Exemption against garnishment

G.R. No. 94723 August 21, 1997

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural
Guardian, and Spouses FEDERICO N. SALVACION, JR., and EVELINA E.
SALVACION
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION and
GREG BARTELLI y NORTHCOTT

FACTS:

Bartelli, an American tourist, coaxed and lured petitioner Karen Salvacion (Karen), then
12 years old to go with him to his apartment. He detained Karen 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, he was arrested and detained at the Makati
Municipal Jail.

The policemen recovered from Bartelli the following items: 1.) Dollar Check No. 368,
Control No. 021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No.
104-108758-8 (Peso Acct.); 3.) Dollar Account-China Banking Corp.,
US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door
Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear) used in seducing the complainant.

On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed against
Greg Bartelli (Bartelli), Criminal Case No. 801 for Serious Illegal Detention and
Criminal Cases Nos. 802, 803, 804, and 805 for four (4) counts of Rape. The petitioners
also filed a civil complaint (with docket number Civil Case No. 89-3214) before the
Regional Trial Court of Makati for damages with preliminary attachment against
Bartelli. The RTC Makati ordered the issuance of the writ of preliminary attachment.

Further, the Deputy Sheriff of Makati served a Notice of Garnishment on China

Banking Corporation, which invoked Republic Act No. 1405 (Law on Secrecy of Bank
Deposits) as its answer. The China Banking Corporation further invoked Section 113 of
Central Bank Circular No. 960 to the effect that the dollar deposits or defendant are
exempt from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body, whatsoever. The
Central Bank affirmed the exemption through reply on the query of petitioner’s counsel
whether Section 113 of CB Circular No. 960 is absolute in application.

Hence, this petition for declaratory relief.

ISSUE:

Whether or not Sec. 113 of the CB Circular No. 960 is applicable to foreign
transient?

HELD:

No. Sec. 113 of the CB Circular No. 960 is not applicable in this case.
The Court stated that the reason for exempting the foreign currency deposits from
attachment, garnishment or any other order or 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. It is to encourage the inflow of foreign
currency deposits into the banking institutions thereby placing such institutions more
in a position to properly channel the same to loans and investments in the Philippines,
thus directly contributing to the economic development of the country.

When the law exempting the foreign currency deposits from garnishment was enacted,
the country's economy was in a shambles and 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. The intention of the questioned law may be good
when enacted. The law failed to anticipate the iniquitous effects producing outright
injustice and inequality such as the case before us.

The foreign currency deposits made by a transient or tourist is not the kind of deposits
encouraged and protected by the invoked provision of the law. Bartelli intended to stay
only for a few days in the country and, therefore, will maintain his deposit in the bank
only for a short time.

The present petition has far-reaching implications on the right of a national to obtain
redress for a wrong committed by an alien who takes refuge under a law and regulation
promulgated for a purpose which does not contemplate the application thereof
envisaged by the alien.

The Court ruled that the provisions of Section 113 of CB Circular No. 960 and PD No.
1246, insofar as it amends Section 8 of R.A. No. 6426 are inapplicable. Respondents,
Central Bank, China Bank Corporation and Bartelli are required to comply with the
writ of execution issued in Civil Case No. 89-3214.
Exemption under AMLA

G.R. No. 174629             February 14, 2008

REPUBLIC OF THE PHILIPPINES, Represented by THE ANTI-MONEY

LAUNDERING COUNCIL (AMLC)
vs.
HON. ANTONIO M. EUGENIO, JR., AS PRESIDING JUDGE OF RTC, MANILA,
BRANCH 34, PANTALEON ALVAREZ and LILIA CHENG

FACTS:

The Compliance and Investigation Staff (CIS) of petitioner Anti-Money Laundering

Council (AMLC) conducted an intelligence database search on the financial
transactions of certain individuals involved in the concession agreement awarded to
the Philippine International Airport Terminal Corporation (PIATCO) over the Ninoy
Aquino International Airport – International Passenger Terminal 3 (NAIA 3) Project.

