Secrecy of Bank Deposits (R.A. 1405 and R.A.
6426, as amended)
a. G.R No. 94723, Karen Salvacion v. Central Bank of the Philippines, et. al, August 21
1997.
DOCTRINE/S:
Remedial Law
a) Jurisdiction over Petitions for Declaratory Relief
GR: Lower Courts has original jurisdiction over Petitions for Declaratory Relief.
Exception: SC takes cognizance of Petitions for Declaratory Relief and treat it as one for
mandamus the petition has far-reaching implications and raises questions that should be
resolved.
Banking Law
a) Foreign Currency Deposit Act not applicable to a tourist or a transient
General Rule: Foreign currency deposits are EXEMPT from attachment, garnishment, or any
other order or process of any court, legislative body, government agency or any administrative
body whatsoever. (Sec 8. R.A. 6426)
Exception: Deposits made by a tourist or a transient
Reason: Offshore Banking System and the Foreign Currency Deposit System were designed
to draw deposits from foreign lenders and investors. However, the foreign currency deposit
made by a transient or a tourist is not the kind of deposit encouraged since 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.
b) Foreign Currency Deposit Act if injustice an exists
General Rule: Foreign currency deposits EXEMPT from attachment, garnishment, or any
other order or process of any court, legislative body, government agency or any administrative
body whatsoever. (Sec 8. R.A. 6426)
Exception: The garnishment of a foreign currency deposit should be allowed to PREVENT
INJUSTICE and for EQUITABLE GROUNDS.
Reason: If garnishment is not allowed even if there is injustice or for equitable grounds then
it 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.
FACTS: Bartelli, an American tourist, detained and raped Salvacion. Salvacion was rescued
and Bartelli was arrested. The policemen recovered from Bartelli several dollar checks and a
dollar account in China Bank. Bartelli however escaped from prison. In the civil case filed
against Bartelli, the trial court awarded Salvacion moral, exemplary and attorney’s fees.
Petitioners tried to execute on Bartelli's dollar deposit with China Bank. But China Bank
refused arguing that Section 113 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/S:
Case Digest
1) WON the Supreme Court has jurisdiction over petitions for declaratory relief since the lower
court has original jurisdiction over such petitions.
2) WON the secrecy of Foreign Currency Deposit Act should be made applicable to a foreign
transient?
HELD:
1) YES. The general rule is that lower Courts has original jurisdiction over Petitions for
Declaratory Relief. But an exception to this rule is that the SC takes cognizance of Petitions
for Declaratory Relief and treat it as one for mandamus is such petition has far-reaching
implications and raises questions that should be resolved.
2) NO. The provisions of Section 133 of CB Circular No. 960 are hereby held to be inapplicable
to this case because of its peculiar circumstances. 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 Bartelli. Supreme Court ruled that the questioned
law makes futile the favorable judgment and award of damages that Salvacion and her
parents fully deserve. 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.” Hence, 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.
Moreover, the SC ruled that 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 but the law failed to anticipate the iniquitous effects producing outright injustice and
inequality such as the case before us.
Furthermore, 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 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.
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
b. G.R No. L-18343, Philippine National Bank and Eduardo Romualdez v. Emilio
Gancayco and Florentino Flor, September 30, 1965.
DOCTRINE/S:
Banking Law
a) Section 2 of Republic Act 1405
GR: Section 2 of Republic Act 1405 declares bank deposits to be "absolutely confidential,"
Exception:
(1) Upon written permission of the depositor;
(2) In cases of impeachment;
(3) Upon order of a competent court in cases of bribery or dereliction of duty of public officials;
(4) In cases where the money deposited is the subject matter of the litigation.
b) Additional exception of the Bank Secrecy Law: Unexplained wealth in Anti-graft cases
Section 8 of the Anti-Graft Law is intended to amend Section 2 of Republic Act No. 1405 by
providing an additional exception to the rule against the disclosure of bank deposits. This is
because no reconciliation can be made between the two laws since these laws are si
repugnant to each other.
c) Cases of unexplained wealth are similar to cases of bribery or dereliction of duty
The policy as to one cannot be different from the policy as to the other. This policy express
the motion that a public office is a public trust and any person who enters upon its discharge
does so with the full knowledge that his life, so far as relevant to his duty, is open to public
scrutiny. Hence unexplained wealth is considered as one of the exceptions of the Bank
Secrecy Law.
FACTS: Defendants Gancayco et al., as special prosecutors of DOJ, required the plaintiff
PNB to produce at a hearing the records of the bank deposits of Jimenez. Jimenez was the
former administrator of the Agricultural Credit and Cooperative Administration, who was then
under investigation for unexplained wealth. In declining to reveal its records, the plaintiff bank
invoked Section 2 of Republic Act No. 1405 (Bank Secrecy Law).
On the other hand, the defendants cited Section 8 of Republic Act 3019 (Anti-Graft and
Corrupt Practices Act) which provides that “if a public official has been found to have acquired
during his incumbency an amount of property and/or money manifestly out of proportion to
his salary and to his other lawful income, that fact shall be a ground for dismissal or removal…
Bank deposits shall be taken into consideration in the enforcement of this section,
notwithstanding any provision of law to the contrary.” Defendants alleged that this provides
an additional ground for the examination of bank deposits and demanded that they produce
the records or be prosecuted for contempt. Because of the threat of prosecution, plaintiffs
filed an action for declaratory judgment with the CFI.
ISSUE/S:
1) WON the (Anti-Graft and Corrupt Practices Act) which took effect on August 17, 1960 is a
general law which cannot be deemed to have impliedly repealed section 2 of RA 1405 (Bank
Secrecy Law).
Case Digest
2) WON a bank can be compelled to disclose the records of accounts of a depositor who is
under investigation for unexplained wealth.
HELD:
1) NO. Republic Act No. 1405 and Republic Act No. 3019 are so repugnant to each other that
no reconciliation is possible. Republic Act No. 1405 provides that bank deposits are
"absolutely confidential ... and [therefore] may not be examined, inquired or looked into,"
except in those cases enumerated therein. On the other hand, the Anti-Graft Law directs in
mandatory terms that bank deposits "shall be taken into consideration in the enforcement of
this section, notwithstanding any provision of law to the contrary." Hence, the only conclusion
possible is that section 8 of the Anti-Graft Law is intended to amend section 2 of Republic Act
No. 1405 by providing additional exception to the rule against the disclosure of bank deposits.
Hence unexplained wealth constitute as an additional exception under the Bank Secrecy Law.
2) YES. The Anti-Graft Law made unexplained wealth in anti-graft cases an additional
exception under the Bank Secrecy Law.
