By: Atty. Gregorio B. Austral, CPA
The nature of bank deposits
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.” Simply, a bank deposit is in the nature of a simple loan or mutuum. Consequently, the relationship between a bank and its depositor is one of debtor-creditor.
In relation, Article 1953 of the Civil Code mandates that “[a] person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality.” Payment made by the debtor to the wrong party does not extinguish his/her obligation to the creditor. This holds true even if the debtor acted in utmost good faith and by mistake as to the person of his/her creditor, or through fraud committed by a third person, paid one who is neither his/her creditor nor authorized to receive payment. As applied to banks, their obligation to their depositor persists, and is not extinguished until they pay the latter. Thus, the banks remain liable even if the payment was made in the name of the depositor, but handed to a person not authorized to receive the payment. (Premiere Development Bank v. Manalo, G.R. Nos. 190359, 190374 & 223057 , [October 6, 2021])
Jurisprudence on bank deposits:
a) The bank has the authority of the claimant to make use of the money deposited on current and savings accounts. The so-called current account and savings deposits have lost the character of deposits properly so-called, and are converted into simple commercial loans, because the bank disposed of the funds deposited by the claimant for its ordinary transactions and for the banking business in which it was engaged||| (Tan Tiong Tick v. American Apothecaries Co., G.R. No. 43682, [March 31, 1938], 65 PHIL 414-429)
b) Third persons who may have a right to the money deposited cannot hold the bank responsible unless there is a court order or garnishment. The duty of the bank is to its creditor-depositor and not to third persons. If a third person has a valid right over the money deposited, he must prove the same before a court of competent jurisdiction. (Aquino, 2021)
c) The officers of the bank cannot be held liable for estafa if they authorized the use of the money deposited by the depositor. The money that is deposited is not held in trust by the bank. If the teller, cashier, bookkeeper or any other bank employee takes the amount deposited, the appropriate crime is qualified theft. (Aquino, 2021)
d) Bank deposits are not special preferred credits under the Civil Code; they are ordinary preferred credits under Article 2244 (9) of the New Civil Code.
e) A bank generally has a right of set-off over the deposits therein for the payment of any withdrawals on the part of a depositor. 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.”