Subject Philosophy of Law

Title Salvacion v. Central Bank of the Philippines, G.R. No. 94723, 21

August 21, 1997

Citation G.R. No. 94723, 21

Date August 21, 1997

PONENTE

Torres, Jr., J;

PETITIONER/S RESPONDENT/S

KAREN E. SALVACION, minor, thru CENTRAL BANK OF THE PHILIPPINES,

Federico N. Salvacion, Jr., father and Natural CHINA BANKING CORPORATION and
Guardian, and Spouses FEDERICO N. GREG BARTELLI y NORTHCOTT
SALVACION, JR., and EVELINA E.
SALVACION

RELEVANT PROVISION/S

DOCTRINE

The doctrine in the case of Salvacion v. Central Bank of the Philippines is that Section 113 of
Central Bank Circular No. 960 and Section 8 of R.A. 6426, as amended by P.D. 1246, which
exempt foreign currency deposits from attachment or garnishment, should not be made
applicable to a foreign transient in peculiar circumstances. While the exemption aims to
promote the development of the Foreign Currency Deposit System and the Offshore Banking
System in the Philippines, applying it to a foreign transient in cases of injustice to a citizen
aggrieved by a foreign guest would contradict the intent of justice and fairness. Therefore, the
court concluded that the provision should not apply in this case due to its unique
circumstances.

FACTS

1. The case involves a complaint filed by the plaintiffs against the defendant, Greg
Bartelli, for damages arising from the rape and kidnapping of the minor plaintiff, Karen
Salvacion. The plaintiffs presented witnesses who testified to the events leading up to
and during the incident. Karen Salvacion recounted how she was approached by the
defendant at a shopping center, who introduced himself as a math teacher and invited
 her to his house to teach his niece. Once at the defendant's house, he locked the door,
tied Karen's hands, undressed her, and raped her multiple times over the course of
several days. Karen eventually managed to call for help and was rescued by the police.

2. Karen Salvacion and her parents filed a petition for declaratory relief against the
Central Bank of the Philippines, China Banking Corporation, and Greg Bartelli, an
American tourist, detained and raped Karen. Criminal charges and a civil case for
damages were filed against Bartelli.The court granted a writ of preliminary attachment.
China Banking Corporation refused to honor the notice of garnishment served by the
Deputy Sheriff. The bank invoked a provision in the Central Bank Circular exempting
foreign currency deposits from attachment or garnishment. The trial court declared
Bartelli in default and awarded damages to the petitioners. The Supreme Court held
that the provision in the Central Bank Circular was inapplicable to this case and
ordered the respondents to comply with the writ of execution and release Bartelli's
dollar deposits to the petitioners.

3. The petitioners argue that Section 113 of the Central Bank Circular, which exempts
foreign currency deposits from attachment or garnishment, is unconstitutional. They
claim that this provision violates their right to due process and equal protection, and
provides a safe haven for criminals. The respondent, the Central Bank, argues that the
provision is based on a law and is reasonable. The Central Bank states that the
provision aims to promote the development of the Foreign Currency Deposit System
and the economic growth of the country. The court is tasked with determining its
jurisdiction over the petition and whether the provision should be applied to a foreign
transient.

4. The petitioner, a 12-year-old girl who was raped by an American tourist, filed a petition
for mandamus. The petitioner was awarded damages in the civil case, but the banks
refused to release the funds. The banks cited a law that exempts foreign currency
deposits from attachment or garnishment. The court held that the law does not apply in
this case and ordered the banks to release the funds. The court emphasized the need for
justice and fairness in protecting the rights of the victim.

ISSUE/S RULING

1. WON, the court has jurisdiction to entertain the petition despite the
fact that original jurisdiction in petitions for declaratory relief rests YES
with the lower court.

2. WON, Section 113 of Central Bank Circular No. 960 and Section 8 of
R.A. 6426, as amended by P.D. 1246, be made applicable to a foreign NO
transient?

RULING

1. The court has jurisdiction to entertain the petition despite the fact that original
jurisdiction in petitions for declaratory relief rests with the lower court.
 2. Section 113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426, as amended
by P.D. 1246, should not be made applicable to a foreign transient.

3. The court held that it has jurisdiction to entertain the petition as it involves a
constitutional issue and the interpretation of a law. The court also ruled that Section
113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426, as amended by P.D.
1246, should not be made applicable to a foreign transient.

4. The court reasoned that the exemption of foreign currency deposits from attachment,
garnishment, or any other court process is based on the law itself and aims to promote
the development of the Foreign Currency Deposit System and the Offshore Banking
System in the Philippines. However, the court found that applying the exemption to a
foreign transient like Bartelli would result in injustice to a citizen aggrieved by a
foreign guest. This would go against the presumption that the lawmaking body
intended right and justice to prevail. Therefore, the court concluded that the provision
should not apply in this case due to its peculiar circumstances.

FINAL DECISION

IN VIEW WHEREOF, the provisions of Section 113 of CB 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.

SO ORDERED.

SUMMARY

The case involves a complaint filed by the plaintiffs against the defendant for damages arising
from the rape and kidnapping of a minor. The court ruled that it has jurisdiction to entertain the
petition and that the exemption of foreign currency deposits from attachment, garnishment, or
any other court process should not be made applicable to a foreign transient. The court
reasoned that the exemption is based on the law itself and aims to promote the development of
the Foreign Currency Deposit System and the Offshore Banking System in the Philippines.
However, applying the exemption to a foreign transient like Bartelli would result in injustice to
a citizen aggrieved by a foreign guest. Therefore, the court ordered the respondents to comply
with the writ of execution and release Bartelli's dollar deposit to satisfy the judgment in favor
of the petitioners. The court held that the provisions of Section 113 of Central Bank Circular
No. 960 and PD No. 1246, which amends Section 8 of R.A. No. 6426, were inapplicable to
this case.