With regard to the claim that disclosure would be contrary to the policy making bank deposits
confidential, it is enough to point out that while Section 2 of Republic Act No. 1405 declares
bank deposits to be “absolutely confidential,” it nevertheless allows such disclosure in the
following instances: (1) Upon written permission of the depositor; (2) In cases of
impeachment; (3) Upon order of a competent court in cases of bribery or dereliction of duty
of public officials; (4) In cases where the money deposited is the subject of the litigation.
Cases of unexplained wealth are similar to cases of bribery or dereliction of duty and no
reason is seen why these two classes of cases cannot be excepted from the rule making bank
deposits confidential. The policy as to one cannot be different from the policy as to the other.
This policy expresses the notion that a public office is a public trust and any person who enters
upon its discharge does so with the full knowledge that his life, so far as relevant to his duty,
is open to public scrutiny.
c. G.R No. L- 18360, Tatalon Barrio Council, et. al v. The Chief Accountant of the Bank
of the Philippine Island, et. al January 31, 1963.
Facts:
• Tatalon Barrio Council, represented by Chairman Raymundo Familara and Erlando
Espeleta, filed a criminal complaint against several respondents, including the Bank
of the Philippine Islands (BPI).
• The complaint alleged violation of certain provisions of the law.
• The council sought access to the respondents' savings and current accounts held at
BPI.
• Access was denied due to the protection provided by Republic Act No. 1405, which
prohibits the disclosure of information regarding bank deposits.
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
Issue:
• Whether the Tatalon Barrio Council has the right to access the savings and current
accounts of the respondents held at BPI, despite the protection provided by Republic
Act No. 1405.
Ruling:
• The court ruled in favor of the respondents and affirmed the lower court's decision
to dismiss the action brought by the Tatalon Barrio Council.
• The court held that savings and current accounts are privileged documents protected
by Republic Act No. 1405.
• The disclosure of such accounts can only be justified under the exceptions
enumerated in Section 2 of the Act, which do not include the prosecution of criminal
actions for violation of the law.
Ratio:
• The court based its decision on the provisions of Republic Act No. 1405, which
considers all deposits with banks in the Philippines as absolutely confidential and
not subject to examination or inquiry by any person or government official, except
under certain circumstances.
• The court emphasized that the Tatalon Barrio Council's case did not fall under any
of the exceptions provided in the law.
• Therefore, the bank was not obligated to disclose the savings and current accounts
of the respondents.
• The court also noted that the investigating fiscal's role is to determine whether a
prima facie case exists, and coercive orders compelling the disclosure of privileged
documents are not necessary for such determination.
d. G.R No. 189206, Government Service Insurance System v. The Honorable 15 th
division of the court of appeals, et. al, June 8, 2011.
FACTS:
On December 13, 1996, a surety bond was agreed with DOMSAT HOLDINGS, INC. as the
principal and the GSIS as administrator and the obliges are Land Bank of the Philippines,
Tong Yang Merchant Bank, Industrial Bank of Korea and First Merchant Banking Corporation
collectively known as “The Banks” with the loan granted to DOMSAT of US $ 11,000,000.00
to be used for the financing of the two-year lease of a Russian Satellite from INTERSPUTNIK.
Domsat failed to pay the loan and GSIS refused to comply with its obligation reasoning that
Domsat did not use the loan proceeds for the payment of rental for the satellite. GSIS alleged
that Domsat, with Westmont Bank as the conduit, transferred the U.S. $11 Million loan
proceeds from the Industrial Bank of Korea to Citibank New York account of Westmont Bank
and from there to the Binondo Branch of Westmont Bank. The Banks filed a complaint before
the RTC of Makati against Domsat and GSIS.
Case Digest
GSIS requested for the issuance of a subpoena duces tecum to the custodian of records of
Westmont Bank to produce bank ledger covering the account of Domsat with the Westmont
Bank (now United Overseas Bank) and other pertinent documents. The RTC issued the
subpoena but nonetheless, the RTC then granted the second motion for reconsideration by
“The Banks” to quash the subpoena granted to GSIS.
GSIS assailed its case to the CA and CA partially granted it’s petition allowing it to look into
documents but not the bank ledger because the US $ 11,000,000.00 deposited by Domsat to
Westmont Bank is covered by R.A. 6426 or the Bank Secrecy Law.
GSIS now filed a petition for certiorari in the Supreme Court for the decision of CA allowing
the quashal by the RTC of a subpoena for the production of bank ledger.
ISSUE:
Whether or not the deposited US $ 11,000,000.00 by Domsat, Inc. to Westmont Bank is
covered by R.A. 6426 as what “The Banks” contend or it is covered by R.A. 1405 as what
GSIS contends.
RULING:
The Supreme Court ruled in favor of R.A. 6426 and thereby AFFIRMING the decision of Court
of Appeals.
R.A. 1405 was enacted on 1955 while R.A. 6426 was enacted on 1974. These two laws both
support the confidentiality of bank deposits. There is no conflict between them. Republic Act
No. 1405 was enacted for the purpose of giving encouragement to the people to deposit their
money in banking institutions and to discourage private hoarding so that the same may be
properly utilized by banks in authorized loans to assist in the economic development of the
country. It covers all bank deposits in the Philippines and no distinction was made between
domestic and foreign deposits. Thus, Republic Act No. 1405 is considered a law of general
application. On the other hand, Republic Act No. 6426 was intended to encourage deposits
from foreign lenders and investors. It is a special law designed especially for foreign currency
deposits in the Philippines. A general law does not nullify a specific or special law. Generalia
specialibus non derogant. Therefore, it is beyond cavil that Republic Act No. 6426 applies in
this case.
Intengan v. Court of Appeals affirmed the above-cited principle and categorically declared that
for foreign currency deposits, such as U.S. dollar deposits, the applicable law is Republic Act
No. 6426.
In said case, Citibank filed an action against its officers for persuading their clients to transfer
their dollar deposits to competitor banks. Bank records, including dollar deposits of petitioners,
purporting to establish the deception practiced by the officers, were annexed to the complaint.
Petitioners now complained that Citibank violated Republic Act No. 1405. Supreme Court
ruled that since the accounts in question are U.S. dollar deposits, the applicable law therefore
is not Republic Act No. 1405 but Republic Act No. 6426.
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
e. G.R No. 128996, Carmen Intengan, Rosario Neri and Rita Brawner v. Court of Appeals,
et. al, February 15, 2002.
FACTS: On September 21, 1993, Citibank filed a complaint for violation of section 31 in
relation to section 144 of the Corporation Code against two (2) of its officers, Dante L. Santos
and Marilou Genuino.
