Banking Cases Part 2 (1)

8/10/2019 Banking Cases Part 2 (1)

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[G.R. No. 128996. February 15, 2002]

CARMEN LL. INTENGAN, ROARIO LL. NERI, a!" RITA #. $RA%NER,petitioners, &'. CO(RT OF A##EAL,)E#ARTMENT OF *(TICE, A+I+ RA*OT%ALA, %ILLIAM FERG(ON, *O-EN REE, a!" -IC

LIM, respondents.

) E C I I O N

)E LEON, *R., J./

Before us is a petition for review on certiorari, seeking the reversal of the Decision [1]dated July 8, 1996 of theforer !ifteenth Division["]of the #ourt of $ppeals in #$%&'(' )* +o' -.-- as well as its (esolution []dated $pril 16,199- denying petitioners/ otion for reconsideration' 0he appellate court, in its Decision, sustained a resolution of theDepartent of Justice ordering the withdrawal of inforations for violation of (epulic $ct +o' 123. against privaterespondents'

0he facts are4

5n )epteer "1, 199, #itiank filed a coplaint for violation of section 1, [2]in relation to section 122[.]of the#orporation #ode against two "7 of its officers, Dante ' )antos and arilou &enuino' $ttached to the coplaint wasan affidavit[6]e:ecuted y private respondent ;ic i, a vice%president of #itiank' *ertinent portions of his affidavit aret also appeared that out of these

transactions, r' Dante ' )antos and s' arilou &enuino derived sustantial financial gains'

.'1 >n the course of the investigation, > was ale to deterine that the ank clients which r' )antos and s'&enuino helped=caused to divert their deposits=oney placeents with #itiank, +$' to 0orrance and &loal theirfaily corporations7 for susentengan:::d7 (osario +eri:::

i7 (ita Brawner

$ll the aove persons=parties have long standing accounts with #itiank, +'$' in savings=dollar deposits and=or in trustaccounts and=or oney placeents'
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$s evidence, i anne:ed ank records purporting to estalish the deception practiced y )antos and &enuino')oe of the docuents pertained to the dollar deposits of petitioners #aren l' >ntengan, (osario l' +eri, and (ita*' Brawner, as follows4

a7 $nne: ?$%6@[-] % an ?$pplication for oney 0ransfer@ in the aount of A) 123,333'33, e:ecuted y>ntengan in favor of #itiank )=$ +o' "26--96, to e deited fro her $ccount +o' "".221C

7 $nne: ?$%-@[8]% a ?oney 0ransfer )lip@ in the aount of A) 2.,996'3, e:ecuted y Brawner in favor of#itiank )=$ +o' "26--96, to e deited fro her $ccount +o' "".2"6C and

c7 $nne: ?$%9@

[9]

% an ?$pplication for oney 0ransfer@ in the aount of A) 133,333'33, e:ecuted y +eri infavor of #itiank )=$ +o' "26--96, to e deited fro her $ccount +o' "2.31318'

>n turn, private respondent Joven (eyes, vice%president=usiness anager of the &loal #onsuer Banking&roup of #itiank, adits to having authoried i to state the naes of the clients involved and to attach thepertinent ank records, including those of petitioners/' [13]Ee states that private respondents $i (aFkotwala andGillia !erguson, #itiank, +'$' &loal #onsuer Banking #ountry Business anager and #ountry #orporate5fficer, respectively, had no hand in the disclosure, and that he did so upon the advice of counsel'

>n his eorandu, the )olicitor &eneral descried the schee as having een conducted in this anner4

!irst step4 )antos and=or &enuino would tell the ank client that they knew of financial products of other copaniesthat were yielding higher rates of interests in which the ank client can place his oney' $cting on this inforation, theank client would then authorie the transfer of his funds fro his #itiank account to the #itiank account of

either 0orrance or &loal'

0he transfer of the #itiank client/s deposits was done through the accoplishent of either an $pplication !oranager/s #hecks or a 0er >nvestent $pplication in favor of &loal or 0orrance that was prepared=filed y &enuinoherself'

Apon approval of the $pplication for anager/s #hecks or 0er >nvestent $pplication, the funds of the ank clientcovered thereof were then deposited in the #itiank accounts of 0orrance and=or &loal'

)econd step4 5nce the said fund transfers had een effected, &loal and=or 0orrance would then issue its= theirchecks drawn against its=their #itiank accounts in favor of the other copanies whose financial products, such assecurities, shares of stocks and other certificates, were offering higher yields'

0hird step4 5n aturity dates7 of the placeents ade y 0orrance and=or &loal in the other copanies, using theonies of the #itiank client, the other copanies would then' return the placeents to &loal and=or0orrance withthe corresponding interests earned'

!ourth step4 Apon receipt y &loal and=or 0orrance of the reittances fro the other copanies, &loaland=or 0orrance would then issue its=their own checks drawn against their #itiank accounts in favor of )antos and&enuino'

0he aounts covered y the checks represent the shares of )antos and &enuino in the argins &loaland=or 0orrance had realied out of the placeents [using the diverted onies of the #itiank clients] ade with theother copanies'

!ifth step4 $t the sae tie, &loal and=or 0orrance would also issue its=their checks7 drawn against its=their #itiankaccounts in favor of the ank client'

0he checks7 cover the principal aount or parts thereof7 which the #itiank client had previously transferred, withthe help of )antos and=or &enuino, fro his #itiank account to the #itiank accounts7 of &loal and=or 0orrance forplaceent in the other copanies, plus the interests or earnings his placeents in other copanies had ade lessthe spreads ade y &loal, 0orrance, )antos and &enuino'

0he coplaints which were docketed as >')' +os' 9%9969, 9%133.8 and 92%1"1. were susen due tie, i and (eyes filed their respective counter%affidavits' [1"]>n separate eoranda dated arch 8,1992 and arch 1., 1992 "nd $ssistant *rovincial *rosecutor Eerino 0' Aana, )r' recoended the disissal ofpetitioners/ coplaints' 0he recoendation was overruled y *rovincial *rosecutor auro ' #astro who, in a
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(esolution dated $ugust 18, 1992,[1]directed the filing of inforations against private respondents for alleged violationof (epulic $ct +o' 123., otherwise known as the Bank )ecrecy aw'

*rivate respondents/ counsel then filed an appeal efore the Departent of Justice D5J7' 5n +oveer 1-,1992, then D5J )ecretary !ranklin ' Drilon issued a (esolution [12]ordering,inter alia, the withdrawal of the aforesaidinforations against private respondents' *etitioners/ otion for reconsideration[1.]was denied y D5J $cting)ecretary Deetrio &' Deetria in a (esolution dated arch 6, 199.'[16]

>nitially, petitioners sought the reversal of the D5J resolutions via a petition for certiorari and mandamus filed withthis #ourt, docketed as &'(' +o' 119999%1"3331' Eowever, the forer !irst Division of this #ourt, in a (esolution

dated June ., 199.,[1-]referred the atter to the #ourt of the $ppeals, on the asis of the latter triunal/s concurrentFurisdiction to issue the e:traordinary writs therein prayed for' 0he petition was docketed as #$%&'(' )* +o' -.-- inthe #ourt of $ppeals'

5n July 8, 1996, the #ourt of $ppeals rendered Fudgent disissing the petition in #$%&'(' )* +o' -.-- anddeclared therein, as follows4

#learly, the disclosure of petitioners/ deposits was necessary to estalish the allegation that )antos and &enuino hadviolated )ection 1 of the #orporation #ode in ac)' +o' 9%8269, their accounts were relevant to the copleteprosecution of the case against )antos and &enuino and the respondent D5J properly ruled that the disclosure of thesae falls under the last e:ception of ('$' +o' 123.' 0hat ruling is consistent with the principle laid down in the caseof ellon Bank, +'$' vs' agsino 193 )#($ 67 where the )upree #ourt allowed the testionies on the ankdeposits of soeone not a party to the case as it found that said ank deposits were aterial or relevant to theallegations in the coplaint' )ignificantly, therefore, as long as the ank deposits are aterial to the case, althoughnot necessarily the direct suFect atter thereof, a disclosure of the sae is proper and falls within the scope of thee:ceptions provided for y ('$' +o' 123.'

::: ::: :::

oreover, the language of the law itself is clear and cannot e suFect to different interpretations' $ reading of the

provision itself would readily reveal that the e:ception ?or in cases where the oney deposited or invested is thesuFect atter of the litigation@ is not ;$0H (H)*5+DH+0) >H&$I $DH D>)#5)A(H) 5!*H0>0>5+H()/ #5+!>DH+0>$ B$+ DH*5)>0) !5( 0EH>( )H!>)E H+D) >+ *(5)H#A0>+& 0EH>(#5*$>+0 >+ >)' +5' 9%8269 0E$0 D>D +50 >+;5;H *H0>0>5+H()'

II.*(>;$0H (H)*5+DH+0)/ D>)#5)A(H) D5 +50 !$ A+DH( 0EH !5A(0E HK#H*0>5+ 5! ('$' +5'123. i'e', ?in cases where the oney deposited or invested is the suFect atter of the litigation@7, +5( A+DH($+I 50EH( HK#H*0>5+4

1*H0>0>5+H()/ DH*5)>0) $(H +50 >+;5;HD >+ $+I >0>&$0>5+ BH0GHH+ *H0>0>5+H() $+D(H)*5+DH+0)' 0EH(H >) +5 >0>&$0>5+ BH0GHH+ 0EH *$(0>H), A#E H)) 5+H >+;5;>+&*H0>0>5+H()/ DH*5)>0) $) 0EH )ABJH#0 $00H( 0EH(H5!'

