BSP vs Sally GO

Facts:

Petitioner is a duly organized domestic corporation presided by its representative, Ricardo Bangayan,
husband of herein respondent Sally Go. Respondent was employed as a cashier, and was engaged, among
others, to receive and account for the payments made by the various customers of the company.
Bangayan filed with the Manila Prosecutor’s Office a complaint for estafa/qualified theft against
respondent alleging that several checks issued by the company’s customers in payment of their obligation
were, instead of being turned over to the company’s coffers, indorsed by respondent who deposited the
same to her personal banking account maintained at Security Bank. Accordingly, respondent was charged
and the prosecution moved for the issuance of subpoena duces tecum/ad testificandum against the
respective managers or records custodians of Security Bank and Asian Savings Bank. Respondent opposed
and meanwhile, prosecution was able to present in court the testimony of one Security Bank
representative. Petitioner moved to exclude the testimony but was denied by the trial court. CA reversed
and set aside the order.

Issue:

Whether or not the testimony on the particulars of respondent’s account with Security Bank, as well as of
the corresponding evidence of the checks allegedly deposited in said account, constitutes an unallowable
inquiry under R.A. 1405.

Ruling: YES.

The Court found guidance in the relevant portions of the legislative deliberations on Senate Bill No. 351
and House Bill No. 3977, which later became the Bank Secrecy Act, and it held that the absolute
confidentiality rule in R.A. No. 1405 actually aims at protection from unwarranted inquiry or investigation
if the purpose of such inquiry or investigation is merely to determine the existence and nature, as well as
the amount of the deposit in any given bank account.

What indeed constitutes the subject matter in litigation in relation to Section 2 of R.A. No. 1405 has been
pointedly and amply addressed in Union Bank of the Philippines v. Court of Appeals, in which the Court
noted that the inquiry into bank deposits allowable under R.A. No. 1405 must be premised on the fact
that the money deposited in the account is itself the subject of the action. Given this perspective, we
deduce that the subject matter of the action in the case at bar is to be determined from the indictment
that charges respondent with the offense, and not from the evidence sought by the prosecution to be
admitted into the records. In the criminal Information filed with the trial court, respondent, unqualifiedly
and in plain language, is charged with qualified theft by abusing petitioner’s trust and confidence and
stealing cash. The said Information makes no factual allegation that in some material way involves the
checks subject of the testimonial and documentary evidence sought to be suppressed. Neither do the
allegations in said Information make mention of the supposed bank account in which the funds
represented by the checks have allegedly been kept.

In other words, it can hardly be inferred from the indictment itself that the Security Bank account is the
ostensible subject of the prosecution’s inquiry. Without needlessly expanding the scope of what is plainly
alleged in the Information, the subject matter of the action in this case is the money alleged to have been
stolen by respondent, and not the money equivalent of the checks which are sought to be admitted in
evidence. Thus, it is that, which the prosecution is bound to prove with its evidence, and no other.

It comes clear that the admission of testimonial and documentary evidence relative to respondent’s
Security Bank account serves no other purpose than to establish the existence of such account, its nature
and the amount kept in it. It constitutes an attempt by the prosecution at an impermissible inquiry into a
bank deposit account the privacy and confidentiality of which is protected by law. On this score alone, the
objection posed by respondent in her motion to suppress should have indeed put an end to the
controversy at the very first instance it was raised before the trial court.

Doña Adela Export International, Inc. v. Trade and Investment Development Corp., G.R. No. 201931
Facts:

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.

Issue:

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.
Marquez v. Desierto, G.R. No. 135882
Facts:

Petitioner Lourdes Marquez received an Order from respondent Ombudsman Aniano Desierto to produce
several bank documents for purposes of inspection in camera relative to various accounts maintained at
the bank where petitioner is the branch manager. The accounts to be inspected are involved in a case
pending with the Ombudsman entitled, Fact-Finding and Intelligence Bureau (FFIB) v. Amado Lagdameo.
It appears that a certain George Trivinio purchased trail managers check and deposited some of it to an
account maintained at petitioner’s branch. Petitioner after meeting with the FFIB Panel to ensure the
veracity of the checks agreed to the in camera inspection. Petitioner being unable to readily identify the
accounts in question, the Ombudsman issued an order directing petitioner to produce the bank
documents. Thus, petitioner sought a declaration of her rights from the court due to the clear conflict
between RA 6770 and RA 1405. Meanwhile, FFIB moved to cite petitioner in contempt before the
Ombudsman.

Issue:

Whether or not the order of Ombudsman to have an in camera inspection of the accounts is an allowable
exception of R.A. No. 1405.

Ruling: NO.

