PHILIPPINE TRUST COMPANY v. HON.

COURT OF APPEALS
2010

G.R. No. 150318 November 22,

Facts: A Deed of Absolute Sale was executed for a lot in favor of Ellenora Vda. De Limcauco..
In the instruments, the signature of the plaintiffs was forged. Likewise, a certification to the
effect that plaintiffs Board of Directors had duly approved the sale contained the forged
signature. A Deed of Absolute Sale was executed by Ellenora Vda. De Limcauco in favor of
defendant Raul P. Claveria. Defendant spouses Claveria mortgaged the property with the
defendant Philippine Trust Company to guarantee a loan. The mortgage was duly registered
and annotated. It had subjected the land offered as security to the usual bank appraisals
and examined the genuineness and authenticity of TCT with the Register of Deeds and found
the same to be in existence and in order. Thereupon, the deed of mortgage executed by the
Claveria spouses was registered by the defendant bank with the Register of Deeds and had
it annotated in the original copy of the title.
ISSUE: Whether or not mere examination of the title in the Registry of Deeds is sufficient to
satisfy the degree of diligence require?
RULING: No. It is settled that banks, their business being impressed with public interest, are
expected to exercise more care and prudence than private individuals in their dealings, even
those involving registered lands. The rule that persons dealing with registered lands can rely
solely on the certificate of title does not apply to banks. Consequently, Philtrust should prove
that it exercised extraordinary diligence required of it in approving the mortgage contract in
favor of the spouses Claveria. The mere fact that Philtrust accepted the subject property as
security most certainly does not prove that it followed the standard operating procedure in
doing so. Had Philtrust properly conducted a credit investigation of the spouses Claveria, it
would have easily discovered that they did not reside and never resided in the address
declared by them, as revealed in the investigation by the NBI.

PHILIPPINE DEPOSIT INSURANCE CORPORATION, v. BUREAU OF INTERNAL REVENUE,

G.R. No. 172892 June 13, 2013
FACTS: In a Resolution, the Monetary Board of the BSP prohibited the Rural Bank of Tuba, Inc.
(RBTI) from doing business in the Philippines, placed it under receivership in accordance with
Section 30 of the New Central Bank Act, and designated the PDIC as receiver. Subsequently,
PDIC conducted an evaluation of RBTIs financial condition and determined that RBTI
remained insolvent. Thus, the Monetary Board issued a Resolution directing PDIC to proceed
with the liquidation of RBTI. Accordingly and pursuant to Section 30 of the New Central Bank
Act, PDIC filed in the RTC of La Trinidad, Benguet a petition for assistance in the liquidation of
RBTI. In an Order, the trial court gave the petition due course and approved it. As an incident
of the proceedings, BIR intervened as one of the creditors of RBTI. The BIR prayed that the
proceedings be suspended until PDIC has secured a tax clearance required under Section
52(C) Tax Reform Act of 1997. The trial court found merit in the BIRs motion and granted it.
PDIC moved for partial reconsideration of the Order with respect to the directive for it to
secure a tax clearance. It argued that Section 52(C) of the Tax Code of 1997 does not cover
closed banking institutions as the liquidation of closed banks is governed by Section 30 of
the New Central Bank Act. The motion was, however, denied.
ISSUE: Whether or not a bank placed under liquidation has to secure a tax clearance from
the BIR before the project of distribution of the assets of the bank can be approved by the
liquidation court?
RULING: No. Section 52(C) of the Tax Code of 1997 is not applicable to banks ordered placed
under liquidation by the Monetary Board, and a tax clearance is not a prerequisite to the
approval of the project of distribution of the assets of a bank under liquidation by the PDIC.
Section 52(C) of the Tax Code of 1997 pertains only to a regulation of the relationship
between the SEC and the BIR with respect to corporations contemplating dissolution or
reorganization. On the other hand, banks under liquidation by the PDIC as ordered by the
Monetary Board constitute a special case governed by the special rules and procedures
provided under Section 30 of the New Central Bank Act, which does not require that a tax
clearance be secured from the BIR. Only a final tax return is required to satisfy the interest of
the BIR in the liquidation of a closed bank, which is the determination of the tax liabilities of
a bank under liquidation by the PDIC. In view of the timeline of the liquidation proceedings
under Section 30 of the New Central Bank Act, it is unreasonable for the liquidation court to
require that a tax clearance be first secured as a condition for the approval of project of
distribution of a bank under liquidation.