2H;H+ $))A>+&ARGUENDO 0E$0 0EH(H >) $ >0>&$0>5+ >+;5;>+& *H0>0>5+H()/ DH*5)>0)$) 0EH )ABJH#0 $00H( 0EH(H5!, *(>;$0H (H)*5+DH+0)/ D>)#5)A(H) 5! *H0>0>5+H()/DH*5)>0) $(H +H;H(0EHH)) >H&$ !5( G$+0 5! 0EH (HLA>)>0H #5A(0 5(DH(, >+;>5$0>5+ 5! ('$' +5' 123.'

III.
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0EH(H!5(H, *H0>0>5+H() $(H H+0>0HD 05 *(5)H#A0H *(>;$0H (H)*5+DH+0) !5( ;>5$0>5+)5! ('$' +5' 123. !5( E$;>+& >H&$I D>)#5)HD *H0>0>5+H()/ #5+!>DH+0>$ B$+ DH*5)>0)$+D (H#5(D) >+ >)' +5' 9%8269'

$part fro the reversal of the decision and resolution of the appellate court as well as the resolutions of theDepartent of Justice, petitioners pray that the latter agency e directed to issue a resolution ordering the *rovincial*rosecutor of (ial to file the corresponding inforations for violation of (epulic $ct +o' 123. against privaterespondents'

0he petition is not eritorious'$ctually, this case should have een studied ore carefully y all concerned' 0he finest legal inds in the

country % fro the parties/ respective counsel, the *rovincial *rosecutor, the Departent of Justice, the )olicitor&eneral, and the #ourt of $ppeals % all appear to have overlooked a single factwhich dictates the outcoe of theentire controversy' $ circuspect review of the record shows us the reason' 0he accounts in ncidentally, the acts of private respondentscoplained of happened efore the enactent on )epteer "9, "331 of ('$' +o' 9163 otherwise known as the $nti%oney aundering $ct of "331'

$ case for violation of Republic Act No. #4$# should have een the proper case rought against privaterespondents' *rivate respondents i and (eyes aditted that they had disclosed details of petitioners/ dollardeposits -itout te latter2s -ritten permission. >t does not atter if that such disclosure was necessary to estalish#itiank/s case against Dante ' )antos and arilou &enuino' i/s act of disclosing details of petitioners/ ankrecords regarding their foreign currency deposits, with the authority of (eyes, would appear to elong to that speciesof criinal acts punishale y special laws, called malum proibitum. >n this regard, it has een held that4

Ghile it is true that, as a rule and on principles of astract Fustice, en are not and should not e held criinallyresponsile for acts coitted y the without guilty knowledge and criinal or at least evil intent :::, the courtshave always recognied the power of the legislature, on grounds of pulic policy and copelled y necessity, ?thegreat aster of things,@ to forid in a liited class of cases the doing of certain acts, and to ake their coissioncriinal without regard to the intent of the doer' ::: >n such cases no Fudicial authority has the power to re


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crie of treason, which shall prescrie after twenty years4 3rovided, o-ever, 0hat all offences against any law or partof law adinistered y the Bureau of >nternal (evenue shall prescrie after five years' ;iolations penalied yunicipal ordinances shall prescrie after two onths'

;iolations of the regulations or conditions of certificates of pulic convenience issued y the *ulic )ervice#oission shall prescrie after two onths'

)H#' "' *rescription shall egin to run fro the day of the coission of the violation of the law, and if the sae enot known at the tie, fro the discovery thereof and the institution of Fudicial proceedings for its investigation and

punishent'

0he prescription shall e interrupted when proceedings are instituted against the guilty person, and shall egin to runagain if the proceedings are disissed for reasons not constituting Feopardy'

$ violation of (epulic $ct +o' 62"6 shall suFect the offender to iprisonent of not less than one year nor orethan five years, or y a fine of not less than five thousand pesos nor ore than twenty%five thousand pesos, or oth'["2]$pplying $ct +o' "6, the offense prescries in eight years' [".]*er availale records, private respondents ay nolonger e haled efore the courts for violation of (epulic $ct +o' 62"6' *rivate respondent ;ic i ade thedisclosure in )epteer of 199 in his affidavit suitted efore the *rovincial !iscal' ["6]>n her coplaint%affidavit,["-]>ntengan stated that she learned of the revelation of the details of her foreign currency ank account on 5ctoer 12,199' 5n the other hand, +eri asserts that she discovered the disclosure on5ctoer "2, 199' ["8]$s to Brawner, the

aterial date is January ., 1992'["9]

Based on any of these dates, prescription has set in'[3]

0he filing of the coplaint or inforation in the case at ar for alleged violation of (epulic $ct +o' 123. did nothave the effect of tolling the prescriptive period' !or it is the filing of the coplaint or inforation corresponding to thecorrect offense which produces that effect'[1]

>t ay well e argued that the foregoing disHD' +o pronounceent as to costs'

O OR)ERE).

6ellosillo, !)airman", 7endo8a, 9uisumbin(, and6uena, ::., concur.
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G.R. No. 90024 Mar , 199

CA AGRO7IN)(TRIAL )E-ELO#MENT COR#., petitioner,vs'T3E 3ONORA$LE CO(RT OF A##EAL a!" EC(RIT $AN AN) TR(T COM#AN, respondents'

Dolorfino ; Domin(ue8 s the contractual relation etween a coercial ank and another party in a contract of rent of a safety deposit o:with respect to its contents placed y the latter one of ailor and ailee or one of lessor and lesseeN

0his is the cru: of the present controversy'

5n July 19-9, petitioner through its *resident, )ergio $guirre7 and the spouses (aon and *aula *ugao entered

into an agreeent wherey the forer purchased fro the latter two "7 parcels of land for a consideration of*.3,6".'33' 5f this aount, *-.,-".'33 was paid as downpayent while the alance was covered y three 7postdated checks' $ong the ters and conditions of the agreeent eodied in a eorandu of 0rue and $ctual$greeent of )ale of and were that the titles to the lots shall e transferred to the petitioner upon full payent of thepurchase price and that the ownerOs copies of the certificates of titles thereto, 0ransfer #ertificates of 0itle 0#07 +os'"826.. and "9"22, shall e deposited in a safety deposit o: of any ank' 0he sae could e withdrawn only uponthe Foint signatures of a representative of the petitioner and the *ugaos upon full payent of the purchase price'*etitioner, through )ergio $guirre, and the *ugaos then rented )afety Deposit Bo: +o' 1228 of private respondent)ecurity Bank and 0rust #opany, a doestic anking corporation hereinafter referred to as the respondent Bank'!or this purpose, oth signed a contract of lease H:hiit P"P7 which contains, inter alia, the following conditions4

1' 0he ank is not a depositary of the contents of the safe and it has neither the possession norcontrol of the sae'

12' 0he ank has no interest whatsoever in said contents, e:cept herein e:pressly provided, and itassues asolutely no liaility in connection therewith'1

$fter the e:ecution of the contract, two "7 renterOs keys were given to the renters Q one to $guirre for the petitioner7and the other to the *ugaos' $ guard key reained in the possession of the respondent Bank' 0he safety deposit o:has two "7 keyholes, one for the guard key and the other for the renterOs key, and can e opened only with the use ofoth keys' *etitioner clais that the certificates of title were placed inside the said o:'

0hereafter, a certain rs' argarita (aos offered to uy fro the petitioner the two "7 lots at a price of *"".'33 perst then interposed a counterclai for e:eplary daages as well asattorneyOs fees in the aount of *"3,333'33' *etitioner suse


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5n defendantOs counterclai, Fudgent is herey rendered ordering plaintiff to pay defendant theaount of !>;H 0E5A)$+D *.,333'337 *H)5) as attorneyOs fees'

Gith costs against plaintiff'6

0he unfavorale verdict is ased on the trial courtOs conclusion that under paragraphs 1 and 12 of the contract oflease, the Bank has no liaility for the loss of the certificates of title' 0he court declared that the said provisions areinding on the parties'

>ts otion for reconsideration4having een denied, petitioner appealed fro the adverse decision to the respondent#ourt of $ppeals which docketed the appeal as #$%&'(' #; +o' 1.1.3' *etitioner urged the respondent #ourt toreverse the challenged decision ecause the trial court erred in a7 asolving the respondent Bank fro liaility frothe loss, 7 not declaring as null and void, for eing contrary to law, pulic order and pulic policy, the provisions inthe contract for lease of the safety deposit o: asolving the Bank fro any liaility for loss, c7 not concluding that inthis Furisdiction, as well as under $erican Furisprudence, the liaility of the Bank is settled and d7 awarding attorneyOsfees to the Bank and denying the petitionerOs prayer for noinal and e:eplary daages and attorneyOs fees' 8

>n its Decision proulgated on 2 July 1989,9respondent #ourt affired the appealed decision principally on the theorythat the contract H:hiit P"P7 e:ecuted y the petitioner and respondent Bank is in the nature of a contract of lease yvirtue of which the petitioner and its co%renter were given control over the safety deposit o: and its contents while theBank retained no right to open the said o: ecause it had neither the possession nor control over it and its contents'

