Banking Case Digests August 23, 2017
(1) Salvacion v Central Bank
G.R. No. 94723 August 21, 1997
Facts
Petitioners obtained a favourable judgment in a civil case for damages filed against private respondent
Greg Bartelli, an alien tourist, in connection with the criminal case for Serious Illegal Detention and four (4)
counts of rape. During the pendency of said civil case, a petition for the issuance of writ of preliminary attachment
was filed by petitioners against the foreign currency account of Bartelli maintained at the China Banking
Corporation, and was thereafter granted. In this instance, private respondent bank refused arguing that Section
113 of Central Bank Circular No. 960 exempts foreign currency deposits from attachment, garnishment, or any
other order or process of any court legislative body, government agency or any administrative body whatsoever.
Respondent bank likewise refused that said deposit be released to satisfy the final judgment issued by the trial
court in the civil case, through the writ of execution, based on the same provision of Central Bank Cicular No.
960.
Issue
Is Section 113 of Central Bank Circular No. 960 applicable to a foreign transient?
Ruling
No. One of the principal purposes of the protection accorded to foreign currency deposits is to assure
the development and speedy growth of the Foreign Currency Deposit system and the Offshore Banking in the
Philippines.
Reference to the Whereas Clauses of the laws (PD 1246 and PD 1034), from which the provision of
the subject circular was based, shows that the Offshore Banking System and the Foreign Currency Deposit System
were designed to draw deposits from foreign lenders and investors. Obviously, the foreign currency deposit made
by a transient or a tourist is not the kind of deposit encouraged and given incentives and protection by said laws
because such depositor stays only for a few days in the country and, therefore, will maintain his deposit in the
bank only for a short time.
Eventually, if it is ruled that the questioned Section 113 of Central Bank Circular No. 960 be made
applicable to a foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest like
accused Bartelli.
Respondent bank is thus required to comply with the writ of execution and to release to petitioners the
dollar deposit in such amount as would satisfy the judgment.
(2) Marquez v Desierto
G.R. No. 135882 June 27, 2001
Facts
Petitioner, Union Bank Branch Manager, received an Order from the Fact-Finding and Intelligence
Bureau (FFIB) of the Ombudsman, for her to produce several bank documents for purposes of inspection in
camera. This is in connection with the pending investigation conducted by FFIB against one Lagdameo and
others. A day after the scheduled in camera inspection, petitioner wrote FFIB that she cannot yet comply with the
order because the accounts cannot readily be identified.
After a series of motions, that of the filing of petitioner for a declaratory relief, issuance of a temporary
restraining order, and writ of injuction against the FFIB, the latter finally filed with the Ombudsman a motion to
cite petitioner in contempt. Petitioner opposed reiterating that she do not have the intention to disobey the orders,
however, she wanted to be clarified as to how she would comply with the order without her breaking any law.
Hearing for the indirect contempt was thereafter instransferrably set for hearing by the Ombudsman panel, hence,
this petition.
Issue
Is the order of the Ombudsman for an in camera inspection an exception to the Bank Secrecy Law
(RA 1405)?
Ruling
No. Before an in camera inspection may be allowed, there must be a pending case before a court of
competent jurisdiction. Further, the account must be clearly identified, the inspection limited to the subject matter
of the pending case before the court of competent jurisdiction. The bank personnel and the account holder must
be notified to be present during the inspection, and such inspection may cover only the account identified in the
pending case.
In the case at bar, there is yet no pending litigation before any court of competent authority. What is
existing is an investigation by the office of the Ombudsman. In short, what the Office of the Ombudsman would
wish to do is to fish for additional evidence to formally charge Lagdameo, et. al., with the Sandiganbayan. Clearly,
there was no pending case in court which would warrant the opening of the bank account for inspection.
(3) Phil. Commercial Intl. Bank v CA
350 SCRA 246
G.R. No. 121413, 121479, 128604 January 29, 2001
Facts
This is a consolidated petition involving three crossed checks issued by Ford Philippines, payable to
the Commissioner of Internal Revenue (CIR), as payment of the assessed percentage taxes for the 3rd quarter of
1977, 2nd quarter of 1978, and 1st quarter of 1979. The collecting bank for the three checks is the respondent
Philippine Commercial International (PCI) Bank, with the Citibank as the drawee bank.
In the course of the issuance of these checks, Rivera, Fords accountant would deposit them with PCI
Bank where it will be cleared by the drawee bank. The corresponding amounts, however, would never reach the
payee.
That check for the 3rd quarter of 1977 percentage tax due was recalled, allegedly, by Ford, upon
instruction of Rivera to be replaced by a Managers check, which PCI Bank acceded. This facilitated the
encashment thereof by unauthorized persons. Further investigation revealed that Rivera was a member of a
syndicate, which at the moment has evaded justice, and in conspiracy with ranking employee, particularly one
Castro, a pro-manager of PCI Bank, in facilitating the fraud with respect to the two other checks which likewise
did not reach the payee.
Issue
Are PCI Bank and Citibank negligent in the discharge of their duties?
Ruling
Yes, and Ford for its contributory negligence. Citibank is liable because the payees checks are only
supposed to be deposited with the CIRs account which is with Metrobank, yet when PCI Bank endorsed said
checks, the same were cleared without verifying with Ford.
PCI Bank has no hands in the embezzlement but since it was its employees that mainly facilitated the
fraud, it is likewise liable because a bank holding out its officers and agents as worthy of confidence will not be
permitted to profit by the frauds these officers or agents were enabled to perpetrate in the apparent course of their
employment; nor will it be permitted to shirk its responsibility for such frauds, even though no benefit may accrue
to the bank therefrom.
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(4) Bank of the Phil. Islands v CA and Benjamin Napiza
326 SCRA 641
G.R. No. 112392 February 29, 2000
Facts
Private respondent deposited in his Foreign Currency Deposit Unit Savings Account a Managers
Check, payable to cash, and duly endorsed by private respondent. Said check belonged to Chan who went to the
