factor as to
venue of action, but that in view of Rule 144 of the Revised Rules of Court, which
provides that all cases brought after the effectivity of the Rules on January 1, 1964 shall
be governed by the provisions of the Rules of Court, Section 2(b) of Rule 4 on venue is
made applicable and available to the Republic in the instant case.
We find these contentions unmeritorious.
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.
1
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, thus:
Section 3. 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. (Emphasis supplied.)
Indeed, if the bank were not a real party in interest, the legislature would not have
provided for its joining as a party in the escheat proceedings.
Besides, under Section 2, Rule 3 of the Rules of Court, private respondent bank is a real
party in interest as its presence in the action is necessary for a complete determination
and settlement of the questions involved therein. Private respondent bank being a real
party in interest, it may and can file a motion to dismiss on the ground of improper
venue.
In defense of the second issue raised, petitioner points to the last sentence of Section 3 of
Act No. 3936 above-quoted as authority for saying that the venue of the escheat
proceedings was properly laid in the City of Manila. Petitioner's reliance on said sentence
is patently misplaced, the same having been obviously read out of context instead of in
relation to the sentence preceding it.
The first sentence of Section 3 of Act No. 3936 directs the Attorney General, now Solicitor
General, to 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. The phrase "or
actions" in this section is very significant. It manifests awareness on the part of the
legislators that a single action to cover all banks wherever located in the Philippines
would not be legally feasible in view of the venue prescribed for such action under the
same section, i.e., the province where the bank is located. Thus, the addition of the last
sentence, which the lower court had correctly interpreted to mean "that for escheat of
unclaimed bank balances all banks located in one and the same province where the Court
of First Instance concerned is located may be made parties defendant "in one
action"
2
was clearly intended to save on litigation and publication expenses, but
certainly not as authority for the lumping together of all banks wherever found in the
Philippines in one single escheat proceedings.
Anent the third issue raised, 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.
We note that while private respondent bank's motion to dismiss was granted, the trial
court in a subsequent order dated November 16, 1968 declared private respondent
bank's depositors and co-defendants Jose Ydirin and Leonora Trumpeta in default for
failure to file their answers. Considering that the complaint in Civil Case No. 73707 states
a common cause of action against private respondent bank and its depositors-co-
defendants, and considering further that the motion to dismiss filed by private
respondent bank alleged facts
3
that would warrant dismissal of the complaint against
said co-defendants, we apply by analogy Section 4 of Rule 18 of the Rules of
Court,
4
thereby decreeing the benefits of the dismissal of the complaint to extend to
private respondent bank's co-defendants Jose Ydirin and Leonora Trumpeta and their
successors- in-interest.
WHEREFORE, the instant appeal by certiorari is hereby denied. No costs.
SO ORDERED.
























Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-16106 December 30, 1961
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
PHILIPPINE NATIONAL BANK, ET AL., defendants,
THE FIRST NATIONAL CITY BANK OF NEW YORK, defendant-appellee.
Office of the Solicitor General for plaintiff-appellant.
Picazo, Lichauco and Agcaoili for defendant-appellee.
BAUTISTA ANGELO, J.:
The Republic of the Philippines filed on September 25, 1957 before the Court of First
Instance of Manila a complaint for escheat of certain unclaimed bank deposits balances
under the provisions of Act No. 3936 against several banks, among them the First
National City Bank of New York. It is alleged that pursuant to Section 2 of said Act
defendant banks 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 known to be dead or who have not made further deposits or withdrawals during
the period of 10 years or more. Wherefore, it is prayed that said credits and deposits be
escheated to the Republic of the Philippines by ordering defendant banks to deposit
them to its credit with the Treasurer of the Philippines.
In its answer the First National City Bank of New York claims that, while it admits that
various savings deposits, pre-war inactive accounts, and sundry accounts contained in its
report submitted to the Treasurer of the Philippines pursuant to Act No. 3936, totalling
more than P100,000.00, which remained dormant for 10 years or more, are subject to
escheat however, it has inadvertently included in said report certain items amounting to
P18,589.89 which, properly speaking, are not credits or deposits within the
contemplation of Act No. 3936. Hence, it prayed that said items be not included in the
claim of plaintiff.
