MARQUEZ V. DESIERTO (G.R. NO.

135882)

Facts:
Petitioner Lourdes Marquez received an Order from respondent Ombudsman Aniano Desierto to produce
several bank documents for purposes of inspection in camera relative to various accounts maintained at
the bank where petitioner is the branch manager. The accounts to be inspected are involved in a case
pending with the Ombudsman entitled, Fact-Finding and Intelligence Bureau (FFIB) v. Amado
Lagdameo. It appears that a certain George Trivinio purchased trail managers check and deposited some
of it to an account maintained at petitioner’s branch. Petitioner after meeting with the FFIB Panel to
ensure the veracity of the checks agreed to the in camera inspection. Petitioner being unable to readily
identify the accounts in question, the Ombudsman issued an order directing petitioner to produce the bank
documents. Thus, petitioner sought a declaration of her rights from the court due to the clear conflict
between RA 6770 and RA 1405. Meanwhile, FFIB moved to cite petitioner in contempt before the
Ombudsman.
Issue:
Whether or not the order of Ombudsman to have an in camera inspection of the accounts is an allowable
exception of R.A. No. 1405.
Ruling: NO.
The order of the Ombudsman to produce for in camera inspection the subject accounts with the Union
Bank of the Philippines, Julia Vargas Branch, is based on a pending investigation at the Office of the
Ombudsman against Amado Lagdameo, et. al. for violation of R.A. No. 3019, Sec. 3 (e) and (g) relative
to the Joint Venture Agreement between the Public Estates Authority and AMARI.
We rule that before an in camera inspection may be allowed, there must be a pending case before a court
of competent jurisdiction. Further, the account must be clearly identified, the inspection limited to the
subject matter of the pending case before the court of competent jurisdiction. The bank personnel and the
account holder must be notified to be present during the inspection, and such inspection may cover only
the account identified in the pending case.
In the case at bar, there is yet no pending litigation before any court of competent authority. What is
existing is an investigation by the Office of the Ombudsman. In short, what the office of the ombudsman
would wish to do is to fish for additional evidence to formally charge Amado Lagdameo, et. al., with the
Sandiganbayan. Clearly, there was no pending case in court which would warrant the opening of the bank
account for inspection.

EJERCITO V. SANDIGANBAYAN (G.R. NOS. 157294-95)

Facts:
In lieu of the Criminal Case “People v. Estrada” for plunder, the Special Prosecution Panel filed before
the Sandiganbayan a request for issuance of Subpoena Duces Tecum directing the President of Export and
Industry Bank or his/her authorized representative to produce documents namely, Trust Account and
Savings Account belonging to petitioner and statement of accounts of one named “Jose Velarde” and to
testify thereon during the hearings. Sandiganbayan granted both requests and subpoenas were accordingly
issued. Sandiganbayan also granted and issued subpoenas prayed for by the Prosecution Panel in another
later date. Petitioner now assisted by his counsel filed two separate motions to quash the two subpoenas
issued. Sandiganbayan denied both motions and the consequent motions for reconsideration of petitioner.
Issues:
(1) Whether or not the trust accounts of petitioner are covered by the term “deposits” as used in R.A. No.
1405
(2) Whether or not plunder is neither bribery nor dereliction of duty not exempted from protection of R.A.
No. 1405
(3) Whether or not the unlawful examination of bank accounts shall render the evidence obtained
therefrom inadmissible in evidence.
Ruling:
(1) YES. An examination of the law shows that the term “deposits” used therein is to be understood
broadly and not limited only to accounts which give rise to a creditor-debtor relationship between the
depositor and the bank.
The policy behind the law is laid down in Section 1. If the money deposited under an account may be
used by banks for authorized loans to third persons, then such account, regardless of whether it creates a
creditor-debtor relationship between the depositor and the bank, falls under the category of accounts
which the law precisely seeks to protect for the purpose of boosting the economic development of the
country.
Trust Account No. 858 is, without doubt, one such account. The Trust Agreement between petitioner and
Urban Bank provides that the trust account covers “deposit, placement or investment of funds” by Urban
Bank for and in behalf of petitioner. The money deposited under Trust Account No. 858, was, therefore,
intended not merely to remain with the bank but to be invested by it elsewhere. To hold that this type of
account is not protected by R.A. 1405 would encourage private hoarding of funds that could otherwise be
invested by banks in other ventures, contrary to the policy behind the law.
Section 2 of the same law in fact even more clearly shows that the term “deposits” was intended to be
understood broadly. 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 shows 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.
(2) NO. 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.
The crime of bribery and the overt acts constitutive of plunder are crimes committed by public officers,
and in either case the noble idea 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” applies with equal force.
Plunder being thus analogous to bribery, the exception to R.A. 1405 applicable in cases of bribery must
also apply to cases of plunder.
(3) NO. Petitioner’s attempt to make the exclusionary rule applicable to the instant case fails. R.A. 1405,
it bears noting, nowhere provides that an unlawful examination of bank accounts shall render the evidence
obtained therefrom inadmissible in evidence. Section 5 of R.A. 1405 only states that “[a]ny violation of
this law will subject the offender upon conviction, to an imprisonment of not more than five years or a
fine of not more than twenty thousand pesos or both, in the discretion of the court.”
Even assuming arguendo, however, that the exclusionary rule applies in principle to cases involving R.A.
1405, the Court finds no reason to apply the same in this particular case. Clearly, the “fruit of the
poisonous tree” doctrine presupposes a violation of law. If there was no violation of R.A. 1405 in the
instant case, then there would be no “poisonous tree” to begin with, and, thus, no reason to apply the
doctrine.
Additional Note: (This case is to be contrasted with Marquez v. Desierto)
The Marquez ruling notwithstanding, the above-described examination by the Ombudsman of petitioner’s
bank accounts, conducted before a case was filed with a court of competent jurisdiction, was lawful.
For the Ombudsman issued the subpoenas bearing on the bank accounts of petitioner about four
months before Marquez was promulgated on June 27, 2001.
When this Court construed the Ombudsman Act of 1989, in light of the Secrecy of Bank Deposits Law in
Marquez, that “before an in camera inspection may be allowed there must be a pending case before a
court of competent jurisdiction”, it was, in fact, reversing an earlier doctrine found in Banco Filipino
Savings and Mortgage Bank v. Purisima.
Banco Filipino involved subpoenas duces tecum issued by the Office of the Ombudsman, then known as
the Tanodbayan, in the course of its preliminary investigation of a charge of violation of the Anti-Graft
and Corrupt Practices Act. As the subpoenas subject of Banco Filipino were issued during a preliminary
investigation, in effect this Court upheld the power of the Tandobayan under P.D. 1630 to issue
subpoenas duces tecum for bank documents prior to the filing of a case before a court of competent
jurisdiction.
Marquez, on the other hand, practically reversed this ruling in Banco Filipino despite the fact that the
subpoena power of the Ombudsman under R.A. 6770 was essentially the same as that under P.D. 1630.
The Marquez ruling that there must be a pending case in order for the Ombudsman to validly inspect bank
records in camera thus reversed a prevailing doctrine. Hence, it may not be retroactively applied. The
Ombudsman’s inquiry into the subject bank accounts prior to the filing of any case before a court of
competent jurisdiction was therefore valid at the time it was conducted. In fine, the subpoenas issued by
the Ombudsman in this case were legal, hence, invocation of the “fruit of the poisonous tree” doctrine is
misplaced.

