BANKS AND FINANCIAL INTERMEDIARIES
JANUARY 22, 2019
4. Degree of diligence required from banks
BPI v. CA
PS Bank v. Chowking Food Corp.
BPI v. Casa Montessori
Serfino v. FEBTC
PCI Bank v. CA
Prudential Bank v. CA
Facts:
Leticia Tupasi-Valenzuela opened Savings Account and Current Account in the
Valenzuela Branch of petitioner Prudential Bank, with automatic transfer of
funds from the savings account to the current account.
Leticia deposited in her Savings Account a check amounting to PHP 35,271.60,
drawn against PCIB. Leticia had a balance of PHP 35,993.48 in her savings
account and PHP 776.93 in her current account, of total deposits of PHP
36,770.41 with PCIB.
Thereafter, Leticia issued PCIB a check amounting to PHP 11,500.00 post-dated
June 20, 1988, in favor of one Belen Legaspi as payment for a jewelry purchased
from her. Legaspi then endorsed the check to one Philip Lhuillier, a
businessman also in the jewelry business. When Lhuillier deposited the check
in his account in PCIB, Pasay Branch, it was dishonored for being drawn against
insufficient funds. Lhuillier contacted Legaspi about the bounced checked then
Legaspi tried to contact Leticia to no avail.
Upon Leticia’s return from province, she was surprised to know her check
bounced. She went to PCIB Valenzuela Branch on July 4, 1988 to inquire. She
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later found out through Albert Angeles Reyes, the officer-in-charge of current
account that there is a PHP 300.00 penalty for the bounced check.
Later, it was found out that the check in the amount of P35,271.60 deposited
by Leticia on June 1, 1988, was credited in her savings account only on June 24,
1988, or after a period of 23 days. Thus the P11,500.00 check was redeposited
by Lhuillier on June 24, 1988, and properly cleared on June 27, 1988.
RTC Decision: Dismissed complaint as well as the counterclaim of PCIB.
CA Decision: In favor of Leticia, setting aside RTC Decision and ordering PCIB to
pay PHP 100,000.00 of moral damages.
Issue: WON the CA erred and gravely abused its discretion in awarding moral
and exemplary damages and attorney’s fees to be paid by PCIB to Leticia.
Held/Ratio: No. CA’s Decision affirmed.
Firstly, petitioner questions the award of moral damages. It claims that private
respondent did not suffer any damage upon the dishonor of the check.
Petitioner avers it acted in good faith. It was an honest mistake on its part,
according to petitioner, when mis-posting of Leticia’s deposit on June 1, 1988,
happened. Further, petitioner contends that private respondent may not
“claim” damages because the petitioner’s manager and other employee had
profusely apologized to Leticia for the error. They offered to make restitution
and apology to the payee of the check, Legaspi, as well as the alleged endorsee,
Lhuillier. Regrettably, it was Leticia who declined the offer and allegedly said,
that there was nothing more to it, and that the matter had been put to rest.
Admittedly, as found by both the respondent appellate court and the trial court,
petitioner bank had committed a mistake. It misposted private respondent’s
check deposit to another account and delayed the posting of the same to the
proper account of the private respondent. The mistake resulted to the dishonor
of the private respondent’s check. The trial court found “that the misposting of
plaintiff’s check deposit to another account and the delayed posting of the
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same to the account of the plaintiff is a clear proof of lack of supervision on the
part of the defendant bank.”
Similarly, CA also found that “while it may be true that the bank’s negligence in
dishonoring the properly funded check of appellant might not have been
attended with malice and bad faith, as appellee [bank] submits, nevertheless,
it is the result of lack of due care and caution expected of an employee of a firm
engaged in so sensitive and accurately demanding task as banking.”
As held in PNB v. CA, “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 millions of pesos. Responsibility arising from negligence in
the performance of every kind of obligation is demandable. While petitioner’s
negligence in this case may not have been attended with malice and bad faith,
nevertheless, it caused serious anxiety, embarrassment and humiliation.”
Hence we ruled that the offended party in said case was entitled to recover
reasonable moral damages.
