CASE DIGESTS ASSIGNMENT

REPUBLIC v. EUGENIO
G.R. No. 174629, February 14, 2008
TINGA, J.

FACTS:
● On the 24th of May 2005, the Office of the Solicitor General asked for the assiatance
of the Anti-Money Laundering Council (AMLC) through a written request in gathering
more evidence that will completely reveal the financial trail of corruption surrounding
the NAIA 3 project. The CIS of AMLC conducted an intelligence database search and
the said search revealed that the respondent Pantaleon Alvarez, maintained eight (8)
different bank accounts with (6) different banks. AMLC made a resolution then filed
an application to inquire into/examine the bank accounts of Pantaleon Alvarez,
Wilfredo Trinidad, Alfredo Liongson and Cheng Yong to the RTC of Makati, which
was soon granted by the said court. After which, AMLC filed an application before the
RTC of Manila to inquire/examine 13 accounts and two (2) related web accounts
alleged to have been used to facilitate corruption in the NAIA 3 project. Among said
accounts were the DBS bank account of Alvarez and metrobank account of Cheng
Yong that may be subject to unlawful activities. The Manila RTC issued a bank
inquiry order granting an Ex Parte application. This said bank inquiry order was
appealed by Alvarez and the said wife of Cheng Yong, Lilia Cheng

ISSUES:
● Whether or not the Anti-Money Laundering Council had the right to examine the said
accounts and is considered as an exemption to the Section 2 of the Republic Act No.
1405 or also known as the Bank Secrecy Law

RULINGS:
● In accordance with the Section 11 of AMLA, the issuance of an Ex Parte of the bank
inquiry order is not permitted. However, also under the said section, the AMLC, upon
the order of court, has the authority to inquire into bank accounts that had an
established probable cause saying that the deposits or investments in the said
account is related to any unlawful activities defined in Section 3(i) and Section 4 of
the law. However, if deposits or investment are involved in kidnapping for ransom,
had certain violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking
and other violations under R.A. No. 6235, as well as destructive arson and murder,
those said bank accounts can be inquired/examined by the AMLC even without any
judicial order. But such scenarios are absent in the said case. Nevertheless, this very
definition signifies the exceptions of AMLA to the Bank Secrecy Act.
● However, it must be noted that 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.
● Thus, due to the Bank Secrecy Act, confidentiality of any bank deposits still prevails
as one of the basic policies of the Philippines. Though the AMLA had added some
exceptions to the Bank Secrecy Act, it does not mean that the later law has
dispensed with the general rule of confidentiality to bank deposits. The rule that
states “all deposits of whatever nature with banks or banking institutions in the
Philippines x x x are hereby considered as of an absolutely confidential nature." must
still be taken account for.

_________________________________________________________________________

DOÑA ADELA EXPORT INTERNATIONAL, INC v. TIDCORP

G.R. No. 201931, February 11, 2015
VILLARAMA, JR., J.

FACTS:
● On the 23rd of August 2006, Doña Adela Export Inc.(DAEI) filed a Petition for
Voluntary Insolvency in the Regional Trial Court of Mandaluyong. August 28, 2006
the RTC, after finding the petition sufficient in both substance and form, declared
DAEI insolvent and stayed all civil proceedings against it. After which Atty. Arlene
Gonzales was appointed as its receiver, making her proceed on making necessary
reports to engage the appraisers and require the creditors to submit some proof of
their respective claims. Atty. Gonzales then filed a Motion for Parties to Enter Into
Compromise Agreement that states her proposed terms of compromise on October
22, 2010. August 11, 2011 the creditors of DAEI, TIDCORP and BPI filed a Joint
Motion to Approve Agreement. The president, Efipanio Ramos Jr., soon after filed a
Manifestation and Motion to the Agreement of TIDCORP and BPI, saying that DAEI
has a distinct personality seperate to its stockholders and officers. DAEI filed a
motion for partial consideration and claimed that TIDCORP and BPI’s agreement
imposes on it several obligations but it is not a party and signatory to the said
agreement. However, on the 14th of May 2012, the RTC denied its motion. DAEI said
that it is not a party to the compromise agreement between BPI and TIDCORP and
its silence or acquiescence is not tantamount to an admission that binds it to the
compromise agreement of the creditors, especially the waiver of confidentiality of
bank deposits. Respondent BPI counters that DAEI is estopped from questioning the
BPI-TIDCORP compromise agreement because petitioner and its counsel
participated in all the proceedings involving the subject compromise agreement and
did not object when the compromise agreement was considered by the RTC.