Ejercito vs. Sandiganbayan G.R. Nos. 157294-95, 30 November 2006

RA 1405 does not provide for the application of this rule. At all events, the Ombudsman is not barred
from requiring the production of documents based solely on information obtained by it from sources
independentof its previous inquiry.
Facts: Joseph Victor G. Ejercito is the owner of Trust Account No. 858 which was originally opened at
Urban Bank but which is now maintained at Export and Industry Bank, which is the purchaser and owner
now of the former Urban Bank and Urbancorp Investment, Inc. He is also the owner of Savings Account
No. 0116-17345-9 which was originally opened at Urban Bank but which is now maintained at Export
and Industry Bank, the purchaser and owner of the former Urban Bank and Urbancorp Investment, Inc.

Estrada was subsequently charged with Plunder. The Sandiganbayan a Request for Issuance of Subpoena
Duces Tecum for the issuance of a subpoena directing the President of Export and Industry Bank (EIB,
formerly Urban Bank) or his/her authorized representative to produce various document related to the
investigation.

The Special Prosecution Panel also filed a Request for Issuance of Subpoena Duces Tecum/Ad
Testificandum directed to the authorized representative of Equitable-PCI Bank to produce statements of
account pertaining to certain accounts in the name of “Jose Velarde” and to testify thereon.

The Sandiganbayan granted both requests by Resolution and subpoenas were accordingly issued. The
Special Prosecution Panel filed still another Request for Issuance of Subpoena Duces Tecum/Ad
Testificandum for the President of EIB or his/her authorized representative to produce the same
documents subject of the first Subpoena Duces Tecum and to testify thereon on the hearings scheduled
and subsequent dates until completion of the testimony. The request was likewise granted by the
Sandiganbayan. A Subpoena Duces Tecum/Ad Testificandum was accordingly issued. Ejercito filed
various motions to quash the various Subpoenas Duces Tecum/Ad Testificandum previously issued. In
his Motion to Quash, he claimed that his bank accounts are covered by R.A. No. 1405 (The Secrecy of
Bank Deposits Law) and do not fall under any of the exceptions stated therein. He further claimed that
the specific identification of documents in the questioned subpoenas, including details on dates and
amounts, could only have been made possible by an earlier illegal disclosure thereof by the EIB and the
Philippine Deposit Insurance Corporation (PDIC) in its capacity as receiver of the then Urban Bank. The
disclosure being illegal, he concluded, the prosecution in the case may not be allowed to make use of the
information. Before the motion was resolved by the Sandiganbayan, the prosecution filed another

Issue: Whether or not a Trust Account is covered by the term “deposit” as used in R.A. 1405;

Held: R.A. 1405 is broad enough to cover Trust Account No. 858. However, the protection afforded by
the law is not absolute. There being recognized exceptions thereto, as above-quoted Section 2 provides.
In the present case, two exceptions apply, to wit: (1) the examination of bank accounts is upon order of a
competent court in cases of bribery or dereliction of duty of public officials, and (2) the money deposited
or invested is the subject matter of the litigation. Ejercito contends that since plunder is neither bribery
nor dereliction of duty, his accounts are not excepted from the protection of R.A. 1405.

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. Undoubtedly, cases for
plunder involve unexplained wealth. The crime of bribery and the overt acts constitutive of plunder are
crimes committed by public officers, noble idea 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” applies with equal force.

Also, the plunder case now pending with the Sandiganbayan necessarily involves an inquiry into the
whereabouts of the amount purportedly acquired illegally by former President Joseph Estrada. Republic
Act No. 1405 allows the disclosure of bank deposits in cases where the money deposited is the subject
matter of the litigation. Hence, these accounts are no longer protected by the Secrecy of Bank Deposits
Law, there being two exceptions to the said law applicable in this case, namely: (1)the examination of
bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of public
officials, and (2)the money deposited or invested is the subject matter of the litigation. Exception (1)
applies since the plunder case pending against former President Estrada is analogous to bribery or
dereliction of duty, while exception (2) applies because the money deposited in Ejercito’s bank accounts
is said to form part of the subject matter of the same plunder case. The “fruit of the poisonous tree”
doctrine or the exclusionary rule is inapplicable in cases of unlawful examination of bank accounts.

UNION BANK OF THE PHILIPPINES V. CA (G.R. NO. 134699)

Facts:
A check in the amount of P1M was drawn against an account 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 P1M to the account of Mr. Alvarez. Petitioner sent the check for clearing and when the
check was presented for payment, a clearing discrepancy was committed by Union Bank’s clearing staff
when the amount P1M was erroneously “under-encoded” to P1,000 only. Petitioner only discovered the
under-encoding almost a year later. Thus, Union Bank notified Allied Bank of the discrepancy by way of
a charge slip for P999,000.00 for automatic debiting against 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.” Union Bank filed a complaint against Allied Bank
before the PCHC Arbitration Committee (Arbicom). Thereafter, Union Bank filed before the RTC a
petition for the examination of the account with respondent bank. Judgment on the arbitration case was
held in abeyance pending the resolution of said petition. The RTC dismissed Union Bank’s petition. CA
affirmed the dismissal ruling that the case was not one where the money deposited is the subject matter of
the litigation.
Issue:
Whether the discrepancy amount is the subject matter of litigation.
Ruling: NO.
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. 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. 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.

Mellon Bank vs. Magsino G.R. No. 71479 October 18, 1990
MARCH 16, 2014LEAVE A COMMENT
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 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.
Facts: On May 27, 1977, 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.
Accordingly, the First National Bank requested the petitioner, Mellon Bank, to effect the transfer.
Unfortunately the wire sent by Mellon Bank to Manufacturers Hanover Bank, a correspondent of
Prudential Bank, indicated the amount transferred as “US$1,000,000.00” instead of US$1,000.00. Hence
Manufacturers Hanover Bank transferred one million dollars less bank charges of $6.30 to the Prudential
Bank for the account of Victoria Javier.

Javier withdrew $475,000 from account No. 343 and converted it into eight cashier’s checks made out to
the following: (a) F.C. Hagedorn & Co., Inc., two cheeks for the total amount of P1,000,000; (b) Elnor
Investment Co., Inc., two checks for P1,000,000; (c) Paramount Finance Corporation, two checks for
P1,000,000; and (d) M. Javier, Jr., two checks for P496,000. Javier also brought several properties in the
United States including the one of his lawyer, Poblador.
Mellon Bank filed a complaint docketed as No. 148056 in the Superior Court of California, County of
Kern, against Melchor Javier, Jane Doe Javier, Honorio Poblador, Jrn, and Does I through V. In its first
amended complaint to impose constructive trust. The testimonies of these witnesses were objected to by
the defense on the grounds of res inter alios acta, immateriality, irrelevancy and confidentiality due to RA
1405. The Javier spouses also contend that inasmuch as the Mellon Bank had filed in California an action
to impose constructive trust on the California property and to recover the same.

Issue:1) Whether or not an account deposit which is relevant and material to the resolution of the case
may be covered under R.A. No. 1405.

2) Whether or not the principle of election of remedies bars recovery of Mellon Bank

Held:

1) Whether or not an account deposit which is relevant and material to the resolution of the case may be
covered under R.A. No. 1405.

Yes. Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited is
the subject matter of the litigation. 24 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.