B. Bank Deposits
1. Nature of Bank Deposits
Article 1980. Fixed, savings, and current deposits of money in banks and similar
institutions shall be governed by the provisions concerning simple loan. (n)
Article 1933. By the contract of loan, one of the parties delivers to another,
either something not consumable so that the latter may use the same for a
certain time and return it, in which case the contract is called a commodatum;
or money or other consumable thing, upon the condition that the same amount
of the same kind and quality shall be paid, in which case the contract is simply
called a loan or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
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In commodatum, the bailor retains the ownership of the thing loaned, while in
simple loan, ownership passes to the borrower. (1740a)
People v. Ong
Facts:
The accused, Dick Ong y. Chan, Lino Morfe y. Gutierrez, Ricardo Villaran and
Lucila Talabis, were charged with the crime of estafa.
Between December 6, 1978 and January 31, 1979, both dates inclusive, in the
City of Manila, Philippines, the said accused, conspiring and confederating
together and helping one another, did then and there wilfully, unlawfully and
feloniously defraud the Home Savings Bank. Dick Ong y. Chan, by means of false
manifestations and fraudulent representations which he made to the
management of the Home Savings Bank, presented checks with a total amount
of PHP 575,504.00 claimed to be good and covered with sufficient funds.
In the same manner, with the conspiracy of his coaccused Lino Morfe y.
Gutierrez, Ricardo Villaran and Lucila Talabis, in their capacities as officer-in
charge, branch accountant and bank branch cashier, respectively, of said bank
(Home Savings Bank), induced and succeeded in inducing the management of
the said bank to accept said checks as deposits, all the said accused well
knowing that Ong’s representation are false and untrue and even facilitated the
opening of a savings account in Ong’s name which allowed Ong to withdraw the
said total amount.
RTC Decision: convicted Ong. CA Decision: affirmed for lack of merit
Upon reconsideration, Ong expressed the following errors against the CA:
(1) it concluded that the withdrawals against the amounts of the subject
checks before clearance and collection of the corresponding amounts
thereof by
(2) the depository bank from the drawee banks is deceit or fraud
constituting estafa under Article 315, paragraph 2(d) of the Revised
Penal Code, in the total absence of evidence showing criminal intent to
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defraud the depository bank; and not a case which is civil in nature
governed solely by the Negotiable Instruments Law;
(3) it stated that he issued and deposited the subject checks when he is
not the issuer, maker, nor drawer thereof but merely an indorser;
hence, his liability, if any, is that of a general indorser under the
Negotiable Instruments Law;
(4) it convicted him on mere presumption, without any evidence that he
had prior knowledge of the lack or insufficiency of funds in the drawee
banks to cover the amounts of the subject checks; and
(5) it failed to consider that a general indorser under the Negotiable
Instruments Law warrants payment of the value of the checks indorsed
by him; no damage could have been suffered by the depository bank
because he had offered payment thereof.
To support the aforementioned assignment of errors, Ong alleges that based
on the testimonies of co-accused Lucila Talabis and Ricardo Villaran, he did not
employ any deceit or fraud on the Bank because the practice of deposit and
withdrawal against uncleared checks and uncollected deposits was tolerated by
it. As soon as he learned of the dishonor of the subject checks, he offered to
pay the amounts thereof and put up as security his property. The subject checks
were not in payment of an obligation but were deposited in his savings account.
He was merely a general indorser of the subject checks and this being the case,
his obligations as such, if any, should be governed by Section 66 of the
Negotiable Instruments Law.
Issue: WON Ong is guilty of estafa.
Held/Ratio: NO. Ong should be acquitted.
Inasmuch as the first part of the first element of Article 315, paragraph 2(d) of
the Revised Penal Code is concerned with the act of “postdating or issuance of
a check,” Ong raises the defense that he was neither the issuer nor drawer of
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the subject checks, but only an indorser thereof. Thus, his liability, if any, should
be governed by the provision of the Negotiable Instruments Law, particularly
Section 66 thereof. AIso, he could not have had any knowledge as to the
sufficiency of the drawers’ funds in their respective banks.
