Overseas Bank of Manila vs. Court of Appeals G.R. No. L-45866, April 19,1989MARCH 16, 2014LEAVE A COMMENTThe obligation to pay interest on the deposit ceases the moment the operation of the bank is completely suspended by the Central Bank. Neither can respondent Cordero recover attorneys fees. Petitioners refusal to pay was not due to a willful and dishonest refusal to comply with its obligation but to restrictions imposed by Central Bank.Facts: Bonifacio Regalado and NAWASA entered a in a contract of sale with instalments for various materials which the latter agreed to supply to the former. In relation to a contract of sale between NAWASA, as vendor and Bonifacio Regalado, as vendee, the amount corresponding to the first payment by Regalado was placed on a time deposit with the Overseas Bank by the NAWASA Treasurer for a period of 6 months. A second payment having been made by Regalado, another time deposit was made by the NAWASA Treasurer with the Overseas Bank, this time in the amount respresenting the balance of the purchase price due from Regalado. The period of this second deposit was fixed 1 year. Subsequently, NAWASAs Acting General Manager wrote to the Overseas Bank advising that (1) as regards the first time deposit which had already matured, NAWASA wished to withdraw it immediately, and (2) with respect to the second time deposit of, it intended to withdraw it 60 days thereafter as authorized by the parties agreement set forth in the certificate of the deposit. Despite several letter request, nothing was heard from the Overseas Bank. It did however pay to NAWASA interest on its time deposits.After maturity of the second time deposit and Overseas Bank not responding to the letter request of NAWASA for the remittance of the time deposits, NAWASA then wrote to the Central Bank Governor about the matter. Apparently, even the Central Bank was ignored by Overseas Bank. One last letter was written by NAWASA to the Overseas Bank, reiterating its demand for the return of its money. Again the letter went unheeded. NAWASA thus brought suit to recover its deposits and damages. CFI Manila rendered judgment in favor of NAWASA and ordered the bank to pay. CA affirmed the trial courts ruling. Hence this petition.Issue: Whether or not Overseas Bank is liable to pay.Held: The obligation to pay interest on the deposit ceases the moment the operation of the bank is completely suspended by the Central Bank. Neither can respondent Cordero recover attorneys fees. Petitioners refusal to pay was not due to a willful and dishonest refusal to comply with its obligation but to restrictions imposed by Central Bank.The banks contention that the punitive actions taken by the Central Bank prevented the bank from conducting its business is devoid of merit. There is absolutely no evidence of these facts in the record. Moreover, the suspension of operations in 1968 could not possibly excuse non-compliance with the obligations in question which matured in 1966. Again, the claim that the Central Bank, by suspending the Overseas Banks banking operations, had made it impossible for the Overseas Bank to pay its debts, whatever validity might be accorded thereto, or the further claim that it had fallen into a distressed financial situation, cannot in any sense excuse it from its obligation to the NAWASA, which had nothing whatever to do with the Central Banks actuations or the events leading to the banks distressed state.