2) Whether or not the principle of election of remedies bars recovery of Mellon Bank

The spouses Javier’s reliance on the procedural principle of election of remedies as part of their ploy to
terminate Civil Case No. 26899 prematurely. With the exception of the Javiers, respondents failed to raise
it as a defense in their answers and therefore, by virtue of Section 2, Rule 9 of the Rules of Court, such
defense is deemed waived. 26 Notwithstanding its lengthy and thorough discussion during the hearing
and in pleadings subsequent to the answers, the issue of election of remedies has not, contrary to the
lower court’s assertion, been elevated to a “substantive one.” Having been waived as a defense, it cannot
be treated as if it has been raised in a motion to dismiss based on the nonexistence of a cause of action.

Moreover, granting that the defense was properly raised, it is inapplicable in this case. In its broad sense,
election of remedies refers to the choice by a party to an action of one of two or more coexisting remedial
rights, where several such rights arise out of the same facts, but the term has been generally limited to a
choice by a party between inconsistent remedial rights, the assertion of one being necessarily repugnant
to, or a repudiation of, the other. In its technical and more restricted sense, election of remedies is the
adoption of one of two or more coexisting remedies, with the effect of precluding a resort to the others.
ONATE V. ABROGAR (G.R. NO. 107303)

Facts:
Sun Life filed a complaint for a sum of money with a prayer for the immediate issuance of a writ of
attachment against petitioners Onate and Dino. Respondent Judge granted the prayer and the writ was
correspondingly issued. After the summons were eventually served upon petitioners, the latter filed
motions to discharge/dissolve the attachment. Meanwhile, Sun Life filed motions for examination of
petitioners’ bank accounts. Respondent judge ruled in all the motions in favor of Sun Life. Petitioners
moved for reconsideration but were denied.
Issue:
Whether or not respondent judge erred in allowing the examination of the bank accounts of herein
petitioners.
Ruling:
We find both petitions unmeritorious.
It is clear from the foregoing provision that notice need only be given to the garnishee, but the person who
is holding property or credits belonging to the defendant. The provision does not require that notice be
furnished the defendant himself, except when there is a need to examine said defendant “for the purpose
of giving information respecting his property.
Furthermore, Section 10 Rule 57 is not incompatible with Republic Act No. 1405, as amended, “An Act
Prohibiting Disclosure or Inquiry Into, Deposits With Any Banking Institution and Providing Penalty
Therefore,” for Section 2 therefore provides an exception “in cases where the money deposited or
invested is the subject matter of the litigation.”
The examination of the bank records is not a fishing expedition, but rather a method by which Sun Life
could trace the proceeds of the check it paid to petitioners.

Emmanuel Oñate and Econ Holdings Corporation v Abrogar and Sunlife Insurance Company of Canada
G.R. No. 107303 February 21, 1994
MARCH 16, 2014LEAVE A COMMENT
Section 10 Rule 57 is not incompatible with Republic Act No. 1405, as amended, (Bank Deposits
Secrecy Law) for Section 2 therefor provides an exception “in cases where the money deposited or
invested is the subject matter of the litigation. The examination of the bank records is not a fishing
expedition, but rather a method by which Sun Life could trace the proceeds of the check it paid to
petitioners.
Facts: Sun Life Assurance Company of Canada (Sun Life) filed a complaint for a sum of money with a
prayer for the immediate issuance of a writ of attachment against petitioners and Noel L. Diño at Branch
150 of the RTC Makati, presided over by respondent Judge. The following day, respondent Judge
Abrogar issued an order granting the issuance of a writ of attachment.

Upon Sun Life’s ex-parte motion, the trial court amended the writ of attachment to reflect the alleged
amount of the indebtedness. That same day, Deputy Sheriff Flores, accompanied by a representative of
Sun Life, attempted to serve summons and a copy of the amended writ of attachment upon petitioners at
their known office address in Makati but was not able to do so since there was no responsible officer to
receive the same. Nonetheless, Sheriff Flores proceeded over a period of several days to serve notices of
garnishment upon several commercial banks and financial institutions, and levied on attachment a
condominium unit and a real property belonging to petitioner Oñate. ECON filed an “Urgent Motion to
Discharge/Dissolve Writ of Attachment.” That same day, Sun Life filed an ex-parte motion to examine
the books of accounts and ledgers of petitioner Brunner Development Corporation (Brunner) at the Urban
Bank, Legaspi Village Branch, and to obtain copies thereof, which motion was granted by respondent
Judge. The examination of said account took place on January 23, 1992. Petitioners filed a motion to
nullify the proceedings taken thereat since they were not present.

ECON and their co-defendants filed a memorandum in support of the motion to discharge attachment.
Also on that same day, Sun Life filed another motion for examination of bank accounts, this time seeking
the examination of Account No. 0041-0277-03 with the Bank of Philippine Islands (BPI) — which,
incidentally, petitioners claim not to be owned by them — and the records of Philippine National Bank
(PNB) with regard to checks payable to Brunner. Sun Life asked the court to order both banks to comply
with the notice of garnishment.

On February 6, 1992, respondent Judge issued an order (1) denying petitioners’ and the co-defendants’
motion to discharge the amended writ of attachment, (2) approving Sun Life’s additional attachment, (3)
granting Sun Life’s motion to examine the BPI account, and (4) denying petitioners’ motion to nullify the
proceedings. Petitioners’ assail the acts of respondent Judge in allowing the examination of Urban Banks’
records and in ordering that the examination of the bank records of BPI and PNB as invalid since no
notice of said examinations were ever given them.

Issue:

1) Whether or not respondent Judge had acted with grave abuse of discretion in issuing ex parte the
original and amended writs of preliminary attachment and the corresponding notices of garnishment and
levy on attachment pending acquisition of the jurisdiction of the RTC.

2) Whether or not respondent Judge had acted with grave abuse of discretion amounting to lack or in
excess of jurisdiction in allowing the examination of the bank records though no notice was given to
them.

Held:

1) Whether or not respondent Judge had acted with grave abuse of discretion in issuing ex parte the
original and amended writs of preliminary attachment and the corresponding notices of garnishment and
levy on attachment pending acquisition of the jurisdiction of the RTC.

No. It is clear from the provision of Section 10, Rule 57 (ROC) that notice need only be given to the
garnishee, but the person who is holding property or credits belonging to the defendant. The provision
does not require that notice be furnished the defendant himself, except when there is a need to examine
said defendant “for the purpose of giving information respecting his property. Furthermore, Section 10
Rule 57 is not incompatible with Republic Act No. 1405, as amended, (Bank Deposits Secrecy Law) for
Section 2 therefor provides an exception “in cases where the money deposited or invested is the subject
matter of the litigation. The examination of the bank records is not a fishing expedition, but rather a
method by which Sun Life could trace the proceeds of the check it paid to petitioners.

2) Whether or not respondent Judge had acted with grave abuse of discretion amounting to lack or in
excess of jurisdiction in allowing the examination of the bank records though no notice was given to
them.
It is well-settled that a writ of preliminary attachment may be validly applied for and granted even before
the defendant is summoned or is heard from. A preliminary attachment may be defined as the provisional
remedy in virtue of which a plaintiff or other proper party may, at the commencement of the action or any
time thereafter, have the property of the adverse party taken into the custody of the court as security for
the satisfaction of any judgment that may be recovered. It is a remedy which is purely statutory in respect
of which the law requires a strict construction of the provisions granting it. Withal no principle, statutory
or jurisprudential, prohibits its issuance by any court before acquisition of jurisdiction over the person of
the defendant.

China Banking Corporation v Court of Appeals G.R. No. 140687 December 18, 2006
MARCH 16, 2014LEAVE A COMMENT
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.
Facts: 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. 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
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. Upon
motion of Elizabeth Gotianuy Lo, the trial court issued a subpoena to Cristota Labios and Isabel Yap,
employees of China Bank, to testify on the case.