After hearing the court a quo rendered judgment holding that cashier's is or manager's
checks and demand drafts as those which defendant wants excluded from the complaint
come within the purview of Act No. 3936, but not the telegraphic transfer payment
which orders are of different category. Consequently, the complaint was dismissed with
regard to the latter. But, after a motion to reconsider was filed by defendant, the court a
quo changed its view and held that even said demand drafts do not come within the
purview of said Act and so amended its decision accordingly. Plaintiff has
appealed.lawphil.net
Section 1, Act No. 3936, provides:
Section 1. "Unclaimed balances" within the meaning of this Act shall include
credits or deposits of money, bullion, security or other evidence of
indebtedness of any kind, and interest thereon with banks, as hereinafter
defined, in favor of any person unheard from for a period of ten years or more.
Such unclaimed balances, together with the increase and proceeds thereof,
shall be deposited with the Insular Treasure to the credit of the Government of
the Philippine Islands to be as the Philippine Legislature may direct.
It would appear that the term "unclaimed balances" that are subject to escheat include
credits or deposits money, or other evidence of indebtedness of any kind with banks, in
favor of any person unheard from for a period of 10 years or more. And as correctly
stated by the trial court, the term "credit" in its usual meaning is a sum credited on the
books of a company to a person who appears to be entitled to it. It presupposes a
creditor-debtor relationship, and may be said to imply ability, by reason of property or
estates, to make a promised payment ( In re Ford, 14 F. 2d 848, 849). It is the correlative
to debt or indebtedness, and that which is due to any person, a distinguished from that
which he owes (Mountain Motor Co. vs. Solof, 124 S.E., 824, 825; Eric vs. Walsh, 61 Atl.
2d 1, 4; See also Libby vs. Hopkins, 104 U.S. 303, 309; Prudential Insurance Co. of
America vs. Nelson, 101 F. 2d, 441, 443; Barnes vs. Treat, 7 Mass. 271, 274). The same is
true with the term "deposits" in banks where the relationship created between the
depositor and the bank is that of creditor and debtor (Article 1980, Civil Code; Gullas vs.
National Bank, 62 Phil. 915; Gopoco Grocery, et al. vs. Pacific Coast Biscuit Co., et al., 65
Phil. 443).
The questions that now arise are: Do demand draft and telegraphic orders come within
the meaning of the term "credits" or "deposits" employed in the law? Can their import be
considered as a sum credited on the books of the bank to a person who appears to be
entitled to it? Do they create a creditor-debtor relationship between drawee and the
payee?
The answers to these questions require a digression the legal meaning of said banking
terminologies.
To begin with, we may say that a demand draft is a bill of exchange payable on demand
(Arnd vs. Aylesworth, 145 Iowa 185; Ward vs. City Trust Company, 102 N.Y.S. 50; Bank of
Republic vs. Republic State Bank, 42 S.W. 2d, 27). Considered as a bill of exchange, a draft
is said to be, like the former, an open letter of request from, and an order by, one person
on another to pay a sum of money therein mentioned to a third person, on demand or at
a future time therein specified (13 Words and Phrases, 371). As a matter of fact, the term
"draft" is often used, and is the common term, for all bills of exchange. And the words
"draft" and "bill of exchange" are used indiscriminately (Ennis vs. Coshoctan Nat. Bank,
108 S.E., 811; Hinnemann vs. Rosenback, 39 N.Y. 98, 100, 101; Wilson vs. Bechenau, 48
Supp. 272, 275).
On the other hand, a bill of exchange within the meaning of our Negotiable Instruments
Law (Act No. 2031) does not operate as an assignment of funds in the hands of the
drawee who is not liable on the instrument until he accepts it. This is the clear import of
Section 127. It says: "A bill of exchange of itself does not operate as an assignment of the
funds in the hands of the drawee available for the payment thereon and the drawee is
not liable on the bill unless and until he accepts the same." In other words, in order that a
drawee may be liable on the draft and then become obligated to the payee it is necessary
that he first accepts the same. In fact, our law requires that with regard to drafts or bills
of exchange there is need that they be presented either for acceptance or for payment
within a reasonable time after their issuance or after their last negotiation thereof as the
case may be (Section 71, Act 2031). Failure to make such presentment will discharge the
drawer from liability or to the extent of the loss caused by the delay (Section 186, Ibid.)
