FINALS Case List Digest Set #10
Busmente
Jomuel Patrick D. Gueta
TOPIC
SIMEX INTERNATIONAL (MANILA),
INCORPORATED, petitioner , vs. THE
HONORABLE COURT OF APPEALS and
TRADERS ROYAL BANK
It is required to exercise utmost diligence in
the handling of deposits.
BANK'S NEGLIGENCE IN THEIR DUTIES
TOWARDS THEIR CLIENTS WARRANTS AWARD
OF EXEMPLARY DAMAGES; REASON THEREOF.
— As a business affected with public interest
and because of the nature of its functions, the
bank is under obligation to treat the accounts
of its depositors with meticulous care, always
having in mind the fiduciary nature of their
relationship.
COMMERCIAL LAW REVIEW
2nd Semester S.Y. 2018-2019
FACTS ISSUE
BANKING LAWS
The petitioner is a private corporation engaged in the Whether the respondent is
exportation of food products. It buys these products from negligent and thus entitles
various local suppliers and then sells them abroad, particularly the petitioner to damages
in the United States, Canada and the Middle East. Most of its
exports are purchased by the petitioner on credit.
The petitioner was a depositor of the respondent bank and
maintained a checking account. On May 25, 1981, the
petitioner deposited to its account in the said bank the
amount of P100,000.00, thus increasing its balance as of that
date to P190,380.74. Subsequently, the petitioner issued
several checks against its deposit but was surprised to learn
later that they had been dishonored for insufficient funds.
As a consequence, the California Manufacturing Corporation,
the Malabon Long Life Trading and the G. and U. Enterprises,
sent a letter of demand to the petitioner and withheld the
delivery of the order made by the petitioner.
The petitioner complained to the respondent bank on June 10,
1981. Investigation disclosed that the sum of P100,000.00
deposited by the petitioner on May 25, 1981, had not been
credited to it. The error was rectified on June 17, 1981, and
the dishonored checks were paid after they were re-
deposited.
The petitioner then filed a complaint in CFI of Rizal claiming
from the private respondent moral damages in the sum of
P1,000,000.00 and exemplary damages in the sum of
P500,000.00, plus 25% attorney's fees, and costs.
Atty.
San Beda College Alabang - School of Law
RULING
TC/CFI: Awarded only Nominal Damages
CA: Affirmed in toto. The respondent court found with the trial
court that the private respondent was guilty of negligence but
agreed that the petitioner was nevertheless not entitled to moral
damages. The essential ingredient of moral damages is proof of bad
faith. When the bank rectified its mistake and paid the dishonored
checks, it negated bad faith and negligence.
SC: It seems to us that the negligence of the private respondent had
been brushed off rather lightly as if it were a minor infraction
requiring no more than a slap on the wrist. We feel it is not enough
to say that the private respondent rectified its records and credited
the deposit in less than a month as if this were sufficient
repentance. The error should not have been committed in the first
place. The respondent bank has not even explained why it was
committed at all.
As the Court sees it, the initial carelessness of the respondent bank,
aggravated by the lack of promptitude in repairing its error, justifies
the grant of moral damages.
In the case at bar, it is obvious that the respondent bank was remiss
in that duty and violated that relationship. What is especially
deplorable is that, having been informed of its error in not crediting
the deposit in question to the petitioner, the respondent bank did
not immediately correct it but did so only one week later or twenty-
three days after the deposit was made. It bears repeating that the
record does not contain any satisfactory explanation of why the
error was made in the first place and why it was not corrected
immediately after its discovery. Such ineptness comes under the
concept of the wanton manner contemplated in the Civil Code that
calls for the imposition of exemplary damages. After deliberating on
this particular matter, the Court, in the exercise of its discretion,
hereby imposes upon the respondent bank exemplary damages in
the amount of P50,000.00, "by way of example or correction for the
public good," in the words of the law. It is expected that this ruling
will serve as a warning and deterrent against the repetition of the
ineptness and indifference that has been displayed here, lest the
confidence of the public in the banking system be further impaired.