Issue: Whether or not the subpoena issued by the court violates PD No. 1035, and further amended by PD
No. 1246, prom. Nov. 21, 1977

Held: 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. Furthermore, it is indubitable that
the Citibank checks were drawn against the foreign currency account with Citibank, NA. The monies
subject of said checks originally came from the late Jose Gotianuy, the owner of the account. Thus, he
also has legal rights and interests in the CBC account where said monies were deposited. More
importantly, the Citibank checks readily demonstrate (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.
China Banking Corporation and Tan Kim Liong vs. Hon. Wenceslao Ortega et. alG.R. No. L-
34964 31 January 1973 Makalintal, J.:

FACTS:
Tan Kim Liong was ordered to inform the Court whether or not there is a deposit inthe China Banking
Corporation of defendant B & B Forest Development Corporation, and if there is any deposit, to hold the
same intact and not allow any withdrawal until furtherorder from the Court. Petitioners in this case refuse
to comply with a court processgarnishing the bank deposit of a judgment debtor by invoking the
provisions of RepublicAct No. 1405 ( Secrecy of Bank Deposits Act) which allegedly prohibits the
disclosure of any information concerning to bank deposits.

ISSUE:

Whether or not a banking institution may validly refuse to comply with a court processes garnishing the
bank deposit of a judgment debtor, by invoking the provisions of Republic Act No. 1405.

HELD:
No. The lower court did not order an examination of or inquiry into deposit of B & BForest Development
Corporation, as contemplated in the law. It merely required Tan KimLiong to inform the court whether or
not the defendant B & B Forest Development Corporation had a deposit in the China Banking
Corporation only for the purposes of thegarnishment issued by it, so that the bank would hold the same
intact and not allow anywithdrawal until further order. It is sufficiently clear that the prohibition
against examination of or inquiry into bank deposit under RA 1405 does not preclude its beinggarnished
to insure satisfaction of a judgment. Indeed there is no real inquiry in such acase, and the existence of the
deposit is disclosed the disclosure is purely incidental to theexecution process. WHEREFORE, the orders
of the lower court dated March 4 and 27, 1972,respectively, are hereby affirmed, with costs against the
petitioners-appellants.

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural Guardian,
and Spouses FEDERICO N. SALVACION, JR., and EVELINA E. SALVACION vs. CENTRAL
BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION and GREG BARTELLI y
NORTHCOTT
G.R. No. 94723 August 21, 1997
FACTS: Greg Bartelli, an American tourist, was arrested for committing four counts of rape and serious
illegal detention against Karen Salvacion. Police recovered from him several dollar checks and a dollar
account in the China Banking Corp. He was, however, able to escape from prison. In a civil case filed
against him, the trial court awarded Salvacion moral, exemplary and attorney’s fees amounting to almost
P1,000,000.00.
Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking Corp. but
the latter refused arguing that Section 11 of Central Bank Circular No. 960 exempts foreign currency
deposits from attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body whatsoever. Salvacion therefore filed this action for
declaratory relief in the Supreme Court.
ISSUE: Should Section 113 of Central Bank Circular No. 960 and Section 8 of Republic Act No. 6426, as
amended by PD 1246, otherwise known as the Foreign Currency Deposit Act be made applicable to a
foreign transient?
HELD: NO.
The provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246, insofar as it amends
Section 8 of Republic Act 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
the civil case and to release to petitioners the dollar deposit of Bartelli in such amount as would satisfy the
judgment.

Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages
that Salvacion and her parents fully deserve. It then proceeded to show that the economic basis for the
enactment of RA No. 6426 is not anymore present; and even if it still exists, the questioned law still
denies those entitled to due process of law for being unreasonable and oppressive. The intention of the
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.

The SC adopted the comment of the Solicitor General who argued that the Offshore Banking System and
the Foreign Currency Deposit System were designed to draw deposits from foreign lenders and investors
and, subsequently, to give the latter protection. However, 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. Considering that Bartelli is just a tourist or a
transient, he 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.
Further, the SC said: “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.”
___________

NOTES:
– 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.

RCBC v Pacifico de Castro and PVTA G.R. No. L-34548 November 29, 1988
MARCH 16, 2014LEAVE A COMMENT
The funds of the PVTA can be garnished since “funds of public corporation which can sue and be
sued were not exempt from garnishment. Inasmuch as the Tobacco Fund, a special fund, was by law,
earmarked specifically to answer obligations incurred by PVTA in connection with its proprietary and
commercial operations authorized under the law, it follows that said funds may be proceeded against
by ordinary judicial processes such as execution and garnishment. Garnishment is considered as a
specie of attachment for reaching credits belonging to the judgment debtor and owing to him from a
stranger to the litigation. Under the above-cited rule, the garnishee [the third person] is obliged to
deliver the credits, etc. to the proper officer issuing the writ and “the law exempts from liability the
person having in his possession or under his control any credits or other personal property belonging
to the defendant, …, if such property be delivered or transferred, …, to the clerk, sheriff, or other
officer of the court in which the action is pending.
Facts: Badoc Planters, Inc. filed an action for recovery of unpaid tobacco deliveries against PVTA. Hon.
Lourdes P. San Diego, then Presiding Judge, ordering the defendants therein to pay jointly and severally,
the plaintiff Badoc Planters, Inc. (hereinafter referred to as “BADOC”) within 48 hours the aggregate
amount of P206,916.76, with legal interests thereon. Accordingly, the Branch Clerk of Court on the very
same day, issued a Writ of Execution addressed to Special Sheriff Faustino Rigor, who then issued a
Notice of Garnishment addressed to the General Manager and/or Cashier of Rizal Commercial Banking
Corporation (hereinafter referred to as RCBC). However, PVTA filed a Motion for Reconsideration. The
Judge set aside the Orders of Execution and of Payment and the Writ of Execution and ordering petitioner
and BADOC “to restore, jointly and severally, the account of PVTA with the said bank in the same
condition and state it was before.

Issues:

1) Whether or not PVTA funds are public funds not subject to garnishment;

2) Whether or not the respondent Judge correctly ordered the herein petitioner to reimburse the amount
paid to the Special Sheriff by virtue of the execution issued pursuant to the Order/Partial Judgment dated
January 15, 1970.

1) Whether or not PVTA funds are public funds not subject to garnishment;

Republic Act No. 2265 created the PVTA as an ordinary corporation with all the attributes of a corporate
entity subject to the provisions of the Corporation Law. Hence, it possesses the power “to sue and be
sued” and “to acquire and hold such assets and incur such liabilities resulting directly from operations
authorized by the provisions of this Act or as essential to the proper conduct of such operations.” Among
the specific powers vested in the PVTA are: 1) to buy Virginia tobacco grown in the Philippines for resale
to local bona fide tobacco manufacturers and leaf tobacco dealers [Section 4(b), R.A. No. 2265]; 2) to
contracts of any kind as may be necessary or incidental to the attainment of its purpose with any person,
firm or corporation, with the Government of the Philippines or with any foreign government, subject to
existing laws [Section 4(h), R.A. No. 22651; and 3) generally, to exercise all the powers of a corporation
under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act [Section
4(k), R.A. No. 2265.]

