JUDITH ELISCIA E.

YACOB JD-3B

TOPIC: LIQUIDATION

TITLE: Carlito Linsangan v. Philippine Deposit Insurance Corporation; GR NO. 228807;

February 11, 2019

DOCTRINE:

In deposit splitting, there is a presumption that the transferees have no beneficial ownership
considering that the source account, which exceeded the maximum deposit insurance coverage,
was split into two or more accounts within 120 days immediately preceding bank closure.

FACTS:

In 2013, the Monetary board ordered the closure of the Cooperative Rural Bank of Bulacan and
was places it under PDIC’s receivership. PDIC took over CRBBI’s assets and affairs and
examined its records in order to determine the insured deposits. Petitioner files a claim for
payment of deposit insurance for his Special Incentive Savings Account.

Upon investigation, PDIC found that petitioner's account originated from the account of
"Cornelio Linsangan or Ligaya Linsangan". PDIC then conducted a tracing of relationship for
the purpose of determining beneficial ownership of accounts and it discovered that petitioner is
not a qualified relative of Cornelio Linsangan and Ligaya Linsangan. Consequently, pursuant to
the provisions of PDIC Regulatory Issuance No. 2009-03, par. V, petitioner's account was
consolidated with the other legitimate deposits of Cornelio and Ligaya for purposes of
computing the insurable deposit. Thus, they were only entitled to the maximum deposit
insurance of P500,000.00.

ISSUE:

Whether or not PDIC has the duty to grant or deny claims for deposit insurance.

RULING:
Yes. Based on its charter, the PDIC has the duty to grant or deny claims for deposit insurance.
"The term 'insured deposit' means the amount due to any bona fide depositor for legitimate
deposits in an insured bank net of any obligation of the depositor to the insured bank as of the
date of closure, but not to exceed Five Hundred Thousand Pesos (P500,000.00).
In deposit splitting, there is a presumption that the transferees have no beneficial ownership
considering that the source account, which exceeded the maximum deposit insurance coverage,
was split into two or more accounts within 120 days immediately preceding bank closure. On the
other hand, in cases wherein the transfer into two or more accounts occurred before the 120-day
period, the PDIC does not discount the possibility that there may have been a transfer for valid
consideration, but in the absence of transfer documents found in the records of the bank at the
time of closure, the presumption arises that the source account remained with the transferor.

Page 1 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: LIQUIDATION

TITLE: Philippine Deposit Insurance Corporation v. Manu Gidwani; GR NO. 234616; June 20,
2018

DOCTRINE:

Under Republic Act No. 3591 (PDIC Charter), as amended, all deposits in a bank maintained in
the same right and capacity for a depositor's benefit, either in his name or in the name of others,
shall be added together for the purpose of determining the insured deposit amount due to a bona
fide depositor, which amount should not exceed the maximum deposit insurance coverage
(MDIC) of P250,000.00.

FACTS:

The Monetary Board of the BSP ordered the closure of the banks controlled by the Legacy
Group of Companies and was placed under the receivership of PDIC. Respondent Manu,
together with his wife Champa Gidwani and other individuals, represented themselves to be
owners of deposit accounts with the Legacy Banks and filed claims with PDIC. The claims were
processed and granted.

Two diagonal lines appeared in each of the Landbank checks, indicating that they were crossed-
checks "Payable to the Payee's Account Only." Despite these explicit instructions, the individuals
did not deposit the crossed checks in their respective bank accounts.

ISSUE:

Whether or not all deposits in a bank maintained in the same right and capacity for a depositor’s
benefit, either in his name or in the name of others, shall be added together for the purpose of
determining the insured deposit amount.

