Nature of Bank Deposits

G.R. No. 183204 January 13, 2014

THE METROPOLITAN BANK AND TRUST COMPANY, Petitioner,

vs.
ANA GRACE ROSALES AND YO YUK TO, Respondents.

Bank deposits, which are in the nature of a simple loan or mutuum,1 must
be paid upon demand by the depositor.2

MACLARING M. LUCMAN, in his capacity as the Manager of the

LAND BANK OF THE PHILIPPINES, Marawi City, petitioner, vs.
ALIMATAR MALAWI, ABDUL-KHAYER PANGCOGA, SALIMATAR
SARIP, LOMALA CADAR, ALIRIBA S. MACARAMBON and ABDUL
USMAN, respondents.
G.R. No. 159794 December 19, 2006

By virtue of the deposits, there exists between the barangays as

depositors and LBP a creditor-debtor relationship. Fixed, savings, and
current deposits of money in banks and similar institutions are governed
by the provisions concerning simple loan.33 In other words, the barangays
are the lenders while the bank is the borrower.
This Court elucidated on the matter in Guingona, Jr., et al. v. The City Fiscal
of Manila, et al.,34 citing Serrano v. Central Bank of the Philippines,35 thus:

Bank deposits are in the 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 law on loans (Art. 1980,
Civil Code; Gullas v. Phil. National Bank, 62 Phil. 519). Current
and savings deposits are loans to a bank because it can use the
same. The petitioner here in making time deposits that earn
interest 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 its obligation as a debtor and not a breach of trust arising
from a depository's failure to return the subject matter of the
deposit. (Emphasis supplied.)36
THE CONSOLIDATED BANK and TRUST CORPORATION, petitioner, vs.
COURT OF APPEALS and L.C. DIAZ and COMPANY, CPAs, respondents.
G.R. No. 138569. September 11, 2003

The contract between the bank and its depositor is governed by the provisions of
the Civil Code on simple loan.1[17] Article 1980 of the Civil Code expressly
provides that x x x savings x x x deposits of money in banks and similar
institutions shall be governed by the provisions concerning simple loan. There is a
debtor-creditor relationship between the bank and its depositor. The bank is the
debtor and the depositor is the creditor. The depositor lends the bank money and
the bank agrees to pay the depositor on demand. The savings deposit agreement
between the bank and the depositor is the contract that determines the rights and
obligations of the parties.

The law imposes on banks high standards in view of the fiduciary nature of
banking. Section 2 of Republic Act No. 8791 (RA 8791),2[18] which took effect
on 13 June 2000, declares that the State recognizes the fiduciary nature of banking
that requires high standards of integrity and performance.3[19] This new provision
in the general banking law, introduced in 2000, is a statutory affirmation of
Supreme Court decisions, starting with the 1990 case of Simex International v.
Court of Appeals,4[20] holding that 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.5[21]