From the foregoing, it is clear that PVTA has been endowed with a personality distinct and separate from
the government which owns and controls it. Accordingly, this Court has heretofore declared that the funds
of the PVTA can be garnished since “funds of public corporation which can sue and be sued were not
exempt from garnishment. Inasmuch as the Tobacco Fund, a special fund, was by law, earmarked
specifically to answer obligations incurred by PVTA in connection with its proprietary and commercial
operations authorized under the law, it follows that said funds may be proceeded against by ordinary
judicial processes such as execution and garnishment. Garnishment is considered as a specie of
attachment for reaching credits belonging to the judgment debtor and owing to him from a stranger to the
litigation. Under the above-cited rule, the garnishee [the third person] is obliged to deliver the credits, etc.
to the proper officer issuing the writ and “the law exempts from liability the person having in his
possession or under his control any credits or other personal property belonging to the defendant, …, if
such property be delivered or transferred, …, to the clerk, sheriff, or other officer of the court in which the
action is pending.

2) Whether or not the respondent Judge correctly ordered the herein petitioner to reimburse the amount
paid to the Special Sheriff

No. The bank was in no position to question the legality of the garnishment since it was not even a party
to the case. As correctly pointed out by the petitioner, it had neither the personality nor the interest to
assail or controvert the orders of respondent Judge. It had no choice but to obey the same inasmuch as it
had no standing at all to impugn the validity of the partial judgment rendered in favor of the plaintiff or of
the processes issued in execution of such judgment. RCBC cannot therefore be compelled to make
restitution solidarily with the plaintiff BADOC. Plaintiff BADOC alone was responsible for the issuance
of the Writ of Execution and Order of Payment and so, the plaintiff alone should bear the consequences of
a subsequent annulment of such court orders; hence, only the plaintiff can be ordered to restore the
account of the PVTA.

BSB GROUP V. SALLY GO (G.R. NO. 168644)

Facts:
Petitioner is a duly organized domestic corporation presided by its representative, Ricardo Bangayan,
husband of herein respondent Sally Go. Respondent was employed as a cashier, and was engaged, among
others, to receive and account for the payments made by the various customers of the company. Bangayan
filed with the Manila Prosecutor’s Office a complaint for estafa/qualified theft against respondent alleging
that several checks 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. Accordingly, respondent was charged and the
prosecution moved for the issuance of subpoena duces tecum/ad testificandum against the respective
managers or records custodians of Security Bank and Asian Savings Bank. Respondent opposed and
meanwhile, prosecution was able to present in court the testimony of one Security Bank representative.
Petitioner moved to exclude the testimony but was denied by the trial court. CA reversed and set aside the
order.
Issue:
Whether or not the 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.
Ruling: YES.
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.
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 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.

Philippine Deposit Insurance Corporation vs. Citibank

GR NO.170290 April 11, 2012

Mendoza, J.:FACTS:

Petitioner Philippine Deposit Insurance Corporation

(PDIC)
is a government instrumentality created by virtue of Republic Act
(R.A.)
No. 3591, as amended by R.A. No.9302.Respondent Citibank, N.A.
(Citibank)
is a banking corporation while respondent Bank of America, S.T. & N.A.
(BA)
is a national banking association, both of which are dulyorganized and existing under the laws of the
United States of America and duly licensed todo business in the Philippines, with offices in Makati
City.In 1977, PDIC conducted an examination of the books of account of Citibank. It discovered that
Citibank, in the course of its banking business, from September 30, 1974 toJune 30, 1977, received from
its head office and other foreign branches a totalof P11,923,163,908.00 in dollars, covered by Certificates
of Dollar Time Deposit that wereinterest-bearing with corresponding maturity dates. These funds, which
were lodged inthe books of
Citibank under the account “Their Account
-Head Office/Branches-Foreign
Currency,” were not reported to PDIC as deposit liabilities that were subject to assessment
for insurance. As such, in a letter dated March 16, 1978, PDIC assessed Citibank fordeficiency in the sum
of P1,595,081.96.Similarly, sometime in 1979, PDIC examined the books of accounts of BA
whichrevealed that from September 30, 1976 to June 30, 1978, BA received from its head officeand its
other foreign branches a total of P629,311,869.10 in dollars, covered by Certificatesof Dollar Time
Deposit that were interest-bearing with corresponding maturity dates and
lodged in their books under the account “Due to Head Office/Branches.” Because BA also
excluded these from its deposit liabilities, PDIC wrote to BA on October 9, 1979, seeking
theremittance of P109,264.83 representing deficiency premium assessments for dollardeposits.Believing
that litigation would inevitably arise from this dispute, Citibank and BAeach filed a petition for
declaratory relief before the Court of First Instance (now theRegional Trial Court) of Rizal on July 19,
1979 and December 11, 1979, respectively. Intheir petitions, Citibank and BA sought a declaratory
judgment stating that the moneyplacements they received from their head office and other foreign
branches were not deposits and did not give rise to insurable deposit liabilities under Sections 3 and 4 of
R.A.No. 3591
(the PDIC Charter)
and, as a consequence, the deficiency assessments made byPDIC were improper and erroneous. The cases
were then consolidated.On June 29, 1998, the Regional Trial Court, Branch 163, PasigCity
(RTC)
promulgated its Decision in favor of Citibank and BA. Aggrieved, PDIC appealedto the CA which
affirmed the ruling of the RTC in its October 27, 2005 Decision. Hence, thispetition.
ISSUE:
Whether or not a branch of a bank has a separate legal Personality.

HELD
: No
.
A branch has no separate legal personality. This Court is of the opinion that thekey to the resolution of
this controversy is the relationship of the Philippine branches of Citibank and BA to their respective head
offices and their other foreign branches.

The Court begins by examining the manner by which a foreign corporation canestablish its presence in
the Philippines. It may choose to incorporate its own subsidiary asa domestic corporation, in which case
such subsidiary would have its own separate andindependent legal personality to conduct business in the
country. In the alternative, it maycreate a branch in the Philippines, which would not be a legally
independent unit, andsimply obtain a license to do business in the Philippines.In the case of Citibank and
BA, it is apparent that they
both did not incorporate
aseparate domestic corporation to represent its business interests in the Philippines. TheirPhilippine
branches are, as the name implies, merely branches, without a separate legalpersonality from their parent
company, Citibank and BA. Thus, being one and the sameentity, the funds placed by the respondents in
their respective branches inthe Philippines should not be treated as deposits made by third parties subject
to deposit insurance under the PDIC Charter. The purpose of the PDIC is to protect the depositingpublic
in the event of a bank closure. It has already been sufficiently establishedby US jurisprudence
and Philippine statutes that the head office shall answer for theliabilities of its branch. Now, suppose the
Philippine branch of Citibank suddenly closes forsome reason. Citibank N.A. would then be required to
answer for the deposit liabilities of Citibank Philippines. If the Court were to adopt the posture of PDIC
that the head office andthe branch are two separate entities and that the funds placed by the head office
and itsforeign branches with the Philippine branch are considered deposits within the meaning of the
PDIC Charter, it would result to the incongruous situation where Citibank, as the headoffice, would be
placed in the ridiculous position of having to reimburse itself, as depositor,for the losses it may incur
occasioned by the closure of Citibank Philippines. Surely our lawmakers could not have envisioned such
a preposterous circumstance when they createdPDIC.Finally, the Court agrees with the CA ruling that
there is nothing in the definition of
a “bank” and a “banking institution” in Section 3(b) of the PDIC Charter
[27]
which explicitlystates that the head office of a foreign bank and its other branches are separate and
distinct from their Philippine branches.There is no need to complicate the matter when it can be solved by
simple logicbolstered by law and jurisprudence. Based on the foregoing, it is clear that the head officeof a
bank and its branches are considered as one under the eyes of the law. While branchesare treated as
separate business units for commercial and financial reporting purposes, inthe end, the head office
remains responsible and answerable for the liabilities of itsbranches which are under its supervision and
control. As such, it is unreasonable for PDICto require the respondents, Citibank and BA, to insure
the money placements made by theirhome office and other branches. Deposit insurance is superfluous and
entirely unnecessarywhen, as in this case, the institution holding the funds and the one which made
theplacements are one and the same legal entity.

