Case Digest Banking Laws

TABLE OF CONTENTS 1. China Banking Corporation and Tan Kim Liong vs. Hon. Wenceslao Ortega et. al................................................................................1 G.R. No. L-34964 31 January 1973......................................................................................................................................................1 Makalintal, J.:........................................................................................................................................................................................1 2. Bańas et. al. vs. Asia Pacific Finance Corporation.................................................................................................................................2 G.R. No. 128703 18 October 2000.......................................................................................................................................................2 Bellosillo, J.:.......................................................................................................................................Error! Bookmark not defined. 3. Simex International Incorporated vs. CA and Traders Royal Bank........................................................................................................3 G.R. No. 88013 - 19 March 1990..........................................................................................................................................................3 Cruz, J.:.................................................................................................................................................................................................3 4. Fultron Iron Works Co. vs. China Banking Corporation..........................................................................................................................4 G.R. No. 32576

November 6, 1930..........................................................................................................................................4

Street, J.:..............................................................................................................................................................................................4 5. Teofisto Guingona vs. The City Fiscal of Manila....................................................................................................................................5 G.R. No. L-60033

4 April 1984..................................................................................................................................................5

Makasiar, Actg. C.J,............................................................................................................................Error! Bookmark not defined. 6. Paulino Gullas vs. Philippine National Bank..........................................................................................................................................6 G.R. No. L-43191

13 November 1935.......................................................................................................................................6

Malcolm, J.:...........................................................................................................................................................................................6 7. Romarico G. Vitug.................................................................................................................................................................................6 G.R. No. 82027 March 29, 1990...........................................................................................................................................................6 Sarmiento, J.:........................................................................................................................................................................................6 8. Banco Filipino vs. Purisima....................................................................................................................................................................7 G.R. No. L-56429 May 28, 1988...........................................................................................................................................................7 Narvasa, J.:...........................................................................................................................................................................................7 9. Joseph Victor Ejercito vs. Sandiganbayan.............................................................................................................................................8 G.R. Nos. 157294-95 - 30 November 2006..........................................................................................................................................8 Carpio-Morales, J.:................................................................................................................................................................................8 10. BSB Group Inc. vs. Sally Go.................................................................................................................................................................9 G.R. No. 168644 February 16, 2010....................................................................................................................................................9 Peralta, J.:..........................................................................................................................................Error! Bookmark not defined. 11. Intengan vs. Court of Appeals...........................................................................................................................................................10 G.R. No. 128996 February 15, 2002.................................................................................................................................................10 De Leon, Jr., J.:....................................................................................................................................................................................10 12. PCIB vs. Court of Appeals..................................................................................................................................................................11 G.R. No. 121413 January 29, 2001....................................................................................................................................................11 Quisumbing, J.:...................................................................................................................................................................................11 13. Philippine Deposit Insurance Corporation vs. Citibank.....................................................................................................................13 GR NO.170290 April 11, 2012............................................................................................................................................................13 Mendoza, J.:.......................................................................................................................................Error! Bookmark not defined. 14. Philippine Deposit Insurance Corporation vs. Court of Appeals........................................................................................................14 G.R. No. 118917 - December 22, 1997..............................................................................................................................................14 Kapunan, J.:........................................................................................................................................................................................14 15. Philippine Deposit Insurance Corporation vs. Court of Appeals........................................................................................................15 G.R. No. 126911 April 30, 2003.........................................................................................................................................................15 Carpio-Morales, J.:..............................................................................................................................................................................15

1. China Banking Corporation and Tan Kim Liong vs. Hon. Wenceslao Ortega et. al G.R. No. L-34964 31 January 1973 Makalintal, J.: FACTS: Tan Kim Liong was ordered to inform the Court whether or not there is a deposit in the China Banking Corporation of defendant B & B Forest Development Corporation, and if there is any deposit, to hold the same intact and not allow any withdrawal until further order from the Court. Petitioners in this case refuse to comply with a court process garnishing the bank deposit of a judgment debtor by invoking the provisions of Republic Act No. 1405 ( Secrecy of Bank Deposits Act) which allegedly prohibits the disclosure of any information concerning to bank deposits. ISSUE: Whether or not a banking institution may validly refuse to comply with a court processes garnishing the bank deposit of a judgment debtor, by invoking the provisions of Republic Act No. 1405. HELD: No. The lower court did not order an examination of or inquiry into deposit of B & B Forest Development Corporation, as contemplated in the law. It merely required Tan Kim Liong to inform the court whether or not the defendant B & B Forest Development Corporation had a deposit in the China Banking Corporation only for the purposes of the garnishment issued by it, so that the bank would hold the same intact and not allow any withdrawal until further order. It is sufficiently clear that the prohibition against examination of or inquiry into bank deposit under RA 1405 does not preclude its being garnished to insure satisfaction of a judgment. Indeed there is no real inquiry in such a case, and the existence of the deposit is disclosed the disclosure is purely incidental to the execution process. WHEREFORE, the orders of the lower court dated March 4 and 27, 1972, respectively, are hereby affirmed, with costs against the petitioners-appellants.

