Union Bank of the Philippines v. CA (G.R. No. 134699)

Facts:

A check in the amount of P1M was drawn against an account with private respondent Allied Bank payable to the order of one Jose Ch. Alvarez. The payee deposited the check with petitioner Union Bank who credited the P1M to the account of Mr. Alvarez. Petitioner sent the check for clearing and when the check was presented for payment, a clearing discrepancy was committed by Union Bank’s clearing staff when the amount P1M was erroneously “under-encoded” to P1,000 only. Petitioner only discovered the under-encoding almost a year later. Thus, Union Bank notified Allied Bank of the discrepancy by way of a charge slip for P999,000.00 for automatic debiting against Allied Bank. The latter, however, refused to accept the charge slip “since [the] transaction was completed per your [Union Bank’s] original instruction and client’s account is now insufficiently funded.” Union Bank filed a complaint against Allied Bank before the PCHC Arbitration Committee (Arbicom). Thereafter, Union Bank filed before the RTC a petition for the examination of the account with respondent bank. Judgment on the arbitration case was held in abeyance pending the resolution of said petition. The RTC dismissed Union Bank’s petition. CA affirmed the dismissal ruling that the case was not one where the money deposited is the subject matter of the litigation.

Issue:

Whether the discrepancy amount is the subject matter of litigation.

Ruling: NO.

The petition before this Court reveals that the true purpose for the examination is to aid petitioner in proving the extent of Allied Bank’s liability. In other words, only a disclosure of the pertinent details and information relating to the transactions involving subject account will enable petitioner to prove its allegations in the pending Arbicom case. Petitioner is fishing for information so it can determine the culpability of private respondent and the amount of damages it can recover from the latter. It does not seek recovery of the very money contained in the deposit. The subject matter of the dispute may be the amount of P999,000.00 that petitioner seeks from private respondent as a result of the latter’s alleged failure to inform the former of the discrepancy; but it is not the P999,000.00 deposited in the drawer’s account. By the terms of R.A. No. 1405, the “money deposited” itself should be the subject matter of the litigation. That petitioner feels a need for such information in order to establish its case against private respondent does not, by itself, warrant the examination of the bank deposits. The necessity of the inquiry, or the lack thereof, is immaterial since the case does not come under any of the exceptions allowed by the Bank Deposits Secrecy Act.

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