Simex International (Manila) Inc. vs. Court of Appeals G.R. No.

88013, March 19, 1990

March 16, 2014 Leave a comment
A bank may be held liable for damages by reason of its unjustified dishonor of a
check, which caused damage to its clients credit standing. The bank must record
every single transaction accurately, down to the last centavo, and as promptly as
possible. This has to be done if the account is to reflect at any given time the
amount of money the depositor can dispose of as he sees fit, confident that the bank
will deliver it as and to whomever he directs. The bank is a fiduciary of the
depositors money.

Facts: Simex International is a private corporation engaged in the exportation of

food products. It buys these products from various local suppliers and then sells them
abroad to the Middle East and the United States. Most of its exports are purchased by
the petitioner on credit. Simex was a depositor of the Far East Savings Bank and
maintained a checking account in its branch in Cubao, Quezon City which issued
several checks against its deposit but was surprised to learn later that they had been
dishonored for insufficient funds. As a consequence, several suppliers sent a letter of
demand to the petitioner, threatening prosecution if the dishonored check issued to it
was not made good and also withheld delivery of the order made by the petitioner.
One supplier also cancelled the petitioners credit line and demanded that future
payments be made by it in cash or certified check. The petitioner complained to the
respondent bank. Investigation disclosed that the sum of P100,000.00 deposited by the
petitioner on May 25, 1981, had not been credited to it. The error was rectified only a
month after, and the dishonored checks were paid after they were re-deposited. The
petitioner then filed a complaint in the then Court of First Instance of Rizal against the
bank for its gross and wanton negligence.

Issue: Whether or not the bank can be held liable for negligence by reason of its
unjustified dishonor of a check

Held: The depositor expects the bank to treat his account with the utmost fidelity
whether such account consists only of a few hundred pesos or of millions. The bank
must record every single transaction accurately, down to the last centavo, and as
promptly as possible. This has to be done if the account is to reflect at any given time
the amount of money the depositor can dispose of as he sees fit, confident that the
bank will deliver it as and to whomever he directs. A blunder on the part of the bank,
such as the dishonour of a check without good reason, can cause the depositor not a
little embarrassment if not also financial loss and perhaps even civil and criminal
litigation.

Article 2205 of the Civil Code provides that actual or compensatory damages may be
received (2) for injury to the plaintiff s business standing or commercial credit.
There is no question that the petitioner did sustain actual injury as a result of the
dishonored checks and that the existence of the loss having been established absolute
certainty as to its amount is not required. 7 Such injury should bolster all the more the
demand of the petitioner for moral damages and justifies the examination by this
Court of the validity and reasonableness of the said claim.

Teofisto Guingona, Jr., Antonio Martin, and Teresita Santos vs. The
City Fiscal of Manila, Hon. Jose Flaminiano, Asst. City Fiscal
Felizardo Lota and

Facts:

From March 1979 to March 1981, Clement David made several

investments with the National Savings and Loan Association. On
March 21, 1981, the bank was placed under receivership by the
Bangko Sentral. Upon Davids request, petitioners Guingona and
Martin issued a joint promissory note, absorbing the obligations of
the bank. On July 17, 1981, they divided the indebtedness. David filed
a complaint for estafa and violation of Central Bank Circular No. 364
and related regulations regarding foreign exchange transactions
before the Office of the City Fiscal of Manila. Petitioners filed the
herein petition for prohibition and injunction with a prayer for
immediate issuance of restraining order and/or writ of preliminary
injunction to enjoin the public respondents to proceed with the
preliminary investigation on the ground that the petitioners
obligation is civil in nature.

