BANK SECRECY LAW RA 1405 EJERCITO v.

SANDIGANBAYAN, 509 SCRA 190 (2006) DOCTRINE: 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. If the money deposited under an account may be used by banks for authorized loans to third persons, then such accounts, regardless of whether it creates a credit or 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. ACTS In the ombudsman case v. !strada, the "andiganbayan issued a subpoena duces tecum for Trust #ccount no $%$, a savings account, certain specified documents, as well as all accounts pertaining to one &'ose (elarde&. !)# filed motions to *uash alleging that the trust account which was allegedly his was a &deposit& within the meaning of sec. + of )# ,-.%, and therefore protected/ and that since he was charged with plunder, not bribery or dereliction of duty, his case does not fall under any of the e0ceptions under sec.+. These motions to *uash were denied. 1ere denied. Thus this petition for certiorari. &"ection +. , #ll deposits of whatever nature with banks or banking institutions in the hilippines including investments in bonds issued by the 2overnment of the hilippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be e0amined, in*uired or looked into by any person, government official, bureau or office, e0cept 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 sub3ect matter of the litigation.& 4ote5 Trust #ccount5 a savings account deposited in the name of a trustee who controls it during his lifetime, after which the balance is payable to a prenominated beneficiary. It may be invested by the bank. ISS!ES5 ,6 1hether a trust account is a deposit, and +6 1hether a plunder charge falls under the e0ceptions under "ection + R!LING ,6 YES, it is a deposit. The contention of the "andiganbayan that trust accounts are not covered by the term deposits, as used in ).#. ,-.%, by the mere fact that they do not entail a creditor-debtor relationship between the trustor and the bank, does not lie. 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. +6 YES, it falls under the e0ceptions. The protection afforded by the law is not absolute, there being recognized e0ceptions thereto, as above-*uoted "ection + provides. Two e0ceptions apply here5 7,6 the e0amination of bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of public officials, and 7+6 the money deposited or invested is the sub3ect matter of the litigation. 8ases of une0plained wealth are similar to cases of bribery or dereliction of duty and no reason is seen why these two classes of cases cannot be e0cepted from the rule making bank deposits confidential. 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 e*ual force. lunder being thus analogous to bribery, the e0ception to ).#. ,-.% applicable in cases of bribery must also apply to cases of plunder. !NION BANK O COR#ORATION T"E #"ILI##INES vs.CA $%& ALLIED BANK

9#8T"5 :n ;arch +,, ,<<., a check dated ;arch =,, ,<<. in the amount of ,,...,...... was drawn against #ccount 4o. .,,,-.,$%--$ with private respondent #llied >ank payable to the order of one 'ose 8h. #lvarez. The payee deposited the check with petitioner ?nion >ank who credited the ,,...,...... to the account of ;r. #lvarez. :n ;ay +,, ,<<., petitioner sent the check for clearing through the hilippine 8learing @ouse 8orporation 7 8@86. 1hen the check was presented for payment, a clearing discrepancy was committed by ?nion >ankAs clearing staff when the amount of ,,...,...... was erroneously &under-encoded& to ,,...... only. etitioner only discovered the under-encoding almost a year later. Thus, on ;ay B, ,<<,, ?nion >ank notified #llied >ank of the discrepancy by way of a charge slip for <<<,...... for automatic debiting against of #llied >ank. The latter, however, refused to accept the charge slip &since the transaction was completed per ?nion >ankAs original instruction and clientAs account is now insufficiently funded.&"ubse*uently, ?nion >ank filed a complaint against #llied >ank before the 8@8 #rbicom. Thereafter, ?nion >ank filed in the )T8 of ;akati a petition for the e0amination of #ccount 4o. ,,,.,$%--$. 'udgment on the arbitration case was held in abeyance pending

