COMMERCIAL LAW

Banking Law

1990 (20) An insurance company is duped into releasing a check to A for P35th to pay for
Treasury Bills (T-bills) that A claims are en route from a government bank on board an
armored truck. Before the insurance company realizes it is a scam, the check is delivered to
A, who deposits it into his XYZ Bank account. When the insurance company realizes this, it
files an action against A to recover the amount defrauded and obtains a writ of preliminary
attachment. Aside from the writ, the Bank has also been served with a subpoena to examine
A's account records.

ANSWER:
Yes. It does not mean that money 'the subject of litigation' is not considered a sale or an
investment within the meaning of Sec 2 of RA 1405, prohibiting bank deposit disclosure or
enquiry except where the money deposited or invested is subject to litigation and whether the
money has been 'spoilt.' It is not considered a sales or a money investment.