In the present case, the prosecution failed to prove that Ong had such
knowledge with respect to the subject checks that he indorsed. With respect
to the subject checks wherein Ong was the issuer/drawer, the first part of the
first element of Article 315, paragraph 2(d) of the Revised Penal Code is
applicable.
However, regarding the second part of the first element of Article 315,
paragraph 2(d) of the Revised Penal Code, Ong alleges that when he deposited
the subject checks in his savings account, it was clearly not in payment of an
obligation to the Bank. This single argument of Ong spells tilting the scale to
his advantage. In several cases, We were categorical that bank deposits are in
the nature of irregular deposits. They are really loans because they earn
interest. All kinds of bank deposits, whether fixed, savings or current are to
be treated as loans and are to be covered by the law on loans.—We were
categorical that bank deposits are in the nature of irregular deposits. They are
really loans because they earn interest. All kinds of bank deposits, whether
fixed, savings, or current are to be treated as loans and are to be covered by
the law on loans. Current and savings deposits are loans to a bank because it
can use the same.
Guigona v. City Fiscal of Manila
Facts:
Private respondent David filed a complaint in the Office of the City Fiscal of
Manila. David charged petitioners (with one Robert Marshall and the directors
of the Nation Savings and Loan Association, Inc. (NSLA) with estafa and violation
of CB Circular No. 364 and related Central Bank regulations on foreign exchange
transactions, allegedly committed as follows:
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From March 20, 1979 to March, 1981, David invested with the NSLA the sum of
P1,145,546.20 on nine deposits, P13,531.94 on savings account deposits
(jointly with his sister, Denise Kuhne), US$10,000.00 on time deposit,
US$15,000.00 under a receipt and guarantee of payment and US$50,000.00
under a receipt dated June 8, 1980 ( jointly with Denise Kuhne).
That David was induced into making the aforestated investments by Robert
Marshall an Australian national who was allegedly a close associate of
petitioner Guingona Jr., then NSLA President, petitioner Martin, then NSLA
Executive Vice-President of NSLA and petitioner Santos, then NSLA General
Manager; that on March 21, 1981 NSLA was placed under receivership by the
Central Bank, so that David filed claims therewith for his investments and those
of his sister; that David received a report from the Central Bank that only
P305,821.92 of those investments were entered in the records of NSLA ; that,
therefore, the petitioners misappropriated the balance of the investments, at
the same time violating CB Circular No. 364 and related Central Bank
regulations on foreign exchange transactions; that after demands, petitioner
Guingona Jr. paid only P200,000.00, thereby reducing the amounts
misappropriated to P959,078.14 and US$75,000.00.
Petitioners, Martin and Santos, filed a joint counter-affidavit in which they
stated the following:
That because NSLA was urgently in need of funds and at David's insistence, his
investments were treated as special- accounts with interest above the legal
rate, an recorded in separate confidential documents only a portion of which
were to be reported because he did not want the Australian government to tax
his total earnings (nor) to know his total investments ; that all transactions with
David were recorded; that David's check for US$50,000.00 was cleared through
Guingona, Jr.'s dollar account because NSLA did not have one, that after NSLA
was placed under receivership, Martin executed a promissory note in David's
favor and caused the transfer to him of a nine and on behalf (9 1/2) carat
diamond ring with a net value of P510,000.00; and, that the liabilities of NSLA
to David were civil in nature
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Petitioner, Guingona, Jr., in his counter-affidavit stated the following:
That he had no hand whatsoever in the transactions between David and NSLA
since he (Guingona Jr.) had resigned as NSLA president prior to those
transactions; that he assumed a portion of the liabilities of NSLA to David
because of the latter's insistence that he placed his investments with NSLA
because of his faith in Guingona, Jr.; that in a Promissory Note, he (Guingona,
Jr.) bound himself to pay David the sums of P668.307.01 and US$37,500.00 in
stated instalments; that he (Guingona, Jr.) secured payment of those amounts.
At the inception of the preliminary investigation before respondent Lota,
petitioners moved to dismiss the charges against them for lack of jurisdiction
because David's claims allegedly comprised a purely civil obligation which was
itself novated. Fiscal Lota denied the motion to dismiss.