office of private respondent to ask that the check be deposited to the latters dollar account by way of
accommodation, for the purpose of clearing, which the latter acceded. Private respondent then delivered to Chan
a signed withdrawal slip, with the understanding that as soon as the check is cleared, both of them would go to the
bank to withdraw the amount of the check upon private respondent's presentation to the bank of his passbook.
Subsequently, one Ruben Gayon, Jr., was able to withdraw from said dollar account of private
respondent. Notably however, the withdrawal slip was payable to Ramon and Agnes, both De Guzman.
Petitioner bank then received a communication from the drawee bank that the check in question was a
counterfeit, thus, it immediately informed private respondent, through his son who is employed in the bank, that
the check bounced. Thereafter, petitioner bank demanded for private respondent to return the amount. Private
respondent however, denied any liability of the withdrawn amount. Hence, the filing of collection suit against
private respondent.
The trial court dismissed the complaint, it held that to hold private respondent liable "would render
inutile the requirement of "clearance" from the drawee bank before the value of a particular foreign check or draft
can be credited to the account of a depositor making such deposit." This decision was affirmed by the respondent
court and held that petitioner committed "clear gross negligence" in allowing Gayon, Jr. to withdraw the money
without presenting private respondent's passbook and, before the check was cleared and in crediting the amount
indicated therein in private respondent's account.
Issue
Was petitioner bank negligent in allowing the withdrawal?
Ruling
Yes. Ordinarily, private respondent may be held liable as an indorser of the check or even as an
accommodation party. However, to hold private respondent liable for the amount of the check he deposited by
the strict application of the law and without considering the attending circumstances in the case would result in an
injustice and in the erosion of the public trust in the banking system. The interest of justice thus demands looking
into the events that led to the encashment of the check.
By depositing the check with petitioner, private respondent was, in a way, merely designating petitioner
as the collecting bank. As such, after receiving the deposit, under its own rules, petitioner shall credit the amount
in private respondent's account or infuse value thereon only after the drawee bank shall have paid the amount of
the check or the check has been cleared for deposit.
Moreover, the propriety of a withdrawal should be gauged by compliance with the rules thereon that
both petitioner bank and its depositors are duty-bound to observe. In this case, petitioner violated its own rules by
allowing the withdrawal of an amount that is definitely over and above the aggregate amount of private
respondent's dollar deposits that had yet to be cleared.
In sum, petitioner's personnel negligently handled private respondent's account to petitioner's
detriment.
(5) Phil. Bank of Commerce (absorbed by PCIB), et.al. v CA and Rommels Mktg. Corp.
269 SCRA 695
G.R. No. 97626 March 14, 1997
Facts
Private respondent is engaged in selling appliances and maintains two current accounts with petitioner
bank. From May 5, 1975 to July 16, 1976, the former entrusted its funds to its secretary, Yabut, for deposit in the
latter bank. All these deposits however, were never credited to the account of private respondent but instead, to
the account of Cotas, Yabuts husband. During these period, petitioner bank had, however, been regularly
furnishing private respondent with monthly statements showing its current accounts balances. Unfortunately, it had
never been the practice of Lipana, the president, to check these monthly statements of account reposing complete
trust and confidence on petitioner bank.
Yabuts modus operandi is to accomplish two sets of deposit slip, the duplicate was allegedly for record
purposes, which would show the account number of Yabuts husband, while only the original deposit slip would
contain the name of Yabuts husband as the account holder and the duplicate was left blank. After validation by
the teller, Ms. Mabayad, Yabut would fill in the name of private respondent in the space left blank and make it
appear therein the latters account number.
Upon discovery of the loss of its funds, private respondent demanded from petitioner bank the return
of its money, but as its demand went unheeded, thus, it filed a collection suit.
The trial court finds the bank and the teller negligent, thus, liable jointly and severally. The respondent
court modified the decision by eliminating the exemplary and attorneys fees specified therein.
Issue
Was the respondent bank remiss in the discharge of its duty?
Ruling
Yes. Considering the fiduciary nature of their relationship with their depositors, banks are duty bound
to treat the accounts of their clients with the highest degree of care. In the case at bar, the fact that the duplicate
slip was not compulsorily required by the bank in accepting deposits should not relieve the petitioner bank of
responsibility. The odd circumstance alone that such duplicate copy lacked one vital information that of the
name of the account holder should have already put teller on guard. Rather than readily validating the
incomplete duplicate copy, she should have proceeded more cautiously by being more probing as to the true
reason why the name of the account holder in the duplicate slip was left blank while that in the original was filled
up. She should not have been so naive in accepting hook, line and sinker the too shallow excuse of Yabut to the
effect that since the duplicate copy was only for her personal record, she would simply fill up the blank space later
on. A "reasonable man of ordinary prudence" would not have given credence to such explanation and would have
insisted that the space left blank be filled up as a condition for validation.
Negligence here lies not only on the part of Ms. Mabayad but also on the part of the bank itself in its
lackadaisical selection and supervision of Ms. Mabayad.
It cannot be denied however, that private respondent was likewise negligent in not checking its monthly
statements of account. Had it done so, the company would have been alerted to the series of frauds being
committed against it by its secretary. The damage would definitely not have ballooned to such an amount if only
the company, particularly its president, had exercised even a little vigilance in their financial affairs. This omission
by the company amounts to contributory negligence which shall mitigate the damages that may be awarded to the
private respondent.
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(6) Simex Intl. (Manila), Inc. v CA and Traders Royal Bank

