Premiere Development Bank v. Manalo

 

Premiere Development Bank v. Manalo

G.R. Nos. 190359, 190374 & 223057

October 6, 2021

 

FACTS:

This case involves three (3) consolidated petitions for review against Premiere Bank, Asian Bank and BDO Unibank against Primitiva Manalo, heirs of Veronidia Saturnino, Gensu Capital Management Corporation, and other banks. The case originated from a complaint filed by Manalo against the three (3) banks for unauthorized withdrawal and misappropriation of her funds. Manalo sold her property and received five (5) checks as payment. She deposited two (2) of her checks with PCI Bank and entrusted Saturnino three (3) of her checks. Saturnino made unauthorized withdrawals and investments using said checks. Now, Manalo filed a complaint against the three (3) banks for negligence and sought the return of her money. The banks raised similar arguments and maintained that the SPA granted Saturnino authority to receive funds on Manalo's behalf from any person, corporation or institution, whether in check or in cash. Alternatively, it argued that assuming Saturnino had no written authority to withdraw, Manalo nonetheless ratified Saturnino's acts

ISSUE:

Whether or not PCI Bank, Asian Bank, and Premiere Bank are guilty of negligence in the performance of their obligations, and consequently, liable to Manalo.

HELD:

Yes. Article 1980 of the Civil Code provides that "fixed, savings, and current deposits of money in banks and similar institutions shall be governed by the provisions concerning simple loan." Simply, a bank deposit is in the nature of a simple loan or mutuum. Consequently, the relationship between a bank and its depositor is one of debtor-creditor. In relation, Article 1953 of the Civil Code mandates that "a person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality." Payment made by the debtor to the wrong party does not extinguish his/her obligation to the creditor. This holds true even if the debtor acted in utmost good faith and by mistake as to the person of his/her creditor, or through fraud committed by a third person, paid one who is neither his/her creditor nor authorized to receive payment. As applied to banks, their obligation to their depositor persists, and is not extinguished until they pay the latter. Thus, the banks remain liable even if the payment was made in the name of the depositor, but handed to a person not authorized to receive the payment. A drawee bank who negligently allows an unauthorized withdrawal from its depositor's account shall be ordered to return the lost funds. As exhaustively discussed, PCI Bank and Asian Bank negligently allowed the withdrawal of Manalo's funds. Their issuance of a crossed check payable to Manalo is not a proper defense that will exempt them from liability. Nonetheless, Premiere Bank as a collecting bank is equally liable. To note, Premiere Bank negligently allowed the deposit of the manager's check. Said manager's checks were crossed checks payable to Manalo. Heedlessly, they did not bother to contact Manalo before terminating her placements and allowing the withdrawal of hefty sums. They could have prevented the loss of funds had they exercised the diligence required of financial institutions.