ISSUES:
● Whether or not the waiver of confidentiality indicated in the Joint Motion to Approve
Agreement by TIDCORP and BPI is valid and shall bound DAEI to the said provision.
RULINGS:
● R.A. No. 1405 provides for exceptions when records of deposits may be disclosed.
These are under any of the following instances: (a) upon written permission of the
depositor, (b) in cases of impeachment, (c) upon order of a competent court in the
case of bribery or dereliction of duty of public officials or, (d) when the money
deposited or invested is the subject matter of the litigation, and (e) in cases of
violation of the Anti-Money Laundering Act, the Anti-Money Laundering Council may
inquire into a bank account upon order of any competent court
● In the case above, only TIDCORP and BPI executed the Joint Motion to Approve
Agreement since there was no written consent given by DAEI or from its
representative that says they are waiving the confidentiality of its bank deposits. The
provision on the waiver of the confidentiality of petitioner’s bank deposits was merely
inserted in the agreement. It is clear therefore that petitioner is not bound by the said
provision since it was without the express consent of petitioner who was not a party
and signatory to the said agreement.

EJERCITO v. SANDIGANBAYAN
G.R. No. 157294-95, November 30, 2006
CARPIO MORALES, J.

FACTS:
● The Special Prosecution Panel filed a request for the issuance of a Subpoena Duces
Tecum before the Sandiganbayan in lieu of the Criminal Case "People v. Estrada" for
plunder, ordering the President of Export and Industry Bank or his/her authorized
representative to produce documents, specifically, the petitioner's Trust Account and
Savings Account as well as the Statement of Accounts of One Named "Jose Velarde"
and to testify thereon during the hearings. Both requests were granted by the
Sandiganbayan, and subpoenas were issued as a result. Additionally, the
Prosecution Panel's request for subpoenas was authorized and issued by
Sandiganbayan at a later time. The petitioner now filed two separate applications to
void the two issued subpoenas with the assistance of his attorney. Both the motions
and the petitioner's subsequent motions for reconsideration were refused by
Sandiganbayan.
ISSUES:
● Whether or not the trust accounts of Ejercito are considered “deposits” as defined
under the Bank Secrecy Law or R.A. no. 1405
● Whether or not the Bank Secrecy Law exempt the Trust and Savings Account of
Ejercito from protection
● Whether or not the evidence derived from the unlawful examination of bank accounts
is valid.
 CHINA BANK v. ORTEGA
G.R. No. L-34964, January 31, 1973
MAKALINTAL, J.

FACTS:
● Vicente Acaban won the civil case for the collection of a sum of money from B&B
Forest Development Corporation. Soon after he sought the garnishment of the sai
corporation with the China Banking Corporation. The Deputy Sheriff of the Trial Court
at that time issued a notice of garnishment. After which, the notice was served at the
said bank through its cashier, Tan Kim Liong. The court ordered Tan Kim Liong to
inform them whether or not B&B Forest Development Corporation made a deposit in
the China Banking Corporation, and if there is, it must be put on hold and no
withdrawals shall be permitted unless ordered by the Court. However, Tan Kim Liong,
together with the said bank, refused to follow the order stating that it violates the
provision in R.A. no 1405 that disclosure of any information regarding bank deposits
are prohibited.

ISSUES:
● Whether or not a banking institution may refuse a court order about garnishing a
certain bank deposit by quoting the provisions of R.A. no. 1405. (Bank Secrecy Law)

RULINGS:
● The court ruled No. The lower court only asked that the China Banking Corporation
and Tan Kim Liong shall inform them if B&B Forest Development Corporation made a
deposit in the said bank, and if there really is a deposit made it shall be put on hold.
Moreover, the notice that was sent by the Deputy Sheriff is not for
inquiry/examination of the bank account of B&B Forest Development Corporation, but
rather for the said bank account to be garnished and insure satisfaction of a
judgement thereof. Thus, making the order completely valid and not subject to any
violations of the provisions in the said Republic Act. Furthermore, 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.

SALVADOR v. CENTRAL BANK and CHINA BANK

G.R. No. 94723, August 21, 1997
TORRES JR., J.