RULING:
Yes. Under Republic Act No. 3591 (PDIC Charter), as amended, all deposits in a bank
maintained in the same right and capacity for a depositor's benefit, either in his name or in the
name of others, shall be added together for the purpose of determining the insured deposit
amount due to a bona fide depositor, which amount should not exceed the maximum deposit
insurance coverage (MDIC) of P250,000.00. Thus, the entitlement to a deposit insurance is based
not on the number of bank accounts held, but on the number of beneficial owners. It is this
government policy and P250,000.00 threshold that respondent Manu purportedly circumvented
by conspiring with the 86 individuals. If not for the fact that the 683 Landbank crossed checks
amounting to P97,733,690.21 were deposited in the RCBC account of respondent Manu,
petitioner would not have gotten wind of this probable concealment of true ownership over the
subject bank accounts.

Page 2 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: LIQUIDATION

TITLE: Philippine Deposit Insurance Corporation vs. Citibank; GR NO. 170290; April 11, 2012

DOCTRINE:

The purpose of the PDIC is to protect the depositing public in the event of a bank closure.

FACTS:

PDIC conducted an examination of the books of account of Citibank. It discovered that Citibank
received from its foreign branches a certain amount of dollars, as proven by the Certificates of
Dollar Time Deposit. These funds were allegedly not reported to the PDIC as deposit liabilities
that were subject to assessments for dollar deposits. A petition was filed by the Citibank where it
sought a declaratory judgment stating that the money placements they received from their head
office and other foreign branches were not deposits and did not give rise to insurable deposit
liabilities.

PDIC argued that the head offices of Citibank and BA and their individual foreign branches are
separate and independent entities. They insisted that a bank’s head office and its branches have a
principal-agent relationship only if they operate in the same jurisdiction.

ISSUE:

Whether or not the purpose of the PDIC is to protect the depositing public in the event of a bank
closure.

RULING:
Yes. The purpose of the PDIC is to protect the depositing public in the event of a bank closure. It
has already been sufficiently established by US jurisprudence and Philippine statutes that the
head office shall answer for the liabilities of its branch. Now, suppose the Philippine branch of
Citibank suddenly closes for some reason. Citibank N.A. would then be required to answer for
the deposit liabilities of Citibank Philippines. If the Court were to adopt the posture of PDIC that
the head office and the branch are two separate entities and that the funds placed by the head
office and its foreign branches with the Philippine branch are considered deposits within the
meaning of the PDIC Charter, it would result to the incongruous situation where Citibank, as the
head office, would be placed in the ridiculous position of having to reimburse itself, as depositor,
for the losses it may incur occasioned by the closure of Citibank Philippines. Surely our law
makers could not have envisioned such a preposterous circumstance when they created PDIC.

Page 3 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: LIQUIDATION

TITLE: Spouses Kishore Ladho Chugani and Prisha Kishore Chugani v. Philippine Deposit
Insurance Corporation; GR NO. 230037; March 19, 2018

DOCTRINE:

The power of the PDIC as to whether it will deny or grant the claim for deposit insurance based
on its rules and regulations partakes of a quasi-judicial function.

FACTS:

Petitioners signified their intention to open Time Deposits with RBMI. Time Deposit Specimen
Signature Cards and Personal Information Sheets with instruction were sent to the petitioners.
Petitioners then opened Time Deposit Accounts with RBMI through inter-branch deposits to the
accounts of RBMI maintained in Metrobank and China Bank- Tagum, Davao Branches.
Thereafter, Certificates of Time Deposits (CTDs) and Official Receipts were issued to
petitioners.

Petitioners came to know that the Monetary Board of the Bangko Sentral ng Pilipinas placed
RBMI under receivership and thereafter closed the latter. Petitioners, then filed claims for
insurance of their time deposits. However, PDIC denied the claims.

ISSUE:

Whether or not the PDIC committed grave abuse of discretion in denying petitioners claim for
deposit insurance.

RULING:
No. The PDIC was created by Republic Act (R.A.) No. 3591 on June 22, 1963 as an insurer of
deposits in all banks entitled to the benefits of insurance under the PDIC Charter to promote and
safeguard the interests of the depositing public by way of providing permanent and continuing
insurance coverage of all insured deposits.
The power of the PDIC as to whether it will deny or grant the claim for deposit insurance based
on its rules and regulations partakes of a quasi-judicial function. Also, the fact that decisions of
the PDIC as to deposit insurance shall be final and executory, such that it can only be set aside
by a petition for certiorari evinces the intention of the Congress to make PDIC as a quasi-judicial
agency.

