DRA. MERCEDES OLIVER VS.

PHILIPPINE SAVINGS BANK AND LILIA CASTRO,

G.R. No. 214567 | 2016-04-04

FACTS:
Oliver was a depositor of PSBank with account number 2812-07991-6. Castro
was the Assistant Vice President of PSBank and the Acting Branch Manager of
PSBank San Pedro, Laguna.

In her Complaint, dated October 5, 1999, Oliver alleged that sometime in 1997,
she made an initial deposit of P12 million into her PSBank account. During that time,
Castro convinced her to loan out her deposit as interim or bridge financing for the
approved loans of bank borrowers who were waiting for the actual release of their
loan proceeds.

Under this arrangement, Castro would first show the approved loan
documents to Oliver. Thereafter, Castro would withdraw the amount needed from
Oliver's account. Upon the actual release of the loan by PSBank to the borrower,
Castro would then charge the rate of 4% a month from the loan proceeds as interim
or bridge financing interest. Together with the interest income, the principal amount
previously withdrawn from Oliver's bank account would be. deposited back to her
account.

Meanwhile, Castro would earn a commission of 10% from the interest. Their
arrangement went on smoothly for months. Due to the frequency of bank
transactions, Oliver even entrusted her passbook to Castro. Because Oliver earned
substantial profit, she was further convinced by Castro to avail of an additional credit
line in the amount of P10 million. The said credit line was secured by a real estate
mortgage on her house and lot in Ayala Alabang covered by Transfer Certificate of
Title (TCT) No. 137796.

Oliver instructed Castro to pay P2 million monthly to PSBank starting on

September 3, 1998 so that her credit line for P10 million would be fully paid by
January 3, 1999.

Beginning September 1998, Castro stopped rendering an accounting for

Oliver. The latter then demanded the return of her passbook. When Castro showed
her the passbook sometime in late January or early February 1999, she noticed
several erasures and superimpositions therein. She became very suspicious of the
many erasures pertaining to the December 1998 entries so she requested a copy of
her transaction history register from PSBank.

When her transaction history register was shown to her, Oliver was surprised
to discover that the amount of P4,491,250.00 (estimated at P4.5 million) was entered
into her account on December 21, 1998. While a total of P7 million was withdrawn
from her account on the same day, Oliver asserted that she neither applied for an
additional loan of P4.5 million nor authorized the withdrawal of P7 million. She also
discovered another loan for P1,396,310.45, acquired on January 5, 1999 and allegedly
issued in connection with the P10 million credit line.

In Oliver's passbook, there were no entries from December 17, 1998 to

December 27, 1998. The transaction history register, however, showed several
transactions on these very same dates including the crediting of P4.5 million and the
debiting of P7 million on December 21, 1998. Oliver then learned that the additional
P4.5 million and P1,396,310.45 loans were also secured by the real estate mortgage,
dated January 8, 1998, covering the same property in Ayala Alabang.

Oliver received two collection letters, dated May 13, 1999 and June 18, 1999,
from PSBank referring to the non-payment of unpaid loans, to wit: (1) P4,491,250.00
from the additional loan and (2) P1,396,310.45 from the P10 million credit line. In
response, Oliver protested that she neither availed of the said loans nor authorized
the withdrawal of P7 million from her account. She also claimed that the P10 million
loan from her credit line was already paid in full.

ISSUE:
Whether or not PSBank failed to exercise the highest degree of diligence
required of banking institutions.

RULING:
PSBank must be held liable because it failed to exercise utmost diligence in
the improper withdrawal of the P7 million from Oliver’s bank account.

In the case of banks, the degree of diligence required is more than that of a
good father of a family. Considering the fiduciary nature of their relationship with
their depositors, banks are duty bound to treat the accounts of their clients with the
highest degree of care. The point is that 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.

Time and again, the Court has emphasized that the bank is expected to
ensure that the depositor’s funds shall only be given to him or his authorized
representative. In Producers Bank of the Phil. v. Court of Appeals, the Court held that
the usual banking procedure was that withdrawals of savings deposits could only
be made by persons whose authorized signatures were in the signature cards on file
with the bank. In the said case, the bank therein allowed an unauthorized person to
withdraw from its depositor’s savings account, thus, it failed to exercise the required
diligence of banks and must be held liable.
SPOUSES EDUARDO & LYDIA SILOS VS. PHILIPPINE NATIONAL BANK
G.R. No. 181045 | 2 July 2014

In loan agreements, it cannot be denied that the rate of interest is a principal

condition, if not the most important component. Thus, any modification thereof
must be mutually agreed upon; otherwise, it has no binding effect.

