Page 1 – FACTS OF THE CASE

Criminal cases were filed against the respondent for Serious Illegal Detention and for four (4) counts of
Rape. Petitioners filed with the RTC a civil case for damages with preliminary attachment. It was alleged
that Greg Bartelli, the defendant, detained Karen Salvacion, the petitioner and a minor, for 4 days and
was able to rape the child. Eventually, she was rescued and Greg Bartelli was arrested and detained. Upon
arrest, the policemen recovered from Bartelli several items which include a dollar account in China
Banking Corp.

Thereafter, in the civil case, the Judge issued an Order granting the application of the petitioners for the
issuance of the writ of preliminary attachment. After the petitioners gave a bond, a writ of preliminary
attachment was issued. However, when the Deputy Sheriff served a Notice of Garnishment on China
Banking Corporation, it invoked RA 1405. The Deputy Sheriff replied stating that the garnishment did not
violate the secrecy of bank deposits since the disclosure is merely incidental to a garnishment legally made
by virtue of a court order. Then, China Banking Corporation answered by invoking Sec. 113 of Central Bank
Circular No. 960 which states 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.”

Page 2 – FACTS OF THE CASE

This prompter the counsel for petitioners to make an inquiry with the Central Bank as to the applicability
of Sec. 113 of CB Circular No. 960. The Central Bank stated that the provision is absolute in application
and that its purpose is to encourage dollar accounts within the country’s banking system which would
help in the development of the economy.

Then, after hearing the case ex-parte, the RTC rendered judgment in favour of petitioners. Thereafter, the
judgment became final and executory after the lapse of 15 days thus, petitioners tried to execute the
judgment on Bartelli’s dollar deposit with China Banking Corporation however, China Banking Corporation
still invoked Section 113 of Central Bank Circular No. 960. Thus, petitioners decide to seek relief from the
SC.

Page 3 – CONTENTIONS OF THE PARTIES

Petitioners argued that Sec. 113 of CB Circular No. 960 violates substantive due process by taking away
their right to have the bank deposit of Bartelli be garnished to satisfy the judgment; that it violates equal
protection clause when it gave foreign currency depositors an undue favour or privilege; also, that it
provides safe haven for criminals since they can escape civil liability for their wrongful acts by merely
converting their money to a foreign currency and depositing it in a foreign currency deposit account; and
lastly, that the Monetary Board, in issuing Section 113 of Central Bank Circular No. 960 has exceeded its
delegated quasi-legislative power.

On the other hand, respondents contended that Monetary Board did not exceed its power in issuing Sec.
113 of CB Circular No. 960 because said provision is copied verbatim from RA No. 6426 as amended by PD
1246 or otherwise known as the Foreign Currency Deposit Act and that the questioned provision is
needed to promote the public interest and general welfare
Page 4- ISSUE

 Whether the dollars deposited by the respondent with China Banking Corporation should be
exempted from attachment as provided under Sec. 113 of Central Bank Circular No. 960?

 Whether Sec. 8 of RA 6426, as amended by PD 1246, otherwise known as the Foreign Currency
Deposit Act should be made applicable to this case?

Page 5 - RULING

NO. Protection granted under Section 113 of Central Bank Circular No. 960 and Section 8 of RA 6426, as
amended by PD 1246, otherwise known as the Foreign Currency Deposit Act is not applicable to the
respondent, a foreign transient.

The SC stated that the petitioner deserves to receive the damages awarded to her by the court and that
the questioned law makes futile the favourable and award of damages that the petitioners fully deserve.

The SC discussed at first the related laws. One of these is RA No. 6426 (PD 1246), otherwise known as
Foreign Currency Deposit Act of the Philippines. The SC stated the when it was enacted, the country’s
economy was in a shamble thus, foreign investments were minimal. However, now, the country has
recovered economically and even if not, the said law still denies those entitled to due process of law for
being unreasonable and oppressive.

Moreover, the purpose of RA No. 6426, as amended by PD 1246 is to accord protection to foreign currency
deposits to assure the development and speedy growth of the Foreign Currency Deposit System and the
Offshore Banking in the Philippines.

On the other hand, both PD 1034 which established Offshore Banking in the Philippines and PD 1035
which created the Foreign Currency Deposit system were created to draw deposits from foreign lenders
and investors. It is these kind deposits that are induced by the 2 laws and given protection and incentives
by them. Therefore, foreign currency deposit made by a transient or a tourist is not the kind of deposit
encouraged by PD Nos. 1034 and 1035 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 and not for investment purposes.

In this case, respondent Bartelli is just a tourist and his dollars deposited with respondent China Banking
Corporation are only for safekeeping during his temporary stay in the Philippines. Therefore, respondent
Bartelli is not entitled to the protection of Section 113 of the Central Bank Circular No. 960 and PD No.
1246 against attachment, garnishment or other court processes.

Lastly, the Court also said that if Sec. 113 be made applicable to foreign transient, injustice would result
especially to a citizen aggrieved by a foreign guest like the accused in this case.