Associated Bank v.

Vicente Tan

Facts:

Vicente Tan (Tan) deposited a postdated check of 101k which was entered into his records making his
total balance 297k. He withdrew 240k and a day after, deposited 50k to ensure sufficient funds for the
checks he issued to his business partners.

His business partners however, went back to him due to bounced checks. The bank did not apologize
despite Tan’s complaint. He then filed a complaint for damages due to his besmirched reputation in the
business community.

The bank contends that they have the right to debit Tan’s account by reason of the dishonor of the check
which was withdrawn prior to its clearing. Further, they aver that it has ni liability with respect to the
clearing of deposited checks as the clearing is undertaken by the CBP and in accepting the check deposit,
it merely obligates itself as the depositor’s collecting agent, subject to the actual payment by the drawee
bank.

The RTC ruled in favor of Tan. The bank allowed Tan to use the funds before the clearing was done out of
accommodation since he has been a long time client. The CA affirmed the decision of the RTC.

ISSUE:

W/N the Petitioner has the right to debit the account of its client for a check deposit which was
dishonored by the drawee bank.

HELD:

Art. 1980 provides that, “fixed, savings, and current deposits of money in banks and similar institutions
shall be governed by the provisions concerning simple loan.

The relationship between banks and depositors is that of Art. 1278 (legal compensation) and may take
place when the requisites provided by Art. 1279 are present.

Banks practice a degree of diligence more than that of a good father of a family (fiduciary). In the case at
bar, the petitioner did not practice the highest degree of care. The bank allowed the withdrawal of the face
value of the check prior to its clearing.

As a general rule, banks are liable for the wrongful/torturous acts and declarations of its officers or
agents within the course and scope of their employment. In this situation, the petitioner failed to show
that they duly and immediately informed Tan of the debiting of his account. He deserves to be notified as
he is a valuable client.

According to the Negotiable Instruments Law, it was incumbent on the bank to give proper notice to Tan.

Lastly, the Court points out that it is not unusual for a businessman like him to immediately deposit
money in his account to answer for the postdated checks he had issued.

Petition denied.
Producers Bank v. CA

FACTS:

Franklin Vives (Vives) by Angeles Sanchez (Sanchez) to help her friend, Arturo Doronilla (Doronilla) in
incorporating his business, Sterela Marketing and Services (Sterela). Specifically, Sanchez asked Vives to
deposit a certain amount in money to Sterela’s account for purposes of its incorporation.

Relying on the assurances and representations of Sanchez and Doronilla, Vives issued a 200k check in
favor of Sterela. Vives instructed his wife to accompany Doronilla and Sanchez in opening a savings
account in the name of Sterela in the Producers Bank of the Philippines.

Vives then learned that Sterela was no longer holding office in the address previously given to him. They
went to the Bank to verify if their money was still intact. They were informed that part of the money in
Savings Account had been withdrawn by Doronilla and only 90k remained. They were also informed that
they were not allowed to withdraw the remaining amount as it had to answer for some postdated checks
issued by Doronilla.

Vives tried to get in touch with Doronilla through Sanchez. He was assured by Doronilla that his money
was intact and would be returned to him. He then issued Doronilla issued a postdated check for 212k in
favor of Vives. The check was dishonored, however.

Vives referred the matter to a lawyer, who then made a written demand upon Doronilla for the return of
Vives’ money. Doronilla reissued a check but was dishonored once again.

Vives initiated an action for recovery of sum of money in the RTC vs. Doronilla, Sanchez, and the Bank.

RTC ruled in favor of Vives and ordered the other party to jointly and severally pay Vives. The CA affirmed
in toto.

ISSUE:

W/N Producers Bank is solidarily liable to Vives, considering that they were not privy to the transaction
between Vives and Doronilla.

HELD:

Although the savings account was in the name of Sterela, the bank records disclose that the only ones
empowered to withdraw the same were Inocencia Vives (wife) and Sanchez. Atienza, the Asst. Bank
Manager, stated that it is the usual banking procedure that withdrawals of savings deposits could only be
made by persons whose authorized signatures are in the signature cards on file with the bank. He,
however, said that this procedure was not followed because Sterela was owned by Doronilla and the latter
had the full authority to withdraw by virtue of such ownership.

The Court disagreed with Atienza for the following reasons:

1.) He was all the time aware that the money came from Vives and did not belong to Sterela. He was
also told by Inocencia Vives that they were only accommodating Doronilla so that a certification
can be issued to the effect that Sterela had a deposit of so much amount to be sued in the
incorporation of the firm.
2.) The signature of Doronilla was not authorized in so far as that account is concerned inasmuch as
he had not signed the signature card provided by the bank whenever a deposit is opened.
3.) Neither Inocencia Vives nor Sanchez had given Doronilla the authority to withdraw.

Moreover, the transfer of fund was done without the passbook having been presented. It is a standard
procedure to require the presentation of the passbook prior to any withdrawal from a savings deposit.
The petitioner is liable for Vives’ loss and is solidarily liable with Doronilla and Dumagpi for the return of
the 200k since it is clear that petitioner failed to prove that it exercised due diligence to prevent the
unauthorized withdrawals from Sterela’s savings account, and that it was not negligent in the selection
and supervision of Atienza.

