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Case Digest - Week 4 - Union Bank Vs CA

Union Bank erroneously encoded a check for 1 million pesos drawn against Allied Bank account number 0111-01854-8 as only 1,000 pesos when depositing it into the payee's Union Bank account. Union Bank filed a petition to examine the Allied Bank account but both the trial court and appellate court dismissed it. The Supreme Court affirmed, ruling that the money in the Allied Bank account was not directly the subject of the litigation, so its examination was not allowed by exceptions to laws protecting bank deposit secrecy.

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Alicia Jane Navarro
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539 views

Case Digest - Week 4 - Union Bank Vs CA

Union Bank erroneously encoded a check for 1 million pesos drawn against Allied Bank account number 0111-01854-8 as only 1,000 pesos when depositing it into the payee's Union Bank account. Union Bank filed a petition to examine the Allied Bank account but both the trial court and appellate court dismissed it. The Supreme Court affirmed, ruling that the money in the Allied Bank account was not directly the subject of the litigation, so its examination was not allowed by exceptions to laws protecting bank deposit secrecy.

Uploaded by

Alicia Jane Navarro
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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UNION BANK OF THE PHILIPPINES, petitioner, vs.

COURT OF APPEALS and ALLIED BANK CORPORATION, respondents.


G.R. No. 134699
December 23, 1999

FACTS: A 1 million check was drawn against Account No. 0111-01854-8 with Allied Bank
payable to the order of one Jose Ch. Alvarez, which was deposited with Union Bank and credited
the same to the account of Mr. Alvarez. The check was sent for clearing through the Philippine
Clearing House Corporation. 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 One Thousand Pesos only. Union Bank filed in the RTC a petition
for the examination of Account No. 111-01854-8. However, the RTC dismissed the case because
it does not fall under any of the foregoing exceptions to warrant a disclosure of or inquiry into the
ledgers/books of account of Allied Checking Account No. 111-01854-8. The Court of Appeals
affirmed the dismissal of the petition, ruling that the case was not one where the money deposited
is the subject matter of the litigation. Hence, this petition.

ISSUE/S: Whether the money deposited in Account No. 0111-01854-8 is the subject matter of
the litigation.

RULING: No, since the 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. 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.

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