22 ChinaBank vs. CA  in Salvacion vs.

Central Bank of the Philippines – inquiry into the

GR NO. 140687 | Dec. 18, 2006 | Chico-Nazaro, J. | Ting
Banking Law
DOCTRINE: All foreign currency deposits under RA 9426 and foreign currency
deposits under PD 1034 are confidential in nature and cannot be inquired into.
Except, upon written permission of the depositor – especially when the source
of the funds, was also a payee, has consented thereto.
ER: Jose alleges that his US dollar account was stolen by Mary. The dollar
account funds were payable to both Jose and Mary. Jose’s substitute Elizabeth
moved for subpoena of chinabank employees to testify on the account of
Mary. The SC held that the employees may testify without violating PD 1246
because Jose, as payee has consented to the inquiry as to the funds.
1. Jose Gotianuy accused Mary Dee, his daughter, of stealing his US dollar
deposits amounting to P35M and $864K – the amounts were deposited in
Mary’s Chinabank account through several checks
a. He also accused George Dee, husband of Mary Dee of transferring his
real properties and shares of stock in George Dee’s name
2. Jose died. So his daughter Elizabeth Lo substituted him
a. Elizabeth moved to subpoena Labios and Yap – Chinabank employees
to testify on the case and on the checks deposited
b. Chinabank moved for reconsideration. TC ordered Labios and Yap to
testify
c. CA affirmed TC’s order
foreign currency deposits was allowed because the American
depositor was charged with illegal detention and rape against a
12-year old. In the civil case, the dollar account of the American
was allowed to be garnished because “the law depends on the
extent of its justice … the law cannot be used by the accused for
wrongdoing
o The law intends to draw and encourage deposits from foreign lenders
and investors
 The accounts may be inquired into.
o Because bothJose and Mary Dee are co-payees of the checks. Mary
even admitted that the checks were sent to her by Jose Gotianuy, and
the checks belonged to Jose;
o There was no issue as to the source of the funds
o As the owner of the funds unlawfully taken and which are undisputably
now deposited with China Bank, Jose Gotianuy has the right to inquire
into the said deposits.
 An inquiry is justified because the funds of Jose was illegally taken from him
o China Bank employee Cristuta Labios testified that Mary Margaret Dee
came to China Bank and deposited the money of Jose Gotianuy in
Citibank US dollar checks to the dollar account of her sister Adrienne
Chu
o This fortifies the conclusion that an inquiry is necessary.

WON Chinabank account of Mary may be inquired into YES

 PD 1246 provides that

o SEC. 8. Secrecy of Foreign Currency Deposits. All foreign currency
deposits authorized under this Act, as amended by Presidential Decree
No. 1035, as well as foreign currency deposits authorized under
Presidential Decree No. 1034, are hereby declared as and considered
of an absolutely confidential nature and, except upon the written
permission of the depositor, in no instance shall such foreign currency
deposits be examined, inquired or looked into by any person,
government official, bureau or office whether judicial or administrative
or legislative or any other entity whether public or private: Provided,
however, that said foreign currency deposits shall be exempt from
attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body
whatsoever.
 All foreign currency deposits under RA 9426 and foreign currency deposits
under PD 1034 are confidential in nature and cannot be inquired into
o Except:
 upon written permission of the depositor.