GEMMA ONG v. PEOPLE OF THE PHILIPPINES

2011

G.R. No. 169440 November 23,

FACTS: The accused engaged in the distribution, sale, [and] offering for sale of counterfeit
Marlboro cigarettes which had caused confusion, deceiving the public that such cigarettes
[were] Marlboro cigarettes and those of the Telengtan Brothers and Sons, Inc., doing
business under the style of La Suerte Cigar and Cigarettes Factory, the exclusive
manufacturer of Marlboro Cigarette in the Philippines and that of Philip Morris Products, Inc.
the registered owner and proprietor of the MARLBORO trademark together with the devices,
including the famous-Root Device, to their damage and prejudice, without the accused
seeking their permit or authority to manufacture and distribute the same.
ISSUE: Whether or not the court of appeals erred in affirming petitioners conviction for
violation of section 155 in relation to section 170 of intellectual property code of the
Philippines?
RULING: No. Gemma is guilty of violating Republic Act No. 8293. The law provides: Any
person who shall, without the consent of the owner of the registered mark: use in commerce
any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same
container or a dominant feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including other preparatory steps
necessary to carry out the sale of any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or to deceive; or reproduce, counterfeit,
copy or colorably imitate a registered mark or a dominant feature thereof and apply such
reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on
or in connection with which such use is likely to cause confusion, or to cause mistake, or to
deceive, shall be liable in a civil action for infringement. To establish trademark
infringement, the following elements must be shown: (1) the validity of plaintiffs mark; (2)
the plaintiffs ownership of the mark; and (3) the use of the mark or its colorable imitation by
the alleged infringer results in likelihood of confusion. Of these, it is the element of likelihood
of confusion that is the gravamen of trademark infringement. A mark is valid if it is
distinctive and not barred from registration. Once registered, not only the marks validity, but
also the registrants ownership of the mark is prima facie presumed. The prosecution was
able to establish that the trademark Marlboro was not only valid for being neither generic
nor descriptive, it was also exclusively owned by PMPI, as evidenced by the certificates of
registration issued by the Intellectual Property Office of the Department of Trade and
Industry. Anent the element of confusion, both the RTC and the Court of Appeals have
correctly held that the counterfeit cigarettes seized from Gemmas possession were intended
to confuse and deceive the public as to the origin of the cigarettes intended to be sold, as
they not only bore PMPIs mark, but they were also packaged almost exactly as PMPIs
products.

BANK OF AMERICA NT & SA v. PHILIPPINE RACING CLUB

2009

G.R. No. 150228 July 30,

FACTS: PRCI is a domestic corporation which maintains an account with BA. The authorized
joint signatories with respect to said Current Account were President Antonia Reyes and VP
for Finance Gregorio Reyes. The President and Vice President Corporation were scheduled to
go out of the country. In order not to disrupt operations in their absence, they pre-signed
several checks relating to Current Account. The internal arrangement was, in the event there
was need to make use of the checks, the accountant would prepare the corresponding
voucher and thereafter complete the entries on the pre-signed checks. A John Doe presented
to defendant bank for encashment a couple of the corporations checks with the indicated
value of P110,000.00 each. It is admitted that these 2 checks were among those presigned
by corporations authorized signatories. On the space where the name of the payee should
be indicated (Pay To The Order Of) the following 2-line entries were instead typewritten: on
the upper line was the word CASH while the lower line had the following typewritten words:
ONE HUNDRED TEN THOUSAND PESOS ONLY. Despite the highly irregular entries on the face
of the checks, defendant bank, without as much as verifying and/or confirming the
legitimacy of the checks considering the substantial amount involved and the obvious
infirmity/defect of the checks on their faces, encashed said checks. A verification process,
even by way of a telephone call to PRCI office, would have taken less than ten (10) minutes.
But this was not done by BA. Investigation conducted by the plaintiff corporation yielded the
fact that there was no transaction involving PRCI that call for the payment of P220,000.00 to
anyone.
ISSUE: Whether or not the wrongful encashment in question was due to the petitioners
failure to verify with the respondent in view of the irregularities on the face of the checks?
RULING: Yes. It is well-settled that banks are engaged in a business impressed with public
interest, and it is their duty to protect their clients and depositors who transact with them.
They have the obligation to treat their clients account meticulously and with the highest
degree of care, considering the fiduciary nature of their relationship. The diligence required
of banks, therefore, is more than that of a good father of a family. The misplacement of the
typewritten entries for the payee and the amount on the same blank and the repetition of
the amount using a check writer were glaringly obvious irregularities on the face of the
check. Clearly, someone made a mistake in filling up the checks and the repetition of the
entries was possibly an attempt to rectify the mistake. Also, if the check had been filled up
by the person who customarily accomplishes the checks of respondent, it should have
occurred to petitioners employees that it would be unlikely such mistakes would be made.
All these circumstances should have alerted the bank to the possibility that the holder or the
person who is attempting to encash the checks did not have proper title to the checks or did

not have authority to fill up and encash the same. As noted by the CA, petitioner could have
made a simple phone call to its client to clarify the irregularities and the loss to respondent
due to the encashment of the stolen checks would have been prevented. If each irregular
circumstance in this case were taken singly or isolated, the banks employees might have
been justified in ignoring them. However, the confluence of the irregularities on the face of
the checks and circumstances that depart from the usual banking practice of respondent
should have put petitioners employees on guard that the checks were possibly not issued by
the respondent in due course of its business. Petitioners subtle sophistry cannot exculpate it
from behavior that fell extremely short of the highest degree of care and diligence required
of it as a banking institution.