FINALS Case List Digest Set #10
Jomuel Patrick D. Gueta
TOPIC
GUINGONA, JR., ANTONIO I. MARTIN, and
TERESITA SANTOS, petitioners, vs. THE CITY
FISCAL OF MANILA, HON. JOSE B.
FLAMINIANO, ASST. CITY FISCAL FELIZARDO N.
LOTA and CLEMENT DAVID, respondents
The officers of the bank cannot be held liable
for estafa if they authorized the use of the
money deposited by the depositor. There
would be no liability for estafa under Article
315(1)(b) of the Revised Penal Code even if the
bank failed to return the amount deposited.
p319
COMMERCIAL LAW REVIEW
2nd Semester S.Y. 2018-2019
FACTS
From March 20, 1979 to March, 1981, David invested with the
NSLA the sum of P1,145,546.20 on time deposits, P13,531.94
on savings account deposits etc. David said he was induced
into making the aforestated investments by Robert Marshall,
an Australian national who was allegedly a close associate of
petitioner Guingona Jr., then NSLA President, petitioner
Martin, then NSLA Executive Vice-President and petitioner
Santos, then NSLA General Manager.
On June 1981, Guingona and Martin, upon David’s request,
assumed the bank’s obligation to David by executing a joint
promissory note. On July 1981, David received a report that
only a portion of his investments was entered in the NSLA
records.
On December 1981, David filed I.S. No. 81-31938 in the Office
of the City Fiscal, which case was assigned to Asst. City Fiscal
Lota for preliminary investigation. David charged petitioners
with estafa and violation of Central Bank Circular No. 364 and
related regulations on foreign exchange transactions.
Petitioners moved to dismiss the charges against them for lack
of jurisdiction because David's claims allegedly comprised a
purely civil obligation, but the motion was denied. After the
presentation of David's principal witness, petitioners filed this
petition for prohibition and injunction because:
a. The production of various documents showed that the
transactions between David and NSLA were simple loans (civil
obligations which were novated when Guingona and Martin
assumed them)
b. David's principal witness testified that the duplicate
originals of the instruments of indebtedness were all on file
with NSLA.
A TRO was issued ordering the respondents to refrain from
proceeding with the preliminary investigation in I.S. No. 81-
31938.
Petitioners’ liability is civil in nature, so respondents have no
jurisdiction over the estafa charge. TRO CORRECTLY ISSUED.
ISSUE
whether public
respondents acted without
jurisdiction when they
investigated the charges
(estafa and violation of CB
Circular No. 364 and
related regulations
regarding foreign exchange
transactions) subject
matter of I.S. No. 81-31938.
Atty. Busmente
San Beda College Alabang - School of Law
RULING
When private respondent David invested his money
on time and savings deposits with the aforesaid bank,
the contract that was perfected was a contract of
simple loan or mutuum and not a contract of deposit
governed by the provisions concerning simple loan
(Article 1980, Civil Code). Hence, the relationship
between the private respondent and the Nation
Savings and Loan Association is that of creditor and
debtor; consequently, the ownership of the amount
deposited was transmitted to the Bank upon the
perfection of the contract and it can make use of the
amount deposited for its banking operations, such as
to pay interests on deposits and to pay withdrawals.
While the Bank has the obligation to return the
amount deposited, it has, however, no obligation to
return or deliver the same money that was deposited.
And, the failure of the Bank to return the amount
deposited will not constitute estafa through
misappropriation punishable under Article 315, par.
1(b) of the Revised Penal Code, but it will only give
rise to civil liability over which the public
respondents have no jurisdiction.
FINALS Case List Digest Set #10
Jomuel Patrick D. Gueta
TOPIC
Vitug v. CA
G.R. No. 82027, March 29, 1990
ROMARICO G. VITUG, petitioner, vs. THE
HONORABLE COURT OF APPEALS and
ROWENA FAUSTINO-CORONA, respondents.