The order of the Ombudsman to produce for in camera inspection the subject accounts with the Union
Bank of the Philippines, Julia Vargas Branch, is based on a pending investigation at the Office of the
Ombudsman against Amado Lagdameo, et. al. for violation of R.A. No. 3019, Sec. 3 (e) and (g) relative to
the Joint Venture Agreement between the Public Estates Authority and AMARI.

We rule that before an in camera inspection may be allowed, there must be a pending case before a court
of competent jurisdiction. Further, the account must be clearly identified, the inspection limited to the
subject matter of the pending case before the court of competent jurisdiction. The bank personnel and
the account holder must be notified to be present during the inspection, and such inspection may cover
only the account identified in the pending case.

In the case at bar, there is yet no pending litigation before any court of competent authority. What is
existing is an investigation by the Office of the Ombudsman. In short, what the office of the ombudsman
would wish to do is to fish for additional evidence to formally charge Amado Lagdameo, et. al., with the
Sandiganbayan. Clearly, there was no pending case in court which would warrant the opening of the bank
account for inspection.

*In contrast to Ejercito v. Sandiganbayan. Interestingly, time is of the essence. A different ruling in Ejercito
was enunciated because there was already a pending investigation months before the ruling made in this
case as to the exemption in the power of the Ombudsman.

Ejercito v. Sandiganbayan, G.R. Nos. 157294-95

Facts:
In lieu of the Criminal Case “People v. Estrada” for plunder, the Special Prosecution Panel filed before the
Sandiganbayan a request for issuance of Subpoena Duces Tecum directing the President of Export and
Industry Bank or his/her authorized representative to produce documents namely, Trust Account and
Savings Account belonging to petitioner and statement of accounts of one named “Jose Velarde” and to
testify thereon during the hearings. Sandiganbayan granted both requests and subpoenas were
accordingly issued. Sandiganbayan also granted and issued subpoenas prayed for by the Prosecution Panel
in another later date. Petitioner now assisted by his counsel filed two separate motions to quash the two
subpoenas issued. Sandiganbayan denied both motions and the consequent motions for reconsideration
of petitioner.

Issues:

(1) Whether or not the trust accounts of petitioner are covered by the term “deposits” as used in R.A. No.
1405

(2) Whether or not plunder is neither bribery nor dereliction of duty not exempted from protection of R.A.
No. 1405

(3) Whether or not the unlawful examination of bank accounts shall render the evidence obtained
therefrom inadmissible in evidence.

Ruling:

(1) YES. An examination of the law shows that the term “deposits” used therein is to be understood
broadly and not limited only to accounts which give rise to a creditor-debtor relationship between the
depositor and the bank.

The policy behind the law is laid down in Section 1. 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.

Trust Account No. 858 is, without doubt, one such account. The Trust Agreement between petitioner and
Urban Bank provides that the trust account covers “deposit, placement or investment of funds” by Urban
Bank for and in behalf of petitioner. The money deposited under Trust Account No. 858, was, therefore,
intended not merely to remain with the bank but to be invested by it elsewhere. To hold that this type of
account is not protected by R.A. 1405 would encourage private hoarding of funds that could otherwise be
invested by banks in other ventures, contrary to the policy behind the law.

Section 2 of the same law in fact even more clearly shows that the term “deposits” was intended to be
understood broadly. The phrase “of whatever nature” proscribes any restrictive interpretation of
“deposits.” Moreover, it is clear from the immediately quoted provision that, generally, the law applies
not only to money which is deposited but also to those which are invested. This further shows that the
law was not intended to apply only to “deposits” in the strict sense of the word. Otherwise, there would
have been no need to add the phrase “or invested.”

Clearly, therefore, R.A. 1405 is broad enough to cover Trust Account No. 858.
(2) NO. 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.
The policy as to one cannot be different from the policy as to the other. This policy expresses the notion
that a public office is a public trust and any person who enters upon its discharge does so with the full
knowledge that his life, so far as relevant to his duty, is open to public scrutiny.

The crime of bribery and the overt acts constitutive of plunder are crimes committed by public officers,
and in either case the noble idea that “a public office is a public trust and any person who enters upon its
discharge does so with the full knowledge that his life, so far as relevant to his duty, is open to public
scrutiny” applies with equal force.

Plunder being thus analogous to bribery, the exception to R.A. 1405 applicable in cases of bribery must
also apply to cases of plunder.

(3) NO. Petitioner’s attempt to make the exclusionary rule applicable to the instant case fails. R.A. 1405,
it bears noting, nowhere provides that an unlawful examination of bank accounts shall render the
evidence obtained therefrom inadmissible in evidence. Section 5 of R.A. 1405 only states that “[a]ny
violation of this law will subject the offender upon conviction, to an imprisonment of not more than five
years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.”