2. Bańas et. al. vs. Asia Pacific Finance Corporation G.R. No. 128703 18 October 2000 FACTS: Sometime in August 1980, Bañas executed a Promissory Note in favor of C. G.Dizon Construction whereby for value received he promised to pay to the order of C. G. Dizon Construction the sum of P390,000.00 in installments of "P32,500.00every 25th day of the month starting from September 25, 1980 up to August 25,1981". Later, C. G. Dizon Construction endorsed with recourse the Promissory Note to Asia Pacific Finance Corporation (Asia Pacific), and to secure its payment, it, through its corporate officers, Dizon, President, executed a Deed of Chattel Mortgage covering three (3) heavy equipment units of Caterpillar Bulldozer Crawler Tractors in favor of Asia Pacific. Dizon also executed a Continuing Undertaking wherein he bound himself to pay the obligation jointly and severally with C. G. Dizon Construction. In compliance with the provisions of the Promissory Note, C. G. Dizon Construction made the installment payments to Asia Pacific totaling P130,000, but thereafter defaulted in the payment of the remaining installments, prompting Asia Pacific to send a Statement of Account to Dizon for the unpaid balance. As the demand was unheeded, Asia Pacific sued Bañas, C. G. Dizon Construction and Dizon. While they admitted the genuineness and due execution of the Promissory Note, the Deed of Chattel Mortgage and the Continuing Undertaking, they nevertheless maintained that these documents were never intended by the parties to be legal, valid and binding but a mere subterfuge to conceal the loan with usurious interests and claimed that since Asia Pacific could not directly engage in banking business, it proposed to them a scheme wherein it could extend a loan to them without violating banking laws. The RTC issued writ of replevin against C. G. Dizon Construction for the surrender of the bulldozer crawler tractors subject of the Deed of Chattel Mortgage, which of the 3, only 2 were actually turned over and were subsequently foreclosed by Asia Pacific to satisfy the obligation. The RTC ruled in favor of Asia Pacific holding them to pay jointly and severally the unpaid balance. On appeal, the CA affirmed in toto the decision. ISSUE: Whether or not they can be held liable under the said documents HELD: They CAN BE HELD LIABLE UNDER THE SAID DOCUMENTS BUTTHE COURT MITIGATED THE AMOUNT OF DAMAGES AS IT WASSHOWN THAT THERE WAS A PARTIAL COMPLIANCE ON THEIR PART. Indubitably, what is prohibited by law is for investment companies to lend funds obtained from the public through receipts of deposit, which is a function of banking institutions. But here, the funds supposedly "lent" to petitioners have not been shown to have been obtained from the public by way of deposits, hence, the inapplicability of banking laws. On their submission that the true intention of the parties was to enter into a contract of loan, the Court examined the Promissory Note and failed to discern anything therein that would support such theory. On the contrary, the terms and conditions of the instrument clear, free from any ambiguity, and expressive of the real intent and agreement of the parties. Likewise, the Deed of Chattel Mortgage and Continuing Undertaking were duly acknowledged before a notary public and, as such, have in their favor the presumption of regularity. To contradict them there must be clear, convincing and more than merely preponderant evidence. In the instant case, the records do not show even a preponderance of evidence in their favor that the Deed of Chattel Mortgage and Continuing Undertaking were never intended by the parties to be legal, valid and binding . With regard to the computation of their liability, the records show that they actually paid a total sum of P130,000.00 in addition to the P180,000.00 proceeds realized from the sale of the bulldozer crawler tractors at public auction. Deducting these amounts from the principal obligation of P390,000.00 leaves a balance of P80,000.00, to which must be added P7,637.50 accrued interests and charges, or a total unpaid balance of P87,637.50 for which they are jointly and severally liable. Furthermore, the unpaid balance should earn 14% interest per annum as stipulated in the Promissory Note, computed from 20 March 1981 until fully paid.

3. Simex International Incorporated vs. CA and Traders Royal Bank G.R. No. 88013 - 19 March 1990 Cruz, J.: FACTS: Simex International is a private corporation engaged in the exportation of food products. It buys these products from various local suppliers and then sells them abroad, particularly in the United States, Canada and the Middle East. Most of its exports are purchased by the petitioner on credit. Simex is a depositor of TRB and maintained a checking account in its Cubao branch. Simex maintained an account in the amount ofP100,000.00, thus increasing its balance as of that date to P190,380.74. Subsequently, the petitioner issued several (8) checks against its deposit but was surprised to learn later that they had been dishonored for insufficient funds. As a consequence, actions on the pending orders of SIMEX with the other suppliers (California Manufacturing Comp., Malabon Longlife Trading Corp., etc.) whose checks were dishonored were deferred. And thus made these companies send demand letters to SIMEX threatening prosecution if the checks were not made good. SIMEX complained to TRB and found out that the sum of P100,000.00 deposited had not been credited. The error was rectified on June 17, 1981, and the dishonored checks were paid after they were re-deposited. SIMEX sent demand letter for reparation against TRB, which was not met, thus a complaint was filed in CFI Rizal by SIMEX. The court denied the moral & exemplary damages but upheld and ordered TRB to pay for nominal damages in the amount of P20,000.00 plus attys fees & costs, which was then affirmed by the CA. The CA found with the trial court that the private respondent was guilty of negligence but agreed that the petitioner was nevertheless not entitled to moral damages. It said: The essential ingredient of moral damages is proof of bad faith (De Aparicio vs. Parogurga, 150 SCRA 280). Indeed, there was the omission by the defendant-appellee bank to credit appellant'sdeposit of P100,000.00 on May 25, 1981. But the bank rectified its records. It credited the said amount in favor of plaintiff-appellant in less than a month. The dishonored checks were eventually paid. These circumstances negate any imputation or insinuation of malicious, fraudulent, wanton and gross bad faith and negligence on the part of the defendant-appellant. ISSUE: Whether or not TRB is guilty of negligence which warrants SIMEX reparation for damages. HELD: YES. Award SIMEX with moral damages (P20,000) and exemplary damages (P50,000). The initial carelessness of the respondent bank, aggravated by the lack of promptitude in repairing its error, justifies the grant of moral damages. This rather lackadaisical attitude toward the complaining depositor constituted the gross negligence, if not wanton bad faith, that the respondent court said had not been established by the petitioner. There was also prejudice suffered by SIMEX in the fact that the petitioner's credit line was canceled and its orders were not acted upon pending receipt of actual payment by the suppliers. Its business declined. Its reputation was tarnished. Its standing was reduced in the business community. All this was due to the fault of the respondent bank which was undeniably remiss in its duty to the petitioner. In the case at bar, it is obvious that the respondent bank was remiss in that duty and violated that relationship. What is especially deplorable is that, having been informed of its error in not crediting the deposit in question to the petitioner, the respondent bank did not immediately correct it but did so only one week later or twenty-three days after the deposit was made. It bears repeating that the record does not contain any satisfactory explanation of why the error was made in the first place and why it was not corrected immediately after its discovery. Such ineptness comes under the concept of the wanton manner contemplated in the Civil Code that calls for the imposition of exemplary damages.

