RIVERA v PEOPLES BANK & TRUST CO.

April 17, 1942 | Ozaeta, J. | Partnership > Nature > Distinguished

From
Digester: Angat, Christine Joy F.
SUMMARY: Edgar Stephenson executed a survivorship
agreement in favor of Ana Rivera, his housekeeper. The agreement
provided that Stephenson and Rivera will be the joint owners of
the money deposited in the account with Peoples Bank and Trust
Co., and upon the death of either one of the party, the survivor will
be the sole owner of the balance in said account. Stephenson died,
and pursuant to the survivorship agreement, Rivera tried to claim
the balance of the joint account. The bank, however, refused.
Rivera filed a complaint to recover the money, but the trial court
dismissed the complaint, ruling that the agreement is either a
power of attorney or a donation mortis causa, the requirements of
which were not satisfied. The Court, in finding the survivorship
agreement valid on its face, characterized it as an aleatory
contract, the transfer of the ownership predicated upon the
condition of who might die first (in other words, the other party
assumes the risk of losing the property if he dies earlier/the other
party gets the property in the chance that he outlives the other).
The Court likewise found the agreement valid as-applied, since
there was no fraud in its execution.
DOCTRINE: (There is nothing in the case which speaks of
Partnership, so the doctrine, as herein stated, is an inference
based on my appreciation of this cases value.) A joint deposit or
joint bank account is not a partnership. The right of survivorship
which is a recognized stipulation in joint deposits is not applied in
partnerships since in the latter, upon the death of a partner, the
estate or heirs of the deceased partner has the right to recover his
contributing capital and any fruits and interests therein.
FACTS:
December 24, 1929: Edgar Stephenson opened an account in
his name with Peoples Bank and Trust Co. by depositing
therein the sum of P1,000.
October 17, 1931: A survivorship agreement made by and
between Edgar Stephenson and Ana Rivera was executed.
o Ana Rivera was Stephensons housekeeper since 1920.
o The survivorship agreement provides that:
All moneys deposited with the Bank will be deposited in
a joint account, without consideration of its previous
ownership

The money deposited and all its interest therein, shall

be the property of both the joint tenants (Stephenson
and Rivera), and shall be payable and collectible by
either of them during their joint lives
In the event of the death of one of the joint tenants, the
balance shall belong to and be the sole property of the
survivor
The agreement shall be binding upon the parties, their
heirs, their executors, administrators, and assigned
Thus, pursuant to the survivorship agreement, the balance of
P2,072 in Stephens account was transferred to the account
under the name of Edgar Stephenson and/or Ana Rivera.
June 8, 1939: Stephenson died.
o At the time of Stephensons death, the account had a
balance of P701.43 and Rivera was in possession of the
deposit book.
Rivera tried to claim the balance of the account, but Peoples
Bank refused. The Bank was under the opinion that the
survivorship agreement was of doubtful validity.
Rivera then filed a petition against the bank in order to recover
the money.
o Minnie Stephenson, administratix of Stephens estate, filed
a complaint-for-intervention, alleging that the money
deposited in the said account was and is the exclusive
property of Stephen. She averred that the survivorship
agreement was a donation mortias causa which was not
executed with the formalities of a will, thus it has no legal
effect.
The trial court ruled in favor of the Bank.
o The TC held that if the agreement will be viewed from its
effect during the lives of both parties, it is a power of
attorney authorizing Rivera to make withdrawals from the
account. However, this power was terminated upon the
death of Stephenson.
o On the other hand, if the agreement will be viewed from
its effect after the death of either one of the parties, it is a
donation mortis causa. Since it was not executed with the
formalities of a will, Rivera did not validly acquire the said
donation.

RULING: Petition granted.

Whether the survivorship agreement was valid, thus Rivera
is entitled to the balance in the bank account -- YES

Contrary to the trial courts ruling, the survivorship agreement

in this case is neither a power of attorney nor a donation
mortis causa. The trial courts conclusion was predicated on
the assumption that Stephenson was the exclusive owner of the
funds deposited in the bank. However, Stephenson and Rivera
became joint owners when the former subsequently
transferred the account to the name of himself and/or Ana
Rivera.
o It is not unusual for a person to deposit money in the bank
in the name of or in the account of another. In this case,
Stephenson transferred the money in a joint account. While
the Court can no longer know the reason behind
Stephensons execution of the survivorship agreement, the
Court is of the conclusion that such transfer was justified,
considering that Rivera served Stephenson, her master, for
about 19 years without actually receiving her salary for
him.
On its face, the survivorship agreement is valid. It is
considered an aleatory contract supported by a lawful
consideration the mutual agreement of the joint depositors
permitting either of them to withdraw the whole deposit during
their lifetime, and transferring the balance to the survivor
upon the death of one of them.
o Civil Code, Article 17901. By an aleatory contract one of the
parties binds himself, or both reciprocally bind themselves
to give or to do something as an equivalent for that which
the other party is to give or do in case of the occurrence of
an event which is uncertain or will happen at an
indeterminate time.
o Macam v Gatmaitan: [The parties] reciprocally assigned
their respective property to one another conditioned upon
who might die first, the time of death determining the event
upon which the acquisition of such right by the one or the
other depended. This contract, as any other contract, is
binding upon the parties.
Further, it is established that a bank account may be created
wherein two persons will be joint owners thereof during their

1 NOTE: This case was decided in 1942, which meant that when
they were referring to the Civil Code, they were referring to the old
one, not the new one which took effect in 1950. Consequently,
Article 1790 is now Article 2010 of the New Civil Code; the text of
the provision, however, remains the same.

mutual lives, and the survivor takes the whole on the death of
the other. The right to make joint deposits has generally been
held not to be done away with by statutes abolishing joint
tenancy and survivorship generally as they existed at common
law.
Even considering the operation or effect of the survivorship
agreement (or, in simple terms, as-applied), the agreement in
this case remains valid. There was no showing that there was
fraud or vitiation of consent as to nullify the contract.
o An agreement which is per se not contrary to law will be
violative of the law if it be shown in a given case that such
agreement is a mere cloak to hide an inofficious donation,
to transfer property in fraud of creditors, or to defeat the
legitime of a forced heir.

NOTES:
For those details which are not important but seems important.