Even assuming arguendo, however, that the exclusionary rule applies in principle to cases involving R.A.
1405, the Court finds no reason to apply the same in this particular case. Clearly, the “fruit of the
poisonous tree” doctrine presupposes a violation of law. If there was no violation of R.A. 1405 in the
instant case, then there would be no “poisonous tree” to begin with, and, thus, no reason to apply the
doctrine.

Additional Note: (This case is to be contrasted with Marquez v. Desierto)

The Marquez ruling notwithstanding, the above-described examination by the Ombudsman of petitioner’s
bank accounts, conducted before a case was filed with a court of competent jurisdiction, was lawful.

For the Ombudsman issued the subpoenas bearing on the bank accounts of petitioner about four months
before Marquez was promulgated on June 27, 2001.

When this Court construed the Ombudsman Act of 1989, in light of the Secrecy of Bank Deposits Law in
Marquez, that “before an in camera inspection may be allowed there must be a pending case before a
court of competent jurisdiction”, it was, in fact, reversing an earlier doctrine found in Banco Filipino
Savings and Mortgage Bank v. Purisima.

Banco Filipino involved subpoenas duces tecum issued by the Office of the Ombudsman, then known as
the Tanodbayan, in the course of its preliminary investigation of a charge of violation of the Anti-Graft
and Corrupt Practices Act. As the subpoenas subject of Banco Filipino were issued during a preliminary
investigation, in effect this Court upheld the power of the Tandobayan under P.D. 1630 to issue subpoenas
duces tecum for bank documents prior to the filing of a case before a court of competent jurisdiction.

Marquez, on the other hand, practically reversed this ruling in Banco Filipino despite the fact that the
subpoena power of the Ombudsman under R.A. 6770 was essentially the same as that under P.D. 1630.
The Marquez ruling that there must be a pending case in order for the Ombudsman to validly inspect bank
records in camera thus reversed a prevailing doctrine. Hence, it may not be retroactively applied. The
Ombudsman’s inquiry into the subject bank accounts prior to the filing of any case before a court of
competent jurisdiction was therefore valid at the time it was conducted. In fine, the subpoenas issued by
the Ombudsman in this case were legal, hence, invocation of the “fruit of the poisonous tree” doctrine is
misplaced.

Union Bank v. CA, G.R. No. 134699

Facts:

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.

Issue:

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.

Mellon Bank, N.A. v. Magsino, G.R. No. 71479

Facts:
 Ventosa requested the transfer of $1000 from the First National Bank Javier in Manila through
the Prudential Bank. Accordingly, the First National Bank requested the petitioner, Mellon Bank, to
effect the transfer. Unfortunately the wire sent by the Mellon Bank to Manufacturer’s Hanover Bank,
a correspondent of Prudential Bank, indicated the amount transferred as $1,000,000 instead of $1000.
Hence Manufacturer’s Hanover Bank transferred one million to Prudential Bank for the account of
Javier. Javier then appropriated the amount with the help of other respondents.
Mellon Bank filed a complaint in the Superior Court of California against Melchor Javier, Jane
Doe Javier, Honorario Poblador, JRN, and Does I through V Mellon Bank also filed in the CFI
complaint against Javier spouses, Poblador, Jocson Jr, Marquez, Garino, Elnor investment, Hagedorn
and Co, and Paramount Finance Inc.
The RTC at first conditionally allowed the testimonies of Baylosis and Red about the bank
transaction. But their testimonies were later stricken of the record on the grounds of res inter alios
acta, immateriality, irrelevancy and confidentiality due to RA 1405.
The RTC dismissed the case for lack of cause of action. Subsequently, Mellon’s two motion
for reconsideration were denied by the RTC. Hence, Mellon Bank filed the instant petition for
certiorari claiming that the resolution on Sep. 10 1982 and the orders of October 28, 1983 and July 9
1985, are void for being unlawful and oppressive exercises of legal authority, subversive of the fair
administration of justice, and in excess of jurisdiction.
Issue:
Whether or not RA 1405 on the secrecy of bank deposits prohibits the disclosure of an account
deposit which is relevant and material to the resolution of the case?
Ruling:
No. Sec. 2 of the said law allows the disclosure of bank deposits in cases where the money
deposited is subject matter of the litigation. The instant case aimed at recovering the amount converted
by the Javiers for the own benefit. Necessarily, an inquiry into the whereabouts of the illegally acquired
amounts extend to whatever is concealed by being held or recorded in the name of persons other than
the one responsible for illegal acquisition.
Oñate v. Abrogar, G.R. No. 107303
Facts:
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.
Issue:
Whether or not respondent judge erred in allowing the examination of the bank accounts of herein
petitioners.
Ruling:
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.
Chinabank v. CA, G.R. No. 140687
Facts:
Jose Gotianuy accused his daughter Mary Margaret Dee of stealing, among his other properties, US
dollar deposits with Citibank N.A. Mary Margaret Dee received these amounts from Citibank through
checks which she allegedly deposited at petitioner China Bank. Jose Gotianuy, died during the
pendency of the case and was substituted by his daughter, Elizabeth Gotianuy Lo. The latter presented
the US Dollar checks withdrawn by Mary Margaret Dee from his US dollar placement with Citibank.
Upon motion of Elizabeth Gotianuy Lo, the trial court issued a subpoena to employees of China Bank
to testify on the case. China Bank moved for reconsideration. The trial court resolved by directing the
employees to appear at the trial of the case only for the purpose of disclosing in whose name/s is the
foreign currency fund deposited with. CA affirmed the order of the trial court.
Issue:
Whether or not a co-depositor may inquire into the deposit without a written consent of the other co-
depositor?
Ruling: YES. [Pro Hac Vice Ruling]