Joint accounts may be the subject of a
survivorship agreement whereby the co-
depositors agree to permit either of them to
withdraw the whole deposit during their
lifetime and transferring the balance to the
survivor upon the death of one of them
p.321
COMMERCIAL LAW REVIEW
2nd Semester S.Y. 2018-2019
FACTS
Spouses Dolores and Romarico Vitug entered into a
survivorship agreement with the Bank of American
NationalTrust and Savings Association. The said agreement
contained the following stipulations:
(1) All money deposited and to be deposited with the Bank in
their joint savings current account shall be both their property
and shall be payable to and collectible or withdrawable by
either or any of them during their lifetime; and
(2) After the death of one of them, the same shall belong to
and be the sole property of the surviving spouse and payable
to and collectible or withdrawable by such survivor
Dolores died naming Rowena Corona in her wills as executrix.
Romarico later filed a motion asking authority to sell certain
shares of stock and real property belonging to the estate to
cover his advances to the estate which he claimed were
personal funds withdrawn from their savings account. Rowena
opposed on the ground that the same funds withdrawn from
the savings account were conjugal partnership properties and
part of the estate. Hence, there should be no reimbursement.
On the other hand, Romarico insists that the same are his
exclusive property acquired through the survivorship
agreement.
TC: upheld the validity of the agreement
CA: survivorship agreement constitutes a conveyance mortis
causa which "did not comply with the formalities of a valid will
as prescribed by Article 805 of the Civil Code," 8 and secondly,
assuming that it is a mere donation inter vivos, it is a
prohibited donation under the provisions of Article 133 of the
Civil Code.
Rivera v Peoples Bank and Trust Co.
that they were joint (and several) owners thereof; and
that either of them could withdraw any part or the whole of
said account during the lifetime of both, and the balance, if
any, upon the death of either, belonged to the survivor.
ISSUE
Whether or not the funds
of the savings account
subject of the survivorship
agreement were conjugal
partnership properties and
part of the estate
Atty. Busmente
San Beda College Alabang - School of Law
RULING
NO. The conveyance in question is not, first of all, one of mortis
causa, which should be embodied in a will. A will has been defined
as “a personal, solemn, revocable and free act by which a
capacitated person disposes of his property and rights and declares
or complies with duties to take effect after his death.” In other
words, the bequest or device must pertain to the testator. In this
case, the monies subject of savings account No. 35342-038 were in
the nature of conjugal funds In the case relied on, Rivera v. People’s
Bank and Trust Co., we rejected claims that a survivorship
agreement purports to deliver one party’s separate properties in
favor of the other, but simply, their joint holdings.
There is no showing that the funds exclusively belonged to one
party, and hence it must be presumed to be conjugal, having been
acquired during the existence of the marital relations.
Neither is the survivorship agreement a donation inter vivos, for
obvious reasons, because it was to take effect after the death of one
party. Secondly, it is not a donation between the spouses because
it involved no conveyance of a spouse’s own properties to the other.
It is also our opinion that the agreement involves no modification
petition of the conjugal partnership, as held by the Court of Appeals,
by “mere stipulation” and that it is no “cloak” to circumvent the law
on conjugal property relations. Certainly, the spouses are not
prohibited by law to invest conjugal property, say, by way of a joint
and several bank account, more commonly denominated in banking
parlance as an “and/or” account. In the case at bar, when the
spouses Vitug opened savings account No. 35342-038, they merely
put what rightfully belonged to them in a money-making venture.
They did not dispose of it in favor of the other, which would have
arguably been sanctionable as a prohibited donation.
The conclusion is accordingly unavoidable that Mrs. Vitug having
predeceased her husband, the latter has acquired upon her death a
vested right over the amounts under savings account No. 35342-
038 of the Bank of America. Insofar as the respondent court ordered
their inclusion in the inventory of assets left by Mrs. Vitug, we hold
that the court was in error. Being the separate property of
petitioner, it forms no more part of the estate of the deceased.
FINALS Case List Digest Set #10 COMMERCIAL LAW REVIEW Atty. Busmente
Jomuel Patrick D. Gueta 2nd Semester S.Y. 2018-2019 San Beda College Alabang - School of Law
TOPIC FACTS ISSUE RULING