But, after the presentation of David's principal witness, petitioners filed the
instant petition because: (a) the production of the Promisory Notes, Banker's
Acceptance, Certificates of Time Deposits and Savings Account allegedly
showed that the transactions between David and NSLA were simple loans, i.e.,
civil obligations on the part of NSLA which were novated when Guingona, Jr.
and Martin assumed them.
Issue: What is the nature of obligation of NSLA with David? Does the Manila
Fiscal have the jurisdiction to the case? CIVIL in nature; NONE
Held/Ratio:
A casual perusal of the affidavit complaint filed by David against petitioners will
show that from he, together with his sister, Denise Kuhne, invested with the
NSLA on time deposits covered by Bankers Acceptances and Certificates of Time
Deposits and on savings account deposits covered by a passbook. It appears
further that private respondent David, together with his sister, made
investments in the aforesaid bank in the amount of US$75,000.00.
Moreover, the records reveal that when the aforesaid bank was placed under
receivership, petitioners Guingona and Martin, upon the request of private
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JANUARY 22, 2019
respondent David, assumed the obligation of the bank to private respondent
David by executing a joint promissory note in favor of private respondent
acknowledging an indebtedness of Pl,336,614.02 and US$75,000.00 . This
promissory note was based on the statement of account prepared by the David.
Thereafter, petitioners Guingona and Martin agreed to divide the said
indebtedness, and petitioner Guingona executed another promissory note
antedated to June 17, 1981 whereby he personally acknowledged an
indebtedness of P668,307.01 and US$37,500.00 (1/2 of US$75,000.00) in favor
of private respondent. The aforesaid promissory notes were executed as a
result of deposits made by Clement David and Denise Kuhne with the Nation
Savings and Loan Association.
Furthermore, the various pleadings and documents filed by David before this
Court indisputably show that he has indeed invested his money on time and
savings deposits with the NSLA.
It must be pointed out that when private respondent David invested his money
on nine and savings deposits with the aforesaid bank, the contract that was
perfected was a contract of simple loan or mutuum and not a contract of
deposit. Thus, Article 1980 of the New Civil Code provides that: “Article 1980.
Fixed, savings, and current deposits of-money in banks and similar institutions
shall be governed by the provisions concerning simple loan.”
Hence, the relationship between the private respondent and the NSLA is that
of creditor and debtor; consequently, the ownership of the amount deposited
was transmitted to the Bank upon the perfection of the contract and it can
make use of the amount deposited for its banking operations, such as to pay
interests on deposits and to pay withdrawals.
While the Bank has the obligation to return the amount deposited, it has,
however, no obligation to return or deliver the same money that was
deposited. And, the failure of the Bank to return the amount deposited will not
constitute estafa through misappropriation punishable under Article 315, par.
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l(b) of the Revised Penal Code, but it will only give rise to civil liability over which
the public respondents have no- jurisdiction.
Associated Bank v. Tan
Facts:
Vicente Henry Tan (hereafter TAN) is a businessman and a regular depositor-
creditor of the Associated Bank (hereinafter referred to as the BANK).
Sometime in September 1990, he deposited a postdated UCPB check with the
said BANK in the amount of P101,000.00 issued to him by a certain Willy Cheng.
The check was duly entered in his bank record thereby making his balance in
the amount of P297,000.00, as of October 1, 1990, from his original deposit of
P196,000.00. Allegedly, upon advice and instruction of the BANK that the
P101,000.00 check was already cleared and backed up by sufficient funds, TAN,
on the same date, withdrew the sum of P240,000.00, leaving a balance of
P57,793.45. A day after, TAN deposited the amount of P50,000.00 making his
existing balance in the amount of P107,793.45, because he has issued several
checks to his business partners.
However, his suppliers and business partners went back to him alleging that the
checks he issued bounced Thereafter, TAN, thru his lawyer, informed the BANK
to take positive steps regarding the matter for he has adequate and sufficient
funds to pay the amount of the subject checks. Nonetheless, the BANK did not
bother nor offer any apology regarding the incident. Consequently, TAN, as
plaintiff, filed a Complaint for Damages.
