Académique Documents
Professionnel Documents
Culture Documents
1. China Banking Corporation and Tan Kim Liong vs. Hon. Wenceslao Ortega et. al................................................................................1
G.R. No. L-34964 31 January 1973......................................................................................................................................................1
Makalintal, J.:........................................................................................................................................................................................1
2. Baas et. al. vs. Asia Pacific Finance Corporation.................................................................................................................................2
G.R. No. 128703 18 October 2000.......................................................................................................................................................2
Bellosillo, J.:.......................................................................................................................................Error! Bookmark not defined.
3. Simex International Incorporated vs. CA and Traders Royal Bank........................................................................................................3
G.R. No. 88013 - 19 March 1990..........................................................................................................................................................3
Cruz, J.:.................................................................................................................................................................................................3
4. Fultron Iron Works Co. vs. China Banking Corporation..........................................................................................................................4
G.R. No. 32576
November 6, 1930..........................................................................................................................................4
Street, J.:..............................................................................................................................................................................................4
5. Teofisto Guingona vs. The City Fiscal of Manila....................................................................................................................................5
G.R. No. L-60033
4 April 1984..................................................................................................................................................5
13 November 1935.......................................................................................................................................6
Malcolm, J.:...........................................................................................................................................................................................6
7. Romarico G. Vitug.................................................................................................................................................................................6
G.R. No. 82027 March 29, 1990...........................................................................................................................................................6
Sarmiento, J.:........................................................................................................................................................................................6
8. Banco Filipino vs. Purisima....................................................................................................................................................................7
G.R. No. L-56429 May 28, 1988...........................................................................................................................................................7
Narvasa, J.:...........................................................................................................................................................................................7
9. Joseph Victor Ejercito vs. Sandiganbayan.............................................................................................................................................8
G.R. Nos. 157294-95 - 30 November 2006..........................................................................................................................................8
Carpio-Morales, J.:................................................................................................................................................................................8
10. BSB Group Inc. vs. Sally Go.................................................................................................................................................................9
G.R. No. 168644 February 16, 2010....................................................................................................................................................9
Peralta, J.:..........................................................................................................................................Error! Bookmark not defined.
11. Intengan vs. Court of Appeals...........................................................................................................................................................10
G.R. No. 128996 February 15, 2002.................................................................................................................................................10
De Leon, Jr., J.:....................................................................................................................................................................................10
12. PCIB vs. Court of Appeals..................................................................................................................................................................11
G.R. No. 121413 January 29, 2001....................................................................................................................................................11
Quisumbing, J.:...................................................................................................................................................................................11
13. Philippine Deposit Insurance Corporation vs. Citibank.....................................................................................................................13
GR NO.170290 April 11, 2012............................................................................................................................................................13
Mendoza, J.:.......................................................................................................................................Error! Bookmark not defined.
14. Philippine Deposit Insurance Corporation vs. Court of Appeals........................................................................................................14
G.R. No. 118917 - December 22, 1997..............................................................................................................................................14
Kapunan, J.:........................................................................................................................................................................................14
15. Philippine Deposit Insurance Corporation vs. Court of Appeals........................................................................................................15
G.R. No. 126911 April 30, 2003.........................................................................................................................................................15
Carpio-Morales, J.:..............................................................................................................................................................................15
1. China Banking Corporation and Tan Kim Liong vs. Hon. Wenceslao Ortega et. al
G.R. No. L-34964 31 January 1973
Makalintal, J.:
FACTS: Tan Kim Liong was ordered to inform the Court whether or not there is a deposit in the
China Banking Corporation of defendant B & B Forest Development Corporation, and if there is any
deposit, to hold the same intact and not allow any withdrawal until further order from the Court.
Petitioners in this case refuse to comply with a court process garnishing the bank deposit of a
judgment debtor by invoking the provisions of Republic Act No. 1405 ( Secrecy of Bank Deposits
Act) which allegedly prohibits the disclosure of any information concerning to bank deposits.