4. Fultron Iron Works Co. vs. China Banking Corporation G.R. No. 32576

November 6, 1930 Street, J.:

FACTS: In the month of March, 1921, the plaintiff the Fulton Iron Works Co., of St. Louis, Missouri, sold to the Binalbagan Estate, Inc. for which the purchaser executed three notes amounting to about $80,000. The consequently delay in the payments of the notes caused the plaintiff to employ a firm of lawyers in Manila, of which S. C. Schwarzkopf was then a member. Schwarzkopf opened a new account with the defendant bank, known as "No. 2 account." Meanwhile, the No. 2 account became depleted, but the manager of the bank, in view, of the funds to Schwarzkopf's credit in the third account conceded to him a credit in No. 2 account of P25,000. By June 15, 1922, said account became overdrawn to the extend of P22, 144.39, and it was obvious that the limit of the conceded credit would soon be reached. The manager of the bank then intervened and requested Schwarzkopf to settle the overdraft. To accomplish this Schwarkopf merely transferred, by check, the money to his credit in his special account as plaintiff's attorney-in-fact to the No. 2 account. The amount thus transferred was P61,360.81, and the effect of the transfer was to absorb the overdraft and place a credit balance of nearly P40,000 in No. 2 account. Schwarzkopf then purchased a draft on New York in the amount of $15,000, and after some delay transmitted the same by mail to the plaintiff. This draft cost Schwarzkopf the sum of P30,375.02, and it was the only remittance ever made by him to his client.On June 23, 1926, an action was instituted in the Court of First Instance of the City of Manila by the Fulton Iron Works Co. against Schwarzkopf and China Banking for misappropriation of its funds with the full knowledge and consent of the defendant bank. Upon hearing the cause, His Honor gave judgment in favor of the plaintiff, the Fulton Iron Works Co. ISSUE: Whether or not the defendant bank is liable to the plaintiff for the sum of P22, 144.39 which was thus applied to the payment of Schwarzkopf's personal indebtedness resulting from his overdraft in the No. 2 account? HELD: The appealed judgment must be modified by reducing the amount of the judgment against the bank to the sum of P22,144.39.When the bank became a party to the application of part of the plaintiff's money to the satisfaction of the overdraft in No. 2 account, it was directly chargeable with knowledge of the misappropriation of the fund to the extent of the overdraft and that fact, as we have already said, made the bank liable. But this rule cannot be extented to subsequent acts of malversation and misappropriation committed by the fiduciary against the real owner of the fund. Furthermore, it is undeniable that a bank may incur liability by assisting the fiduciary to accomplish a misappropriation, although the bank does not actually profit by the misappropriation.The liability of the defendant bank, to the extent recognized in this decision proceeds upon the fundamental idea that a creditor cannot apply to the obligation of his debtor money which as he knows belongs to another, without the consent of the latter, — a principle implicit in all law.

5. Teofisto Guingona vs. The City Fiscal of Manila G.R. No. L-60033

4 April 1984

FACTS: From March 1979 to March 1981, Clement David made several investments with the National Savings and Loan Association. On March 21, 1981, the bank was placed under receivership by the Bangko Sentral. Upon David’s request, petitioners Guingona and Martin issued a joint promissory note, absorbing the obligations of the bank. On July 17, 1981, they divided the indebtedness. David filed a complaint for estafa and violation of Central Bank Circular No. 364 and related regulations regarding foreign exchange transactions before the Office of the City Fiscal of Manila. Petitioners filed the herein petition for prohibition and injunction with a prayer for immediate issuance of restraining order and/or writ of preliminary injunction to enjoin the public respondents to proceed with the preliminary investigation on the ground that the petitioners’ obligation is civil in nature. ISSUES: (1) Whether the contract between NSLA and David is a contract of depositor a contract of loan, which answer determines whether the City Fiscal has the jurisdiction to file a case for estafa (2) Whether there was a violation of Central Bank Circular No. 364 HELD: (1) 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. Hence, the relationship between the private respondent and the Nation Savings and Loan Association 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. l(b) of the Revised Penal Code, but it will only give rise to civil liability over which the public respondents have no jurisdiction. But even granting that the failure of the bank to pay the time and savings deposits of private respondent David would constitute a violation of paragraph 1(b) of Article 315 of the Revised Penal Code, nevertheless any incipient criminal liability was deemed avoided, because when the aforesaid bank was placed under receivership by the Central Bank, petitioners Guingona and Martin assumed the obligation of the bank to private respondent David, thereby resulting in the novation of the original contractual obligation arising from deposit into a contract of loan and converting the original trust relation between the bank and private respondent David into an ordinary debtor-creditor relation between the petitioners and private respondent. Consequently, the failure of the bank or petitioners Guingona and Martin to pay the deposits of private respondent would not constitute a breach of trust but would merely be a failure to pay the obligation as a debtor. Moreover, while it is true that novation does not extinguish criminal liability, it may however, prevent the rise of criminal liability as long as it occurs prior to the filing of the criminal information in court. In the case at bar, there is no dispute that petitioners Guingona and Martin executed a promissory note on June 17, 1981 assuming the obligation of the bank to private respondent David; while the criminal complaint for estafa was filed on December 23, 1981 with the Office of the City Fiscal. Hence, it is clear that novation occurred long before the filing of the criminal complaint with the Office of the City Fiscal. Consequently, as aforestated, any incipient criminal liability would be avoided but there will still be a civil liability on the part of petitioners Guingona and Martin to pay the assumed obligation. (2) Petitioner Guingona merely accommodated the request of the Nation Savings and loan Association in order to clear the bank draft through his dollar account because the bank did not have a dollar account. Immediately after the bank draft was cleared, petitioner Guingona authorized Nation Savings and Loan Association to withdraw the same in order to be utilized by the bank for its operations. It is safe to assume that the U.S. dollars were converted first into Philippine pesos before they were accepted and deposited in Nation Savings and Loan Association, because the bank is presumed to have followed the ordinary course of the business which is to accept deposits in Philippine currency only, and that the transaction was regular and fair, in the absence of a clear and convincing evidence to the contrary. In conclusion, considering that the liability of the petitioners is purely civil in nature and that there is no clear showing that they engaged in foreign exchange transactions, We hold that the public respondents acted without jurisdiction when they investigated the charges against the petitioners. Consequently, public respondents should be restrained from further proceeding with the criminal case for to allow the case to continue, even if the petitioners could have appealed to the Ministry of Justice, would work great injustice to petitioners and would render meaningless the proper administration of justice.