FACTS:
● February 4, 1989 Greg Bartelli coaxed and lured the 12-year old Karen Salvacion to
to his apartment where the said young girl was detained and raped once on February
4, 1989 and thrice ever day from Feburuary 5 till February 7, 1989. A criminal case
for illegal detention and rape was filed against Greg Bartelli. But on February 24,
1989 a scheduled hearing for Bartelli’s petition to bail was conducted. Not long after,
Bartelli escaped jail. On March 1, 1989, the Deputy Sheriff of Makati issued a Notice
of Garnishment on China Banking Corporation. However, the said institution quoted
that the notice violated the Republic Act No. 1405. Which then soon after was replied
 by the Deputy Sheriff saying that no violations were incurred by the said garnishment
and that it was properly and legally made by virtue of a court order which has placed
the subject deposits in custodia legis. China Banking Corporation yet again replied
on March 20, 1989 saying that the dollar deposits of Greg Bartelli are exempted from
attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body, whatsoever. However, on March 29,
1990 the court rendered judgement in favor of Karen Salvacion.

ISSUES:
● Whether or not Greg Bartelli’s Dollar Account is protected by Section 113 of the
Central Bank Circular No. 960.

RULINGS:
● The court ruled No. This is due to the fact that Section 113 of the Central Bank
Circular No. 960 is not applicable to the said case since the Court only requested the
China Banking Corporation to release the dollar deposit of Greg Bartelli so that the
judgement will be satisfied. Moreover, if the said Circular No. by the Central Bank will
prevail in the case, injustice will be served to the victim, Karen Salvacion. Such case
will also violate Article 10 of the New Civil Code which states "in case of doubt in the
interpretation or application of laws, it is presumed that the lawmaking body intended
right and justice to prevail”
● Additionally, the Offshore Banking System and Foreign Currency Deposits System
are directed to foreign investors and assure them the safety of their investments.
Those deposits that are rather made by transients or tourists are not the kind of
investment targeted by the said systems since such people are believed to be
residing in the country only for a short while. Thus, making Greg Bartelli and
exemption to the said regulation given that he is considered as a transient or tourist.

CONSOLIDATED BANK v. CA
G.R. No. 91494, July 14, 1995
QUIASON., J.

FACTS:
● Starting from the year of 1977 to 1979, George King Tim Pua had applied and
secured a number of loans evidenced by promissory notes for himself as well as to
the George and George Trade Inc. After which, George King Tim Pua assigned to
SOLIDBANK the proceeds of a fire insurance policy issued by the Kerr Insurance
Company in the sum of P2,908,485 in order to ensure that the defendant's debt to
the said bank would be paid. The proceeds of the fire insurance George King Tim
Pua availed to Kerr insurance was then given to SOLIDBANK. This then applied to
George King Tim Pua's personal account that made it fully satisfied. However,
SOLIDBANK instituted a civil action against the said individual and corporation in the
once Court of first instance Manila to recover what was claimed as unpaid balances
on the three promissory notes of the loans availed by George King Tim Pua as well
as the 10% attorney's fee associated with it. After which George King Tim Pua and
the George and George trade inc. filed and claimed that there should not have any
balances left at all since the proceeds of the fire insurance was already assigned to
 them (SOLIDBANK). In addition to that statement, the latter also claims that it was
actually the bank who has a liability to them since they are the ones who haven't
given the remaining proceeds of the loan that was availed beforehand.

ISSUES:
● Whether private respondents are indebted to petitioners in the amount of 288,469.80
as held by the then Court of First Instance of Manila or whether said private
respondents are entitled to reimbursement from petitioner in the amount of
P466,182.39 as decreed by the Court of Appeals.

RULINGS:
● The court has decided that SOLIDBANK will rather reimburse George King Tim Pua
amounting 3, 616.65 pesos together with a legal interest starting September 8, 1979
until the said amount is fully paid. Additionally, the provisions of Republic Act No.
3765, also known as the "Truth in Lending Act," must be strictly followed by all banks
and non-bank financial intermediaries authorized to engage in quasi-banking
functions. They must also make the true and effective cost of borrowing an integral
part of every loan agreement, despite the Central Bank Circular No. 504 authorizing
banks to collect handling fees on loans. There is no mention of the payment of
handling fees in the promissory notes that private respondents signed. Therefore, the
petitioner bank is unable to impose such processing fees on private respondents.