Banking Case Digests.docx

BANKING

DEPOSIT FUNCTION

BPI v. First Metro Facts: Respondent FMIC an investment house, through its EVP Ong, opened a current account amounting P100M with petitioner’s San Francisco Del Monte branch upon the request of his friend which is a close acquaintance of said bank’s branch manager with the latter’s aim of increasing the deposit level in his branch. Petitioner through its SFDM branch manager guaranteed the payment of deposit by the FMIC with interest on the condition that the interest is to be paid in advance. An agreement was reached between the parties and subsequently petitioner paid FMIC upon clearance of the latter’s check deposit. However, on the basis of an Authority to Debit signed by the EVP and Senior Manager of FMIC, petitioner transferred P80M from FMCI’s current account to the savings account of one Tevesteco, a stevedoring company. FMIC denied having authorized the transfer of its funds claiming that the signatures were falsified. In order to recover immediately its deposit, FMCI issued a check payable to itself and drawn on its deposit but was dishonored upon upon presentation for payment. Thus, FMIC filed a complaint with the RTC which then ruled in their favor. CA affirmed. Issue: Whether petitioner was remiss in its fiduciary duty. Ruling: YES. Petitioner maintains that respondent should have first inquired whether the deposit of P100 Million and the fixing of the interest rate were pursuant to its (petitioner’s) internal procedures. Petitioner’s stance is a futile attempt to evade an obligation clearly established by the intent of the parties. What transpires in the corporate board room is entirely an internal matter. Hence, petitioner may not impute negligence on the part of respondent’s representative in failing to find out the scope of authority of petitioner’s Branch Manager. Indeed, the public has the right to rely on the trustworthiness of bank managers and their acts. Obviously, confidence in the banking system, which necessarily includes reliance on bank managers, is vital in the economic life of our society. Thus, we uphold the finding of both lower courts that petitioner failed to exercise that degree of diligence required by the nature of its obligations to its depositors. A bank is under obligation to treat the accounts of its depositors with meticulous care, whether such account consists only of a few hundred pesos or of million of pesos. Here, petitioner cannot claim it exercised such a degree of care required of it and must, therefore, bear the consequence.

Marquez v. Desierto, Facts: Petitioner Lourdes Marquez received an Order from respondent Ombudsman Aniano Desierto to produce several bank documents for purposes of inspection in camera relative to various accounts maintained at the bank where petitioner is the branch manager. The accounts to be inspected are involved in a case pending with the Ombudsman entitled, Fact-Finding and Intelligence Bureau (FFIB) v. Amado Lagdameo. It appears that a certain George Trivinio purchased trail managers check and deposited some of it to an account maintained at petitioner’s branch. Petitioner after meeting with the FFIB Panel to ensure the veracity of the checks agreed to the in camera inspection. Petitioner being unable to readily identify the accounts in question, the Ombudsman issued an order directing petitioner to produce the bank documents. Thus, petitioner sought a declaration of her rights from the court due to the clear conflict between RA 6770 and RA 1405. Meanwhile, FFIB moved to cite petitioner in contempt before the Ombudsman. Issue: Whether or not the order of Ombudsman to have an in camera inspection of the accounts is an allowable exception of R.A. No. 1405. Ruling: NO. The order of the Ombudsman to produce for in camera inspection the subject accounts with the Union Bank of the Philippines, Julia Vargas Branch, is based on a pending investigation at the Office of the Ombudsman against Amado Lagdameo, et. al. for violation of R.A. No. 3019, Sec. 3 (e) and (g) relative to the Joint Venture Agreement between the Public Estates Authority and AMARI. We rule that before an in camera inspection may be allowed, there must be a pending case before a court of competent jurisdiction. Further, the account must be clearly identified, the inspection limited to the subject matter of the pending case before the court of competent jurisdiction. The bank personnel and the account holder must be notified to be present during the inspection, and such inspection may cover only the account identified in the pending case. In the case at bar, there is yet no pending litigation before any court of competent authority. What is existing is an investigation by the Office of the Ombudsman. In short, what the office of the ombudsman would wish to do is to fish for additional evidence to formally charge Amado Lagdameo, et. al., with the Sandiganbayan. Clearly, there was no pending case in court which would warrant the opening of the bank account for inspection.