PDIC Law; Inter-branch deposits; not covered by PDIC Law. As explained by the respondents, the
transfer of funds, which resulted from the inter-branch transactions, took place in the books of account of
the respective branches in their head office located in theUnited States. Hence, because it is payable
outside of the Philippines, it is not considered a deposit pursuant to Section 3(f) of the PDIC Charter:
Sec. 3(f) The term “deposit” means the unpaid balance of money or its equivalent received by a bank in
the usual course of business and for which it has given or is obliged to give credit to a commercial,
checking, savings, time or thrift account or which is evidenced by its certificate of deposit, and trust funds
held by such bank whether retained or deposited in any department of said bank or deposit in another
bank, together with such other obligations of a bank as the Board of Directors shall find and shall
prescribe by regulations to be deposit liabilities of the Bank; Provided, that any obligation of a bank
which is payable at the office of the bank located outside of the Philippines shall not be a deposit for any
of the purposes of this Act or included as part of the total deposits or of the insured deposits; Provided
further, that any insured bank which is incorporated under the laws of the Philippines may elect to include
for insurance its deposit obligation payable only at such branch.

The testimony of Mr. Shaffer as to the treatment of such inter-branch deposits by the FDIC, after which
PDIC was modelled, is also persuasive. Inter-branch deposits refer to funds of one branch deposited in
another branch and both branches are part of the same parent company and it is the practice of the FDIC
to exclude such inter-branch deposits from a bank’s total deposit liabilities subject to assessment. PDIC
vs. Citibank, N.A. and Bank of America, S.T. & N.A, G.R. No. 170290, April 11, 2012.

G.R. No. 170281

January 18, 2008

REPUBLIC OF THE PHILIPPINES, represented by the ANTI-MONEYLAUNDERING
COUNCIL VS. GLASGOW CREDIT ANDCOLLECTION SERVICES, INC. and
CITYSTATE SAVINGS BANK, INC.
FACTS:On July 18, 2003, petitioner filed a complaint for civil forfeiture of assets withthe RTC of Manila
against the bank deposits in account number CS – 005-10-000121-5 maintained by GLASGOW in CSBI.
The case was filed pursuant to RA 9160 or theAnti-Money Laundering Act of 2001.On July 21, 2003, the
RTC of Manila issued a 72-hour TRO. And on
August8 , 2 0 0 3 a w r i t o f p r e l i m i n a r y i n j u n c t i o n w a s i s s u e d . M e a n w h i l e , s
u m m o n s t o GLASGOW was returned “unserved” as it could no longer be found at its last
knownaddress.On October 8, 2003, petitioner filed a verified omnibus motion for a) issuanceof alias
summons and b) leave of court to serve summons by publication. On October 15, 2003, the trial court
directed the issuance of alias summons. No mention was made of the motion for leave of court to
serve summons by
publication.O n J a n u a r y 3 0 , 2 0 0 4 , t h e t r i a l c o u r t a r c h i v e d t h e c a s e f o r f a i l
u r e o f t h e Republic to serve alias summons. The Republic filed an ex parte omnibus
motion tor e i n s t a t e t h e c a s e a n d r e s o l v e t h e m o t i o n f o r l e a v e o f c o u r t t o s e r v e
s u m m o n s b y publication.

On May 31, 2004, the trial court ordered the reinstatement of the case
directing the Republic to serve the alias summons to Glasgow and CSBI within 15 days.On
July 12, 2004, petitioner received a copy of the sheriff’s return stating thatthe alias summons was
returned “unserved” as GLASGOW was no longer holding office at the given address since July
2002.On August 11, 2005, petitioner filed a manifestation and ex parte motion to resolve its
motion for leave of court to serve summons by publication.On August 12, 2005, the OSG received
a copy of GLASGOW’s motion todismiss by way of special appearance al leging that 1) the
court had no jurisdictiono v e r i t s p e r s o n a s s u m m o n s h a d n o t y e t b e e n s e r v e d o n i t
2 ) t h e c o m p l a i n t w a s premature and stated no cause of action and 3) there was failure to
prosecute on the part of the Republic.On October 17, 2005, the trial court dismissed the case
on the grounds of 1)improper venue 2) insufficiency of the complaint in form and substance and 3)
failureto prosecute and lifted the writ of preliminary injunction.Petitioner filed a petition for
review.ISSUE:Whether or not the complaint for civil forfeiture was properly instituted.

RULING:S e c . 1 2 ( a ) o f R A 9 1 6 0 p r o v i d e s t w o c o n d i t i o n s w h e n a p p l y i n g f o r
c i v i l forfeiture:1 . w h e n t h e r e i s s u s p i c i o u s t r a n s a c t i o n r e p o r t o r a c o v e r e d
t r a n s a c t i o n report deemed suspicious after investigation by the AMLC;2.the court has, in a
petition filed for the purpose; ordered the seizure of any monetary instrument or property,
in whole or in part, directly or indirectly, related to said
report.T h e w r i t o f p r e l i m i n a r y i n j u c t i o n i s s u e d o n A u g u s t
8, 2003 removeda c c o u n t n o . C A - 0 0 5 - 1 0 - 0 0 0 1 2 1 -
5 f r o m t h e e f f e c t i v e c o n t r o l o f e i t h e r GLASGOW or CSBI or their representatives or
agents and subjected it to the process of the court. Since this account was covered by several
suspiciousreports and placed under the control of the trial court upon the issuance of thewrit, the
conditions provided in Section 12 (a) of RA 9160 were satisfied. The petitioner properly instituted the
complaint for civil forfeiture.

Republic v Judge Eugenio G.R. No. 174629,

February 14, 2008
MARCH 16, 2014LEAVE A COMMENT
Sec. 2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank accounts may be
examined by any person, government official, bureau or offial; namely when: (1) upon written
permission of the depositor; (2) in cases of impeachment; (3) the examination of bank accounts is
upon order of a competent court in cases of bribery or dereliction of duty of public officials; and
(4) the money deposited or invested is the subject matter of the litigation. Section 8 of R.A. Act No.
3019, the Anti-Graft and Corrupt Practices Act, has been recognized by this Court as constituting
an additional exception to the rule of absolute confidentiality, and there have been other similar
recognitions as well.[
Facts: Under the authority granted by the Resolution, the AMLC filed an application to inquire into
or examine the deposits or investments of Alvarez, Trinidad, Liongson and Cheng Yong before the
RTC of Makati, Branch 138, presided by Judge (now Court of Appeals Justice) Sixto Marella, Jr.
The application was docketed as AMLC No. 05-005. The Makati RTC heard the testimony of the
Deputy Director of the AMLC, Richard David C. Funk II, and received the documentary evidence of
the AMLC.[14] Thereafter, on 4 July 2005, the Makati RTC rendered an Order (Makati RTC bank
inquiry order) granting the AMLC the authority to inquire and examine the subject bank accounts of
Alvarez, Trinidad, Liongson and Cheng Yong, the trial court being satisfied that there existed
p]robable cause [to] believe that the deposits in various bank accounts, details of which appear in
paragraph 1 of the Application, are related to the offense of violation of Anti-Graft and Corrupt
Practices Act now the subject of criminal prosecution before the Sandiganbayan as attested to by the
Informations, Exhibits C, D, E, F, and G Pursuant to the Makati RTC bank inquiry order, the CIS
proceeded to inquire and examine the deposits, investments and related web accounts of the four. [16]
Meanwhile, the Special Prosecutor of the Office of the Ombudsman, Dennis Villa-Ignacio, wrote a
letter dated 2 November 2005, requesting the AMLC to investigate the accounts of Alvarez,
PIATCO, and several other entities involved in the nullified contract. The letter adverted to probable
cause to believe that the bank accounts were used in the commission of unlawful activities that were
committed a in relation to the criminal cases then pending before the Sandiganbayan. Attached to the
letter was a memorandum on why the investigation of the [accounts] is necessary in the prosecution
of the above criminal cases before the Sandiganbayan. In response to the letter of the Special
Prosecutor, the AMLC promulgated on 9 December 2005 Resolution No. 121 Series of
2005,[19] which authorized the executive director of the AMLC to inquire into and examine the
accounts named in the letter, including one maintained by Alvarez with DBS Bank and two other
accounts in the name of Cheng Yong with Metrobank. The Resolution characterized the
memorandum attached to the Special Prosecutors letter as extensively justif[ying] the existence of
probable cause that the bank accounts of the persons and entities mentioned in the letter are related to
the unlawful activity of violation of Sections 3(g) and 3(e) of Rep. Act No. 3019, as amended.
Issue: Whether or not the bank accounts of respondents can be examined.

