ASSIGNMENT:

1. What is the relationship b/n depositor and bank

2. Type of treatment (ADB case)
3. What are Political Subdivisions
READ:
1. RA 9504 (Min wage earners)
2. Escudero v CIR GR184450

(1) General Legal Relationship Between Bank And Customer

There are numerous kinds of relationship between the bank and the customer. The relationship between a banker and a
customer depends on the type of transaction; products or services offered by bank to its customers. The legal
relationship between a bank and its customer differs in several important respects from the relationships between most
other service providers. In order to answer the question, the essay will begins by describing and analysing the legal
relationship between a bank and its customer. After that, it will goes on to compare that between other service
providers and their customer.

The general legal relationship between bank and its customer

The general legal relationship of bank and customer is contractual relationship, started from the date of opening an
account.
[1] When customer deposits money into his bank account, the bank becomes a debtor of the customer.
[2] No new contract is created every time there is a new deposit as the account is continuing in nature.
[3] The banker is not, in the general case, the custodian of money.
 The money paid into a bank account becomes the property of the bank and bank has a right to use the money
as it likes.
 The bank is not bound to inform the depositor the manner of utilization of funds deposited by him. Bank does
not give any security to the debtor (depositor).
 The bank has borrowed money but does not pay money on its own, as banker is to repay the money upon
payment being demanded.
[4] Thus, bank’s position is quite different from normal debtors. On the other hand, when the bank lends money to his
customer, the relationship between the bank and customer is reversed. Then the bank takes the position as a creditor
of the customer and the customer becomes a debtor of the bank. Borrower executes documents and offer security to
the bank before utilizing the credit facility.

Therefore, the general relationship between bank and its customer is that of a debtor and a creditor.

(2) Type of tax treatment

(3) What are Political Subdivisions

THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES – ARTICLE X
LOCAL GOVERNMENT

GENERAL PROVISIONS

Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as
hereinafter provided.

*Encyclopedia - POLITICAL SUBDIVISIONS are local government units created by the states to help fulfill their
obligations. Political subdivisions include counties, cities, towns, villages, and special districts such as school districts,
water districts, park districts, and airport districts.

*proprietary function
rmc 73 2014

rr 2-98

employer-employee= subj to the will and power of the employer (how

shall it be done)