The complaint was attached with the affidavit of Vic Lim, VP of Citibank, who was then
instructed by the higher management of the bank to investigate the anomalous/highly irregular
activities of the said officers.
As evidence, Lim annexed bank records purporting to establish the deception practiced by
Santos and Genuino. Some of the documents pertained to the dollar deposits of petitioners
Carmen Ll. Intengan, Rosario Ll. Neri, and Rita P. Brawner.
In turn, private respondent Joven Reyes, vice-president/business manager of the Global
Consumer Banking Group of Citibank, admits to having authorized Lim to state the names of
the clients involved and to attach the pertinent bank records, including those of petitioners’
Petitioners aver that respondents violated RA 1405 (Bank Secrecy Law).
ISSUES: Whether or not Respondents are liable for violation of Secrecy of Bank Deposits
Act, RA 1405.
RULING: NO. The accounts in question are U.S. dollar deposits; consequently, the applicable
law is not Republic Act No. 1405, but Republic Act (R.A.) No. 6426, known as the “Foreign
Currency Deposit Act of the Philippines,” section 8 of which provides: Sec. 8. Secrecy of
Foreign Currency Deposits.—All foreign currency deposits authorized under this Act, as
amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized
under Presidential Decree 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 such 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.
Thus, 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.
A case for violation of Republic Act No. 6426 should have been the proper case brought
against private respondents. Private respondents Lim and Reyes admitted that they had
disclosed details of petitioners’ dollar deposits without the letter’s written permission. It does
not matter if that such disclosure was necessary to establish Citibank’s case against Dante L.
Santos and Marilou Genuino. Lim’s act of disclosing details of petitioners’ bank records
Case Digest
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.
f. G.R No. L- 56429, Banco Filipino Savings and Mortgage Bank v. Hon. Fidel Purisima,
et. al, May 28, 1988.
FACTS:
Manuel Caturla, special agent of the Bureau of Customs, was accused by BIR before the
Tanodbayan of having allegedly acquired property manifestly out of proportion to his salary
and other lawful income, in violation of the “AntiGraft and Corrupt Practices Act.” In the course
of the preliminary investigation thereof, the Tanodbayan issued a subpoena duces tecum to
the Banco Filipino Savings & Mortgage Bank, commanding its representative to appear at the
Office of the Tanodbayan and furnish the latter with duly certified copies of the records of the
loans, savings and time deposits and other banking transactions appearing in the names of
Caturla, his wife, their children and friends.
Caturla moved to quash the subpoena duces tecum arguing that compliance therewith would
result in a violation of Sections 2 and 3 of the Law on Secrecy of Bank Deposits. Then
Tanodbayan not only denied the motion for lack of merit, and directed compliance with the
subpoena, but also expanded its scope through a second and third subpoena duces tecum.
BF Bank took over from Caturla in the effort to nullify the subpoenae. It filed a complaint for
declaratory relief with the CFI of Manila, praying for a judicial declaration as to whether its
compliance with the subpoenae duces tecum would constitute an infringement of the
provisions of Sections 2 and 3 of R.A. No. 1405 in relation to Section 8 of R.A. No. 3019. It
also asked that pending final resolution of the question, the Tanodbayan be provisionally
restrained from exacting compliance with the subpoenae.
It further argues that subpoenae in question are in the nature of "fishing expeditions" or
"general warrants" since they authorize indiscriminate inquiry into bank records; that,
assuming that such an inquiry is allowed as regards public officials under investigation for a
violation of the Anti-Graft & Corrupt Practices Act, it is constitutionally impermissible with
respect to private individuals or public officials not under investigation on a charge of violating
said Act.
Respondent Judge Purisima issued an Order denying for lack of merit the application by BF
Bank for a preliminary injunction and/or restraining order.
This Order is now impugned in the instant certiorari action instituted by BF Bank before this
Court, as having been issued with grave abuse of discretion, amounting to lack of jurisdiction.
ISSUE:
WON the “Law on Secrecy of Bank Deposits” prohibit production by subpoena duces tecum
of bank records of transactions by or in the names of the wife, children and friends of the
accused. (NO)
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
HELD:
No. The Law on Secrecy of Bank Deposit does not prohibit production by subpoena of bank
records of transactions of the spouse, children and friends of the accused.
The provisions of R.A. No. 1405 subject of BF’s declaratory action, read as follows:
Sec. 2. All deposits of whatever nature with banks or banking institutions in the Philippines
including investments in bonds issued by the Government of the Philippines, its political
subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential
nature and may not be examined, inquired or looked into by any person, government official,
bureau or office, EXCEPT upon written permission of the depositor, or in cases of
impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of
public officials, or in cases where the money deposited or invested is the subject matter of
litigation.
In Philippine National Bank v. Gancayco, we upheld the judgment of the Trial Court “sustaining
the power of the defendants (special prosecutors of the Department of Justice) to compel the
disclosure (by PNB) of bank accounts of ACCFA Administrator Jimenez (then under
investigation for unexplained wealth),.. (it being ruled) that, by enacting section 8 of the Anti-
Graft and Corrupt Practices Act, Congress clearly intended to provide an additional ground
for the examination of bank deposits ..
xxx
While Republic Act No. 1405 provides that bank deposits are “absolutely confidential and
therefore may not be examined, inquired or looked into,” except in those cases enumerated
therein, the Anti-Graft Law directs in mandatory terms that bank deposits “shall be taken into
consideration in the enforcement of this section, notwithstanding any provision of law to the
contrary.” The only conclusion possible is that section 8 of the Anti-Graft Law is
intended to amend section 2 of Republic Act No. 1405 by providing an additional
exception to the rule against the disclosure of bank deposits.
Congress clearly intended to provide an additional ground for the examination of bank
deposits for without such provision, the prosecutors would be hampered if not altogether
frustrated in the prosecution of those charged with having acquired unexplained wealth while
in public office.
xxx
Cases of unexplained wealth are similar to cases of bribery or dereliction of duty and no
reason is seen why these two classes of cases cannot be excepted from the rule making bank
deposits confidential. This policy expresses the notion that a public office is a public trust and
any person who enters upon its discharge does so with the full knowledge that his life, so far
as relevant to his duty, is open to public scrutiny.
The petition for certiorari is DISMISSED.
Case Digest
g. G.R No. L- 34964, China Banking Corporation and Taan Kim Liong v. Hon. Wenceslao
Ortega, January 31, 1973.
FACTS:
Vicente Acaban won in a civil case for sum of money against B & B Forest Development
Corporation. To satisfy the judgment, the Acaban sought the garnishment of the bank deposit
of the B & B Forest Development Corporation with the China Banking Corporation (CBC).
