CHINA BANKIGN CORPORATION V.

THE HONORABLE COURT OF APPEALS AND

JOSE “JOSEPH” GOTIANUY as substituted by ELIZABETH GOTIANUY LO
GR NO. 140687, December 18, 2006

FACTS:

Jose Gotianuy [hereinafter referred to as Gotianuy] accused his daughter Mary Margaret
Dee [herein after referred to as Mary] of stealing, among his other properties, US dollar
deposits with Citibank N. A. amounting to no less than Php 35,000,000.00 and US$
864,000.00. Mary received these amounts from Citibank N.A. through checks which she
allegedly deposited to China Banking Corporation (hereinafter referred to as China Bank).

He likewise accused his son-in-law, George Dee [hereinafter referred to as George],

husband of his daughter, Mary, of transferring his real properties and shares of stock in
George’s name without consideration. Gotianuy died during the pendency of the case before
the trial court, thus, he was substituted by his another daughter, Elizabeth Gotianuy
[hereinafter referred to as Elizabeth] who presented the US Dollar checks withdrawn by Mary
from his US dollar placement with Citibank.

Upon motion of Elizabeth, the trial court issued a subpoena to the employees of China
Bank, Cristota Labios and Isabel Yap, to appear in person and to testify in the hearing of the
case with regard to the Citibank checks (Foreign Currency Fund) and other matters material
and relevant to the issues of the case.

China Bank moved for reconsideration of the Order. Denying the motion, the trial court
ruled that, as the foreign currency fund is deposited with the movant China Bank, Cebu Main
Branch, Cebu City, “the disclosure only as to the name or in whose name the said fund is
deposited is not violative of the law. Justice will be better served if the name or names of the
depositor of said fund shall be disclosed because such a disclosure is material and important
to the issues between the parties.”1

China bank filed a petition for certiorari with the Court of Appeals. The Court of Appeals
denied the petition of China Bank and affirmed the Order of the trial court. The Court of
Appeals ratiocinated that, “the law specifically encompasses only the money or funds in
foreign currency deposit in a bank. Thus, the coverage of the law extends only to foreign
currency deposit in the CBC account where Mary deposited the Citibank checks in question
and nothing more.”2 More, the Court of Appeals held that, “the contention of petitioner that
the [prescription] on absolute confidentiality under the law in question covers even the name
of the depositor and is beyond the compulsive process of the courts is palpably untenable as
the law protects only the deposits itself but not the name of the depositor.”3

ISSUE:

(1) Whether or not petitioner China Bank is correct in its submission that the Citibank
dollar checks with both Gotianuy and/or Mary as payees, deposited with China Bank, may
not be looked into under the law on secrecy of foreign currency deposits.

(2) Whether or not Jose Gotianuy may be considered a depositor who is entitled to seek
an inquiry over the said deposits.

1
Order of the Trial Court dated 16 April 1999
2
Decision of the Court of Appeals dated 29 October 1999.
3
Id.
 RULING:

The law on secrecy of foreign currency deposits under Section 8 of Republic Act (RA)
No. 6426, as amended by Presidential Decree (PD) No. 1246, reads:

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
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. Xxx [emphasis supplied].

The Supreme Court agreed in the conclusion arrived at by the Court of Appeals, which
allows the inquiry, considered Gotianuy, a co-depositor of Mary, thus, allowed the inquiry.
More, the Supreme Court agreed with the Court of Appeals when the latter held that, since
Gotianuy is the named co-payee of the latter in the subject checks, which checks were
deposited in China bank. Gotianuy is likewise a depositor thereof. On that basis, no written
consent from Mary is necessitated.

Since the following facts are established, to wit: (1) Gotianuy and Mary are co-payees of
various Citbank checks; (2) Mary withdrew those checks from Citibank; (3) Mary admitted in
her Answer to the Request for Admission by the Adverse Party sent to her by Gotianuy that
she withdrew the funds from Citibank upon the instruction of her father Gotianuy and that the
fund belonged exclusively to the latter; (4) those checks were endorsed by Mary at the dorsal
portion; and, (5) Gotianuy discovered that those checks were deposited with China Bank as
shown by the stamp of China Bank at the dorsal side of the checks, thus, there is no issue as
to the source of the funds. Mary declared the source to be Gotianuy. There is likewise no
dispute that those funds in the form of Citibank US dollar checks were deposited with China
Bank. As the owner of the funds unlawfully taken and which are undisputably now deposited
with China Bank, Gotianuy has the right to inquire into the said deposits. Stated otherwise,
the Supreme Court ruled that, Gotianuy, as the owner of the fund, is entitled to a hearing on
the whereabouts of those funds. Borrowing the words of the Supreme Court, it held 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.”

However, the Supreme Court is constrained to render a limited pro hac vice ruling. It was
not the intent of the legislature when it enacted the law on secrecy of foreign currency
deposits to perpetuate injustice.