THE REAL BANK (A THRIFT BANK), INC., PETITIONER, VS.

DALMACIO CRUZ
MANINGAS, RESPONDENT.
G.R. No. 211837. March 16, 2022

Facts

The case revolves around a lawsuit that Dalmacio Cruz Maningas filed seeking
damages and the recovery of a certain amount of money against Thrift Bank, Inc., Real
Bank and Metrobank. Dalmacio Maningas, a Filipino-British national residing in London,
wrote two crossed checks for his buddy Bienvenido Rosaria. However, the cheques
were intercepted by an imposter who went by the name “BIENVINIDO ROSARIA” and
created an account with the Real Bank. The imposter then withdrew the whole amount
of the checks. Later on, Maningas filed a case, saying that both banks were negligent in
enabling the illicit withdrawal of the funds despite the cheques' fake endorsements.
Meanwhile, the Regional Trial Court found in Maningas' favor, ordering Real Bank to
pay him the full amount of the checks plus interest and the RTC deemed the Real Bank
to be irresponsible as a collecting bank and last endorser. The Court of Appeals (CA)
confirmed the decision of RTC. Then, the Real Bank filed an appeal with the Supreme
Court, alleging that the RTC erred in accepting new evidence, that Maningas was
irresponsible in misspelling the payee's name and mailing the checks by regular mail,
and that the fictitious payee rule should be applied.

Issues

The Court's main issue raised in the case were as follows:

1. Whether the RTC erred in allowing additional evidence.

2. Whether Maningas was negligent in misspelling the payee's name and sending
the checks by ordinary mail.
3. Whether the fictitious payee rule should apply.

Court’s Ruling

The petition is DENIED. The Supreme Court ruled that Real Bank must repay the sum
of the checks to Maningas because it did not apply the greatest level of care and
attention as a bank. The Court determined that Real Bank was negligent as a collecting
bank and last indorser since it enabled the unlawful withdrawal of the funds
notwithstanding the checks' forged endorsements. The Court also determined that
Maningas was not negligent in misspelling the payee's name and delivering the
cheques through regular mail. The Court highlighted that a collecting bank's obligation is
to verify the authenticity of all earlier endorsements and to show extreme caution and
discretion in its dealings.

With this regard, the court decided that the fictitious payee rule does not apply in this
case. The fictitious payee rule asserts that when a check is issued payable to a fictitious
or non-existent individual, the drawer is presumed to have meant to pay the money to
the person who first endorses the check in good faith. However, in this instance, the
payee's name was misspelled but still related to a genuine individual, Bienvenido
Rosaria. Thus, the fictitious payee rule does not apply.

The Court, however, determined that the RTC's request to produce data relevant to the
fake bank account violated the legislation on bank deposit confidentiality. The Court
highlighted that the secrecy of bank deposits is guaranteed by law, and any exceptions
to this norm should be rigorously interpreted. The Court ruled that the RTC should not
have ordered the release of the documents unless it met the criteria in lifting bank
secrecy. In the end, the Court emphasized that the duty of a collecting bank is to verify
the genuineness of all prior endorsements and to exercise a high degree of diligence
and prudence in its dealings.

GSIS v. Court of Appeals

GR No. 211837 March 16, 2022

Facts.

The Banks, which are Land Bank of the Philippines, Tong Yang Merchant Bank,
Industrial Bank of Korea, and First Merchant Banking Corporation, collectively referred
to as "The Banks," agreed to a surety bond on December 13, 1996, with DOMSAT
HOLDINGS, INC. acting as the principal and GSIS acting as the administrator. The loan
amount of US $11,000,000.00 was given to DOMSAT to be used toward the financing of
a two-year lease of a Russian satellite from INTERSPUTNIK. Because Domsat did not
use the loan profits to pay for the satellite rental, GSIS refused to fulfill its duty and
Domsat defaulted on the debt. GSIS said that Domsat moved the $11 million loan
proceeds from the Industrial Bank of Korea to Westmont Bank's Citibank New York
account and then to the bank's Binondo Branch, using Westmont Bank as a middleman.
The Banks brought a complaint against Domsat and GSIS before the Makati RTC. In
order to get the bank ledger covering Domsat's account with Westmont Bank (now
United Overseas Bank) and other relevant documents, GSIS sought that a subpoena
duces tecum be issued to the custodian of Westmont Bank's records. The RTC issued
the subpoena, but it also approved "The Banks'" second move for reconsideration in an
attempt to revoke the subpoena that had been given to GSIS.

In this case, GSIS filed a lawsuit with the CA, and the CA partially approved its request,
enabling it to examine papers but not the bank ledger since R.A. protected the
US$11,000,000.00 that Domsat placed with Westmont Bank. The Bank Secrecy Law,
6426. GSIS then filed a certiorari appeal with the Supreme Court challenging the CA's
ruling permitting the RTC to revoke a subpoena for the submission of bank ledgers.

Issue

The main issue in this case is whether or not the deposited US $ 11,000,000.00 by
Domsat, Inc. to Westmont Bank is covered by R.A. 6426 as what “The Banks” contend
or it is covered by R.A. 1405 as what GSIS contends.