AMLC issued Resolution No. 75, Series of 2005 which authorizes AMLC Secretariat
"to conduct an inquiry into subject accounts once the Regional Trial Court grants
the application to inquire into and/or examine the bank accounts" of Pantaleon
Alvarez, Wilfredo Trinidad, Alfredo Liongson, and Cheng Yong. The resolution
enumerated the particular bank accounts to be subject of the inquiry. The rationale
for the said resolution was founded on the cited findings of the CIS that amounts
were transferred from a Hong Kong bank account owned by Jetstream Pacific Ltd.
Account to bank accounts in the Philippines maintained by Liongson and Cheng
Yong.
The AMLC filed an application to inquire into or examine the deposits or
investments of those four individuals before the Makati RTC. The Court rendered a
bank inquiry order granting the AMLC the authority to inquire and examine the
subject bank accounts of Alvarez, Trinidad, Liongson and Cheng Yong. The basis
for the order is Section 11 of R.A. No. 9160, as amended, otherwise known as the
Anti-Money Laundering Act (AMLA) of 2001 and Rules 11.1 and 11.2 of the Revised
Implementing Rules and Regulations.

Moreover, a letter from Special Prosecutor of the Office of the Ombudsman, Dennis
Villa-Ignacio adverted to probable cause to believe that the bank accounts "were
used in the commission of unlawful activities that were committed" in relation to
the criminal cases then pending before the Sandiganbayan.

Before the Manila RTC, an application was filed for a bank inquiry order to inquire
into and/or examine other bank accounts of Alvarez and Chen Yong. The subjects
of inquiry are thirteen (13) accounts and two (2) related web of accounts alleged as
having been used to facilitate corruption in the NAIA 3 Project. Among said
accounts were the DBS Bank account of Alvarez and the Metrobank accounts of
Cheng Yong. 
The Manila RTC granted the Ex Parte application for a bank inquiry, citing same
provision with Makati RTC.

Petitioner Alvarez alleged that he fortuitously learned of the bank inquiry order,
which was issued following an ex parte application, and he argued that nothing in
R.A. No. 9160 authorized the AMLC to seek the authority to inquire into bank
accounts ex parte. Considering that the Manila RTC bank inquiry order was
issued ex parte, without notice to those other persons, Alvarez prayed that the
AMLC be ordered to refrain from inquiring into any of the other bank deposits and
alleged web of accounts enumerated in AMLC’s application with the RTC.

Respondent Lilia Cheng filed with the Court of Appeals a Petition for Certiorari,
Prohibition and Mandamus with Application for TRO and/or Writ of Preliminary
Injunction on the decisions on Manila RTC and Makati RTC. She identified herself
as the wife of Cheng Yong with whom she jointly owns a conjugal bank account
with Citibank that is covered by the Makati RTC bank inquiry order, and two
conjugal bank accounts with Metrobank that are covered by the Manila RTC bank
inquiry order. She contended that both RTCs erred in granting the ex parte
applications for a bank inquiry order, that their constitutional right to due process
was violated.

CA issued a Temporary Restraining Order (TRO) enjoining the Manila and Makati

RTCs from implementing, enforcing or executing the respective bank inquiry orders
previously issued, and the AMLC from enforcing and implementing such orders.

Petitioner invoked that the bank inquiry orders issued by the Manila and Makati
RTCs are valid and immediately enforceable whereas the assailed rulings, which
effectively stayed the enforcement of the Manila and Makati RTCs bank inquiry
orders, are sullied with grave abuse of discretion. These conclusions flow from the
posture that a bank inquiry order, issued upon a finding of probable cause, may be
issued ex parte and, once issued, is immediately executory. The bank inquiry order
under Sec. 11 of AMLA is an exemption under the Bank Secrecy Law.

ISSUE:

Whether or not the bank inquiry order in Sec. 11 of AMLA is an exemption of Bank
Secrecy Law?

HELD:

No. The bank inquiry order cited in Sec. 11 of AMLA is not an exemption of the
Bank Secrecy Act.