183 SCRA 408
G.R. No. 88013 March 19, 1990

Facts
Petitioner, a private corporation engaged in exportation of food products, maintained a checking
account with respondent bank. On May 25, 1981, petitioner deposited P100,000.00 in said bank, thus increasing
the balance thereof as of the even date. Subsequently, petitioner issued several checks against the checking
account, in favour of its suppliers, totalling less than the expected balance of deposits, but these checks were
dishonoured for insufficient funds. Consequently, demands for payment from suppliers, were received by
petitioner, some threatened for a prosecution and cancelled petitioners credit line, while others deferred action on
pending orders.
Petitioner complained to respondent bank on June 10, 1981. The subsequent investigation revealed
that the deposit ofP100,000.00 was not credited to petitioners account. The bank rectified the error only on June
17, 1981 and the previously dishonoured checks were paid after they were re-deposited.
Petitioner then demanded reparation from the respondent bank for its gross and wanton negligence,
but this demand was not met. Hence, petitioner sued bank for moral and exemplary damages.
The trial court denied the claim for said damages holding that its demand were not called for under
the circumstances, and instead, granted award for nominal damages. Respondent court affirmed in toto said
decision and further said that petitioner is not entitled to moral damages because the bank rectified its records in
less than a month and paid the dishonoured checks, thus, negating bad faith and negligence.

Issue
Was the respondent bank remiss in the discharge of its duty?

Ruling
Yes. As a business affected with public interest and because of the nature of its functions, the bank is
under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary
nature of their relationship. In the case at bar, it is obvious that the respondent bank was remiss in that duty and
violated that relationship. It bears repeating that the record does not contain any satisfactory explanation of why
the error was made in the first place and why it was not corrected immediately after its discovery. Such ineptness
comes under the concept of the wanton manner contemplated in the Civil Code that calls for the imposition of
exemplary damages.

Also, petitioner did suffer injury because of the private respondent's negligence that caused the
dishonour of the checks issued by it. The immediate consequence was that its prestige was impaired because of
the bouncing checks and confidence in it as a reliable debtor was diminished, thus, entitling petitioner to moral
damages.

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