G.R. No.

128996
February 15, 2002

CARMEN LL.
INTENGAN,
ROSARIO LL. NERI,
and RITA P.
BRAWNER,
petitioners,
vs.
COURT OF
APPEALS,
DEPARTMENT OF
JUSTICE, AZIZ
RAJKOTWALA,
WILLIAM
FERGUSON, JOVEN
REYES, and VIC LIM,
respondents.

DECISION

DE LEON, JR., J.:

Before us is a petition
for review on
certiorari, seeking the
reversal of the
Decision1 dated July
8, 1996 of the former
Fifteenth Division2 of
the Court of Appeals
in CA-G.R. SP No.
37577 as well as its
Resolution3 dated
April 16, 1997
denying petitioners’
motion for
reconsideration. The
appellate court, in its
Decision, sustained a
resolution of the
Department of Justice
ordering the
withdrawal of
informations for
violation of Republic
Act No. 1405 against
private respondents.

The facts are:

On September 21,
1993, Citibank filed a
complaint for
violation of section
31,4 in relation to
section 1445 of the
Corporation Code
against two (2) of its
officers, Dante L.
Santos and Marilou
Genuino. Attached to
the complaint was an
affidavit6 executed by
private respondent
Vic Lim, a vice-
president of Citibank.
Pertinent portions of
his affidavit are
quoted hereunder:

2.1 Sometime this

year, the higher
management of
Citibank, N.A.
assigned me to assist
in the investigation of
certain
anomalous/highly
irregular activities of
the Treasurer of the
Global Consumer
Group of the bank,
namely, Dante L.
Santos and the Asst.
Vice President in the
office of Mr. Dante L.
Santos, namely Ms.
Marilou (also called
Malou) Genuino. Ms.
Marilou Genuino
apart from being an
Assistant Vice
President in the office
of Mr. Dante L. Santos
also performed the
duties of an Account
Officer. An Account
Officer in the office of
Mr. Dante L. Santos
personally attends to
clients of the bank in
the effort to persuade
clients to place and
keep their monies in
the products of
Citibank, NA., such as
peso and dollar
deposits, mortgage
backed securities and
money placements,
among others.
xxx xxx x
xx

4.1 The investigation

in which I was asked
to participate 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.
5.1 In the course of
the investigation, I
was able to determine
that the bank clients
which Mr. Santos and
Ms. Genuino
helped/caused to
divert their
deposits/money
placements with
Citibank, NA. to
Torrance and Global
(their family
corporations) for
subsequent
investment in
securities, shares of
stocks and debt
papers in other
companies were as
follows:

xxx

b) Carmen Intengan

xxx
d) Rosario Neri

xxx

i) Rita Brawner

All the above

persons/parties have
long standing
accounts with
Citibank, N.A. in
savings/dollar
deposits and/or in
trust accounts and/or
money placements.
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, as follows:

a) Annex "A-6"7 - an
"Application for
Money Transfer" in
the amount of US
$140,000.00,
executed by Intengan
in favor of Citibank $
S/A No. 24367796, to
be debited from her
Account No.
22543341;
b) Annex "A-7"8 - a
"Money Transfer Slip"
in the amount of US
$45,996.30, executed
by Brawner in favor of
Citibank $ S/A No.
24367796, to be
debited from her
Account No.
22543236; and

c) Annex "A-9"9 - an
"Application for
Money Transfer" in
the amount of US
$100,000.00,
executed by Neri in
favor of Citibank $
S/A No. 24367796, to
be debited from her
Account No.
24501018.

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’.10 He
states that private
respondents Aziz
Rajkotwala and
William Ferguson,
Citibank, N.A. Global
Consumer Banking
Country Business
Manager and Country
Corporate Officer,
respectively, had no
hand in the
disclosure, and that
he did so upon the
advice of counsel.
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.

In due time, Lim and

Reyes filed their
respective counter-
affidavits.12 In
separate Memoranda
dated March 8, 1994
and March 15, 1994
2nd Assistant
Provincial Prosecutor
Hermino T. Ubana,
Sr. recommended the
dismissal of
petitioners’
complaints. The
recommendation was
overruled by
Provincial Prosecutor
Mauro M. Castro who,
in a Resolution dated
August 18, 1994,13
directed the filing of
informations against
private respondents
for alleged violation of
Republic Act No.
1405, otherwise
known as the Bank
Secrecy Law.
Private respondents’
counsel then filed an
appeal before the
Department of Justice
(DOJ). On November
17, 1994, then DOJ
Secretary Franklin M.
Drilon issued a
Resolution14
ordering, inter alia,
the withdrawal of the
aforesaid
informations against
private respondents.
Petitioners’ motion
for reconsideration15
was denied by DOJ
Acting Secretary
Demetrio G. Demetria
in a Resolution dated
March 6, 1995.16

Initially, petitioners
sought the reversal of
the DOJ resolutions
via a petition for
certiorari and
mandamus filed with
this Court, docketed
as G.R. No. 119999-
120001. However, the
former First Division
of this Court, in a
Resolution dated
June 5, 1995,17
referred the matter to
the Court of the
Appeals, on the basis
of the latter tribunal’s
concurrent
jurisdiction to issue
the extraordinary
writs therein prayed
for. The petition was
docketed as CA-G.R.
SP No. 37577 in the
Court of Appeals.

On July 8, 1996, the

Court of Appeals
rendered judgment
dismissing the
petition in CA-G.R. SP
No. 37577 and
declared therein, as
follows:

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.

Although petitioners
were not the parties
involved in IS. No. 93-
8469, their accounts
were relevant to the
complete prosecution
of the case against
Santos and Genuino
and the respondent
DOJ properly ruled
that the disclosure of
the same falls under
the last exception of
R.A. No. 1405. That
ruling is consistent
with the principle laid
down in the case of
Mellon Bank, N.A. vs.
Magsino (190 SCRA
633) where the
Supreme Court
allowed the
testimonies on the
bank deposits of
someone not a party
to the case as it found
that said bank
deposits were
material or relevant to
the allegations in the
complaint.
Significantly,
therefore, as long as
the bank deposits are
material to the case,
although not
necessarily the direct
subject matter
thereof, a disclosure
of the same is proper
and falls within the
scope of the
exceptions provided
for by R.A. No. 1405.

xxx xxx x
xx

Moreover, the
language of the law
itself is clear and
cannot be subject to
different
interpretations. A
reading of the
provision itself would
readily reveal that the
exception "or in cases
where the money
deposited or invested
is the subject matter
of the litigation" is not
qualified by the
phrase "upon order of
competent Court"
which refers only to
cases of bribery or
dereliction of duty of
public officials.

Petitioners’ motion
for reconsideration
was similarly denied
in a Resolution dated
April 16, 1997.
Appeal was made in
due time to this Court.

The instant petition

was actually denied by
the former Third
Division of this Court
in a Resolution18
dated July 16, 1997,
on the ground that
petitioners had failed
to show that a
reversible error had
been committed. On
motion, however, the
petition was
reinstated19 and
eventually given due
course.20

In assailing the
appellate court’s
findings, petitioners
assert that the
disclosure of their
bank records was
unwarranted and
illegal for the
following reasons:

I.

IN BLATANT
VIOLATION OF R.A.
NO. 1405, PRIVATE
RESPONDENTS
ILLEGALLY MADE
DISCLOSURES OF
PETITIONERS’
CONFIDENTIAL
BANK DEPOSITS
FOR THEIR
SELFISH ENDS IN
PROSECUTING
THEIR COMPLAINT
IN IS. NO. 93-8469
THAT DID NOT
INVOLVE
PETITIONERS.