FACTS:
Spouses Eduardo and Lydia Silos secured a revolving credit line with
Philippine National Bank (PNB)through a real estate mortgage as a security. After
two years, their credit line increased. Spouses Silos then signed a Credit Agreement,
which was also amended two years later, and several Promissory Notes (PN) as
regards their Credit Agreements with PNB.The said loan was initially subjected to a
19.5% interest rate per annum. In the Credit Agreements, Spouses Silos bound
themselves to the power of PNB to modify the interest rate depending on whatever
policy that PNB may adopt in the future, without the need of notice upon them.
Thus, the said interest rates played from 16% to as high as 32% per annum.Spouses
Silos acceded to the policy by pre-signing a total of twenty-six (26) PNs leaving the
individual applicable interest rates at hand blank since it would be subject to
modification by PNB.

Spouses Silos regularly renewed and made good on their PNs, religiously paid
the interests without objection or failure. However, during the 1997 Asian Financial
Crisis, Spouses Silos faltered when the interest rates soared. Spouses Silos’ 26th PN
became past due, and despite repeated demands by PNB, they failed to make good
on the note. Thus, PNB foreclosed and auctioned the involved security for the
mortgage. Spouses Silos instituted an action to annul the foreclosure sale on the
ground that the succeeding interest rates used in their loan agreements was left to
the sole will of PNB, the same fixed by the latter without their prior consent and thus,
void. The Regional Trial Court (RTC) ruled that such stipulation authorizing both the
increase and decrease of interest rates as may be applicable is valid. The Court of
Appeals (CA) affirmed the RTC decision.

ISSUE:
May the bank, on its own, modify the interest rate in a loan agreement without
violating the mutuality of contracts?

RULING:
Any modification in the contract, such as the interest rates, must be made
with the consent of the contracting parties. The minds of all the parties must meet
as to the proposed modification, especially when it affects an important aspect of
the agreement. In the case of loan agreements, the rate of interest is a principal
condition, if not the most important component.

Loan and credit arrangements may be made enticing by, or "sweetened" with,
offers of low initial interest rates, but actually accompanied by provisions written in
fine print that allow lenders to later on increase or decrease interest rates unilaterally,
without the consent of the borrower, and depending on complex and subjective
factors. Because they have been lured into these contracts by initially low interest
rates, borrowers get caught and stuck in the web of subsequent steep rates and
penalties, surcharges and the like. Being ordinary individuals or entities, they
naturally dread legal complications and cannot afford court litigation; they succumb
to whatever charges the lenders impose. At the very least, borrowers should be
charged rightly; but then again this is not possible in a one-sided credit system
where the temptation to abuse is strong and the willingness to rectify is made weak
by the eternal desire for profit.
BANCO FILIPINO SAVINGS AND MORTGAGE BANK VS. BANGKO SENTRAL NG
PILIPINAS AND THE MONETARY BOARD.
G.R. No. 200678 | June 4, 2018

FACTS:
Petitioner bank has been placed under receivership when it filed a Petition for
Certiorari with the Supreme Court. Said Petition was assailed by the respondent that
contended that the same should be dismissed outright for being led without
Philippine Deposit Insurance Corporation’s authority. It asserts that petitioner was
placed under receivership on March 17, 2011, and thus, petitioner’s Executive
Committee would have had no authority to sign for or on behalf of petitioner absent
the authority of its receiver, Philippine Deposit Insurance Corporation. They also point
out that both the Philippine Deposit Insurance Corporation Charter and Republic Act
No. 7653 categorically state that the authority to file suits or retain counsels for closed
banks is vested in the receiver. Thus, the verification and certification of non-forum
shopping signed by the petitioner's Executive Committee has no legal effect.

ISSUE:
Whether or not petitioner Banco Filipino, as a closed bank under receivership,
could file this Petition for Review without joining its statutory receiver, the Philippine
Deposit Insurance Corporation, as a party to the case.

RULING:
A closed bank under receivership can only sue or be sued through its receiver,
the Philippine Deposit Insurance Corporation. Under Republic Act No. 7653, when
the Monetary Board finds a bank insolvent, it may “summarily and without need for
prior hearing forbid the institution from doing business in the Philippines and
designate the Philippine Deposit Insurance Corporation as receiver of the banking
institution.”