$s such, the contract is governed y $rticle 162 of the #ivil #ode10

which provides4

$rt' 162' >n the lease of things, one of the parties inds hiself to give to another the enFoyent oruse of a thing for a price certain, and for a period which ay e definite or indefinite' Eowever, nolease for ore than ninety%nine years shall e valid'

>t invoked =olentino vs. Gon8ales 11>which held that the owner of the property loses his control over theproperty leased during the period of the contract Q and $rticle 19-. of the #ivil #ode which provides4

$rt' 19-.' 0he depositary holding certificates, onds, securities or instruents which earn interestshall e ound to collect the latter when it ecoes due, and to take such steps as ay e necessaryin order that the securities ay preserve their value and the rights corresponding to the according tolaw'

0he aove provision shall not apply to contracts for the rent of safety deposit o:es'

and then concluded that P[c]learly, the defendant%appellee is not under any duty to aintain the contents of theo:' 0he stipulation asolving the defendant%appellee fro liaility is in accordance with the nature of thecontract of lease and cannot e regarded as contrary to law, pulic order and pulic policy'P 120he appellatecourt was n a nutshell, petitioner aintains that regardless of noenclature, thecontract for the rent of the safety deposit o: H:hiit P"P7 is actually a contract of deposit governed y 0itle K>>, Book>; of the #ivil #ode of the*hilippines' 16$ccordingly, it is claied that the respondent Bank is liale for the loss of the certificates of titlepursuant to $rticle 19-" of the said #ode which provides4

$rt' 19-"' 0he depositary is oliged to keep the thing safely and to return it, when re


8/74

contract' Eis responsiility, with regard to the safekeeping and the loss of the thing, shall e governedy the provisions of 0itle > of this Book'

>f the deposit is gratuitous, this fact shall e taken into account in deterining the degree of care thatthe depositary ust oserve'

*etitioner then t cannot e characteried as an ordinary contract of leaseunder $rticle 162 ecause the full and asolute possession and control of the safety deposit o: was not given to theFoint renters Q the petitioner and the *ugaos' 0he guard key of the o: reained with the respondent BankC withoutthis key, neither of the renters could open the o:' 5n the other hand, the respondent Bank could not likewise openthe o: without the renterOs key' >n this case, the said key had a duplicate which was ade so that oth renters could

have access to the o:'

Eence, the authorities cited y the respondent #ourt 20on this point do not apply' +either could $rticle 19-., alsorelied upon y the respondent #ourt, e invoked as an arguent against the deposit theory' 5viously, the firstparagraph of such provision cannot apply to a depositary of certificates, onds, securities or instruents which earninterest if such docuents are kept in a rented safety deposit o:' >t is clear that the depositary cannot open the o:without the renter eing present'

Ge oserve, however, that the deposit theory itself does not altogether find unanious support even in $ericanFurisprudence' Ge agree with the petitioner that under the latter, the prevailing rule is that the relation etween a ankrenting out safe%deposit o:es and its custoer with respect to the contents of the o: is that of a ail or and ailee,the ailent eing for hire and utual enefit' 210his is Fust the prevailing view ecause4

0here is, however, soe support for the view that the relationship in


9/74

Furisdiction in which any rule other than that applicale to ailents governs , Book >; of the #ivil #ode' $ccordingly, the depositary would eliale if, in perforing its oligation, it is found guilty of fraud, negligence, delay or contravention of the tenor of theagreeent' 26>n the asence of any stipulation prescriing the degree of diligence ren the instant case, petitioner aintains that conditions 1 and 12 of the t has een said4

Gith respect to property deposited in a safe%deposit o: y a custoer of a safe%deposit copany,the parties, since the relation is a contractual one, ay y special contract define their respectiveduties or provide for increasing or liiting the liaility of the deposit copany, provided such contractis not in violation of law or pulic policy' >t ust clearly appear that there actually was such a special

contract, however, in order to vary the ordinary oligations iplied y law fro the relationship of thepartiesC liaility of the deposit copany will not e enlarged or restricted y words of doutfuleaning' 0he copany, in rentingsafe%deposit o:es, cannot e:ept itself fro liaility for loss of the contents y its own fraud ornegligence or that of its agents or servants, and if a provision of the contract ay e construed as anattept to do so, it will e held ineffective for the purpose' $lthough it has een held that the lessor of


10/74


11/74

G.R. No. 102940 May 1, 199

L(+AN IA, petitioner,vs'CO(RT OF A##EAL a!" EC(RIT $AN a!" TR(T COM#AN, respondents'

Asuncion


12/74

::: ::: :::

P1' 0he Bank is not a depository of the contents of the safe and it has neither the possession nor thecontrol of the sae' 0he Bank has no interest whatsoever in said contents, e:cept as herein provided,and it assues asolutely no liaility in connection therewith'P

0he defendant ank also contended that its contract with the plaintiff over safety deposit o: +o' .2was one of lease and not of deposit and, therefore, governed y the lease agreeent H:hs' P$P, PP7which should e the applicale lawC that the destruction of the plaintiffOs staps collection was due to

a calaity eyond oligation on its part to notify the plaintiff aout the floodwaters that inundated itspreises at Binondo ranch which allegedly seeped into the safety deposit o: leased to the plaintiff'

0he trial court then directed that an ocular inspection on sic7 the contents of the safety deposit o: econducted, which was done on Deceer 8, 1988 y its clerk of court in the presence of the partiesand their counsels' $ report thereon was then suitted on Deceer 1", 1988 (ecords, p' 98%$7and confired in open court y oth parties thru counsel during the hearing on the sae date ?bid.,p' 13"7 stating4

P0hat the )afety Bo: Deposit +o' .2 was opened y oth plaintiff uan )ia and the$cting Branch anager Jiy B' Inion in the presence of the undersigned, plaintiffOsand defendantOs counsel' )aid )afety Bo: when opened contains two alus of

different sies and thickness, length and width and a tin o: with printed word O0ai*ing )hiang (oast *ork in pieces with #hinese designs and character'P

#ondition of the aove%stated >tes Q

PBoth alus are wet, oldy and adly daaged'

1' 0he first alu easures 13 1=8 inches in length, 8 inches in width and =2 in thick' 0he leaves ofthe alu are attached to every page and cannot e lifted without destroying it, hence the stapscontained therein are no longer visile'

"' 0he second alu easure 1" 1=" inches in length, 9 =2 in width 1 inch thick' )oe of its pages

can still e lifted' 0he staps therein can still e distinguished ut eyond restoration' 5thers havelost its original for'

' 0he tin o: is rusty inside' >t contains an alu with several pieces of papers stuck up to the coverof the o:' 0he condition of the alu is the second aoveentioned alu'P 5

0he )H#A(>0I B$+ $+D 0(A)0 #5*$+I, hereinafter referred to as )B0#, appealed the trial courtOs decision tothe pulic respondent #ourt of $ppeals' 0he appeal was docketed as #$%&'(' #; +o' "6--'

>n urging the pulic respondent to reverse the decision of the trial court, )B0# contended that the latter erred in a7holding that the lease agreeent is a contract of adhesionC 7 finding that the defendant had failed to e:ercise there)>))HD' 0he appellant ankOs counterclai is likewise D>)>))HD' +ocosts'6

>n reversing the trial courtOs decision and asolving )B0# fro liaility, the pulic respondent found and ruled that4

a7 the fine print in the Pease $greeent P H:hiits P$P and P1P 7 constitutes the ters and conditions of the contract oflease which the appellee now petitioner7 had voluntarily and knowingly e:ecuted with )B0#C

7 the contract entered into y the parties regarding )afe Deposit Bo: +o' .2 was not a contract of deposit whereinthe ank ecae a depositary of the suFect stap collectionC hence, as contended y )B0#, the provisions of Book>;, 0itle K>> of the #ivil #ode on deposits do not applyC


13/74

c7 0he following provisions of the

>0 G$) $ &($;H H((5( 5( $+ $BA)H 5! D>)#(H0>5+ 5+ 0EH *$(0 5! 0EH (H)*5+DH+0#5A(0 GEH+ >0 (AHD 0E$0 (H)*5+DH+0 )B0# D>D +50 !$> 05 HKH(#>)H 0EH(HLA>(HD D>>&H+#H >+ $>+0$>+>+& 0EH )$!H0I DH*5)>0 B5K 5! 0EH *H0>0>5+H(#5+)>DH(>+& 0E$0 )AB)0$+0>$ H;>DH+#H HK>)0 sic7 *(5;>+& 0EH #5+0($(I'

>>

0EH (H)*5+DH+0 #5A(0 )H(>5A)I H((HD >+ HK#A*$0>+& *(>;$0H (H)*5+DH+0!(5 $+I >$B>>0I GE$0)5H;H( BI (H$)5+ 5! 0EH *(5;>)>5+) 5! *$($&($*E) 9$+D 1 5! 0EH $&(HHH+0 HKE)' P$P $+D P$%1P7'

>>>

0EH (H)*5+DH+0 #5A(0 )H(>5A)I H((HD >+ +50 A*E5D>+& 0EH $G$(D) 5! 0EH0(>$ #5A(0 !5( $#0A$ $+D 5($ D$$&H), >+#AD>+& $005(+HIO) !HH) $+DH&$ HK*H+)H), >+ !$;5( 5! 0EH *H0>0>5+H(' 8

