Far East Bank and Trust Company v. QuerimitG.R. No. 148582January 16, 2002Chapter I: Requisites of Negotiability

FACTS: Respondent Estrella Querimit worked as an internal auditor of thePhilippine Savings Bank (PSB) for 19 years. She opened a dollar savings account in petitioner Far East Bank and Trust Company (FEBTC)—issued to her was four (4) Certificates of Deposit, each representing a total amount of 60,000 USD. Said certificates wereto mature on January 23, 1987 and were payable to bearer at 4.5% interest per annum. Respondent kept her money in the bankto ear more interest and use her funds after she retired. After accompanying his husband, who eventually died, to the United States, she returned to the Philippines and went to petitioner to withdraw her deposit. Petitioner told respondent that her husband had withdrawn the money deposit. Despite several demands made by the respondent, petitioner refused to pay prompting Querimit to file a complaint against FEBTC. Petitioner insisted thatthey allowed respondent’s husband to withdraw the deposit by presenting certified true copies of documents showing the payment. The trial court and the Court of Appeals rendered judgment for respondent stating the fact that FEBTC failed to prove that the certificates of deposit had been paid out of its funds. Respondent’s subject certificates of deposit until now remain unendorsed, undelivered and unwithdrawn.

ISSUE/S: Whether or not the subject certificates of deposit have already been paid by petitioner.

HELD: No, petitioner bank failed to prove their payment to respondent Estrella Querimit, as the bearer and lawful holder of the subject certificates of deposit. A certificate of deposit is a written acknowledgement by a bank of the receipt of a sum of money on deposit which the bank promises to pay to the depositor, on demand of the same, to some other person wherebya debtor-creditor relationship between the bank and depositor is created. The principle that payment must be made to someone authorize to receive in order to release a debt is necessary to the payment of certificates of deposit. In general, one who pleads payment has the burden to prove it such that the burden rests on the defendant to prove payment than on the plaintiff. The certificates of deposit were clearly marked payable to “bearer” which means “the person in possession of an instrument”. FEBTCshould not have paid respondent’s husband or any third party without the surrender of the said certificates. The business of banks is impressed with public interest since there exists a fiduciary nature of relationship with their depositors to treat their accounts with the highest degree of care. Responsibility arising from negligence in the performance of every kinds of obligation is demandable. The principle of laches is not sufficient to defeat the rights of respondent over the subject certificates of deposit. FEBTC is liable for exemplary damages, moral damages and attorney’s fees.