1 CASE DIGEST (Commercial Law): PNB vs. Gancayco G.R. No.

L-18343 September 30, 1965 FACTS: Defendants Emilio Gancayco and Florentino Flor, as special prosecutors of the Department of Justice, required the plaintiff Philippine National Bank to produce at a hearing the records of the bank deposits of Ernesto Jimenez, former administrator of the Agricultural Credit and Cooperative Administration, who was then under investigation for unexplained wealth. In declining to reveal its records, the plaintiff bank invoked Section 2 of Republic Act No. 1405. On the other hand, the defendants cited Section 8 of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019) in support of their claim of authority,which allegedly provides an additional ground for the examination of bank deposits. ISSUE: Whether Section 8 of Republic Act No. 3019 provides an additional ground for the examination of bank deposits. HELD: Yes. The truth is that these laws are so repugnant to each other than no reconciliation is possible. x x x. The only conclusion possible is that section 8 of the Anti-Graft Law is intended to amend section 2 of Republic Act No. 1405 by providing additional exception to the rule against the disclosure of bank deposits. x x x [W]hile section 2 of Republic Act 1405 declares bank deposits to be "absolutely confidential," it nevertheless allows such disclosure in the following instances: (1) Upon written permission of the depositor; (2) In cases of impeachment; (3) Upon order of a competent court in cases of bribery or dereliction of duty of public officials; (4) In cases where the money deposited is the subject matter of the litigation. Cases of unexplained wealth are similar to cases of bribery or dereliction of duty CASE DIGEST (Commercial Law) Banco Filipino vs. Purisima G.R. No. L-56429 May 28, 1988 FACTS: Customs special agent Manuel Caturla is accused by the Bureau of Internal Revenue of having violated R.A. No. 3019 of the "Anti-Graft and Corrupt Practices Act" for having allegedly acquired property manifestly out of proportion to his salary and other lawful income. In the course of the preliminary investigation thereof, the Tanodbayan issued a subpoena duces tecum to the Banco Filipino Savings & Mortgage Bank, commanding its representative to appear at a specified time at the Office of the Tanodbayan and furnish the latter with duly certified copies of the records in all its branches and extension offices, of the loans, savings and time deposits and other banking transactions, dating back to 1969, appearing in the names of Caturla, his wife, Purita Caturla, their children — Manuel, Jr., Marilyn and Michael — and/or Pedro Escuyos. Caturla moved to quash the subpoena duces tecum but was denied by Tanodbayan Vicente Ericta.Petitioner Banco Filipino filed a complaint for declaratory relief with the Court of First Instance of Manila but was denied for lack of merit by respondent Judge Purisima. ISSUE: Whether or not the RA 1405 "Law on Secrecy of Bank Deposits" precludes production by subpoena duces tecum of bank records of transactions by or in the names of the wife, children and friends of a special agent of the Bureau of Customs, accused before the Tanodbayan of having allegedly acquired property manifestly out of proportion to his salary and other lawful income, in violation of the "Anti-Graft and Corrupt Practices Act".