Issue:

(1) Whether the contract between NSLA and David is a contract of

depositor a contract of loan, which answer determines whether the
City Fiscal has the jurisdiction to file a case for estafa

(2) Whether there was a violation of Central Bank Circular No. 364

Held:

(1) When private respondent David invested his money on nine. and
savings deposits with the aforesaid bank, the contract that was
perfected was a contract of simple loan or mutuum and not a contract
of deposit. Hence, the relationship between the private respondent
and the Nation Savings and Loan Association is that of creditor and
debtor; consequently, the ownership of the amount deposited was
transmitted to the Bank upon the perfection of the contract and it can
make use of the amount deposited for its banking operations, such as
to pay interests on deposits and to pay withdrawals. While the Bank
has the obligation to return the amount deposited, it has, however,
no obligation to return or deliver the same money that was deposited.
And, the failure of the Bank to return the amount deposited will not
constitute estafa through misappropriation punishable under Article
315, par. l(b) of the Revised Penal Code, but it will only give rise to
civil liability over which the public respondents have no jurisdiction.

But even granting that the failure of the bank to pay the time and
savings deposits of private respondent David would constitute a
violation of paragraph 1(b) of Article 315 of the Revised Penal Code,
nevertheless any incipient criminal liability was deemed avoided,
because when the aforesaid bank was placed under receivership by
the Central Bank, petitioners Guingona and Martin assumed the
obligation of the bank to private respondent David, thereby resulting
in the novation of the original contractual obligation arising from
deposit into a contract of loan and converting the original trust
relation between the bank and private respondent David into an
ordinary debtor-creditor relation between the petitioners and private
respondent. Consequently, the failure of the bank or petitioners
Guingona and Martin to pay the deposits of private respondent would
not constitute a breach of trust but would merely be a failure to pay
the obligation as a debtor. Moreover, while it is true that novation
does not extinguish criminal liability, it may however, prevent the
rise of criminal liability as long as it occurs prior to the filing of the
criminal information in court. In the case at bar, there is no dispute
that petitioners Guingona and Martin executed a promissory note on
June 17, 1981 assuming the obligation of the bank to private
respondent David; while the criminal complaint for estafa was filed
on December 23, 1981 with the Office of the City Fiscal. Hence, it is
clear that novation occurred long before the filing of the criminal
complaint with the Office of the City Fiscal. Consequently, as
aforestated, any incipient criminal liability would be avoided but
there will still be a civil liability on the part of petitioners Guingona
and Martin to pay the assumed obligation.

(2) Petitioner Guingona merely accommodated the request of the

Nation Savings and loan Association in order to clear the bank draft
through his dollar account because the bank did not have a dollar
account. Immediately after the bank draft was cleared, petitioner
Guingona authorized Nation Savings and Loan Association to
withdraw the same in order to be utilized by the bank for its
operations. It is safe to assume that the U.S. dollars were converted
first into Philippine pesos before they were accepted and deposited in
Nation Savings and Loan Association, because the bank is presumed
to have followed the ordinary course of the business which is to
accept deposits in Philippine currency only, and that the transaction
was regular and fair, in the absence of a clear and convincing
evidence to the contrary.
In conclusion, considering that the liability of the petitioners is purely
civil in nature and that there is no clear showing that they engaged in
foreign exchange transactions, We hold that the public respondents
acted without jurisdiction when they investigated the charges against
the petitioners. Consequently, public respondents should be
restrained from further proceeding with the criminal case for to allow
the case to continue, even if the petitioners could have appealed to
the Ministry of Justice, would work great injustice to petitioners and
would render meaningless the proper administration of justice.

Vitug vs. CA Digest

Vitug v. Court of Appeals

Facts:
1. The case is a chapter in an earlier suit involving the issue on
two (2) wills of the late Dolores Vitug who died in New York, USA in
Nov 1980. She named therein private respondent Rowena Corona
(Executrix) while Nenita Alonte was co-special administrator together
with petitioner Romarico pending probate.

2. In January 1985, Romarico filed a motion asking for authorization

of the probate court to sell shares of stocks and real property of
the estate as reimbursements for advances he made to the estate. The
said amount was spent for payment of estate tax from a savings
account in the Bank of America.

3. Rowena Corona opposed the motion to sell contending that from the
said account are conjugal funds, hence part of the estate. Vitug
insisted saying that the said funds are his exclusive property
acquired by virtue of a survivorship agreement executed with his late
wife and the bank previously. In the said agreement, they agreed that
in the event of death of either, the funds will become the sole
property of the survivor.

