Angel Javellana vs.
Jose Lim Gavieres vs Taverna
GR No 4015, August 24, 1908
Facts:
On May 26, 1897, Jose and others executed a document in favor of Angel, wherein
it stated that they had received a sum of P2600.86 as a “deposit” without interest from the
latter. The document also stipulated that they would return the same amount jointly and
severally on January 20, 1898.
Upon the stipulated due date, however, Jose and others asked for an extension to
pay and bound themselves to pay 125% interest per annum on the amount of their
indebtedness, to which the Angel acceded. Despite the extension, Jose and others still failed
to pay the full amount of their indebtedness. Consequently, this prompted Angel to file a civil
action before the CFI of Iloilo. The CFI subsequently rules in favor of Angel to recover the
amount due plus the payment of 15% interest per annum.
Issue:
Whether or not the contract executed by Angel and Jose and others was that of a
deposit.
Ruling:
It must be understood that Jose and others were lawfully authorized to make use of
the amount deposited, which they have done as subsequently shown when they asked for an
extension of the time for the return thereof. They were conscious that they had used, for their
own profit and gain, the money which they apparently received as a “deposit”. Moreover, they
engaged to pay interest to Angel from the stipulated date until the time when the refund should
have been made.
Where money, consisting of coins of legal tender, is deposited with a person and the
latter is authorized by the depositor to use and dispose the same, the agreement is not a
contract of deposit, but a loan. Moreover, Article 1768 of the old Civil Code (1978 in the NCC)
provides that when the depository has permission to make use of the thing deposited, the
contract loses the character of a deposit and becomes a loan or bailment.
A subsequent agreement between the parties as to the interest on the amount said
to have been deposited, because the same could not be returned at the time fixed therefore,
does not constitute a renewal of an agreement of deposit, but it is the best evidence that the
original contract entered into between them was for a loan under the guise of a deposit.
GR No. 6, November 14, 1901
Facts:
This is an appeal from a decision made by the CFI of Tondo, commenced on January
10, 1900 by Don Manuel Garcia Gavieres as plantiff and successor-in-interest of the
deceased Dona Ignacia de GOrricho against Don Trinidad H. Pardo de Tavera as universal
heir and successor o9f the deceased Don Felix Pardo de Taverna.
The plaintiff alleges that Dona Ignacia deposited with Don Trinidad the amount of
P3000 in gold, as a deposit payable on two months’ notice in advance, with interest at 6% per
annum that was evidenced by an agreement signed by the two parties in October 31, 1859.
Don Manuel came before the court to seek aid in recovering the balance of P1423.75 from
the estate of Don Trinidad.
The defendant in answering the original complaint alleged that the document which
the complaint is based upon was not a contract of deposit but one of for a contract of loan.
The defendant further presented evidence that showed that the principal obligation was paid
by Don Trinidad through his agent and that in case of nonpayment of the balance that any
action is barred by prescription.
Issue:
Whether or not the document presented by the plaintiff a contract of loan or that of
a deposit.
Ruling:
The Court held that the contract was that of a contract of loan.
Although in the document in question a deposit is spoken of, nevertheless from an
examination of the entire document it clearly appears that the contract was a loan and that
such was the intention of the parties. The obligation of the depositary to pay the interest at
the rate of 6% to the depositor suffi9ces the cause the obligation to be considered as a loan
and makes i9t likewise evident that it was the amount deposited, since it was stipulated that
the amount could be collected after notice of tw3o months in advance. Such being the case,
the contract lost the character of a deposit and acquired that of a loan.
All personal actions, such as those which arise from a contract of loan, cease to
have legal effect after 20 years according to the former law and after 15 years according to
the NCC. The document dated January 8, 1869, executed by Don Felix Garcia Gavieres,
husband and legal representative of Dona Ignacia Gorricho, acknowledges the receipt of P
1224 from Don Manuel Darvin, the representative of the deceased Don Felix Pardo de
Tavera. This sum is declared in the document was the balance due upon the debt of P2000.
This was more or less the amount which remained as due upon the original obligation after
deducting the payment which was admitted to have been made. In the absence of evidence
disclosing that there were other claims in favor of Gavieres it is reasonable to suppose that
this payment was made to satisfy bthe balance due upon the original obligation.
He who by laches in the exercise of his rights has caused a failure of prrof has no
right to complain if the court does not apply the strict rules of evidence which are applicable
in ordinary cases, and admits to a certain extent the presumption to which the conduct of the
interest party himself naturally giuves rise.
It was the opinion of the court that the judgment of the CFI should be affirmed, and
it was so ordered with costs of appeal taxed against the appellant.
Citibank NA vs. Spouses Luis and Carmelita Cabamongan, et. al.
GR No. 146918, May 2, 3006
Facts:
Respondent spouses opened a joint foreign currency time deposit in trust for their
sons at PNB Makati branch. Prior to the maturity, a person claiming to be Carmelita
Cabamongan pre-terminated the said account upon presenting identification cards. Though
not being able to surrender the Original Certificate of Deposit, the money was released to her
despite the release and waiver documents not being notarized.
Respondent spouses learned of the incident and informed PNB that Carmelita could
not have pre-terminated the account since she was in the US at the time. The spouses made
a formal demand of payment of the deposit and consequently, filed a complaint when
petitioner refused to pay.
Petitioner bank insists that it was not negligent of its duties since the deposit was
released upon proper identification and verification. RTC ruled in favor of the spouses to
which decision the CA affirmed.
Issue:
Whether or not petitioner bank was negligent in its duties as to be liable for damages.