Ge suse


14/74

$s Ge see it, )B0#Os theory, which was upheld y the pulic respondent, is that the Pease $greeent P covering)afe Deposit Bo: +o' .2 H:hiit P$ and P1P7 is Fust that Q a contract of lease Q and not a contract of deposit, andthat paragraphs 9 and 1 thereof, which e:pressly liit the ankOs liaility as follows4

9' 0he liaility of the ank y reason of the lease, is liited to the e:ercise of the diligence to preventthe opening of the )afe y any person other than the (enter, his autlioried agent or legalrepresentativeC

::: ::: :::

1' 0he ank is not a depository of the contents of the )afe and it has neither the possession nor thecontrol of the sae' 0he Bank has no interest whatsoever said contents, e:cept as herein provided,and it assues asolutely no liaility in connection therewith' 12

are valid and inding upon the parties' >n the challenged decision, the pulic respondent further avers that evenwithout such a liitation of liaility, )B0# should still e asolved fro any responsiility for the daage sustained ythe petitioner as it appears that such daage was occasioned y a fortuitous event and that the respondent ank wasfree fro any participation in the aggravation of the inFury'

Ge cannot accept this theory and ratiocination' #onse, Book >; of the #ivil #ode' $ccordingly, thedepositary would e liale if, in perforing its oligation, it is found guilty of fraud, negligence, delay orcontravention of the tenor of the agreeent [$rt' 11-3, id.]' >n the asence of any stipulationprescriing the degree of diligence re


15/74

P12' 0he ank has no interest whatsoever in said contents, e:cept as herein e:pressly provided, and itassues asolutely no liaility in connection therewith'P

are void as they are contrary to law and pulic policy' Ge find 5urselves in agreeent with thisproposition for indeed, said provisions are inconsistent with the respondent BankOs responsiility as adepositary under )ection -" a7 of the &eneral Banking $ct' Both e:ept the latter fro any liailitye:cept as conteplated in condition 8 thereof which liits its duty to e:ercise reasonale diligenceonly with respect to who shall e aditted to any rented safe, to wit4

P8' 0he Bank shall use due diligence that no unauthoried person shall e aditted toany rented safe and eyond this, the Bank will not e responsile for the contents ofany safe rented fro it'P

!urtherore condition 1 stands on a wrong preise and is contrary to the actual practice of theBank' >t is not correct to assert that the Bank has neither the possession nor control of the contents ofthe o: since in fact, the safety deposit o: itself is located in its preises and is under its asolutecontrolC oreover, the respondent Bank keeps the guard key to the said o:' $s stated earlier, renterscannot open their respective o:es unless the Bank cooperates y presenting and using this guardkey' #learly then, to the e:tent aove stated, the foregoing conditions in the contract in t ust clearly appear that there actually was such a special contract, however,in order to vary the ordinary oligations iplied y law fro the relationship of thepartiesC liaility of the deposit copany will not e enlarged or restricted y words ofdoutful eaning' 0he copany, in renting safe%deposit o:es, cannot e:ept itselffro liaility for loss of the contents y its own fraud or negligence or that, of itsagents or servants, and if a provision of the contract ay e construed as an atteptto do so, it will e held ineffective for the purpose' $lthough it has een held that thelessor of a safe%deposit o: cannot liit its liaility for loss of the contents thereofthrough its own negligence, the view has een taken that such a lessor ay liit its

liaility to soe e:tent y agreeent or stipulation 'P[13 $ JA( "d', 266]' citationsoitted7 16

>t ust e noted that conditions +o' 1 and +o' 12 in the #ontract of ease of )afety Deposit Bo: in )A A(ro*?ndustrial Development )orp.are strikingly siilar to condition +o' 1 in the instant case' 5n the other hand, othcondition +o' 8 in )A A(ro*?ndustrial Development )orp.and condition +o' 9 in the present case liit the scope of thee:ercise of due diligence y the anks involved to erely seeing to it that only the renter, his authoried agent or hislegal representative should open or have access to the safety deposit o:' >n short, in all other situations, it wouldsee that )B0# is not ound to e:ercise diligence of any kind at all' $ssayed in the light of 5ur aforeentionedpronounceents in)A A(ro*lndustrial Development )orp.,it is not at all difficult to conclude that oth conditions +o' 9and +o' 1 of the Pease $greeentP covering the safety deposit o: in n its dissertation of the phrase @caso fortuito@ the Enciclopedia :urisdicada Espaola 14says4 P>n alegal sense and, conse


16/74

ust e ipossile to foresee the event which constitutes the @caso fortuito,@or if it can e foreseen,it ust e ipossile to avoidC 7 the occurrence ust e such as to render it ipossile for onedetor to fulfill his oligation in a noral annerC and 27 the oligor ust e free fro anyparticipation in the aggravation of the inFury resulting to the creditor'P cited in )ervando vs.*hil',)tea +avigation #o',supra7' 19

Eere, the unforeseen or une:pected inundating floods were independent of the will of the appellantank and the latter was not shown to have participated in aggravating daage sic7 to the stapscollection of the appellee' >n fact, the appellant ank offered its services to secure the assistance of

an e:pert to save ost of the then good staps ut the appelle refused and let sic7 theserecoverale staps inside the safety deposit o: until they were ruined' 20

Both the law and authority cited are clear enough and ren this respect, it failed toe:ercise the reasonale care and prudence e:pected of a good father of a faily, therey ecoing a party to theaggravation of the inFury or loss' $ccordingly, the aforeentioned fourth characteristic of a fortuitous event is asent$rticle 11-3 of the #ivil #ode, which reads4

0hose who in the perforance of their oligation are guilty of fraud, negligence, or delay, and thosewho in any anner contravene the tenor thereof, are liale for daages,

thus coes to the succor of the petitioner' 0he destruction or loss of the stap collection which was, in the languageof the trial court, the Pproduct of "- years of patience and diligenceP 21caused the petitioner pecuniary lossC hence, heust e copensated therefor'

Ge cannot, however, place 5ur ipriatur on the trial courtOs award of oral daages' )ince the relationshipetween the petitioner and )B0# is ased on a contract, either of the ay e held liale for oral daages forreach thereof only if said party had acted fraudulently or in ad faith' 220here is here no proof of fraud or ad faith onthe part of )B0#'

GEH(H!5(H, the instant petition is herey &($+0HD' 0he challenged Decision and (esolution of the pulicrespondent #ourt of $ppeals of "1 $ugust 1991 and "1 +oveer 1991, respectively, in #$%&'(' #; +o' "6--, areherey )H0 $)>DH and the Decision of 19 !eruary 1993 of Branch 2- of the (egional 0rial #ourt of anila in #ivil#ase +o' 8-%2"631 is herey (H>+)0$0HD in full, e:cept as to the award of oral daages which is herey setaside'

#osts against the private respondent'

)5 5(DH(HD'

'eliciano, 6idin, Romero and 7elo, ::., concur.


17/74

G.R. No. 189206 *u!e 8, 2011

GO-ERNMENT ER-ICE IN(RANCE TEM,*etitioner,vs'T3E 3ONORA$LE 15 )I-IION OF T3E CO(RT OF A##EAL a!" IN)(TRIAL $AN OF OREA, TONGANG MERC3ANT $AN, 3ANARE(M $ANING COR#., LAN) $AN OF T3E #3ILI##INE, %ETMONT$AN a!" )OMAT 3OL)ING, INC.,(espondents'

D H # > ) > 5 +

#ERE+, J.:

0he suFect of this petition for certiorari is the Decision1of the #ourt of $ppeals in #$%&'(' )* +o' 8"62- allowing thendustrial Bank of orea, 0ong Iang erchant Bank, !irst erchant Banking #orporation, and Bank of the*hilippines, and Gestont Bank now Anited 5verseas Bank7, collectively known as Pthe BanksP against DosatEoldings, >nc' Dosat7 and the &overnent )ervice >nsurance )yste &)>)7' )aid case steed fro a oan$greeent,"wherey the Banks agreed to lend Anited )tates A')'7 11 illion to Dosat for the purpose of financingthe lease and=or purchase of a &orion )atellite fro the >nternational 5rganiation of )pace #ounications>ntersputnik7'

0he controversy originated fro a surety agreeent y which Dosat otained a surety ond fro &)>) to securethe payent of the loan fro the Banks' Ge +#>*$, and the &5;H(+H+0 )H(;>#H>+)A($+#H )I)0H, as $dinistrator of the &H+H($ >+)A($+#H !A+D, a corporation duly organied ande:isting under and y virtue of the laws of the *hilippines, with principal office in the #ity of *asay, etro anila,*hilippines as )A(H0I, are held and firly ound unto the 5B>&HH)4 $+D B$+ 5! 0EH *E>>**>+H), -th!loor, and Bank Bldg' >;' 1 )en' &il J' *uyat $venue, akati #ityC GH)05+0 B$+, 211 Luintin *aredes )t',Binondo, anila4 05+& I$+& H(#E$+0 B$+, 18., "%a, Alchi%ro, #hungk%ku, )eoul, oreaC >+DA)0(>$B$+ 5! 5(H$, .3, "%&a, Alchi%ro, #hung%gu, )eoul, oreaC and !>()0 H(#E$+0 B$+>+& #5(*5($0>5+,199%23, "%&a, HuliFi%ro, Jung%gu, )eoul, orea, in the su, of A) HH;H+ >>5+ D5$() 11,333,333'337 forthe payent of which su, well and truly to e ade, we ind ourselves, our heirs, e:ecutors, adinistrators,

successors and assigns, Fointly and severally, firly y these presents'