000.Mellon filed a complaint in California.A.00 only. Deeds were issued in favor of Javier the other one of which was sent to Kern County Registrar in California for Registration. without having seen the said property he agreed to buy the same. Jr. Melchor Javier. This is an absurdity that we will not ascribe to the lawmakers. Roberto Griño immediately informed Javier spouses of such transfer though he knew of such mistake in the transfer of the amount.800 ( $437. 2 of R. and restrict the inquiry only to property held by or in the name of the government official or employee.A. witnesses Boylasis and Red made to testify that in PVB there was a transaction made by Azada which involved checks No. Marquez . However. Jr. California City. al. property unlawfully acquired by the respondent. 1405 the secrecy of bank deposit. descendants. 1405. it aimed the recovery of the amount converted by Javier for their own benefit. . 1977.00 to Vidtoria Javier through Prudential Bank. "legitimately acquired property of a public officer or employee shall not include .405).000. Prudential Bank chief accountant.75 and this was to transferred to Hagedorn one of the companies which is in connection with Poblador. or his spouse and unmarried children is unwarranted in the light of the provisions of the statutes in question. 343 in Prudential Bank.00 as the amount to be transferred instead of $1. to recover the proceeds of the California property. against the Javier spouses to imposed constructive trust of the property from the money erroneously transferred to their account.000. The spouses without wasting their time opened a new dollar account No. Mellon also filed a complaint before the Court of first Instance of Rizal. 18 October 1990 Facts: Dolores Ventosa. For the payment of which. Held: No. Jr. Jr. Mellon Bank erroneously indicated there $ 1. all they would have to do would be to simply place the property in the possession or name of persons other than their spouse and unmarried children.2 HELD: No. ascendants. requested Marues to look for a real property for sale in U.A. 268. 1405 states that it allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation. as an agent of Poblador. They withdrew the money and converted each with a payee of different companies. 490. Jr. No. it wired to Manufacture Hanover Bank a correspondence of Prudential Bank. an inquiry to the whereabouts of the illegally acquired amount extend to whatever is concealed by being held or recorded in the name of the persons other than the one responsible for the illegal acquisition. No. in Mojave Desert. First National Bank requested Mellon Bank to effect the transfer. This proposition is made clear by R. In order to trace the whereabouts the portion of the funds . Jr. 3019 which quite categorically states that the term. these were delivered to Jose Marquez and Honorio Poblador. Magsino et. sec. Issue: Whether or not an account deposit which is relevant and material to the resolution of the case may be covered under R. Poblador.. requested it shall not be directed to him.S. respondent's spouse. and would make available to persons in government who illegally acquire property an easy and fool-proof means of evading investigation and prosecution. or P 3.000. instead to the companies. The inquiry into illegally acquired property — or property NOT "legitimately acquired" — extends to cases where such property is concealed by being held by or recorded in the name of other persons. Inasmuch as in this case. necessarily. They. 71479. or held by." To sustain the petitioner's theory. relatives or any other persons. No. GR No.A. No.S. on May 27. to transfer $1. the spouses and each of them must be held as an involuntary or constructive trustee of the property. 339736 and339737 for the total amount of P874. thus the checks were delivered to companies each with different instructions from Poblador.A. requested the First National Bank in U.acre.. Branch X.A. The defendants averred that such testimonies must be stricken from the record because this was against R. but its ownership is concealed by its being recorded in the name of. Case Digest on Mellon Bank v.

in the natural and continuous sequence. of course that the contributory negligence was the proximate cause of the injury of which complaint is made. which decision was affirmed in toto by the Court of Appeals. It appears that although the employees of Ford initiated the transactions attributable to an organized syndicate. 1977. so plaintiff was compelled to make a second payment. The case against PBC was dismissed. passed it to Castro. R. The trial court held Citibank and PCIB jointly and severally liable to Ford.851. No. and was replaced by a manager’s check.706. subsequently cleared the the Central Bank. but was embezzled allegedly by an organized syndicate. The checks never reached BIR. The trial court absolved PCIB and held Citibank liable. Nos.591.746. G. in our view. The case against Rivera was likewise dismissed because summons could not be served. R.37 and P6. and paid by Citibank to IBAA.73. the latter's negligence is imputed to his superior and will defeat the superior's action against the third person. CA Facts: This case is composed of three consolidated petitions involving several checks. proximate cause is that which. An investigation revealed that the check was recalled by Godofredo Rivera. The check was deposited with defendant IBAA (now PCIB). 121413 and 121479 On October 19. plaintiff Ford issued a Citibank check amounting to P4. Castro opened a checking account in the name of a fictitious person “Reynaldo Reyes”. the worthless check was replaced by the genuine one from Ford. 128604 Ford drew two checks in favor of the Commissioner of Internal Revenue. Issues: (1) Whether there is contributory negligence on the part of Ford (2) Has petitioner Ford the right to recover from the collecting bank (PCIBank) and the drawee bank (Citibank) the value of the checks intended as payment to the Commissioner of Internal Revenue? Held: (2) The general rule is that if the master is injured by the negligence of a third person and by the concuring contributory negligence of his own servant or agent. As defined. if any. but the Court of Appeals only held PCIB liable. payable to the Bureau of Internal Revenue. I. Castro deposited a worthless Bank of America check with the same amount as that issued by Ford. their actions were not the proximate cause of encashing the checks payable to the CIR. Plaintiff instituted an action for recovery against PCIB and Citibank. G. While being routed to the Central Bank for clearing. On investigation of NBI.3 PCIB v. Ford filed a third party complaint against Rivera and PBC. and so the latter filed a complaint.41 in favor of the Commissioner of Internal Revenue for the payment of manufacturer’s taxes. Both are crossed checks payable to payee’s account only. Gorofredo Rivera made the checks but instead of delivering them to BIR. The proceeds never reached BIR. the general ledger accountant of Ford. II.114. the modus operandi was discovered. asuming. so plaintiff was compelled to make second payments. could not be characterized as the proximate cause of the injury to the . unbroken by any efficient. The degree of Ford's negligence.311. Defendant refused to reimburse plaintiff. Alleged members of a syndicate deposited the two manager’s checks with Pacific Banking Corporation. who was the manager of PCIB San Andres. amounting to P5. intervening cause produces the injury and without the result would not have occurred.