II.
PRIVATE
RESPONDENTS’
DISCLOSURES DO
NOT FALL UNDER
THE FOURTH
EXCEPTION OF R.A.
NO. 1405 (i.e., "in
cases where the
money deposited or
invested is the subject
matter of the
litigation"), NOR
UNDER ANY OTHER
EXCEPTION:

(1)
PETITIONERS’
DEPOSITS ARE NOT
INVOLVED IN ANY
LITIGATION
BETWEEN
PETITIONERS AND
RESPONDENTS.
THERE IS NO
LITIGATION
BETWEEN THE
PARTIES, MUCH
LESS ONE
INVOLVING
PETITIONERS’
DEPOSITS AS THE
SUBJECT MATTER
THEREOF.
(2)

EVEN ASSUMING
ARGUENDO THAT
THERE IS A
LITIGATION
INVOLVING
PETITIONERS’
DEPOSITS AS THE
SUBJECT MATTER
THEREOF, PRIVATE
RESPONDENTS’
DISCLOSURES OF
PETITIONERS’
DEPOSITS ARE
NEVERTHELESS
ILLEGAL FOR WANT
OF THE REQUISITE
COURT ORDER, IN
VIOLATION OF R.A.
NO. 1405.

III.

THEREFORE,
PETITIONERS ARE
ENTITLED TO
PROSECUTE
PRIVATE
RESPONDENTS FOR
VIOLATIONS OF
R.A. NO. 1405 FOR
HAVING ILLEGALLY
DISCLOSED
PETITIONERS’
CONFIDENTIAL
BANK DEPOSITS
AND RECORDS IN
IS. NO. 93-8469.

Apart from the

reversal of the
decision and
resolution of the
appellate court as well
as the resolutions of
the Department of
Justice, petitioners
pray that the latter
agency be directed to
issue a resolution
ordering the
Provincial Prosecutor
of Rizal to file the
corresponding
informations for
violation of Republic
Act No. 1405 against
private respondents.

The petition is not

meritorious.
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.21
(italics supplied)
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.
Incidentally, the acts
of private
respondents
complained of
happened before the
enactment on
September 29, 2001
of R.A. No. 9160
otherwise known as
the Anti-Money
Laundering Act of
2001.

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
latter’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. In this
regard, it has been
held that:

While it is true that, as

a rule and on
principles of abstract
justice, men are not
and should not be
held criminally
responsible for acts
committed by them
without guilty
knowledge and
criminal or at least
evil intent xxx, the
courts have always
recognized the power
of the legislature, on
grounds of public
policy and compelled
by necessity, "the
great master of
things," to forbid in a
limited class of cases
the doing of certain
acts, and to make
their commission
criminal without
regard to the intent of
the doer. xxx In such
cases no judicial
authority has the
power to require, in
the enforcement of
the law, such
knowledge or motive
to be shown. As was
said in the case of
State vs. McBrayer
xxx:

‘It is a mistaken
notion that positive,
willful intent, as
distinguished from a
mere intent, to violate
the criminal law, is an
essential ingredient in
every criminal
offense, and that
where there is the
absence of such intent
there is no offense;
this is especially so as
to statutory offenses.
When the statute
plainly forbids an act
to be done, and it is
done by some person,
the law implies
conclusively the guilty
intent, although the
offender was honestly
mistaken as to the
meaning of the law he
violates. When the
language is plain and
positive, and the
offense is not made to
depend upon the
positive, willful intent
and purpose, nothing
is left to
interpretation.’22

Ordinarily, the
dismissal of the
instant petition would
have been without
prejudice to the filing
of the proper charges
against private
respondents. The
matter would have
ended here were it not
for the intervention of
time, specifically the
lapse thereof. So as
not to unduly prolong
the settlement of the
case, we are
constrained to rule on
a material issue even
though it was not
raised by the parties.
We refer to the issue
of prescription.
Republic Act No.
6426 being a special
law, the provisions of
Act No. 3326,23 as
amended by Act No.
3763, are applicable:

SECTION 1.
Violations penalized
by special acts shall,
unless otherwise
provided in such acts,
prescribe in
accordance with the
following rules: (a)
after a year for
offences punished
only by a fine or by
imprisonment for not
more than one month,
or both: (b) after four
years for those
punished by
imprisonment for
more than one month,
but less than two
years; (c) after eight
years for those
punished by
imprisonment for two
years or more, but less
than six years; and (d)
after twelve years for
any other offence
punished by
imprisonment for six
years or more, except
the crime of treason,
which shall prescribe
after twenty years:
Provided, however,
That all offences
against any law or
part of law
administered by the
Bureau of Internal
Revenue shall
prescribe after five
years. Violations
penalized by
municipal ordinances
shall prescribe after
two months.
Violations of the
regulations or
conditions of
certificates of public
convenience issued by
the Public Service
Commission shall
prescribe after two
months.
SEC. 2. Prescription
shall begin to run
from the day of the
commission of the
violation of the law,
and if the same be not
known at the time,
from the discovery
thereof and the
institution of judicial
proceedings for its
investigation and
punishment.

The prescription shall

be interrupted when
proceedings are
instituted against the
guilty person, and
shall begin to run
again if the
proceedings are
dismissed for reasons
not constituting
jeopardy.1âwphi1
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.24
Applying Act No.
3326, the offense
prescribes in eight
years.25 Per available
records, private
respondents may no
longer be haled before
the courts for
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.26
In her complaint-
affidavit,27 Intengan
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, 1993.28
As to Brawner, the
material date is
January 5, 1994.29
Based on any of these
dates, prescription
has set in.30

The filing of the

complaint or
information in the
case at bar for alleged
violation of Republic
Act No. 1405 did not
have the effect of
tolling the
prescriptive period.
For it is the filing of
the complaint or
information
corresponding to the
correct offense which
produces that
effect.31

It may well be argued

that the foregoing
disquisition would
leave petitioners with
no remedy in law. We
point out, however,
that the
confidentiality of
foreign currency
deposits mandated by
Republic Act No.
6426, as amended by
Presidential Decree
No. 1246, came into
effect as far back as
1977. Hence,
ignorance thereof
cannot be pretended.
On one hand, the
existence of laws is a
matter of mandatory
judicial notice;32 on
the other, ignorantia
legis non excusat.33
Even during the
pendency of this
appeal, nothing
prevented the
petitioners from filing
a complaint charging
the correct offense
against private
respondents. This was
not done, as everyone
involved was content
to submit the case on
the basis of an alleged
violation of Republic
Act No. 1405 (Bank
Secrecy Law),
however, incorrectly
invoked.34
WHEREFORE, the
petition is hereby
DENIED. No
pronouncement as to
costs.

SO ORDERED.
X---------------------X
G.R. No. 200238
November 20, 2012

PHILIPPINE
SAVINGS BANK
(PSBANK) and
PASCUAL M.
GARCIA III, as
representative of
Philippine Savings
Bank and in his
personal capacity,
Petitioners,
vs.
SENATE
IMPEACHMENT
COURT, consisting of
the senators of the
republic of the
philippines acting as
senator judges,
namely: JUAN
PONCE ENRILE,
JINGGOY EJERCITO
ESTRADA, VICENTE
C. SOTTO III, ALAN
PETER S.
CAYETANO,
EDGARDO J.
ANGARA, JOKER P.
ARROYO, PIA S.
CAYETANO,
FRANKLIN M.
DRILON, FRANCIS
G. ESCUDERO,
TEOFISTO
GUINGONA III,
GREGORIO B.
HONASAN II,
PANFILO M.
LACSON, MANUEL
M. LAPID, LOREN B.
LEGARDA,
FERDINAND R.
MARCOS, JR.,
SERGIO R. OSMENA
III, FRANCIS "KIKO"
PANGILINAN,
AQUILINO
PIMENTEL III,
RALPH G. RECTO,
RAMON REVILLA,
JR., ANTONIO F.
TRILLANES IV,
MANNY VILLAR; and
THE HONORABLE
MEMBERS OF THE
PROSECUTION
PANEL OF THE
HOUSE OF
REPRESENTATIVES
, Respondents.
RESOLUTION

PERLAS-BERNABE,
J.:

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.

