Intengan v. CA (G.R. No. 128996)


Citibank filed a complaint for violation of the Corporation Code against 2 of its officers. The complaint was attached with the affidavit of Vic Lim, VP of Citibank, who was then instructed by the higher management of the bank to investigate the anomalous/highly irregular activities of the said officers. As evidence, Lim annexed bank records purporting to establish the deception practiced by the officers. Some of the documents pertained to the dollar deposits of petitioners. As an incident to the foregoing, petitioners filed respective motions for the exclusion and physical withdrawal of their bank records that were attached to Lim’s affidavit. The filing of Informations against private respondents was recommended for alleged violation of Republic Act No. 1405. Private respondents appealed before the DOJ which ruled in their favor. Resort to the Court, referred the matter to the CA which then held that the disclosure was proper and falls under the exception under R.A. No. 1405.


Whether or not the disclosure falls under the exception under R.A. No. 1405.

Ruling: NO.

Actually, this case should have been studied more carefully by all concerned. The finest legal minds in the country – from the parties’ respective counsel, the Provincial Prosecutor, the Department of Justice, the Solicitor General, and the Court of Appeals – all appear to have overlooked a single fact which dictates the outcome of the entire controversy. A circumspect review of the record shows us the reason. The accounts in question are U.S. dollar deposits; consequently, the applicable law is not Republic Act No. 1405 but Republic Act (RA) No. 6426, known as the “Foreign Currency Deposit Act of the Philippines.”

Thus, under R.A. No. 6426 there is only a single exception to the secrecy of foreign currency deposits, that is, disclosure is allowed only upon the written permission of the depositor. Incidentally, the acts of private respondents complained of happened before the enactment on September 29, 2001 of R.A. No. 9160 otherwise known as the Anti-Money Laundering Act of 2001.

A case for violation of Republic Act No. 6426 should have been the proper case brought against private respondents. Private respondents Lim and Reyes admitted that they had disclosed details of petitioners’ dollar deposits without the latter’s written permission. It does not matter if that such disclosure was necessary to establish Citibank’s case against Dante L. Santos and Marilou Genuino. Lim’s act of disclosing details of petitioners’ bank records regarding their foreign currency deposits, with the authority of Reyes, would appear to belong to that species of criminal acts punishable by special laws, called malum prohibitum.

*The decision however was still unfavorable to the petitioners since there is an issue as to prescription. The action to assail the disclosure of herein private respondents for them to be liable for violating RA 6426 had already prescribed.


Union Bank of the Philippines v. CA (G.R. No. 134699)


A check in the amount of P1M was drawn against an account with private respondent Allied Bank payable to the order of one Jose Ch. Alvarez. The payee deposited the check with petitioner Union Bank who credited the P1M to the account of Mr. Alvarez. Petitioner sent the check for clearing and when the check was presented for payment, a clearing discrepancy was committed by Union Bank’s clearing staff when the amount P1M was erroneously “under-encoded” to P1,000 only. Petitioner only discovered the under-encoding almost a year later. Thus, Union Bank notified Allied Bank of the discrepancy by way of a charge slip for P999,000.00 for automatic debiting against Allied Bank. The latter, however, refused to accept the charge slip “since [the] transaction was completed per your [Union Bank’s] original instruction and client’s account is now insufficiently funded.” Union Bank filed a complaint against Allied Bank before the PCHC Arbitration Committee (Arbicom). Thereafter, Union Bank filed before the RTC a petition for the examination of the account with respondent bank. Judgment on the arbitration case was held in abeyance pending the resolution of said petition. The RTC dismissed Union Bank’s petition. CA affirmed the dismissal ruling that the case was not one where the money deposited is the subject matter of the litigation.


Whether the discrepancy amount is the subject matter of litigation.

Ruling: NO.

The petition before this Court reveals that the true purpose for the examination is to aid petitioner in proving the extent of Allied Bank’s liability. In other words, only a disclosure of the pertinent details and information relating to the transactions involving subject account will enable petitioner to prove its allegations in the pending Arbicom case. Petitioner is fishing for information so it can determine the culpability of private respondent and the amount of damages it can recover from the latter. It does not seek recovery of the very money contained in the deposit. The subject matter of the dispute may be the amount of P999,000.00 that petitioner seeks from private respondent as a result of the latter’s alleged failure to inform the former of the discrepancy; but it is not the P999,000.00 deposited in the drawer’s account. By the terms of R.A. No. 1405, the “money deposited” itself should be the subject matter of the litigation. That petitioner feels a need for such information in order to establish its case against private respondent does not, by itself, warrant the examination of the bank deposits. The necessity of the inquiry, or the lack thereof, is immaterial since the case does not come under any of the exceptions allowed by the Bank Deposits Secrecy Act.

Salvacion v. Central Bank of the Philippines (G.R. No. 94723)


Greg Bartelli y Northcott, an American tourist, was charged with serious Illegal detention and Rape of herein petitioner Karen Salvacion. Upon his arrest, it was recovered from him among others, bank books and a dollar account with China Bank Corp. On the day of the hearing of his petition for bail, he was able to escape from jail. Pending his arrest the criminal cases were archived. Meanwhile, in the Civil Case against Bartelli, the Judge granted the prayer of attachment and a notice of garnishment was served on China Bank. China Bank invoked R.A. No. 1405 and later on, Section 113 Central Bank Circular No. 960 to the effect that the dollar deposits of Bartelli are exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. This prompted petitioner’s counsel to inquire herein respondent whether the said circular has any exception or has been repealed/amended. Respondent cited that the provision is absolute in application. Meanwhile, the court has rendered judgment in favor of petitioners. Petitioners tried to execute on Bartelli’s dollar deposit with China Bank but the bank invoked the CB Circular. Thus, petitioners decided to seek relief from this Court.