As a general rule. a. who by virtue of his position had unusual facilities for perpertrating the fraud and imposing the forged paper upon the bank. that of principal and agent. For this reason. in the absence of an argreement to the contrary. No. without requiring proof as to the identity of persons presenting it. And if the one cashing the check through indifference or other circumstance assists the forger in committing the fraud. SN-04867 was duly authorized. 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. satisfied itself of the authenticity of the negotiation of the checks. it is the duty of the collecting bank PCIBank to ascertain that the check be deposited in payee's account only. 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. 121413 and 121479 On record. is guilty of negligence which proximately contributed to the success of the fraud practiced on the drawee bank. The neglect of PCIBank employees to verify whether his letter requesting for the replacement of the Citibank Check No. A bank which receives such paper for collection is the agent of the payee or holder. 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. Therefore. Indeed. by the usual proper investigation. cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards diverted to the hands of a third party. PCIBank's share of negligence when the syndicate achieved its ultimate agenda of stealing the proceeds of these checks. But in this case. 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". Nos.4 parties. G. b. Lastly. or making inquiries with regard to them. The latter may recover from the holder the money paid on the check. it was admitted that PCIBank is authorized to collect the payment of taxpayers in behalf of the BIR. the crossing of the check with the phrase "Payee's Account Only. The mere fact that the forgery was committed by a drawer-payor's confidential employee or agent. R. however. Rivera to negotiate the checks. responsibility for negligence does not lie on PCIBank's shoulders alone. 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 which cashes a check drawn upon another bank. 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. A bank will be held liable for the negligence of its officers or agents when acting within the course and scope of their employment. In such cases the drawee bank has a right to believe that the cashing bank (or the collecting bank) had." is a warning that the check should be deposited only in the account of the CIR. As an agent of BIR. there was no evidence presented confirming the conscious participation of PCIBank in the embezzlement. R. This rule likewise applies to the checks fraudulently negotiated or diverted by the confidential employees who hold them in their possession. 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. G. 128604 In this case. PCIBank failed to verify the authority of Mr. one who encashed a check which had been forged or diverted and in turn received payment thereon from the drawee. . In this case. Thus. separately. showed lack of care and prudence required in the circumstances. PCIBank is duty bound to consult its principal regarding the unwarranted instructions given by the payor or its agent. (2) We have to scrutinize. Furthermore. Thus. in the absence of some circumstance raising estoppel against the drawer. does notentitle the bank toshift the loss to the drawer-payor.

CHINA BANKING CORPORATION and GREG BARTELLI y NORTHCOTT G. or any . father and Natural Guardian. to give the latter protection. 1246 against attachment. Salvacion. For this reason. exemplary and attorney’s fees amounting to almost P1. Citibank had indeed failed to perform what was incumbent upon it. Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking Corp. 6426. Respondents are hereby required to comply with the writ of execution issued in the civil case and to release to petitioners the dollar deposit of Bartelli in such amount as would satisfy the judgment. able to escape from prison.00. and EVELINA E. if we rule that the questioned Section 113 of Central Bank Circular No. as amended by PD 1246. the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. the bank is under obligation to treat the accounts of its depositors with meticulous care. ISSUE: Should Section 113 of Central Bank Circular No. 94723 August 21. otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign transient? HELD: NO. 960 exempts foreign currency deposits from attachment. It then proceeded to show that the economic basis for the enactment of RA No. The intention of the law may be good when enacted. always having in mind the fiduciary nature of their relationship. Thus. 960 and Section 8 of Republic Act No. Jr. SALVACION. 960 and PD No. The SC adopted the comment of the Solicitor General who argued that the Offshore Banking System and the Foreign Currency Deposit System were designed to draw deposits from foreign lenders and investors and. 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. however. government agency or any administrative body whatsoever. the trial court awarded Salvacion moral. Police recovered from him several dollar checks and a dollar account in the China Banking Corp. Eventually. will maintain his deposit in the bank only for a short time.000. SALVACION. or any other order or process of any court. 1997 FACTS: Greg Bartelli. insofar as it amends Section 8 of Republic Act No.. CENTRAL BANK OF THE PHILIPPINES. Salvacion therefore filed this action for declaratory relief in the Supreme Court. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us. He was. The point is that as a business affected with public interest and because of the nature of its functions. Thus. Further. garnishment or other court processes. 960 which exempts from attachment. garnishment. 6426 is not anymore present. SALVACION vs. No. he is not entitled to the protection of Section 113 of Central Bank Circular No. The provisions of Section 113 of Central Bank Circular No. invoking the doctrine of comparative negligence. thru Federico N. the application of the law depends on the extent of its justice. garnishment. 1034 and 1035 and given incentives and protection by said laws because such depositor stays only for a few days in the country and. subsequently. the SC said: “In fine. and Spouses FEDERICO N. CENTRAL BANK Leave a comment KAREN E. therefore. the foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged by PD Nos. but the latter refused arguing that Section 11 of Central Bank Circular No. SALVACION VS. However. 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. and even if it still exists. In a civil case filed against him.R. an American tourist. was arrested for committing four counts of rape and serious illegal detention against Karen Salvacion.5 Citibank failed to notice and verify the absence of the clearing stamps. minor.000. are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances. Considering that Bartelli is just a tourist or a transient. which is to ensure that the amount of the checks should be paid only to its designated payee. Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages that Salvacion and her parents fully deserve. SN 10597 AND 16508. 1246. legislative body. 960 and PD No. 6426.. JR.

