Serrano v.

Central Bank of the Philippines, GR L-30511, February 14, 1980 - INOK

Topic :
Article 1158
Obligations derived from law are not presumed. Only those expressly determined in this Code
or in special laws are demandable, and shall be regulated by the precepts of the law which
establishes them; and as to what has not been foreseen, by the provisions of this Book.

Facts :
Manuel Serrano made a time deposit, for one year with 6%interest of One Hundred
Fifty Thousand Pesos with the Respondent Overseas Bank of Manila. Concepcion Maneja
also made a time deposit, for one year with 6-1/2% interest, of Two Hundred Thousand Pesos
on the same respondent Overseas Bank of Manila
Concepcion Maneja,then married, assigned and conveyed to petitioner Manuel
Serrano, her time deposit of Php200,000.00. Notwithstanding series of demands for
encashment of the aforementioned time deposit from the respondent Overseas Bank of
Manila, not a single one of the time deposit certificates was honored by respondent Overseas
Bank of Manila. Respondent Central Bank dissolve and liquidated the Overseas Bank of
Manila .The former denied that it is a guarantor of the permanent solvency of any banking
institution as claimed by the petitioner. Respondent Central Bank avers no knowledge of
petitioners claim that the properties given by the respondent Overseas Bank of Manila as
additional collaterals to the respondent Central Bank of the Philippines for the formers over
drafts and emergency loans were acquired from the depositors money including the time
deposits of the petitioner . Hence, this petition.

ISSUE : Whether or not the respondents are jointly and solidary liable for damages due to
breach of trust

HELD :
The Court held that both respondent banks was not given preliminary injunction with
respect to the acts of the respondent Central Bank.
Both parties overlooked the fundamental principle in the nature of bank deposits when
the petitioner claimed that there should be created a constructive trust in his favor when the
respondent Overseas Bank of Manila increased the collaterals in favor of the respondent
Central Bank of the Philippines for the formers overdrafts and emergency loans, since these
collaterals were acquired by the use of depositors money.
Bank deposits are in nature of irregular deposits. They are really loans because they
earn interest. All kinds of bank deposits, whether fixed, savings or current are to be treated as
loans and are to be covered by the loans. Current and savings deposits are loans to a bank
because it can use the same. The petitioner here in the making time deposits that earn

interests with respondent Overseas Bank of Manila was in reality a creditor of the respondent
bank and not a depositor. The respondent bank was in turn a debtor of petitioner. Failure of
the respondent bank to honor the time deposit is failure to pay obligation as a debtor and not
a breach of trust arising from depositorys failure to return the subject matter of the deposit.