Page 4 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: BSB Group, Inc. vs. Sally Go; GR NO. 168644; February 16, 2010

DOCTRINE:
R.A. No. 1405 has two allied purposes. It hopes to discourage private hoarding and at the same
time encourage the people to deposit their money in banking institutions, so that it may be
utilized by way of authorized loans and thereby assist in economic development. Owing to this
piece of legislation, the confidentiality of bank deposits remains to be a basic state policy in the
Philippines.

FACTS:

In 2002, Bangayan filed with the Manila Prosecutor’s Office a complaint for estafa and/or
qualified theft against respondent, alleging that several checks representing the aggregate amount
of ₱1,534,135.50 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 and Trust Company (Security
Bank) in Divisoria, Manila Branch.

Petitioner held that the checks represented the cash money stolen by respondent and, hence, the
subject matter in this case is not only the cash amount represented by the checks supposedly
stolen by respondent, but also the checks themselves.

ISSUE:

Whether or not the testimony of Marasigan the accompanying documents are also violative of
the absolutely confidential nature of bank deposits and, hence, excluded by operation of R.A.
No. 1405.

RULING:
Yes. R.A. No. 1405 has two allied purposes. It hopes to discourage private hoarding and at the
same time encourage the people to deposit their money in banking institutions, so that it may be
utilized by way of authorized loans and thereby assist in economic development. Owing to this
piece of legislation, the confidentiality of bank deposits remains to be a basic state policy in the
Philippines.
The Supreme Court held that the testimony of Marasigan on the particulars of respondent’s
supposed bank account with Security Bank and the documentary evidence represented by the
checks adduced in support thereof, are not only incompetent for being excluded by operation of
R.A. No. 1405. They are likewise irrelevant to the case, inasmuch as they do not appear to have
any logical and reasonable connection to the prosecution of respondent for qualified theft.

Page 5 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Dona Adela Export International vs. Trade and Investment Development Corporation
and the Bank of the Philippine Islands; GR NO. 201931; February 11, 2015

DOCTRINE:
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.

FACTS:

The RTC issued an order declaring petitioner as insolvent and staying all civil proceedings
against petitioner. Atty. Arlene Gonzales was appointed as receiver. After taking her oath, Atty.
Gonzales proceeded to make the necessary report, engages appraisers and required the creditors
to submit proof of their respective claims.

Respondent TIDCORP contended that the waiver of confidentiality under Republic Act (R.A.)
Nos. 1405 and 8791 does not require the express or written consent of the depositor. It is
TIDCORP’s position that upon declaration of insolvency, the insolvency court obtains complete
jurisdiction over the insolvent’s property which includes the authority to issue orders to look into
the insolvent’s bank deposits. Since bank deposits are considered debts owed by the banks to the
petitioner, the receiver is empowered to recover them even without petitioner’s express or
written consent, said TIDCORP.

ISSUE:

Whether or not the petitioner is bound by the provision in the BPI-TIDCORP Joint Motion to
Approve Agreement that petitioner shall 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.
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.
It is an elementary rule that the existence of a waiver must be positively demonstrated since a
waiver by implication is not normally countenanced. The norm is that a waiver must not only be
voluntary, but must have been made knowingly, intelligently, and with sufficient awareness of
the relevant circumstances and likely consequences.

Page 6 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Joseph Victor Ejercito v. Sandiganbayan; GR NO. 157294-95; November 30, 2006

DOCTRINE:
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.

FACTS:

Petitioner 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, petitioner concluded, the prosecution in the case
may not be allowed to make use of the information.

ISSUE:

1. Whether petitioner’s Trust Account No. 858 is covered by the term "deposit" as used in
R.A. 1405.
2. Whether petitioner’s Trust Account No. 858 and Savings Account No. 0116-17345-9 are
excepted from the protection of R.A. 1405.