The Court of Appeals, in allowing the inquiry, considered Jose Gotianuy, a co-depositor of Mary
Margaret Dee. It reasoned that since Jose Gotianuy is the named co-payee of the latter in the subject
checks, which checks were deposited in China Bank, then, Jose Gotianuy is likewise a depositor
thereof. On that basis, no written consent from Mary Margaret Dee is necessitated.
We agree in the conclusion arrived at by the Court of Appeals.
Thus, with this, there is no issue as to the source of the funds. Mary Margaret Dee declared the source
to be Jose Gotianuy. There is likewise no dispute that these funds in the form of Citibank US dollar
Checks are now deposited with China Bank. 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.
On this score, the observations of the Court of Appeals are worth reiterating:
Furthermore, it is indubitable that the Citibank checks were drawn against the foreign currency
account with Citibank, NA. The monies subject of said checks originally came from the late Jose
Gotianuy, the owner of the account. Thus, he also has legal rights and interests in the CBC account
where said monies were deposited. More importantly, the Citibank checks readily demonstrate that
the late Jose Gotianuy is one of the payees of said checks. Being a co-payee thereof, then he or his
estate can be considered as a co-depositor of said checks. Ergo, since the late Jose Gotianuy is a co-
depositor of the CBC account, then his request for the assailed subpoena is tantamount to an express
permission of a depositor for the disclosure of the name of the account holder.
All things considered and in view of the distinctive circumstances attendant to the present case, we
are constrained to render a limited pro hac vice ruling. Clearly it was not the intent of the legislature
when it enacted the law on secrecy on foreign currency deposits to perpetuate injustice. This Court is
of the view that the allowance of the inquiry would be in accord with the rudiments of fair play, the
upholding of fairness in our judicial system and would be an avoidance of delay and time-wasteful and
circuitous way of administering justice.
Chinabank v. Ortega, G.R. No. L-34964
Facts:
Vicente Acaban won in a civil case for sum of money against B & B Forest Development Corporation.
To satisfy the judgment, the Acaban sought the garnishment of the bank deposit of the B & B Forest
Development Corporation with the China Banking Corporation (CBC). Accordingly, a notice of
garnishment was issued by the Deputy Sheriff of the trial court and served on said bank through its
cashier, Tan Kim Liong. Liong was ordered to inform the Court whether or not there is a deposit in
the CBC of B & B Forest Development Corporation, and if there is any deposit, to hold the same
intact and not allow any withdrawal until further order from the Court. CBC and Liong refuse to
comply with a court process garnishing the bank deposit of a judgment debtor by invoking the
provisions of Republic Act No. 1405 (An Act Prohibiting Disclosure of or Inquiry into Deposits with
any Banking Institution) which allegedly prohibits the disclosure of any information concerning to
bank deposits.
Issue:
Whether or not a banking institution may validly refuse to comply with a court processes garnishing
the bank deposit of a judgment debtor, by invoking the provisions of Republic Act No. 1405.
Held:
No. The lower court did not order an examination of or inquiry into deposit of B & B Forest
Development Corporation, as contemplated in the law. It merely required Tan Kim Liong to inform
the court whether or not the defendant B & B Forest Development Corporation had a deposit in the
China Banking Corporation only for the purposes of the garnishment issued by it, so that the bank
would hold the same intact and not allow any withdrawal until further order. It is sufficiently clear that
the prohibition against examination of or inquiry into bank deposit under RA 1405 does not preclude
its being garnished to insure satisfaction of a judgment. Indeed there is no real inquiry in such a case,
and the existence of the deposit is disclosed the disclosure is purely incidental to the execution process.
It is hard to conceive that it was ever within the intention of Congress to enable debtors to evade
payment of their just debts, even if ordered by the Court, through the expedient of converting their
assets into cash and depositing the same in a bank. (China Banking Corporation vs Ortega, G.R. No.
L-34964, 31 January 1973).
Fernandez v. Aniñon, G.R. No. 138967