COMMERCIAL LAW – BANKING LAWS

Proposed Questions and Answers

1. Armando, a Director of XYZ Bank, in a last ditch effort to save XYZ Bank
from its financial woes, is negotiating with its debtors for the
restructuring of their loans. Armando guaranteed that he will take care
of the paper works to expedite the process of collection. Subsequently,
XYZ Bank was placed under receivership. Believing that the collections
will save XYZ Bank, Armando pushed through with the collection of the
restructured loans. The financial condition of XYZ Bank improved. Did
Armando incur any liability?

SUGGESTED ANSWER: Yes, Armando violated Sec. 70 of R.A. No.

7891. Said provision provides in part that any Director or officer of
any bank declared insolvent or placed under receivership who
receives or permits or causes to be received in said bank any
deposit, collection of loans and/or receivables shall be subject to
the penal provisions of the New Central Bank act. The act of
Armando, a director of XYZ bank under receivership, in accepting
or causing the receipt of collection of loans is expressly prohibited
although it may have produced some positive effect. Hence,
Armando may be held liable for violation of R.A. No. 7891.

2. Berting deposited fifteen (15) checks with ABC Bank. ABC Bank duly
noted the receipt of said fifteen (15) checks. However, the value of the
deposit only amounted to thirteen (13) checks as two (2) checks have
been lost by one of the employees of ABC Bank. Berting filed a case
wherein he was awarded, among others, exemplary damages. ABC Bank
now argues that said award of exemplary damages was improper since it
can only be imposed when the act complained of was done in a wanton,
fraudulent and oppressive manner. Rule on the contention of ABC Bank.

SUGGESTED ANSWER: ABC Bank is wrong. The business of

banking is impressed with public interest and great reliance is
made on the bank’s sworn profession of diligence and
meticulousness in giving irreproachable service. Hence, for failure
to carry out its responsibility and to account for Berting’s lost
 checks, even if not fraudulently or oppressively done, the award of
exemplary damages was proper. (Solidbank Corporation, et al. v.
Sps. Tan, G.R. No. 167346, 2 Apr 2007)

3. DEF Corporation and A, a natural person, have Php250,000 in joint

savings account with JKL Bank. A has a savings account worth Php250,000
in another savings account with the same bank solely in his name. Supposing
JKL Bank closed, how much can DEF Corporation claim from the Philippine
Deposit Insurance Corporation (PDIC)?

SUGGESTED ANSWER: DEF Corporation can claim from the PDIC

the amount of Php250,000. The law provides that if an account is
held by a juridical person jointly with one or more natural persons,
the maximum insured deposit shall be presumed to belong entirely
to the juridical entity. Hence, DEF Corporation can claim for
Php250,000 from PDIC.