BANKS IN DISTRESS

Philippine International Bank v. CA, G.R. No. 115849, January 24, 1996; Facts: In the course of its banking operations, the defendant Producer Bank of the Philippines acquired 6 parcels of land with a total area of 101 hectares located at Don Jose, Sta. Rosa, Laguna and covered by TCT No. T-106932 to T-106937. The property used to be owned by BYME Investment and Development Corporation which hd them mortgaged with the bank as collateral for a loan. The plaintiff originals, Demetrio Demetria and Jose Janolo wanted to purchase the property and thus initiated negotiations for that purpose. In the early part of August 1987 said plaintiffs, upon the suggestion of BYME investment’s legal counsel, Fajardo met with defendant Mercurio Rivera, manager of the property management department of the defendant bank. The meeting was held in pursuant to plaintiffs’ plan to buy the property. After the meeting, plaintiff Janolo, following the advice of defendant Rivera made a formal purchase offer to the Bank through a letter dated August 30,1987. Negotiations took place and an offer price was fixed at P5.5million. During the course of the negotiations, the defendant bank was placed under conservatorship and a new conservator was appointed to which the name has been refused to recognize. A derivative suit has been filed against Rivera for the damages suffered from the alleged perfect contract of sale involving the 6 parcels of land. Issue: Whether or not a derivative suit may lie involving the bank and its stockholders. Held: No. An individual stockholder is permitted to institute a derivative suit on behalf of the corporation wherein he hold stock in order to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue, or are the ones, to be sued or hold the control of the corporation. In such actions, the suing stockholder is regarded as a nominal party with the corporation as the real party in interest. In the face of the damaging admissions taken from the complaint in the second case, petitioners, quite strangely, sought to deny that the second case was a derivative suit, reasoning that it was brought not by the minority shareholders, but by Henry Co. etal. who not only hold or control over 80% of the outstanding capital stock, but also constitute the majority in the board of directors of petitioners bank. That being so, then they really represent the bank, so whether they sued derivatively or directly, there is undeniably an identity of interest/entity represented. In addition to the many cases, where the corporate fiction has been regarded, we now add the instant case, and declare herewith that the corporate veil cannot be used to shield an otherwise blatant violation of the prohibition against forum shopping. Shareholders, whether suing as the majority in direct actions or as the minority in a derivative suit, cannot be allowed to trifle with court processes particularly where, as in this case, the corporation itself has not been remiss in vigorously prosecuting or defending corporate causes and in using and applying remedies available to it. To rule otherwise would be to encourage corporate litigants to use their shareholders as fronts to circumvent the stringent rules against forum shopping.

Vivas v. Monetary Board,

Facts: The Rural Bank of Faire, Incorporated (RBFI) was a duly registered rural banking institution that the corporate life expired on May 2005. Vivas and the new management team conducted internal audit and introduced measures to revitalize the dismal operation of the bank. BSP on December 2006 extended RBFI corporate life for another 50 years and approve the change of its name to EuroCredit Community Bank, Incorporated (ECBI). General examination of ECBI from 2007 to 2009 were conducted by BSP and was placed under Prompt Corrective Action (PCA) by the Monetary Board in 2008 because of the serious findings and supervisory concerns noted during the general examination. The MB posited that ECBI unjustly refused to allow the BSP examiners from examining and inspecting its books and records and hence issued Resolution No. 726 imposing monetary penalty/fine and referred it to the Office of the Special Investigation for filing og appropriate legal action. The MB issued Resolution No. 823 on June 2009, approving the issuance of a cease and desist order against ECBI, which enjoined it from pursuing certain acts and transactions that were considered unsafe or unsound banking practices, and from doing such other acts or transactions constituting fraud or might result in the dissipation of its assets. It was also prohibited from doing business in the Philippines and to place its assets and affairs under receivership through OSI recommendation. Vivas filed petition for prohibition ascribing grave abuse of discretion to the MB for prohibiting ECBI from continuing its banking business and for placing it under receivership. Issue: WON petition for prohibition will lie against MB. Decision: The petition must fail. Vivas availed of the wrong remedy. The resolution issued by MB placing the bank under receivership may not be restrained or set aside except on a petition for certiorari pursuant to RA 7653. Granting that a petition for prohibition is allowed, it is already an ineffective remedy. Prohibition is that process by which a superior court prevents inferior courts, tribunals, officers, or persons from usurping or exercising a jurisdiction with which they have not been vested by law, and confines them to the exercise of those powers legally conferred.

The proper function of a writ of prohibition is to prevent the doing of an act which is about to be done. It is not intended to provide a remedy for acts already accomplished. Settled is the rule that prohibition does not lie to restrain an act that is already a fait accompli. *Fait accompli -a thing that has already happened or been decided before those affected hear about it, leaving them with no option but to accept.