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  • Grocery Company Claims Not Preferred in Bank Liquidation

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    kjhenyo218502
    753 vizualizări2 pagini
    This case involved claims by Gopoco Grocery and others (petitioners) that deposits they made into the now liquidated Mercantile Bank of China should be considered preferred credits rather than ordinary credits. [1] The lower court appointed a commissioner who determined the claims should be considered ordinary credits. [2] The petitioners argued their claims were preferred because the deposits were made on current account and should be returned with interest. [3] The court ruled against the petitioners, finding that because the bank paid them interest on the deposits, this changed the nature of the deposits to ordinary loans rather than deposits, so the claims were correctly considered ordinary credits.

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    Titlu original

    Gopoco Grocery v. Pacific Coast Biscuit Co. [Simple Loan v. Deposit in Bank; Payment of Interest Only in Loans]

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    This case involved claims by Gopoco Grocery and others (petitioners) that deposits they made into the now liquidated Mercantile Bank of China should be considered preferred credits rather than ordinary credits. [1] The lower court appointed a commissioner who determined the claims should be considered ordinary credits. [2] The petitioners argued their claims were preferred because the deposits were made on current account and should be returned with interest. [3] The court ruled against the petitioners, finding that because the bank paid them interest on the deposits, this changed the nature of the deposits to ordinary loans rather than deposits, so the claims were correctly considered ordinary credits.

    Drepturi de autor:

    © All Rights Reserved
    Descărcați ca DOCX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    753 vizualizări2 pagini

    Grocery Company Claims Not Preferred in Bank Liquidation

    Încărcat de

    kjhenyo218502
    This case involved claims by Gopoco Grocery and others (petitioners) that deposits they made into the now liquidated Mercantile Bank of China should be considered preferred credits rather than ordinary credits. [1] The lower court appointed a commissioner who determined the claims should be considered ordinary credits. [2] The petitioners argued their claims were preferred because the deposits were made on current account and should be returned with interest. [3] The court ruled against the petitioners, finding that because the bank paid them interest on the deposits, this changed the nature of the deposits to ordinary loans rather than deposits, so the claims were correctly considered ordinary credits.

    Drepturi de autor:

    © All Rights Reserved
    Descărcați ca DOCX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    din 2

    Gopoco Grocery v. Pacific Coast Biscuit Co.

    G.R. Nos. L-43697 and L-442200, March 31, 1938



    FACTS:
    Mercantile Bank of China was declared in liquidation as it could not continue operating as such
    without running the risk of suffering losses and prejudice its depositors and customers. Creditors
    Gopoco Grocery, et. al. alleged that they deposited sum of money in the bank under liquidation on
    current account.
    To resolve these claims, Fulgencio Borromeo was appointed by the lower court as commissioner
    and referee to receive the evidence which the interested parties may desire to present. Borromeo
    resolved the claims by recommending that the same be considered as an ordinary credit only, and not
    as a preferred credit as Gopoco Grocery, Et Al wanted, because they were at the same time debtors of
    the bank. The lower court upheld Borromeos recommendations.
    Gopoco Grocery, et. al. contended that their claims are preferred credits because they are
    deposits in contemplation of law, and as such, should be returned with the corresponding interest
    thereon.

    ISSUE: WON the lower court erred in not holding petitioners claims as preferred credits?

    RULING:
    NO, deposits on current account in the bank now under liquidation are considered ordinary
    credits only.
    Gopoco Grocery, et. al., themselves, admit that the bank owes them interest which should have
    been paid to them before it was declared in a state of liquidation. This fact undoubtedly destroys the
    character which they nullifies their contention that the same be considered as irregular deposits,
    because the payment of interest only takes place in the case of loans.
    The so-called current account and savings deposits have lost their character of deposits and
    are convertible into simple commercial loans because, in cases of such deposits, the bank has made
    use thereof in the ordinary course of its transactions as an institution engaged in the banking
    business, not because it so wishes, but precisely because of the authority deemed to have been
    granted to it by Gopoco Grocery, Et Al to enable them to collect the interest which they had been and
    they are now collecting, and by virtue further of the authority granted to it by Corporation Law and
    Banking Law.
    Wherefore, deposits on current account of Gopoco Grocery, Et Al in the bank under liquidation,
    with the right on their part to collect interest, have not created and could not create a juridical relation
    between them except that of creditors and debtor, they being the creditors and the bank the debtor.

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