Ruling:
The Court has repeatedly emphasized that, since the banking business is impressed
with public interest, of paramount importance thereto is the trust and confidence of the public
in general. Consequently, the highest degree of diligence is expected, and high standards of
integrity and performance are even required of it. By the nature of its functions, a bank is
“under obligation to treat the accounts of its depositors with meticulous care, always having
in mind the fiduciary nature of their relationship.”
In this case, it has been sufficiently shown that the signatures of Carmelita in the
forms for pre-termination of deposits are forgeries. Citibank, with its signature verification
procedure, failed to detect the forgery. Its negligence consisted in the omission of that degree
of diligence required of banks. The Court has held that a bank is “bound to know the
signatures of its customers; and if it pays a forged check, it must be considered as making
the payment out of its own funds, and cannot ordinarily charge the amount so paid to the
account of the depositor whose name was forged.” Such principle equally applies here.
The Court agrees with the observation of the CA that Citibank, thru Account Officer San
Pedro, openly courted disaster when despite noticing discrepancies in the signature and
photograph of the person claiming to be Carmelita and the failure to surrender the original
certificate of time deposit, the pre-termination of the account was allowed. Even the waiver
document was not notarized, a procedure meant to protect the bank. For not observing the
degree of diligence required of banking institutions, whose business is impressed with public
interest, Citibank is liable for damages.
CA-Agro Industrial Devt Corp vs CA
219 SCRA 426
Facts:
On July 3, 1979, petitioner (through its President- Sergio Aguirre) and the Spouses Ramon
and Paula Pugao entered into an agreement whereby the former purchase two parcel of lands
from the latter. It was paid of downpayment while the balance was covered by there postdated
checks. Among the terms and conditions embodied in the agreement were the titles shall be
transferred to the petitioner upon full payment of the price and the owner's copies of the
certificate of titles shall be deposited in a safety deposit box of any bank. Petitioner and the
Pugaos then rented Safety Deposit box of private respondent Security Bank and Trust
Company.
Thereafter, a certain Margarita Ramos offered to buy from the petitioner. Mrs Ramos demand
the execution of a deed of sale which necessarily entailed the production of the certificate of
titles. In view thereof, Aguirre, accompanied by the Pugaos, then proceed to the respondent
Bank to open the safety deposit box and get the certificate of titles. However, when opened
in the presence of the Bank's representative, the box yielded no such certificate. Because of
the delay in the reconstitution of the title, Mrs Ramos withdrew her earlier offer to purchase.
Hence this petition.
Issue:
Whether or not the contract of rent between a commercial bank and another party for the use
of safety deposit box can be considered alike to a lessor-lessee relationship.
Ruling:
The petitioner is correct in making the contention that the contract for the rent of the deposit
box is not a ordinary contract of lease as defined in Article 1643 of the Civil Code. However,
the Court do not really subscribe to its view that the same is a contract of deposit that is to be
strictly governed by the provisions in Civil Code on Deposit; the contract in the case at bar is
a special kind of deposit. It cannot be characterized as an ordinary contract of lease under
Article 1643 because the full and absolute possession and control of the safety deposit box
was not given to the joint renters- the petitioner and the Pugaos. The guard key of the box
remained with the respondent bank; without this key, neither of the renters could open the
box. On the other hand, the respondent bank could not likewise open the box without the
renter's key. The Court further assailed that the petitioner is correct in applying American
Jurisprudence. Herein, the prevailing view is that the relation between the a bank renting out
safe deposits boxes and its customer with respect to the contents of the box is that of a bail
or/ and bailee, the bailment being for hire and mutual benefits. That prevailing rule has been
adopted in Section 72 of the General Banking Act.
Section 72. In addition to the operations specifically authorized elsewhere in this Act, banking
institutions other that building and loan associations may perform the following services:
(a) Receive in custody funds, document and valuable objects and rents safety deposits taxes
for the safeguard of such effects.
xxx xxx xxx
The bank shall perform the services permitted under subsections (a) (b) and (c) of this section
as depositories or as agents.
Paulino Gullas v. PNB
G.R. No. L-43191
Facts:
Petitioner Gullas maintains a current account with herein respondent PNB. He together with
one Pedro Lopez signed as endorsers of a Warrant issued by the US Veterans Bureau
payable to the order of one Francisco Bacos. PNB cashed the check but was subsequently
dishonored by the Insular Treasurer. PNB then sent notices to petitioner which could not be
delivered to him at the time because he was in Manila. PNB in the letter informed the petitioner
the outstanding balance on his account was applied to the part payment of the dishonored
check. Upon petitioner’s return, he received the notice of dishonor and immediately paid the
unpaid balance of the warrant. As a consequence of these, petitioner was inconvenienced
when his insurance was not paid due to lack of funds and was publicized widely at his area
to his mortification.
Issue:
Whether or not PNB has the right to apply petitioner’s deposit to his debt to the bank.
Ruling:
NO.
As a general rule, a bank has a right of set off of the deposits in its hands for the payment of
any indebtedness to it on the part of a depositor. The Civil Code contains provisions regarding
compensation (set off) and deposit. The portions of Philippine law provide that compensation
shall take place when two persons are reciprocally creditor and debtor of each other. In this
connection, it has been held that the relation existing between a depositor and a bank is that
of creditor and debtor. [General Rule]
Starting, therefore, from the premise that the Philippine National Bank had with respect to the
deposit of Gullas a right of set off, we next consider if that remedy was enforced properly. The
fact we believe is undeniable that prior to the mailing of notice of dishonor, and without waiting
for any action by Gullas, the bank made use of the money standing in his account to make
good for the treasury warrant.
Gullas was merely an indorser and had issued in good faith. As to an indorser, the situation
is different and notice should actually have been given him in order that he might protect his
interests. We accordingly are of the opinion that the action of the bank was prejudicial to
Gullas.