G.R. No. L-3869 Case Digest

G.R. No. L-3869, January 31, 1952

S. David Winship

vs Philippine Trust Company

Ponente: Paras

Facts:

Prior to December 1941, the Eastern Isles Import Corporation, which is mainly owned by American citizens, had a current account deposit with the Phil Trust Company. Then later, the Japanese administration issued an order requiring all deposit accounts of the hostile people to be transferred to the bank of Taiwan. In compliance, Phil. Trust transferred and paid the credit balances of the current account deposits of the corporation to the bank of Taiwan.

The pre-war current deposit accounts of the Eastern Isles Import Corporation and of the Eastern Isles, Inc. were subsequently transferred to S. Davis Winship who, on August 12, 1947, presented to the Philippine Trust Company checks Nos. A-79212 and H-579401 covering the aforesaid deposits. The Philippine Trust Company, however, refused to pay said checks, whereupon, on September 6, 1947, S. Davis Winship instituted the present action against the Philippine Trust Company in the Court of First Instance of Manila, to recover upon the first cause of action the sum of P51,410.91 and under the second cause of action the sum of P34,827.74.

In its answer, the defendant Philippine trust Company invoked the order of the Japanese Military Administration by virtue of which it transferred the current deposit accounts in question to the Bank of Taiwan as the depository of the Bureau of Enemy Property Custody of the Japanese Military Administration.

After trial, the Court of First Instance of Manila rendered a decision upholding the contention of the defendant and accordingly dismissing the complaint.

Ruling:

In view of this pronouncement, we have to affirm the appealed judgment. As it has been stipulated by the parties that the defendant transferred the deposits in question to the Bank of Taiwan in compliance with the order of the Japanese Military Administration, the defendant was released from any obligation to the depositors or their transferee. Appellant's contention that there is no positive showing that the transfer was made by the Philippine Trust Company in compliance with the order of the Japanese Military Administration, and its logical effect is to make such act binding on said company. At any rate, the defendant corporation has not impugned its validity.

In the case of Filipinas Compañia de Seguros vs. Christern Henefeld and Co., Inc., Phil., 54, we held that the nationality of a private corporation is determined by the character or citizenship of its controlling stockholders; and this pronouncement is of course decisive as to the hostile character of the Eastern Isles, Inc., as far as the Japanese Military Administration was concerned, it being conceded that the controlling stockholders of said corporations were American citizens.

Wherefore, the appealed judgment is affirmed, with costs against the appellant.