6. Paulino Gullas vs. Philippine National Bank G.R. No. L-43191

13 November 1935

Malcolm, J.: FACTS: The United States Veterans Bureau issued a warrant payable to the order of Francico Sabectoria Bacos. Paulino Gullas and Pedro Lopez signed as endorsers of the aforementioned check. Thereupon, it was cashed by the Philippine National Bank. Subsequently, the treasury warrant was dishonored. The bank sent notices by mail to Mr. Gullas which could not be delivered to him at that time because he was in Manila. The bank then proceeded to apply the outstanding balances of Mr. Gullas account with the part payment of the subject check. ISSUE: Whether or not PNB properly set off the account of Gullas with the payment of the indorsed check. HELD: No. Although PNB had with respect to the deposit of Gullas a right of set off, its remedy was not enforced properly. Notice of dishonor is necessary in order to charge an indorser and that the right of action against him does not accrue until the notice is given. Prior to the mailing of notice of dishonor, and without waiting for any action by Gullas, the bank made use of the money standing in his account to make good for the treasury warrant. The action of the bank was prejudicial to Gullas. As such,Gullas should be awarded nominal damages because of the premature action of the bank.

7. Romarico G. Vitug G.R. No. 82027 March 29, 1990 Sarmiento, J.: FACTS: The case is a chapter in an earlier suit involving the issue on two (2) wills of the late Dolores Vitug who died in New York, USA in Nov 1980. She named therein private respondent Rowena Corona (Executrix) while Nenita Alonte was co-special administrator together with petitioner Romarico pending probate. In January 1985, Romarico filed a motion asking for authorization of the probate court to sell shares of stocks and real property of the estate as reimbursements for advances he made to the estate. The said amount was spent for payment of estate tax from a savings account in the Bank of America. Rowena Corona opposed the motion to sell contending that from the said account are conjugal funds, hence part of the estate. Vitug insisted saying that the said funds are his exclusive property acquired by virtue of a survivorship agreement executed with his late wife and the bank previously. In the said agreement, they agreed that in the event of death of either, the funds will become the sole property of the survivor. The lower court upheld the validity of the survivorship agreement and granted Romarico's motion to sell. The Court of Appeals however held that said agreement constituted a conveyance mortis causa which did not comply with the formalities of a valid will. Further, assuming that it is donation inter vivos, it is a prohibited donation. Vitug petitioned to the Court contending that the said agreement is an aleatory contract. ISSUE: Whether or not the conveyance is one of mortis causa hence should conform to the form required of wills. HELD: No. The survivorship agreement is a contract which imposed a mere obligation with a term--being death. Such contracts are permitted under Article 2012 on aleatory contracts. When Dolores predeceased her husband the latter acquired upon her death a vested right over the funds in the account. The conveyance is therefore not mortis causa.

8. Banco Filipino vs. Purisima G.R. No. L-56429 May 28, 1988 Narvasa, J.: FACTS: Customs special agent Manuel Caturla is accused by the Bureau of Internal Revenue of having violated R.A. No. 3019 of the "Anti-Graft and Corrupt Practices Act" for having allegedly acquired property manifestly out of proportion to his salary and other lawful income. In the course of the preliminary investigation thereof, the Tanodbayan issued a subpoena duces tecum to the Banco Filipino Savings & Mortgage Bank, commanding its representative to appear at a specified time at the Office of the Tanodbayan and furnish the latter with duly certified copies of the records in all its branches and extension offices, of the loans, savings and time deposits and other banking transactions, dating back to 1969, appearing in the names of Caturla, His wife, Purita Caturla, their Children; Manuel, Jr., Marilyn and Michael and Pedro Escuyos, Caturla moved to quash the subpoena duces tecum but was denied by Tanodbayan Vicente Ericta. Petitioner Banco Filipino filed a complaint for declaratory relief with the Court of First Instance of Manila but was denied for lack of merit by respondent Judge Purisima. ISSUE: Whether or not the RA 1405 “Law on Secrecy of Bank Deposits” precludes production by subpoena duces tecum of bank records of transactions by or in the names of the wife, children and friends of the accused. HELD: No. The inquiry into illegally acquired property or property NOT "legitimately acquired” extends to cases where such property is concealed by being held by or recorded in the name of other persons. This proposition is made clear by R.A. No. 3019 which quite categorically states that the term, "legitimately acquired property of a public officer or employee shall not include ... property unlawfully acquired by the respondent, but its ownership is concealed by its being recorded in the name of, or held by, respondent's spouse, ascendants, descendants, relatives or any other persons.” To sustain the petitioner's theory, and restrict the inquiry only to property held by or in the name of the government official or employee, or his spouse and unmarried children is unwarranted in the light of the provisions of the statutes in question, and would make available to persons in government who illegally acquire property an easy and fool-proof means of evading investigation and prosecution; all they would have to do would be to simply place the property in the possession or name of persons other than their spouse and unmarried children. This is an absurdity that we will not ascribe to the lawmakers.

9. Joseph Victor Ejercito vs. Sandiganbayan G.R. Nos. 157294-95 - 30 November 2006 Carpio-Morales, J.: FACTS: The Office of the Ombudsman requested the Sandiganbayan to issue subpoena duces tecum against the Urban Bank relative to the case against President Joseph Estrada. Ms. Dela Paz, receiver of the Urban Bank, furnished the Office of the Ombudsman certified copies of manager checks detailed in the subpoena duces tecum. The Sandiganbayan granted the same. However, Ejercito claims that the subpoenas issued by the Sandiganbayan are invalid and may not be enforced because the information found therein, given their extremely detailed character and could only have been obtained by the Special Prosecution Panel through an illegal disclosure by the bank officials. Ejercito thus contended that, following the fruit of the poisonous tree doctrine, the subpoenas must be quashed. Moreover, the extremely-detailed information obtained by the Ombudsman from the bank officials concerned during a previous investigation of the charges against him, such inquiry into his bank accounts would itself be illegal.