RULING:
1. No. 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. 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.
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.
2. No. In light then of this Court’s pronouncement in Union Bank, the subject matter of the
litigation cannot be limited to bank accounts under the name of President Estrada alone,
but must include those accounts to which the money purportedly acquired illegally or a
portion thereof was alleged to have been transferred. Trust Account No. 858 and Savings
Account No. 0116-17345-9 in the name of petitioner fall under this description and must
thus be part of the subject matter of the litigation.

Page 7 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: People of the Philippines vs. Estrada; GR NO. 164368-69; April 2, 2009

DOCTRINE:

In this light, there is no actual frontal clash between CA No. 142 and R.A. No. 1405 that requires
harmonization. Each operates within its own sphere, but must necessarily be read together when
these spheres interface with one another. Finally, R.A. No. 9160, as a law of recent vintage in
relation to the indictment against Estrada, cannot be a source or an influencing factor in his
indictment.

FACTS:

an Information for plunder (docketed as Crim. Case No. 26558) was filed with the
Sandiganbayan against respondent Estrada, among other accused. A separate Information for
illegal use of alias, docketed as Crim. Case No. 26565, was likewise filed against Estrada.

ISSUE:

Whether the court a quo gravely erred and abused its discretion in dismissing Crim. Case No.
26565 and in applying R.A. No. 1405 as an exception to the illegal use of alias punishable under
Commonwealth Act No. 142.

RULING:
Yes. On the issue of the applicability of R.A. No. 1405 and its relationship with CA No. 142, that
since nothing in CA No. 142 excuses the use of an alias, the Sandiganbayan gravely abused its
discretion when it ruled that R.A. No. 1405 is an exception to CA No. 142’s coverage.
The application of R.A. No. 1405 is significant only because Estrada’s use of the alias was
pursuant to a transaction that the law considers private or, at the very least, where the law
guarantees a reasonable expectation of privacy to the parties to the transactions. It is at this point
that R.A. No. 1405 tangentially interfaces with an indictment under CA 142. In this light, there is
no actual frontal clash between CA No. 142 and R.A. No. 1405 that requires harmonization.
Each operates within its own sphere, but must necessarily be read together when these spheres
interface with one another. Finally, R.A. No. 9160, as a law of recent vintage in relation to the
indictment against Estrada, cannot be a source or an influencing factor in his indictment.

Page 8 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Lourdes Marquez vs. Aniano Desierto; GR NO. 135882; June 27, 2001

DOCTRINE:

An examination of the secrecy of bank deposits law (R. A. No. 1405) would reveal the following
exceptions: (a) Where the depositor consents in writing; (b) Impeachment case; (c) By court
order in bribery or dereliction of duty cases against public officials;(d) Deposit is subject of
litigation; and (e) Sec. 8, R. A. No. 3019, in cases of unexplained wealth.

FACTS:

Petitioner Marquez received an Order from the Ombudsman Aniano A. Desierto to produce
several bank documents for purposes of inspection in camera relative to various accounts
maintained at Union Bank of the Philippines, Julia Vargas Branch, where petitioner is the branch
manager. The accounts to be inspected are Account Nos. 011-37270, 240-020718.

The basis of the Ombudsman in ordering an in camera inspection of the accounts is a trail of
managers checks purchased by one George Trivinio, a respondent in OMB-0-97-0411, pending
with the office of the Ombudsman. It would appear that Mr. George Trivinio, purchased fifty one
(51) Managers Checks (MCs).

ISSUE:

Whether or not the order of the Ombudsman to have an in camera inspection of the questioned
account is allowed as an exception to the law on secrecy of bank deposits.

RULING:
No. An examination of the secrecy of bank deposits law (R. A. No. 1405) would reveal the
following exceptions: (a) Where the depositor consents in writing; (b) Impeachment case; (c) By
court order in bribery or dereliction of duty cases against public officials;(d) Deposit is subject of
litigation; and (e) Sec. 8, R. A. No. 3019, in cases of unexplained wealth.
The Supreme Court ruled that before an in camera inspection may be allowed, there must be a
pending case before a court of competent jurisdiction. Additionally, 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.

