Obligations and Contracts

MANUEL M. SERRANO
vs. CENTRAL BANK OF
THE PHILIPPINES, ET
AL.
cdizonblog 3 years ago

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Rene Diokno for petitioner.

F.E. Evangelista & Glecerio T. Orsolino
for respondent Central Bank of the
Philippines.
Feliciano C. Tumale, Pacifico T. Torres
and Antonio B. Periquet for
respondent Overseas Bank of Manila.
Josefina G. Salonga for all other
respondents.

Facts:

Petitioner, Serrano had worth

350,000 pesos with interest of time
deposits in Overseas Bank of Manila.
He tried to recover the time deposit
with interest multiple times but
failed. He filed a case against
Overseas Bank, Central Bank, and its
stockholders so they’ll all be liable
on the alleged failure of the
Overseas Bank of Manila to return
the time deposits made by
petitioner and assigned to him, on
the ground that respondent Central
Bank failed in its duty to exercise
strict supervision over respondent
Overseas Bank of Manila to protect
depositors and the general
public. The petition is dismissed for
lack of merit, with costs against the
petitioner.

Issue:

Whether or not the central bank is

liable for the failure of
encashment worth 350,ooo
including interest.

Held:

No, because there was no breach of

trust from a bank’s failure to return
the subject matter of the deposit.
Bank deposits are in nature of
irregular deposits. They are really
loans because they earn interest. All
kinds of bank deposits are to be
treated as loans. 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
bank to honor the time deposit is
failure to pay obligation as a debtor
and not a breach of trust arising
from depository’s failure to return
the subject matter of the deposit.

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Obligations and Contracts

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