1.

That a deposit is in the nature of a loan –

a. Is inconsistent with the fiduciary duty imposed on banks in
the handling thereof.
b. Means that the same may be classified as a preferred credit.
c. Means that the bank which has loaned the depositor money has a
right to compensation if both loan obligations are already due
and demandable, even without prior consent of the depositor.
d. Means that in cases where banks are placed under receivership
or liquidation, a depositor has no other means to recover on
his deposit except through such receivership and liquidation
proceedings where he will be treated as a creditor of the
bank.

2. A time deposit differs from a demand deposit in that –

a. Numbered accounts are not allowed for time deposits, but are
allowed for demand deposits.
b. Instruments issued pursuant to a time deposit are generally
non-negotiable, while instruments issued pursuant to a demand
deposit are negotiable.
c. Funds in time deposit account earn interest, while funds in a
demand deposit account cannot earn interest.
d. Funds in a time deposit account cannot be withdrawn at any
time, while funds in a demand deposit account can.

3. A bank dishonors a check drawn against an account with

insufficient funds. Under which circumstances can the bank be
held liable for such dishonor?
a. If the depositor has another account in the bank with
sufficient funds to cover the amount of the check drawn but
the bank did not apply such funds to cover said check.
b. If the bank did not notify the depositor that it had
previously availed of its legal right to compensation and
applied the funds in the checking account in payment of
depositor’s loan to the bank resulting in the insufficiency of
the funds to cover the amount of the check drawn.
c. If before dishonoring the check, the bank did not notify the
depositor that his funds are insufficient to cover the amount
of the check drawn as to give him an opportunity to deposit
sufficient funds.
d. If the bank does not allow the depositor to deposit the funds
needed to cover the check drawn within a reasonable time after
presentment in order to avoid dishonor of said check.

4. A Bank is liable to the depositor if it allows withdrawal of the

funds in the depositor’s account by someone who is not actually
authorized by the depositor, but who –
a. Presents the passbook and a withdrawal slip signed by the
depositor.
b. Surrenders the certificate of time deposit.
 c. Appears as an authorized signatory of a corporate depositor in
the latest board resolution submitted to the bank, but is
actually no longer connected with the corporate depositor.
d. Appears in the bank records as the depositor but is actually
merely a trustee for the true owner of the funds.

5. What can a bank lawfully do or omit to do without violating its

duty to exercise extraordinary diligence in the handling of
deposits?
a. Allowing a crossed check to be cashed provided that the payee
is personally known to the bank.
b. Accepting as deposit a check which is not indorsed by the
payee, provided that the check is a manager’s check.
c. Closing a demand deposit account with prior notice to a
depositor who has been misusing such account repeatedly
overdrawing against it.
d. Disclosing information regarding “and/or” savings account
where one of the two depositors has given his written
permission for such disclosure.