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.
But 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. Thus, a
cashier's check has been clearly characterized in In Re Bank of the United States, 277
N.Y.S. 96. 100, as follows:
A cashier's check issued by a bank, however, is not an ordinary draft. The latter
is a bill of exchange payable demand. It is an order upon a third party
purporting to drawn upon a deposit of funds. Drinkall v. Movious State Bank, 11
N.D. 10, 88 N.W. 724, 57 L.R.A. 341, 95 Am. St. Rep. 693; State v. Tyler County
State Bank (Tex. Com. App.) 277 S.W. 625, 42 A.L.R. 1347. A cashier's check is of
a very different character. It is the primary obligation of the bank which issues
it (Nissenbaum v. State, 38 Ga. App. 253, S.E. 776) and constitutes its written
promise to pay upon demand (Steinmetz v. Schultz, 59 S.D. 603, 241 N.W.
734)....lawphil.net
The following definitions cited by appellant also confirm this view:
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 (10 C.J.S. 409).
A cashier's check issued on request of a depositor is the substantial equivalent
of a certified check and the deposit represented by the check passes to the
credit of the checkholder, who is thereafter a depositor to that amount
(Lummus Cotton Gin Co. v. Walker, 70 So. 754, 756, 195 Ala. 552).
A cashier's check, being merely a bill of exchange drawn by a bank on itself, and
accepted in advance by the act of issuance, is not subject to countermand by the
payee after indorsement, and has the same legal effects as a certificate deposit
or a certified check (Walker v. Sellers, 77 So. 715, 201 Ala. 189).
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 a has been termed a purchase and sale
transaction (9 C.J.S. 368). 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 (Ibid.) We
agree 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 (were) 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."
WHEREFORE, the decision of the trial court is hereby modified in the sense that the
items specifically referred to and listed under paragraph 3 of appellee bank's answer
representing telegraphic transfer payment orders should be escheated in favor of the
Republic of the Philippines. No costs.

SECOND DIVISION
[G.R. No. 132964. February 18, 2000]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. DAVID REY GUZMAN, represented
by his Attorney-in-Fact, LOLITA G. ABELA, and the REGISTER OF DEEDS OF
BULACAN, MEYCAUAYAN BRANCH, respondents.
D E C I S I O N
BELLOSILLO, J.:
The REPUBLIC OF THE PHILIPPINES seeks the nullification of the 5 March 1998 Decision
of the Court of Appeals
[1]
which affirmed the dismissal by the Regional Trial Court, Br. 77,
Malolos, Bulacan, of the petition for escheat filed by the Government.
[2]
h Y
David Rey Guzman, a natural-born American citizen, is the son of the spouses Simeon
Guzman,
[3]
a naturalized American citizen, and Helen Meyers Guzman, an American
citizen. In 1968 Simeon died leaving to his sole heirs Helen and David an estate
consisting of several parcels of land located in Bagbaguin, Sta. Maria, Bulacan, covered by
TCT Nos. T-146837 (M), T-146839 (M), T-146840 (M), T- 146841 (M), T-146842 (M), T-
120254 (M) and T-120257 (M).
On 29 December 1970 Helen and David executed a Deed of Extrajudicial Settlement of
the Estate of Simeon Guzman dividing and adjudicating to themselves all the property
belonging to the estate of Simeon. The document of extrajudicial settlement was
registered in the Office of the Register of Deeds on 8 December 1971. The taxes due
thereon were paid through their attorneys-in-fact, Attys. Juan L. Austria and Lolita G.
Abela, and the parcels of land were accordingly registered in the name of Helen Meyers
Guzman and David Rey Guzman in undivided equal shares.
On 10 December 1981 Helen executed a Quitclaim Deed assigning, transferring and
conveying to her son David her undivided one-half (1/2) interest on all the parcels of
land subject matter of the Deed of Extrajudicial Settlement of the Estate of Simeon
Guzman. Since the document appeared not to have been registered, upon advice of Atty.
