EJERCITO vs.

SANDIGANBAYAN
Topic: RULES OF EXECUTION (Rule 128)

Mr. X = former President Estrada

Facts:

The Special Prosecution Panel filed before the Sandiganbayan a Request for Issuance of Subpoena Duces
Tecum for the issuance of a subpoena directing the President of Export and Industry Bank (EIB, formerly
Urban Bank) or his/her authorized representative to produce documents relating to Trust Account No.
858 and Savings Account of Mr. X (who was charged with plunder). The Sandiganbayan granted the
requests.

Mr. X filed a Motion to Quash Subpoena Duces Tecum/Ad Testificandum praying that the subpoenas
previously issued to the President of Export and Industry Bank be quashed. Mr. X claimed that his bank
accounts are covered by R.A. No. 1405 (The Secrecy of Bank Deposits Law) and do not fall under any of
the exceptions stated therein. He further claimed that the specific identification of documents in the
questioned subpoenas, including details on dates and amounts, could only have been made possible by
an earlier illegal disclosure thereof by the EIB and the Philippine Deposit Insurance Corporation (PDIC) in
its capacity as receiver of the then Urban Bank. The disclosure being illegal, Mr. X concluded, the
prosecution in the case may not be allowed to make use of the information.

Issue:

1. Whether or not a Trust Account is covered by the term “deposit” as used in R.A. 1405.

2. Are the Trust and Savings Accounts of Mr. X excepted from the protection of the Bank Secrecy Law.

RULING:

1. Yes

The contention that trust accounts are not covered by the term “deposits,”as used in R.A. 1405, by the
mere fact that they do not entail a creditor-debtor relationship between the trustor and the bank, does
not lie. The policy behind the law is laid down in Section 1:

SECTION 1. It is hereby declared to be the policy of the Government to give encouragement to the people
to deposit their money in banking institutions and to discourage private hoarding so that the same may
be properly utilized by banks in authorized loans to assist in the economic development of the country.

If the money deposited under an account may be used by banks for authorized loans to third persons,
then such account, regardless of whether it creates a creditor-debtor relationship between the depositor
and the bank, falls under the category of accounts which the law precisely seeks to protect for the purpose
of boosting the economic development of the country.
Section 2 of the same law in fact even more clearly shows that the term “deposits” was intended to be
understood broadly: SECTION2. All deposits of whatever nature with banks or banking institutions; The
phrase “of whatever nature” proscribes any restrictive interpretation of “deposits”—Republic Act No.
1405 applies not only to money which is deposited but also to those which are invested, such as those
placed in a trust account.

2. Yes.

The protection afforded by the law is, however, not absolute, there being recognized exceptions as
provided by Section 2 of R.A 1405. In the present case, two exceptions apply, to wit: (1) the examination
of bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of public
officials, and (2) the money deposited or invested is the subject matter of the litigation.

Petitioner contends that since plunder is neither bribery nor dereliction of duty, his accounts are not
excepted from the protection of R.A. 1405. Cases of unexplained wealth are similar to cases of bribery or
dereliction of duty and no reason is seen why these two classes of cases cannot be excepted from the rule
making bank deposits confidential.

In sum, exception applies since the plunder case pending against Mr. X is analogous to bribery or
dereliction of duty, and the money deposited in petitioner’s bank accounts is said to form part of the
subject matter of the same plunder case.