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)

Indeed, the main

issue of 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.
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.
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.1âwphi1
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.

SO ORDERED.
X------------------------
--X

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,
petitioners,
vs.
CENTRAL BANK OF
THE PHILIPPINES,
CHINA BANKING
CORPORATION and
GREG BARTELLI y
NORTHCOTT,
respondents.

TORRES, JR., J.:

In our predisposition
to discover the
"original intent" of a
statute, courts
become the unfeeling
pillars of the status
quo. Ligle do we
realize that statutes or
even constitutions are
bundles of
compromises thrown
our way by their
framers. Unless we
exercise vigilance, the
statute may already be
out of tune and
irrelevant to our day.

The petition is for

declaratory relief. It
prays for the following
reliefs:

a.) Immediately upon

the filing of this
petition, an Order be
issued restraining the
respondents from
applying and
enforcing Section 113
of Central Bank
Circular No. 960;

b.) After hearing,

judgment be
rendered:
1.) Declaring the
respective rights and
duties of petitioners
and respondents;

2.) Adjudging Section

113 of Central Bank
Circular No. 960 as
contrary to the
provisions of the
Constitution, hence
void; because its
provision that
"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

i.) has taken away the

right of petitioners to
have the bank deposit
of defendant Greg
Bartelli y Northcott
garnished to satisfy
the judgment
rendered in
petitioners' favor in
violation of
substantive due
process guaranteed by
the Constitution;

ii.) has given foreign

currency depositors
an undue favor or a
class privilege in
violation of the equal
protection clause of
the Constitution;

iii.) has provided a

safe haven for
criminals like the
herein respondent
Greg Bartelli y
Northcott since
criminals could
escape civil liability
for their wrongful acts
by merely converting
their money to a
foreign currency and
depositing it in a
foreign currency
deposit account with
an authorized bank.

The antecedent facts:

On February 4, 1989,
Greg Bartelli y
Northcott, an
American tourist,
coaxed and lured
petitioner Karen
Salvacion, then 12
years old to go with
him to his apartment.
Therein, Greg Bartelli
detained Karen
Salvacion 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, Greg Bartelli
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, Criminal
Case No. 801 for
Serious Illegal
Detention and
Criminal Cases Nos.
802, 803, 804, and
805 for four (4)
counts of Rape. On
the same day,
petitioners filed with
the Regional Trial
Court of Makati Civil
Case No. 89-3214 for
damages with
preliminary
attachment against
Greg Bartelli. On
February 24, 1989,
the day there was a
scheduled hearing for
Bartelli's petition for
bail the latter escaped
from jail.

On February 28,
1989, the court
granted the fiscal's
Urgent Ex-Parte
Motion for the
Issuance of Warrant
of Arrest and Hold
Departure Order.
Pending the arrest of
the accused Greg
Bartelli y Northcott,
the criminal cases
were archived in an
Order dated February
28, 1989.

Meanwhile, in Civil
Case No. 89-3214, the
Judge issued an Order
dated February 22,
1989 granting the
application of herein
petitioners, for the
issuance of the writ of
preliminary
attachment. After
petitioners gave Bond
No. JCL (4) 1981 by
FGU Insurance
Corporation in the
amount of
P100,000.00, a Writ
of Preliminary
Attachment was
issued by the trial
court on February 28,
1989.

On March 1, 1989, the

Deputy Sheriff of
Makati served a
Notice of
Garnishment on
China Banking
Corporation. In a
letter dated March 13,
1989 to the Deputy
Sheriff of Makati,
China Banking
Corporation invoked
Republic Act No.
1405 as its answer to
the notice of
garnishment served
on it. On March 15,
1989, Deputy Sheriff
of Makati Armando de
Guzman sent his reply
to China Banking
Corporation saying
that the garnishment
did not violate the
secrecy of bank
deposits since the
disclosure is merely
incidental to a
garnishment properly
and legally made by
virtue of a court order
which has placed the
subject deposits in
custodia legis. In
answer to this letter of
the Deputy Sheriff of
Makati, China
Banking Corporation,
in a letter dated
March 20, 1989,
invoked Section 113
of Central Bank
Circular No. 960 to
the effect that the
dollar deposits or
defendant Greg
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 the
counsel for
petitioners to make an
inquiry with the
Central Bank in a
letter dated April 25,
1989 on whether
Section 113 of CB
Circular No. 960 has
any exception or
whether said section
has been repealed or
amended since said
section has rendered
nugatory the
substantive right of
the plaintiff to have
the claim sought to be
enforced by the civil
action secured by way
of the writ of
preliminary
attachment as granted
to the plaintiff under
Rule 57 of the Revised
Rules of Court. The
Central Bank
responded as follows:

May 26, 1989

Ms. Erlinda S.
Carolino
12 Pres. Osmena
Avenue
South Admiral Village
Paranaque, Metro
Manila

Dear Ms. Carolino:

This is in reply to your

letter dated April 25,
1989 regarding your
inquiry on Section
113, CB Circular No.
960 (1983).

The cited provision is

absolute in
application. It does
not admit of any
exception, nor has the
same been repealed
nor amended.

The purpose of the

law is to encourage
dollar accounts within
the country's banking
system which would
help in the
development of the
economy. There is no
intention to render
futile the basic rights
of a person as was
suggested in your
subject letter. The law
may be harsh as some
perceive it, but it is
still the law.
Compliance is,
therefore, enjoined.

Very truly yours,

(SGD) AGAPITO S.
FAJARDO
Director1
Meanwhile, on April
10, 1989, the trial
court granted
petitioners' motion
for leave to serve
summons by
publication in the
Civil Case No. 89-
3214 entitled "Karen
Salvacion, et al. vs.
Greg Bartelli y
Northcott." Summons
with the complaint
was a published in the
Manila Times once a
week for three
consecutive weeks.
Greg Bartelli failed to
file his answer to the
complaint and was
declared in default on
August 7, 1989. After
hearing the case ex-
parte, the court
rendered judgment in
favor of petitioners on
March 29, 1990, the
dispositive portion of
which reads:

WHEREFORE,
judgment is hereby
rendered in favor of
plaintiffs and against
defendant, ordering
the latter:

1. To pay plaintiff
Karen E. Salvacion
the amount of
P500,000.00 as moral
damages;
2. To pay her parents,
plaintiffs spouses
Federico N. Salvacion,
Jr., and Evelina E.
Salvacion the amount
of P150,000.00 each
or a total of
P300,000.00 for both
of them;
3. To pay plaintiffs
exemplary damages of
P100,000.00; and

4. To pay attorney's
fees in an amount
equivalent to 25% of
the total amount of
damages herein
awarded;

5. To pay litigation
expenses of
P10,000.00; plus

6. Costs of the suit.

SO ORDERED.

The heinous acts of

respondent Greg
Bartelli which gave
rise to the award were
related in graphic
detail by the trial
court in its decision as
follows:

The defendant in this

case was originally
detained in the
municipal jail of
Makati but was able to
escape therefrom on
February 24, 1989 as
per report of the Jail
Warden of Makati to
the Presiding Judge,
Honorable Manuel M.
Cosico of the Regional
Trial Court of Makati,
Branch 136, where he
was charged with four
counts of Rape and
Serious Illegal
Detention (Crim.
Cases Nos. 802 to
805). Accordingly,
upon motion of
plaintiffs, through
counsel, summons
was served upon
defendant by
publication in the
Manila Times, a
newspaper of general
circulation as attested
by the Advertising
Manager of the Metro
Media Times, Inc., the
publisher of the said
newspaper.
Defendant, however,
failed to file his
answer to the
complaint despite the
lapse of the period of
sixty (60) days from
the last publication;
hence, upon motion of
the plaintiffs, through
counsel, defendant
was declared in
default and plaintiffs
were authorized to
present their evidence
ex parte.
In support of the
complaint, plaintiffs
presented as
witnesses the minor
Karen E. Salvacion,
her father, Federico
N. Salvacion, Jr., a
certain Joseph
Aguilar and a certain
Liberato Madulio,
who gave the
following testimony:

Karen took her first

year high school in St.
Mary's Academy in
Pasay City but has
recently transferred
to Arellano University
for her second year.