Lolita G. Abela, Helen executed another document, a Deed of Quitclaim, on 9 August 1989
confirming the earlier deed of quitclaim as well as modifying the document to encompass
all her other property in the Philippines.
[4]

On 18 October 1989 David executed a Special Power of Attorney where he acknowledged
that he became the owner of the parcels of land subject of the Deed of Quitclaim executed
by Helen on 9 August 1989 and empowering Atty. Lolita G. Abela to sell or otherwise
dispose of the lots. On 1 February 1990 Atty. Lolita G. Abela, upon instruction of Helen,
paid donors taxes to facilitate the registry of the parcels of land in the name of David.
On 16 March 1994 a certain Atty. Mario A. Batongbacal wrote the Office of the Solicitor
General and furnished it with documents showing that Davids ownership of the one-half
(1/2) of the estate of Simeon Guzman was defective. On the basis thereof, the
Government filed before the Regional Trial Court of Malolos Bulacan a Petition for
Escheat praying that one-half (1/2) of David's interest in each of the subject parcels of
land be forfeited in its favor. On 9 August 1994 David Rey Guzman responded with a
prayer that the petition be dismissed. Sppedsc
On 11 July 1995 the trial court dismissed the petition holding that the two (2) deeds of
quitclaim executed by Helen Meyers Guzman had no legal force and effect so that the
ownership of the property subject thereof remained with her.
[5]

The Government appealed
[6]
the dismissal of the petition but the appellate court affirmed
the court a quo.
Petitioner anchors its argument on Art. XII of the Constitution which provides -
Sec. 7. Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a
natural-born citizen of the Philippines who has lost his Philippine
citizenship may be a transferee of private lands, subject to limitations
provided by law.
Thus as a rule, only a Filipino citizen can acquire private lands in the Philippines. The
only instances when a foreigner can acquire private lands in the Philippines are by
hereditary succession and if he was formerly a natural-born Filipino citizen who lost his
Philippine citizenship. Petitioner therefore contends that the acquisition of the parcels of
land by David does not fall under any of these exceptions. It asserts that David being an
American citizen could not validly acquire one-half (1/2) interest in each of the subject
parcels of land by way of the two (2) deeds of quitclaim as they are in reality donations
inter vivos. It also reasons out that the elements of donation are present in the
conveyance made by Helen in favor of David: first, Helen consented to the execution of
the documents; second, the dispositions were made in public documents; third, David
manifested his acceptance of the donation in the Special Power of Attorney he executed
in favor of Atty. Lolita G. Abela; fourth, the deeds were executed with the intention of
benefiting David; and lastly, there was a resultant decrease in the assets or patrimony of
Helen, being the donor. Petitioner further argues that the payment of donors taxes on
the property proved that Helen intended the transfer to be a gift or donation inter vivos.
David maintains, on the other hand, that he acquired the property by right of accretion
and not by way of donation, with the deeds of quitclaim merely declaring Helens
intention to renounce her share in the property and not an intention to donate. He
further argues that, assuming there was indeed a donation, it never took effect since the
Special Power of Attorney he executed does not indicate acceptance of the alleged
donation. Calrsc
There are three (3) essential elements of a donation: (a) the reduction of the patrimony
of the donor; (b) the increase in the patrimony of the donee; and, (c) the intent to do an
act of liberality or animus donandi. When applied to a donation of an immovable
property, the law further requires that the donation be made in a public document and
that there should be an acceptance thereof made in the same deed of donation or in a
separate public document.
[7]
In cases where the acceptance is made in a separate
instrument, it is mandated that the donor should be notified thereof in an authentic form,
to be noted in both instruments.
