Banco Filipino v Monetary Board et al
G.R. No. 70054 | July 8, 1986
Petitioner: BANCO FILIPINO
Respondents: MONETARY BOARD, ET AL., respondents.
Topic: Disqualification by Reason of Marriage/ Privileged Communication
Facts
Subject of this "Petition to Set Aside Order to Produce Documents dated 17 February
1986" is the Order of Branch 136, RTC, Makati, granting the motion of the petitioner
herein, based on Section 1, Rule 27, of the Rules of Court, for the production,
inspection, and copying of certain papers and records which are claimed as needed
by the Petitioner Bank for the preparation of its comments, objections, and exceptions
to the Conservator's report dated January 8, 1985, and Receiver's Report dated
March 19, 1985.
 The documents now asked to be produced, inspected, and copied are:
o (1) Copies of tapes and transcripts of the Monetary Board (MB)
deliberations on the closure of Banco Filipino (BF) and its meeting
on July 27, 1984, and March 22, 1985; 
o (2) Copies of the letter and reports of first conservator, Mr. Basilio
Estanislao, to the MB and to Central Bank Governor Jose
Fernandez; 
o (3) Papers showing computations of all the interests and penalties
charged by the CB against BF;  Dept. It (SES) Reports, copies of which were given to it pursuant to
o (4) Schedule of recommended valuation of reserves per Mr.
Tiaoqui's report dated March 19, 1985;  o (2) The Supreme Court in its referral of October 8, 1985 to the RTC
o (5) Adjustment per Annex "C" of Mr. Tiaoqui's report;  Makati intended full evidence taking of the proceeding for judicial
o (6) Annexes"A","B",and"C"of the joint report of Mr. Tiaoqui, Mr.
Aurellano, and Mrs. Valenzuela;  trial court being better equipped for evidence taking.
o (7) Schedule of devaluation of CB premises of Paseo de Roxas of
same report; 
o (8) Schedule of BF's realizable assets from P5,159.44 B to
P3,909.23 B as of January 25, 1985;  1
o (9) Documents listed in BF's letter to Mrs. Carlota Valenzuela dated
October 25, 1985.  given matter, said member shall not participate in the discussion or resolution of the matter and must retire
 In issuing the challenged order, the court below took the view that the SC’s
resolution referring to it the matters relative to the bank's closure does not
preclude the petitioner from availing of this mode of discovery as an
additional means of preparing for the hearing.
o It considered the documents sought to be produced as not
privileged because these constitute or contain evidence material to
the issues into by the Court.
o These materials are said to comprise of records of the
administrative proceedings conducted by respondent's officials and
representatives from the inception of and preparation of the
challenged reports and the resolution placing petitioner under
receivership and thereafter under liquidation as it is the regularity
and impartiality of these administrative proceedings which are being
assailed by the petitioner, the trial court saw no reason why said
documents should be thus concealed from it. 
 Respondents Monetary Board and Central Bank take exception to the said
order and pray in their petition before this Court for the reversal and setting
aside of the same. The grounds recited in support of their petition are:
o (1) The ratiocination of the trial court is wholly in error because the
proceedings before it do not at all deal with either the administrative
proceedings conducted by the respondents or the regularity and
impartiality of the CB actions on BF; it does so simply upon the
charge that no "hearing" was given BF prior to those actions of
closure and liquidation. However, no such prior hearing had been
called as none is required by the law and by the Supreme Court
decisions in force to this date
o (2) The tapes and transcripts of the MB deliberations are
confidential pursuant to Ses 13 and 15 of the Central Bank Act.1 
o (3) The Monetary Board deliberations were necessarily held
subsequent to the submission of the CB reports. They did not enter
into the making of those reports and can have no materiality to any
question of fact that may be raised in relation to their contents. 
 On April 16, 1986, Petitioner Banco Filipino filed its Comment on
Respondent's petition to set aside the order for the production of the
documents. In said pleading, the petitioner bank assails the respondent's
petition on the following grounds: 
o (1) There is no reason why Banco Filipino should not be furnished
the documents, particularly Nos. 3 to 9 of its motion, when these
are merely attachments to the Supervision and Examination Sector,
a Supreme Court order. 
review of administrative action filed with the Supreme Court, the
 
Sec. 13. Withdrawal of persons having a personal interest. Whenever any member attending a meeting of
the Monetary Board has a material personal interest, directly or indirectly, in the discussion or resolution of any
from the meeting during the deliberation thereon. The subject matter, when resolved, and the fact that a
member had a personal interest in it, shall be made available to the public. The minutes of the meeting shall
note the withdrawal of the member concerned. (As amended by PD No. 1827). 