In the afternoon of
February 4, 1989,
Karen was at the Plaza
Fair Makati Cinema
Square, with her
friend Edna Tangile
whiling away her free
time. At about 3:30
p.m. while she was
finishing her snack on
a concrete bench in
front of Plaza Fair, an
American approached
her. She was then
alone because Edna
Tangile had already
left, and she was
about to go home.
(TSN, Aug. 15, 1989,
pp. 2 to 5)

The American asked

her name and
introduced himself as
Greg Bartelli. He sat
beside her when he
talked to her. He said
he was a Math teacher
and told her that he
has a sister who is a
nurse in New York.
His sister allegedly
has a daughter who is
about Karen's age and
who was with him in
his house along
Kalayaan Avenue.
(TSN, Aug. 15, 1989,
pp. 4-5)

The American asked

Karen what was her
favorite subject and
she told him it's
Pilipino. He then
invited her to go with
him to his house
where she could teach
Pilipino to his niece.
He even gave her a
stuffed toy to
persuade her to teach
his niece. (Id., pp. 5-
6)

They walked from

Plaza Fair along
Pasong Tamo, turning
right to reach the
defendant's house
along Kalayaan
Avenue. (Id., p. 6)

When they reached

the apartment house,
Karen noticed that
defendant's alleged
niece was not outside
the house but
defendant told her
maybe his niece was
inside. When Karen
did not see the alleged
niece inside the
house, defendant told
her maybe his niece
was upstairs, and
invited Karen to go
upstairs. (Id., p. 7)

Upon entering the

bedroom defendant
suddenly locked the
door. Karen became
nervous because his
niece was not there.
Defendant got a piece
of cotton cord and tied
Karen's hands with it,
and then he
undressed her. Karen
cried for help but
defendant strangled
her. He took a packing
tape and he covered
her mouth with it and
he circled it around
her head. (Id., p. 7)

Then, defendant
suddenly pushed
Karen towards the
bed which was just
near the door. He tied
her feet and hands
spread apart to the
bed posts. He knelt in
front of her and
inserted his finger in
her sex organ. She felt
severe pain. She tried
to shout but no sound
could come out
because there were
tapes on her mouth.
When defendant
withdrew his finger it
was full of blood and
Karen felt more pain
after the withdrawal
of the finger. (Id., p. 8)
He then got a
Johnson's Baby Oil
and he applied it to his
sex organ as well as to
her sex organ. After
that he forced his sex
organ into her but he
was not able to do so.
While he was doing it,
Karen found it
difficult to breathe
and she perspired a
lot while feeling
severe pain. She
merely presumed that
he was able to insert
his sex organ a little,
because she could not
see. Karen could not
recall how long the
defendant was in that
position. (Id. pp. 8-9)

After that, he stood up

and went to the
bathroom to wash. He
also told Karen to take
a shower and he
untied her hands.
Karen could only hear
the sound of the water
while the defendant,
she presumed, was in
the bathroom
washing his sex organ.
When she took a
shower more blood
came out from her. In
the meantime,
defendant changed
the mattress because
it was full of blood.
After the shower,
Karen was allowed by
defendant to sleep.
She fell asleep
because she got tired
crying. The incident
happened at about
4:00 p.m. Karen had
no way of determining
the exact time because
defendant removed
her watch. Defendant
did not care to give
her food before she
went to sleep. Karen
woke up at about 8:00
o'clock the following
morning. (Id., pp. 9-
10)
The following day,
February 5, 1989, a
Sunday, after a
breakfast of biscuit
and coke at about
8:30 to 9:00 a.m.
defendant raped
Karen while she was
still bleeding. For
lunch, they also took
biscuit and coke. She
was raped for the
second time at about
12:00 to 2:00 p.m. In
the evening, they had
rice for dinner which
defendant had stored
downstairs; it was he
who cooked the rice
that is why it looks
like "lugaw". For the
third time, Karen was
raped again during
the night. During
those three times
defendant succeeded
in inserting his sex
organ but she could
not say whether the
organ was inserted
wholly.

Karen did not see any

firearm or any bladed
weapon. The
defendant did not tie
her hands and feet nor
put a tape on her
mouth anymore but
she did not cry for
help for fear that she
might be killed;
besides, all the
windows and doors
were closed. And even
if she shouted for
help, nobody would
hear her. She was so
afraid that if
somebody would hear
her and would be able
to call the police, it
was still possible that
as she was still inside
the house, defendant
might kill her.
Besides, the
defendant did not
leave that Sunday,
ruling out her chance
to call for help. At
nighttime he slept
with her again. (TSN,
Aug. 15, 1989, pp. 12-
14)

On February 6, 1989,
Monday, Karen was
raped three times,
once in the morning
for thirty minutes
after a breakfast of
biscuits; again in the
afternoon; and again
in the evening. At
first, Karen did not
know that there was a
window because
everything was
covered by a carpet,
until defendant
opened the window
for around fifteen
minutes or less to let
some air in, and she
found that the
window was covered
by styrofoam and
plywood. After that,
he again closed the
window with a
hammer and he put
the styrofoam,
plywood, and carpet
back. (Id., pp. 14-15)

That Monday
evening, Karen had a
chance to call for help,
although defendant
left but kept the door
closed. She went to
the bathroom and saw
a small window
covered by styrofoam
and she also spotted a
small hole. She
stepped on the bowl
and she cried for help
through the hole. She
cried: "Maawa no po
kayo so akin.
Tulungan n'yo akong
makalabas dito.
Kinidnap ako!"
Somebody heard her.
It was a woman,
probably a neighbor,
but she got angry and
said she was "istorbo".
Karen pleaded for
help and the woman
told her to sleep and
she will call the police.
She finally fell asleep
but no policeman
came. (TSN, Aug. 15,
1989, pp. 15-16)

She woke up at 6:00

o'clock the following
morning, and she saw
defendant in bed, this
time sleeping. She
waited for him to
wake up. When he
woke up, he again got
some food but he
always kept the door
locked. As usual, she
was merely fed with
biscuit and coke. On
that day, February 7,
1989, she was again
raped three times.
The first at about 6:30
to 7:00 a.m., the
second at about 8:30
— 9:00, and the third
was after lunch at
12:00 noon. After he
had raped her for the
second time he left
but only for a short
while. Upon his
return, he caught her
shouting for help but
he did not understand
what she was shouting
about. After she was
raped the third time,
he left the house.
(TSN, Aug. 15, 1989,
pp. 16-17) She again
went to the bathroom
and shouted for help.
After shouting for
about five minutes,
she heard many
voices. The voices
were asking for her
name and she gave
her name as Karen
Salvacion. After a
while, she heard a
voice of a woman
saying they will just
call the police. They
were also telling her to
change her clothes.
She went from the
bathroom to the room
but she did not change
her clothes being
afraid that should the
neighbors call for the
police and the
defendant see her in
different clothes, he
might kill her. At that
time she was wearing
a T-shirt of the
American because the
latter washed her
dress. (Id., p. 16)