In his Complaint, Tan maintained that he had sufficient funds to pay the subject
checks and alleged that his suppliers decreased in number for lack of trust.
Bank field Motion to Dismiss but later dismissed for lack of merit. Then, By way
of affirmative defense, Bank averred that Tan had no cause of action against it
and argued that it has all the right to debit the account of Tan by reason of the
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dishonor of the check deposited by Tan which was withdrawn by him prior to
its clearing. Bank further averred that it has no liability with respect to the
clearing of deposited checks as the clearing is being undertaken by the Central
Bank and in accepting the check deposit, it merely obligates itself as depositor’s
collecting agent subject to actual payment by the drawee bank.
RTC decided in favor of Tan and against the Bank. RTC held that Tan was not
officially informed about the debiting of the P101,000.00 from his existing
balance and that the BANK merely allowed Tan to use the fund prior to clearing
merely for accommodation because the BANK considered him as one of its
valued clients. The trial court ruled that the bank manager was negligent in
handling the particular checking account of Tan stating that such lapses caused
all the inconveniences to Tan.
Bank appealed before CA. CA affirmed RTC decision. It ruled that the bank
should not have authorized the withdrawal of the value of the deposited check
prior to its clearing. Having done so, contrary to its obligation to treat
respondent’s account with meticulous care, the bank violated its own policy.
Without such notice, it is estopped from blaming him for failing to fund his
account.
Issue: WON Bank, acting as collecting bank, has the right to debit the account
of its clients for a check deposit which was dishonored by the drawee bank.
Held/Ratio:
Bank insists that its right to debit the amount of the dishonored check from the
account of respondent is clear and unmistakable. Even assuming that it did not
give him notice that the check had been dishonored, such right remains
immediately enforceable.
A bank generally has a right of setoff over the deposits therein for the payment
of any withdrawals on the part of a depositor.
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The right of a collecting bank to debit a client’s account for the value of a
dishonored check that has previously been credited has fairly been established
by jurisprudence. To begin with, Article 1980 of the Civil Code provides that
“[f]ixed, savings, and current deposits of money in banks and similar institutions
shall be governed by the provisions concerning simple loan.”
Hence, the relationship between banks and depositors has been held to be that
of creditor and debtor.
Thus, legal compensation under Article 1278 of the Civil Code may take place
“when all the requisites mentioned in Article 1279 are present,” as follows:
(1) That each one of the obligors be bound principally, and that he be at
the same time a principal creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same quality if
the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy,
commenced by third persons and communicated in due time to the
debtor.”
The liability of petitioner in this case ultimately revolves around the issue of
whether it properly exercised its right of setoff. The determination thereof
hinges, in turn, on the bank’s role and obligations, first, as respondent’s
depositary bank; and second, as collecting agent for the check in question.
Obligations as Depositary Bank has been held in various jurisprudence. It is
notable that “…the highest degree of diligence is expected, and high standards
of integrity and performance are even required of it. By the nature of its
functions, a bank is under obligation to treat the accounts of its depositors with
meticulous care.”
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Did petitioner treat respondent’s account with the highest degree of care?
From all indications, it did not.
It is undisputed—nay, even admitted—that purportedly as an act of
accommodation to a valued client, petitioner allowed the withdrawal of the
face value of the deposited check prior to its clearing. That act certainly
disregarded the clearance requirement of the banking system. Such a practice
is unusual, because a check is not legal tender or money; and its value can
properly be transferred to a depositor’s account only after the check has been
cleared by the drawee bank.
Under ordinary banking practice, after receiving a check deposit, a bank either
immediately credit the amount to a depositor’s account; or infuse value to that
account only after the drawee bank shall have paid such amount.
Before the check shall have been cleared for deposit, the collecting bank can
only “assume” at its own risk—as herein petitioner did—that the check would
be cleared and paid out.
Reasonable business practice and prudence, moreover, dictated that petitioner
should not have authorized the withdrawal by respondent of P240,000 on
October 1, 1990, as this amount was over and above his outstanding cleared
balance of P196,793.45.
Hence, the lower courts correctly appreciated the evidence in his favor.