ISSUE: Whether or not a banking institution may validly refuse to comply with a court processes
garnishing the bank deposit of a judgment debtor, by invoking the provisions of Republic Act No.
1405.
HELD: No. The lower court did not order an examination of or inquiry into deposit of B & B Forest
Development Corporation, as contemplated in the law. It merely required Tan Kim Liong to inform
the court whether or not the defendant B & B Forest Development Corporation had a deposit in the
China Banking Corporation only for the purposes of the garnishment issued by it, so that the bank
would hold the same intact and not allow any withdrawal until further order. It is sufficiently clear that
the prohibition against examination of or inquiry into bank deposit under RA 1405 does not preclude
its being garnished to insure satisfaction of a judgment. Indeed there is no real inquiry in such a
case, and the existence of the deposit is disclosed the disclosure is purely incidental to the
execution process. WHEREFORE, the orders of the lower court dated March 4 and 27, 1972,
respectively, are hereby affirmed, with costs against the petitioners-appellants.
November 6, 1930
Street, J.:
FACTS: In the month of March, 1921, the plaintiff the Fulton Iron Works Co., of St. Louis, Missouri,
sold to the Binalbagan Estate, Inc. for which the purchaser executed three notes amounting to
about $80,000. The consequently delay in the payments of the notes caused the plaintiff to employ
a firm of lawyers in Manila, of which S. C. Schwarzkopf was then a member. Schwarzkopf opened a
new account with the defendant bank, known as "No. 2 account." Meanwhile, the No. 2 account
became depleted, but the manager of the bank, in view, of the funds to Schwarzkopf's credit in the
third account conceded to him a credit in No. 2 account of P25,000. By June 15, 1922, said account
became overdrawn to the extend of P22, 144.39, and it was obvious that the limit of the conceded
credit would soon be reached. The manager of the bank then intervened and requested
Schwarzkopf to settle the overdraft. To accomplish this Schwarkopf merely transferred, by check,
the money to his credit in his special account as plaintiff's attorney-in-fact to the No. 2 account. The
amount thus transferred was P61,360.81, and the effect of the transfer was to absorb the overdraft
and place a credit balance of nearly P40,000 in No. 2 account. Schwarzkopf then purchased a draft
on New York in the amount of $15,000, and after some delay transmitted the same by mail to the
plaintiff. This draft cost Schwarzkopf the sum of P30,375.02, and it was the only remittance ever
made by him to his client.On June 23, 1926, an action was instituted in the Court of First Instance of
the City of Manila by the Fulton Iron Works Co. against Schwarzkopf and China Banking for
misappropriation of its funds with the full knowledge and consent of the defendant bank. Upon
hearing the cause, His Honor gave judgment in favor of the plaintiff, the Fulton Iron Works Co.
ISSUE: Whether or not the defendant bank is liable to the plaintiff for the sum of P22, 144.39 which
was thus applied to the payment of Schwarzkopf's personal indebtedness resulting from his
overdraft in the No. 2 account?
HELD: The appealed judgment must be modified by reducing the amount of the judgment against
the bank to the sum of P22,144.39.When the bank became a party to the application of part of the
plaintiff's money to the satisfaction of the overdraft in No. 2 account, it was directly chargeable with
knowledge of the misappropriation of the fund to the extent of the overdraft and that fact, as we
have already said, made the bank liable. But this rule cannot be extented to subsequent acts of
malversation and misappropriation committed by the fiduciary against the real owner of the fund.
Furthermore, it is undeniable that a bank may incur liability by assisting the fiduciary to accomplish a
misappropriation, although the bank does not actually profit by the misappropriation.The liability of
the defendant bank, to the extent recognized in this decision proceeds upon the fundamental idea
that a creditor cannot apply to the obligation of his debtor money which as he knows belongs to
another, without the consent of the latter, a principle implicit in all law.
4 April 1984
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.
