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    Lipana vs. Development Bank of The Philippines Digest

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    Joseph Macalintal
    Petitioners filed a collection suit against the respondent Development Bank of Rizal after being unable to cash matured time deposit certificates and access savings deposits. The trial court ruled in petitioners' favor but stayed execution pending appeal. Petitioners sought to lift the stay, which was denied. The issue is whether execution could be legally stayed given the bank was placed under receivership by the Monetary Board after being declared insolvent. The court held the stay was warranted as the Board becomes trustee of assets for equal benefit of all creditors after insolvency, and executing the judgment would unduly deplete assets to prejudice of other creditors and depositors.

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    Lipana vs. Development Bank of The Philippines Digest

    Uploaded by

    Joseph Macalintal
    258 views1 page
    Petitioners filed a collection suit against the respondent Development Bank of Rizal after being unable to cash matured time deposit certificates and access savings deposits. The trial court ruled in petitioners' favor but stayed execution pending appeal. Petitioners sought to lift the stay, which was denied. The issue is whether execution could be legally stayed given the bank was placed under receivership by the Monetary Board after being declared insolvent. The court held the stay was warranted as the Board becomes trustee of assets for equal benefit of all creditors after insolvency, and executing the judgment would unduly deplete assets to prejudice of other creditors and depositors.

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    Lipana vs. Development Bank of the Philippines Digest

    Original Title

    Lipana vs. Development Bank of the Philippines Digest

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    Petitioners filed a collection suit against the respondent Development Bank of Rizal after being unable to cash matured time deposit certificates and access savings deposits. The trial court ruled in petitioners' favor but stayed execution pending appeal. Petitioners sought to lift the stay, which was denied. The issue is whether execution could be legally stayed given the bank was placed under receivership by the Monetary Board after being declared insolvent. The court held the stay was warranted as the Board becomes trustee of assets for equal benefit of all creditors after insolvency, and executing the judgment would unduly deplete assets to prejudice of other creditors and depositors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    258 views1 page

    Lipana vs. Development Bank of The Philippines Digest

    Uploaded by

    Joseph Macalintal
    Petitioners filed a collection suit against the respondent Development Bank of Rizal after being unable to cash matured time deposit certificates and access savings deposits. The trial court ruled in petitioners' favor but stayed execution pending appeal. Petitioners sought to lift the stay, which was denied. The issue is whether execution could be legally stayed given the bank was placed under receivership by the Monetary Board after being declared insolvent. The court held the stay was warranted as the Board becomes trustee of assets for equal benefit of all creditors after insolvency, and executing the judgment would unduly deplete assets to prejudice of other creditors and depositors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Lipana vs.

    Development Bank of the Philippines

    After the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the
    trustee of its assets for the equal benefit of all the creditors, including depositors. To execute the judgment would unduly deplete
    the assets of respondent bank to the obvious prejudice of other depositors and creditors.

    Facts: Petitioners opened and maintained both time and savings deposits with the respondent Development Bank of Rizal. When
    some of the time deposit certificates matured, petitioners were not able to cash them but instead were issued a manager’s check
    which was dishonored upon presentment. Demands for the payment of both time and savings deposits have failed. Hence,
    petitioners filed with the RTC a collection suit with prayer for issuance of a writ of preliminary attachment which was granted by the
    court. The RTC rendered judgment in favor of petitioners. Meanwhile, the Monetary Board placed the respondent bank under
    receivership. Subsequently, the motion for execution pending appeal filed by petitioners was granted by the court but was also
    stayed by the trial judge. The motion filed by petitioners to lift the stay order having been denied, this petition was filed.

    Issue: Whether or not respondent judge could legally stay execution of judgment that has already become final and executor

    Held: In the instant case, the stay of the execution of judgment is warranted by the fact that respondent bank was placed under
    receivership. To execute the judgment would unduly deplete the assets of respondent bank to the obvious prejudice of other
    depositors and creditors, since, as aptly stated in Central Bank of the Philippines vs. Morfe (63 SCRA 114), after the Monetary Board
    has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the trustee of its assets for the
    equal benefit of all the creditors, including depositors. The assets of the insolvent banking institution are held in trust for the equal
    benefit of all creditors, and after its insolvency, one cannot obtain an advantage or a preference over another by an attachment,
    execution or otherwise.

    After the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the
    trustee of its assets for the equal benefit of all the creditors, including depositors. The assets of the insolvent banking institution are
    held in trust for the equal benefit of all creditors, and after its insolvency, one cannot obtain an advantage or a preference over
    another by an attachment, execution or otherwise. To execute the judgment would unduly deplete the assets of respondent bank to
    the obvious prejudice of other depositors and creditors.

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