1. INTENGAN vs.

COURT OF APPEALS
G.R. No. 128996, February 15, 2002
PONENTE: DE LEON, JR., J.:.

FACTS: On September 21, 1993, Citibank filed a complaint for violation of section 31 (Section
31 of the Corporation Code in acquiring "any interest adverse to the corporation in respect of
any matter which has been reposed in him in confidence.") in relation to section 144 of the
Corporation Code against two (2) of its officers, Dante L. Santos ( Treasurer of the Global
Consumer Group of the bank) and Marilou Genuino (Assistant Vice President in the office of Mr.
Dante L. Santos also performed the duties of an Account Officer).

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.

The investigation was undertaken because the bank had found records/evidence showing that
Mr. Dante L. Santos and Ms. Malou Genuino, contrary to their disclosures and the
aforementioned bank policy, appeared to have been actively engaged in business endeavors
that were in conflict with the business of the bank. It was found that with the use of two (2)
companies in which they have personal financial interest, namely Torrance Development
Corporation and Global Pacific Corporation, they managed or caused existing bank
clients/depositors to divert their money from Citibank, N.A., such as those placed in peso and
dollar deposits and money placements, to products offered by other companies that were
commanding higher rate of yields. This was done by first transferring bank clients’ monies to
Torrance and Global which in turn placed the monies of the bank clients in securities, shares of
stock and other certificates of third parties. It also appeared that out of these transactions, Mr.
Dante L. Santos and Ms. Marilou Genuino derived substantial financial gains.

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’

In his memorandum, the Solicitor General described the scheme as having been conducted in
this manner:

First step: Santos and/or Genuino would tell the bank client that they knew of financial products
of other companies that were yielding higher rates of interests in which the bank client can place
his money. Acting on this information, the bank client would then authorize the transfer of his
funds from his Citibank account to the Citibank account of either Torrance or Global.

The transfer of the Citibank client’s deposits was done through the accomplishment of either an
Application For Manager’s Checks or a Term Investment Application in favor of Global or
Torrance that was prepared/filed by Genuino herself.
Upon approval of the Application for Manager’s Checks or Term Investment Application, the
funds of the bank client covered thereof were then deposited in the Citibank accounts of
Torrance and/or Global.

Second step: Once the said fund transfers had been effected, Global and/or Torrance would
then issue its/ their checks drawn against its/their Citibank accounts in favor of the other
companies whose financial products, such as securities, shares of stocks and other certificates,
were offering higher yields.

Third step: On maturity date(s) of the placements made by Torrance and/or Global in the other
companies, using the monies of the Citibank client, the other companies would then. return the
placements to Global and/or Torrance with the corresponding interests earned.

Fourth step: Upon receipt by Global and/or Torrance of the remittances from the other
companies, Global and/or Torrance would then issue its/their own checks drawn against their
Citibank accounts in favor of Santos and Genuino.

The amounts covered by the checks represent the shares of Santos and Genuino in the
margins Global and/or Torrance had realized out of the placements [using the diverted monies
of the Citibank clients] made with the other companies.

Fifth step: At the same time, Global and/or Torrance would also issue its/their check(s) drawn
against its/their Citibank accounts in favor of the bank client.

The check(s) cover the principal amount (or parts thereof) which the Citibank client had
previously transferred, with the help of Santos and/or Genuino, from his Citibank account to the
Citibank account(s) of Global and/or Torrance for placement in the other companies, plus the
interests or earnings his placements in other companies had made less the spreads made by
Global, Torrance, Santos and Genuino.

The complaints which were docketed as I.S. Nos. 93-9969, 93-10058 and 94-1215 were
subsequently amended to include a charge of estafa under Article 315, paragraph 1(b)11 of the
Revised Penal Code.

As an incident to the foregoing, petitioners filed respective motions for the exclusion and
physical withdrawal of their bank records that were attached to Lim’s affidavit.

Petitioners aver that respondents violated RA 1405 (Bank Secrecy Law).

Clearly, the disclosure of petitioners’ deposits was necessary to establish the allegation that
Santos and Genuino had violated Section 31 of the Corporation Code in acquiring "any interest
adverse to the corporation in respect of any matter which has been reposed in him in
confidence." To substantiate the alleged scheme of Santos and Genuino, private respondents
had to present the records of the monies which were manipulated by the two officers which
included the bank records of herein petitioners.

ISSUES: Whether or not Respondents are liable for violation of Secrecy of Bank Deposits Act,
RA 1405.

