Union Bank of the Philippines v. CA

Facts:

On March 21, 1990, a check dated March 31, 1990 in the amount of One Million Pesos was drawn against Account No. 0111-01854-8 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 P1,000,000.00 to the account of Mr. Alvarez. On May 21, 1990, petitioner sent the check for clearing through the Philippine Clearing House Corporation (PCHC). When the check was presented for payment, a clearing discrepancy was committed by Union Bank's clearing staff when the amount of One Million Pesos was erroneously "under-encoded" to P1,000.00 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 of 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."

Subsequently, Union Bank filed a complaint against Allied Bank before the PCHC Arbitration Committee (Arbicom).

Thereafter, Union Bank filed in RTC Makati a petition for the examination of Account No. 111-01854-8.  Judgment on the arbitration case was held in abeyance pending the resolution of said petition.

RTC denied the petition.

CA affirmed RTC’s decision.

Issue:

Whether or not the case at bar falls on the exception to Sec 2 of the Law on Secrecy of Bank Deposits which states “(6) In cases where the money deposited or invested is the subject matter of the litigation.”

Held:

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.