G.R. No. L-30839 November 28, 1975
REPUBLIC OF THE PHILIPPINES, petitioner, vs. COURT OF FIRST INSTANCE OF MANILA, BRANCH XIII, Hon. JESUS MORFE, Presiding Judge, and REPUBLIC BANK (only its provincial branches), respondents.

FACTS

The Republic of the Philippines filed a complaint for escheat under Act No. 3936 in the Court of First Instance (CFI) of Manila against several banks, including respondent Republic Bank, which had its principal office in Manila but also operated provincial branches. The complaint sought to escheat dormant deposits held by these banks, including those in Republic Bank’s provincial branches, alleging that the statutory requirements of publication had been complied with. After summons by publication, the trial court declared Republic Bank and other defendants in default for failure to answer.
Subsequently, Republic Bank filed a motion to dismiss the complaint insofar as it pertained to deposits in its provincial branches, arguing improper venue. It contended that under the Rules of Court, the action should have been filed in the provinces where each branch holding the dormant deposits was located. The petitioner Republic opposed, arguing that the bank was merely a nominal party, that its branches had no separate juridical personality, and that Act No. 3936 permitted a single consolidated action. The trial court granted the motion to dismiss, holding that venue was improperly laid as to the provincial branches.

ISSUE

Whether the Court of First Instance of Manila acquired jurisdiction over the escheat proceedings concerning dormant deposits held in the provincial branches of Republic Bank.

RULING

Yes, the CFI of Manila properly acquired jurisdiction. The Supreme Court reversed the trial court’s orders of dismissal. The legal logic rests on the nature of escheat proceedings and the interpretation of Act No. 3936 in relation to venue rules. An escheat proceeding is an action in rem, directed against the res itself—the dormant deposits—and not merely a personal action against the bank. Jurisdiction in such proceedings is vested in the court of the place where the res is situated. For purposes of this in rem action, the “situs” of bank deposits is the branch where the deposit accounts are maintained.
Critically, Republic Bank, as a single corporate entity with its principal office in Manila, is the trustee or holder of the deposits for all its branches. The provincial branches are not independent entities. When the Republic sued the bank at its principal office in Manila, it effectively sued the entire corporate entity, compelling it to account for all dormant deposits under its control, regardless of branch location. Act No. 3936 , which governs these proceedings, does not specify a venue contrary to the general rules. Therefore, under Section 2(b) of Rule 4, a personal action may be commenced where the defendant (the bank) resides. The bank “resides” at its principal office in Manila. Consequently, filing the suit in Manila was proper. The trial court erred in applying ordinary venue rules strictly without considering the unitary nature of the corporate defendant and the in rem character of the escheat action aimed at a single entity holding the res in its various branches.