RULING: NO.
Actually, this case should have been studied more carefully by all concerned. The finest legal
minds in the country - from the parties’ respective counsel, the Provincial Prosecutor, the
Department of Justice, the Solicitor General, and the Court of Appeals - all appear to have
overlooked a single fact which dictates the outcome of the entire controversy. A circumspect
review of the record shows us the reason. The accounts in question are U.S. dollar deposits;
consequently, the applicable law is not Republic Act No. 1405 but Republic Act (RA) 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 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.

A violation of Republic Act No. 6426 shall subject the offender to imprisonment of not less than one
year nor more than five years, or by a fine of not less than five thousand pesos nor more than
twenty-five thousand pesos, or both. Applying Act No. 3326, the offense prescribes in eight
24 

years. Per available records, private respondents may no longer be haled before the courts for
25 

violation of Republic Act No. 6426. Private respondent Vic Lim made the disclosure in September of
1993 in his affidavit submitted before the Provincial Fiscal. In her complaint-affidavit, Intengan
26  27 

stated that she learned of the revelation of the details of her foreign currency bank account on
October 14, 1993. On the other hand, Neri asserts that she discovered the disclosure on October 24,
1993. As to Brawner, the material date is January 5, 1994. Based on any of these dates,
28  29 

prescription has set in.

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2. PHILIPPINE SAVINGS BANK (PSBANK) vs. SENATE IMPEACHMENT COURT

G.R. No. 200238 November 20, 2012

Facts: A moot and academic case is one that ceases to present a justiciable controversy by virtue
of supervening events, so that a declaration thereon would be of no practical value.

Petitioners Philippine Savings Bank (PSBank) and Pascual M. Garcia III, as President of
PSBank, filed a Petition for Certiorari and Prohibition seeking to nullity and set aside the
Resolution1 of respondent Senate of the Republic of the Philippines, sitting as an Impeachment
Court, which granted the prosecution's requests for subpoena duces tecum ad testificandum2 to
PSBank and/or its representatives requiring them to testify and produce before the
Impeachment Court documents relative to the foreign currency accounts that were alleged to
belong to then Suprerpe Court Chief Justice Renato C. Corona.

On November 5, 2012, and during the pendency of this petition, petitioners filed a Motion with
Leave of Court to Withdraw the Petition3 averring that subsequent events have overtaken the
petition and that, with the termination of the impeachment proceedings against former Chief
Justice Corona, they are no longer faced with the dilemma of either violating Republic Act No.
6426 (RA 6426) or being held in contempt of court for refusing to disclose the details of the
subject foreign currency deposits.

Issue:

Whether the Impeachment Court acted arbitrarily when it issued the assailed subpoena to
obtain information concerning the subject foreign currency deposits notwithstanding the
confidentiality of such deposits under RA 6426 has been overtaken by events.

Ruling: Yes.

The supervening conviction of Chief Justice Corona on May 29, 2012, as well as his execution
of a waiver against the confidentiality of all his bank accounts, whether in peso or foreign
currency, has rendered the present petition moot and academic.

It is well-settled that courts will not determine questions that have become moot and academic
because there is no longer any justiciable controversy to speak of. The judgment will not serve
any useful purpose or have any practical legal effect because, in the nature of things, it cannot
be enforced.4 In Gancho-on v. Secretary of Labor and Employment,5 the Court ruled:

It is a rule of universal application that courts of justice constituted to pass upon substantial
rights will not consider questions in which no actual interests are involved; they decline
jurisdiction of moot cases. And where the issue has become moot and academic, there is no
justiciable controversy, so that a declaration thereon would be of no practical use or value.
There is no actual substantial relief to which petitioners would be entitled and which would be
negated by the dismissal of the petition. (Citations omitted)

On the basis of the foregoing, the Court finds it appropriate to abstain from passing upon the
merits of this case where legal relief is no longer needed nor called for.

WHEREFORE, the petition is DISMISSED for having become moot and academic and the
temporary restraining order issued by the Court on February 9, 2012 is LIFTED.

3. Salvacion v. Central Bank of the Philippines (G.R. No. 94723)

Facts:

Greg Bartelli y Northcott, an American tourist, was charged with serious Illegal detention and
Rape of herein petitioner Karen Salvacion. Upon his arrest, it was recovered from him among
others, bank books and a dollar account with China Bank Corp. On the day of the hearing of his
petition for bail, he was able to escape from jail. Pending his arrest the criminal cases were
archived. Meanwhile, in the Civil Case against Bartelli, the Judge granted the prayer of
attachment and a notice of garnishment was served on China Bank. China Bank invoked R.A.
No. 1405 and later on, Section 113 Central Bank Circular No. 960 to the effect that the dollar
deposits of Bartelli are exempt from attachment, garnishment, or any other order or process of
any court, legislative body, government agency or any administrative body whatsoever. This
prompted petitioner’s counsel to inquire herein respondent whether the said circular has any
exception or has been repealed/amended. Respondent cited that the provision is absolute in
application. Meanwhile, the court has rendered judgment in favor of petitioners. Petitioners tried
to execute on Bartelli’s dollar deposit with China Bank but the bank invoked the CB Circular.
Thus, petitioners decided to seek relief from this Court.