0EH #5+D>0>5+) 5! 0EH 5B>&$0>5+ $(H $) !55G)4

GEH(H$), the aove ounden *(>+#>*$, on the 1"th day of Deceer, 1996 entered into a contract agreeentwith the aforeentioned 5B>&HH) to fully and faithfully

&uarantee the repayent of the principal and interest on the loan granted the *(>+#>*$ to e used for the financingof the two "7 year lease of a (ussian )atellite fro >+0H()*A0+>, in accordance with the ters and conditions ofthe credit package entered into y the parties'

0his ond shall reain valid and effective until the loan including interest has een fully paid and li&HH) re+#>*$ to give a good and sufficient ond in the aovestated su to secure the full and faithful perforance on his part of said contract=agreeent'
http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt1http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt1http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt2http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt3http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt4http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt1http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt2http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt3http://www.lawphil.net/judjuris/juri2011/jun2011/gr_189206_2011.html#fnt4


18/74

+5G, 0EH(H!5(H, if the *(>+#>*$ shall well and truly perfor and fulfill all the undertakings, covenants, ters,conditions, and agreeents stipulated in said contract=agreeents, then this oligation shall e null and voidCotherwise, it shall reain in full force and effect'

G>0+H)) 5A( E$+D) $+D )H$) this 1th day of Deceer 1996 at *asay #ity, *hilippines'

D5)$0 E5D>+&), >+#'*rincipal

&5;H(+H+0 )H(;>#H >+)A($+#H )I)0H&eneral >nsurance !und

By4

#$*0' (5D(>&5 $' )>;H(>5*resident

By4

$$>5 $' $$(>)enior ;ice%*resident&eneral >nsurance &roup

Ghen Dosat failed to pay the loan, &)>) refused to coply with its oligation reasoning that Dosat did not use theloan proceeds for the payent of rental for the satellite' &)>) alleged that Dosat, with Gestont Bank as theconduit, transferred the A')' 11 illion loan proceeds fro the >ndustrial Bank of orea to #itiank +ew Iork accountof Gestont Bank and fro there to the Binondo Branch of Gestont Bank' .0he Banks filed a coplaint efore the(0# of akati against Dosat and &)>)'

>n the course of the hearing, &)>) renc' with or through the Gestont Bank now Anited 5verseasBank7 for the period January 199- to Deceer "33", in his=her direct or indirect possession, custody orcontrol whether actual or constructive7, whether in his=her capacity as #ustodian of (ecords or otherwiseC

"' $ll applications for cashier/s= anager/s checks and ank transfers funded y the account of D5)$0Eoldings, >nc' with or through the Gestont Bank now Anited 5verseas Bank7 for the period January 199- toDeceer "33", and all other data and aterials covering said applications, in his=her direct or indirectpossession, custody or control whether actual or constructive7, whether in his=her capacity as #ustodian of(ecords or otherwiseC

' edger covering the account of *hilippine $gila )atellite, >nc' with Gestont Bank now Anited 5verseasBank7, any and all docuents, records, files, ooks, deeds, papers, notes and other data and aterialsrelating to the account or transactions of *hilippine $gila )atellite, >nc' with or through the Gestont anknow Anited 5verseas Bank7 for the period January 199- to Deceer "33", in his=her direct or indirectpossession, custody or control whether actual or constructive7, whether in his=her capacity as #ustodian of(ecords or otherwiseC

2' $ll applications for cashier/s=anager/s checks funded y the account of *hilippine $gila )atellite, >nc' withor through the Gestont Bank now Anited 5verseas Bank7 for the period January 199- to Deceer "33",and all other data and aterials covering said applications, in his=her direct or indirect possession, custody or

control whether actual or constructive7, whether in his=her capacity as #ustodian of (ecords or otherwise'6

0he (0# issued a supoena decus tecu on "1 +oveer "33"'-$ otion to t is the contention of defendant &)>) that the proceeds of
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19/74

the loan was deviated to purposes other than to what the loan was e:tended' 0he ) its right to prove its defenses'

GEH(H!5(H, for lack of erit the otion is DH+>HD'13

5n "6 June "33, another 5rder was issued y the (0# denying the otion for reconsideration filed y theanks'115n 1 )epteer "33 however, the trial court granted the second otion for reconsideration filed y theanks' 0he previous supoenas issued were conse>>'

)ince oth respondent anks and respondent Dosat have disclosed during the trial the A)11,333,333'33 deposit, itis no longer secret and confidential, and petitioner &)>)/ right to inntengan vs'#ourt of $ppeals where the )upree #ourt has ruled that the under ('$' 62"6 there is only a single e:ception to thesecrecy of foreign currency deposits, that is, disclosure is allowed only upon the written perission of the depositor'*etitioner, therefore, had inappropriately invoked the provisions of #entral Bank #B7 #ircular +os' 2 which hasalready een superseded y ore recently issued #B #irculars' #B #ircular 2 ren its (eply to respondent anks/ coent, petitioner appears to have conceded that what is applicale in this case is#B #ircular 189' 5viously, under #B 189, proceeds of foreign orrowings are no longer re


20/74

Andaunted, petitioner now argues that paragraph ", )ection "- of #B #ircular 189 is applicale ecause Dosat/s11,333,333'33 loan fro respondent anks was intended to e paid to a foreign supplier >ntersputnik and, therefore,should have een paid directly to >ntersputnik and not deposited into Gestont Bank' 0he fact that it was deposited tothe local ank Gestont Bank, petitioner clais violates the circular and akes the deposit lose its confidentialitystatus under ('$' 62"6' Eowever, a reading of the entire )ection "- of #B #ircular 189 reveals that the portionntersputnik for the ac) filed a petition for certiorari under (ule 6. of the (ules of #ourt to assail the Decision and(esolution of the #ourt of $ppeals' *etitioner availed of the iproper reedy as the appeal fro a final disposition ofthe #ourt of $ppeals is a petition for review under (ule 2. and not a special civil action under (ule 6.' 18#ertiorariunder (ule 6. lies only when there is no appeal, nor plain, speedy and ade


21/74

astly, &)>) defends the acceptance y the trial court of the second otion for reconsideration filed y the anks onthe grounds that it is pro fora and did not confor to the notice ret now reads4

e:o! 2.$ll deposits of whatever nature with anks or anking institutions in the *hilippines including investentsin onds issued y the &overnent of the *hilippines, its political sudivisions and its instruentalities, are hereyconsidered as of an asolutely confidential nature and ay not e e:ained, int covers all ank deposits in the *hilippines and no distinctionwas ade etween doestic and foreign deposits' 0hus, (epulic $ct +o' 123. is considered a law of generalapplication' 5n the other hand, (epulic $ct +o' 62"6 was intended to encourage deposits fro foreign lenders andinvestors'"2>t is a special law designed especially for foreign currency deposits in the *hilippines' $ general law doesnot nullify a specific or special law' &eneralia specialius non derogant' ".0herefore, it is eyond cavil that (epulic$ct +o' 62"6 applies in this case'
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>ntengan v' #ourt of $ppeals affired the aove%cited principle and categorically declared that for foreign currencydeposits, such as A')' dollar deposits, the applicale law is (epulic $ct +o' 62"6'

>n said case, #itiank filed an action against its officers for persuading their clients to transfer their dollar deposits tocopetitor anks' Bank records, including dollar deposits of petitioners, purporting to estalish the deception practicedy the officers, were anne:ed to the coplaint' *etitioners now coplained that #itiank violated (epulic $ct +o'123.' 0his #ourt ruled that since the accounts in


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FIRT #LANTER G.R. No. 141#A%N3O#, INC.,

*etitioner, *resent4

I+$(H)%)$+0>$&5, :., )airperson, % versus % $A)0(>$%$(0>+HR, #E>#5%+$R$(>5, +$#EA($, and

(HIH), ::.COMMIIONER OF INTERNAL RE-EN(E, *roulgated4 (espondent' July 3, "338

: % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % :

) E C I I O N

A(TRIA7MARTINE+, J.