Page 9 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Karen Salvacion vs. Central Bank of the Philippines; GR NO. 94723; August 21, 1997

DOCTRINE:

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
specially to a citizen aggrieved by a foreign guest like accused Greg Bartelli.

FACTS:

Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen Salvacion,
then 12 years old to go with him to his apartment. Therein, Greg Bartelli detained Karen
Salvacion for four days. In Civil Case No. 89-3214, the Judge issued an Order dated February
22, 1989 granting the application of herein petitioners, for the issuance of the writ of preliminary
attachment. After petitioners gave Bond No. JCL (4) 1981 by FGU Insurance Corporation in the
amount of 100,000.00, a Writ of Preliminary Attachment was issued by the trial court on
February 28, 1989.

Deputy Sheriff of Makati served a Notice of Garnishment on China Banking Corporation. In a

letter to the Deputy Sheriff of Makati, China Banking Corporation invoked Republic Act No.
1405 as its answer to the notice of garnishment served on it. Deputy Sheriff of Makati Armando
De Guzman sent his reply to China Banking Corporation saying that the garnishment did not
violate the secrecy of bank deposits since the disclosure is merely incidental to a garnishment
properly and legally made by virtue of a court order which has placed the subject deposits in
custodia legis

ISSUE:

Whether or not Section 113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426, as
amended by P.D. 1246, otherwise known as the Foreign Currency Deposit Act should be made
applicable to a foreign transient?.

RULING:
No. 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
specially 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.

Page 10 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: China Bank Corporation vs. Court of Appeals; GR NO. 140687; December 18, 2006

DOCTRINE:

The law provides that all foreign currency deposits authorized under Republic Act No. 6426, as
amended by Sec. 8, Presidential Decree No. 1246, Presidential Decree No. 1035, as well as
foreign currency deposits authorized under Presidential Decree No. 1034 are considered
absolutely confidential in nature and may not be inquired into.

FACTS:

A Complaint for recovery of sums of money and annulment of sales of real properties and shares
of stock docketed as CEB-21445 was filed by Jose "Joseph" Gotianuy against his son-in-law,
George Dee, and his daughter, Mary Margaret Dee.

Jose Gotianuy accused his daughter Mary Margaret Dee of stealing, among his other properties,
US dollar deposits with Citibank N.A. amounting to not less than P35,000,000.00 and
US$864,000.00. Mary Margaret Dee received these amounts from Citibank N.A. through checks
which she allegedly deposited at China Banking Corporation (China Bank).

ISSUE:

Whether or not the Honorable Court of Appeals has interpreted the Foreign Currency Deposit.

RULING:
Yes. The law provides that all foreign currency deposits authorized under Republic Act No.
6426, as amended by Sec. 8, Presidential Decree No. 1246, Presidential Decree No. 1035, as well
as foreign currency deposits authorized under Presidential Decree No. 1034 are considered
absolutely confidential in nature and may not be inquired into. There is only one exception to the
secrecy of foreign currency deposits, that is, disclosure is allowed upon the written permission of
the depositor.
As to the deposit in foreign currencies entitled to be protected under the confidentiality rule,
Presidential Decree No. 1034 defines deposits to mean funds in foreign currencies which are
accepted and held by an offshore banking unit in the regular course of business, with the
obligation to return an equivalent amount to the owner thereof, with or without interest.

Page 11 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Mellon Bank vs. Celso Magsino; GR NO. 71479; Octiber 18, 1990

DOCTRINE:

Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited
is the subject matter of the litigation

FACTS:

Dolores Ventosa requested the transfer of $1,000 from the First National Bank of Moundsville,
West Virginia, U.S.A. to Victoria Javier in Manila through the Prudential Bank. Accordingly, the
First National Bank requested the petitioner, Mellon Bank, to effect the transfer. Javier withdrew
$475,000 from account No. 343 and converted it into eight cashier's checks.

Mellon Bank filed a complaint in the Superior Court of California, County of Kern, against
Melchor Javier, Jane Doe Javier, Honorio Poblador, Jrn, and Does I through V. In its first
amended complaint to impose constructive trust dated July 14, 1977, Mellon Bank alleged that it
had mistakenly and inadvertently cause the transfer of the sum of $999,000.00 to Jane Doe
Javier.