Accordingly, a notice of garnishment was issued by the Deputy Sheriff of the trial court and
served on said bank through its cashier, Tan Kim Liong. Liong was ordered to inform the Court
whether or not there is a deposit in the CBC of & B Forest Development Corporation, and if
there is any deposit, to hold the same intact and not allow any withdrawal until further order
from the Court. CBC and Liong refuse to comply with a court process garnishing the bank
deposit of a judgment debtor by invoking the provisions of Republic Act No. 1405 ( Secrecy
of Bank Deposits Act) which allegedly prohibits the disclosure of any information concerning
to bank deposits.
ISSUES: Whether or not a banking institution may validly refuse to comply with a court
processes garnishing the bank deposit of a judgment debtor, by invoking the provisions of
Republic Act No. 1405.
RULING: NO. The lower court did not order an examination of or inquiry into deposit of B & B
Forest Development Corporation, as contemplated in the law. It merely required Tan Kim
Liong to inform the court whether or not the defendant B & B Forest Development Corporation
had a deposit in the China Banking Corporation only for the purposes of the garnishment
issued by it, so that the bank would hold the same intact and not allow any withdrawal until
further order. It is sufficiently clear that the prohibition against examination of or inquiry into
bank deposit under RA 1405 does not preclude its being garnished to insure satisfaction of a
judgment. Indeed there is no real inquiry in such a case, and the existence of the deposit is
disclosed the disclosure is purely incidental to the execution process. It is hard to conceive
that it was ever within the intention of Congress to enable debtors to evade payment of their
just debts, even if ordered by the Court, through the expedient of converting their assets into
cash and depositing the same in a bank.
h. G.R No. 84526, Philippine Commercial and Industrial Bank and Jose Henares v. Court of
Appeals and Marinduque Mining and Industrial Corporation, January 28, 1991.
i. Mellon Bank N.A v. Magsino, 190 scra 633 1990
DOCTRINE/S:
Remedial Law
a) Interlocutory Order
Does not dispose of the case completely but leaves something more to be done upon its
merits.
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
b) Meaning of "election of remedies"
Election of remedies refers to the choice by a party to an action of one of two or more
coexisting remedial rights, where several such rights arise out of the same facts, but the term
has been generally limited to a choice by a party between inconsistent remedial rights, the
assertion of one being necessarily repugnant to, or a repudiation of, the other. In its technical
and more restricted sense, election of remedies is the adoption of one of two or more
coexisting remedies, with the effect of precluding a resort to the others.
c) Purpose of "election of remedies"
Purpose of the doctrine of election of remedies to prevent double redress for a single wrong.
It is regarded as an application of the law of estoppel, upon the theory that a party cannot, in
the assertion of his right occupy inconsistent positions which form the basis of his respective
remedies.
c) When "election of remedies" is binding
No binding election occurs before a decision on the merits is had or a detriment to the other
party supervenes. This is because the principle of election of remedies is discordant with the
modern procedural concepts embodied in the Code of Civil Procedure which Permits a party
to seek inconsistent remedies in his claim for relief without being required to elect between
them at the pleading stage of the litigation.
Banking Law
a) Section 2 of Republic Act No. 1405 on the secrecy of bank deposits
- 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:
Short version: Mellon Bank made a mistake in transferring $1M to Javier’s account instead of
just $1K. Javier with the help of the other respondents appropriated the amount for himself.
Mellon then filed a complaint against Javier et al. before Superior Court of California and Court
of First Instance in the Philippines. The RTC at first conditionally allowed the testimonies of
Baylosis and Red about the transactiom. But their testimonies were later stricken off the
record. RTC dimissed the case. Mellon then filed the instant petition for certiorari.
Long version: Ventosa requested the transfer of $1,000 from the First National Bank Javier in
Manila through the Prudential Bank. Accordingly, the First National Bank requested the
petitioner, Mellon Bank, to effect the transfer. Unfortunately the wire sent by Mellon Bank to
Manufacturers Hanover Bank, a correspondent of Prudential Bank, indicated the amount
transferred as “US$1,000,000.00” instead of US$1,000.00. Hence Manufacturers Hanover
Bank transferred one million to the Prudential Bank for the account of Javier. Javier then
appropriated the amount with the help of the other respondents.
Mellon Bank filed a complaint in the Superior Court of California against Melchor Javier, Jane
Doe Javier, Honorio Poblador, Jrn, and Does I through V. Mellon Bank also filed in the Court
of First Instance complaint against the Javier spouses, Honorio Poblador, Jr., Domingo L.
Jhocson, Jr., Jose Marquez, Roberto Gariño, Elnor Investment Co., Inc., F.C. Hagedorn &
Case Digest
Co., Inc. and Paramount Finance Corporation. After its amendment, Rafael Caballero and Tri-
Arc Investment & Management Company, Inc. were also named defendants.
The RTC at first conditionally allowed the testimonies of Baylosis and Red about the bank
transaction. But their testimonies were later stricken off the record on the grounds of res inter
alios acta, immateriality, irrelevancy and confidentiality due to RA 1405.
The RTC dimissed the case for lack of cause of action. Subsequently, Mellon’s 2 Motions for
Reconsideration were denied by the RTC. Hence, Mellon Bank filed the instant petition for
certiorari claiming that the resolution of September 10, 1982 and the orders of October 28,
1983 and July 9, 1985 are void for being unlawful and oppressive exercises of legal authority,
subversive of the fair administration of justice, and in excess of jurisdiction.
ISSUE/S:
1) WON CFI gravely abused its discretion in ruling that the resolution of September 10, 1982
is a "final and definitive disposition" of petitioner's claim for the purchase price of the Kern
property?
2) WON Republic Act No. 1405 on the secrecy of bank deposits prohibits the disclosure of an
account deposit which is relevant and material to the resolution of the case?
3) WON the principle of election of remedies bars recovery of Mellon Bank?
HELD:
1)YES. An interlocutory order is one which does not dispose of the case completely but leaves
something more to be done upon its merits. In this case, the resolution is interlocutory
because the issue resolved therein is merely the admissibility of the plaintiff's evidence. It
only orders that the testimonies of Baylosis and Red and the documents they testified on
should be stricken from the record. As such, there are things left undone in Civil Case No.
26899 after the issuance of the September 10, 1982 resolution not only because of its explicit
dispositive portion but also due to the fact that even until now, the case is still pending and
being heard.
2) NO. Section 2 of said law allows the disclosure of bank deposits in cases where the money
deposited is the subject matter of the litigation. In the instant case, 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.