[8]

Not all the elements of a donation of an immovable property are present in the instant
case. The transfer of the property by virtue of the Deed of Quitclaim executed by Helen
resulted in the reduction of her patrimony as donor and the consequent increase in the
patrimony of David as donee. However, Helens intention to perform an act of liberality
in favor of David was not sufficiently established. A perusal of the two (2) deeds of
quitclaim reveals that Helen intended to convey to her son David certain parcels of land
located in the Philippines, and to re-affirm the quitclaim she executed in 1981 which
likewise declared a waiver and renunciation of her rights over the parcels of land. The
language of the deed of quitclaim is clear that Helen merely contemplated a waiver of her
rights, title and interest over the lands in favor of David, and not a donation. That a
donation was far from Helen's mind is further supported by her deposition which
indicated that she was aware that a donation of the parcels of land was not possible since
Philippine law does not allow such an arrangement.
[9]
She reasoned that if she really
intended to donate something to David it would have been more convenient if she sold
the property and gave him the proceeds therefrom.
[10]
It appears that foremost in Helens
mind was the preservation of the Bulacan realty within the bloodline of Simeon from
where they originated, over and above the benefit that would accrue to David by reason
of her renunciation.
[11]
The element of animus donandi therefore was missing.
Likewise, the two (2) deeds of quitclaim executed by Helen may have been in the nature
of a public document but they lack the essential element of acceptance in the proper
form required by law to make the donation valid. We find no merit in petitioners
argument that the Special Power of Attorney executed by David in favor of Atty. Lolita G.
Abela manifests his implied acceptance of his mothers alleged donation as a scrutiny of
the document clearly evinces the absence thereof. The Special Power of Attorney merely
acknowledges that David owns the property referred to and that he authorizes Atty.
Abela to sell the same in his name. There is no intimation, expressly or impliedly, that
Davids acquisition of the parcels of land is by virtue of Helens possible donation to him
and we cannot look beyond the language of the document to make a contrary
construction as this would be inconsistent with the parol evidence rule.
[12]

Moreover, it is mandated that if an acceptance is made in a separate public writing the
notice of the acceptance must be noted not only in the document containing the
acceptance but also in the deed of donation. Commenting on Art. 633 of the Civil Code
from whence Art. 749
[13]
came Manresa said: "If the acceptance does not appear in the
same document, it must be made in another. Solemn words are not necessary; it is
sufficient if it shows the intention to accept x x x x it is necessary that formal notice
thereof be given to the donor, and the fact that due notice has been given must be noted
in both instruments. Then and only then is the donation perfected.
[14]
"
Thus, in Santos v. Robledo we emphasized that when the deed of donation is recorded in
the registry of property the document that evidences the acceptance - if this has not been
made in the deed of gift - should also be recorded. And in one or both documents, as the
case may be, the notification of the acceptance as formally made to the donor or donors
should be duly set forth.
[15]
Where the deed of donation fails to show the acceptance, or
where the formal notice of the acceptance made in a separate instrument is either not
given to the donor or else noted in the deed of donation, and in the separate acceptance,
the donation is null and void.
[16]

These requisites, definitely prescribed by law, have not been complied with, and no proof
of compliance appears in the record. The two (2) quitclaim deeds set out the conveyance
of the parcels of land by Helen in favor of David but its acceptance by David does not
appear in the deeds, nor in the Special Power of Attorney. Further, the records reveal no
other instrument that evidences such acceptance and notice thereof to the donor in an
authentic manner. It is well-settled that if the notification and notation are not complied
with, the donation is void. Therefore, the provisions of the law not having been complied
with, there was no effective conveyance of the parcels of land by way of donation inter
vivos.
[17]
Scncm
However, the inexistence of a donation does not render the repudiation made by Helen
in favor of David valid. There is no valid repudiation of inheritance as Helen had already
accepted her share of the inheritance when she, together with David, executed a Deed of
Extrajudicial Settlement of the Estate of Simeon Guzman on 29 December 1970 dividing
and adjudicating between the two (2) of them all the property in Simeons estate. By
virtue of such extrajudicial settlement the parcels of land were registered in her and her
sons name in undivided equal share and for eleven (11) years they possessed the lands
in the concept of owner. Article 1056 of the Civil Code provides -
The acceptance or repudiation of an inheritance, once made is
irrevocable and cannot be impugned, except when it was made
through any of the causes that vitiate consent or when an unknown
will appears.
