Ching vs. Pacioles, Jr.

A foreign currency deposit account is exempt from attachment, garnishment, or any other order or process of any court, and in a joint "and" account, the consent of all co-depositors is indispensable before any withdrawal may be made; however, where a co-depositor's right over the account has been extinguished by removal as co-administrator, the case must be remanded for proper proceedings to remove his name from the account.

Miguelita Ching Pacioles died leaving real properties, stock investments, and bank deposits, including two dollar accounts with BPI-SFDM. She was survived by her husband Emilio B. Pacioles, Jr., their two minor children, her mother Miguela Chuatoco-Ching (now deceased), and her brother Emmanuel C. Ching. Emilio filed a petition for settlement of Miguelita's estate in 1992, and both Emilio and Emmanuel were initially appointed co-administrators, though Emmanuel's appointment was later nullified by the CA in 2002. The dollar accounts were consolidated into a single account under the names of Emilio and Miguela or Emmanuel, raising the question of whether court-ordered withdrawal from a joint foreign currency deposit account could proceed without the consent of all named co-depositors.

Upon the death of Miguelita Ching Pacioles, she left several real properties, stock investments, bank deposits, and interests. She was survived by her husband Emilio B. Pacioles, Jr., their two minor children, her mother Miguela Chuatoco-Ching (now deceased), and her brother Emmanuel C. Ching. On August 20, 1992, Emilio filed a petition for the settlement of Miguelita's estate with a prayer for his appointment as regular administrator. Thereafter, both Emilio and Emmanuel were appointed as co-administrators, though Emmanuel's appointment was subsequently nullified by the CA in a Decision dated July 22, 2002 in CA-G.R. CV No. 46763.

Among the properties included in the inventory of Miguelita's estate were her two dollar accounts with BPI-SFDM Branch. These dollar accounts were closed and consolidated into a single account — Account No. 003248-2799-14 — under the names of Emilio and Miguela Chuatoco or Emmanuel, upon their written request addressed to the bank. On September 30, 2011, Emilio filed a motion to allow him to withdraw money from the subject BPI account to defray the cost of property taxes due on the real properties of Miguelita's estate.

In an Order dated November 28, 2011, the intestate court granted the motion and directed BPI to release Php 430,000 in favor of Emilio, with the remainder to stay in the bank's custody. BPI-SFDM, through its bank manager, requested clarification and opined that the account was covered by the Foreign Currency Deposit Act, making it exempt from court orders and withdrawable only with the written consent of all account holders. In an Order dated May 31, 2012, the intestate court affirmed its earlier order, deeming Emilio's consent sufficient since the account was under the names of Emilio and Miguela or Emmanuel. Emmanuel filed a motion for reconsideration, which was denied in an Order dated September 3, 2012. Emmanuel then elevated the matter to the CA via a petition for certiorari. The CA dismissed the petition on February 27, 2014, finding that the intestate court did not err in allowing the withdrawal as it had jurisdiction over the estate properties until distribution. Emmanuel's motion for reconsideration was denied by the CA on September 4, 2014, prompting the present petition.

• Foreign Currency Deposit Exemption: Petitioner argued that the trial court erred in directing the withdrawal of funds from the subject BPI account, which is a foreign currency deposit account exempt from court orders under the Foreign Currency Deposit Act.
• Joint Account Consent Requirement: Petitioner maintained that the subject account is a joint "and" account requiring the consent of all co-depositors before any withdrawal could be made, and that the intestate court improperly deemed only Emilio's consent sufficient.

• Foreign Currency Deposit Exemption: Whether the intestate court's order directing the release of funds from a foreign currency deposit account is proper notwithstanding the exemption from court orders under Section 8 of RA 6426.
• Joint Account Consent: Whether the order of release of funds from a joint foreign currency deposit account without securing the consent of a co-depositor is proper.

• Foreign Currency Deposit Exemption: No. The intestate court's order directing the bank to release funds from a foreign currency deposit account violated Section 8 of RA 6426, which expressly exempts such deposits from attachment, garnishment, or any other order or process of any court.
• Joint Account Consent: No. In a joint "and" account, the consent of all depositors is indispensable before any withdrawal may be made; the intestate court erred in deeming only one co-depositor's consent sufficient. However, since the petitioner's appointment as co-administrator had been revoked, his right over the account no longer existed, necessitating remand for proper proceedings to remove his name as co-depositor.

• Foreign Currency Deposit Exemption: Section 8 of RA 6426 (the Foreign Currency Deposit Act of the Philippines), as amended, declares all foreign currency deposits as absolutely confidential and exempts them from attachment, garnishment, or any other order or process of any court, legislative body, government agency, or administrative body. This provision was reproduced in Section 87 of Central Bank Circular No. 1318, series of 1992. The intestate court's May 31, 2012 Order directed the branch manager of BPI to release Php 430,000 from the subject account, which is a foreign currency deposit. In so ordering, the intestate court committed a violation of the law's express prohibition against subjecting foreign currency deposits to any court order or process. The statutory exemption is absolute and admits of no exception for intestate proceedings.