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 case.

RULING:
No. Private respondents' protestations that to allow the questioned testimonies to remain on
record would be in violation of the provisions of Republic Act No. 1405 on the secrecy of bank
deposits, is unfounded. Section 2 of said law allows the disclosure of bank deposits in cases
where the money deposited is the subject matter of the litigation. Inasmuch as Civil Case No.
26899 is aimed at recovering the amount converted by the Javiers for their own benefit,
necessarily, an inquiry into the whereabouts of the illegally acquired amount extends to whatever
is concealed by being held or recorded in the name of persons other than the one responsible for
the illegal acquisition.

Page 12 of 18
JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Union Bank of the Philippines v. Court of Appeals; GR NO. 134699; December 23,
1999

DOCTRINE:

Section 2 of the Law on Secrecy of Bank Deposits, as amended, declares bank deposits to be
"absolutely confidential" except:(1) In an examination made in the course of a special or general
examination of a bank that is specifically authorized by the Monetary Board after being satisfied
that there is reasonable ground to believe that a bank fraud or serious irregularity has been or is
being committed and that it is necessary to look into the deposit to establish such fraud or
irregularity; (2) In an examination made by an independent auditor hired by the bank to conduct
its regular audit provided that the examination is for audit purposes only and the results thereof
shall be for the exclusive use of the bank; (3) Upon written permission of the depositor; (4) In
cases of impeachment; (5) Upon order of a competent court in cases of bribery or dereliction of
duty of public officials, or (6) In cases where the money deposited or invested is the subject
matter of the litigation.

FACTS:

In 1990, A check amounting to One Million Pesos was drawn against Account no. 0111-01854-8
with private respondent Allied Bank payable to one Jose Alvarez. The payee deposited the check
with petitioner Union Bank who credited the amount to the account of Mr. Alvarez.
Subsequently, petitioner sent the check for clearing through the Philippine Clearing House
Corporation. When the check was presented for payment, a clearing discrepancy was committed
by the Union Bank’s clearing staff when the amount was erroneously under-encoded.

Union Bank notified Allied Bank of the discrepancy by way of a charge slip for Nine Hundred
Ninety-Nine Thousand Pesos for automatic debiting against the account of Allied Bank.
Subsequenty, Union Bank files a complaint against Allied Bank before the PCHC Arbitration
Committee.

ISSUE:

Whether or not the case at bar falls under the exception of the Law on Secrecy.

RULING:

No. Section 2 of the Law on Secrecy of Bank Deposits, as amended, declares bank deposits to
be "absolutely confidential" except:(1) In an examination made in the course of a special or
general examination of a bank that is specifically authorized by the Monetary Board after being
satisfied that there is reasonable ground to believe that a bank fraud or serious irregularity has
been or is being committed and that it is necessary to look into the deposit to establish such fraud
or irregularity; (2) In an examination made by an independent auditor hired by the bank to
conduct its regular audit provided that the examination is for audit purposes only and the results
thereof shall be for the exclusive use of the bank; (3) Upon written permission of the depositor;
(4) In cases of impeachment; (5) Upon order of a competent court in cases of bribery or
dereliction of duty of public officials, or (6) In cases where the money deposited or invested is
the subject matter of the litigation.

The Supreme Court found that the petitioner’s definition of the phrase "subject matter of the
action" is consistent with the term "subject matter of the litigation," as the latter is used in the
Bank Deposits Secrecy Act. Additionally, the necessity of the inquiry, or the lack thereof, is

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immaterial since the case does not come under any of the exceptions allowed by the Bank
Deposits Secrecy Act.

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Emmanuel Onate vs. Hon. Zues Abrogar; GR NO. 107303; February 23, 1995

DOCTRINE:

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."

FACTS:

These are motions separately filed by petitioners, seeking reconsideration of the decision of the
Second Division holding that although the levy on attachment of petitioner's properties had been
made before the trial court acquired jurisdiction over them, the subsequent service of summons
on them cured the invalidity of the attachment.

