Practice question
A depositor demands repayment of a matured ordinary time deposit. The bank argues that its use of the funds for authorized lending extinguished the deposit debt. No payment or other extinguishing event is established. Which conclusion is sound?
- Use in lending does not by itself extinguish the bank's repayment obligation under the deposit contract.
- Authorized lending makes every depositor's balance zero.
- A bank can repay solely by showing another customer received a loan.
- Every time deposit is a donation to borrowers.
- The creditor must become a bank director to demand payment.
Legal references
- Civil Code, Articles1953 and1980: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html
- RA8791, General Banking Law, Sections2 and55: https://lawphil.net/statutes/repacts/ra2000/ra_8791_2000.html
- BDO Unibank v. People, GR255367, October2 2024, main decision: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/69675
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