Petition Denied.
Joseph Goyanko, Jr., administrator of the estate of Joseph Goyanko, Sr. v UCPB

FACTS:

Joseph Goyanko, Sr. (Goyanko) invested 2M with Philippine Asia Lending Investors, Inc. family,
represented by the petitioner, and his illegitimate family presented conflicting claims to PALII for the
release of the investment. Pending the investigation of the conflicting claims, PALII deposited the proceeds
of the investments with UCPB under the name “Phil Asia: ITF The Heirs of Joseph Goyanko, Sr.” The total
deposit for the amount was P1,509,318.76.

UCPB allowed PALII to withdraw 1.5m from the account, leaving only 9318.76. UCPB refused to restore
the amount withdrawn plus legal interest hence, the petitioner filed a complaint before the RTC.

The RTC dismissed the petitioner’s complaint. It concluded that UCPB merely performed its duty as a
depository bank in allowing PALII to withdraw from the account, as the contract of deposit was officially
only between PALII, in its own capacity, and UCPB. The CA partially granted the petitioner’s appeal.

ISSUE:

W/N UCPB should be held liable for the amount withdrawn because a trust agreement existed between
PALII and UCPB, in favor of HEIRS, when PALII opened the account with UCPB.

HELD:

Contrary to the petitioner’s position, UCPB did not become a trustee by mere opening of the account.

Per Art. 1980 of the Civil Code, a creditor-debtor relationship exists between the bank and its depositor.
The savings deposit agreement is between the bank and the depositor; by receiving the deposit, the bank
impliedly agrees to pay upon demand and only upon the depositor’s order.

Since the records and the petitioner’s own admission showed that the account was opened by PALII,
UCPB’s receipt of the deposit signified that it agreed to pay PALII upon its demand and only upon its
order. Thus, when UCPB allowed PALII to withdraw from the account, it was merely performing its
contractual obligation under their savings deposit agreement. No negligence or bad faith can be imputed
to UCPB for this action. As far as UCPB was concerned, PALII is the account holder and not the HEIRS.
Third persons, like the HEIRS, who may have the right to the money deposited cannot hold the bank
responsible unless there is a court order or garnishment.

UCPB’s obligation was towards PALII as its creditor-depositor. While the HEIRS may have valid
claim over the proceeds of the investment, the obligation to turn-over those proceeds lies with
PALII.

Petition Denied.
BPI v CA

FACTS:

A.A. Salazar Construction and Engineering Services (later replaced by Annabelle A. Salazar as a private
respondent) filed for an action for a sum of money with damages against BPI. She prayed for the recovery
of the 267k debited by BPI from her account, along with damages and atty. fees.

In its answer, BPI contended that Julio Templonuevo (3rd party defendant) demanded from them 267k
representing 3 checks payable to him but was deposited to Salazar’s account instead without his
knowledge and endorsement. Finding that his claim was valid, BPI froze A.A. Salazar Construction’s bank
account instead of Salazar’s other account which was either closed or had insufficient funds.

Salazar was told to settle with Templonuevo but did not come to anything.

Salazar’s bank account was debited 267,707.70 and the sum of 267,692.50 was paid to Templonuevo via
cashier’s check, the difference being bank charges.

Templonuevo admits the receipt of the 267k but this was to correct the malicious deposit made by
Salazar to her account and the matter was violative of primary and ordinary rules of banking. He adds
that the debiting of BPI of Salazar’s account was purely between the said parties and pursuant to banking
rules and regulations but does not affect him.

The RTC ruled in favor of Salazar. The counterclaim, 3rd party complaint, and Templonuevo’s complaint
were all dismissed. The CA affirmed the RTC.

ISSUE:

W/N BPI had the right to set-off the amount from Salazar’s account the value of the checks it previously
credited in her favor.

HELD:

A bank generally has a right of set-off over the deposits therein for the payment of any withdrawals on the
part of a depositor. The right of a collecting bank to debit a client’s account for the value of a dishonored
check that has previously been credited has fairly been established by jurisprudence.

Art. 1980 of the Civil Code provides that “fixed, savings, and current deposits of money in banks and
similar institutions shall be governed by the provisions concerning simple loan.”

Hence the relationship between banks and depositors has been held to be that of creditor and debtor.
Thus, legal compensation under Art. 1278 of the Civil Code may take place when all the requisites
provided by 1279 are present.

Though BPI had the right to set-off over the amount it paid to Templonuevo against the deposit of Salazar,
the issue of whether it acted judiciously is an entirely different matter. The fiduciary nature of banks
dictate that they take meticulous care of the deposits of their clients.

More importantly, however, the petitioner debited the account held in the name of the sole proprietorship
of Salazar without due notice even with full knowledge of the brewing conflict between their two clients.
This is contrary to the petitioner’s assurances to Salazar that the account would remain untouched,
pending the resolution of the controversy between her and Templonuevo.

Petition partly granted. 267k will not be returned to Salazar.