Afterwards,
defendant arrived and
he opened the door.
He asked her if she
had asked for help
because there were
many policemen
outside and she
denied it. He told her
to change her clothes,
and she did change to
the one she was
wearing on Saturday.
He instructed her to
tell the police that she
left home and
willingly; then he
went downstairs but
he locked the door.
She could hear people
conversing but she
could not understand
what they were
saying. (Id., p. 19)

When she heard the

voices of many people
who were conversing
downstairs, she
knocked repeatedly at
the door as hard as
she could. She heard
somebody going
upstairs and when the
door was opened, she
saw a policeman. The
policeman asked her
name and the reason
why she was there.
She told him she was
kidnapped.
Downstairs, he saw
about five policemen
in uniform and the
defendant was talking
to them. "Nakikipag-
areglo po sa mga
pulis," Karen added.
"The policeman told
him to just explain at
the precinct. (Id., p.
20)

They went out of the

house and she saw
some of her neighbors
in front of the house.
They rode the car of a
certain person she
called Kuya Boy
together with
defendant, the
policeman, and two of
her neighbors whom
she called Kuya Bong
Lacson and one Ate
Nita. They were
brought to Sub-
Station I and there
she was investigated
by a policeman. At
about 2:00 a.m., her
father arrived,
followed by her
mother together with
some of their
neighbors. Then they
were brought to the
second floor of the
police headquarters.
(Id., p. 21)
At the headquarters,
she was asked several
questions by the
investigator. The
written statement she
gave to the police was
marked as Exhibit A.
Then they proceeded
to the National
Bureau of
Investigation together
with the investigator
and her parents. At
the NBI, a doctor, a
medico-legal officer,
examined her private
parts. It was already
3:00 in the early
morning of the
following day when
they reached the NBI.
(TSN, Aug. 15, 1989,
p. 22) The findings of
the medico-legal
officer has been
marked as Exhibit B.
She was studying at
the St. Mary's
Academy in Pasay
City at the time of the
incident but she
subsequently
transferred to
Apolinario Mabini,
Arellano University,
situated along Taft
Avenue, because she
was ashamed to be the
subject of
conversation in the
school. She first
applied for transfer to
Jose Abad Santos,
Arellano University
along Taft Avenue
near the Light Rail
Transit Station but
she was denied
admission after she
told the school the
true reason for her
transfer. The reason
for their denial was
that they might be
implicated in the case.
(TSN, Aug. 15, 1989,
p. 46)

xxx xxx xxx

After the incident,

Karen has changed a
lot. She does not play
with her brother and
sister anymore, and
she is always in a state
of shock; she has been
absent-minded and is
ashamed even to go
out of the house.
(TSN, Sept. 12, 1989,
p. 10) She appears to
be restless or sad, (Id.,
p. 11) The father
prays for P500,000.00
moral damages for
Karen for this
shocking experience
which probably, she
would always recall
until she reaches old
age, and he is not sure
if she could ever
recover from this
experience. (TSN,
Sept. 24, 1989, pp.
10-11)
Pursuant to an Order
granting leave to
publish notice of
decision, said notice
was published in the
Manila Bulletin once a
week for three
consecutive weeks.
After the lapse of
fifteen (15) days from
the date of the last
publication of the
notice of judgment
and the decision of the
trial court had
become final,
petitioners tried to
execute on Bartelli's
dollar deposit with
China Banking
Corporation.
Likewise, the bank
invoked Section 113
of Central Bank
Circular No. 960.
Thus, petitioners
decided to seek relief
from this Court.

The issues raised and

the arguments
articulated by the
parties boil down to
two:
May this Court
entertain the instant
petition despite the
fact that original
jurisdiction in
petitions for
declaratory relief rests
with the lower court?
Should Section 113 of
Central Bank Circular
No. 960 and Section 8
of R.A. 6426, as
amended by P.D.
1246, otherwise
known as the Foreign
Currency Deposit Act
be made applicable to
a foreign transient?

Petitioners aver as
heretofore stated that
Section 113 of Central
Bank Circular No. 960
providing that
"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."
should be adjudged as
unconstitutional on
the grounds that: 1.) it
has taken away the
right of petitioners to
have the bank deposit
of defendant Greg
Bartelli y Northcott
garnished to satisfy
the judgment
rendered in
petitioners' favor in
violation of
substantive due
process guaranteed by
the Constitution; 2.) it
has given foreign
currency depositors
an undue favor or a
class privilege in
violation of the equal
protection clause of
the Constitution; 3.) it
has provided a safe
haven for criminals
like the herein
respondent Greg
Bartelli y Northcott
since criminals could
escape civil liability
for their wrongful acts
by merely converting
their money to a
foreign currency and
depositing it in a
foreign currency
deposit account with
an authorized bank;
and 4.) The Monetary
Board, in issuing
Section 113 of Central
Bank Circular No. 960
has exceeded its
delegated quasi-
legislative power
when it took away: a.)
the plaintiffs
substantive right to
have the claim sought
to be enforced by the
civil action secured by
way of the writ of
preliminary
attachment as granted
by Rule 57 of the
Revised Rules of
Court; b.) the
plaintiffs substantive
right to have the
judgment credit
satisfied by way of the
writ of execution out
of the bank deposit of
the judgment debtor
as granted to the
judgment creditor by
Rule 39 of the Revised
Rules of Court, which
is beyond its power to
do so.
On the other hand,
respondent Central
Bank, in its Comment
alleges that the
Monetary Board in
issuing Section 113 of
CB Circular No. 960
did not exceed its
power or authority
because the subject
Section is copied
verbatim from a
portion of R.A. No.
6426 as amended by
P.D. 1246. Hence, it
was not the Monetary
Board that grants
exemption from
attachment or
garnishment to
foreign currency
deposits, but the law
(R.A. 6426 as
amended) itself; that
it does not violate the
substantive due
process guaranteed by
the Constitution
because a.) it was
based on a law; b.) the
law seems to be
reasonable; c.) it is
enforced according to
regular methods of
procedure; and d.) it
applies to all
members of a class.

Expanding, the
Central Bank said;
that one 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; that
another reason 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; that the
subject section is
being enforced
according to the
regular methods of
procedure; and that it
applies to all foreign
currency deposits
made by any person
and therefore does
not violate the equal
protection clause of
the Constitution.

Respondent Central
Bank further avers
that the questioned
provision is needed to
promote the public
interest and the
general welfare; that
the State cannot just
stand idly by while a
considerable segment
of the society suffers
from economic
distress; that the State
had to take some
measures to
encourage economic
development; and
that in so doing
persons and property
may be subjected to
some kinds of
restraints or burdens
to secure the general
welfare or public
interest. Respondent
Central Bank also
alleges that Rule 39
and Rule 57 of the
Revised Rules of
Court provide that
some properties are
exempted from
execution/attachmen
t especially provided
by law and R.A. No.
6426 as amended is
such a law, in that it
specifically provides,
among others, that
foreign currency
deposits shall be
exempted from
attachment,
garnishment, or any
other order or process
of any court,
legislative body,
government agency or
any administrative
body whatsoever.
For its part,
respondent China
Banking Corporation,
aside from giving
reasons similar to that
of respondent Central
Bank, also stated that
respondent China
Bank is not unmindful
of the inhuman
sufferings
experienced by the
minor Karen E.
Salvacion from the
beastly hands of Greg
Bartelli; that it is only
too willing to release
the dollar deposit of
Bartelli which may
perhaps partly
mitigate the
sufferings petitioner
has undergone; but it
is restrained from
doing so in view of
R.A. No. 6426 and
Section 113 of Central
Bank Circular No.
960; and that despite
the harsh effect of
these laws on
petitioners, CBC has
no other alternative
but to follow the
same.
This Court finds the
petition to be partly
meritorious.