Held: Any exception to the rule of absolute confidentiality must be specifically legislated. Section 2
of the Bank Secrecy Act itself prescribes exceptions whereby these bank accounts may be examined
by any person, government official, bureau or offial; namely when: (1) upon written permission of
the depositor; (2) in cases of impeachment; (3) the examination of bank accounts is upon order of a
competent court in cases of bribery or dereliction of duty of public officials; and (4) the money
deposited or invested is the subject matter of the litigation. Section 8 of R.A. Act No. 3019, the Anti-
Graft and Corrupt Practices Act, has been recognized by this Court as constituting an additional
exception to the rule of absolute confidentiality, and there have been other similar recognitions as
well.
The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the AMLC may
inquire into a bank account upon order of any competent court in cases of violation of the AMLA, it
having been established that there is probable cause that the deposits or investments are related to
unlawful activities as defined in Section 3(i) of the law, or a money laundering offense under Section
4 thereof. Further, in instances where there is probable cause that the deposits or investments are
related to kidnapping for ransom,[certain violations of the Comprehensive Dangerous Drugs Act of
2002,hijacking and other violations under R.A. No. 6235, destructive arson and murder, then there is
no need for the AMLC to obtain a court order before it could inquire into such accounts. It cannot be
successfully argued the proceedings relating to the bank inquiry order under Section 11 of the AMLA
is a litigation encompassed in one of the exceptions to the Bank Secrecy Act which is when money
deposited or invested is the subject matter of the litigation. The orientation of the bank inquiry order
is simply to serve as a provisional relief or remedy. As earlier stated, the application for such does
not entail a full-blown trial. Nevertheless, just because the AMLA establishes additional exceptions
to the Bank Secrecy Act it does not mean that the later law has dispensed with the general principle
established in the older law that all deposits of whatever nature with banks or banking institutions in
the Philippines x x x are hereby considered as of an absolutely confidential nature. Indeed, by force
of statute, all bank deposits are absolutely confidential, and that nature is unaltered even by the
legislated exceptions referred to above.

PEOPLE vs. ESTRADA

G.R. No. 164368-69
April 2, 2009

FACTS:

An Information for plunder was filed with the Sandiganbayan against respondent Estrada, among
other accused. A separate Information for illegal use of alias was likewise filed. The Amended
Information reads: “…to conceal the ill-gotten wealth he acquired during his tenure and his true
identity as the President, represents himself as JOSE VELARDE in several transactions and use and
employ the said alias Jose Velarde which is neither his registered name at birth nor his baptismal
name, in signing documents with Equitable PCI Bank and/or other corporate entities.

ISSUES:

1. Whether or not Joseph Estrada’s use of his alias Jose Velarde was not public despite the presence
of Messrs. Aprodicio Laquian and Fernando Chua on 4 February 2000 (YES, not public)
2. Whether or not Joseph Estrada’s use of his alias Jose Velarde was allowable under banking rules,
despite the clear prohibition under Commonwealth Act No. 142; (YES, allowable when the act was
committed)
3. Whether or not the court a quo gravely erred and abused its discretion in limiting the coverage of
the amended Information in Crim. Case No. 26565 to the use of the alias Jose Velarde by respondent
Joseph Estrada on February 4, 2000; (Not limitative [procedural question])
4. Whether or not the court a quo gravely erred and abused its discretion in departing from its earlier
final finding on the non-applicability of Ursua v. Court of Appeals and forcing its application to the
instant case. (NO)

HELD:

The petition has no merit.

The Law on Illegal Use of Alias and the Ursua Ruling

Ursua definition of an alias: a name or names used by a person or intended to be used by

him publicly and habitually usually in business transactions in addition to his real name by which he
is registered at birth or baptized the first time or substitute name authorized by a competent
authority. There must be a sign or indication that the user intends to be known by this name (the
alias) in addition to his real name, and there must be habituality. The repeated use of an alias within a
single day cannot be deemed habitual, as it does not amount to a customary practice or use.

Following the doctrine of stare decisis, we are guided by the Ursua ruling on how the crime
punished under CA No. 142 may be committed.
The court found no merit in the argument that the Sandiganbayan erred when it resurrected the
application of Ursua, resulting in the reversal of its earlier final ruling. First, the cited
Sandiganbayan resolution is a mere interlocutory order. Second, in the earlier motion to quash, the
Sandiganbayan solely looked at the allegations of the Information to determine the sufficiency of
these allegations and did not consider any evidence aliened.

What is the coverage of the indictment? (Regarding the limitative coverage)

The court found no merit on the argument of the People that the Sandiganbayan abused its discretion
in limiting the coverage of the amended Information to Estrada's use of the alias Jose Velarde on
February 4, 2000, considering that there were other transactions covered by the phrase prior to or
subsequent thereto.

The date of the commission of the offense need not be precisely stated in the complaint or
information except when the precise date is a material ingredient of the offense.

Under this analysis, the several transactions involving the signing of documents with Equitable PCI
Bank and/or other corporate entities all had their reference to February 4, 2000; they were all
made on or about or prior or subsequent to that date, thus plainly implying that all these transactions
took place only on February 4, 2000 or on another single date sometime before or after February 4,
2000. To be sure, the Information could have simply said on or about February 4, 2000 to capture all
the alternative approximate dates, so that the phrase sometime prior or subsequent thereto would
effectively be a surplusage that has no meaning separately from the on or about already
expressed. This consequent uselessness of the prior or subsequent thereto phrase cannot be denied,
but it is a direct and necessary consequence of the use of the OR between the two phrases and the
THERETO that referred back to February 4, 2000 in the second phrase. Of course, the reading
would have been very different (and would have been clearly in accord with the Peoples present
interpretation) had the Information simply used AND instead of OR to separate the phrases; the
intent to refer to various transactions occurring on various dates and occasions all proximate to
February 4, 2000 could not be disputed. Unfortunately for the People, the imprecision in the use of
OR is the reality the case has to live with. To act contrary to this reality would violate Estradas
right to be informed of the nature and cause of accusation against him; the multiple transactions
on several separate days that the People claims would result in surprise and denial of an opportunity
to prepare for Estrada, who has a right to rely on the single day mentioned in the Information.