135882June 27. 3 (e) and (g) relative to the Joint Venture Agreement between the Public Estates Authority and AMARI. Amado Lagdameo.Petitioner together with Union Bank of the Philippines filed a petition for declaratory relief. In short. 6770. Makati City. 2001 MARQUEZ VS. We rule that before an in camera inspection may be allowed. et. what the office of the ombudsman would wish to do is to fish for additional evidence to formally charge Amado Lagdameo. But petitioner’s motion for reconsideration was dismissed. The bank personnel and the accountholder must be notified to be present during the inspection. filed with the Office of the Ombudsman by Agapito B. and is merely intended to delay the investigation of the case. it is presumed that the lawmaking body intended right and justice to prevail.Petitioner filed with the Ombudsman an opposition to the motion to cite her in contempt on the ground that compliance with the Ombudsman’s orders would be in violation of RA. Fact-Finding and Intelligence Bureau (FFIB) v. pending with the office of the Ombudsman by virtue of its power to investigate and to require the production and inspection of records and documents granted to it by RA No. there must be a pending case before a court of competent jurisdiction. Desierto to produce several bank documents for purposes of inspection in camera relative to various accounts maintained at Union Bank of the Philippines. et. 1405. This would negate Article 10 of the New Civil Code which provides that “in case of doubt in the interpretation or application of laws. the account must be clearly identified.” G. the inspection limited to the subject matter of the pending case before the court of competent jurisdiction. Further.The Ombudsman issued an order directing petitioner to produce the bank documents relative to accounts in issue in line of her persistent refusal to comply with Ombudsman's order which they sais as an unjustified. On August 21. there was no .R. Director. Rosales. The basis of the Ombudsman ordering an in camera inspection of the accounts is a trail managers checks purchased by one George Trivinio.1405) HELD: The order of the Ombudsman to produce for in camera inspection the subject accounts with the Union Bank of the Philippines. al. The lower court denied petitioner's petition. No. government agency or any administrative body whatsoever. legislative body. In the case at bar.A.6770. The accounts to be inspected were involved in a case pending with the Ombudsman entitled. Hence. for violation of R. al. against the Ombudsman. petitioner received a copy of the motion to cite her for contempt. No. is based on a pending investigation at the Office of the Ombudsman against Amado Lagdameo. and such inspection may cover only the account identified in the pending case. the present petition. prohibition and injunctions with the Regional Trial Court. injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli.. Julia Vargas Branch. there is yet no pending litigation before any court of competent authority.A. is applicable to a foreign transient. 1998. What’s existing is an investigation by the Office of the Ombudsman. Clearly. et al. a respondent in OMB-0970411. with the Sandiganbayan. DESIERTO FACTS: Petitioner Marquez received an Order from the Ombudsman Aniano A. No.A. 3019. where she is the branch manager. Julia Vargas Branch. Sec. Fact Finding and Intelligence Bureau (FFIB). No. ISSUE: Whether or not an in camera inspection of the questioned account is allowed as an exception to the law on secrecy of bank deposits (R. constitutes disobedience of or resistance to a lawful order issued by this office punishable as Indirect under R.6 other order or process of any court.

IN VIEW WHEREOF. Invasion of privacy is an offense in special laws like the Anti-Wiretapping Law. Zone of privacy are recognized and protected in our laws.7 pending case in court which would warrant the opening of the bank account for inspection. and similar orders. 1998. or anyone in her place to comply with the order dated October 14. We order the Ombudsman to cease and desist from requiring Union Bank Manager Lourdes T. Marquez. we GRANT the petition. No cost . and the Intellectual Property Code. the Secrecy of Bank Deposits Act.

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.