!irst *lanters *awnshop, >nc' petitioner7 contests the deficiency value%added and docuentary stap ta:es iposed uponit y the Bureau of >nternal (evenue B>(7 for the year "333' 0he core of petitionerOs arguent is that it is not a lending investor withinthe purview of )ection 138$7 of the +ational >nternal (evenue #ode +>(#7, as aended, and therefore not suFect to value%added

ta: ;$07' *etitioner also contends that a pawn ticket is not suFect to docuentary stap ta: D)07 ecause it is not proof of thepledge transaction, and even assuing that it is so, still, it is not suFect to ta: since a docuentary stap ta: is levied on thedocuent issued and not on the transaction'

0he facts4

>n a *re%$ssessent +otice dated July -, "33, petitioner was infored y the B>( that it has an e:isting ta: deficiency onits ;$0 and D)0 liailities for the year "333' 0he deficiency assessent was at *.21,13"'-9 for ;$0 and *",626' for D)0'[1] *etitioner protested the assessent for lack of legal and factual ases'["]

*etitioner suseHD for lack of erit' 0heassailed Decision dated ay 9, "33. and (esolution dated 5ctoer -, "33. are herey $!!>(HD'

)5 5(DH(HD'[13]

*etitioner sought reconsideration ut this was denied y the #0$ En6ancper (esolution dated $ugust 12, "336'[11]

Eence, the present petition for review under (ule 2. of the (ules of #ourt ased on the following grounds4

>0EH E5+5($BH #5A(0 5! 0$K $**H$) EN 6AN)&($;HI H((HD >+ !>+D>+& *H0>0>5+H(>$BH !5( ;$0'

>>

0EH E5+5($BH #5A(0 5! 0$K $**H$) EN 6AN)&($;HI H((HD >+ (A>+& 0E$0 *H0>0>5+H(>) >$BH !5( D)0 5+ *$G+ 0>#H0)' [1"]

0he deterination of petitionerOs ta: liaility depends on the ta: treatent of a pawnshop usiness' 5ddly, there has noteen any definitive declaration in this regard despite the fact that pawnshops have long een in e:istence' $ll that has een stated iswhat pawnshops are not, ut not what pawnshops are'
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0he B>( itself has aintained an aivalent stance on this issue' >nitially, in Revenue 7emorandum Order No. 1*1issued on arch 11, 1991, a pawnshop usiness was considered as ?akin to lending investor/s usiness activity@ and suFect to.U percentage ta: eginning January 1, 1991, under )ection 116 of the 0a: #ode of 19--, as aended y H'5' +o' "-'[1]

Gith the passage of (epulic $ct ('$'7 +o' --16 or the H;$0 aw in 1992, [12]the B>( aandoned its earlier position andaintained that pawnshops are suFect to 13U ;$0, as ipleented y (evenue (egulations +o' -%9.' 0his was copleentedy Revenue 7emorandum )ircular No. 4*01 dated 5ctoer 1", "331, which provided that pawnshop operators are liale to the13U ;$0 ased on gross receipts eginning January 1, 1996, while pawnshops whose gross annual receipts do note:ceed *..3,333'33 are liale for percentage ta:, pursuant to )ection 1397 of the 0a: #ode of 199-'

#0$ decisions affired the B>(Os position that pawnshops are suFect to ;$0' >n B. =ambuntin( 3a-nsop, ?nc. v.)ommissioner of ?nternal Revenue,[1.]the #0$ ruled that the petitioner therein was suFect to 13U ;$0 under )ection 138 of the 0a:#ode of 199-' Antam 3a-nsop )orporation v. )ommissioner of ?nternal Revenue [16]reiterates said ruling' >t was the#0$Os viewthat the services rendered y pawnshops fall under the general definition of ?sale or e:change of services@ under )ection 138$7 ofthe 0a: #ode of 199-'

5n July 1., "33, the #ourt rendered )ommissioner of ?nternal Revenue v. 7icel :. (# of 19--, asaended y H:ecutive 5rder +o' "-'

>n view of said ruling, the B>( issued Revenue 7emorandum )ircular No. C#*$004dated June 16, "332, canceling theprevious lending investorOs ta: assessents on pawnshops' )aid #ircular stated, inter alia4

>n view of the said )upree #ourt decision, all assessents on pawnshops for percentage ta:es aslending investors are herey cancelled' 0his #ircular is eing issued for the sole purpose of resolving the ta:liaility of pawnshops to the .U lending investors ta: provided under the then )ection 116 of the +>(# of 19--, asaended, and shall not cover issues relating to their other ta: liailities' $ll internal revenue officials are enFoinedfro issuing assessents on pawnshops for percentage ta:es on lending investors, under the then )ection 116 ofthe +>(# of 19--, as aended' !or purposes of the gross receipt ta: provided for under (epulic $ct +o' 9"92, the pawnshops are

now suFect thereof' 0his shall however, e covered y another issuance'[19]

Revenue 7emorandum )ircular No. C5*$004was issued on the sae date wherey pawnshop usinesses were allowedto settle their ;$0 liailities for the ta: years 1996%"33" pursuant to a eorandu of agreeent entered into y the #oissionerof >nternal (evenue and the #haers of *awnrokers of the *hilippines, >nc' 0he #ircular likewise instructed all revenue officers toensure that ?all ;$0 due fro pawnshops eginning January 1, "33, including increents thereto, if any, are assessed andcollected fro pawnshops under its Furisdiction'@

>n the interi, however, #ongress passed (epulic $ct ('$'7 +o' 9"8 on !eruary ., "332 entitled, ?$n $ct $ending#ertain )ections of the +ational >nternal (evenue #ode of 199-, as aended, y H:cluding )everal )ervices fro the #overage ofthe ;alue%added 0a: and (e%iposing the &ross (eceipts 0a: on Banks and +on%ank !inancial >nterediaries *erforing Luasi%anking !unctions and 5ther +on%ank !inancial >nterediaries eginning January 31, "332'@ ["3]

*ending pulication of ('$' +o' 9"8, the B>( issued Bank Bulletin +o' "332%31 on !eruary 13, "332 advising all anksand non%ank financial interediaries that they shall reain liale under the ;$0 syste'

Ghen ('$' +o' 9"8 took effect on !eruary 16, "332, the Departent of !inance issued Revenue Re(ulations No. 10*$004dated 5ctoer 18, "332, classifying pawnshops as 5ther +on%ank !inancial >nterediaries' 0he B>( then issued Revenue7emorandum )ircular No. 5C*$004on +oveer "., "332, prescriing the guidelines and policies on the assessent andcollection of 13U ;$0 for gross annual sales=receipts e:ceeding *..3,333'33 or U percentage ta: for gross annual sales=receiptsnot e:ceeding *..3,333'33 of pawnshops prior to January 1, "33.'

>n fine, prior to the H;$0 aw, pawnshops were treated as lending investors suFect to lending investorOs ta:' )use


25/74

Ander the +ational >nternal (evenue #ode of 19--,["1]pawnshops should have een levied the .Upercentage ta: on gross receipts iposed on ank and non%ank financial interediaries under )ection 119 now)ection 1"1 of the 0a: #ode of 199-7C

Gith the iposition of the ;$0 under ('$' +o' --16 or the H;$0 aw,[""]pawnshops should have eensuFected to the 13U ;$0 iposed on anks and non%ank financial interediaries and financial institutions under)ection 13" of the 0a: #ode of 19-- now )ection 138 of the 0a: #ode of 199-7C ["]

0his was restated y ('$' +o' 8"21,["2]which aended ('$' +o' --16, although the levy, collection andassessent of the 13U ;$0 on services renderedy anks, non%ank financial interediaries, finance copanies,and other financial interediaries not perforing


26/74

17 $ person or entity licensed and=or registered with any governent regulatory ody as a non%ankfinancial interediary, such as investent house, investent copany, financing copany, securitiesdealer=roker, lending investor, ?a@!'o?, oney roker : : :' Hphasis supplied7

Revenue Re(ulations No. 10*$004, in fact, recognied these ases, to wit4

)H#' "' B$)H) 5! LA$>!I>+& *$G+)E5*) $) +5+%B$+ !>+$+#>$ >+0H(HD>$(>H)' %

Ghereas, in relation to )ec' "' of (ev' (egs +o' 9%"332 defining ?+on%ank !inancial >nterediaries, the ter?pawnshop@ as defined under *residential Decree +o' 112 which authoried its creation, to be a person or entit&

en(a(ed in te business of lendin( mone&, all fall within the classification of +on%ank !inancial >nterediaries andtherefore, covered y )ec' 2 of ('$' +o' 9"8' 0his classification is e


27/74

earing fro the foregoing doctrines, we scrutinied )ection 19. of the +>(#, ut there is no way that saidprovision ay e interpreted in favor of petitioner' )ection 19. u!ua=:;:e"=y 'ubDe' a== ?=e"e' to D)0' >tstates that ?[o]n ever& ++ + pled(e + + + tere sall be collected a documentar& stamp ta+ + + +. @ >t is clear,categorical, and needs no further interpretation or construction' 0he e:plicit tenor thereof re(# enuerated certain docuents which are not

suFect to stap ta:C ut a pawnshop ticket is not one of the' Eence, petitioner/s neulous clai that it is notsuFect to D)0 is without erit' >t cannot e over%ephasied that ta: e:eption represents a loss of revenue tothe governent and ust, therefore, not rest on vague inference' H:eption fro ta:ation is never presued' !orta: e:eption to e recognied, the grant ust e clear and e:pressC it cannot e ade to rest on doutfuliplications'

Ander the principle of staredecisiset non uieta movere follow past precedents and do not distur what has een settled7,

once a case has een decided one way, any other case involving e:actly the sae point at issue, as in the case at ar, should edecided in the sae anner'[6]

%3EREFORE, thepetition is #ARTIALL GRANTE)' 0he Decision dated June -, "336 and (esolution dated $ugust12, "336 of the #ourt of 0a: $ppeals En 6ancisMO)IFIE)to the effect that the Bureau of >nternal (evenue assessent for ;$0

deficiency in the aount of *.21,13"'-9 for the year "333 is RE-ERE) a!" ET AI)E, whileits assessent for D)0deficiency in the aount of *"2,-2-'1, inclusive of surcharge and interest, is (#3EL)'

O OR)ERE)'
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G.R. No. L7519 Mar 1, 1988