4. The lower court upheld the validity of the survivorship agreement

and granted Romarico's motion to sell. The Court of Appeals however
held that said agreement constituted a conveyance mortis causa which
did not comply with the formalities of a valid will. Further,
assuming that it is donation inter vivos, it is a prohibited
donation. Vitug petitioned to the Court contending that the said
agreement is an aleatory contract.

Issue: Whether or not the conveyance is one of mortis causa

hence should conform to the form required of wills

NO. The survivorship agreement is a contract which imposed a mere

obligation with a term--being death. Such contracts are permitted
under Article 2012 on aleatory contracts. When Dolores predeceased
her husbandm the latter acquired upon her death a vested right over
the funds in the account. The conveyance is therefore not mortis
causa.
Ejercito vs. Sandiganbayan G.R. Nos. 157294-95, 30
November 2006
March 16, 2014 Leave a comment
RA 1405 does not provide for the application of this rule. At all events, the
Ombudsman is not barred from requiring the production of documents based solely
on information obtained by it from sources independentof its previous inquiry.

Facts: Joseph Victor G. Ejercito is the owner of Trust Account No. 858 which was
originally opened at Urban Bank but which is now maintained at Export and Industry
Bank, which is the purchaser and owner now of the former Urban Bank and
Urbancorp Investment, Inc. He is also the owner of Savings Account No. 0116-
17345-9 which was originally opened at Urban Bank but which is now maintained at
Export and Industry Bank, the purchaser and owner of the former Urban Bank and
Urbancorp Investment, Inc.

Estrada was subsequently charged with Plunder. The Sandiganbayan a Request for
Issuance of Subpoena Duces Tecum for the issuance of a subpoena directing the
President of Export and Industry Bank (EIB, formerly Urban Bank) or his/her
authorized representative to produce various document related to the investigation.

The Special Prosecution Panel also filed a Request for Issuance of Subpoena Duces
Tecum/Ad Testificandum directed to the authorized representative of Equitable-PCI
Bank to produce statements of account pertaining to certain accounts in the name of
Jose Velarde and to testify thereon.

The Sandiganbayan granted both requests by Resolution and subpoenas

were accordingly issued. The Special Prosecution Panel filed still another Request for
Issuance of Subpoena Duces Tecum/Ad Testificandum for the President of EIB or
his/her authorized representative to produce the same documents subject of the first
Subpoena Duces Tecum and to testify thereon on the hearings scheduled and
subsequent dates until completion of the testimony. The request was likewise granted
by the Sandiganbayan. A Subpoena Duces Tecum/Ad Testificandum was accordingly
issued. Ejercito filed various motions to quash the various Subpoenas Duces
Tecum/Ad Testificandum previously issued. In his Motion to Quash, he claimed that
his bank accounts are covered by R.A. No. 1405 (The Secrecy of Bank Deposits Law)
and do not fall under any of the exceptions stated therein. He further claimed that the
specific identification of documents in the questioned subpoenas, including details on
dates and amounts, could only have been made possible by an earlier illegal
disclosure thereof by the EIB and the Philippine Deposit Insurance Corporation
(PDIC) in its capacity as receiver of the then Urban Bank. The disclosure being
illegal, he concluded, the prosecution in the case may not be allowed to make use of
the information. Before the motion was resolved by the Sandiganbayan, the
prosecution filed another

Issue: Whether or not a Trust Account is covered by the term deposit as used in
R.A. 1405;
Held: R.A. 1405 is broad enough to cover Trust Account No. 858. However, the
protection afforded by the law is not absolute. There being recognized exceptions
thereto, as above-quoted Section 2 provides. In the present case, two exceptions
apply, to wit: (1) the examination of bank accounts is upon order of a competent
court in cases of bribery or dereliction of duty of public officials, and (2) the money
deposited or invested is the subject matter of the litigation. Ejercito contends that
since plunder is neither bribery nor dereliction of duty, his accounts are not excepted
from the protection of R.A. 1405.