Sec. 15. Responsibility. — Any member of the Monetary Board or officer or employee of the Central Bank who
wilfully violates this Act or who is guilty of gross negligence in the performance of his duties shall be held liable
for any loss or injury suffered by the Bank as a result of such violation or negligence. Similar responsibility
shall apply to the disclosure of any information of a confidential nature about the discussion or resolutions of
the Monetary Board, except as required in Section 13 of this Act, or about the operations of the Bank, and to
the use of such information for personal gain or to the detriment of the Government, the Bank or third parties.
(As amended by Presidential Decree No. 72).
 o (3) The respondents cannot claim privilege in refusing to produce to the board itself or to the Central Bank. The transcripts of
the Central Bank records because it is based only on the stenographic notes on the deliberations of the MB are not official
generalized interest in confidentiality. Petitioner cites as a records of the CB; they are taken merely to assist the Secretary of
precedent the doctrine established in the case of U.S. vs. Nixon, the MB in the preparation of the minutes of the meetings. And as
which states that "when the ground for asserting privilege as to advertedly also, the tape recordings are not available as these are
subpoenaed materials sought for use in a criminal case is based used over and over again. 
only on the generalized interest in confidentiality, it cannot prevail  The motion for the production of the subject documents was filed by
over the fundamental demands of due process of law."  petitioner pursuant to Section 1, Rule 27, of the Rules of Court.
o (4) The requested documents and records of the Central Bank are o It has been held that "a party is ordinarily entitled to the production
material and relevant because BF is entitled to prove from the CB of books, documents and papers which are material and relevant to
records (a) that Governor Fernandez closed BF without a MB the establishment of his cause of action or defense" (General
resolution and without examiner's reports on the financial position Electric Co. vs. Superior Court in and for Alameda County).
of BF; (b) that a MB resolution was later made to legalize the BF o "The test to be applied by the trial judge in determining the
closure but it had no supporting examiner's report; (c) that the relevancy of documents and the sufficiency of their description is
earlier reports did not satisfy respondent Governor Fernandez and one of reasonableness and practicability" (Line Corp. of the
he ordered the examiners and the conservator, Gilberto Teodoro, to Philippines vs. Moran).
"improve" them; and (d) that the reports were then fabricated.  o "On the ground of public policy, the rules providing for production
 Petitioner adds that what respondents fear is disclosure of their proceedings and inspection of books and papers do not authorize the production
because petitioner has accused the CB governor of (a) covering 51% of its or inspection of privileged matter, that is, books, papers which
stockholding, (b) encashing BF securities in trickles as fuel a run, (c) because of their confidential and privileged character could not be
appointing a conservator when the President ordered the MB to grant received in evidence" (27) CJS 224).
petitioner a P 3 Billion credit line, (d) replacing Estanislao with Gilberto o "In passing on a motion for discovery of documents, the courts
Teodoro when the former wanted to resume normal operations of BF, and should be liberal in determining whether or not documents are
(e) changing the conservatorship to receivership when it appointed Carlota relevant to the subject matter of action" (Hercules Powder Co. vs.
Valenzuela as receiver again without hearing.  Haas Co).
 On May 13, 1986, Respondent Monetary Board filed their Reply to Petitioner o Likewise, "any statute declaring in general terms that official
Bank's Comment dated April 15, 1986. Respondents argue that:  records are confidential should be liberally construed, to have an
o (1) The case of U.S. vs. Nixon and the other decisions cited by implied exception for disclosure when needed in a court of justice"
petitioner are inapplicable because-  (Wigmore on Evidence, Vol. VIII, p. 801, citing the case of Marbury
 a) The authorities cited refer only to a claim of privilege vs. Madison, 1 Cr. 137,143). 
based only on the generalized interest of confidentiality or
on an executive privilege that is merely presumptive. On
ISSUE W/N the Court below committed grave abuse of discretion in granting
the other hand, the so-called MB deliberations are petitioner’s motion for the production of the documents enumerated herein – NO
privileged communications pursuant to Section 21, Rule
130 of the Rules of Court because statements and
opinions expressed in the deliberation of the members of Held
the MB are specifically vested with confidentiality under
Secs. 13 and 15 of the Central Bank Act. The "public  In the light of the jurisprudence above-cited, this Court holds that no GAOD
interest" requirement for non-disclosure is evident from the was committed by the court below in granting petitioner's motion for the
fact that the statute punishes any disclosure of such production of the documents enumerated herein.
deliberations.   We accept the view taken by the court below that the documents are not
 b) Petitioner has not in the least shown any relevance or privileged and that these constitute or contain evidence material to the
need to produce the alleged MB deliberations. What issues being inquired into by the Court. 
petitioner intends to prove are not "issues" raised in the  With respect to Items Nos. 3 to 9, these are the annexes to the Supervision
pleadings of the main petition.  and Examination Sector, Dept. II (SES) Reports submitted to the Central
o (2) Petitioner is interested, not in discovering evidence, but in Bank and Monetary Board which were taken into consideration by said
practicing oppression by the forced publication of the MB members' respondents in closing petitioner bank.
confidential statements at board meetings.  o A copy of the SES Reports was furnished to the petitioner. We,
o (3) The so-called deliberations of the Monetary Board are in truth therefore, fail to see any proper reason why the annexes thereto
merely the individual statements and expressions of opinion of its should be withheld.
members. They are not statements or opinions that can be imputed
 o Petitioner cannot adequately study and properly analyze the report
without the corresponding annexes. Pertinent and relevant, these
could be useful and even necessary to the preparation by petitioner
of its comment, objections and exceptions to the Conservator's
reports and receiver's reports.  sought by petitioner.