The issues of publicity, and the application of CA No. 142, R.A. No. 1405,
and R.A. No. 9160

The rule in the law of libel that mere communication to a third person is publicity does not apply to
violations of CA No. 142. The use of the alias, to be considered public, must be made openly, or in
an open manner or place, or to cause it to become generally known, in other words, the intent to
publicly use the alias must be manifest.

The enactment of R.A. No. 9160 clearly manifests that prior to its enactment, numbered
accounts or anonymous accounts were permitted banking transactions, whether they be
allowed by law or by a mere banking regulation. To be sure, an indictment against Estrada
using this relatively recent law cannot be maintained without violating the constitutional
prohibition on the enactment and use of ex post facto laws.

Alias Jose Velarde

Posted on May 3, 2009 by Hector M. de Leon Jr. • Posted in Criminal Law • Tagged alias
As a rule, a person is required to use the name with which he or she was registered at birth in the office of the
local civil registry. Generally, only a select group of persons like Love Marie Ongpauco (a.k.a. Heart
Evangelista), Phylbert Angellie Ranollo Pagestrom (a.k.a. Bea Alonzo), Angelica Colmenares (a.k.a. Angel
Locsin) and Joseph Ejercito (a.k.a. Joseph Estrada) can use a pseudonym.
Commonwealth Act (“C.A.”) No. 142 provides:

Section 1. Except as a pseudonym solely for literary, cinema, television, radio or other entertainment purposes
and in athletic events where the use of pseudonym is a normally accepted practice, no person shall use any
name different from the one with which he was registered at birth in the office of the local civil registry or with
which he was baptized for the first time, or in case of an alien, with which he was registered in the bureau of
immigration upon entry; or such substitute name as may have been authorized by a competent court: Provided,
That persons whose births have not been registered in any local civil registry and who have not been baptized,
have one year from the approval of this act within which to register their names in the civil registry of their
residence. The name shall comprise the patronymic name and one or two surnames.

Section 2. Any person desiring to use an alias shall apply for authority therefor in proceedings like those
legally provided to obtain judicial authority for a change of name and no person shall be allowed to secure
such judicial authority for more than one alias. The petition for an alias shall set forth the person’s baptismal
and family name and the name recorded in the civil registry, if different, his immigrant’s name, if an alien, and
his pseudonym, if he has such names other than his original or real name, specifying the reason or reasons for
the desired alias. The judicial authority for the use of alias, the Christian name and the alien immigrant’s name
shall be recorded in the proper local civil registry, and no person shall use any name or names other than his
original or real name unless the same is or are duly recorded in the proper local civil registry.

According to the Supreme Court, CA 142 is violated by the use of an alias. In People of the Philippines vs.
Joseph Ejercito, G.R. No. 164368-69, April 2, 2009, the Supreme Court, citing the earlier case of Ursua vs.
Court of Appeals, defined an “alias” as:
a name or names used by a person or intended to be used by him publicly and habitually usually in business
transactions in addition to his real name by which he is registered at birth or baptized the first time or substitute
name authorized by a competent authority. There must be, in the words of Ursua, a “sign or indication that the
user intends to be known by this name (the alias) in addition to his real name from that day forth … [for the use of
alias to] fall within the prohibition contained in C.A. No. 142 as amended.
The person must use the alias publicly and habitually. In relation to the public use of an alias, the Supreme
Court explained:

. . . the required publicity in the use of alias is more than mere communication to a third person; the use of the
alias, to be considered public, must be made openly, or in an open manner or place, or to cause it to become
generally known. In order to be held liable for a violation of CA No. 142, the user of the alias must have held
himself out as a person who shall publicly be known under that other name. In other words, the intent to
publicly use the alias must be manifest.

Given the foregoing, the Supreme Court ruled that the prosecution’s evidence that former President Estrada
used the name “Jose Velarde” when he opened bank trust accounts in the presence of PCIB officers Clarissa
Ocampo and Manuel Curato, Malacanang Chief of Staff Aprodicio Lacquian and Estrada lawyer-friend
Fernando Chua was not a public use of the alias. According to the Supreme Court:

Our close reading of Ursua – particularly, the requirement that there be intention by the user to be culpable and
the historical reasons we cited above – tells us that the required publicity in the use of alias is more than mere
communication to a third person; the use of the alias, to be considered public, must be made openly, or in an
open manner or place, or to cause it to become generally known. In order to be held liable for a violation of
CA No. 142, the user of the alias must have held himself out as a person who shall publicly be known under
that other name. In other words, the intent to publicly use the alias must be manifest.

To our mind, the presence of Lacquian and Chua when Estrada signed as Jose Velarde and opened Trust
Account No. C-163 does not necessarily indicate his intention to be publicly known henceforth as Jose
Velarde. In relation to Estrada, Lacquian and Chua were not part of the public who had no access to Estrada’s
privacy and to the confidential matters that transpired in Malacañan where he sat as President; Lacquian was
the Chief of Staff with whom he shared matters of the highest and strictest confidence, while Chua was a
lawyer-friend bound by his oath of office and ties of friendship to keep and maintain the privacy and secrecy of
his affairs. Thus, Estrada could not be said to have intended his signing as Jose Velarde to be for public
consumption by the fact alone that Lacquian and Chua were also inside the room at that time. The same holds
true for Estrada’s alleged representations with Ortaliza and Dichavez, assuming the evidence for these
representations to be admissible. All of Estrada’s representations to these people were made in privacy and in
secrecy, with no iota of intention of publicity.

The Supreme Court also stated that the nature of the transaction on which the indictment rests affords Estrada a
reasonable expectation of privacy, as the alleged criminal act related to the opening of a trust account – a
transaction that Republic Act (“R.A.”) No. 1405 considers absolutely confidential in nature:
We have consistently ruled that bank deposits under R.A. No. 1405 (the Secrecy of Bank Deposits Law) are
statutorily protected or recognized zones of privacy. Given the private nature of Estrada’s act of signing the
documents as “Jose Velarde” related to the opening of the trust account, the People cannot claim that there was
already a public use of alias when Ocampo and Curato witnessed the signing. We need not even consider here
the impact of the obligations imposed by R.A. No.1405 on the bank officers; what is essentially significant is
the privacy situation that is necessarily implied in these kinds of transactions. This statutorily guaranteed
privacy and secrecy effectively negate a conclusion that the transaction was done publicly or with the intent to
use the alias publicly.
The Supreme Court noted the enactment of R.A. No. 9160 (the “Anti-Money Laundering Act”), which
prohibits the opening of accounts under fictitious names. However, the Supreme Court stated that Anti-Money
Laundering Act, which was enacted after Estrada’s alleged use of an alias in opening the trust account, cannot
be applied to Estrada:

The enactment of R.A. No.9160, on the other hand, is a significant development only because it clearly
manifests that prior to its enactment, numbered accounts or anonymous accounts were permitted banking
transactions, whether they be allowed by law or by a mere banking regulation. To be sure, an indictment
against Estrada using this relatively recent law cannot be maintained without violating the constitutional
prohibition on the enactment and use of ex post facto laws. . . . R.A. No. 9160, as a law of recent vintage in
relation to the indictment against Estrada, cannot be a source or an influencing factor in his indictment.
The Supreme Court pointed out that it did not decide whether Estrada’s use of an alias when he occupied the
highest executive position in the land was valid and legal; according to the Supreme Court, it simply
determined whether he may be made liable for the offense charged based on the evidence presented.