ISSUE: Whether or not subpoena duces tecum/ad testificandum may be issued to order the production of statement of bank accounts even before a case for plunder is filed in court

HELD: The Supreme Court held that plunder is analogous to bribery, and therefore, the exception to R.A. 1405 must also apply to cases of plunder. The court also reiterated the ruling in Marquez v. Desierto 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 pending case before the court of competent jurisdiction. As no plunder case against then President Estrada had yet been filed before a court of competent jurisdiction at the time the Ombudsman conducted an investigation, he concludes that the information about his bank accounts were acquired illegally, hence, it may not be lawfully used to facilitate a subsequent inquiry into the same bank accounts. Thus, his attempt to make the exclusionary rule applicable to the instant case fails. The high Court, however, rejected the arguments of the petitioner Ejercito that the bank accounts which where demanded from certain banks even before the case was filed before the proper court is inadmissible in evidence being fruits of poisonous tree. This is because the Ombudsman issued the subpoenas bearing on the bank accounts of Ejercito about four months before Marquez was promulgated on June 27, 2001. While judicial interpretations of statutes, such as that made in Marquez with respect to R.A. No. 6770 or the Ombudsman Act of 1989, are deemed part of the statute as of the date it was originally passed, the rule is not absolute. Thus, the Court referred to the teaching of Columbia Pictures Inc., v. Court of Appeals, that: It is consequently clear that a judicial interpretation becomes a part of the law as of the date that law was originally passed, subject only to the qualification that when a doctrine of this Court is overruled and a different view is adopted, and more so when there is a reversal thereof, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted in good faith.

10. BSB Group Inc. vs. Sally Go G.R. No. 168644 February 16, 2010 FACTS: Petitioner, the BSB Group, Inc., is a duly organized domestic corporation presided by its herein representative, Ricardo Bangayan (Bangayan). Respondent Sally Go, alternatively referred to as Sally Sia Go and Sally Go-Bangayan, is Bangayan's wife, who was employed in the company as a cashier, and was engaged, among others, to receive and account for the payments made by the various customers of the company. In 2002, Bangayan filed with the Manila Prosecutor's Office a complaint for estafaand/or qualified theft against respondent, alleging that several checks representing the aggregate amount of P1,534,135.50 issued by the company's customers in payment of their obligation were, instead of being turned over to the company's coffers, indorsed by respondent who deposited the same to her personal banking account maintained at Security Bank and Trust Company (Security Bank) in Divisoria, Manila Branch. Upon a finding that the evidence adduced was uncontroverted, the assistant city prosecutor recommended the filing of the Information for qualified theft against respondent. Accordingly, respondent was charged before the Regional Trial Court of Manila. She was found guilty; that in the commission of the said offense, said accused acted with grave abuse of confidence, being then employed as cashier by said complainant at the time of the commission of the said offense and as such she was entrusted with the said amount of money. Respondent entered a negative plea when arraigned. The trial ensued. On the premise that respondent had allegedly encashed the subject checks and deposited the corresponding amounts thereof to her personal banking account. Petitioner, opposing respondent's move, argued for the relevancy of the Metrobank account on the ground that the complaint-affidavit showed that there were two checks which respondent allegedly deposited in an account with the said bank. To this, respondent filed a supplemental motion to quash, invoking the absolutely confidential nature of the Metrobank account under the provisions of Republic Act(R.A.) No. 1405. The trial court did not sustain respondent; hence, it denied the motion to quash for lack of merit. Meanwhile, the prosecution was able to present in court the testimony of Elenita Marasigan (Marasigan), the representative of Security Bank. In a nutshell ,Marasigan's testimony sought to prove that between 1988 and 1989, respondent ,while engaged as cashier at the BSB Group, Inc., was able to run away with the checks issued to the company by its customers, endorse the same, and credit the corresponding amounts to her personal deposit account with Security Bank. In the course of the testimony, the subject checks were presented to Marasigan for identification and marking as the same checks received by respondent, endorsed, and then deposited in her personal account with Security Bank. CA affirmed RTC’s decision. ISSUE: Whether or not there is no difference between cash and check for purposes of prosecuting respondent for theft of cash HELD: In theft, the act of unlawful taking connotes deprivation of personal property of one by another with intent to gain, and it is immaterial that the offender is able or unable to freely dispose of the property stolen because the deprivation relative to the offended party has already ensued from such act of execution. The allegation of theft of money, hence, necessitates that evidence presented must have a tendency to prove that the offender has unlawfully taken money belonging to another. Interestingly, petitioner has taken pains in attempting to draw a connection between the evidence subject of the instant review, and the allegation of theft in the Information by claiming that respondent had fraudulently deposited the checks in her own name. But this line of argument works more prejudice than favor, because it in effect, seeks to establish the commission, not of theft, but rather of some other crime probably estafa. Moreover, that there is no difference between cash and check is true in other instances. In estafa by conversion, for instance, whether the thing converted is cash or check, is immaterial in relation to the formal allegation in an information for that offense; a check, after all, while not regarded as legal tender, is normally accepted under commercial usage as a substitute for cash, and the credit it represents instated monetary value is properly capable of appropriation. And it is in this respect that what the offender does with the check subsequent to the act of unlawfully taking it becomes material inasmuch as this offense is a continuing one. In other words, in pursuing a case for this offense, the prosecution may establish its cause by the presentation of the checks involved. These checks would then constitute the best evidence to establish their contents and to prove the elemental act of conversion in support of the proposition that the offender has indeed indorsed the same in his own name.

11. Intengan vs. Court of Appeals G.R. No. 128996 February 15, 2002 De Leon, Jr., J.: FACTS: On September 21, 1993, Citibank filed a complaint for violation of section 31 in relation to section 144 of the Corporation Code against two (2) of its officers, Dante L. Santos and Marilou Genuino. Attached to the complaint was an affidavit executed by private respondent Vic Lim, a vicepresident of Citibank. As evidence, Lim annexed bank records purporting to establish the deception practiced by Santos and Genuino. Some of the documents pertained to the dollar deposits of petitioners Carmen Ll. Intengan, Rosario Ll. Neri, and Rita P. Brawner. In turn, private respondent Joven Reyes, vicepresident/business manager of the Global Consumer Banking Group of Citibank, admits to having authorized Lim to state the names of the clients involved and to attach the pertinent bank records, including those of petitioners’ Petitioners aver that respondents violated RA 1405. ISSUE: Whether or not Respondents are liable for violation of Secrecy of Bank Deposits Act, RA 1405. HELD: No. The accounts in question are U.S. dollar deposits; consequently, the applicable law is not Republic Act No. 1405 but Republic Act (RA) No. 6426, known as the “Foreign Currency Deposit Act of the Philippines,” However, applying Act No. 3326, the offense prescribes in eight years, therefore, per available records, private respondents may no longer be haled before the courts for violation of Republic Act No. 6426.