 Regarding copies of the letter and reports of first Conservator, Mr. Basilio
Estanislao, to the Monetary Board and to Central Bank Governor Fernandez
(Item No. 2) these appear relevant as petitioner has asserted that the above-
named Conservator had in fact wanted to resume normal operations of
Banco Filipino but then he was thereafter replaced by Mr. Gilberto Teodoro.
The letter and reports could be favorable or adverse to the case of petitioner
but whatever the result may be, petitioner should be allowed to photocopy
the same.  
 As to the tapes and transcripts of the Monetary Board deliberations on the
closure of Banco Filipino and its meetings on July 27, 1984, and March 22,
1985, (Item No. 1), respondents contend that "it is obvious from the
requirement (Sections 13 and 15 of the Central Bank Act) that the subject
matter (of the deliberations), when resolved. . . shall be made available to
the public but the deliberations themselves are not open to disclosure but
are to be kept in confidence."
o This Court, however, sees it in a different light. The deliberations
may be confidential but not necessarily absolute and privileged.
o There is no specific provision in the Central Bank Act, even in
Sections 13 and 15 thereof, which prohibits absolutely the courts
from conducting an inquiry on said deliberations when these are
relevant or material to a matter subject of a suit pending before it.
The disclosure is here not intended to obtain information for
personal gain.
o There is no indication that such disclosure would cause detriment to
the government, to the bank or to third parties. Significantly, it is the
bank itself here that is interested in obtaining what it considers as
information useful and indispensably needed by it to support its
position in the matter being inquired to by the court below. 
 On the other hand, respondents cite Section 21, Rule 130, Rules of
Court which states: 
o Section 21. Privileged Communications. The following persons
cannot testify as to matters learned in confidence in the following
cases: 
o (e) A public officer cannot be examined during his term of office or
afterwards, as to communications made to him in official
confidence, when the court finds that the public interest would
suffer by disclosure. 
 But this privilege, as this Court notes, is intended not for the protection
of public officers but for the protection of public interest (Vogel vs.
Gruaz 110 U.S. 311 cited in Moran, Comments on the Rules of Court, 1980
Ed. Vol. 5, p. 211). Where there is no public interest that would be
prejudiced, this invoked rule will not be applicable. 
o The rule that a public officer cannot be examined as to
communications made to him in official confidence does not apply
when there is nothing to show that the public interest would suffer
by the disclosure question. ( Agnew vs. Agnew,'52 SD 472, cited in
Martin Rules of Court of the Philippines, 3rd Edition, Vol. 5, p. 199). 
 In the case at bar, the respondents have not established that public
interest would suffer by the disclosure of the papers and documents
 Considering that petitioner bank was already closed as of January 25, 1985,
any disclosure of the aforementioned letters, reports, and transcripts at this
time pose no danger or peril to our economy. Neither will it trigger any bank
run nor compromise state secrets. Respondent's reason for their resistance
to the order of production are tenuous and specious. If the respondents
public officials acted rightfully and prudently in the performance of their
duties, there should be nothing at all that would provoke fear of disclosure 
On the contrary, public interests will be best served by the disclosure of the
documents. Not only the banks and its employees but also its numerous
depositors and creditors are entitled to be informed as to whether or not
there was a valid and legal justification for the petitioner's bank closure. It will
be well to consider that— 
o Public interest means more than a mere curiosity; it means
something in which the public, the community at large, has some
pecuniary interest by which their legal rights or liabilities are
affected (State vs. Crocket, 206, p. 816 cited in Words and
Phrases, Vol. 35, p. 229). 
IN VIEW OF ALL THE FOREGOING, the order to produce documents dated February
17, 1986 issued by the court below in S.C.- G.R. No. 70054, is hereby affirmed,
except as to the copies of the tapes relative to the Monetary Board deliberations on
the closure of Banco Filipino on January 25, 1985 and its meetings on July 27, 1984,
and March 22, 1985 and only if such tapes are actually no longer available taking into
account respondent Monetary Board's manifestations that the tape recording of the
deliberations of that Board are, for purposes of economy, used over and over again
inasmuch as these tapes are not required to be kept or stored. (See Respondent's
Reply, dated May 12, 1986; Rollo, Vol. IV, pp. 1288-1289).
SO ORDERED.