On September 3, 2003, the petitioner, represented by Antonio - After finishing her transaction, Rosales approached Perez,

Ivan Aguirre from the Special Audit Department, filed a who told her that Liu Chiu Fang had closed her account and
criminal case (I.S. No. 03I-25014) against Rosales. The case left. Perez handed Rosales a copy of the Withdrawal
involved charges of Estafa (fraud) due to False Pretenses, Clearance issued by PLRA.
Misrepresentation, Deceit, and Use of Falsified Documents.
- On June 16, 2003, Liu Chiu Fang contacted Rosales about
The petitioner claimed that Rosales, along with an extending her PLRA Visa and inquiring about her dollar
unidentified woman, were responsible for an unauthorized account. Only then did Liu Chiu Fang discover her account was
withdrawal of US$75,000.00 from Liu Chiu Fang's dollar closed without her knowledge.
account at the petitioner's Escolta Branch. The events
- Rosales then went to the bank to inform Gutierrez and Perez
unfolded as follows:
about the unauthorized withdrawal.
- On February 5, 2003, the petitioner's Escolta Branch
- On June 23, 2003, Rosales and Liu Chiu Fang visited the PLRA
received a Withdrawal Clearance for Liu Chiu Fang's dollar
Office. There, they learned that the Withdrawal Clearance
account from PLRA.
was based on a Special Power of Attorney (SPA) supposedly
- Later that day, Rosales visited the Escolta Branch and signed by Liu Chiu Fang in favor of Richard So. Liu Chiu Fang
informed the Branch Head, Celia A. Gutierrez, that Liu Chiu denied signing the SPA.
Fang wanted to withdraw her dollar deposits in cash.
- The next day, Rosales, Liu Chiu Fang, Gutierrez, and Perez
- Gutierrez advised Rosales to return the next day because the held a meeting at the PLRA Office to discuss the unauthorized
bank didn't have enough dollars on hand. withdrawal. During the meeting, the bank officers assured Liu
Chiu Fang that her money would be returned.
- On February 6, 2003, Rosales accompanied an unidentified
impostor posing as Liu Chiu Fang to the bank. In short, Rosales disputed her involvement and shared her
side of the story regarding the events following the alleged
- The impostor successfully withdrew US$75,000.00 from Liu
unauthorized withdrawal.
Chiu Fang's account.
The Bank has the right to put a hold on the account balance if
- On March 3, 2003, the respondents (Rosales and others)
any of the Depositors owe the Bank money. All Depositors
opened a dollar account with the petitioner.
agree to this, and if only one Depositor owes, the account can
- Subsequently, the bank discovered that the serial numbers be used to pay off their debt.
on the dollar notes deposited by the respondents
The argument that petitioner relies on the "Hold Out" clause
(US$11,800.00) were the same as those withdrawn by the
in the Application and Agreement for Deposit Account is not
impostor.
correct.
In summary, the petitioner accused Rosales and an unknown
The "Hold Out" clause only works if there is a valid reason for
accomplice of orchestrating a fraudulent withdrawal from Liu
it under the law, contracts, or other legal matters. The Bank
Chiu Fang's account by using false pretenses and deceitful
has not shown any valid reason why respondents owe them
tactics.
money based on any of these reasons. Even though the Bank
Respondent Rosales, however, denied any involvement in the filed a criminal case against respondent Rosales, it's not
unauthorized withdrawal from Liu Chiu Fang's dollar account, enough reason to put a "Hold Out" on the account, especially
contrary to the petitioner's allegations. since the case was still ongoing and no judgment had been
made. In fact, the "Hold Out" was put in place before the case
Rosales stated that she didn't visit the bank on February 5, was even filed. So, since none of the valid reasons apply, the
2003, and didn't inform Gutierrez about Liu Chiu Fang's "Hold Out" doesn't make sense in this case.
account closure. She also mentioned losing contact with Liu
Chiu Fang after the latter opened an account with the bank. Because of this, it's clear that the Bank breached the contract
Here's Rosales' version of events that followed: by not giving back the deposit when asked. Because of this
breach, the Bank needs to pay for the damages.
- On February 6, 2003, she got a call from Gutierrez, who
informed her about Liu Chiu Fang wanting to close her The respondents have the right to receive moral and
account. Later that day, Rosales went to the bank for her own exemplary damages and attorney's fees.
transaction.
Moral damages can be asked for in a breach of contract case if
- While dealing with a teller, Rosales noticed a woman at the the wrongdoer acted badly or dishonestly. This happened in
desk of the Branch Operating Officer, Melinda Perez. this case, as the Bank issued the "Hold Out" without reason,
didn't explain why, and did it before the criminal case even To sum up, the Bank can protect itself, but it must follow the
started. Because of this, the Bank should pay moral damages. law and treat its customers fairly and honestly.

Exemplary damages can be given as a lesson or correction for

the public good, on top of other damages. The Bank acted
recklessly and wrongly in not giving back the deposits, so
exemplary damages are fair.

As for attorney's fees, the Civil Code allows it in this case.

To sum up, the Bank has the right to protect itself, but it
needs to follow the law and treat its customers fairly and
honestly.

RULING

The Bank can decide to put a hold on any money in the

account, even without telling the Depositors. They can use
this money to pay off any debts the Depositors owe the Bank.
If only one Depositor owes money, everyone agrees the
account can be used to pay their share of the debt

Petitioner's argument using the "Hold Out" clause in the

Application and Agreement for Deposit Account is wrong.

The "Hold Out" clause only works if there's a valid and

existing reason under the law, contracts, or other legal
matters. But the Bank couldn't show any valid reason why
respondents owed them money in any of these ways. Even
though the Bank filed a criminal case against respondent
Rosales, it's not enough reason to put a "Hold Out" on the
account, especially since the case was ongoing and no final
judgment had been made. In fact, the "Hold Out" was put in
place before the case was even filed. So, since none of the
valid reasons apply, the "Hold Out" doesn't make sense in this
case.

Because of this, it's clear that the Bank broke the contract by
not giving back the deposit when asked. Because of this
breach, the Bank needs to pay for the damages.

The respondents should get moral and exemplary damages

and attorney's fees.

Moral damages can be asked for if the one who did wrong
acted badly or dishonestly. This happened in this case, as the
Bank issued the "Hold Out" without reason, didn't explain
why, and did it before the criminal case even started. Because
of this, the Bank should pay moral damages.

Exemplary damages can be given as a lesson or correction for

the public good, on top of other damages. The Bank acted
recklessly and wrongly in not giving back the deposits, so
exemplary damages are fair.

Attorney's fees are also proper under the Civil Code.