12. PCIB vs. Court of Appeals G.R. No. 121413 January 29, 2001 Quisumbing, J.: FACTS: This case is composed of three consolidated petitions involving several checks, payable to the Bureau of Internal Revenue, but was embezzled allegedly by an organized syndicate. I. G. R. Nos. 121413 and 121479 On October 19, 1977, plaintiff Ford issued a Citibank check amounting to P4,746,114.41 in favor of the Commissioner of Internal Revenue for the payment of manufacturer’s taxes. The check was deposited with defendant IBAA (now PCIB), subsequently cleared the the Central Bank, and paid by Citibank to IBAA. The proceeds never reached BIR, so plaintiff was compelled to make a second payment. Defendant refused to reimburse plaintiff, and so the latter filed a complaint. An investigation revealed that the check was recalled by Godofredo Rivera, the general ledger accountant of Ford, and was replaced by a manager’s check. Alleged members of a syndicate deposited the two manager’s checks with Pacific Banking Corporation. Ford filed a third party complaint against Rivera and PBC. The case against PBC was dismissed. The case against Rivera was likewise dismissed because summons could not be served. The trial court held Citibank and PCIB jointly and severally liable to Ford, but the Court of Appeals only held PCIB liable. II. G. R. No. 128604 Ford drew two checks in favor of the Commissioner of Internal Revenue, amounting to P5,851,706.37 and P6,311,591.73. Both are crossed checks payable to payee’s account only. The checks never reached BIR, so plaintiff was compelled to make second payments. Plaintiff instituted an action for recovery against PCIB and Citibank. On investigation of NBI, the modus operandi was discovered. Gorofredo Rivera made the checks but instead of delivering them to BIR, passed it to Castro, who was the manager of PCIB San Andres. Castro opened a checking account in the name of a fictitious person “Reynaldo Reyes”. Castro deposited a worthless Bank of America check with the same amount as that issued by Ford. While being routed to the Central Bank for clearing, the worthless check was replaced by the genuine one from Ford. The trial court absolved PCIB and held Citibank liable, which decision was affirmed in toto by the Court of Appeals. ISSUES: (1) Whether there is contributory negligence on the part of Ford (2) Has petitioner Ford the right to recover from the collecting bank (PCIBank) and the drawee bank (Citibank) the value of the checks intended as payment to the Commissioner of Internal Revenue? HELD: (1) The general rule is that if the master is injured by the negligence of a third person and by the concurring contributory negligence of his own servant or agent, the latter's negligence is imputed to his superior and will defeat the superior's action against the third person, assuming, of course that the contributory negligence was the proximate cause of the injury of which complaint is made. As defined, proximate cause is that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause produces the injury and without the result would not have occurred. It appears that although the employees of Ford initiated the transactions attributable to an organized syndicate, in our view, their actions were not the proximate cause of encashing the checks payable to the CIR. The degree of Ford's negligence, if any, could not be characterized as the proximate cause of the injury to the parties. The mere fact that the forgery was committed by a drawer-payor's confidential employee or agent, who by virtue of his position had unusual facilities for perpertrating the fraud and imposing the forged paper upon the bank, does notentitle the bank toshift the loss to the drawer-payor, in the absence of some circumstance raising estoppel against the drawer. This rule likewise applies to the checks fraudulently negotiated or diverted by the confidential employees who hold them in their possession. (2) We have to scrutinize, separately, PCIBank's share of negligence when the syndicate achieved its ultimate agenda of stealing the proceeds of these checks. a. G. R. Nos. 121413 and 121479.

On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The neglect of PCIBank employees to verify whether his letter requesting for the replacement of the Citibank Check No. SN-04867 was duly authorized, showed lack of care and prudence required in the circumstances. Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in behalf of the BIR. As an agent of BIR, PCIBank is duty bound to consult its principal regarding the unwarranted instructions given by the payor or its agent. It is a well-settled rule that the relationship between the payee or holder of commercial paper and the bank to which it is sent for collection is, in the absence of an argreement to the contrary, that of principal and agent. A bank which receives such paper for collection is the agent of the payee or holder. Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the check should be deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank to ascertain that the check be deposited in payee's account only. Therefore, it is the collecting bank (PCIBank) which is bound to scrutinize the check and to know its depositors before it could make the clearing indorsement "all prior indorsements and/or lack of indorsement guaranteed". Lastly, banking business requires that the one who first cashes and negotiates the check must take some precautions to learn whether or not it is genuine. And if the one cashing the check through indifference or other circumstance assists the forger in committing the fraud, he should not be permitted to retain the proceeds of the check from the drawee whose sole fault was that it did not discover the forgery or the defect in the title of the person negotiating the instrument before paying the check. For this reason, a bank which cashes a check drawn upon another bank, without requiring proof as to the identity of persons presenting it, or making inquiries with regard to them, cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards diverted to the hands of a third party. In such cases the drawee bank has a right to believe that the cashing bank (or the collecting bank) had, by the usual proper investigation, satisfied itself of the authenticity of the negotiation of the checks. Thus, one who encashed a check which had been forged or diverted and in turn received payment thereon from the drawee, is guilty of negligence which proximately contributed to the success of the fraud practiced on the drawee bank. The latter may recover from the holder the money paid on the check. b. G. R. No. 128604 In this case, there was no evidence presented confirming the conscious participation of PCIBank in the embezzlement. As a general rule, however, a banking corporation is liable for the wrongful or tortuous acts and declarations of its officers or agents within the course and scope of their employment. A bank will be held liable for the negligence of its officers or agents when acting within the course and scope of their employment. It may be liable for the tortuous acts of its officers even as regards that species of tort of which malice is an essential element. In this case, we find a situation where the PCIBank appears also to be the victim of the scheme hatched by a syndicate in which its own management employees had participated. But in this case, responsibility for negligence does not lie on PCIBank's shoulders alone. Citibank failed to notice and verify the absence of the clearing stamps. For this reason, Citibank had indeed failed to perform what was incumbent upon it, which is to ensure that the amount of the checks should be paid only to its designated payee. 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. Thus, invoking the doctrine of comparative negligence, we are of the view that both PCIBank and Citibank failed in their respective obligations and both were negligent in the selection and supervision of their employees resulting in the encashment of Citibank Check Nos. SN 10597 AND 16508. Thus, we are constrained to hold them equally liable for the loss of the proceeds of said checks issued by Ford in favor of the CIR.