Cases of unexplained wealth are similar to cases of bribery or dereliction of duty and
no reason is seen why these two classes of cases cannot be excepted from the rule
making bank deposits confidential. The policy as to one cannot be different from the
policy as to the other. This policy expresses the notion that a public office is a public
trust and any person who enters upon its discharge does so with the full knowledge
that his life, so far as relevant to his duty, is open to public scrutiny. Undoubtedly,
cases for plunder involve unexplained wealth. The crime of bribery and the overt acts
constitutive of plunder are crimes committed by public officers, noble idea that a
public office is a public trust and any person who enters upon its discharge does so
with the full knowledge that his life, so far as relevant to his duty, is open to public
scrutiny applies with equal force.

Also, the plunder case now pending with the Sandiganbayan necessarily involves an
inquiry into the whereabouts of the amount purportedly acquired illegally by former
President Joseph Estrada. Republic Act No. 1405 allows the disclosure of bank
deposits in cases where the money deposited is the subject matter of the litigation.
Hence, these accounts are no longer protected by the Secrecy of Bank Deposits Law,
there being two exceptions to the said law applicable in this case, namely: (1)the
examination of bank accounts is upon order of a competent court in cases of bribery
or dereliction of duty of public officials, and (2)the money deposited or invested is the
subject matter of the litigation. Exception (1) applies since the plunder case pending
against former President Estrada is analogous to bribery or dereliction of duty, while
exception (2) applies because the money deposited in Ejercitos bank accounts is said
to form part of the subject matter of the same plunder case. The fruit of the
poisonous tree doctrine or the exclusionary rule is inapplicable in cases of unlawful
examination of bank accounts.

The confidentiality of bank deposits remains to be a basic state policy in the

Philippines.
November 16, 2014 By The Lawyer's Post

BSB Group, Inc., represented by its president, Ricardo, filed a case for Qualified
Theft against Sally, his wife. Per the complaint, Sally was employed by the
company as cashier, engaged to receive and account for the payments made by
the various customers of the company. Sally was charged when several checks
totalling P1,534,135.50 issued by the companys customers were indorsed by by
her to her personal banking account with the Security Bank and Trust Company.
After a finding of probable cause, the Office of the City Prosecutor filed an
Information charging Sally with Qualified Theft for theft of cash money
belonging to BSB Group Inc. After arraignment, trial ensued on the merits. To
prove that Sally deposited the money to her personal account, the prosecution
moved for issuance of subpoena duces mecum against the
managers/representatives of SecurityBank, as well as the Metrobank Jose Abad
Santos branch. Sally moved to quash the subpoena to Metrobank, noting that no
mention was made of Sallys bank account with Metrobank. While arguing that the
account with Metrobank was immaterial to the case, she waived her objection to
the Security Bank subpoena. BSB opposed the motion to quash, arguing that the
complaint affidavit showed two checks were deposited to the Metrobank account.
Sally also filed a supplemental motion to quash, alleging secrecy of bank deposits
under R.A. 1405. The trial court denied the motions to quash. In the meantime,
the representative of Security Bank testified and identified the checks deposited
to Sallys Security Bank account. Before her testimony could be completed,
however, Sally moved to suppress her testimony, invoking irrelevancy and
secrecy of bank deposits under R.A. 1405. When the trial court denied anew her
motion to suppress, Sally filed a petition with the Court of Appeals, alleging grave
abuse of discretion on the part of the trial court in denying her motions to quash
with respect to the Metrobank account, and the motion to suppress on the
testimony of the bank representative from Security Bank.

The Court of Appeals granted the petition for certiorari filed by Sally and reversed
the assailed orders of the trial court as well as struck off the testimony of the bank
representative of Security Bank.

BSB Group, Inc and Ricardo then filed a petition for certiorari with the Supreme
Court. They argued that the allegation in the Information of cash money taken
by Sally encompass the checks deposited to the questioned bank accounts of
Sally.