Nothing on record shows that Helens acceptance of her inheritance from Simeon was
made through any of the causes which vitiated her consent nor is there any proof of the
existence of an unknown will executed by Simeon. Thus, pursuant to Art. 1056, Helen
cannot belatedly execute an instrument which has the effect of revoking or impugning
her previous acceptance of her one-half (1/2) share of the subject property from
Simeons estate. Hence, the two (2) quitclaim deeds which she executed eleven (11)
years after she had accepted the inheritance have no legal force and effect.
Nevertheless, the nullity of the repudiation does not ipso facto operate to convert the
parcels of land into res nullius
[18]
to be escheated in favor of the Government. The
repudiation being of no effect whatsoever the parcels of land should revert to their
private owner, Helen, who, although being an American citizen, is qualified by hereditary
succession to own the property subject of the litigation.
WHEREFORE, the assailed Decision of the Court of Appeals which sustained the Decision
of the Regional Trial Court of Malolos, Bulacan, dismissing the petition for escheat is
AFFIRMED. No costs.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-14157 October 26, 1960
In the matter of escheat proceedings of the estate of the deceased Anne Fallon
Murphy and Tomas Fallon married to Julia Fallon. MUNICIPALITIES OF MAGALLON,
ISABELA and LA CASTELLANA, NEGROS OCCIDENTAL, petitioners-appellees,
vs.
IGNATIUS HENRY BEZORE, ET AL., oppositors-heirs appellants.
Martiniano O. dela Cruz for appellant.
Assistant General Antonio A. Torres and Solicitor Conrado T. Limcaoco for appellees.
LABRADOR, J.:
These are escheat proceedings instituted by the Municipalities of Magallon, La Castellana
and Isabela, Province of Negros Occidental, in the Court of First Instance of that province,
praying that the estates of the deceased Anne Fallon Murphy and Thomas Fallon the
latter married to Julia Fallon, consisting of agricultural lands and residential lots, as well
as accrued rentals deposited with the Warner, Barnes and Co., Ltd., be escheated in favor
of the above-named municipalities, respectively, wherever the real estates are situated.
Finding that the petition was in order, the judge of the court ordered the publication of
the petition and set the same for hearing before itself on October 9, 1957.
The evidence shows that the properties sought to be escheated originally to Charles J.
Fallon, an American citizen, married to Rosario Santaromana. Fallon died in Manila on
March 25, 1935, so his wife acquired by inheritance one-half of the said properties as
owner, and the other half as usufructuary. The value of the properties of Charles J. Fallon
in 1936 is estimated at P46l,105.41 (Exhibit "H"). His wife Rosario Santaromana died in
1943, and thereupon the properties which she held in usufruct were transmitted to the
brother and sister of her deceased husband, namely, Thomas Fallon and Anne Fallon
Murphy. The value of the estate belonging to both Thomas Fallon and Anne Fallon
Murphy were residents of the United States and as nothing was known about them from
their relatives in the United States, the petitioning municipalities believed that they had
died without heirs. Hence the petition for escheat.
At the hearing of the petition, evidence was submitted that Anne Fallon Murphy died on
March 12, 1936 in San Francisco, California (ROA p. 21), while Thomas Fallon, died on
May 26, 1936, also in San Francisco, California (ROA p. 25). Julia Fallon, on the other
hand, died in San Francisco, California on December 2, 1944 (ROA p. 26).
Opposition to the petition for escheat was filed by Ignatius Bezore. Elwood
Knickerbocker and Mary Irene Fallon McCormick Henry Bezore claims that he is the a
nephew of the decedents because his mother was their sister. Elwood Knickerbocker
also claims to be the sole legatee of his wife Loreta Knickerbocker, who in turn, was the
residuary legatee of Anne Fallon Murphy. Mary Irene Murphy McCormick likewise claims
that she is the niece of the decedents as her father was a brother of said decedents.
Conformably to their petitions, all the oppositors pray that the petition for escheat be
dismissed and that the properties of the decedents be disturbed among them.