• Joint Account Consent: The subject BPI account is a joint account held by two or more natural persons, making the depositors joint owners or co-owners with presumed equal shares unless the contrary is proved. In an "and" joint account, as in this case, the depositors are joint creditors of the bank, and the signatures of all depositors are necessary to allow withdrawal. The intestate court erred in deeming Emilio's consent alone sufficient, as the law requires the consent of all persons named as account holders before any withdrawal. Nevertheless, the Court recognized that Emmanuel's appointment as co-administrator had been revoked by the CA in CA-G.R. CV No. 46763, and his right over the funds in the joint account merely emanated from his being a co-administrator. Since that right no longer existed, his name should be removed as an account holder and co-depositor in a proper forum. The intestate court's jurisdiction over the estate continues until after payment of all debts and delivery of the remaining estate to the heirs, so proper proceedings must be had before it to ensure the account is administered solely by Emilio as the lone administrator.

• Foreign Currency Deposit Exemption Doctrine — Under Section 8 of RA 6426, as amended by PD No. 1035 and PD No. 1246, all foreign currency deposits are absolutely confidential and exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency, or administrative body whatsoever. The exemption is absolute and applies even in intestate estate proceedings. The Court applied this doctrine to hold that the intestate court's order directing release of funds from a foreign currency deposit account violated the express statutory prohibition.

• Joint Account Consent Rule — In a joint account, depositors are joint owners or co-owners of the account, with their shares presumed equal unless the contrary is proved. In an "and" joint account, the depositors are joint creditors of the bank, and the signatures of all depositors are necessary to allow withdrawal. The Court applied this rule to hold that the intestate court erred in deeming only one co-depositor's consent sufficient, while also noting that the petitioner's removal as co-administrator extinguished his right over the account, warranting remand for proper proceedings to remove his name.

• Jurisdiction of Intestate Court — A trial court sitting as an intestate court has jurisdiction over the proper disposition of the estate of the deceased, and such jurisdiction continues until after the payment of all debts and the remaining estate is delivered to the heirs entitled to receive the same. The Court relied on this doctrine to justify remand for proper proceedings to remove the petitioner's name as co-depositor, enabling the sole administrator to fully perform his functions.

• "It is apparent that in ordering the branch manager or any representative of BPI to release the money contained in a foreign currency deposit account, the intestate court committed a violation of the law, which expressly provides that all foreign currency deposits as defined by applicable laws are not subject to any form of attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body." — This passage states the ratio decidendi on the foreign currency deposit exemption, articulating why the intestate court's order was unlawful.

• "Thus, it is indispensable that all the persons named as account holders give their consent before any withdrawal could be made." — This passage defines the controlling rule for joint "and" accounts, establishing the consent requirement that the intestate court failed to satisfy.

• "However, since Emmanuel no longer has a right over the subject joint account in view of his removal as a co-administrator, it is necessary that his name should be removed as an account holder and co-depositor of Emilio in a proper forum for Emilio to be able to completely perform his functions and duties as an administrator." — This passage articulates the Court's practical resolution, balancing the joint account consent rule with the consequences of the petitioner's removal as co-administrator.

• Apique vs. Fahnenstich, 765 Phil. 915 (2015) — Cited for the definition and nature of joint accounts, specifically that depositors are joint owners or co-owners with presumed equal shares unless the contrary is proved. The Court applied this principle to the subject BPI account.

• Vda. de Gurrea vs. Suplico, 522 Phil. 295 (2006) — Cited for the doctrine that an intestate court's jurisdiction over the estate continues until after payment of all debts and delivery of the remaining estate to the heirs. The Court relied on this to justify remand for proper proceedings.

• Section 8, Republic Act No. 6426 (Foreign Currency Deposit Act of the Philippines) — Declares all foreign currency deposits as absolutely confidential and exempts them from attachment, garnishment, or any other order or process of any court, legislative body, government agency, or administrative body. Applied to hold that the intestate court's order directing release of funds from the foreign currency deposit account was unlawful.

• Section 87, Central Bank of the Philippines Circular No. 1318, series of 1992 — Reproduces the exemption of foreign currency deposits from court orders or processes. Cited as a parallel provision reinforcing the statutory exemption under RA 6426.

• Section 1(b), Rule 81 of the Rules of Court — Enumerates the duties of an administrator, including administering all goods, chattels, rights, credits, and estate that come into his possession and paying debts, legacies, and charges from the proceeds. Cited to recognize Emilio's functions and duties as administrator of the estate.

Bersamin (Acting Chairperson) and Del Castillo, JJ., concurred. Jardeleza, J., was on official business. Gesmundo, J., was on leave.