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Metropolitan Bank and Trust Company, The vs. Rosales 713 SCRA 75, January 13, 2014, G.R. No. 183204

This case involved a "Hold Out" order issued by Metropolitan Bank against the accounts of respondent Rosales and her client Liu Chiu Fang. The Bank claimed Rosales was involved in fraudulent withdrawals from Liu's dollar account. However, the court found the Bank failed to show Rosales had any existing legal obligation to the Bank that would warrant the "Hold Out" order. A criminal case filed against Rosales was still pending and she denied involvement. As no final conviction was rendered, the pending case did not justify the order. The court ruled the Bank breached its contract by unjustifiably refusing to release the deposit amounts, and held the Bank liable for damages.

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174 views1 page

Metropolitan Bank and Trust Company, The vs. Rosales 713 SCRA 75, January 13, 2014, G.R. No. 183204

This case involved a "Hold Out" order issued by Metropolitan Bank against the accounts of respondent Rosales and her client Liu Chiu Fang. The Bank claimed Rosales was involved in fraudulent withdrawals from Liu's dollar account. However, the court found the Bank failed to show Rosales had any existing legal obligation to the Bank that would warrant the "Hold Out" order. A criminal case filed against Rosales was still pending and she denied involvement. As no final conviction was rendered, the pending case did not justify the order. The court ruled the Bank breached its contract by unjustifiably refusing to release the deposit amounts, and held the Bank liable for damages.

Uploaded by

Almer Tinapay
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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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Download as DOCX, PDF, TXT or read online on Scribd
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ALMER RODPHIL L.

TINAPAY - SATURDAY 11:00 – 12:00 & 1:00 – 2:00


Metropolitan Bank and Trust Company, The vs. Rosales 713 SCRA 75 , January 13, 2014, G.R. No. 183204

FACTS:

In May 2002, respondent Rosales accompanied her client Liu Chiu Fang, a Taiwanese National applying
for a retiree’s visa from the Philippine Leisure and Retirement Authority (PLRA), to petitioner’s branch in
Escolta to open a savings account. Since Liu Chiu Fang could speak only in Mandarin, respondent Rosales
acted as an interpreter for her.

On March 3, 2003, respondents opened with petitioner’s Pritil-Tondo Branch a Joint Dollar Account with
an initial deposit of US$14,000.00.

On July 31, 2003, petitioner issued a “Hold Out” order against respondents’ accounts.

On September 3, 2003, petitioner, through its Special Audit Department Head Antonio Ivan Aguirre, filed
before the Office of the Prosecutor of Manila a criminal case for Estafa through False Pretences,
Misrepresentation, Deceit, and Use of Falsified Documents.

Respondent Rosales, however, denied taking part in the fraudulent and unauthorized withdrawal from
the dollar account of Liu Chiu Fang.

On December 15, 2003, the Office of the City Prosecutor of Manila issued a Resolution dismissing the
criminal case for lack of probable cause. On September 10, 2004, respondents filed before the RTC of
Manila a complaint for Breach of Obligation and Contract with Damages.

ISSUES:

Whether or not the contention of the petitioner that the respondent have an existing obligation that
warranted the hold out order is correct? No.

HELD:

The Supreme Court held that petitioner’s reliance on the “Hold Out” clause in the Application and
Agreement for Deposit Account is misplaced. The “Hold Out” clause applies only if there is a valid and
existing obligation arising from any of the sources of obligation enumerated in Article 1157 of the Civil
Code, to wit: law, contracts, quasi-contracts, delict, and quasi-delict. In this case, petitioner failed to
show that respondents have an obligation to it under any law, contract, quasi-contract, delict, or quasi-
delict. And although a criminal case was filed by petitioner against respondent Rosales, this is not
enough reason for petitioner to issue a “Hold Out” order as the case is still pending and no final
judgment of conviction has been rendered against respondent Rosales. In fact, it is significant to note
that at the time petitioner issued the “Hold Out” order, the criminal complaint had not yet been filed.
Thus, considering that respondent Rosales is not liable under any of the five sources of obligation, there
was no legal basis for petitioner to issue the “Hold Out” order. Accordingly, we agree with the findings of
the RTC and the CA that the “Hold Out” clause does not apply in the instant case. In view of the
foregoing, we find that petitioner is guilty of breach of contract when it unjustifiably refused to release
respondents’ deposit despite demand. Having breached its contract with respondents, petitioner is
liable for damages.

DECISION:

WHEREFORE, the Petition is hereby DENIED. The assailed April 2, 2008 Decision and the May 30, 2008
Resolution of the Court of Appeals in CA-G.R. CV No. 89086 are hereby AFFIRMED.

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