#3ILI##INE NATIONAL $AN petitioner,vs'3ON. ROM(LO . (IM#O, #re':":! *u"e, Cour o; F:r' I!'a!e o; R:a=, $ra! I-, a!" FRANCICO .GO+ON II, respondents'

GANCACO, J.:

5n July , 19-, !rancisco )' &oon >>, who was a depositor of the #aloocan #ity Branch of the *hilippine +ationalBank, went to the ank in his car accopanied y his friend Hrnesto )antos who he left in the car while hetransacted usiness in the ank' Ghen )antos saw that &oon left his check ook he took a check therefro, filled itup for the aount of *.,333'33, forged the signature of &oon, and thereafter he encashed the check in the ank onthe sae day' 0he account of &oon was deited the said aount' Apon receipt of the stateent of account fro theank, &oon asked that the said aount of *.,333'33 should e returned to his account as his signature on the checkwas forged ut the ank refused'

Apon coplaint of private respondent on !eruary 1, 19-2 Hrnesto )antos was apprehended y the police authoritiesand upon investigation he aditted that he stole the check of &oon, forged his signature and encashed the sae

with the Bank'

Eence &oon filed the coplaint for recovery of the aount of *.,333'33, plus interest, daages, attorneyOs fees andcosts against the ank in the #ourt of !irst >nstance of (ial' $fter the issues were Foined and the trial on the eritsensued, a decision was rendered on !eruary 2, 1983, the dispositive part of which reads as follows4

GEH(H!5(H, Fudgent is herey rendered in favor of the plaintiff' 0he defendant is hereycondened to return to plaintiff the aount of *.,333'33 which it had unlawfully withheld fro thelatter, with interest at the legal rate fro )epteer "", 19-" until the aount is fully delivered' 0hedefendant is further condened to pay plaintiff the su of *",333'33 as attorneyOs fees and to pay thecosts of this suit'

+ot satisfied therewith, the ank now filed this petition for review on certiorari in this #ourt raising the sole legal issuethat Q

0EH $#0 5! (H)*5+DH+0 !($+#>)#5 &5R5+, >> >+ *A00>+& E>) #EH# B55#5+0$>+>+& 0EH #EH# >+ LAH)0>5+ >+05 0EH E$+D) 5! H(+H)05 )$+05) G$)>+DHHD 0EH *(5K>$0H #$A)H 5! 0EH 5)), 0EH(HBI *(H#AD>+& E> !(5 )H00>+&A* 0EH DH!H+)H 5! !5(&H(I 5( G$+0 3! $A0E5(>0I A+DH( )H#0>5+ " 5! 0EH+H&50>$BH >+)0(AH+0) $G, $#0 +5' "31

0he petition is devoid of erit'

0his #ourt reproduces with approval the dis


29/74

$ coparison of the signature H:hiit P$%lP7 on the forged check H:hiit P$P7 with plaintiffs e:eplarsignatures H:hiits P.%+P and P.%BP7 found in the *+B !or .%$ would iediately show thenegligence of the eployees of the defendant ank' Hven a not too careful coparison wouldiediately arrest oneOs attention and direct it to the graceful lines of plaintiffs e:eplar signaturesfound in H:hiits P.%$P and P.%BP' 0he foration of the first letter P!P in the e:eplars, which could eregarded as artistic, is copletely different fro the way the sae letter is fored in H:hiit P$%lP' 0hatalone should have alerted a ore careful and prudent signature verifier'

0he prie duty of a ank is to ascertain the genuineness of the signature of the drawer or the depositor on the check

eing encashed' 1>t is e:pected to use reasonale usiness prudence in accepting and cashing a check presented toit'

>n this case the findings of facts of the court a uoare conclusive' 0he trial court found that a coparison of thesignature on the forged check and the saple signatures of private respondent show arked differences as thegraceful lines in the saple signature which is copletely different fro those of the signature on the forged check'>ndeed the +B> handwriting e:pert Hstelita )antiago $gnes who the trial court considered to e an Puniasedscientific e:pertP indicated the arked differences etween the signature of private respondent on the saplesignatures and the )>))HD for lack of erit with costs against petitioner'

)5 5(DH(HD'

=eean/ee, ).:., Narvasa, )ru8 and Grio*Auino, ::., concur.


30/74

$#I FAMIL $AN, G.R. No. 18196 *etitioner,

% versus %

E)GAR)O $(ENA-ENT(RA, MRNA LI+AR)Oa!" OLAN)A TICA,

(espondents'

: % % % % % % % % % % % % % % % % % % % % % % % % % % :

E)GAR)O $(ENA-ENT(RA, MRNA LI+AR)Oa!" OLAN)A TICA,

G.R. No. 18259

*etitioners, *resent4

*A+5, )airman,$A)0(>$%$(0>+HR,

% versus % #$HJ5, )(', 0>+&$, and #E>#5%+$R$(>5, JJ'

*roulgated4

$#I FAMIL $AN,(espondent' )epteer 3, "33.

: % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % :

) E C I I O NA(TRIA7MARTINE+, J./

Before us are two consolidated petitions for review on certiorariunder (ule 2. of the (ules of #ourt assailing

the Decision[1]of the #ourt of $ppeals #$7 dated +oveer "-, "333 in #$%&'(' #; +o' .96", which affired with

odification the Decision dated $ugust 11, 199. of the (egional 0rial #ourt, Branch "., anila anila (0#7C and the#$ (esolution dated ay , "331, which denied the parties/ separate otions for reconsideration'

0he factual ackground of the case is as follows4

5n ay ", 1993, Hdgardo Buenaventura, yrna iardo and Iolanda 0ica Buenaventura, et al.7, all officers

of the >nternational Baptist #hurch and >nternational Baptist $cadey in alaon, etro anila, filed a coplaint for

?(einstateent of #urrent $ccount=(elease of oney plus Daages@ against B*> !aily Bank B*>%!B7 efore the

anila (0#, docketed as #ivil #ase +o' 93%.1.2'["]

0hey alleged that4 on $ugust 3, 1989, theyaccepted fro $ado !ranco B*>%!B #heck +o' 1"9332 dated$ugust "9, 1989 in the aount of *.33,333'33, Fointly issued y Hladio 0eves and Joseph 0evesC []they opened#urrent $ccount +o' 83-%36.12%3 with the B*>%!B Branch at Bonifacio arket, Hdsa, #aloocan #ity and depositedthe check as initial depositC the check was suse%!B that their #urrent $ccount had een froen upon instruction of )everino *' #oronacion,;ice%*resident of B*>%!B on the ground that the source of fund was illegal or unauthoriedC they deanded thereinstateent of the account, ut B*>%!B refused'
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31/74

5n June "3, 1993, B*>%!B filed a otion to disiss on the ground of litis pendentia, alleging that there is a

pending case for recovery of su of oney arising fro the B*>%!B #heck +o' 1"9332 dated $ugust "9, 1989 efore

the (egional 0rial #ourt (0#7, Branch 126, akati[2]and Buenaventura is one of the defendants therein'[.]

Buenaventura, et al.opposed the otion to disiss on the ground that there is no identity of parties, rights asserted

and reliefs prayed etween the two cases' [6]

5n 5ctoer 13, 1993, the anila (0# denied the otion to disiss, ruling that there can e no res

udicataetween the two cases since the parties are different and the causes of action are not the sae' [-]

5n Deceer 13, 1993, B*>%!B filed its answer alleging that4 the check received y Buenaventura, et al.fro

$ado !ranco was drawn y Hladio 0eves and Joseph 0eves against the #urrent $ccount of the 0evesteco $rrastre

)tevedoring #o', >nc' 0evesteco7C the funds in the said 0evesteco account allegedly consisted ainly of funds in the

aount of *83,333,333'33 transferred to it fro another account elonging to the !irst etro >nvestent #orporation

!>#7C such transfer of funds was effected on the asis of an $uthority to Deit earing the signatures of certain

officers of !>#C upon its investigation, B*>%!B found that the signatures in the $uthority to Deit were forgedC efore

this, however, 0evesteco had already issued several checks against its #urrent $ccount, one of which is the B*>%!B

#heck +o' 1"9332 received y Buenaventura, et al.fro $ado !ranco, after a series of indorseentsC it has the

right to consider the #urrent $ccount of Buenaventura, et al., which is funded fro B*>%!B #heck +o' 1"9332, as

closed and to refuse any further withdrawal fro the saeC assuing that the forgery clai of !># is untrue and

incorrect, it is the right of the B*>%!B, as a atter of protecting its interests, to freee their account or to hold it in

suspense and not to allow any withdrawals therefro in the eantie that the issue of forgery reains unsettledC

!># has instituted another civil action, presently pending appeal, against B*>%!B and several other defendants for

the recovery of the *83,333,333'33 transferred fro the forer/s account to 0evesteco/s account' [8]

!ollowing trial on the erits, on $ugust 11, 199., the anila (0# rendered its decision , finding that4 B*>%!B

had no right to unilaterally freee the deposits of Buenaventura, et al.since the latter had no participation in any fraud

that ay have attended the prior fund transfers fro !># to 0evestecoC as holders in good faith and for value of the