ISSUES:
(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.
13 November 1935
Malcolm, J.:
FACTS: The United States Veterans Bureau issued a warrant payable to the order of Francico
Sabectoria Bacos. Paulino Gullas and Pedro Lopez signed as endorsers of the aforementioned check.
Thereupon, it was cashed by the Philippine National Bank. Subsequently, the treasury warrant was
dishonored. The bank sent notices by mail to Mr. Gullas which could not be delivered to him at that time
because he was in Manila. The bank then proceeded to apply the outstanding balances of Mr. Gullas
account with the part payment of the subject check.
ISSUE: Whether or not PNB properly set off the account of Gullas with the payment of the indorsed
check.
HELD: No. Although PNB had with respect to the deposit of Gullas a right of set off, its remedy was not
enforced properly.
Notice of dishonor is necessary in order to charge an indorser and that the right of action against
him does not accrue until the notice is given. Prior to the mailing of notice of dishonor, and without
waiting for any action by Gullas, the bank made use of the money standing in his account to make good
for the treasury warrant. The action of the bank was prejudicial to Gullas. As such,Gullas should be
awarded nominal damages because of the premature action of the bank.
7. Romarico G. Vitug
G.R. No. 82027 March 29, 1990
Sarmiento, J.:
FACTS: 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.
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.
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.
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.
HELD: 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 husband the latter acquired upon her death a vested right over the funds in the
account. The conveyance is therefore not mortis causa.
ISSUE: Whether or not subpoena duces tecum/ad testificandum may be issued to order the
production of statement of bank accounts even before a case for plunder is filed in court
HELD: The Supreme Court held that plunder is analogous to bribery, and therefore, the exception to
R.A. 1405 must also apply to cases of plunder. The court also reiterated the ruling in Marquez v.
Desierto that 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 pending case before the court of competent jurisdiction.
As no plunder case against then President Estrada had yet been filed before a court of
competent jurisdiction at the time the Ombudsman conducted an investigation, he concludes that
the information about his bank accounts were acquired illegally, hence, it may not be lawfully used
to facilitate a subsequent inquiry into the same bank accounts. Thus, his attempt to make the
exclusionary rule applicable to the instant case fails.
The high Court, however, rejected the arguments of the petitioner Ejercito that the bank
accounts which where demanded from certain banks even before the case was filed before the
proper court is inadmissible in evidence being fruits of poisonous tree. This is because the
Ombudsman issued the subpoenas bearing on the bank accounts of Ejercito about four months
before Marquez was promulgated on June 27, 2001. While judicial interpretations of statutes, such
as that made in Marquez with respect to R.A. No. 6770 or the Ombudsman Act of 1989, are
deemed part of the statute as of the date it was originally passed, the rule is not absolute. Thus, the
Court referred to the teaching of Columbia Pictures Inc., v. Court of Appeals, that: It is consequently
clear that a judicial interpretation becomes a part of the law as of the date that law was originally
passed, subject only to the qualification that when a doctrine of this Court is overruled and a
different view is adopted, and more so when there is a reversal thereof, the new doctrine should be
applied prospectively and should not apply to parties who relied on the old doctrine and acted in
good faith.
On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The
neglect of PCIBank employees to verify whether his letter requesting for the replacement of the
Citibank Check No. SN-04867 was duly authorized, showed lack of care and prudence required in
the circumstances. Furthermore, it was admitted that PCIBank is authorized to collect the payment
of taxpayers in behalf of the BIR. As an agent of BIR, PCIBank is duty bound to consult its principal
regarding the unwarranted instructions given by the payor or its agent. It is a well-settled rule that
the relationship between the payee or holder of commercial paper and the bank to which it is sent
for collection is, in the absence of an argreement to the contrary, that of principal and agent. A bank
which receives such paper for collection is the agent of the payee or holder.
Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that
the check should be deposited only in the account of the CIR. Thus, it is the duty of the collecting
bank PCIBank to ascertain that the check be deposited in payee's account only. Therefore, it is the
collecting bank (PCIBank) which is bound to scrutinize the check and to know its depositors before it
could make the clearing indorsement "all prior indorsements and/or lack of indorsement
guaranteed".
Lastly, banking business requires that the one who first cashes and negotiates the check
must take some precautions to learn whether or not it is genuine. And if the one cashing the check
through indifference or other circumstance assists the forger in committing the fraud, he should not
be permitted to retain the proceeds of the check from the drawee whose sole fault was that it did not
discover the forgery or the defect in the title of the person negotiating the instrument before paying
the check. For this reason, a bank which cashes a check drawn upon another bank, without
requiring proof as to the identity of persons presenting it, or making inquiries with regard to them,
cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards
diverted to the hands of a third party. In such cases the drawee bank has a right to believe that the
cashing bank (or the collecting bank) had, by the usual proper investigation, satisfied itself of the
authenticity of the negotiation of the checks. Thus, one who encashed a check which had been
forged or diverted and in turn received payment thereon from the drawee, is guilty of negligence
which proximately contributed to the success of the fraud practiced on the drawee bank. The latter
may recover from the holder the money paid on the check.
b. G. R. No. 128604
In this case, there was no evidence presented confirming the conscious participation of
PCIBank in the embezzlement. As a general rule, however, a banking corporation is liable for the
wrongful or tortuous acts and declarations of its officers or agents within the course and scope of
their employment. A bank will be held liable for the negligence of its officers or agents when acting
within the course and scope of their employment. It may be liable for the tortuous acts of its officers
even as regards that species of tort of which malice is an essential element. In this case, we find a
situation where the PCIBank appears also to be the victim of the scheme hatched by a syndicate in
which its own management employees had participated. But in this case, responsibility for
negligence does not lie on PCIBank's shoulders alone.
Citibank failed to notice and verify the absence of the clearing stamps. For this reason,
Citibank had indeed failed to perform what was incumbent upon it, which is to ensure that the
amount of the checks should be paid only to its designated payee. The point is that 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. Thus, invoking the doctrine of comparative negligence, we are of the
view that both PCIBank and Citibank failed in their respective obligations and both were negligent in
the selection and supervision of their employees resulting in the encashment of Citibank Check
Nos. SN 10597 AND 16508. Thus, we are constrained to hold them equally liable for the loss of the
proceeds of said checks issued by Ford in favor of the CIR.
13. Philippine Deposit Insurance Corporation vs. Citibank, GR NO.170290 April 11, 2012
FACTS: Petitioner Philippine Deposit Insurance Corporation (PDIC) is a government instrumentality created by
virtue of Republic Act (R.A.) No. 3591, as amended by R.A. No. 9302.
Respondent Citibank, N.A. (Citibank) is a banking corporation while respondent Bank of America, S.T. &
N.A. (BA) is a national banking association, both of which are duly organized and existing under the laws of
the United States of America and duly licensed to do business in the Philippines, with offices in Makati City.
In 1977, PDIC conducted an examination of the books of account of Citibank. It discovered that Citibank, in
the course of its banking business, from September 30, 1974 to June 30, 1977, received from its head office and
other foreign branches a total of P11,923,163,908.00 in dollars, covered by Certificates of Dollar Time Deposit that
were interest-bearing with corresponding maturity dates. These funds, which were lodged in the books of Citibank
under the account Their Account-Head Office/Branches-Foreign Currency, were not reported to PDIC as deposit
liabilities that were subject to assessment for insurance. As such, in a letter dated March 16, 1978, PDIC assessed
Citibank for deficiency in the sum of P1,595,081.96.
