China Banking Corp (CBC) vs.

Ortega
G.R. No. L-34964 January 31, 1973 Makalintal, J.
Nature/Keyword: Disclosure or inquiry with any banking institution
Petitioners: Respondents:
China Bank Corporation (CBC) Hon. Wenceslao Ortega
Tan Kim Liong Foreign Affair Sec. Domingo Siazon
Recit Ready Summary
The plaintiff, Vicente Acaban filed a complaint against Bautista Logging Co., Inc. and Marino
Bautista for the collection of a sum of money. Upon motion of the plaintiff, the court declared
the defendants in default for failure to answer within the prescribe period and authorized the
Deputy Clerk to receive the plaintiff’s evidence. The judgement results to a default against the
defendants (Bautista Logging Co., Inc. and Marino Bautista). The plaintiff seized the bank
deposit of the defendant (B&B Development corporation) with the China Banking Corporation.
A notice of garnishment was issued by the Deputy Sheriff of the trial court which was given to
the cashier of the bank (Tan Kim Liong). In reply, Tan Kim Liong (bank cashier) told the Deputy
Sheriff that according to the provision of Republic Act. 1405 states that it prohibits the
disclosure of any information relative to the bank deposits. On March 4, 1972, Vicente Acaban
(plaintiff) filed a motion to Tan Kim Liong for contempt of court but it was denied. Eventhough
the case against Tan Kim Liong was denied, he was ordered to inform the court within five days
whether there is a deposit in China Bank Corporation of the defendant (B&B Forest
Development Corporation) and if there is any deposit, they must hold the same intact and not
allow withdrawal until further order by court. Tan Kim Liong moved to reconsider was turned
down on March 27, 1972. In the same order, he was asked to comply with the order on March
4, 1972 within 10 days otherwise he will be arrested. With the two orders (March 4, 1972 and
March 27, 1972), the China Bank Corporation and Tan Kim Liong made a petition. The petitioner
argues that a disclosure of information regarding B&B Forest Development Corporation is
against the provision of RA 1405 but the lower court only asked whether the B&B Development
corporation had a deposit which is not the examination or inquiry of the deposit. The final
judgement of the lower court was to affirm with the March 4 and 27, 1972 orders with the cost
against the petitioners-appellants (China Bank Corporation and Tan Kim Liong).
Facts of the case
1. On December 17, 1968 Vicente Abacan filed a complaint in the court against Bautista Logging
Co., Inc. and Marino Bautista for the collection of a sum of money. Upon motion of the plaintiff,
the court declared the defendants in default for failure to answer within the prescribe period
and authorized the Deputy Clerk to receive the plaintiff’s evidence. The judgement results to a
default against the defendants (Bautista Logging Co., Inc. and Marino Bautista).
2. The plaintiff seized the bank deposit of the defendant (B&B Development corporation) with
the China Banking Corporation. A notice of garnishment was issued by the Deputy Sheriff of the
trial court which was given to the cashier of the bank (Tan Kim Liong). In reply, Tan Kim Liong
(bank cashier) told the Deputy Sheriff that according to the provision of Republic Act. 1405
states that it prohibits the disclosure of any information relative to the bank deposits.
3. On March 4, 1972, Vicente Acaban (plaintiff) filed a motion to Tan Kim Liong for contempt of
court but it was denied. Eventhough the case against Tan Kim Liong was denied, he was
ordered to inform the court within five days whether there is a deposit in China Bank
Corporation of the defendant (B&B Forest Development Corporation) and if there is any
deposit, they must hold the same intact and not allow withdrawal until further order by court.
4. There were two orders specifically the March 4, 1972 which is complying with the order of
the court within five days and the March 27, 1972 which is to comply with the order within 10
days. The order of the lower court was to inform them whether the B&B Development
corporation had a deposit and refusing to do the order will result to an arrest. Tan Kim Liong
and China Bank Corporation thus they refused with the order and filed a petition against Hon.
Wenceslao and Vicente Abacan.
Issue Ruling
1. W/N China Bank Corporation may validly refuse to comply NO
with a court process garnishing the bank deposit of the judgement
debtor, by invoking the provision of RA 1405
Rationale/ Legal Basis
The petitioner argue that the disclosure of information required by the court does not fall
within any of the four-exceptions enumerated in Section 2 of the RA. 1405 which states that

Section 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 the litigation.

Thus, they will be criminally liable if they refuse to comply with the provision of RA 1405 as
stated in Section 5 of the RA 1405

Section 5. Any violation of this law will subject offender upon conviction, to an imprisonment of
not more than five years or a fine of not more than twenty thousand pesos or both, in the
discretion of the court.

The lower court did not order an examination of or inquiry into the deposit of B&B Forest
Development Corporation rather they required Tan Kim Liong to inform the court whether or not
the B&B Forest Development Corporation had a deposit in China Bank Corporation only for the
purpose of garnishment in which the bank will hold the same intact and not allow withdrawal
until further order. With this, the prohibition against examination or inquiry in to the bank
deposit under RA 1405 does not forbid it. In the present case, there was no inquiry of the how
much the actual deposits since the intent of the court was to only know whether or not the
defendant has a deposit in the China Bank Corporation.

Disposition
The orders of the lower court dated March 4 and 27, 1972, respectively, are hereby affirmed cost
against the petitioners- appellants (China Bank Corporation and Tan Kim Liong)