Equitable PCI-Bank v. Ng Shung Ngor
Facts:
Respondents Ng Sheung Ngor, Ken Appliance Division, Inc. and Benjamin E. Go
filed an action for annulment and/or reformation of documents and Contracts
against petitioner Equitable PCI Bank (Equitable) and its employees.
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They claimed that Equitable induced them to avail of its peso and dollar credit
facilities by offering low interest rates so they accepted Equitable’s proposal
and signed the bank’s preprinted promissory notes on various dates beginning
1996. They, however, were unaware that the documents contained identical
escalation clauses granting Equitable authority to increase interest rates
without their consent.
Equitable, in its answer, asserted that respondents knowingly accepted all the
terms and conditions contained in the promissory notes.In fact, they
continuously availed of and benefited from Equitable’s credit facilities for five
years.
RTC upheld the validity of the promissory notes. It found that, in 2001 alone,
Equitable restructured respondents’ loans amounting to US$228,200 and P
1,000,000. The trial court, however, invalidated the escalation clause contained
therein because it violated the principle of mutuality of contracts. Nevertheless,
it took judicial notice of the steep depreciation of the peso during the
intervening period and declared the existence of extraordinary deflation.
RTC ordered the use of the 1996 dollar exchange rate in computing
respondents’ dollar denominated loans. Lastly, because the business
reputation of respondents was (allegedly) severely damaged when Equitable
froze their accounts, the trial court awarded moral and exemplary damages to
them.
On appeal and simultaneous MR, RTC dismissed Equitable’s appeal for lack of
merit due to procedural issues. A writ of execution was thereafter issued and
three real properties of Equitable were levied upon.
CA dismissed its certiorari.
Issue:
WON promissory notes issued by Equitable were valid?
WON Equitable has the right to set-off from the deposit of Ng Sheung Ngor?
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JANUARY 22, 2019
Held/Ratio:
1. Yes. The RTC upheld the validity of the promissory notes despite
respondents’ assertion that those documents were contracts of adhesion. It is
erroneous, however, to conclude that contracts of adhesion are invalid per se.
They are, on the contrary, as binding as ordinary contracts. A party is in reality
free to accept or reject it. A contract of adhesion becomes void only when the
dominant party takes advantage of the weakness of the other party, completely
depriving the latter of the opportunity to bargain on equal footing.
That was not the case here. As the trial court noted, if the terms and conditions
offered by Equitable had been truly prejudicial to respondents, they would have
walked out and negotiated with another bank at the first available instance. But
they did not. Instead, they continuously availed of Equitable’s credit facilities
for five long years.
While the RTC categorically found that respondents had outstanding dollar and
Peso denominated loans with Equitable, it, however, failed to ascertain the
total amount due (principal, interest and penalties, if any) as of July 9, 2001.
Such would be determined by the lower court.
2. Yes. The RTC found that respondents did not pay Equitable the interest due
on February 9, 2001 (or any month thereafter prior to the maturity of the loan)
or the amount due (principal plus interest) due on July 9, 2001.
Consequently, Equitable applied respondents’ deposits to their loans upon
maturity.
The relationship between a bank and its depositor is that of creditor and
debtor. For this reason, a bank has the right to set-off the deposits in its hands
for the payment of a depositor’s indebtedness.
Respondents indeed defaulted on their obligation. For this reason, Equitable
had the option to exercise its legal right to set-off or compensation. However,
the RTC mistakenly (or, as it now appears, deliberately) concluded that
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Equitable acted “fraudulently or in bad faith or in wanton disregard” of its
contractual obligations despite the absence of proof. The undeniable fact was
that, whatever damage respondents sustained was purely the consequence of
their failure to pay their loans. There was therefore absolutely no basis for the
award of moral damages to them.
2. Certain Types of Bank Accounts
Joint Accounts
Article 484. There is co-ownership whenever the ownership of an undivided
thing or right belongs to different persons.
In default of contracts, or of special provisions, co-ownership shall be governed
by the provisions of this Title. (392)
AGE OF MAJORITY (CIVIL CODE)
Article 402. Majority commences upon the attainment of the age of twenty-
one years.