3) NO. Respondents, with the exception of the Javiers, failed to raise “election of remedies”
as a defense in their answers and therefore, by virtue of Section 2, Rule 9 of the Rules of
Court, such defense is deemed waived. Having been waived as a defense, it cannot be
treated as if it has been raised in a motion to dismiss based on the nonexistence of a cause
of action.
Moreover, granting that the defense was properly raised, it is inapplicable in this case. Election
of remedies refers to the choice by a party to an action of one of two or more coexisting
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
remedial rights, where several such rights arise out of the same facts, but the term has been
generally limited to a choice by a party between inconsistent remedial rights, the assertion of
one being necessarily repugnant to, or a repudiation of, the other. In its technical and more
restricted sense, election of remedies is the adoption of one of two or more coexisting
remedies, with the effect of precluding a resort to the others.
It should be noted that the remedies pursued in the California case and in Civil Case No.
26899 are not exactly repugnant or inconsistent with each other. If ever, they are merely
alternative in view of the inclusion of parties in the latter case who are not named defendants
in the former. The causes of action, although they all stem from the erroneous transmittal of
dollars, are distinct as shown by the complaints lengthily set out above. The bar of an election
of remedies does not apply to the assertion of distinct causes of action against different
persons arising out of independent transactions.
j. Marquez v. Desierto, 359 scra 722 2001
DOCTRINE/S:
Banking Law
a) Bank deposits are “absolutely confidential”; Exceptions.
GR: bank deposits are “absolutely confidential” (Section 2 of the Secrecy of Bank Deposits
Law, as amended)
Exceptions:
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
3. Where the depositor consents in writing;
4. Impeachment case;
5. By court order in bribery or dereliction of duty cases against public officials;
6. Deposit is subject of litigation;
7. Sec. 8, R. A. No. 3019, in cases of unexplained wealth (PNB vs. Gancayco)
b) Requisites for an in camera inspection
1. There must be a pending case before a court of competent jurisdiction.
2. The account must be clearly identified.
3. The inspection is limited to the subject matter of the pending case before the court of
competent jurisdiction.
4. The bank personnel and the account holder must be notified to be present during the
inspection.
5. Inspection may cover only the account identified in the pending case.
Case Digest
c) Invasion of privacy is an offense in special laws like the Anti-Wiretapping Law, the Secrecy
of Bank Deposits Act, and the Intellectual Property Code.
FACTS:
SHORT VERSION: Petitioner Marquez, a Branch Manager of Union Bank. received an Order
from the Ombudsman to produce several bank documents for purposes of inspection in
camera relative to various accounts maintained at said Bank. The accounts to be inspected
were involved in a case pending with the Ombudsman. Marquez agreed to an in camera
inspection. But later on, Marquez wrote the Ombudsman that he could not comply with the
in camera inspection since the accounts in question could not readily be identified. Marquez
asked for time to respond to the order. But the Ombudsman issued an order directing Marquez
to produce the said bank documents stating that her persistent refusal to comply with the
order is unjustified and is punishable as Indirect Contempt. Petitioner Marquez received a
copy of the motion to cite her for contempt. Petitioner filed with the Ombudsman an opposition
to the motion to cite her in contempt on the ground that the filing thereof was premature due
to the petition pending in the lower court.
LONG VERSION: Petitioner Marquez received an Order from the Ombudsman Ato produce
several bank documents for purposes of inspection in camera relative to various accounts
maintained at Union Bank where petitioner was the branch manager. The accounts to be
inspected were involved in a case pending with the Ombudsman entitled. The Order was
grounded on Section 15 of RA 6770 (Ombudsman Act of 1989) which modifies the law on the
Secrecy of Bank Deposits (R.A. 1405) and places the office of the Ombudsman in the same
footing as the courts of law in this regard.”
The basis of the Ombudsman in ordering an in camera inspection of the accounts was a trail
of managers checks (MCs) purchased by one Trivinio, a respondent in the case pending with
the office of the Ombudsman. It appeared that Trivinio purchased MCs at Traders Royal Bank
(TRB) and 11 of MCs in were deposited and credited to an account maintained at Union Bank.
Petitioner agreed to an in camera inspection. However, later on, Marquez wrote the
Ombudsman that the accounts in question could not readily be identified since the checks
were issued in cash or bearer, and asked for time to respond to the order. Marquez surmised
that these accounts had long been dormant, hence were not covered by the new account
number generated by the UB system, thus sought to verify from the Interbank records
archives for the whereabouts of these accounts.
The Ombudsman, responding to the request of Marquez for time to comply with the order,
stated that UBP-Julia Vargas, not Interbank, was the depositary bank of the subject TRB MCs
as shown at its dorsal portion and as cleared by the Philippine Clearing House.
Notwithstanding the fact that the checks were payable to cash or bearer, the name of the
depositor(s) could easily be identified since the account numbers where said checks were
deposited were identified in the order. Even assuming that the accounts were already
classified as dormant accounts, the bank was still required to preserve the records pertaining
to the accounts within a certain period of time as required by existing banking rules and
regulations.
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
The Ombudsman issued an order directing Marquez to produce the bank documents relative
to the accounts in issue, stating that her persistent refusal to comply with the order is
unjustified and is punishable as Indirect Contempt.
Marquez together with UBP filed a petition for declaratory relief, prohibition and injunction with
the RTC against the Ombudsman allegedly because the Ombudsman and other persons
acting under his authority were continuously harassing her to produce the bank documents
relative to the accounts in question. Moreover, , the Ombudsman issued another order stating
that unless she appeared before the FFIB with the documents requested, Marquez would be
charged with indirect contempt and obstruction of justice.
The lower court denied petitioner’s prayer for a temporary restraining order stating that since
petitioner failed to show prima facie evidence that the subject matter of the investigation is
outside the jurisdiction of the Office of the Ombudsman, no writ of injunction may be issued
by the RTC to delay the investigation pursuant to Section 14 of the Ombudsman Act of 1989.
Petitioner filed a motion for reconsideration but was denied.
Petitioner received a copy of the motion to cite her for contempt. Petitioner then filed with the
Ombudsman an opposition to the motion to cite her in contempt on the ground that the filing
thereof was premature due to the petition pending in the lower court. Petitioner likewise
reiterated that she had no intention to disobey the orders of the Ombudsman. However, she
wanted to be clarified as to how she would comply with the orders without her breaking any
law, particularly RA 1405.
ISSUE/S: WON 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 (RA
1405).
HELD: NO. The requisites in order for an In camera inspection to be allowd are: there must
be a pending case before a court of competent jurisdiction; 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.