Court’s Ruling

The petition for certiorari is DISMISSED. The Supreme Court ruled in favor of R.A.
6426, affirming the Court of Appeals' ruling. R.A. 1405 was passed in 1955, while R.A.
6426 was passed in 1974. These two statutes both promote the secrecy of bank
deposits. There is no conflict between them and Republic Act No. 1405 was passed to
encourage citizens to deposit their money in banking institutions and to discourage
private hoarding so that the funds may be effectively employed by banks in approved
loans to help the country's economic growth. It includes all bank deposits in the
Philippines, with no difference made between domestic and international deposits.
Therefore, Republic Act No. 1405 is considered as a law of general application. The
Republic Act No. 6426, on the other hand, was intended to encourage foreign lenders
and investors to make deposits. It is a special law that is intended specifically for foreign
currency deposits in the Philippines. A general law does not repeal a specialized or
special legislation. Therefore, it is without doubt that Republic Act No. 6426 applies in
this situation.

Meanwhile, Intengan v. The Court of Appeals upheld the aforementioned concept and
said unequivocally that Republic Act No. 6426 governs foreign currency deposits, such
as those in US dollars. In this case, Citibank sued its officers for urging clients to move
their dollar accounts to other banks. The lawsuit included bank documents, including
dollar deposits made by petitioners, that purported to show the officers' deceit.
Petitioners have now alleged that Citibank violated Republic Act No. 1405. The
Supreme Court concluded that because the accounts in dispute involve deposits in US
dollars, Republic Act No. 6426 applies rather than Republic Act No. 1405.

CARMEN LL. INTENGAN, ROSARIO LL. NERI, and RITA P. BRAWNER, petitioners,
vs.
COURT OF APPEALS, DEPARTMENT OF JUSTICE, AZIZ RAJKOTWALA, WILLIAM
FERGUSON, JOVEN REYES, and VIC LIM, respondents.

G.R. No. 128996 February 15, 2002

Facts

Citibank filed a complaint against two of its officials, Dante L. Santos and Marilou
Genuino, for violating Section 31 and Section 144 of the Corporation Code. The lawsuit
included an affidavit that was signed by Vic Lim, a Citibank vice-president. Based on the
affidavit, Lim discovered that Santos and Genuino used two (2) companies in which
they have personal financial interests, Torrance Development Corporation and Global
Pacific Corporation, to divert existing bank clients/depositors' money from Citibank to
other companies with higher yields. This was done by transferring bank clients' funds to
Torrance and Global invested bank clients' funds in third-party securities, such as stock
and certificates. The petitioners, Carmen Intengan, Rosario Neri, and Rita Brawner,
gained financially from diverting their bank deposits. Later, the petitioners filed a request
to exclude their bank records, which were linked to Lim's affidavit. Lim and Joven
Reyes, Citibank's business manager, filed counter-affidavits. The Provincial Prosecutor,
Mauro M. Castro, directed the filing of information against private respondents Aziz
Rajkotwala and William Ferguson, Citibank, N.A. Global Consumer Banking Country
Business Manager and Country Corporate Officer, respectively, for allegedly violating
Republic Act No. 1405, also known as the Bank Secrecy Law. Then, the private
respondents' counsel then filed an appeal with the Department of Justice (DOJ) where
the appeal was granted.

An application was submitted to the CA by petitioners. The court ruled that the
disclosure of petitioners' deposits was necessary to establish the allegation that Santos
and Genuino violated Section 31 of the Corporation Code by acquiring "any interest
adverse to the corporation in respect of any matter which has." The DOJ ruled that the
disclosure falls under the last exception of R.A. No. 1405, in accordance with the case
of Mellon Bank, N.A. vs. Magsino, where the Supreme Court allowed the testimony on a
non-party's bank deposits was judged to be relevant to the complaint accusations.
 Issue

The main issue in this case is whether or not the disclosure of the dollar deposits falls
under the exception of RA 1405.

Court’s Ruling

The accounts in dispute are in U.S. dollar deposits, hence the appropriate law is in
accordance with Republic Act No. 6426, also known as the "Foreign Currency Deposit
Act of the Philippines," under Section 8 of Secrecy of Foreign Currency Deposits. It
stated there that all foreign currency deposits are thus declared and deemed to be
entirely secret, and, except upon the express without the depositor's authorization, no
individual, government official bureau or office, whether judicial, administrative, or
legislative, or any other public or private organization may inspect, question, or
investigate such foreign currency deposits. Therefore, under R.A. No. 6426, foreign
currency deposits can only be disclosed with the depositor's explicit authorization or
with written permission of the depositor. Private respondents complained of conduct that
occurred prior to the implementation of R.A. on September 29, 2001. No. 9160, also
known as the Anti-Money Laundering Act of 2001. A case for violating Republic Act No.
6426 should have been filed against the private respondents. Private respondents Lim
and Reyes acknowledged disclosing facts about petitioners' dollar deposits without the
latter's prior consent. With that being said, it doesn't matter if the revelation was
required to establish Citibank's case against Dante L. Santos and Marilou Genuino.