Issue:

Whether or not the secrecy of foreign currency deposits should be made applicable to a foreign
transient?

Ruling: NO.

This Court finds the petition to be partly meritorious.

It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country’s
economy was in a shambles; when foreign investments were minimal and presumably, this was
the reason why said statute was enacted. 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.

In his Comment, the Solicitor General correctly opined, thus:

It is evident from the above [Whereas clauses] that the Offshore Banking System and the
Foreign Currency Deposit System were designed to draw deposits from foreign lenders and
investors (Vide second Whereas of PD No. 1034; third Whereas of PD No. 1035). It is these
deposits that are induced by the two laws and given protection and incentives by them.
Obviously, the foreign currency deposit made by a transient or a tourist is not the kind of deposit
encouraged by PD Nos. 1034 and 1035 and given incentives and protection by said laws
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.

Respondent Greg Bartelli, as stated, is just a tourist or a transient. He deposited his dollars with
respondent China Banking Corporation only for safekeeping during his temporary stay in the
Philippines.

4. China Bank v. CA (G.R. No. 140687)

Facts:

Jose Gotianuy accused his daughter Mary Margaret Dee of stealing, among his other
properties, US dollar deposits with Citibank N.A. Mary Margaret Dee received these amounts
from Citibank through checks which she allegedly deposited at petitioner China Bank. Jose
Gotianuy, died during the pendency of the case and 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. Upon motion of Elizabeth Gotianuy Lo, the trial court
issued a subpoena to employees of China Bank to testify on the case. China Bank moved for
reconsideration. The trial court resolved by directing the employees to appear at the trial of the
case only for the purpose of disclosing in whose name/s is the foreign currency fund deposited
with. CA affirmed the order of the trial court.

Issue:

Whether or not a co-depositor may inquire into the deposit without a written consent of the other
co-depositor?

Ruling: YES. [Pro Hac Vice Ruling]

The Court of Appeals, in allowing the inquiry, considered Jose Gotianuy, a co-depositor of Mary
Margaret Dee. It reasoned that since Jose Gotianuy is the named co-payee of the latter in the
subject checks, which checks were deposited in China Bank, then, Jose Gotianuy is likewise a
depositor thereof. On that basis, no written consent from Mary Margaret Dee is necessitated.

We agree in the conclusion arrived at by the Court of Appeals.

Thus, with this, 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.

On this score, the observations of the Court of Appeals are worth reiterating:

Furthermore, it is indubitable that the Citibank checks were drawn against the foreign currency
account with Citibank, NA. The monies subject of said checks originally came from the late Jose
Gotianuy, the owner of the account. Thus, he also has legal rights and interests in the CBC
account where said monies were deposited. More importantly, the Citibank checks readily
demonstrate that the late Jose Gotianuy is one of the payees of said checks. Being a co-payee
thereof, then he or his estate can be considered as a co-depositor of said checks. Ergo, since
the late Jose Gotianuy is a co-depositor of the CBC account, then his request for the assailed
subpoena is tantamount to an express permission of a depositor for the disclosure of the name
of the account holder.

All things considered and in view of the distinctive circumstances attendant to the present case,
we are constrained to render a limited pro hac vice ruling. Clearly it was not the intent of the
legislature when it enacted the law on secrecy on foreign currency deposits to perpetuate
injustice. This Court is of the view that the allowance of the inquiry would be in accord with the
rudiments of fair play, the upholding of fairness in our judicial system and would be an
avoidance of delay and time-wasteful and circuitous way of administering justice.
For the reasons stated above, the Solicitor General thus submits that the dollar deposit of
respondent Greg Bartelli 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.

In fine, the application of the law depends on the extent of its justice. Eventually, 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 Greg Bartelli. 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. “Ninguno non deue enriquecerse tortizeramente con dano de otro.” Simply
stated, when the statute is silent or ambiguous, this is one of those fundamental solutions that
would respond to the vehement urge of conscience.

IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No. 1246,
insofar as it amends Section 8 of R.A. No. 6426 are hereby held to be INAPPLICABLE to this
case because of its peculiar circumstances.