In the case at bar, there is yet no pending litigation before any court of competent authority.
What is existing is an investigation by the office of the Ombudsman. Clearly, there was no
pending case in court which would warrant the opening of the bank account for inspection.
Case Digest
k. Ejercito v. Sandiganbayan, 509 scra 190, 2006)
FACTS:
The Special Prosecution Panel filed before the Sandiganbayan a Request for Issuance of
Subpoena Duces Tecum for the issuance of a subpoena directing the President of Export and
Industry Bank (EIB, formerly Urban Bank) or his/her authorized representative to produce
documents relating to Trust Account No. 858 and Savings Account of President Estrada. The
SB granted the request.
Estrada filed a Motion to Quash the subpoenas claiming 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. The SB denied the motion.
ISSUE/S:
1. Is the Trust Account covered by the term “deposit”under the Bank Secrecy Law?
2. Are the Trust and Savings Accounts of Estrada excepted from the protection of the Bank
Secrecy Law?
3. Does the fruit of poisonous tree principle apply?
RULING:
1. YES. 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
Estrada and Urban Bank provides that the trust account covers “deposit, placement or
investment of funds”by Urban Bank for and in behalf of Estrada. The money deposited under
Trust Account No. 858, was, therefore, intended not merely to remain with the bank but to be
invested by it elsewhere. To hold that this type of account is not protected by R.A. 1405 would
encourage private hoarding of funds that could otherwise be invested by banks in other
ventures, contrary to the policy behind the law.
The phrase “of whatever nature”proscribes any restrictive interpretation of
“deposits.”Moreover, it is clear from the immediately quoted provision that, generally, the law
applies not only to money which is deposited but also to those which are invested. This further
shows that the law was not intended to apply only to “deposits”in the strict sense of the word.
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
Otherwise, there would have been no need to add the phrase “or invested.” Clearly, therefore,
R.A. 1405 is broad enough to cover Trust Account No. 858.
2. YES. The protection afforded by the law is, however, not absolute, there being recognized
exceptions thereto, as abovequoted Section 2 provides. In the present case, two exceptions
apply, to wit: (1) the examination of bank accounts is upon order of a competent court in cases
of bribery or dereliction of duty of public officials, and (2) the money deposited or invested is
the subject matter of the litigation.
Estrada contends that since plunder is neither bribery nor dereliction of duty, his accounts are
not excepted from the protection of R.A. 1405. He is wrong. Cases of unexplained wealth are
similar to cases of bribery or dereliction of duty and no reason is seen why these two classes
of cases cannot be excepted from the rule making bank deposits confidential. The policy as
to one cannot be different from the policy as to the other. This policy expresses the notion that
a public office is a public trust and any person who enters upon its discharge does so with the
full knowledge that his life, so far as relevant to his duty, is open to public scrutiny. An
examination of the “overt or criminal acts as described in Section 1(d)”of R.A. No. 7080 would
make the similarity between plunder and bribery even more pronounced since bribery is
essentially included among these criminal acts. Plunder being thus analogous to bribery, the
exception to R.A. 1405 applicable in cases of bribery must also apply to cases of plunder.
The plunder case now pending with the SB necessarily involves an inquiry into the
whereabouts of the amount purportedly acquired illegally by former President Joseph
Estrada. 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.
In sum, exception (1) applies since the plunder case pending against former President
Estrada is analogous to bribery or dereliction of duty, while exception (2) applies because the
money deposited in petitioner’s bank accounts is said to form part of the subject matter of the
same plunder case.
3. NO. The “fruit of the poisonous tree”principle, which states that once the primary source
(the “tree”) is shown to have been unlawfully obtained, any secondary or derivative evidence
(the “fruit”) derived from it is also inadmissible, does not apply in this case. In the first place,
R.A. 1405 does not provide for the application of this rule. R.A. 1405, it bears noting, nowhere
provides that an unlawful examination of bank accounts shall render the evidence obtained
therefrom inadmissible in evidence. Moreover, there is no basis for applying the same in this
case since the primary source for the detailed information regarding petitioner’s bank
accounts—the investigation previously conducted by the Ombudsman—was lawful.
Case Digest
l. PNB v. Gancayco, 122 Phil. 503 1965)
DOCTRINE/S:
Banking Law
a) Section 2 of Republic Act 1405
GR: Section 2 of Republic Act 1405 declares bank deposits to be "absolutely confidential,"
Exception:
(1) Upon written permission of the depositor;
(2) In cases of impeachment;
(3) Upon order of a competent court in cases of bribery or dereliction of duty of public officials;
(4) In cases where the money deposited is the subject matter of the litigation.
b) Additional exception of the Bank Secrecy Law: Unexplained wealth in Anti-graft cases
Section 8 of the Anti-Graft Law is intended to amend Section 2 of Republic Act No. 1405 by
providing an additional exception to the rule against the disclosure of bank deposits. This is
because no reconciliation can be made between the two laws since these laws are si
repugnant to each other.
c) Cases of unexplained wealth are similar to cases of bribery or dereliction of duty
The policy as to one cannot be different from the policy as to the other. This policy express
the motion that a public office is a public trust and any person who enters upon its discharge
does so with the full knowledge that his life, so far as relevant to his duty, is open to public
scrutiny. Hence unexplained wealth is considered as one of the exceptions of the Bank
Secrecy Law.
FACTS: Defendants Gancayco et al., as special prosecutors of DOJ, required the plaintiff
PNB to produce at a hearing the records of the bank deposits of Jimenez. Jimenez was the
former administrator of the Agricultural Credit and Cooperative Administratio , who was then
under investigation for unexplained wealth. In declining to reveal its records, the plaintiff bank
invoked Section 2 of Republic Act No. 1405 (Bank Secrecy Law).
On the other hand, the defendants cited Section 8 of Republic Act 3019 (Anti-Graft and
Corrupt Practices Act) which provides that “if a a public official has been found to have
acquired during his incumbency an amount of property and/or money manifestly out of
proportion to his salary and to his other lawful incomecome, that fact shall be a ground for
dismissal or removal… Bank deposits shall be taken into consideration in the enforcement of
this section, notwithstanding any provision of law to the contrary.” Defendants alleged that
this provides an additional ground for the examination of bank deposits and demanded that
they produce the records or be prosecuted for contempt. Because of the threat of prosecution,
plaintiffs filed an action for declaratory judgment with the CFI.
ISSUE/S:
1) WON the (Anti-Graft and Corrupt Practices Act) which took effect on August 17, 1960 is a
general law which cannot be deemed to have impliedly repealed section 2 of RA 1405 (Bank
Secrecy Law).
