Rivera v People’s Bank and Trust Co.
and Minnie Stephenson (administratrix of estate of Edgar Stephenson)
April 7, 1942 | Ozaeta, J.
Survivorship/ Joint Account
FACTS:
• Rivera was Edgar’s housekeeper from 1920-1939 (when he died)
• Edgar opened an account in his name w/ Peoples Bank by depositing 1,000php.
o Oct 17, 1931 w/ account balance: 2,027php, the survivorship agreement was executed and the account
was transferred to the name of “Edgar Stephenson and/or Ana Rivera”
• Survivorship Agreement: (salient portion)
o That we hereby agree […] all moneys now or hereafter deposited by us or either of us with the Bank […]
with the understanding and upon the condition that said money be deposited without consideration of its
previous ownership, and that said money and all interest thereon, if any there be, shall be the property of
both of us joint tenants, and shall be payable to and collectible by either of us during our joint lives, and
after the death of one of us shall belong to and be the sole property of the survivor, and shall be
payable to and collectible by such survivor.
• At the time of Edgar’s death, Rivera held the deposit book and the balance in the account was 701.43php
• Rivera claimed the balance but the bank refused to pay on advice from their attys that the survivorship agreement
was of doubtful validity
• Rivera then instituted the present action against the bank and Minnie as administratrix intervened claiming the
balance as property of the estate.
• TC: Survivorship agreement was a mere power of attorney authorizing Rivera to withdraw the deposit which power
terminated upon the death of Edgar
o The donation mortis causa was without legal effect for not being executed following formalities under law
ISSUE: w/n the survivorship agreement was valid à YES
COURT RULING: TC REVERSED; JUDGMENT IN FAVOR OF RIVERA ORDERING THE BANK TO PAY
HER THE 701.43PHP W/ LEGAL INTEREST
• The survivorship agreement was not a mere power of attorney nor a gift mortis causa of the bank account
o Such conclusion was reached by the TC in assuming that the funds solely belonged to Edgar
• In this case, it appears that Rivera served Edgar for 19 years without receiving her salary from him
o This and the fact of execution of the agreement and change of account name is proof that Edgar was not the
exclusive owner of the bank account
o In the absence, then, of clear proof of the contrary, we must give full faith and credit to the certificate of
deposit, which recites in effect that the funds in question belonged to Edgar Stephenson and Ana Rivera;
that they were joint owners thereof; and that either of them could withdraw any part or the whole of said
account during the lifetime of both, and the balance, if any, upon the death of either, belonged to the
survivor.
• The survivorship agreement is prima facie valid à an aleatory contract supported by law 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.
• a bank account may be so created that two persons shall be joint owners thereof during their mutual lives, and the
survivor take the whole on the death of the other. The right to make such joint deposits has generally been held not
to be done with by statutes abolishing joint tenancy and survivorship generally as they existed at common law.
• When is a survivorship agreement contrary to law in operation?
o If shown to be a cloack to hide an inofficious donation, transfer of property in fraud of creditors, or to defeat
legitime
o In this case, no such allegation of any ground has been made.
