Case Digest onSalvacion v.

Central Bank of the Philippines

278 SCRA 27
FACTS:
Greg Bartelli, an American tourist, was arrested for committing four counts of rape and serious illegal detention
against Karen Salvacion. Police recovered from him several dollar checks and a dollar account in the China Banking
Corp. He was, however, able to escape from prison. In a civil case filed against him, the trial court awarded Salvacion
moral, exemplary and attorney’s fees amounting to almost P1,000,000.00.
Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking Corp. but the latter
refused arguing that Section 11 of Central Bank Circular No. 960 exempts foreign currency deposits from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any administrative
body whatsoever.
Salvacion therefore filed this action for declaratory relief in the Supreme Court.
ISSUE:     Should Section 113 of Central Bank Circular No. 960 and Section 8 of Republic Act No. 6426, as amended
by PD 1246, otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign transient?
HELD:    The provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246, insofar as it amends
Section 8 of Republic Act No. 6426, are hereby held to be INAPPLICABLE to this case because of its peculiar
circumstances. Respondents are hereby required to comply with the writ of execution issued in the civil case and to
release to petitioners the dollar deposit of Bartelli in such amount as would satisfy the judgment.
RATIO:    Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages
that Salvacion and her parents fully deserve. It then proceeded to show that the economic basis for the enactment of
RA No. 6426 is not anymore present; and even if it still exists, the questioned law still denies those entitled to due
process of law for being unreasonable and oppressive. The intention of the 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.
The SC adopted the comment of the Solicitor General who argued that the Offshore Banking System and the Foreign
Currency Deposit System were designed to draw deposits from foreign lenders and investors and, subsequently, to
give the latter protection. However, 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. Considering that Bartelli is just a tourist or a transient, he 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.
Further, the SC said: “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.”