The motions were referred to the Court en banc in view of the fact that in another decision
rendered by the Third Division on the same question, it was held that the subsequent acquisition
of jurisdiction over the person of a defendant does not render valid the previous attachment of his
property.

Petitioner contended that the examination of the books and ledgers of the BPI, PNB, and Urban
Bank was a "fishing expedition" which the trial court should not have authorized because
petitioner Emmanuel C. Oñate, whose accounts were examined, was not a signatory to any of the
documents evidencing the transaction between Sun Life and Brunner.

ISSUE:

Whether or not the transaction is considered a sale or money placement does not make the
money the "subject matter of litigation" within the meaning of Section 2 of Republic Act No.
1405 which prohibits the disclosure or inquiry into bank deposits except "in cases where the
money deposited or invested is the subject matter of litigation.

RULING:

No. 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.

Since the attachment of petitioner's properties was invalid, the examination ordered in
connection with such attachment must likewise be considered invalid.

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TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Carmen Intengsn vs. Court of Appeals; GR NO. 128996; February 15, 2002

DOCTRINE:

The applicable law is not Republic Act no. 14054 but Republic Act 6426, known as the Foreign
Currency Deposit Act of the Philippines.

FACTS:

Citibank filed a complaint against two of its officers, Dante Santos and Marilou Genuino for
violation of the Corporation Code. The Provincial prosecutor directed the filing of information
against private respondents for alleged violation of Republic Act no. 1405. The DOJ issued a
resolution ordering the withdrawal of the information against the respondents. The issue was
raised to the Court of Appeals which rendered that the disclosure of petitioners deposits was
necessary to establish the allegation that Santos and Genuino had violated Section 31 of the
Corporation Code in acquiring any interest adverse to the corporation in respect of any matter
which has been reposed in him in confidence.

ISSUE:

Whether or not private respondents’ disclosure do not fall under the exception of RA 1405.

RULING:

No. The Accounts in question are US dollar deposits. Consequently, the applicable law is not
Republic Act no. 14054 but Republic Act 6426. Under R.A. No. 6426 there is only a single
exception to the secrecy of foreign currency deposits, that is, disclosure is allowed only upon the
written permission of the depositor.

Incidentally, the acts of private respondents complained of happened before the enactment on
September 29, 2001 of R.A. No. 9160 otherwise known as the Anti-Money Laundering Act of
2001. It does not matter if that such disclosure was necessary to establish Citibanks case against
Dante L. Santos and Marilou Genuino. Lims act of disclosing details of petitioners bank records
regarding their foreign currency deposits, with the authority of Reyes, would appear to belong to
that species of criminal acts punishable by special laws, called malum prohibitum.

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JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Philippine Savings Bank vs. Senate Impeachment Court; GR No. 200238; November
20, 2012

DOCTRINE:

It is well-settled that courts will not determine questions that have become moot and academic
because there is no longer any justiciable controversy to speak of. The judgment will not serve
any useful purpose or have any practical legal effect because, in the nature of things, it cannot be
enforced.

FACTS:

Petitioners Philippine Savings Bank (PSBank) and Pascual M. Garcia III, as President of
PSBank, filed a Petition for Certiorari and Prohibition seeking to nullity and set aside the
Resolution of respondent Senate of the Republic of the Philippines, sitting as an Impeachment
Court, which granted the prosecution's requests for subpoena duces tecum ad testificandum to
PSBank and/or its representatives requiring them to testify and produce before the Impeachment
Court documents relative to the foreign currency accounts that were alleged to belong to then
Suprerpe Court Chief Justice Renato C. Corona.

ISSUE:

Whether or not the Impeachment Court acted arbitrarily when it issued the assailed subpoena to
obtain information concerning the subject foreign currency deposits notwithstanding the
confidentiality of such deposits under RA 6426 has been overtaken by events.

RULING:

The Supreme Court found that it is appropriate to abstain from passing upon the merits of this
case where legal relief is no longer needed nor called for.