The relationship between the Philippine Deposit Insurance Corporation and a

closed bank is fiduciary in nature. Section 30 of Republic Act No. 7653 directs the
receiver of a closed bank to “immediately gather and take charge of all the assets
and liabilities of the institution” and “administer the same for the benefit of its
creditors.” The law likewise grants the receiver “the general powers of a receiver
under the Revised Rules of Court.” Under Rule 59, Section 6 of the Rules of Court, “a
receiver shall have the power to bring and defend, in such capacity, actions in his [or
her] own name.” Thus, Republic Act No. 7653 provides that the receiver shall also “in
the name of the institution, and with the assistance of counsel as [it] may retain,
institute such actions as may be necessary to collect and recover accounts and
assets of, or defend any action against, the institution.” Considering that the receiver
has the power to take charge of all the assets of the closed bank and to institute for
or defend any action against it, only the receiver, in its fiduciary capacity, may sue
and be sued on behalf of the closed bank.

When petitioner was placed under receivership, the powers of its Board of
Directors and its officers were suspended. Thus, its Board of Directors could not have
validly authorized its Executive Vice Presidents to file the suit on its behalf. The
Petition, not having been properly verified, is considered an unsigned pleading. A
defect in the certification of non-forum shopping is likewise fatal to petitioner’s
cause. Considering that the Petition was led by signatories who were not validly
authorized to do so, the Petition does not produce any legal effect. Being an
unauthorized pleading, this Court never validly acquired jurisdiction over the case.
The Petition, therefore, must be dismissed.
RAY SHU VS. JAIME DEE, ENRIQUETO MAGPANTAY, RAMON MIRANDA, LARRY
MACILLAN, AND EDWIN SO
G.R. No. 182573 | April 23, 2014

FACTS:
Petitioner filed a complaint before the National Bureau of Investigation (NBI)
charging the respondents of falsification of two deeds of real estate mortgage
submitted to Metrobank. Both deeds of real estate mortgage were allegedly signed
by the petitioner, one in his own name while the other was on behalf of 3A Apparel
Corporation. According to the petitioner, the respondents were employees of
Metrobank. After investigation, the NBI filed a complaint with the City Prosecutor of
Makati charging the respondents with the crime of forgery and falsification of public
documents.

The respondents argued in their counter-affidavits that they were denied their
right to due process during the NBI investigation because the agency never required
them and Metrobank to submit the standard sample signatures of the petitioner for
comparison.

The respondents argued in their counter-affidavits that they were denied their
right to due process during the NBI investigation because the agency never required
them and Metrobank to submit the standard sample signatures of the petitioner for
comparison. The findings contained in the questioned documents report only
covered the sample signatures unilaterally submitted by the petitioner as compared
with the signatures appearing on the two deeds of real estate mortgage. An
examination of the signatures of the petitioner which appear in several documents
in Metrobank’s possession revealed that his signatures in the questioned deeds are
genuine.

ISSUE:
Whether or not the respondents were denied their right to due process during
the NBI investigation.

RULING:
NO. The Court held that the functions of this agency are merely investigatory
and informational in nature. It has no judicial or quasi-judicial powers and is
incapable of granting any relief to any party. It cannot even determine probable
cause. The NBI is an investigative agency whose findings are merely
recommendatory. It undertakes investigation of crimes upon its own initiative or as
public welfare may require in accordance with its mandate. It also renders assistance
when requested in the investigation or detection of crimes in order to prosecute the
persons responsible.

Since the NBI’s findings were merely recommendatory, the Court found that
no denial of the respondents’ due process right could have taken place; the NBI’s
findings were still subject to the prosecutor’s and the Secretary of Justice’s actions
for purposes of finding the existence of probable cause.

The respondents were not likewise denied their right to due process when the
NBI issued the questioned documents report. There was no categorical finding in the
questioned documents report that the respondents falsified the documents. This
report, too, was procured during the conduct of the NBI’s investigation at the
petitioner’s request for assistance in the investigation of the alleged crime of
falsification. The report is inconclusive and does not prevent the respondents from
securing a separate documents examination by handwriting experts based on their
own evidence. On its own, the NBI’s questioned documents report does not directly
point to the respondents’ involvement in the crime charged.