The Supreme Court:

R.A. No. 1405 has two allied purposes. It hopes to discourage private hoarding
and at the same time encourage the people to deposit their money in banking
institutions, so that it may be utilized by way of authorized loans and thereby
assist in economic development. Owing to this piece of legislation, the
confidentiality of bank deposits remains to be a basic state policy in the
Philippines. Section 2 of the law institutionalized this policy by characterizing as
absolutely confidential in general all deposits of whatever nature with banks and
other financial institutions in the country. It declares:

Section 2. All deposits of whatever nature with banks or banking institutions in the
Philippines including investments in bonds issued by the Government of the
Philippines, its political subdivisions and its instrumentalities, are hereby
considered as of an absolutely confidential nature and may not be examined,
inquired or looked into by any person, government official, bureau or office,
except upon written permission of the depositor, or in cases of impeachment, or
upon order of a competent court in cases of bribery or dereliction of duty of public
officials, or in cases where the money deposited or invested is the subject matter
of the litigation.

xxx

What indeed constitutes the subject matter in litigation in relation to Section 2 of

R.A. No. 1405 has been pointedly and amply addressed in Union Bank of the
Philippines v. Court of Appeals, in which the Court noted that the inquiry into bank
deposits allowable under R.A. No. 1405 must be premised on the fact that the
money deposited in the account is itself the subject of the action. Given this
perspective, we deduce that the subject matter of the action in the case at bar is
to be determined from the indictment that charges respondent with the offense,
and not from the evidence sought by the prosecution to be admitted into the
records. In the criminal Information filed with the trial court, respondent,
unqualifiedly and in plain language, is charged with qualified theft by abusing
petitioners trust and confidence and stealing cash in the amount of
P1,534,135.50. The said Information makes no factual allegation that in some
material way involves the checks subject of the testimonial and documentary
evidence sought to be suppressed. Neither do the allegations in said Information
make mention of the supposed bank account in which the funds represented by
the checks have allegedly been kept.

In other words, it can hardly be inferred from the indictment itself that the
Security Bank account is the ostensible subject of the prosecutions inquiry.
Without needlessly expanding the scope of what is plainly alleged in the
Information, the subject matter of the action in this case is the money amounting
to P1,534,135.50 alleged to have been stolen by respondent, and not the money
equivalent of the checks which are sought to be admitted in evidence. Thus, it is
that, which the prosecution is bound to prove with its evidence, and no other.

It comes clear that the admission of testimonial and documentary evidence

relative to respondents Security Bank account serves no other purpose than to
establish the existence of such account, its nature and the amount kept in it. It
constitutes an attempt by the prosecution at an impermissible inquiry into a bank
deposit account the privacy and confidentiality of which is protected by law. On
this score alone, the objection posed by respondent in her motion to suppress
should have indeed put an end to the controversy at the very first instance it was
raised before the trial court.

In sum, we hold that the testimony of Marasigan on the particulars of

respondents supposed bank account with Security Bank and the documentary
evidence represented by the checks adduced in support thereof, are not only
incompetent for being excluded by operation of R.A. No. 1405. They are likewise
irrelevant to the case, inasmuch as they do not appear to have any logical and
reasonable connection to the prosecution of respondent for qualified theft. We find
full merit in and affirm respondents objection to the evidence of the prosecution.
The Court of Appeals was, therefore, correct in reversing the assailed orders of the
trial court.

A final note. In any given jurisdiction where the right of privacy extends its scope
to include an individuals financial privacy rights and personal financial matters,
there is an intermediate or heightened scrutiny given by courts and legislators to
laws infringing such rights. Should there be doubts in upholding the absolutely
confidential nature of bank deposits against affirming the authority to inquire into
such accounts, then such doubts must be resolved in favor of the former. This
attitude persists unless congress lifts its finger to reverse the general state policy
respecting the absolutely confidential nature of bank deposits.

THIRD DIVISION, G.R. No. 168644, February 16, 2010, BSB GROUP, INC.,
REPRESENTED BY ITS PRESIDENT, MR. RICARDO BANGAYAN, PETITIONER, VS.
SALLY GO A.K.A. SALLY GO-BANGAYAN, RESPONDENT.