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
2) WON a bank can be compelled to disclose the records of accounts of a depositor who is
under investigation for unexplained wealth.
HELD:
1) NO. Republic Act No. 1405 and Republic Act No. 3019 are so repugnant to each other than
no reconciliation is possible. Republic Act No. 1405 provides that bank deposits are
"absolutely confidential ... and [therefore] may not be examined, inquired or looked into,"
except in those cases enumerated therein. On the other hand, the Anti-Graft Law directs in
mandatory terms that bank deposits "shall be taken into consideration in the enforcement of
this section, notwithstanding any provision of law to the contrary." Hence, the only conclusion
possible is that section 8 of the Anti-Graft Law is intended to amend section 2 of Republic Act
No. 1405 by providing additional exception to the rule against the disclosure of bank deposits.
Hence unexplained wealth (constitute as an additional exception under the Bank Secrecy
Law.
2) YES. The Anti-Graft Law made unexplained wealth in anti-graft cases an additional
exception under the Bank Secrecy Law.
With regard to the claim that disclosure would be contrary to the policy making bank deposits
confidential, it is enough to point out that while Section 2 of Republic Act No. 1405 declares
bank deposits to be “absolutely confidential,” it nevertheless allows such disclosure in the
following instances: (1) Upon written permission of the depositor; (2) In cases of
impeachment; (3) Upon order of a competent court in cases of bribery or dereliction of duty
of public officials; (4) In cases where the money deposited is the subject of the litigation.
Cases of unexplained wealth are similar to cases of bribery or dereliction of duty and no
reason is seen why these two classes of cases cannot be excepted from the rule making bank
deposits confidential. The policy as to one cannot be different from the policy as to the other.
This policy expresses the notion that a public office is a public trust and any person who enters
upon its discharge does so with the full knowledge that his life, so far as relevant to his duty,
is open to public scrutiny.
m. China Banking Corporation v. Ortega, 49 SCRA 355, 197
DOCTRINE/S:
Banking Law
a) Inquiry into existence if bank deposits and garnishment not covered by the Bank Secrecy
Law provided under nder Republic Act 1405
- Prohibition against examination of or inquiry into a bank deposit under Republic Act 1405
does not preclude its being garnished to insure satisfaction of a judgment.
- It is not the intention of the lawmakers to place bank deposits beyond the reach of execution
to satisfy a final judgment through Republic Act 1405.It is hard to conceive that it was ever
within the intention of Congress to enable debtors to evade payment of their just debts, even
if ordered by the Court, through the expedient of converting their assets into cash and
depositing the same in a bank.
Case Digest
FACTS: Acaban won in a civil case for collection of a sum of money against B & B Forest
Development Corporation. To satisfy the judgment, the Acaban sought the garnishment of the
bank deposit of the B & B Forest with the China Bank. A notice of garnishment was issued by
the Deputy Sheriff of the trial court and served on said bank through its cashier, Liong. Liong
was ordered to inform the Court whether or not there is a deposit in the China Bank of B & B
and if there is any deposit, to hold the same intact and not allow any withdrawal until further
order from the Court. China Bank and Liong refused to comply with a court order since they
alleged that Republic Act No. 1405 (An Act Prohibiting Disclosure of or Inquiry into Deposits
with any Banking Institution) prohibits the disclosure of any information concerning to bank
deposits. China Bank further alleges that Section 2 of Republic Act No. 1405 enumerates the
exception to the Bank Secrecy law but the disclosure of the information required by the court
does not fall within any of the four (4) exceptions.
ISSUE/S: WON a banking institution may validly refuse to comply with a court processes
garnishing the bank deposit of a judgment debtor, by invoking the provisions of Republic Act
No. 1405.
HELD: NO. The prohibition against examination of or inquiry into a bank deposit under
Republic Act 1405 does not preclude its being garnished to insure satisfaction of a judgment.
In the present case, there was no inquiry as to how much the actual deposits are. The only
inquiry that the court had was whether or not there are deposits of the then defendants in
China bank and if there are, for the Bank hold the same intact and not allow any withdrawal
until further order.
It is not the intention of the lawmakers to place bank deposits beyond the reach of execution
to satisfy a final judgment through Republic Act 1405.It is hard to conceive that it was ever
within the intention of Congress to enable debtors to evade payment of their just debts, even
if ordered by the Court, through the expedient of converting their assets into cash and
depositing the same in a bank.
n. Soriano v. Manuzon, C.A G.R S.P No. 87643
Before this Court is a Petition for Certiorari under Rule 65 of the Rules of Court seeking to
annul and set aside as having been issued by public respondent Undersecretary of Justice,
with grave abuse of discretion amounting to excess of jurisdiction, the following: (1) Resolution
dated February 13, 2003 of the Department of Justice dismissing the petitioner's petition for
review of the Resolution of the Office of the City Prosecutor of Manila dated February 14,
2002; and (2) Resolution dated August 27, 2004 3 of the Department of Justice denying
petitioner's Motion for Reconsideration.
FACTS: On September 29, 2000, Mrs. Melinda S. Manuzon, the former Head of the Treasury
Department of RBSM, executed an affidavit where she disclosed that on December 1997,
herein complainant Hilario P. Soriano opened the following accounts with the San Miguel
Branch of RBSM bank:
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended)
a) Savings Account No. 0104-08338-7 Signatories – Mr. Hilario Soriano and Mr.
Marces Perez
b) Savings Account No. 0104-08339-5 Signatories – Mr. Hilario Soriano and Mrs.
Melinda Manuzon
Mrs. Manuzon later on submitted the said affidavit with the Department of Justice, City of
Manila.
Thus, on August 13, 2001, Mr. Soriano filed a criminal complaint against Mrs. Manuzon for
Violation of R.A. 1405, otherwise known as the Secrecy of Bank Deposits Law.
In her Counter-Affidavit, Mrs. Manuzon alleged that the prohibitions under R.A. 1405 do not
apply to a bank under receivership like in the case of RBSM.
In response thereto, Mr. Soriano filed his Reply-Affidavit where he stated that there is nothing
under R.A. 1405, as amended, which stated that the prohibitions stated therein does not apply
to a bank under receivership, much less, if the bank is already undergoing liquidation.
On October 30, 2001, Mrs. Manuzon filed her Rejoinder Affidavit where she reiterated her
claim that R.A. 1405, as amended, does not apply to bank under receivership.
On February 14, 2002, Assistant City Prosecutor Pedro B. Salonga issued the questioned
resolution recommending the dismissal of the complaint for Violation of R.A. 1405 against
Mrs. Melinda S. Manuzon.