Whether or not the secrecy of foreign currency deposits should be made applicable to a foreign transient?

Ruling: NO.

This Court finds the petition to be partly meritorious.

It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country’s economy was in a shambles; when foreign investments were minimal and presumably, this was the reason why said statute was enacted. But the realities of the present times show that the country has recovered economically; and even if not, the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. The intention of the questioned law may be good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us.

In his Comment, the Solicitor General correctly opined, thus:

It is evident from the above [Whereas clauses] that the Offshore Banking System and the Foreign Currency Deposit System were designed to draw deposits from foreign lenders and investors (Vide second Whereas of PD No. 1034; third Whereas of PD No. 1035). It is these deposits that are induced by the two laws and given protection and incentives by them. Obviously, the foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged by PD Nos. 1034 and 1035 and given incentives and protection by said laws because such depositor stays only for a few days in the country and, therefore, will maintain his deposit in the bank only for a short time.

Respondent Greg Bartelli, as stated, is just a tourist or a transient. He deposited his dollars with respondent China Banking Corporation only for safekeeping during his temporary stay in the Philippines.

For the reasons stated above, the Solicitor General thus submits that the dollar deposit of respondent Greg Bartelli is not entitled to the protection of Section 113 of Central Bank Circular No. 960 and PD No. 1246 against attachment, garnishment or other court processes.

In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides that “in case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail. “Ninguno non deue enriquecerse tortizeramente con dano de otro.” Simply stated, when the statute is silent or ambiguous, this is one of those fundamental solutions that would respond to the vehement urge of conscience.

IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar as it amends Section 8 of R.A. No. 6426 are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances.

Dona Adela Export International v. Trade and Investment Development Corp (G.R. No. 201931)


Petitioner Dona Adela filed a Petition for Voluntary Insolvency before the RTC. After finding the petition sufficient in form and substance, RTC declared petitioner herein as insolvent and stayed all civil proceedings against it. Thereafter, Atty. Arlene Gonzales was appointed as a receiver and proceeded to make the necessary report, to engage appraisers and require the creditors to submit proof of their respective claims. Atty. Gonzales then filed a Motion for Parties to Enter Into Compromise Agreement incorporating therein her proposed terms of compromise. Then, TIDCORP and BPI also filed a Joint Motion to Approve Agreement which was approved. Petitioner filed a motion for partial reconsideration claiming that TIDCORP and BPI’s agreement imposes upon it several obligations such as payment of expenses and taxes and waiver of confidentiality of bank deposits when it is not a party and signatory to the said agreement. RTC denied the motion.


Whether or not petitioner is bound by the provision in the BPI-TIDCORP Joint Motion to Approve Agreement to waive its rights to confidentiality of its bank deposits under R.A. No. 1405.

Ruling: NO.

R.A. No. 1405 provides for exceptions when records of deposits may be disclosed. These are under any of the following instances: (a) upon written permission of the depositor, (b) in cases of impeachment, (c) upon order of a competent court in the case of bribery or dereliction of duty of public officials or, (d) when the money deposited or invested is the subject matter of the litigation, and (e) in cases of violation of the Anti-Money Laundering Act, the Anti-Money Laundering Council may inquire into a bank account upon order of any competent court.

In this case, the Joint Motion to Approve Agreement was executed by BPI and TIDCORP only. There was no written consent given by petitioner or its representative, Epifanio Ramos, Jr., that petitioner is waiving the confidentiality of its bank deposits. The provision on the waiver of the confidentiality of petitioner’s bank deposits was merely inserted in the agreement. It is clear therefore that petitioner is not bound by the said provision since it was without the express consent of petitioner who was not a party and signatory to the said agreement.

Clearly, the waiver of confidentiality of petitioner’s bank deposits in the BPI-TIDCORP Joint Motion to Approve Agreement lacks the required written consent of petitioner and conformity of the receiver. We, thus, hold that petitioner is not bound by the said provision.

Onate v. Abrogar (G.R. No. 107303)


Sun Life filed a complaint for a sum of money with a prayer for the immediate issuance of a writ of attachment against petitioners Onate and Dino. Respondent Judge granted the prayer and the writ was correspondingly issued. After the summons were eventually served upon petitioners, the latter filed motions to discharge/dissolve the attachment. Meanwhile, Sun Life filed motions for examination of petitioners’ bank accounts. Respondent judge ruled in all the motions in favor of Sun Life. Petitioners moved for reconsideration but were denied.


Whether or not respondent judge erred in allowing the examination of the bank accounts of herein petitioners.


We find both petitions unmeritorious.

It is clear from the foregoing provision that notice need only be given to the garnishee, but the person who is holding property or credits belonging to the defendant. The provision does not require that notice be furnished the defendant himself, except when there is a need to examine said defendant “for the purpose of giving information respecting his property.

Furthermore, Section 10 Rule 57 is not incompatible with Republic Act No. 1405, as amended, “An Act Prohibiting Disclosure or Inquiry Into, Deposits With Any Banking Institution and Providing Penalty Therefore,” for Section 2 therefore provides an exception “in cases where the money deposited or invested is the subject matter of the litigation.”

The examination of the bank records is not a fishing expedition, but rather a method by which Sun Life could trace the proceeds of the check it paid to petitioners.