13. Philippine Deposit Insurance Corporation vs. Citibank, GR NO.170290 April 11, 2012 FACTS: Petitioner Philippine Deposit Insurance Corporation (PDIC) is a government instrumentality created by virtue of Republic Act (R.A.) No. 3591, as amended by R.A. No. 9302. Respondent Citibank, N.A. (Citibank) is a banking corporation while respondent Bank of America, S.T. & N.A. (BA) is a national banking association, both of which are duly organized and existing under the laws of the United States of America and duly licensed to do business in the Philippines, with offices in Makati City. In 1977, PDIC conducted an examination of the books of account of Citibank. It discovered that Citibank, in the course of its banking business, from September 30, 1974 to June 30, 1977, received from its head office and other foreign branches a total of P11,923,163,908.00 in dollars, covered by Certificates of Dollar Time Deposit that were interest-bearing with corresponding maturity dates. These funds, which were lodged in the books of Citibank under the account “Their Account-Head Office/Branches-Foreign Currency,” were not reported to PDIC as deposit liabilities that were subject to assessment for insurance. As such, in a letter dated March 16, 1978, PDIC assessed Citibank for deficiency in the sum of P1,595,081.96. Similarly, sometime in 1979, PDIC examined the books of accounts of BA which revealed that from September 30, 1976 to June 30, 1978, BA received from its head office and its other foreign branches a total of P629,311,869.10 in dollars, covered by Certificates of Dollar Time Deposit that were interest-bearing with corresponding maturity dates and lodged in their books under the account “Due to Head Office/Branches.” Because BA also excluded these from its deposit liabilities, PDIC wrote to BA on October 9, 1979, seeking the remittance of P109,264.83 representing deficiency premium assessments for dollar deposits. Believing that litigation would inevitably arise from this dispute, Citibank and BA each filed a petition for declaratory relief before the Court of First Instance (now the Regional Trial Court) of Rizal on July 19, 1979 and December 11, 1979, respectively. In their petitions, Citibank and BA sought a declaratory judgment stating that the money placements they received from their head office and other foreign branches were not deposits and did not give rise to insurable deposit liabilities under Sections 3 and 4 of R.A. No. 3591 (the PDIC Charter) and, as a consequence, the deficiency assessments made by PDIC were improper and erroneous. The cases were then consolidated. On June 29, 1998, the Regional Trial Court, Branch 163, Pasig City (RTC) promulgated its Decision in favor of Citibank and BA. Aggrieved, PDIC appealed to the CA which affirmed the ruling of the RTC in its October 27, 2005 Decision. Hence, this petition. ISSUE: Whether or not a branch of a bank has a separate legal Personality. HELD: No. A branch has no separate legal personality. This Court is of the opinion that the key to the resolution of this controversy is the relationship of the Philippine branches of Citibank and BA to their respective head offices and their other foreign branches. The Court begins by examining the manner by which a foreign corporation can establish its presence in the Philippines. It may choose to incorporate its own subsidiary as a domestic corporation, in which case such subsidiary would have its own separate and independent legal personality to conduct business in the country. In the alternative, it may create a branch in the Philippines, which would not be a legally independent unit, and simply obtain a license to do business in the Philippines. In the case of Citibank and BA, it is apparent that they both did not incorporate a separate domestic corporation to represent its business interests in the Philippines. Their Philippine branches are, as the name implies, merely branches, without a separate legal personality from their parent company, Citibank and BA. Thus, being one and the same entity, the funds placed by the respondents in their respective branches in the Philippines should not be treated as deposits made by third parties subject to deposit insurance under the PDIC Charter. The purpose of the PDIC is to protect the depositing public in the event of a bank closure. It has already been sufficiently established by US jurisprudence and Philippine statutes that the head office shall answer for the liabilities of its branch. Now, suppose the Philippine branch of Citibank suddenly closes for some reason. Citibank N.A. would then be required to answer for the deposit liabilities of Citibank Philippines. If the Court were to adopt the posture of PDIC that the head office and the branch are two separate entities and that the funds placed by the head office and its foreign branches with the Philippine branch are considered deposits within the meaning of the PDIC Charter, it would result to the incongruous situation where Citibank, as the head office, would be placed in the ridiculous position of having to reimburse itself, as depositor, for the losses it may incur occasioned by the closure of Citibank Philippines. Surely our law makers could not have envisioned such a preposterous circumstance when they created PDIC. Finally, the Court agrees with the CA ruling that there is nothing in the definition of a “bank” and a “banking institution” in Section 3(b) of the PDIC Charter [27] which explicitly states that the head office of a foreign bank and its other branches are separate and distinct from their Philippine branches. There is no need to complicate the matter when it can be solved by simple logic bolstered by law and jurisprudence. Based on the foregoing, it is clear that the head office of a bank and its branches are considered as one under the eyes of the law. While branches are treated as separate business units for commercial and financial reporting purposes, in the end, the head office remains responsible and answerable for the liabilities of its branches which are under its supervision and control. As such, it is unreasonable for PDIC to require the respondents, Citibank and BA, to insure the money placements made by their home office and other branches. Deposit insurance is superfluous and entirely unnecessary when, as in this case, the institution holding the funds and the one which made the placements are one and the same legal entity.