It is well-settled that courts will not determine questions that have become moot and academic
because there is no longer any justiciable controversy to speak of. The judgment will not serve
any useful purpose or have any practical legal effect because, in the nature of things, it cannot be
enforced.

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JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: Norlina Sibayan vs. Elizabeth Alda; GR NO. 233395; January 17, 2018

DOCTRINE:

In proceedings before administrative or quasi-judicial bodies, like the OGCLS-BSP, decisions

may be reached on the basis of position papers or other documentary evidence only. They are not
bound by technical rules of procedure and evidence.

FACTS:

A letter-complaint was filed by respondent Elizabeth Aida with the office of Special
investigation of BSP. Elizabeth charged Norlina with unauthorized deduction of her BDO
Savings Account, as well as for failure to post certain check deposits. The complaint alleged that
while Elizabeth did not make any withdrawals from her account, such amount in the account was
reduce. Further, Elizabeth claimed that two crossed manager’s checks issued to her were not
posted in her BDO savings account despite the fact the said checks were deposited.

As for Norlina's defense, she argued that the charges were only meant to harass her and BDO as
the latter previously filed a criminal case against Elizabeth, Ruby, and their cohorts, for theft,
estafa, and violation of Republic Act No. 8484, otherwise known as the Access Devise
Regulation Act of 1998.

ISSUE:

Whether or not Petitioner Sibayan is entitled to the Production of Bank Documents pursuant to
the Rules of Court.

RULING:
No.The denial of the motion for production of bank documents pertaining to 1) UCPB Account
No. 2351047157 and 2) BPI Account No. 85890237923 is justified as the bank accounts sought
to be examined are privileged. Section 2 of Republic Act No. 1405, otherwise known as The
Law on Secrecy of Bank Deposit
The rationale and purpose of the summary nature of administrative proceedings is to achieve an
expeditious and inexpensive determination of cases without regard to technical rules. As such, in
proceedings before administrative or quasi-judicial bodies, like the OGCLS-BSP, decisions may
be reached on the basis of position papers or other documentary evidence only. They are not
bound by technical rules of procedure and evidence. To require otherwise would negate the
summary nature of the proceedings which could defeat its very purpose.

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JUDITH ELISCIA E. YACOB JD-3B

TOPIC: FOREIGN CURRENCY DEPOSIT ACT

TITLE: In the Matter of the Intestate Estate of Miguelita Pacioles and Emmanuel Ching vs.
Pacioles; GR NO. 214415; October 15, 2018

DOCTRINE:

In proceedings before administrative or quasi-judicial bodies, like the OGCLS-BSP, decisions

may be reached on the basis of position papers or other documentary evidence only. They are not
bound by technical rules of procedure and evidence.

FACTS:

Upon the death of Miguelita, she left several real properties, stock investments, bank deposits
and interests. She was survived by her husband, respondent Emilio, their two minor children,
Miguelita's mother, Miguela, now deceased and Miguelita's brother, herein petitioner Emmanuel.
Emilio filed a petition for the settlement of Miguelita's estate with prayer for his appointment as
its regular administrator.

Among the properties left by Miguelita and included in the inventory of her estate were her two
dollar accounts with the Bank of the Philippine Islands (BPI)-San Francisco Del Monte (SFDM)
Branch (subject BPI account), the subject matter of the instant case.However, said dollar
accounts were closed and consolidated into a single account.

ISSUE:

Whether or not the order of release of funds from a joint foreign currency deposit account
without securing the consent of a co-depositor is proper.

RULING:
No. All foreign currency deposits authorized under this Act, as amended by PD No. 1035, as
well as foreign currency deposits authorized under PD 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 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.
The subject BPI account is in the nature of a joint account. "[It] is one that is held jointly by two
or more natural persons, or by two or more juridical persons or entities. Under such setup, the
depositors are joint owners or co-owners of the said account, and their share in the deposits shall
be presumed equal, unless the contrary is proved."
Thus, it is indispensable that all the persons named as account holders give their consent before
any withdrawal could be made.

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