Dear Atty. Gab,

Musta Atty! My name is Maria Hizon. My siblings and I inherited a piece of land in Batangas from our parents many years ago. Recently, a government agency needed a portion of it for a road widening project. Since I was the one managing things locally, I handled the negotiation and signed the Deed of Sale for that portion, amounting to around Php 600,000. The agency deposited the payment directly into my personal savings account at a local bank.

I withdrew a small amount for initial expenses related to the sale. However, a few weeks later, my brother, who lives abroad, apparently complained to the government agency. He claims he wasn’t properly consulted (even though we all informally agreed before) and that his share should have been given directly to him. Because of his complaint, the government agency wrote to my bank, asking them to put a hold on the remaining balance in my account, about Php 500,000.

When I tried to withdraw more funds, the bank manager told me they couldn’t release the money because of the agency’s request, pending clarification on the ownership issue among us siblings. I showed them the Deed of Sale where I was the named seller and the deposit confirmation to my account, but they refused to budge. Can the bank legally do this just based on a letter from the agency, without any court order? That money is technically mine based on the sale contract, even if I intend to share it later. I feel stuck and unsure of my rights. What should I do?

Hoping for your guidance.

Sincerely,
Maria Hizon

Dear Maria,

Thank you for reaching out. It’s understandable why you feel frustrated and confused about the bank freezing funds in your personal account based on a third-party request, especially when the funds originated from a sale contract you entered into.

Generally, the relationship between a bank and its depositor is that of a creditor and debtor. When you deposit money, the bank essentially borrows it and is obligated to pay it back to you upon demand, subject to the terms of your account agreement and applicable laws. While disputes among co-owners regarding sale proceeds are common, a bank’s ability to unilaterally freeze an account based solely on a third party’s request (without a court order or garnishment) is legally questionable. Furthermore, resolving disputes often involves determining facts, which has implications for how legal challenges are pursued, particularly on appeal.

Untangling Bank Holds and Co-Owner Claims

Your situation touches upon fundamental principles regarding banking law, co-ownership, and procedural rules in our legal system. The core of the bank-depositor relationship is contractual. The bank has a primary obligation to you, the depositor, to honor withdrawals against the available funds in your account. Freezing an account is a significant restriction that typically requires a strong legal basis, such as a court order (like a writ of garnishment or preliminary attachment) or specific laws allowing it (e.g., under anti-money laundering regulations under specific circumstances). A mere request from a third party, even a government agency involved in the initial transaction, usually doesn’t automatically grant the bank the authority to deny you access to your funds, especially funds already credited to your personal account following a completed sale.

While your brother’s claim as a co-owner might be valid against you regarding the distribution of the sale proceeds, it doesn’t automatically translate into a right for the government agency or the bank to interfere with your existing deposit without due process. The agency’s concern about potential liability to other co-owners is understandable, but instructing the bank to freeze your account might be an overstep if not backed by proper legal authority or court intervention. The issue between you and your siblings is essentially a separate matter concerning the internal division of inherited property or its proceeds, which ideally should be resolved among yourselves or through appropriate legal action for partition or settlement of estate, if necessary.

Furthermore, should this dispute escalate into a lawsuit, understanding the nature of the questions involved becomes crucial, especially if an appeal becomes necessary. Philippine jurisprudence distinguishes clearly between appeals raising purely legal questions and those involving factual matters.

“A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.”

This distinction dictates the proper mode and venue for appeal. Appeals from the Regional Trial Court (RTC) based on pure questions of law go directly to the Supreme Court, while those involving questions of fact or mixed questions of law and fact go to the Court of Appeals.

“(1) In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be made to the Court of Appeals by mere notice of appeal where the appellant raises questions of fact or mixed questions of fact and law; (2) In all cases decided by the RTC in the exercise of its original jurisdiction where the appellant raises only questions of law, the appeal must be taken to the Supreme Court on a petition for review on certiorari under Rule 45.”

In your situation, if you were to sue the bank and potentially win, and the bank appeals arguing about its justification for freezing the account or contesting damages awarded, factual issues would likely be involved. For instance, determining whether the bank acted in bad faith or whether you are entitled to damages requires examining the circumstances and evidence presented.

“The discretion of the court to award attorney’s fees under Article 2208 of the Civil Code demands factual, legal, and equitable justification, without which the award is a conclusion without a premise, its basis being improperly left to speculation and conjecture.”

Therefore, any appeal challenging the factual basis for the bank’s actions or the award of damages would likely involve questions of fact, making the Court of Appeals the proper venue. Understanding this procedural aspect is important if litigation becomes necessary.

Practical Advice for Your Situation

• Communicate with the Bank: Formally write to the bank demanding the release of your funds. Cite your deposit agreement and the absence of a court order justifying the freeze. Request their legal basis for holding the funds.
• Engage with Your Sibling: Try to resolve the issue directly with your brother. Clarify the terms of your prior agreement regarding the sale and distribution of proceeds. A written agreement among heirs can prevent future disputes.
• Review the Deed of Sale: Carefully examine the Deed of Absolute Sale you signed with the government agency. Confirm the terms regarding payment and who the designated payee was.
• Consult the Government Agency: Discuss the matter with the agency that requested the hold. Explain your situation and inquire if they can withdraw their request, perhaps suggesting alternative ways to address your brother’s claim without freezing your entire account.
• Consider Legal Action: If the bank continues to refuse releasing your funds without a valid legal basis (like a court order), you may consider filing a complaint for recovery of the deposit plus damages against the bank. It might be prudent to also implead the government agency.
• Document Everything: Keep copies of all correspondence (letters, emails), agreements (Deed of Sale), bank statements, and records of conversations related to this issue. This documentation will be crucial if legal action is pursued.
• Seek Partition if Necessary: To prevent future issues, consider initiating a formal partition of the inherited property among the heirs if this hasn’t been done yet.
• Gather Evidence for Damages: If you incur costs (like attorney’s fees) or suffer damages due to the bank’s potentially unjustified action, ensure you have evidence to support these claims, as factual justification is required.

Dealing with family property and bank procedures can be complex. While the bank might feel caught in the middle, its primary duty is generally to you as the depositor unless compelled otherwise by law or a court order. Addressing the underlying co-ownership issue with your sibling is key, but it shouldn’t necessarily allow the bank to withhold your funds indefinitely without proper legal process.

Hope this helps!

Sincerely,
Atty. Gabriel Ablola

For more specific legal assistance related to your situation, please contact me through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This correspondence is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please schedule a formal consultation.