SERRANO V.

CENTRAL BANK OF THE PHILIPPINES

G.R. NO. L-30511. FEBRUARY 14, 1980
I.PARTIES:
Petitioner -Manuel Serrano
Respondents-Central Bank of the Philippines Overseas Bank of Manila and its
Stockholders
II.PRIOR PROCEEDINGS
Court of First Instance
Supreme Court
III. THEORIES OF THE PARTIES
Petitioner:
The petitioner claimed to establish joint and solidary liability to the amount of
Php350,000.00 with interest against respondent and its stockholders on the failure
to return the time deposits on the ground that the respondent Central Bank failed in
its duty to exercise strict supervision over Overseas Bank of Manila to protect
depositors and general public.
Respondent:
Central Bank claimed that it is not guarantor of the permanent solvency of a
banking institution. Central Bank denied that a constructive trust was created in
favor of the petitioner and his predecessor in interest Concepcion Manejawhen their
time deposits were made with Overseas Bank of Manila.
IV.OBJECTIVES OF THE PARTY
Petitioner: The petitioner sought to recover time deposits with an amount of
Php350,000.00 including interests due therein from respondent Overseas Bank of
Manila and recovery of damages against respondent Central Bank by virtue of
constructive trust.
Respondent: The respondent sought to be relieved in paying damages due to the
petitioners claim as during that time Overseas Bank of Manila was not an insolvent
bank.
V.KEY FACTS:
Manuel Serrano made a time deposit, for one year with 6%interest of One Hundred
Fifty Thousand Pesos with the Respondent Overseas Bank of Manila. Concepcion
Maneja also made a time deposit, for one year with 6- % interest, of Two Hundred
Thousand Pesos on the same respondent Overseas Bank of Manila.
Concepcion Maneja, then married, assigned and conveyed to petitioner Manuel
Serrano, her time deposit of Php200,000.00.Notwithstanding series of demands for
encashment of the aforementioned time deposit from the respondent Overseas
Bank of Manila, not a single one of the time deposit certificates was honored by
respondent Overseas Bank of Manila. Respondent Central Bank dissolves and
liquidated the Overseas Bank of Manila. The former denied that it is a guarantor of
the permanent solvency of any banking institution as claimed by the petitioner.

Respondent Central Bank avers no knowledge of petitioners claim that the

properties given by the respondent Overseas Bank of Manila as additional
collaterals to the respondent Central Bank of the Philippines for the formers
overdrafts and emergency loans were acquired from the depositors money
including the time deposits of the petitioner. Hence, this petition.
VI.ISSUE:
Whether or not the respondents are jointly and solidary liable for damages due to
breach of trust.
VII.HOLDINGS:
The Court held that both respondent banks were not given preliminary injunction
with respect to the acts of the respondent Central Bank.
VIII. RATIO DECIDENDI
Both parties overlooked the fundamental principle in the nature of bank deposits
when the petitioner claimed that there should be created a constructive trust in his
favor when the respondent Overseas Bank of Manila increased the collaterals in
favor of the respondent Central Bank of the Philippines for the formers overdrafts
and emergency loans, since these collaterals were acquired by the use of
depositors money. Bank deposits are in 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 loans. Current
and savings deposits are loans to a bank because it can use the same. The
petitioner here in the making time deposits that earn interests with respondent
Overseas Bank of Manila was in reality a creditor of the respondent bank and not a
depositor. The respondent bank was in turn a debtor of petitioner. Failure of the
respondent bank to honor the time deposit is failure to pay obligations a debtor and
not a breach of trust arising from depositorys failure to return the subject matter of
the deposit.IX.DISPOSITION the petition is dismissed for lack of merit, with costs
against the petitioner.