14. Philippine Deposit Insurance Corporation vs. Court of Appeals G.R. No. 118917 - December 22, 1997 Kapunan, J.: FACTS: On September 22, 1983, plaintiffs-appellees invested in money market placements with the Premiere Financing Corporation (PFC) in the sum of P10,000.00 each for which they were issued by the PFC corresponding promissory notes and checks. On the same date (September 22, 1983), John Francis Cotaoco, for and in behalf of plaintiffs-appellees, went to the PFC to encash the promissory notes and checks, but the PFC referred him to the Regent Saving Bank (RSB). Instead of paying the promissory notes and checks, the RSB, upon agreement of Cotaoco, issued the subject 13 certificates of time deposit with Nos. 09648 to 09660, inclusive, each stating, among others, that the same certifies that the bearer thereof has deposited with the RSB the sum of P10,000.00; that the certificate shall bear 14% interest per annum; that the certificate is insured up toP15,000.00 with the PDIC; and that the maturity date thereof is on November 3, 1983 (Exhs. “B”, “B-1” to “B-12”). On the aforesaid maturity dated (November 3, 1983), Cotaoco went to the RSB to encash the said certificates. Thereat, RSB Executive Vice President Jose M. Damian requested Cotaoco for a deferment or an extension of a few days to enable the RSB to raise the amount to pay for the same (Exh. “D”). Cotaoco agreed. Despite said extension, the RSB still failed to pay the value of the certificates. Instead, RSB advised Cotaoco to file a claim with the PDIC. Meanwhile, on June 15, 1984, the Monetary Board of the Central Bank issued Resolution No. 788 (Exh. ‘2’, Records, p. 159) suspending the operations of the RSB. Eventually, the records of RSB were secured and its deposit liabilities were eventually determined. On December 7, 1984, the Monetary Board issued Resolution No. 1496 (Exh. ‘1’) liquidating the RSB. Subsequently, a masterlist or inventory of the RSB assets and liabilities was prepared. However, the certificates of time deposit of plaintiffsappellees were not included in the list on the ground that the certificates were not funded by the PFC or duly recorded as liabilities of RSB. On September 4, 1984, plaintiffs-appellees filed with the PDIC their respective claims for the amount of the certificates (Exhs. “C”, “C-1”, to “C-12”). Sabina Yu, James Ngkaion, Elaine Ngkaion and Jeffrey Ngkaion, who have similar claims on their certificates of time deposit with the RSB, likewise filed their claims with the PDIC. To their dismay, PDIC refused the aforesaid claims on the ground that the Traders Royal Bank Check No. 299255 dated September 22, 1983 for the amount of P125,846.07 (Exh. “B”) issued by PFC for the aforementioned certificates was returned by the drawee bank for having been drawn against insufficient funds; and said check was not replaced by the PFC, resulting in the cancellation of the certificates as indebtedness or liabilities of RSB. Consequently, on March 31, 1987, private respondents filed an action for collection against PDIC, RSB and the Central Bank. On September 14, 1987, the trial court, declared the Central Bank in default for failing to file an answer. On May 29, 1989, the trial court rendered its decision ordering the defendants therein to pay plaintiffs, jointly and severally, the amount corresponding to the latter’s certificates of time deposit. Both PDIC and RSB appealed. ISSUE: Whether or not PDIC can be held liable for value of the certificates of time deposit held by the petitioners. HELD: NO. Whenever an insured bank shall have been closed on account of insolvency, payment of the insured deposits in such bank shall be made by the Corporation as soon as possible. The term “deposit” means the unpaid balance of money or its equivalent received by a bank in the usual course of business and for which it has given or is obliged to give credit to a commercial, checking, savings, time or thrift account or which is evidence by passbook, check and/or certificate of deposit printed or issued in accordance with Central Bank rules and regulations and other applicable laws, together with such other obligations of a bank which, consistent with banking usage and practices, the Board of Directors shall determine and prescribe by regulations to be deposit liabilities of the Bank . These pieces of evidence convincingly show that the subject CTDs were indeed issued without RSB receiving any money therefor. No deposit, as defined in Section 3 (f) of R.A. No. 3591, therefore came into existence. Accordingly, petitioner PDIC cannot be held liable for value of the certificates of time deposit held by private respondents.

15. Philippine Deposit Insurance Corporation vs. Court of Appeals G.R. No. 126911 April 30, 2003 Carpio-Morales, J.: FACTS: Prior to May 22, 1997, respondents had 71 certificates of time deposits denominated as "Golden Time Deposits" (GTD) with an aggregate face value of P1,115,889.96. May 22, 1987, a Friday, the Monetary Board (MB) of the Central Bank of the Philippines, now Bangko Sentral ng Pilipinas, issued Resolution 5052 prohibiting Manila Banking Corporation to do business in the Philippines, and placing its assets and affairs under receivership. The Resolution, however, was not served on MBC until Tuesday the following week, or on May 26, 1987, when the designated Receiver took over. On May 25, 1987 - the next banking day following the issuance of the MB Resolution, respondent Jose Abad was at the MBC at 9:00 a.m. for the purpose of pre-terminating the71 aforementioned GTDs and re-depositing the fund represented thereby into 28 new GTDs in denominations of P40,000.00 or less under the names of herein respondents individually or jointly with each others Of the 28 new GTDs, Jose Abad pre-terminated 8 and withdrew the value thereof in the total amount of P320,000.00. Respondents thereafter filed their claims with the PDIC for the payment of the remaining 20 insured GTDs. February 11, 1988, PDIC paid respondents the value of 3 claims in the total amount of P120,000.00. PDIC, however, withheld payment of the 17 remaining claims after Washington Solidum, Deputy Receiver of MBC-Iloilo, submitted a report to the PDIC that there was massive conversion and substitution of trust and deposit accounts on May 25, 1987 at MBC-Iloilo. Because of the report, PDIC entertained serious reservation in recognizing respondents' GTDs as deposit liabilities of MBC-Iloilo. Thus, PDIC filed a petition for declaratory relief against respondents with the RTC of Iloilo City, for a judicial declaration determination of the insurability of respondents' GTD sat MBC-Iloilo. In their Answer respondents set up a counterclaim against PDIC whereby they asked for payment of their insured deposits. The Trial Court ordered petitioners to pay the balance of the deposit insurance to respondents. The Court of Appeals affirmed the decision of the lower court. Petitioner posits that the trial court erred in ordering it to pay the balance of the deposit insurance to respondents, maintaining that the instant petition stemmed from a petition for declaratory relief which does not essentially entail an executory process, and the only relief that should have been granted by the trial court is a declaration of the parties' rights and duties. As such, petitioner continues, no order of payment may arise from the case as this is beyond the office of declaratory relief proceedings. ISSUE: Whether or not the trial court order the payment of the balance even if the petition stemmed from a petition for declaratory relief which does not essentially entail an executor process. HELD: YES. Without doubt, a petition for declaratory relief does not essentially entail an executory process. There is nothing in its nature, however, that prohibits a counter claim from being set-up in the same action. There is nothing in the nature of a special civil action for declaratory relief that prescribes the filing of a counterclaim based on the same transaction, deed or contract subject of the complaint. A special civil action is after all not essentially different from an ordinary civil action, which is generally governed by Rules 1 to 56 of the Rules of Court, except that the former deals with a special subject matter which makes necessary some special regulation. But the identity between their fundamental nature is such that the same rules governing ordinary civil suits may and do apply to special civil actions if not inconsistent with or if they may serve to supplement the provisions of the peculiar rules governing special laws.