Similarly, sometime in 1979, PDIC examined the books of accounts of BA which revealed that from
September 30, 1976 to June 30, 1978, BA received from its head office and its other foreign branches a total
of P629,311,869.10 in dollars, covered by Certificates of Dollar Time Deposit that were interest-bearing with
corresponding maturity dates and lodged in their books under the account Due to Head Office/Branches. Because
BA also excluded these from its deposit liabilities, PDIC wrote to BA on October 9, 1979, seeking the remittance
of P109,264.83 representing deficiency premium assessments for dollar deposits.
Believing that litigation would inevitably arise from this dispute, Citibank and BA each filed a petition for
declaratory relief before the Court of First Instance (now the Regional Trial Court) of Rizal on July 19,
1979 and December 11, 1979, respectively. In their petitions, Citibank and BA sought a declaratory judgment
stating that the money placements they received from their head office and other foreign branches were not
deposits and did not give rise to insurable deposit liabilities under Sections 3 and 4 of R.A. No. 3591 (the PDIC
Charter) and, as a consequence, the deficiency assessments made by PDIC were improper and erroneous. The
cases were then consolidated.
On June 29, 1998, the Regional Trial Court, Branch 163, Pasig City (RTC) promulgated its Decision in
favor of Citibank and BA. Aggrieved, PDIC appealed to the CA which affirmed the ruling of the RTC in its October
27, 2005 Decision. Hence, this petition.
ISSUE: Whether or not a branch of a bank has a separate legal Personality.
HELD: No. A branch has no separate legal personality. This Court is of the opinion that the key to the resolution of
this controversy is the relationship of the Philippine branches of Citibank and BA to their respective head offices and
their other foreign branches.
The Court begins by examining the manner by which a foreign corporation can establish its presence in
the Philippines. It may choose to incorporate its own subsidiary as a domestic corporation, in which case such
subsidiary would have its own separate and independent legal personality to conduct business in the country. In the
alternative, it may create a branch in the Philippines, which would not be a legally independent unit, and simply
obtain a license to do business in the Philippines.
In the case of Citibank and BA, it is apparent that they both did not incorporate a separate domestic
corporation to represent its business interests in the Philippines. Their Philippine branches are, as the name
implies, merely branches, without a separate legal personality from their parent company, Citibank and BA. Thus,
being one and the same entity, the funds placed by the respondents in their respective branches in
the Philippines should not be treated as deposits made by third parties subject to deposit insurance under the PDIC
Charter. The purpose of the PDIC is to protect the depositing public in the event of a bank closure. It has already
been sufficiently established by US jurisprudence and Philippine statutes that the head office shall answer for the
liabilities of its branch. Now, suppose the Philippine branch of Citibank suddenly closes for some reason. Citibank
N.A. would then be required to answer for the deposit liabilities of Citibank Philippines. If the Court were to adopt
the posture of PDIC that the head office and the branch are two separate entities and that the funds placed by the
head office and its foreign branches with the Philippine branch are considered deposits within the meaning of the
PDIC Charter, it would result to the incongruous situation where Citibank, as the head office, would be placed in the
ridiculous position of having to reimburse itself, as depositor, for the losses it may incur occasioned by the closure of
Citibank Philippines. Surely our law makers could not have envisioned such a preposterous circumstance when
they created PDIC.
Finally, the Court agrees with the CA ruling that there is nothing in the definition of a bank and a banking
institution in Section 3(b) of the PDIC Charter [27] which explicitly states that the head office of a foreign bank and its
other branches are separate and distinct from their Philippine branches.
There is no need to complicate the matter when it can be solved by simple logic bolstered by law and
jurisprudence. Based on the foregoing, it is clear that the head office of a bank and its branches are considered as
one under the eyes of the law. While branches are treated as separate business units for commercial and financial
reporting purposes, in the end, the head office remains responsible and answerable for the liabilities of its branches
which are under its supervision and control. As such, it is unreasonable for PDIC to require the respondents,
Citibank and BA, to insure the money placements made by their home office and other branches. Deposit
insurance is superfluous and entirely unnecessary when, as in this case, the institution holding the funds and the
one which made the placements are one and the same legal entity.