Central Bank v.

Morfe (20 SCRA 507)

Facts:
First Mutual Savings and loan organization is a registered non stock corporation which
their purpose is to extend financial assistance in the form of loans to its members with
funds deposited by them.
Central Bank of the Philippine announce the all savings and loan association have never
been authorised by the central bank to accept deposit of funds from the public nor to
engage in banking business. Despite of the announcement, Private respondent First
Mutual Savings and loan organization continued to operate their activities without the
authorisation of the petitioner Central Bank of the Philippines.
Issue: Whether the petitioner has the power to authorise the institutions doing banking
activities?
Ruling: Yes, The law requiring compliance with certain requirements before anybody can
engage in banking obviously seeks to protect the public against actual, as well as
potential, injury.
Marquez v. Disierto (359 SCRA 772 [2001])
Facts:
Petitioner Marquez received an Order from the Ombudsman Desierto to produce several
bank documents for purposes of inspection in camera relative to various accounts
maintained at Union Bank of the Philippines, Julia Vargas Branch, where petitioner is the
branch manager.
The accounts to be inspected are Accounts involved in a case pending with the
Ombudsman.
Petitioner failed to produce the several bank documents.
The Ombudsman issued an order directing petitioner to produce the bank documents
relative to the accounts in issue
Petitioner prayed for a temporary restraining order (TRO) because the Ombudsman and
other persons acting under his authority were continuously harassing her to produce the
bank documents relative to the accounts in question.
respondent argues that power of the Ombudsman to investigate and to require the
production and inspection of records and documents is sanctioned by the 1987 Philippine
Constitution, Republic Act No. 6770, otherwise known as the Ombudsman Act of 1989 and
under existing jurisprudence on the matter
Issue: whether the order of the Ombudsman to have an in camera inspection of the
questioned account is allowed as an exception to the law on secrecy of bank deposits
Ruling: No, the court ruled 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 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. Here, 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 Amado Lagdameo, et. al., with the Sandiganbayan.
Hence, there was no pending case in court which would warrant the opening of the bank
account for inspection.
Traders Royal Bank v. Radio Philippines Network, Inc. (390 SCRA 608 [2002])
BIR assessed the respondents tax obligations for the five taxable years. Respondents
comptroller, sent a letter to the BIR requesting settlement of plaintiffs tax obligations. BIR
granted the request and respondents purchased from defendant Traders Royal Bank
(TRB) three (3) managers checks to be used as payment for their tax liabilities. Petitioner
TRB turned over the checks to Mrs. Vera who was supposed to deliver the same to the
BIR in payment of respondents taxes.BIR again assessed plaintiffs for their tax liabilities. It
was then they discovered that the (3) managers checks intended as payment for their
taxes were never delivered nor paid to the BIR by Mrs. Vera. Instead, the checks were
presented for payment by unknown persons to defendant Security Bank and Trust
Company (SBTC), Taytay Branch as shown by the banks routing symbol transit number.
Respondent sent letters to both defendants, demanding that the amounts covered by the
checks be reimbursed or credited to their account. The petitioner refused, hence,
respondent filed a case.
The trial court rendered a decision in favour of the respondent and ordered the TRB and
SBTC to pay the amount which has been erroneously paid to the unknown person.
The CA modified the decision of the trial court and held TRB solely liable.
Issue:
Whether TRB should be held solely liable when it paid the amount of the checks in
question to a person other than the payee indicated on the face of the check, the Bureau
of Internal Revenue.
Ruling:
Yes, one of the subject checks was crossed. The crossing of one of the subject
checks should have put petitioner on guard; it was duty-bound to ascertain the indorsers
title to the check or the nature of his possession.
Doctrine: Petitioner should have known the effects of a crossed check: (a) the check may
not be encashed but only deposited in the bank; (b) the check may be negotiated only
once to one who has an account with a bank and (c) the act of crossing the check serves
as a warning to the holder that the check has been issued for a definite purpose so that he
must inquire if he has received the check pursuant to that purpose, otherwise, he is not a
holder in due course.