Petitioner deserves to
receive the damages
awarded to her by the
court. But this
petition for
declaratory relief can
only be entertained
and treated as a
petition for
mandamus to require
respondents to honor
and comply with the
writ of execution in
Civil Case No. 89-
3214.

This Court has no

original and exclusive
jurisdiction over a
petition for
declaratory relief.2
However, exceptions
to this rule have been
recognized. Thus,
where the petition has
far-reaching
implications and
raises questions that
should be resolved, it
may be treated as one
for mandamus.3
Here is a child, a 12-
year old girl, who in
her belief that all
Americans are good
and in her gesture of
kindness by teaching
his alleged niece the
Filipino language as
requested by the
American, trustingly
went with said
stranger to his
apartment, and there
she was raped by said
American tourist Greg
Bartelli. Not once, but
ten times. She was
detained therein for
four (4) days. This
American tourist was
able to escape from
the jail and avoid
punishment. On the
other hand, the child,
having received a
favorable judgment in
the Civil Case for
damages in the
amount of more than
P1,000,000.00, which
amount could
alleviate the
humiliation, anxiety,
and besmirched
reputation she had
suffered and may
continue to suffer for
a long, long time; and
knowing that this
person who had
wronged her has the
money, could not,
however get the award
of damages because of
this unreasonable
law. This questioned
law, therefore makes
futile the favorable
judgment and award
of damages that she
and her parents fully
deserve. As stated by
the trial court in its
decision,

Indeed, after hearing

the testimony of
Karen, the Court
believes that it was
undoubtedly a
shocking and
traumatic experience
she had undergone
which could haunt her
mind for a long, long
time, the mere recall
of which could make
her feel so humiliated,
as in fact she had been
actually humiliated
once when she was
refused admission at
the Abad Santos High
School, Arellano
University, where she
sought to transfer
from another school,
simply because the
school authorities of
the said High School
learned about what
happened to her and
allegedly feared that
they might be
implicated in the case.

xxx xxx xxx

The reason for
imposing exemplary
or corrective damages
is due to the wanton
and bestial manner
defendant had
committed the acts of
rape during a period
of serious illegal
detention of his
hapless victim, the
minor Karen
Salvacion whose only
fault was in her being
so naive and
credulous to believe
easily that defendant,
an American national,
could not have such a
bestial desire on her
nor capable of
committing such a
heinous crime. Being
only 12 years old
when that
unfortunate incident
happened, she has
never heard of an old
Filipino adage that in
every forest there is a
snake, . . . .4

If Karen's sad fate had

happened to
anybody's own kin, it
would be difficult for
him to fathom how
the incentive for
foreign currency
deposit could be more
important than his
child's rights to said
award of damages; in
this case, the victim's
claim for damages
from this alien who
had the gall to wrong a
child of tender years
of a country where he
is a mere visitor. This
further illustrates the
flaw in the questioned
provisions.
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.
It has thus been said
that —

But I also know,5 that

laws and institutions
must go hand in hand
with the progress of
the human mind. As
that becomes more
developed, more
enlightened, as new
discoveries are made,
new truths are
disclosed and
manners and
opinions change with
the change of
circumstances,
institutions must
advance also, and
keep pace with the
times. . . We might as
well require a man to
wear still the coat
which fitted him when
a boy, as civilized
society to remain ever
under the regimen of
their barbarous
ancestors.

In his Comment, the

Solicitor General
correctly opined,
thus:
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. More
specifically, the
petition raises the
question whether the
protection against
attachment,
garnishment or other
court process
accorded to foreign
currency deposits by
PD No. 1246 and CB
Circular No. 960
applies when the
deposit does not come
from a lender or
investor but from a
mere transient or
tourist who is not
expected to maintain
the deposit in the
bank for long.
The resolution of this
question is important
for the protection of
nationals who are
victimized in the
forum by foreigners
who are merely
passing through.
xxx xxx xxx

. . . Respondents
China Banking
Corporation and
Central Bank of the
Philippines refused to
honor the writ of
execution issued in
Civil Case No. 89-
3214 on the strength
of the following
provision of Central
Bank Circular No.
960:

Sec. 113. Exemption

from attachment. —
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.

Central Bank Circular

No. 960 was issued
pursuant to Section 7
of Republic Act No.
6426:
Sec. 7. Rules and
Regulations. The
Monetary Board of
the Central Bank shall
promulgate such rules
and regulations as
may be necessary to
carry out the
provisions of this Act
which shall take effect
after the publication
of such rules and
regulations in the
Official Gazette and in
a newspaper of
national circulation
for at least once a
week for three
consecutive weeks. In
case the Central Bank
promulgates new
rules and regulations
decreasing the rights
of depositors, the
rules and regulations
at the time the deposit
was made shall
govern.

The aforecited Section

113 was copied from
Section 8 of Republic
Act NO. 6426, as
amended by P.D.
1246, thus:
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.
The purpose of PD
1246 in according
protection against
attachment,
garnishment and
other court process to
foreign currency
deposits is stated in
its whereases, viz.:

WHEREAS, under
Republic Act No.
6426, as amended by
Presidential Decree
No. 1035, certain
Philippine banking
institutions and
branches of foreign
banks are authorized
to accept deposits in
foreign currency;

WHEREAS, under the

provisions of
Presidential Decree
No. 1034 authorizing
the establishment of
an offshore banking
system in the
Philippines, offshore
banking units are also
authorized to receive
foreign currency
deposits in certain
cases;

WHEREAS, in order
to assure the
development and
speedy growth of the
Foreign Currency
Deposit System and
the Offshore Banking
System in the
Philippines, certain
incentives were
provided for under
the two Systems such
as confidentiality of
deposits subject to
certain exceptions
and tax exemptions
on the interest income
of depositors who are
nonresidents and are
not engaged in trade
or business in the
Philippines;
WHEREAS, making
absolute the
protective cloak of
confidentiality over
such foreign currency
deposits, exempting
such deposits from
tax, and guaranteeing
the vested rights of
depositors would
better encourage the
inflow of foreign
currency deposits into
the banking
institutions
authorized to accept
such deposits in the
Philippines 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;

Thus, one of the

principal purposes of
the protection
accorded to foreign
currency deposits is
"to assure the
development and
speedy growth of the
Foreign Currency
Deposit system and
the Offshore Banking
in the Philippines"
(3rd Whereas).
The Offshore Banking
System was
established by PD No.
1034. In turn, the
purposes of PD No.
1034 are as follows:

WHEREAS,
conditions conducive
to the establishment
of an offshore banking
system, such as
political stability, a
growing economy and
adequate
communication
facilities, among
others, exist in the
Philippines;

WHEREAS, it is in the
interest of developing
countries to have as
wide access as
possible to the
sources of capital
funds for economic
development;

WHEREAS, an
offshore banking
system based in the
Philippines will be
advantageous and
beneficial to the
country by increasing
our links with foreign
lenders, facilitating
the flow of desired
investments into the
Philippines, creating
employment
opportunities and
expertise in
international finance,
and contributing to
the national
development effort.

WHEREAS, the
geographical location,
physical and human
resources, and other
positive factors
provide the
Philippines with the
clear potential to
develop as another
financial center in
Asia;
On the other hand,
the Foreign Currency
Deposit system was
created by PD. No.
1035. Its purposes are
as follows:

WHEREAS, the
establishment of an
offshore banking
system in the
Philippines has been
authorized under a
separate decree;

WHEREAS, a number
of local commercial
banks, as depository
bank under the
Foreign Currency
Deposit Act (RA No.
6426), have the
resources and
managerial
competence to more
actively engage in
foreign exchange
transactions and
participate in the
grant of foreign
currency loans to
resident corporations
and firms;

WHEREAS, it is
timely to expand the
foreign currency
lending authority of
the said depository
banks under RA 6426
and apply to their
transactions the same
taxes as would be
applicable to
transaction of the
proposed offshore
banking units;

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.
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.6

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. (Padilla
vs. Padilla, 74 Phil.
377).
It would be
unthinkable, that the
questioned Section
113 of Central Bank
No. 960 would be
used as a device by
accused Greg Bartelli
for wrongdoing, and
in so doing, acquitting
the guilty at the
expense of the
innocent.

Call it what it may —

but is there no conflict
of legal policy here?
Dollar against Peso?
Upholding the final
and executory
judgment of the lower
court against the
Central Bank Circular
protecting the foreign
depositor? Shielding
or protecting the
dollar deposit of a
transient alien
depositor against
injustice to a national
and victim of a crime?
This situation calls for
fairness against legal
tyranny.

We definitely cannot
have both ways and
rest in the belief that
we have served the
ends of justice.

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.
Respondents are
hereby REQUIRED to
COMPLY with the
writ of execution
issued in Civil Case
No. 89-3214, "Karen
Salvacion, et al. vs.
Greg Bartelli y
Northcott, by Branch
CXLIV, RTC Makati
and to RELEASE to
petitioners the dollar
deposit of respondent
Greg Bartelli y
Northcott in such
amount as would
satisfy the judgment.

SO ORDERED.
X------------------X
G.R. No. 140687
December 18, 2006

CHINA BANKING
CORPORATION,
petitioner,
vs.
THE HONORABLE
COURT OF APPEALS
and JOSE "JOSEPH"
GOTIANUY as
substituted by
ELIZABETH
GOTIANUY LO,
respondents.
DECISION

CHICO-NAZARIO, J.:

A Complaint for
recovery of sums of
money and
annulment of sales of
real properties and
shares of stock
docketed as CEB-
21445 was filed by
Jose "Joseph"
Gotianuy against his
son-in-law, George
Dee, and his
daughter, Mary
Margaret Dee, before
the Regional Trial
Court (RTC) of Cebu
City, Branch 58.

Jose Gotianuy
accused his daughter
Mary Margaret Dee of
stealing, among his
other properties, US
dollar deposits with
Citibank N.A.
amounting to not less
than P35,000,000.00
and US$864,000.00.
Mary Margaret Dee
received these
amounts from
Citibank N.A. through
checks which she
allegedly deposited at
China Banking
Corporation (China
Bank). He likewise
accused his son-in-
law, George Dee,
husband of his
daughter, Mary
Margaret, of
transferring his real
properties and shares
of stock in George
Dee's name without
any consideration.
Jose Gotianuy, died
during the pendency
of the case before the
trial court.1 He 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. The details
of the said checks are:

1) CITIBANK CHECK
NO.
69003194405412
dated September 29
1997 in the amount of
US$5,937.52 payable
to GOTIANUY: JOSE
AND/OR DEE: MARY
MARGARET;

2) CITIBANK CHECK
NO.
69003194405296
dated September 29
1997 in the amount of
US$7,197.59 payable
to GOTIANUY: JOSE
AND/OR DEE: MARY
MARGARET;
3) CITIBANK CHECK
NO.
69003194405414
dated September 29
1997 in the amount of
US$1,198.94 payable
to GOTIANUY: JOSE
AND/OR DEE: MARY
MARGARET;
4) CITIBANK CHECK
NO.
69003194405413
dated September 29
1997 in the amount of
US$989.04 payable to
GOTIANUY: JOSE
AND/OR DEE: MARY
MARGARET;

5) CITIBANK CHECK
NO.
69003194405297
dated October 01
1997 in the amount of
US$766,011.97
payable to
GOTIANUY: JOSE
AND/OR DEE: MARY
MARGARET; and

6) CITIBANK CHECK
NO.
69003194405339
dated October 09
1997 in the amount of
US$83,053.10
payable to
GOTIANUY: JOSE
AND/OR DEE: MARY
MARGARET.2

Upon motion of
Elizabeth Gotianuy
Lo, the trial court3
issued a subpoena to
Cristota Labios and
Isabel Yap, employees
of China Bank, to
testify on the case.
The Order of the trial
court dated 23
February 1999,
states:

Issue a subpoena ad
testificandum
requiring MS.
ISABEL YAP and
CRISTOTA LABIOS
of China Banking
Corporation, Cebu
Main Branch, corner
Magallanes and D.
Jakosalem Sts., Cebu
City, to appear in
person and to testify
in the hearing of the
above entitled case on
March 1, 1999 at 8:30
in the morning, with
regards to Citibank
Checks (Exhs. "AAA"
to "AAA-5") and other
matters material and
relevant to the issues
of this case.4
China Bank moved for
a reconsideration.
Resolving the motion,
the trial court issued
an Order dated 16
April 1999 and held:

The Court is of the

view that as the
foreign currency fund
(Exhs. "AAA" to
"AAA-5") is deposited
with the movant
China Banking
Corporation, Cebu
Main Branch, Cebu
City, the disclosure
only as to the name or
in whose name the
said fund is deposited
is not violative of the
law. Justice will be
better served if the
name or names of the
depositor of said fund
shall be disclosed
because such a
disclosure is material
and important to the
issues between the
parties in the case at
bar.

Premises considered,
the motion for
reconsideration is
denied partly and
granted partly, in the
sense that Isabel Yap
and/or Cristuta
Labios are directed to
appear before this
Court and to testify at
the trial of this case on
April 20, 1999, May 6
& 7, 1999 at 10:00
o'clock in the morning
and only for the
purpose of disclosing
in whose name or
names is the foreign
currency fund (Exhs.
"AAA" to "AAA-5")
deposited with the
movant Bank and not
to other matters
material and relevant
to the issues in the
case at bar.5

From this Order,

China Bank filed a
Petition for
Certiorari6 with the
Court of Appeals. In a
Decision7 dated 29
October 1999, the
Court of Appeals
denied the petition of
China Bank and
affirmed the Order of
the RTC.
In justifying its
conclusion, the Court
of Appeals
ratiocinated:

From the foregoing, it

is pristinely clear the
law specifically
encompasses only the
money or funds in
foreign currency
deposited in a bank.
Thus, the coverage of
the law extends only
to the foreign
currency deposit in
the CBC account
where Mary Margaret
Dee deposited the
Citibank checks in
question and nothing
more.

It has to be pointed
out that the April 16,
1999 Order of the
court of origin
modified its previous
February 23, 1999
Order such that the
CBC representatives
are directed solely to
divulge "in whose
name or names is the
foreign currency fund
(Exhs. "AAA" to
"AAA-5") deposited
with the movant
bank." It precluded
inquiry on "other
materials and
relevant to the issues
in the case at bar." We
find that the directive
of the court below
does not contravene
the plain language of
RA 6426 as amended
by P.D. No. 1246.

The contention of
petitioner that the
[prescription] on
absolute
confidentiality under
the law in question
covers even the name
of the depositor and is
beyond the
compulsive process of
the courts is palpably
untenable as the law
protects only the
deposits itself but not
the name of the
depositor. To uphold
the theory of
petitioner CBC is
reading into the
statute "something
that is not within the
manifest intention of
the legislature as
gathered from the
statute itself, for to
depart from the
meaning expressed by
the words, is to alter
the statute, to
legislate and not to
interpret, and judicial
legislation should be
avoided. Maledicta
expositio quae
corrumpit textum – It
is a dangerous
construction which is
against the words.
Expressing the same
principle is the
maxim: Ubi lex non
distinguit nec nos
distinguere debemos,
which simply means
that where the law
does not distinguish,
we should not make
any distinction."
(Gonzaga, Statutes
and their
Construction, p. 75.)8

From the Decision of

the Court of Appeals,
China Bank elevated
the case to this Court
based on the following
issues:

THE HONORABLE
COURT OF APPEALS
HAS INTERPRETED
THE PROVISION OF
SECTION 8 OF R.A.
6426, AS AMENDED,
OTHERWISE
KNOWN AS THE
FOREIGN
CURRENCY
DEPOSIT ACT, IN A
MANNER
CONTRARY TO THE
LEGISLATIVE
PURPOSE, THAT IS,
TO PROVIDE
ABSOLUTE
CONFIDENTIALITY
OF WHATEVER
INFORMATION
RELATIVE TO THE
FOREIGN
CURRENCY
DEPOSIT.

II

PRIVATE
RESPONDENT IS
NOT THE OWNER
OF THE
QUESTIONED
FOREIGN
CURRENCY
DEPOSIT. THUS, HE
CANNOT INVOKE
THE AID OF THE
COURT IN
COMPELLING THE
DISCLOSURE OF
SOMEONE ELSE'S
FOREIGN
CURRENCY
DEPOSIT ON THE
FLIMSY PRETEXT
THAT THE CHECKS
(IN FOREIGN
CURRENCY) HE
HAD ISSUED MAY
HAVE ENDED UP
THEREIN.

III

PETITIONER CAN
RIGHTLY INVOKE
THE PROVISION OF
SEC. 8, R.A. 6426, IN
BEHALF OF THE
FOREIGN
CURRENCY
DEPOSITOR,
OWING TO ITS
SOLEMN
OBLIGATION TO ITS
CLIENT TO
EXERCISE
EXTRAORDINARY
DILIGENCE IN THE
HANDLING OF THE
ACCOUNT.9

As amended by
Presidential Decree
No. 1246, the law
reads:
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. (As
amended by PD No.
1035, and further
amended by PD No.
1246, prom. Nov. 21,
1977) (Emphasis
supplied.)

Under the above

provision, the law
provides that all
foreign currency
deposits authorized
under Republic Act
No. 6426, as amended
by Sec. 8, Presidential
Decree No. 1246,
Presidential Decree
No. 1035, as well as
foreign currency
deposits authorized
under Presidential
Decree No. 1034 are
considered absolutely
confidential in nature
and may not be
inquired into. There is
only one exception to
the secrecy of foreign
currency deposits,
that is, disclosure is
allowed upon the
written permission of
the depositor.

This much was

pronounced in the
case of Intengan v.
Court of Appeals,10
where it was held that
the only exception to
the secrecy of foreign
currency deposits is in
the case of a written
permission of the
depositor.
It must be
remembered that
under the whereas
clause of Presidential
Decree No. 1246
which amended Sec. 8
of Republic Act No.
6426, the Foreign
Currency Deposit
System including the
Offshore Banking
System under
Presidential Decree
1034 were intended to
draw deposits from
foreign lenders and
investors, and we
quote:
Whereas, in order to
assure the
development and
speedy growth of the
Foreign Currency
Deposit System and
the Offshore Banking
System in the
Philippines, certain
incentives were
provided for under
the two Systems such
as confidentiality of
deposits subject to
certain exceptions
and tax exemptions
on the interest income
of depositors who are
nonresidents and are
not engaged in trade
or business in the
Philippines;

Whereas, making
absolute the
protective cloak of
confidentiality over
such foreign currency
deposits, exempting
such deposits from
tax, and guaranteeing
the vested rights of
depositors would
better encourage the
inflow of foreign
currency deposits into
the banking
institutions
authorized to accept
such deposits in the
Philippines 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.
As to the deposit in
foreign currencies
entitled to be
protected under the
confidentiality rule,
Presidential Decree
No. 1034,11 defines
deposits to mean
funds in foreign
currencies which are
accepted and held by
an offshore banking
unit in the regular
course of business,
with the obligation to
return an equivalent
amount to the owner
thereof, with or
without interest.12

It is in this light that

the court in the case of
Salvacion v. Central
Bank of the
Philippines,13
allowed the inquiry of
the foreign currency
deposit in question
mainly due to the
peculiar
circumstances of the
case such that a strict
interpretation of the
letter of the law would
result to rank
injustice. Therein,
Greg Bartelli y
Northcott, an
American tourist, was
charged with criminal
cases for serious
illegal detention and
rape committed
against then 12 year-
old Karen Salvacion.
A separate civil case
for damages with
preliminary
attachment was filed
against Greg Bartelli.
The trial court issued
an Order granting the
Salvacions'
application for the
issuance of a writ of
preliminary
attachment. A notice
of garnishment was
then served on China
Bank where Bartelli
held a dollar account.
China Bank refused,
invoking the secrecy
of bank deposits. The
Supreme Court ruled:
"In fine, the
application of the law
depends on the extent
of its justice x x x It
would be unthinkable,
that the questioned
law exempting foreign
currency deposits
from attachment,
garnishment, or any
other order or process
of any court,
legislative body,
government agency or
any administrative
body whatsoever
would be used as a
device by an accused x
x x for wrongdoing,
and in so doing,
acquitting the guilty
at the expense of the
innocent.14
With the foregoing,
we are now tasked to
determine the single
material issue of
whether or not
petitioner China Bank
is correct in its
submission that the
Citibank dollar checks
with both Jose
Gotianuy and/or
Mary Margaret Dee as
payees, deposited
with China Bank, may
not be looked into
under the law on
secrecy of foreign
currency deposits. As
a corollary issue,
sought to be resolved
is whether Jose
Gotianuy may be
considered a
depositor who is
entitled to seek an
inquiry over the said
deposits.
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.
The following facts
are established: (1)
Jose Gotianuy and
Mary Margaret Dee
are co-payees of
various Citibank
checks;15 (2) Mary
Margaret Dee
withdrew these
checks from
Citibank;16 (3) Mary
Margaret Dee
admitted in her
Answer to the Request
for Admissions by the
Adverse Party sent to
her by Jose
Gotianuy17 that she
withdrew the funds
from Citibank upon
the instruction of her
father Jose Gotianuy
and that the funds
belonged exclusively
to the latter; (4) these
checks were endorsed
by Mary Margaret Dee
at the dorsal portion;
and (5) Jose Gotianuy
discovered that these
checks were deposited
with China Bank as
shown by the stamp of
China Bank at the
dorsal side of the
checks.
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.

A depositor, in cases
of bank deposits, is
one who pays money
into the bank in the
usual course of
business, to be placed
to his credit and
subject to his check or
the beneficiary of the
funds held by the
bank as trustee.18
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
(Exhibits "AAA" to
"AAA-5") readily
demonstrate (sic) 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. The April 16,
1999 Order perforce
must be sustained.19
(Emphasis supplied.)

One more point. It

must be remembered
that in the complaint
of Jose Gotianuy, he
alleged that his US
dollar deposits with
Citibank were illegally
taken from him. On
the other hand, China
Bank employee
Cristuta Labios
testified that Mary
Margaret Dee came to
China Bank and
deposited the money
of Jose Gotianuy in
Citibank US dollar
checks to the dollar
account of her sister
Adrienne Chu.20 This
fortifies our
conclusion that an
inquiry into the said
deposit at China Bank
is justified. At the very
least, Jose Gotianuy
as the owner of these
funds is entitled to a
hearing on the
whereabouts of these
funds.

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.21 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,22 the upholding
of fairness in our
judicial system and
would be an
avoidance of delay
and time-wasteful
and circuitous way of
administering
justice.23

WHEREFORE,
premises considered,
the Petition is
DENIED. The
Decision of the Court
of Appeals dated 29
October 1999
affirming the Order of
the RTC, Branch 58,
Cebu City dated 16
April 1999 is
AFFIRMED and this
case is ordered
REMANDED to the
trial court for
continuation of
hearing with utmost
dispatch consistent
with the above
disquisition. No costs.
SO ORDERED.