The allegation of theft of money, necessitates that evidence presented must have
a tendency to prove that the offender has unlawfully taken money belonging to
another.

BSB Group, Inc., represented by its president, Ricardo, filed a case for Qualified
Theft against Sally, his wife. Per the complaint, Sally was employed by the
company as cashier, engaged to receive and account for the payments made by
the various customers of the company. Sally was charged when several

In "case digests"
It was not the intent of the legislature when it enacted the law on secrecy on
foreign currency deposits to perpetuate injustice.
Jose filed a case for recovery of sums of money and annulment of sales of real
properties and shares of stock against his daughter, Margaret, and son-in-law
George. According to him, Margaret stole P35 Million and $864,000.00. During the
pendency of the case, Jose died, hence he was substituted by

In "case digests"
Accused Cannot Be Convicted For Estafa If She Had Merely Material, Not Juridical
Possession Of The Cash Or Goods Allegedly Stolen...

The Facts: Margie was charged with Estafa by the Balasan Barangays Multi-
Purpose Cooperative, who used to employ her as cashier. During trial, only
Napoleon (Timonera) testified for the prosecution. According to him, Margie was
their cashier at BABMPC, and was tasked with among others, receiving
remittances, depositing to the bank,

In "case digests"

Salvacion vs. Central Bank of the Philippines (G.R. No. 94723.

August 21, 1997)
16 Apr
KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and
Natural Guardian, and Spouses FEDERICO N. SALVACION, JR., and
EVELINA E. SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING
CORPORATION and GREG BARTELLI y NORTHCOTT,respondents.

Ponente: TORRES, JR.

FACTS:

Respondent Greg Bartelli y Northcott, an American tourist, coaxed and lured the 12-
year old petitioner Karen Salvacion to go with him in his apartment where the former
repeatedly raped latter. After the rescue, policemen recovered dollar and peso checks
including a foreign currency deposit from China Banking Corporation (CBC). Writ of
preliminary attachment and hold departure order were issued. Notice of Garnishment
was served by the Deputy Sheriff to CBC which later invoked R.A. No. 1405 as its
answer to it. Deputy Sheriff sent his reply to CBC saying that the garnishment did not
violate the secrecy of bank deposits since the disclosure is merely incidental to a
garnishment properly and legally made by virtue of a court order which has placed the
subject deposits in custodia legis. CBC replied and invoked Section 113 of Central
Bank Circular No. 960 to the effect that the dollar deposits of Greg Bartelli are
exempt from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body, whatsoever. Central
Bank of the Philippines affirmed the defense of CBC.

ISSUE:

Whether or not Sec. 113 of Central Bank Circular 960 and Sec. 8 of RA 6426
amended by PD 1246 otherwise known as the Foreign Currency Deposit Act be
made applicable to a foreign transient.
HELD:

NO. The provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar
as it amends Section 8 of R.A. No. 6426 are hereby held to be INAPPLICABLE to
this case because of its peculiar circumstances.

RATIO:

[T]he application of the law depends on the extent of its justice. Eventually, if we rule
that the questioned Section 113 of Central Bank Circular No. 960 which exempts
from attachment, garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body whatsoever, is applicable to a
foreign transient, injustice would result especially to a citizen aggrieved by a foreign
guest like accused Greg Bartelli. This would negate Article 10 of the New Civil Code
which provides that in case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to prevail.

Ninguno non deue enriquecerse tortizeramente con dano de otro. Simply stated,
when the statute is silent or ambiguous, this is one of those fundamental solutions that
would respond to the vehement urge of conscience. It would be unthinkable, that the
questioned Section 113 of Central Bank No. 960 would be used as a device by
accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the
expense of the innocent.

Call it what it may but is there no conflict of legal policy here? Dollar against
Peso? Upholding the final and executory judgment of the lower court against the
Central Bank Circular protecting the foreign depositor? Shielding or protecting the
dollar deposit of a transient alien depositor against injustice to a national and victim of
a crime? This situation calls for fairness against legal tyranny.

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