B*>%!B #heck +o' 1"9332, their rights to the su eodied in the said check should have een respectedC B*>%!B/s

unilateral action of freeing the #urrent $ccount aounted to an unlawful confiscation of their property without due

process' 0he dispositive portion of the (0# decision reads as follows4

GEH(H!5(H, in view of the foregoing Fudgent is rendered in favor of the plaintiff and

against the defendant ank and the latter is ordered as follows41' 0o pay the plaintiff the su of *293,"8'.3 representing the alance of the plaintiff/s

deposit under $ccount +o' 83-%36.%1%3 which was unlawfully froen y the ank and finally deitedagainst said account with legal rate of interest fro date of closureC

"' 0o pay the su of *"33,333'33 as oral daagesC' 0o pay the aount of *"33,333'33 as e:eplary daages to serve as an e:aple and

lesson to serve as a deterrent for siilar action which the ank ay take against its depositors in thefutureC

2' 0o pay the su of *.3,333'33 as attorney/s fees'

)5 5(DH(HD'[9]
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Dissatisfied, B*>%!B appealed to the #$' >t alleged that4 the case should have een disissed for lack of

cause of action ecause it is the >nternational Baptist $cadey which is the owner of the funds deposited with B*>%!B

and therefore the real party%in%interest, although the account is in the nae of Buenaventura, et al.C the (0# should

not have ordered the payent of the alance of the #urrent $ccount of Buenaventura, et al.ecause the latter were

interested only in the reinstateent of their #urrent $ccountC the provisions of the +egotiale >nstruents aw should

not have een applied y the (0# to support its position that Buenaventura, et al.are the owners of the funds in their

#urrent $ccountC B*>%!B is entitled to freee the account of Buenaventura, et al.and to disallow any withdrawals

therefro as a easure to protect its interestC B*>%!B, not Buenaventura, et al., is entitled to daages'5n +oveer "-, "333, the #$ affired the decision of the anila (0#, holding that B*>%!B did not act in

accordance with law'[13] >t ruled that the relationship etween the ank and the depositor is that of detor and creditor

and, as such, B*>%!B could not lawfully refuse to ake payents on the checks drawn and issued y

Buenaventura, et al.,provided only that there are funds availale in the latter/s deposit' >t further declared that B*>%!B

is not Fustified in freeing the aounts deposited y Buenaventura, et al.for suspicion of eing ?illegal@ or

?unauthoried@ as a result of the claied fraud perpetuated against !># ecause4 a7 it has not een sufficiently

shown that the funds in the account of Buenaventura, et al.were derived e:clusively fro the alleged *83,333,333'33

unlawfully transferred fro the funds of !># or that the deposit under the nae of 0evesteco consisted e:clusively

of the said *83,333,333'33 deited fro !>#/s accountC and 7 there is no clear proof of any involveent of

Buenaventura, et al., the >nternational Baptist #hurch or >nternational Baptist $cadey in the alleged irregularities

attending the fund transfer fro !># to 0evesteco'

0he #$ also found uneritorious B*>%!B/s clai that Buenaventura, et al.have no cause of action since the

>nternational Baptist $cadey is the real party%in%interest' >t held that since it is undisputed that it is the #urrent

$ccount of Buenaventura, et al.which was froen and closed y B*>%!B, then the forer are the parties%in%interest in

the reopening of the said account' >t found no error in the anila (0#/s order that B*>%!B pay the aount

of *293,"8'.3 plus interest directly to Buenaventura, et al.since the reinstateent of the #urrent $ccount would

ean the sae thing as the payent of the alanceC Buenaventura, et al.would necessarily have the right to

withdraw their deposit if and when they see it fit' !urtherore, the #$ held that the (0#/s disposition falls under the

general prayer of Buenaventura, et al. for such other reliefs as ay e Fust and e%!B was not aniated y any wanton,

fraudulent, reckless, oppressive or alevolent intent'

Both parties filed separate otions for reconsideration' Buenaventura, et al.sought reconsideration of the

deletion of the award of e:eplary daages'[11] 5n the other hand, B*>%!B reiterated its arguent that the

>nternational Baptist $cadey is the real party%in%interest' >t also assailed the findings and conclusions of the #$'[1"]

5n ay , "331, the #$ denied oth otions for reconsideration' [1]

Eence, the present two consolidated petitions for review on certiorari.

>n &'( +o' 128196, B*>%!B ascries si: errors upon the #$, to wit4
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>' 0he Eonorale #ourt of $ppeals coitted a reversile error in holding that therespondents are the real parties%in%interest in this case contrary to the adissions of respondentstheselves that it is the >nternational Baptist $cadey who is the owner of the funds in %!B is entitled to freee respondents/ account and to disallowany withdrawal therefro as a easure to protect its interest'

>;' 0he Eonorale #ourt of $ppeals coitted a reversile error in holding, ased on a

isapprehension of facts, that it has not een sufficiently shown that the funds in deposit with B*>%!Bunder the nae of the respondents were derived e:clusively fro the alleged 83 illion pesosunlawfully transferred fro the funds of !># or that the deposit under the nae of 0evestecoconsisted e:clusively of the said 83 illion pesos deited fro !>#/s account'

;' 0he Eonorale #ourt of $ppeals coitted a grave ause of discretion in +50

upholding the position of B*>%!B on the freeing of respondents/ current account when it held thatthere was no clear proof of any involveent y the respondents with the alleged irregularitiesattending the fund transfer fro !># to 0evesteco'

;>' 0he Eonorale #ourt of $ppeals coitted a grave ause of discretion, in holding, in

effect, that there is nothing wrong with the ower #ourt/s order directing B*>%!B to pay to respondentsdirectly the alance of their account plus interest although their prayer in their coplaint was only toreinstate their current account'[12]

$nent the first and second grounds, B*>%!B aintains that the coplaint should have een disissed for lack

of cause of action ecause Buenaventura et al.adit that the >nternational Baptist $cadey is the owner of the funds

in # is true and correct, the

aount transferred fro !>#/s account to 0evesteco/s account is the oney of B*>%!B under the principle that a

ank is deeed to have disursed its own funds' >t suits that as an original owner who is restored in possession of

stolen property, it has a etter right over such property than a ere transferee no atter how innocent the latter ay

e'

#oncerning the fourth ground, B*>%!B suits that aple proof was presented y it that the deposit under the

nae of 0evesteco consisted e:clusively of the*83,333,333'33 deited fro !>#/s account and the funds in deposit

with B*>%!B under the nae of Buenaventura, et al.were derived e:clusively fro the *83,333,333'33 unlawfully

transferred fro the funds of !>#'

Gith regard to the fifth ground, B*>%!B concedes that there is no clear proof of any involveent y

Buenaventura, et al.in the alleged irregularities attending the fund transfer fro !># to 0evesteco' >t insists,

however, that the freeing of the account was triggered y the forgery clai of !># and the unauthoried fund

transfer to 0evesteco ased on the principle that a ank is deeed to have disursed its own funds, and not its

depositors, where the authority for such disurseent is a forgery and null and void' >t had the right to set up its

ownership of the oney as against that of Buenaventura, et al.and to refuse to return the sae to the'
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$s to the si:th ground, B*>%!B points out that Buenaventura, et al.originally prayed in the alternative for the

reinstateent of their #urrent $ccount or for payent of the alance reaining in said account ut they susen &'(' +o' 128".9, Buenaventura, et al. anchor their petition on a sole ground, to wit4

0he Eonorale #ourt of $ppeals has decided the case in a way not in accord with law andapplicale Furisprudence in the deletion of the award of e:eplary daages granted y the court a%!B failed in its oligation, as an

entity engaged in usiness affected with pulic interest, to treat the accounts of its depositors with eticulous care,

having in ind the fiduciary nature of their relationship' oreover, as if to copound its reckless conduct, B*>%!B

declared itself the owner of the oney which the depositors have placed in its care, freeing and later closing the

depositors/ account, all efore due notice and without first giving the latter the opportunity to properly present their side

or at least sufficient tie to direct their course of action, like refraining fro issuing any check, to eventually save

theselves fro any earrassent and=or possile criinal prosecution for estafa or violation of Batas *aansa

Blg' ""'

Ge rule in favor of Buenaventura, et al.

>t is eleentary that it is only in the nae of a real party%in%interest that a civil suit ay e prosecuted' Ander

)ection ", (ule of the (ules of #ivil *rocedure, a real party%in%interest is the party who stands to e enefited or

inFured y the Fudgent in the suit, or the party entitled to the avails of the suit' P>nterestP within the eaning of the rule

eans aterial interest, an interest in issue and to e affected y the decree, as distinguished fro ere interest in

the n the present case, Buenaventura, et al.are the real parties%in%interest' 0hey are the parties who contracted

with B*>%!B with regard to the #urrent $ccount' Ghile the funds were used for purposes of the >nternational Baptist

#hurch and the >nternational Baptist $cadey, it ust e noted that the #urrent $ccount is in the nae of

Buenaventura,et al.0hey are the signatories of the check which was dishonored y B*>%!B upon presentent and the

ones who will e held accountale for the nonpayent or dishonor of any check they issued' 0hus, they are the real

parties%in%interest to enforce the ters of the contract of deposit with B*>%!B'

!urtherore, B*>%!B has no unilateral right to freee the current account of Buenaventura, et al.ased on the

suspicion that the funds in the latter/s account are illegal or unauthoried having een sourced fro the
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unlawful transfer of funds fro the account of !># to 0evesteco and disallow an

Documents

Banking Cases Part 2 (1)