G.R. No. L-65189 - People vs. Duhan

July 31, 2003: Petitioner placed respondents’ accounts under a “hold-out” order.
September 3, 2003: Petitioner filed an Estafa complaint against Rosales alleging her role in a US$75,000 fraudulent withdrawal from Liu’s account; criminal case was initially dismissed, then reinstated.
September 10, 2004: Respondents sued petitioner for breach of contract and sought damages and release of their deposits.
January 15, 2007: RTC ruled for respondents, ordering release of deposits with interest and awarding P130,000 in damages plus attorney’s fees.
April 2, 2008: CA affirmed but deleted actual damages.
January 13, 2014: SC denied certiorari petition, affirming the CA decision.

No final judgment or conviction established Rosales’s liability when the hold-out order was issued.
Bank officers permitted withdrawal from Liu’s account based on an allegedly forged Special Power of Attorney, without adequate identity verification.
Respondents repeatedly demanded release of their deposits but were denied without explanation.

1987 Constitution governs.
Civil Code Article 1157: A bank’s lien or right to withhold deposits arises only from valid obligations (law, contract, quasi‐contract, delict, quasi‐delict).
Deposits are loans repayable on demand (mutuum).
Civil Code Article 2220: Moral damages in breach of contract require fraud or bad faith.
Article 2232: Exemplary damages require wanton, reckless, oppressive or malevolent conduct.
Article 2208: Attorney’s fees are recoverable when exemplary damages are awarded.

Does the hold-out clause in the deposit agreement justify withholding respondents’ deposits absent a valid obligation?
Did petitioner breach its contract by refusing to release deposits upon demand?
Are respondents entitled to moral damages, exemplary damages, and attorney’s fees?

The hold-out clause is inapplicable because respondents owed no existing obligation; the pending criminal complaint did not constitute a final judgment.
Petitioner breached its contractual duty to return deposits on demand and acted in bad faith by issuing the hold-out order without legal basis or noti

The Metropolitan Bank and Trust Company (MBTC) is a domestic banking corporation organized under Philippine law.
Ana Grace Rosales owns China Golden Bridge Travel Services; Yo Yuk To is her mother.
In 2000, Rosales and To opened a Joint Peso Account with MBTC’s Pritil-Tondo Branch, which had a balance of ₱2,515,693.52 as of August 4, 2004.
In March 2003, the same parties opened a Joint Dollar Account at the same branch with an initial deposit of US$14,000.
On July 31, 2003, MBTC placed both accounts under a “Hold-Out” order.
MBTC’s Special Audit Department filed a criminal complaint for estafa against Rosales, alleging she conspired in the unauthorized withdrawal of US$75,000 from a Taiwanese client, Liu Chiu Fang, at MBTC’s Escolta Branch.
Rosales denied involvement, recounted a different series of bank visits, and maintained she only learned of the withdrawal when Liu Chiu Fang inquired in June 2003.
The City Prosecutor initially dismissed the estafa complaint for lack of probable cause on December 15, 2003; MBTC moved for reconsideration.

September 10, 2004: Rosales and To filed a Complaint for Breach of Contract and Damages (Civil Case No. 04-110895) in the RTC of Manila, Branch 21, seeking release of deposits, lifting of the Hold-Out order, and actual, moral, exemplary damages, plus attorney’s fees.
MBTC countered that the Hold-Out order was valid due to Rosales’s alleged fraud and that it had reimbursed Liu Chiu Fang US$75,000.
February 18, 2005: City Prosecutor reversed the prior dismissal and filed an Information for estafa against Rosales in RTC Branch 14.
January 15, 2007: The RTC found MBTC liable for breach of contract, ordering release of deposits with interest, awarding actual (₱50,000), moral (₱50,000), exemplary (₱30,000) damages, and 10% attorney’s fees; MBTC’s counterclaim was dismissed.
April 2, 2008: The CA affirmed the RTC’s decision but deleted the award of actual damages,