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10. Serrano vs.

Central Bank, 96 SCRA 96 (1980)

Facts: Petitioner Serrano made a time deposit of P350,000.00 in Overseas Central Bank. Upon encashment,
not a single time deposit certificate was honored by Overseas Central Bank. He filed a case against Overseas
Central band including Central Bank to be jointly and severally liable for damages on the ground that
Central Bank failed to supervise the acts of overseas bank and protect the interests of its depositors.

Issue: Whether Central Bank should be liable?

Ruling: No. There is no breach of trust from a bank’s failure to return the subject matter of the deposit.
Bank deposits are in the nature of irregular deposits. They are really loans because they earn interest. The
petitioner here in 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

Accordingly, the relation between a depositor and a bank is that of a creditor and a debtor. The depositor
(creditor) lends the bank (debtor) money and the bank agrees to pay the depositor on demand. The deposit
agreement between the bank and the depositor determines the rights and obligations of the parties.
Consequently: (a) A bank’s failure to honor a deposit is failure to pay its obligation as debtor and not a
breach of trust arising from a depositary’s failure to return the subject matter of the deposit.

11. Citibank vs. Cabamongan 488 SCRA 517 (2006)

Facts: Respondent spouses Cabamongan opened a joint foreign currency time deposit in trust for their sons
with Citibank. Prior to maturity, a person claiming to be Carmelita Cabamongan pre-terminated the said
account upon presenting identification cards. Though not being able to surrender the Original Certificate of
Deposit, the money was released to her despite the release and waiver documents not being notarized.
Respondent spouses learned of the incident and informed petitioner bank that Carmelita could not have pre-
terminated the account since she was in the US at that time. The spouses made a formal demand of payment
of the deposit and consequently, filed a complaint when petitioner refused to pay. Petitioner bank insists
that it was not negligent of its duties since the deposit was released upon proper identification and
verification. RTC ruled in favor of the spouses

Issue: Whether or not petitioner bank was negligent in its duties as to be liable for damages

Ruling: Yes. Citibank was negligent. First, the “depositor” didn’t present the Certificate of Deposit.
Second, from the internal memorandum issued by the Account Officer, he admitted to the fact that the
specimen signature was different from the one who misrepresented herself as Carmelita Cabamongan.
Third, the bank kept in its records pictures of its depositors. It is inconceivable how the bank was duped
by an impostor.

The time deposit subject matter of herein petition is a simple loan. The provisions of the New Civil Code
on simple loan govern the contract between a bank and its depositor. Specifically, Article 1980 thereof
categorically provides that ". . . savings . . . deposits of money in banks and similar institutions shall be
governed by the provisions concerning simple loan." Thus, the relationship between a bank and its depositor
is that of a debtor-creditor, the depositor being the creditor as it lends the bank money, and the bank is the
debtor which agrees to pay the depositor on demand.

The applicable interest rate on the actual damages of $55,216.69, should be in accordance with the
guidelines set forth in Eastern Shipping Lines, Inc. v. Court of Appeals to wit:
Thus, in a loan or forbearance of money, the interest due should be that stipulated in writing, and in the
absence thereof, the rate shall be 12% per annum counted from the time of demand. Accordingly, the
stipulated interest rate of 2.562% per annum shall apply for the 182-day contract period from August 16,
1993 to February 14, 1994. For the period from the date of extra-judicial demand, September 16, 1994,
until full payment, the rate of 12% shall apply. As for the intervening period between February 15, 1994 to
September 15, 1994, the rate of interest then prevailing granted by Citibank shall apply since the time
deposit provided for roll over upon maturity of the principal and interest.

Hence, such deposits are governed by the provisions on mutuum or simple loan, and the rules on the
imposition of legal interest. 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.

12. Solid Bank Corporation vs. Tan, 520 SCRA 123

Facts: Respondents’ representative deposited a total of ten checks with petitioner bank where respondents
maintain an account. It was later found that one of the checks was not posted to respondents’ passbook. The
duplicate deposit slip listing the checks deposited by their representative but it did not include the missing
check. Petitioners subsequently learned that the check had cleared after it was inexplicably deposited in a
different bank. The spouses filed a case for collection of a sum of money after the bank refused to pay them
the amount of the check.

Issue: Whether or not petitioner bank was negligent.

Ruling: Yes. The bank is engaged in business impressed with public interest, and it is its duty to protect in
return its many clients and depositors who transact business with it with the highest degree of care, more
than that of a good father of the family or of an ordinary business firm. It is its obligation to see to it that
all funds invested with it are properly accounted for and duly posted in its ledger. In every case, the
depositor expects the bank to treat his account with utmost fidelity, whether such account consists of only
a few hundred pesos or of millions, always having in mind the fiduciary nature of their relationship.

Like a common carrier whose business is imbued with public interest, a bank should exercise extraordinary
diligence to negate its liability to its depositors.