The person who has reached majority is qualified for all acts of civil life, save
the exceptions established by this Code in special cases. (320a)
Article 403. Notwithstanding the provisions of the preceding article, a daughter
above twenty-one but below twenty-three years of age cannot leave the
parental home without the consent of the father or mother in whose company
she lives, except to become a wife, or when she exercises a profession or calling,
or when the father or mother has contracted a subsequent marriage. (321a)
Article 404. An orphan who is minor may, at the instance of any relative or
other person, obtain emancipation by concession upon an order of the Court
of First Instance. (322a)
Article 405. For the concession and approval referred to in the preceding article
it is necessary:
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(1) That the minor be eighteen years of age;
(2) That he consent thereto; and
(3) That the concession be deemed convenient for the minor.
The concession shall be recorded in the Civil Register. (323a)
Article 406. The provisions of article 399 are applicable to an orphan who has
been emancipated according to article 404. The court will give the necessary
approval with respect to the contracts mentioned in article 399. In litigations, a
guardian ad litem for the minor shall be appointed by the court. (324a)
Numbered Accounts
BSP Circular No. 302, Sec. 9, AMLA
Section 1. Banks, quasi-banks, trust entities and all other institutions, and their
subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng
Pilipinas (covered institutions) are hereby directed to strictly comply with the
following provisions of Section 9 of R.A. No. 9160 upon its effectivity on 17
October 2001:
Sec. 9. Prevention of Money Laundering: Customer Identification Requirements
and Record Keeping – (a) Customer identification. – Covered institutions shall
establish and record the true identity of its clients based on official documents.
They shall maintain a system of verifying the true identity of their clients and,
in case of corporate clients, require a system of verifying their legal existence
and organizational structure, as well as the authority and identification of all
persons purporting to act on their behalf.
The provisions of existing laws to the contrary notwithstanding, anonymous
accounts, accounts under fictitious names, and all other similar accounts shall
be absolutely prohibited. Peso and foreign currency non-checking numbered
accounts shall be allowed. The BSP may conduct annual testing solely limited
to the determination of the existence and the identity of the owners of such
accounts.
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(b) Record Keeping. – All records of all transactions of covered institutions shall
be maintained and safely stored for five (5) years from the dates of
transactions. With respect to closed accounts, the records on customer
identification, account files and business corrrespondence, shall be preserved
and safely stored for at leat five (5) years from the dates when they were closed.
(c) Reporting of Covered Transactions. – Covered institutions shall report to the
AMLC all covered transactions within five (5) working days from occurrence
thereof, unless the Supervising Authority concerned prescribes a longer period
not exceeding ten (10) working days.
When reporting covered transactions to the AMLC, covered institutions and
their officers, employees, representatives, agents, advisors, consultants or
associates shall not be deemed to have violated Republic Act. No. 1405, as
amended; Republic Act. No. 6426, as amended; Republic Act. No. 8791 and
other similar laws, but are prohibited from communicating, directly or
indirectly, in any manner or by any means, to any person the fact that a covered
transaction report was made, the contents thereof, or any other information in
relation thereto. In case of violation thereof, the concerned officer, employee,
representative, agent, advisor, consultant or associate of the covered
institution, shall be criminally liable. However, no administrative, criminal or
civil proceedings, shall lie against any person for having made a covered
transaction report in the regular performance of his duties and in good faith,
whether or not such reporting results in any criminal prosecution under this Act
or any other Philippine law.
When reporting covered transactions to the AMLC, covered institutions and
their officers, employees, representatives, agents, advisors, consultants or
associates are prohibited from communicating, directly or indirectly, in any
manner or by any means, to any person, entity, the media, the fact that a
covered transaction report was made, the contents therof, or any other
information in relation thereto. Neither may such reporting be published or
aired in any manner or form by the mass media, electronic mail, or other similar
devices. In case of violation thereof, the concerned officer, employee,
 BANKS AND FINANCIAL INTERMEDIARIES
JANUARY 22, 2019

representative, agent, advisor, consultant or associate of the covered

institution, or media shall be held criminally liable.

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