The court, after hearing, found that Anne Fallon Murphy died in San Francisco on March
12, 1936 and Thomas Fallon, also in the same city on May 26, 1936; that Thomas Fallon
was survived by his wife Julia Fallon, who in turn, died in San Francisco on December 22,
1944; that Ane Fallon Murphy executed a will on February 7, 1935, which was admitted
to probate on May 7, 1937. Considering these facts the court denied the petition for
escheat of the properties of the deceased Anne Fallon Murphy and Thomas Fallon, for the
reason that Thomas Fallon died with an heir his wife Julia Fallon, and Anne Fallon
Murphy, for her part, died leaving a will, in which she disposed of all her properties.
As to prayers contained in the opposition asking that the oppositors be declared heirs of
the deceased Thomas Fallon and Anne Fallon Murphy, the court declared that the
evidence submitted was not competent or sufficient to sustain the claim of the
oppositors and, therefore denied said prayers.
The petitioning municipalities presented no appeal, but the oppositors did appeal,
claiming that the lower court erred in not rendering judgment in their favor and in not
declaring them heirs of the decedents Anne Fallon Murphy and Thomas Fallon.
This appeal can not be entertained. While it is possible for the estates of the deceased
Anne Fallon Murphy and Thomas Fallon, who at the time of their death were residents of
San Francisco, California, to be settled here, or more especially in Negros Occidental
where they had properties, these proceedings were instituted as escheat proceedings
and not for the settlement of the estate of deceased persons. The court acquired
jurisdiction to hear the petition for escheat by virtue of the publication of the petition for
escheat. The jurisdiction acquired can not be converted into one for the distribution of
the properties of the said decedents. For such proceedings (for the distribution of the
estate of the decedents) to be instituted, the proper parties must be presented and the
proceedings should comply with the requirements of the Rule. Hence, the court of First
Instance did not have the power to order, or to proceed with, the distribution of the
estates of the decedents in these escheat proceedings, and adjudicate the properties to
the oppositors.
WHEREFORE, the decision appealed from should be, as it hereby is, affirmed, without
costs.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-21570 August 30, 1924
Intestate estate of Julia de la Pea, deceased.
DIEGO DE GUZMAN, ET AL., petitioners-appellants,
vs.
RUFINO SEVILLA, ET AL., opponents-opponents.
Juan F. Gonzalez for petitioners-appellants.
Alfredo Santos for opponents-appellants.
ROMUALDEZ, J.:
This is an appeal from an order dated July 20, 1923, of the Court of First Instance of
Nueva Ecija denying the petition both of the petitioners and of the opponents for
declaration of heirs and denying also the authority to sell certain property, which was
applied for by the former. Both parties have appealed from this order, each assigning
errors thereto.
This case is concerned with the inheritance of the deceased Julia de la Pea.
The evidence shows that this Julia de la Pea was daughter of Julio Sevilla and Catalina
de la Pea, who were not married. The petitioners have introduced evidence to the effect
that Julia de la Pea was an adulterous child because Julio Sevilla was married with
Josefa Gutierrez who was alive at the time. The fact is that Julia de la Pea was a child of
unmarried parents, and therefore she was not a legitimate child, nor does she appear to
have been legitimated, and is, at most, an acknowledged natural child, supposing it not to
have been proven that she was an adulterous child, as alleged by the petitioners.
Now, the persons entitled to succeed a natural child in an intestate succession are the
father or mother who acknowledged it (art. 944, Civil Code), and in default of either, its
natural brothers (art. 945, Civil Code). It was not proven nor it is contended that the
petitioners or the opponents are parents or brothers of the deceased Julia de la Pea; and
with the exception of the relatives mentioned in said articles 944 and 945 of the Civil
Code, no other relative of the natural child has the right to succeed it, as is clearly
provided by article 943 of the same Code.
It is, therefore, clear that neither the petitioners nor the opponents can be declared heirs
of the deceased Julia de la Pea without a will.
We find no error in the order appealed from, except in its last disposition which says "In
lieu thereof, the estate is awarded to the State." We think this awarding is premature
because the requirements of sections 750 to 752 of the Code of Civil Procedure have not
previously been complied with.
The order appealed from is affirmed in other respects, without pronouncement as to
costs, with instruction to the lower court to furnish the provincial fiscal of Nueva Ecija a
copy of this decision for such action as may be proper under the aforesaid sections 750
to 752 of the Code of Civil Procedure. So ordered.