CASE: KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr.

, father and Natural

Guardian, and Spouses FEDERICO N. SALVACION, JR., and EVELINA E. SALVACION,
petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION and GREG
BARTELLI y NORTHCOTT, respondents.

FACTS: The petition prays for the relief of declaring Section 113 of Central Bank Circular No. 960 as
contrary to the Constitution because of its provision that foreign currency deposits shall be exempt from
attachment, garnishment, or any other order to process of any court, legislative body, government agency
or any administrative body whatsoever.

On February 4, 1989, 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, or up to February 7, 1989 and was able to rape the child once on February 4, and
three times each day on February 5, 6, and 7, 1989. On February 7, 1989, after policemen and people
living nearby, rescued Karen, Greg Bartelli was arrested and detained at the Makati Municipal Jail.

On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed against Greg Bartelli,
a criminal case for Serious Illegal Detention and several criminal cases for four (4) counts of Rape. On
the same day, petitioners filed with the Regional Trial Court of Makati Civil Case No. 89-3214 for
damages with preliminary attachment against Greg Bartelli. On February 24, 1989, the day there was a
scheduled hearing for Bartelli’s petition for bail the latter escaped from jail. On March 1, 1989, the
Deputy Sheriff of Makati served a Notice of Garnishment on China Banking Corporation. In a letter dated
March 13, 1989 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.

Petitioners assails Section 113 of Central Bank Circular No. 960 providing that “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.” should be adjudged as
unconstitutional on the grounds that it has taken away the right of petitioners to have the bank deposit of
defendant Greg Bartelli y Northcott garnished to satisfy the judgment rendered in petitioners’ favor in
violation of substantive due process guaranteed by the Constitution and that the Monetary Board, in
issuing Section 113 of Central Bank Circular No. 960 has exceeded its delegated quasi-legislative power
when it took away the plaintiff’s substantive right to have the claim sought to be enforced by the civil
action secured by way of the writ of preliminary attachment as granted by Rule 57 of the Revised Rules
of Court, and the plaintiff’s substantive right to have the judgment credit satisfied by way of the writ of
execution out of the bank deposit of the judgment debtor as granted to the judgment creditor by Rule 39
of the Revised Rules of Court, which is beyond its power to do so.

On the other hand, respondent Central Bank commented that the Monetary Board in issuing
Section 113 of CB Circular No. 960 did not exceed its power or authority because the subject Section is
copied verbatim from a portion of R.A. No. 6426 as amended by P.D. 1246. Hence, it was not the
Monetary Board that grants exemption from attachment or garnishment to foreign currency deposits, but
the law itself. Central Bank also argued that the Circular does not violate the substantive due process
guaranteed by the Constitution because it was based on a law, the law seems to be reasonable, it is
enforced according to regular methods of procedure, and that it applies to all members of a class.
Additionally, the Central Bank said that one reason for exempting the foreign currency deposits from
attachment, garnishment or any other order process of any court, is to assure the development and speedy
growth of the Foreign Currency Deposit System and the Offshore Banking System in the Philippines.

For its part, respondent China Banking Corporation, aside from giving reasons similar to that of
respondent Central Bank, also stated that respondent China Bank is restrained from executing the
garnishment in view of R.A. No. 6426 and Section 113 of Central Bank Circular No. 960; and that despite
the harsh effect to these laws on petitioners, CBC has no other alternative but to follow the same.

ISSUE: Whether or not the bank account of Greg Bartelli in China Bank can be a subject of garnishment
vis-a-vis the existence of Central Bank Circular No. 960 and the decision of the Regional Trial Court.

RULING: The Court finds the petition to be partly meritorious.

Petitioner deserves to receive the damages awarded to her by the court. But this petition for
declaratory relief can only be entertained and treated as a petition for mandamus to require respondents to
honor and comply with the writ of execution in Civil Case No. 89-3214. The Court considered heavily the
abuse that Karen Salvacion suffered in the hands of Greg Bartelli. The Court considered that it would the
height of injustice to not award the damages that the petitioner justly deserves in contrast to the law that
prevents the garnishment of the foreign account of Greg Bartelli. If Karen’s sad fate had happened to
anybody’s own kin, it would be difficult for anyone to fathom how the incentive for foreign currency
deposit could be more important than his child’s right to said award of damages. This further illustrates
the flaw in the questioned provisions.

Historically, R.A. No. 6426 was enacted in 1983, which was a time when the country’s economy
was in shambles, and when foreign investments were minimal. But the realities of the present times show
that the country has recovered economically; and even if not, the questioned law still denies those entitled
to due process of law for being unreasonable and oppressive. These conditions justifying the existence of
the law are no longer prevalent today.

In fine, the application of the law depends on the extent of its justice. To not subject a foreign
account to garnishment as remedy for damages done in a cThis 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. When a statute is silent or ambiguous, this is
one of those fundamental solutions that would respond to the vehement urge of conscience.

Therefore, the provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246,
insofar as it amends Section 8 of R.A. 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 Civil Case No. 89-3214, “Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by
Branch CXLIV, RTC Makati and to RELEASE to petitioners the dollar deposit of respondent Greg
Bartelli y Northcott in such amount as would satisfy the judgment.

NATURAL LAW APPLICATION: In the case at bar, the application of natural law can be aptly observed
on to how the Court justified their decision by serving the ends of justice, and by not strictly adhering to
the letter of the law found in Central Bank Circular No. 960. The Court justified that applying the assailed
Circular would be tantamount to enacting injustice in the guise of being lawful. That it is unthinkable and
reprehensible to prioritize a foreigner, who is but a visitor of our country, in comparison to a Filipino
child who deserves all the protection that Philippine laws can afford to provide. To allow the Circular to
prevail over the awarding of damages is tantamount to our laws favoring the foreigners more in
comparison to our own citizens.

The Court is not legally baseless in their decision. Article 10 of the New Civil Code 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." Therefore it follows that when there seems to be doubt as to what
statute shall prevail, it should be the one where what is right and just prevails. In the case at bar, it was
more just and right to award the damages to the petitioner in comparison to the protection from
garnishment of the foreign account of a foreigner. Indeed, it would be unjust to not execute the damages
awarded to the petitioners at bar. To not grant the garnishment would render the decision toothless, and
justice denied.

It is a principle in statutory construction that cessante ratione legis, cessat ipsa lex, that is, when
the reason of the law ceases, the law itself ceases. In the case at bar, the reason for the inapplicability of
the assailed law in the case at bar is due to the fact that the economy of the Philippines is no longer in
shambles. The Court noted that the law was passed during a time where foreign currency is needed.
Therefore, the reason of the law of encouraging the injection of foreign currency in our country for the
purpose of improving our economy is no longer a compelling reason to enact the law since our economy
is no longer in shambles, which further points out how inapplicable the law is in the case at bar.

Natural law was also applied in the case at bar when the Court put more prime to the welfare of a
child in comparison to private property or a foreign deposit. The decision stressed that human life is far
more important, and that in case of doubt, and it should be the welfare of human life that should prevail,
even more if the victim of a gruesome crime is a child. It would be the height of injustice to