On appeal, the public respondent affirmed the Assistant City Prosecutor's resolution in
this manner:
xxx xxx xxx “Under Section 12, in relation to Section 7, of Deparment Circular No.
70 dated July 3, 2000, the Secretary of Justice may motu propio dismiss outright the
appeal if there is no showing of any reversible error in the questioned resolution or
when the issues raised therein are too unsubstantial to require consideration. We
carefully examined the petition and its attachments and found no such error
committed by the prosecutor that would justify a reversal of the assailed resolution
which is in accord with the law and evidence on the matter.
CONSEQUENTLY, the petition for review is hereby DISMISSED. SO ORDERED.”
Its Motion for Reconsideration having been denied, petitioner filed the instant petition
anchored on the following ground, hence: The Resolution dismissing the petition as well
as the Resolution denying herein petitioner's motion for reconsideration, were issued
with grave abuse of discretion amounting to lack of jurisdiction since the dismissal
has no support in fact and in law.
The petition lacks merit.
Case Digest
It should be noted, in the first place, that the sole office of a writ of certiorari is the correction
of errors of jurisdiction including the commission of grave abuse of discretion amounting to
lack or excess of jurisdiction. The familiar rule is that grave abuse of discretion exists when
the questioned act of the DOJ was exercised capriciously and whimsically as is equivalent to
lack or in excess of jurisdiction. It does not include correction of public respondent DOJ's
findings which hardly qualifies as grave abuse of discretion. In a long line of cases, the
Supreme Court held:
“Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, or in other words where the power
is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility, and it must be so patent and gross as to amount to an invasion of positive
duty or to a virtual refusal to preform the duty enjoined or to act at all in contemplation
of the law.
There is grave abuse of discretion where the respondent acts in a capricious,
whimsical, arbitrary or despotic manner in the exercise of his judgment as to be said
to be equivalent to lack of jurisdiction. (Nepomuceno vs. Court of Appeals, 303 SCRA
679 [Feb. 15, 1999] citing Nable, 72 Phil. 278 [1941]; Abad Santos v. Province of
Tarlac, 66 Phil. 480; Alafriz v. Nable, 62 Phil. 278; Republic of the Philippines v.
Villarama, Jr., 278 SCRA 736; Lalican v. Vergara, 276 SCRA 158).”
In the case at bench, there is no showing that public respondent DOJ exceeded its jurisdiction
in rendering the assailed Resolutions. Neither public respondent DOJ rendered the assailed
Resolutions with grave abuse of discretion. Petitioner in this case has not proven such
allegation of grave abuse of discretion on the part of the DOJ.
What is being sought here is the annulment of the Resolutions by the public respondent DOJ
so that the filing of an information/complaint for Violation of R.A. 1405, as amended, otherwise
known as the Secrecy of Bank Deposits Law may prosper against private respondent Melinda
S. Manuzon, who executed an affidavit allegedly narrating the accounts of the petitioner. Such
demand would involve an interpretation of the said law – R.A. 1405, which is certainly beyond
the province of the extraordinary writ of certiorari. But even then, as held by the public
respondent DOJ, the Assistant City Prosecutor's finding that there was no violation
whatsoever by the private respondent of Republic Act No. 1405 has basis at all.
First, it must be noted that the RBSM (Rural Bank of San Miguel) was placed under
receivership on January 21, 2000, and it has been then under liquidation. Private respondent
executed the affidavit on September 29, 2000 – long after RBSM was closed by BSP.
Under Section 30 of R.A. 7653, otherwise known as the New Central Bank Act, when a bank
is placed under receivership or liquidation, it presupposes that the BSP Monetary Board (MB)
had already forbidden the bank from doing business in the Philippines and, the MB had
designated the Philippine Deposit Insurance Corporation (PDIC) as the bank's statutory
receiver.
 Secrecy of Bank Deposits (R.A. 1405 and R.A. 6426, as amended) Case Digest

Thus, logically, having forbidden to do business, RBSM could no longer perform the functions
of a banking institution, and the only reason for its existence is to wind up its corporate affairs,
gather its assets and settle its obligations. Thus, the disclosure by private respondent of the
bank account is not a prohibited act under R.A. 1405 inasmuch as RBSM is not anymore a
“banking institution” within the spirit and letter of the law.
Whether or not petitioner China Bank is correct in its submission that the Citibank dollar
checks with both Jose Gotianuy and/or Mary Margaret Dee as payees, deposited with China
Bank, may not be looked into under the law on secrecy of foreign currency deposits.
RULING: NO.

Second, it cannot be gainsaid that petitioner's alleged act of irregularities will be covered by
the impunity offered by R.A. 1405, as amended. To sustain petitioner's theory would make
available to person who made anomalies an easy means of evading prosecution. It must be
stressed that the execution of the affidavit relates to whether the petitioner
diverted/misappropriated RBSM funds. Thus, the disclosure is purely incidental. It is hard to
conceive that it was ever within the intention of Congress to consider such disclosure within
the purview of the prohibition of the Bank Secrecy Law under R.A. 1405.
Finally, the action of public respondent DOJ dismissing petitioner's Petition for Review and in
denying the Motion for Reconsideration, if erroneous, is an error of judgment not error of
jurisdiction, and therefore, certiorari cannot lie.
WHEREFORE, in view of the foregoing, the instant petition is DENIED for lack of merit. The
assailed Resolutions of the Department of Justice in I.S. No. 01H-32320 are AFFIRMED. SO
ORDERED.
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.
In the case at bar, there is no issue as to the source of the funds. Mary Margaret Dee declared
the source to be Jose Gotianuy. There is likewise no dispute that these funds in the form of
Citibank US dollar Checks are now deposited with China Bank. As the owner of the funds
unlawfully taken and which are undisputably now deposited with China Bank, Jose Gotianuy
has the right to inquire into the said deposits.

o. China Banking Corporation v. Court of Appeals, 511 SCRA 110, 2006

FACTS: 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). He
likewise accused his son-in-law, George Dee, husband of his daughter, Mary Margaret, of
transferring his real properties and shares of stock in George Dees name without any
consideration. Jose Gotianuy, died during the pendency of the case before the trial court. He
was substituted by his daughter, Elizabeth Gotianuy Lo. The latter presented the US Dollar
checks withdrawn by Mary Margaret Dee from his US dollar placement with Citibank.

RTC ruling: As the foreign currency fund is deposited with the movant China Banking
Corporation, the disclosure only as to the name or in whose name the said fund is deposited
is not violative of the law.

China Bank filed a Petition for Certiorari with the Court of Appeals.

ISSUE/S: