SECOND DIVISION

[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

Decision dated July 8, 1996 of the former Fifteenth Division of the Court of Appeals in
CA-G.R. SP No. 37577 as well as its Resolution 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.
[1]

[2]

[3]

The facts are:

On September 21, 1993, Citibank filed a complaint for violation of section 31, in
relation to section 144 of the Corporation Code against two (2) of its officers, Dante L.
Santos and Marilou Genuino. Attached to the complaint was an affidavit executed by
private respondent Vic Lim, a vice-president of Citibank. Pertinent portions of his
affidavit are quoted hereunder:
[4]

[5]

[6]

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

xxx

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. 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.
[10]

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 clients deposits was done through the accomplishment of
either an Application For Managers 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 Managers 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 ofestafa under Article 315, paragraph
1(b) of the Revised Penal Code.
[11]

As an incident to the foregoing, petitioners filed respective motions for the exclusion
and physical withdrawal of their bank records that were attached to Lims affidavit.
In due time, Lim and Reyes filed their respective counter-affidavits. 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, directed the filing of informations
[12]

[13]

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
Resolution ordering, inter alia, the withdrawal of the aforesaid informations against
private respondents. Petitioners motion for reconsideration was denied by DOJ Acting
Secretary Demetrio G. Demetria in a Resolution dated March 6, 1995.
[14]

[15]

[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. 119999120001. However, the former First Division of this Court, in a Resolution dated June 5,
1995, referred the matter to the Court of the Appeals, on the basis of the latter
tribunals 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.
[17]

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

xxx

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 Resolution 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
reinstated and eventually given due course.
[18]

[19]

[20]

In assailing the appellate courts 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 onSeptember 29, 2001 of R.A. No. 9160 otherwise known as the AntiMoney 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 latters written
permission. It does not matter if that such disclosure was necessary to establish
Citibanks case against Dante L. Santos and Marilou Genuino. Lims 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,
amended by Act No. 3763, are applicable:

[23]

as

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

[25]

before the Provincial Fiscal. In her complaint-affidavit, Intengan stated that she
learned of the revelation of the details of her foreign currency bank account onOctober
14, 1993. On the other hand, Neri asserts that she discovered the disclosure
on October 24, 1993. As to Brawner, the material date is January 5, 1994. Based on
any of these dates, prescription has set in.
[26]

[27]

[28]

[29]

[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;
on the other, ignorantia legis non excusat. 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.
[32]

[33]

[34]

WHEREFORE, the petition is hereby DENIED. No pronouncement as to costs.

SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

[1]

Rollo, pp. 61-70.

[2]

Former Presiding Justice Salome A. Montoya, (ret.), ponente, with Justice Godardo A. Jacinto and
Justice Maximiano C. Asuncion, concurring.

[3]

Rollo, p. 72.

[4]

SEC. 31. Liability of directors, trustees or officers-Directors or trustees who willfully and knowingly vote
for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or
bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in

conflict with their duty as such directors or trustees shall be liable jointly and severally for all
damages resulting therefrom suffered by the corporation, its stockholders or members and other
persons.
When a director, trustee or officer attempts to acquire or acquires, in violation of his duty, any interest
adverse to the corporation in respect of any matter which has been reposed in him in confidence,
as to which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a
trustee for the corporation and must account for the profits which otherwise would have accrued
to the corporation.
[5]

SEC. 144. Violations of the Code. -Violations of any of the provisions of this Code or its amendments
not otherwise specifically penalized therein shall be punished by a fine of not less than one
thousand (P1,000.00) pesos but not more than ten thousand (P10,000.00) pesos or by
imprisonment for not less than thirty (30) days but not more than five (5) years, or both, in the
discretion of the court. If the violation is committed by a corporation, the same may, after notice
and hearing, be dissolved in appropriate proceedings before the Securities and Exchange
Commission; Provided, That such dissolution shall not preclude the institution of appropriate
action against the director, trustee or officer of the corporation responsible for said violation;
Provided, further, That nothing in this section shall be construed to repeal the other causes for
dissolution of a corporation provided in this Code.

[6]

Rollo, pp. 94-104.

[7]

Rollo, p. 575.

[8]

Rollo, p. 576.

[9]

Rollo, p. 577.

[10]

Counter-affidavit of Joven Reyes, Rollo, pp. 123-126.

[11]

ARTICLE 315. Swindling (estafa).-Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by: xxx

1.

With unfaithfulness or abuse of confidence, namely: xxx

(b)

By misappropriating or converting, to the prejudice of another, money, goods, or any other

personal property received by the offender in trust, or on commission, or for administration, or
under any other obligation involving the duty to make delivery of, or to return the same, even
though such obligation be totally or partially guaranteed by a bond; or by denying having received
such money, goods, or other property; xxx

[12]

Ferguson and Rajkotwala failed to file theirs, and so were held to have waived their right.

[13]

Annex G of the petition, Rollo, pp. 153-168.

[14]

Annex A-2, Rollo, pp. 73-84.

[15]

Annex J, Rollo, pp. 286-315.

[16]

Annex A-3, Rollo, pp. 85-87.

[17]

CA Rollo, p. 290.

[18]

Rollo, p. 514.

[19]

Resolution dated September 22, 1997; Rollo, p. 530.

[20]

Resolution dated September 11, 2000; Rollo, p. 751.

[21]

The absolute confidentiality of foreign currency deposits, subject to the lone exception, was introduced
by Presidential Decree No. 1246 promulgated on November 21, 1977.

[22]

U.S. v. Siy Cong Bieng, et al., 30 Phil. 577, 579-580 (1915).

[23]

An Act to Establish Periods of Prescription for Violations Penalized by Special Acts and Municipal
Ordinances and to Provide When Prescription Shall Begin to Run.

[24]

Section 10, R.A. No. 6426.

[25]

It is true that Republic Act No. 6426 prescribes, as an alternative penalty, a fine ranging from five
thousand pesos to twenty-five thousand pesos. However, this cannot be used as the basis for
determining prescription, as was done in People v. Basalo (101 Phil. 57 [1957]), inasmuch as
Article 90 of the Revised Penal Code does not apply to offenses punishable under special laws
(People v. Ching Lak, 103 Phil. 1149 [1958]).

[26]

The exact date cannot be determined, it being unintelligible from the photocopies contained in the rollo.

[27]

Rollo, p. 90.

[28]

Complaint-Affidavit of Rosario LL. Neri, Rollo, p. 108.

[29]

Complaint-Affidavit of Rita P. Brawner, Rollo, p. 114.

[30]

In Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, 317 SCRA 272, 298
(1999), citing People v. Duque, 212 SCRA 607, 613-614 (1992), we held, to wit: In the nature of
things, acts made criminal by special laws are frequently not immoral or obviously criminal in
themselves; for this reason, the applicable statute requires that if the violation of the special law is
not known at the time, prescription begins to run only from the discovery thereof, i.e., discovery of
the unlawful nature of the constitutive act or acts.

[31]

Cf. People v. Abuy, 5 SCRA 222, 226-227(1962).

[32]

Revised Rules on Evidence, Rule 129, section 1.

[33]

Art. 3, New Civil Code. Ignorance of the law excuses no one from compliance therewith.

[34]

This complacency is amply evidenced by the rollo of this case, which consists of more than 900 pages.
The rollo of CA-G.R. SP No. 37577 appears to be of even greater length.

Philippine National Bank v. Gancayco GR

No. 18343, 30 September 1965
Section 8 of the Anti-Graft Law is intended to amend Section 2 of
Republic Act No. 1405 by providing an additional exception to the rule
against the disclosure of bank deposits.
Facts: Emilio Gancayco and Florentino Flor, as special prosecutors of the Department of
Justice, required the Philippine National Bank to produce at a hearing the records of the
bank deposits of Ernesto Jimenez, former administrator of the Agricultural Credit and
Cooperative Administration, who was then under investigation for unexplained wealth.
PNB refused to disclose his bank deposits, invoking Section 2 of Republic Act No. 1405. On
the other hand, the prosecutors cited the Anti-Graft and Corrupt Practices Act, particularly
Section 8 therewith, to wit:
Section 8. Dismissal due to unexplained wealth. If in accordance with the provisions of
RA 1379, a public official has been found to have acquired during his incumbency, whether
in his name or in the name of other persons, an amount of property and/or money
manifestly out of proportion to his salary and to his other lawful income, that fact shall be a
ground for dismissal or removal. Properties in the name of the spouse and unmarried
children of such public official, may be taken into consideration, when their acquisition
through legitimate means cannot be satisfactorily shown. Bank deposits shall be taken
into consideration in the enforcement of this section, notwithstanding any
provision of law to the contrary. PNB then filed an action for declaratory judgment in
the CFI of Manila which ruled that Section 8 of the Anti-Graft and Corrupt Practices Act
clearly intended to provide an additional ground for the examination of bank deposits.
Hence, this appeal.
Issue: Whether or not a bank can be compelled to disclose the records of accounts of a
depositor who is under investigation for unexplained wealth
Held :

Yes. While Republic Act No. 1405 provides that bank deposits are absolutely

confidential and may not be examined, inquired or looked into, , the Anti-Graft Law

directs in mandatory terms that bank deposits shall be taken into consideration
notwithstanding any provision of law to the contrary
While No reconciliation is possible between Republic Act No. 1405 and Republic Act No.
3019 as the two laws are so repugnant to each other. Thus, while Section 2 of Republic Act
No. 1405 provides that bank deposits are absolutely confidential and, therefore, may not
be examined, inquired or looked into, except in those cases enumerated therein, Section 8
of Republic Act No. 3019 (Anti-graft law) directs in mandatory terms that bank deposits
shall be taken into consideration in the enforcement of this section, notwithstanding any
provision of law to the contrary. The only conclusion possible is that Section 8 of the AntiGraft Law is intended to amend Section 2 of Republic Act No. 1405 by providing an
additional exception to the rule against the disclosure of bank deposits.
With regard to the claim that disclosure would be contrary to the policy making bank
deposits confidential, it is enough to point out that while Section 2 of Republic Act No. 1405
declares bank deposits to be absolutely confidential, it nevertheless allows such
disclosure in the following instances: (1) Upon written permission of the depositor; (2) In
cases of impeachment; (3) Upon order of a competent court in cases of bribery or
dereliction of duty of public officials; (4) In cases where the money deposited is the subject
of the litigation.
Cases of unexplained wealth are similar to cases of bribery or dereliction of duty and no
reason is seen why these two classes of cases cannot be excepted from the rule making
bank deposits confidential. The policy as to one cannot be different from the policy as to the
other. This policy expresses the notion that a public office is a public trust and any person
who enters upon its discharge does so with the full knowledge that his life, so far as relevant
to his duty, is open to public scrutiny.

Ejercito vs. Sandiganbayan, 509 SCRA 190 (2006)

Facts: A request for Issuance of Subpoena Duces Tecum for the issuance of a subpoena
directing the President of Export and Industry Bank or his/her authorized representative to
produce documents during hearings.
Special Prosecution Panel filed a Request for Issuance of Subpoena Duces Tecum/Ad
Testificandum directed to the authorized representative of Equitable PCI Bank to produce
statements of accounts pertaining to certain accounts in the name of Jose Velarde and to
testify thereon.
Sandiganbayan granted both requests and subpoenas were issued.
Petitioner, claiming to have learned from the media that the Special Prosecution Panel had
requested for the issuance of subpoenas for the examination of bank accounts belonging to
him, attended the hearing of the case and filed before the Sandiganbayan a letter
expressing his concerns.
Petitioner filed a Motion to Quash Subpoena Duces Tecum/Ad Testificandum. He claimed
that his bank accounts are covered by RA 1405 and do not fall under any of the exceptions
therein.
Issue: Whether or not petitioners trust account is covered by the term deposit as used in
RA 1405
Ruling: All deposits of whatever nature with banks or banking institutions in the Philippines
including investments in bonds issued by the Government of the Philippines, its political
subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential
nature and may not be examined, inquired or looked into by any person, government
official, bureau or office, except upon written permission of the depositor, or in cases of
impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of
public officials, or in cases where the money deposited or invested is the subject matter of
the litigation.
The phrase "of whatever nature" proscribes any restrictive interpretation of "deposits."
Moreover, it is clear from the immediately quoted provision that, generally, the law applies
not only to money which is deposited but also to those which are invested. This further show
that the law was not intended to apply only to "deposits" in the strict sense of the word.
Otherwise, there would have been no need to add the phrase "or invested." Clearly,
therefore, R.A. 1405 is broad enough to cover Trust Account No. 858.

G.R. No. 71479

October 18, 1990
MELLON BANK, N.A vs. MAGSINO
FACTS:
Dolores Ventosa requested the transfer of $1,000 from the First National Bank of Moundsville,
West Virginia, U.S.A. to Victoria Javier in Manila through the Prudential Bank.
To effect the transfer, the First National Bank requested the petitioner, Mellon Bank, which
mistakenly indicated in its wire sent to Manufacturers Hanover Bank, a correspondent of
Prudential Bank the amount transferred as "US$1,000,000.00" instead of US$1,000.00.
Manufacturers Hanover Bank transferred one million dollars less bank charges of $6.30 to the
Prudential Bank for the account of Victoria Javier.
Javier opened a new dollar account (No. 343) in the Prudential Bank and deposited $999,943.70.
Immediately, Victoria Javier and her husband, Melchor Javier, Jr., made withdrawals from the
account, deposited them in several banks only to withdraw them later in an apparent plan to
conceal, "launder" and dissipate the erroneously sent amount.
Melchor Javier, requested Jose Marquez, a realtor, to look for properties for sale in the United
States. Marquez offered a 160-acre lot in the Mojave Desert in California City which was owned
by Honorio Poblador.
Without having seen the property, Javier agreed to buy said property. Deeds were issued and one
of it was sent to the Kern County Registrar in California for registration.
The payment of the purchased property was made through six cashier's checks withdrawn from
dollar account 434 while the balance of P236,000 was paid in cash by Javier who did not even
ask for a receipt.
Inasmuch as Poblador had requested that the purchase price should not be paid directly to him,
the payment was coursed through six companies in which he is financially related with.
Mellon Bank filed a complaint in the Superior Court of California, County of Kern, against
Javier spouses to impose constructive trust of the property theyve purchased from the money
mistakenly and erroneously transferred to their account.
Mellon Bank also filed in the Court of First Instance
of Rizal, Branch X, a complaint against the Javier spouses, Honorio Poblador, etc to recover the
amount they received for the sale of the 160-acre lot in California City.

In due course, it was found out that the checks originally issued by Javier spouses were already
negotiated and now were deposited to Account 2825-1 of the Philippine Veterans Bank in the
name of Cipriano Azada, Poblador's law partner and counsel to the Javiers.

Mellon Bank then subpoenaed Erlinda Baylosis of Veterans Bank to show that Azada deposited
HSBC checks No. 339736 and 339737 amounting to P874,490.75 in his personal current account
with said bank and Pilologo Red, Jr. of HSBC to prove that said amount was returned by Azada
to Hagedorn one of the companies connected with Poblador.

The testimonies of these witnesses were objected to by the defense on the grounds of res inter
alios acta, immateriality, irrelevancy and confidentiality and then moved to strike off the
testimonies from the record of the case in violation of Republic Act No. 1405 the Secrecy of
Bank Deposits.

ISSUE:

Whether or not disclosure of bank deposits in cases where the money is the subject matter of
litigation violates RA 1405.

HELD:

Private respondents' protestations that to allow the questioned testimonies to remain on record
would be in violation of the provisions of Republic Act No. 1405 on the secrecy of bank
deposits, is unfounded.

Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited
is the subject matter of the litigation. Inasmuch as Civil Case is aimed at recovering the amount
converted by the Javiers for their own benefit, necessarily, an inquiry into the whereabouts of the

illegally acquired amount extends to whatever is concealed by being held or recorded in the
name of persons other than the one responsible for the illegal acquisition.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 134699 December 23, 1999

UNION BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS and ALLIED BANK CORPORATION, respondents.

KAPUNAN, J.:
Sec. 2 of the Law on Secrecy of Bank Deposits, 1 as amended, declares bank deposits to be
"absolutely confidential" except:

(1) In an examination made in the course of a special or general examination of a bank

that is specifically authorized by the Monetary Board after being satisfied that there is
reasonable ground to believe that a bank fraud or serious irregularity has been or is
being committed and that it is necessary to look into the deposit to establish such fraud
or irregularity,
(2) In an examination made by an independent auditor hired by the bank to conduct its
regular audit provided that the examination is for audit purposes only and the results
thereof shall be for the exclusive use of the bank,
(3) Upon written permission of the depositor,
(4) In cases of impeachment,
(5) Upon order of a competent court in cases of bribery or dereliction of duty of public
officials, or
(6) In cases where the money deposited or invested is the subject matter of the
litigation.

Whether or not the case at bar falls under the last exception is the issue in the instant
petition.
The facts are not disputed.
On March 21, 1990, a check (Check No. 11669677) dated March 31, 1990 in the
amount of One Million Pesos (P1,000,000.00) was drawn against Account No. 011101854-8 with private respondent Allied Bank payable to the order of one Jose Ch.
Alvarez. The payee deposited the check with petitioner Union Bank who credited the
P1,000,000.00 to the account of Mr. Alvarez. On May 21, 1990, petitioner sent the
check for clearing through the Philippine Clearing House Corporation (PCHC). When
the check was presented for payment, a clearing discrepancy was committed by Union
Bank's clearing staff when the amount of One Million Pesos (P1,000,000.00) was
erroneously "under-encoded" to One Thousand Pesos (P1,000.00) only.
Petitioner only discovered the under-encoding almost a year later. Thus, on May 7,
1991, Union Bank notified Allied Bank of the discrepancy by way of a charge slip for
Nine Hundred Ninety-Nine Thousand Pesos (P999,000.00) for automatic debiting
against of Allied Bank. The latter, however, refused to accept the charge slip "since [the]
transaction was completed per your [Union Bank's] original instruction and client's
account is now insufficiently funded."
Subsequently, Union Bank filed a complaint against Allied Bank before the PCHC
Arbitration Committee (Arbicom), praying that:
. . . judgment be rendered in favor of plaintiff against defendant sentencing
it to pay plaintiff:
1. The sum of NINE HUNDRED NINETY-NINE THOUSAND PESOS
(P999,000.00);
2. The sum of THREE HUNDRED SIXTY-ONE AND FOUR HUNDRED
EIGHTY AND 20/XX P361,480.20 as of October 9, 1991 representing
reimbursements for opportunity losses and interest at the rate of 24% per
annum arising from actual losses sustained by plaintiff as of May 21,
1990;
3. The amount for attorney's fees at the rate of 25% of any and all sums
due;
4. Penalty Charges at the rate of 1/8 of 1% of P999,000.00 from May 22,
1990 until payment thereof.

5. Exemplary and punitive damages against the defendant in such

amounts as may be awarded by this Tribunal in order to serve a lesson to
all member-Banks under the PCHC umbrella to strictly comply with the
provisions thereof;
6. The costs of suit which includes filing fee in addition to litigation
expenses which shall be proven in the course of arbitration.
7. Such other damages that may be awarded by this Tribunal.

Thereafter, Union Bank filed in the Regional Trial Court (RTC) of Makati a petition for
the examination of Account No. 111-01854-8. Judgment on the arbitration case was held
in abeyance pending the resolution of said petition.
Upon motion of private respondent, the RTC dismissed Union Bank's petition. The RTC
held that:
The case of the herein petitioner does not fall under any of the foregoing
exceptions to warrant a disclosure of or inquiry into the ledgers/books of
account of Allied Checking Account No. 111-01854-8. Needless to say, the
complaint filed by herein petitioner against Allied Banking Corporation
before the Philippine Clearing House Corporation (PCHC) Arbitration
Committee and docketed therein as Arb[i]com Case No. 91-068 (Annex
"A", petition) is not one for bribery or dereliction of duty of public officials
much less is there any showing that the subject matter thereof is the
money deposited in the account in question. Petitioner's complaint
primarily hing[e]s on the alleged deliberate violation by Allied Bank
Corporation of the provisions of the PCHC Rule Book, Sec. 25[.]3, and as
principal reliefs, it seeks for [sic] the recovery of amounts of money as a
consequence of an alleged under-coding of check amount to
P1,000,000.00 and damage[s] by way of loss of interest income. 3
The Court of Appeals affirmed the dismissal of the petition, ruling that the case was not
one where the money deposited is the subject matter of the litigation.
Petitioner collecting bank itself in its complaint filed before the PCHC,
Arbicom Case No. 91-068, clearly stated that its "cause of action against
defendant arose from defendant's deliberate violation of the provisions of
the PCHC Rule Book, Sec. 25.3, specifically on Under-Encoding of check
amounting to P1,000,000.00 drawn upon defendant's Tondo Branch which
was deposited with plaintiff herein on May 20, 1990, . . . which was

erroneously encoded at P1,000.00 which defendant as the receiving bank

thereof, never called nor notified the plaintiff of the error committed thus
causing actual losses to plaintiff in the principal amount of P999,000.00
exclusive of opportunity losses and interest."
Furthermore, a reading of petitioner collecting bank's complaint in the
Arbicom case shows that its thrust is directed against respondent drawee
bank's alleged failure to inform the former of the under-encoding when
Sec. 25.3 of the PCHC Rule Book is clear that it is receiving bank's
(respondent drawee bank herein) duty and obligation to notify the erring
bank (petitioner collecting bank herein) of any such under-encoding of any
check amount submitted for clearing within the member banks of the
PCHC not later than 10:00 a.m. of the following clearing day and prays
that respondent drawee bank be held liable to petitioner collecting bank for
penalties in view of the latter's violation of the notification requirement.
Prescinding from the above, we see no cogent reason to depart from the
time-honored general banking rule that all deposits of whatever nature
with banks are considered of absolutely confidential nature and may not
be examined, inquired or looked into by any person, government official,
bureau or office and corollarily, that it is unlawful for any official or
employee of a bank to disclose to any person any information concerning
deposits.
Nowhere in petitioner collecting bank's complaint filed before the PCHC
does it mention of the amount it seeks to recover from Account No. 0111018548 itself, but speaks of P999,000.00 only as an incident of its alleged
opportunity losses and interest as a result of its own employee's admitted
error in encoding the check.
The money deposited in Account No. 0111-018548 is not the subject
matter of the litigation in the Arbicom case for as clearly stated by
petitioner itself, it is the alleged violation by respondent of the rules and
regulations of the PCHC. 4
Union Bank is now before this Court insisting that the money deposited in Account No.
0111-01854-8 is the subject matter of the litigation Petitioner cites the case of Mathay
vs. Consolidated Bank and Trust Company, 5where we defined "subject matter of the action,"
thus:

. . . By the phrase "subject matter of the action" is meant "the physical

facts, the things real or personal, the money, lands, chattels, and the like,
in relation to which the suit is prosecuted, and not the delict or wrong
committed by the defendant."
Petitioner contends that the Court of Appeals confuses the "cause of action" with the
"subject of the action." InYusingco vs. Ong Hing Lian, 6 petitioner points out, this Court
distinguished the two concepts.

. . . The cause of action is the legal wrong threatened or committed, while

the object of the action is to prevent or redress the wrong by obtaining
some legal relief; but the subject of the action is neither of these since it is
not the wrong or the relief demanded, the subject of the action is the
matter or thing with respect to which the controversy has arisen,
concerning which the wrong has been done, and this ordinarily is the
property, or the contract and its subject matter, or the thing in dispute.
The argument is well taken. We note with approval the difference between the "subject
of the action" from the "cause of action." We also find petitioner's definition of the phrase
"subject matter of the action" is consistent with the term "subject matter of the litigation,"
as the latter is used in the Bank Deposits Secrecy Act.
In Mellon Bank, N.A. vs. Magsino, 7 where the petitioner bank inadvertently caused the transfer of
the amount of US$1,000,000.00 instead of only US$1,000.00, the Court sanctioned the examination of
the bank accounts where part of the money was subsequently caused to be deposited:

. . . Sec. 2 of [Republic Act No. 1405] allows the disclosure of bank

deposits in cases where the money deposited is the subject matter of the
litigation. Inasmuch as Civil Case No. 26899 is aimed at recovering the
amount converted by the Javiers for their own benefit, necessarily, an
inquiry into the whereabouts of the illegally acquired amount extends to
whatever is concealed by being held or recorded in the name of persons
other than the one responsible for the illegal acquisition.
Clearly, Mellon Bank involved a case where the money deposited was the subject
matter of the litigation since the money so deposited was the very thing in dispute. This,
however, is not the case here.
Petitioner's theory is that private respondent Allied Bank should have informed petitioner
of the under-encoding pursuant to the provisions of Section 25.3.1 of the PCHC
Handbook, which states:

25.3.1. The Receiving Bank should inform the erring Bank about the
under-encoding of amount not later than 10:00 A.M. of the following
clearing day.
Failing in that duty, petitioner holds private respondent directly liable for the
P999,000.00 and other damages. It does not appear that petitioner is seeking
reimbursement from the account of the drawer. This much is evident in
petitioner's complaint before the Arbicom.
. . . plaintiff's cause of action against defendant arose from defendant's
deliberate violation of the provisions of the PCHC Rule Book, Sec. 25.3,
specifically on Under-Encoding of check amounting to P1,000,000.00
drawn upon defendant's Tondo Branch which was deposited with plaintiff
herein sometime on May 20, 1990. From the check amount of
P1,000,000.00, it was instead erroneously encoded at P1,000.00
which defendant as the receiving bank thereof, never called nor notified
the plaintiff of the error committed thus causing actual losses to plaintiff in
the principal amount of P999,000.00 exclusive of opportunity losses and
interest thereon whatsoever. . . . 8
Petitioner even requested private respondent's Branch Manager for
reimbursement from private respondent's account through the automatic debiting
system.
2.7. On May 6, 1991, plaintiff's Senior Vice-President, Ms. ERLINDA V.
VALENTON wrote defendant's Tondo Branch Manager, Mr. RODOLFO
JOSE on the incident and requested assistance in facilitating correction of
the erroneous coding with request for reimbursement thru the industry's
automatic debiting of defendant's account. . . . 9
Further, petitioner rejected private respondent's proposal that the drawer issue
postdated checks in favor of petitioner since the identity and credit standing of
the depositor were unknown to petitioner.
2.9. On May 23, 1991, defendant's Branch Manager, the same Mr. Rodolfo
Jose wrote plaintiff's Ms. Erlinda Valenton again insisting on the execution
of the Quitclaim and Release in favor of defendant as the Branch has
endeavored to negotiate with its client for the collection of such amount.
Upon a reading of the terms of the Quitclaim and Release being proposed
by defendant, the unmistakable fact lies that again defendant attempts for
the second time to take advantage of plaintiffs plight by indicating that the

terms of the payment of the principal amount of P999,000.00 is by way of

several personal postdated checks up to March 21, 1992 from a person
whose identify is not even disclosed to plaintiff. . . .
To an ordinary person aggrieved already by having been taken advantage
of for 620 days more or less, the proposal of defendant could not be
acceptable for the reason that aside from the interest lost already for the
use of its money by another party, no assurance is made as to the actual
collection thereof from a party whose credit standing, the recipient is not at
all aware of. . . . 10
Petitioner also believed that it had no privity with the depositor:
2.12. Plaintiff then replied to defendant's letter by requesting that in lieu of
the post-dated checks from defendant's client with whom plaintiff has no
privity whatsoever, if the defendant could tender the full payment of the
amount of P999,000.00 in defendant's own Manager's check and that
plaintiff is willing to forego its further claims for interest and losses for a
period of 620 days, more or less. . . .11
The following argument adduced by petitioner in the Arbicom case leaves no doubt that
petitioner is holding private respondent itself liable for the discrepancy:
Defendant by its acceptance thru the clearing exchange of the check
deposit from its client cannot be said to be free from any liability for the
unpaid portion of the check amount considering that defendant as the
drawee bank, is remiss in its duty of verifying possible technicalities on the
face of the check.
Since the provisions of the PCHC Rule Book has so imposed upon the
defendant being the Receiving Bank of a discrepant check item to give
that timely notification and defendant failing to comply with such
requirement, then it can be said that defendant is guilty of negligence. He
who is guilty of negligence in the performance of its [sic] duty is liable for
damages. (Art. 1170, New Civil Code.)
Art. 1172 of the Civil Code provides that:
"Responsibility arising from negligence in the performance of
every kind of obligation is also demandable, but such liability

may be regulated by the courts, according to the

circumstances.["] 12
Petitioner points to its prayer in its complaint to show that it sought reimbursement from
the drawer's account. The prayer, however, does not specifically state that it was
seeking recovery of the amount from the depositor's account. Petitioner merely asked
that "judgment be rendered in favor of plaintiff against defendant sentencing it to pay
plaintiff: 1. The sum of NINE HUNDRED NINETY-NINE THOUSAND PESOS
(P999,000.00). . . . 13
On the other hand, the petition before this Court reveals that the true purpose for the
examination is to aid petitioner in proving the extent of Allied Bank's liability:
Hence, the amount actually debited from the subject account becomes
very material and germane to petitioner's claim for reimbursement as it is
only upon examination of subject account can it be proved that indeed a
discrepancy in the amount credited to petitioner was committed, thereby,
rendering respondent Allied Bank liable to petitioner for the deficiency. The
money deposited in aforesaid account is undeniably the subject matter of
the litigation since the issue in the Arbicom case is whether respondent
Bank should be held liable to petitioner for reimbursement of the amount
of money constituting the difference between the amount of the check and
the amount credited to petitioner, that is, P999,000.00, which has
remained deposited in aforesaid account.
On top of the allegations in the Complaint, which can be verified only by
examining the subject bank account, the defense of respondent Allied
Bank that the reimbursement cannot be made since client's account is not
sufficiently funded at the time petitioner sent its Charge Slip, bolsters
petitioner's contention that the money in subject account is the very
subject matter of the pending Arbicom case.
Indeed, to prove the allegations in its Complaint before the PCHC
Arbitration Committee, and to rebut private respondent's defense on the
matter, petitioner needs to determine:
1. how long respondent Allied Bank had wilfully or negligently allowed the
difference of P999,000.00 to be maintained in the subject account without
remitting the same to petitioner;

2. whether indeed the subject account was no longer sufficiently funded

when petitioner sent its charge slip for reimbursement to respondent bank
on May 7, 1991; and
3. whether or not respondent Allied Bank's actuations in refusing to
immediately reimburse the discrepancy was attended by good or bad faith.
In other words, only a disclosure of the pertinent details and information
relating to the transactions involving subject account will enable petitioner
to prove its allegations in the pending Arbicom
case. . . . . 14
In short, petitioner is fishing for information so it can determine the culpability of private
respondent and the amount of damages it can recover from the latter. It does not seek
recovery of the very money contained in the deposit. The subject matter of the dispute
may be the amount of P999,000.00 that petitioner seeks from private respondent as a
result of the latter's alleged failure to inform the former of the discrepancy; but it is not
the P999,000.00 deposited in the drawer's account. By the terms of R.A. No. 1405, the
"money deposited" itself should be the subject matter of the litigation.
That petitioner feels a need for such information in order to establish its case against
private respondent does not, by itself, warrant the examination of the bank deposits.
The necessity of the inquiry, or the lack thereof, is immaterial since the case does not
come under any of the exceptions allowed by the Bank Deposits Secrecy Act.
WHEREFORE, the petition is DENIED.
SO ORDERED.

BSB v. Sally Go
Facts: Petitioner, the BSB Group, Inc., is a duly organized domestic corporation
presided by its herein representative, Ricardo Bangayan (Bangayan). Respondent Sally
Go, alternatively referred to as Sally Sia Go and Sally Go-Bangayan, is Bangayan's
wife, who was employed in the company as a cashier, and was engaged, among others,
to receive and account for the payments made by the various customers of the
company.
In 2002, Bangayan filed with the Manila Prosecutor's Office a complaint for estafa
and/or qualified theft against respondent, alleging that several checks representing the
aggregate amount of P1,534,135.50 issued by the company's customers in payment of
their obligation were, instead of being turned over to the company's coffers, indorsed by
respondent who deposited the same to her personal banking account maintained at
Security Bank and Trust Company (Security Bank) in Divisoria, Manila Branch. Upon a
finding that the evidence adduced was uncontroverted, the assistant city prosecutor
recommended the filing of the Information for qualified theft against respondent.
Accordingly, respondent was charged before the Regional Trial Court of Manila. She
was found guilty; that in the commission of the said offense, said accused acted with
grave abuse of confidence, being then employed as cashier by said complainant at the
time of the commission of the said offense and as such she was entrusted with the said
amount of money.
Respondent entered a negative plea when arraigned. The trial ensued. On the premise
that respondent had allegedly encashed the subject checks and deposited the
corresponding amounts thereof to her personal banking account.
Petitioner, opposing respondent's move, argued for the relevancy of the Metrobank
account on the ground that the complaint-affidavit showed that there were two checks
which respondent allegedly deposited in an account with the said bank. To this,
respondent filed a supplemental motion to quash, invoking the absolutely confidential
nature of the Metrobank account under the provisions of Republic Act (R.A.) No. 1405.
The trial court did not sustain respondent; hence, it denied the motion to quash for lack
of merit.
Meanwhile, the prosecution was able to present in court the testimony of Elenita
Marasigan (Marasigan), the representative of Security Bank. In a nutshell, Marasigan's
testimony sought to prove that between 1988 and 1989, respondent, while engaged as
cashier at the BSB Group, Inc., was able to run away with the checks issued to the
company by its customers, endorse the same, and credit the corresponding amounts to
her personal deposit account with Security Bank. In the course of the testimony, the
subject checks were presented to Marasigan for identification and marking as the same
checks received by respondent, endorsed, and then deposited in her personal account
with Security Bank. CA affirmed RTCs decision.
Issue: WON there is no difference between cash and check for purposes of prosecuting
respondent for theft of cash

Held: In theft, the act of unlawful taking connotes deprivation of personal property of
one by another with intent to gain, and it is immaterial that the offender is able or unable
to freely dispose of the property stolen because the deprivation relative to the offended
party has already ensued from such act of execution. The allegation of theft of money,
hence, necessitates that evidence presented must have a tendency to prove that the
offender has unlawfully taken money belonging to another. Interestingly, petitioner has
taken pains in attempting to draw a connection between the evidence subject of the
instant review, and the allegation of theft in the Information by claiming that respondent
had fraudulently deposited the checks in her own name. But this line of argument works
more prejudice than favor, because it in effect, seeks to establish the commission, not of
theft, but rather of some other crime probably estafa.
Moreover, that there is no difference between cash and check is true in other instances.
In estafa by conversion, for instance, whether the thing converted is cash or check, is
immaterial in relation to the formal allegation in an information for that offense; a check,
after all, while not regarded as legal tender, is normally accepted under commercial
usage as a substitute for cash, and the credit it represents in stated monetary value is
properly capable of appropriation. And it is in this respect that what the offender does
with the check subsequent to the act of unlawfully taking it becomes material inasmuch
as this offense is a continuing one. In other words, in pursuing a case for this offense,
the prosecution may establish its cause by the presentation of the checks involved.
These checks would then constitute the best evidence to establish their contents and to
prove the elemental act of conversion in support of the proposition that the offender has
indeed indorsed the same in his own name.
Theft, however, is not of such character. Thus, for our purposes, as the Information in
this case accuses respondent of having stolen cash, proof tending to establish that
respondent has actualized her criminal intent by indorsing the checks and depositing
the proceeds thereof in her personal account, becomes not only irrelevant but also
immaterial and, on that score, inadmissible in evidence.
We now address the issue of whether the admission of Marasigan's testimony on the
particulars of respondent's account with Security Bank, as well as of the corresponding
evidence of the checks allegedly deposited in said account, constitutes an unallowable
inquiry under R.A. 1405.
It is conceded that while the fundamental law has not bothered with the triviality of
specifically addressing privacy rights relative to banking accounts, there, nevertheless,
exists in our jurisdiction a legitimate expectation of privacy governing such accounts.
The source of this right of expectation is statutory, and it is found in R.A. No. 1405,
otherwise known as the Bank Secrecy Act of 1955.
R.A. No. 1405 has two allied purposes. It hopes to discourage private hoarding and at
the same time encourage the people to deposit their money in banking institutions, so
that it may be utilized by way of authorized loans and thereby assist in economic
development. Owing to this piece of legislation, the confidentiality of bank deposits
remains to be a basic state policy in the Philippines. Section 2 of the law
institutionalized this policy by characterizing as absolutely confidential in general all

deposits of whatever nature with banks and other financial institutions in the country. It
declares:
Section 2.All deposits of whatever nature with banks or banking institutions in the
Philippines including investments in bonds issued by the Government of the Philippines,
its political subdivisions and its instrumentalities, are hereby considered as of an
absolutely confidential nature and may not be examined, inquired or looked into by any
person, government official, bureau or office, except upon written permission of the
depositor, or in cases of impeachment, or upon order of a competent court in cases of
bribery or dereliction of duty of public officials, or in cases where the money deposited
or invested is the subject matter of the litigation.
Subsequent statutory enactments have expanded the list of exceptions to this policy yet
the secrecy of bank deposits still lies as the general rule, falling as it does within the
legally recognized zones of privacy. There is, in fact, much disfavor to construing these
primary and supplemental exceptions in a manner that would authorize unbridled
discretion, whether governmental or otherwise, in utilizing these exceptions as authority
for unwarranted inquiry into bank accounts. It is then perceivable that the present legal
order is obliged to conserve the absolutely confidential nature of bank deposits.
The measure of protection afforded by the law has been explained in China Banking
Corporation v. Ortega. That case principally addressed the issue of whether the
prohibition against an examination of bank deposits precludes garnishment in
satisfaction of a judgment. Ruling on that issue in the negative, the Court found
guidance in the relevant portions of the legislative deliberations on Senate Bill No. 351
and House Bill No. 3977, which later became the Bank Secrecy Act, and it held that the
absolute confidentiality rule in R.A. No. 1405 actually aims at protection from
unwarranted inquiry or investigation if the purpose of such inquiry or investigation is
merely to determine the existence and nature, as well as the amount of the deposit in
any given bank account.
What indeed constitutes the subject matter in litigation in relation to Section 2 of R.A.
No. 1405 has been pointedly and amply addressed in Union Bank of the Philippines v.
Court of Appeals, in which the Court noted that the inquiry into bank deposits allowable
under R.A. No. 1405 must be premised on the fact that the money deposited in the
account is itself the subject of the action. Given this perspective, we deduce that the
subject matter of the action in the case at bar is to be determined from the indictment
that charges respondent with the offense, and not from the evidence sought by the
prosecution to be admitted into the records. In the criminal Information filed with the trial
court, respondent, unqualifiedly and in plain language, is charged with qualified theft by
abusing petitioner's trust and confidence and stealing cash in the amount
of P1,534,135.50. The said Information makes no factual allegation that in some
material way involves the checks subject of the testimonial and documentary evidence
sought to be suppressed. Neither do the allegations in said Information make mention of
the supposed bank account in which the funds represented by the checks have
allegedly been kept.

In other words, it can hardly be inferred from the indictment itself that the Security Bank
account is the ostensible subject of the prosecution's inquiry. Without needlessly
expanding the scope of what is plainly alleged in the Information, the subject matter of
the action in this case is the money amounting to P1,534,135.50 alleged to have been
stolen by respondent, and not the money equivalent of the checks which are sought to
be admitted in evidence. Thus, it is that, which the prosecution is bound to prove with its
evidence, and no other.
It comes clear that the admission of testimonial and documentary evidence relative to
respondent's Security Bank account serves no other purpose than to establish the
existence of such account, its nature and the amount kept in it. It constitutes an attempt
by the prosecution at an impermissible inquiry into a bank deposit account the privacy
and confidentiality of which is protected by law. On this score alone, the objection posed
by respondent in her motion to suppress should have indeed put an end to the
controversy at the very first instance it was raised before the trial court.
In sum, we hold that the testimony of Marasigan on the particulars of respondent's
supposed bank account with Security Bank and the documentary evidence represented
by the checks adduced in support thereof, are not only incompetent for being excluded
by operation of R.A. No. 1405. They are likewise irrelevant to the case, inasmuch as
they do not appear to have any logical and reasonable connection to the prosecution of
respondent for qualified theft. We find full merit in and affirm respondent's objection to
the evidence of the prosecution. The Court of Appeals was, therefore, correct in
reversing the assailed orders of the trial court.
A final note. In any given jurisdiction where the right of privacy extends its scope to
include an individual's financial privacy rights and personal financial matters, there is an
intermediate or heightened scrutiny given by courts and legislators to laws infringing
such rights. Should there be doubts in upholding the absolutely confidential nature of
bank deposits against affirming the authority to inquire into such accounts, then such
doubts must be resolved in favor of the former. This attitude persists unless congress
lifts its finger to reverse the general state policy respecting the absolutely confidential
nature of bank deposits. Petition denied.

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 Petition 3 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.
1wphi1

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.
ESTELA M. PERLAS-BERNABE
Associate Justice
WE CONCUR:

Salvacion vs. Central Bank of the Philippines, 278 SCRA 27 (1997)

Facts: Greg Bertelli, an American tourist, co-axed and lured petitioner Karen Salvacion
to go with him to his apartment. Greg Bertelli detained Karen Salvacion for 4 days and
was able to rape the child. After policemen and people lvicing nearby, rescued Karen,
Greg Bertelli was arrested and detained at jail.
Deputy Sheriff of Makati served a notice of garnishment on CBC but the latter invoked
RA1 405. CBC invoked Sec.113 of CB Circular No. 960 to the effect that the dollar
deposit of Greg Bertelli are exempt from garnishment, attachment or any other order or
process of the court, legislative body, government agency or administrative body.
This prompted counsel for petitioner to make an inquiry with the CB on whether Sec.
113 of CB Circular No. 960 has any extension or whether it has been repealed or
amended.
After the lapse of 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
Bertellis dollar account deposit with CBC. Likewise, the bank invoked Sec. 113 of CB
Circular No. 960.
Issue: Whether or not Sec. 113 of CB Circular No. 960, as amended by PD 1246,
otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign
transient
Ruling: No. 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.
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.
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.