It is a well-settled rule that the confidentiality of bank deposits remains a basic

state policy in the Philippines. It falls within the zones of privacy recognized by our
laws. As a general rule, the secrecy of bank deposits should be upheld.

Unless the Bank Secrecy Act is repealed or amended, the legal order is obliged to
conserve the absolutely confidential nature of Philippine bank deposits. Any
exception to the rule of absolute confidentiality must be specifically legislated.

Section 2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank
accounts may be examined by "any person, government official, bureau or office";
namely when:

(1) upon written permission of the depositor;

(2) in cases of impeachment;
(3) the examination of bank accounts is upon order of a competent court in
cases of bribery or dereliction of duty of public officials; and
(4) the money deposited or invested is the subject matter of the litigation.
Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act, has been
recognized by this Court as constituting an additional exception to the rule of
absolute confidentiality, and there have been other similar recognitions as well.

The Court ruled that the proceedings relating to the bank inquiry order under
Section 11 of the AMLA is not a "litigation" encompassed in one of the exceptions to
the Bank Secrecy Act which is when "the money deposited or invested is the
subject matter of the litigation." The orientation of the bank inquiry order is simply
to serve as a provisional relief or remedy. Under Section 11, the AMLC may inquire
into a bank account upon order of any competent court in cases of violation of the
AMLA, it having been established that there is probable cause that the deposits or
investments are related to unlawful activities as defined in Section 3(i) of the law, or
a money laundering offense under Section 4 thereof.

Section 11 also allows the AMLC to inquire into bank accounts without having to
obtain a judicial order in cases where there is probable cause that the deposits or
investments are related to kidnapping for ransom, certain violations of the
Comprehensive Dangerous Drugs Act of 2002, hijacking and other violations under
R.A. No. 6235, destructive arson and murder. Suffice it to say, the proviso
contemplates a situation distinct from the present case.

The Court dismissed the petitions for certiorari and prohibition under Rule 65
assailing said orders and resolutions issued by two different courts in two different
cases that arose from the ruling of this Court in Agan v. PIATCO.
Casual buss on the cheek, not sexual harassment

A.M. No. CTA 01-1 April 2, 2002

Atty. Susan Aquino vs. Judge Ernesto Acosta

FACTS:

Atty. Aquino, Chief of the Legal and Technical Staff of the Court of Tax Appeals
(CTA), filed an affidavit-complaint against Judge Ernesto Acosta, Presiding Judge of
CTA, for sexual harassment under RA 7877 and violation of the Canons of Judicial
Ethics and Code of Professional Responsibility.

She claimed that she was sexually harassed on the following occasions:

(1) when she entered the judge’s room to give gifts from her vacation to US, he
shook her hand, pulled her towards him and kissed her on her cheeks;
(2) the judge entered her room, greeted “Merry Christmas”, and embraced and
kissed her;
(3) she was asked by the judge to go to his chamber to discuss something, but
when she arrived, he attempted to kiss her which she was able to evade;
(4) when they were celebrating for the Senate’s approval on the proposed bill
expanding CTA’s jurisdiction, the judge placed his around her shoulders
and kissed her; and
(5) she was asked by the judge to meet him at his office, and when they were
left alone, the judge grabbed and kissed her.

Judge Acosta denied her allegations. The investigating justice recommended that
there was no sexual harassment.

ISSUE:

Whether or not the judge’s gestures constitute sexual harassment?

HELD:

No. The Court ruled that there was no convincing evidence to prove the allegations.

The Court held that they perceive the acts he committed as casual gestures of
camaraderie and friendship, nothing more, nothing less.

In the kissing complaint, there was no indication that such act was motivated by
malice or lewd design. The actuations cannot be construed as work-related sexual
harassment under RA 7877 since there was no showing that the judge demanded,
requested or required any sexual favor to Atty. Aquino in exchange for favorable
compensation, terms, condition, promotion or privileges as specified under Section
3 of the said Act.

While the Court exonerated the judge from charges, he was admonished not to
commit similar acts against Atty. Aquino or any other female employee of CTA,
otherwise, his conduct may be construed as tainted with impropriety.