the resolution of said petition. motion of private respondent, the )T8 dismissed ?nion >ankAs petition. The )T8 held that5 The case of the herein petitioner does not fall under any of the foregoing e0ceptions to warrant a disclosure of or in*uiry into the ledgersCbooks of account of #llied 8hecking #ccount 4o. ,,,-.,$%--$. 4eedless to say, the complaint filed by herein petitioner against #llied >anking 8orporation before the 8@8 #rbcom is not one for bribery or dereliction of duty of public officials much less is there any showing that the sub3ect matter thereof is the money deposited in the account in *uestion. etitionerAs complaint primarily hinges on the alleged deliberate violation by #llied >ank 8orporation of the provisions of the 8@8 )ule >ook, "ec. +%, specifically the under-encoding of check amounting to ,,...,... which was erroneously encoded at ,,...... which the defendant as the receiving bank did not notify nor called the plaintiff for the error committed thus causing actual losses to plaintiff in the amount of <<<,.... The 8# 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 e0amined, in*uired 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.4owhere in petitioner collecting bankAs complaint filed before the 8@8 does it mention of the amount it seeks to recover from #ccount 4o. .,,,-.,$%-$ itself, but speaks of <<<,...... only as an incident of its alleged opportunity losses and interest as a result of its own employeeAs admitted error in encoding the check.The money deposited in #ccount 4o. .,,,-.,$%-$ is not the sub3ect matter of the litigation in the #rbicom case for as clearly stated by petitioner itself, it is the alleged violation by respondent of the rules and regulations of the 8@8. ISS!E5 1:4 the money deposited is the sub3ect matter of the litigation. "ELD: etitioner 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 sub3ect matter of the dispute may be the amount of <<<,...... that petitioner seeks from private respondent as a result of the latterAs alleged failure to inform the former of the discrepancy/ but it is not the <<<,...... deposited in the drawerAs account. >y the terms of ).#. 4o. ,-.%, the &money deposited& itself should be the sub3ect 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 e0amination of the bank deposits. The necessity of the in*uiry, or the lack thereof, is immaterial

since the case does not come under any of the e0ceptions allowed by the >ank Deposits "ecrecy #ct.

L!'AN SIA v(. CA $%& SEC!RITY BANK $%& TR!ST CO)#ANY ACTS: The plaintiff rented the "afety Deposit >o0 4o. %- of the defendant wherein he placed his collection of stamps. The said safety deposit bo0 leased by the plaintiff was at the bottom or at the lowest level of the safety deposit bo0es of the defendant bank at its >inondo >ranch. During the floods that took place in ,<$% and ,<$E, floodwater entered into the defendant bankAs premises, seeped into the safety deposit bo0 leased by the plaintiff and caused, according to the plaintiff, damage to his stamps collection. The defendant bank re3ected the plaintiffAs claim for compensation for his damaged stamps collection, so, the plaintiff instituted an action for damages against the defendant bank. The defendant bank denied liability for the damaged stamps collection of the plaintiff on the basis of the &)ules and )egulations 2overning the Fease of "afe Deposit >o0es for the liability of the >ank by reason of the lease, is limited to the e0ercise of the diligence to prevent the opening of the safe by any person other than the )enter, his authorized agent or legal representative. The >ank is not a depository of the contents of the safe and it has neither the possession nor the control of the same. The >ank has no interest whatsoever in said contents, e0cept as herein provided, and it assumes absolutely no liability in connection therewith. The defendant bank contends that its contract with the plaintiff was one of lease and not deposit. ISS!E: 1:4 the contract for the use of safety deposit bo0 is a deposit. "ELD: In the recent case 8# #gro-Industrial Development 8orp. vs. 8ourt of #ppeals, this 8ourt e0plicitly re3ected the contention that a contract for the use of a safety deposit bo0 is a contract of lease governed by Title (II, >ook I( of the 8ivil 8ode. 4or did 1e fully subscribe to the view that it is a contract of deposit to be strictly governed by the 8ivil 8ode provision on deposit, it is, as 1e declared, a special kind of deposit. The prevailing rule in #merican 3urisprudence G that the relation between a bank renting out safe deposit bo0es and its customer with respect to the contents of the bo0 is that of a bailor and bailee, the bailment for hire and mutual benefit has been adopted in this 3urisdiction.

#ssayed in the light of :ur aforementioned pronouncements in 8# #grolndustrial Development 8orp., it is not at all difficult to conclude that both conditions 4o. < and 4o. ,= of the &Fease #greement& covering the safety deposit bo0 in *uestion must be stricken down for being contrary to law and public policy as they are meant to e0empt ">T8 from any liability for damage, loss or destruction of the contents of the safety deposit bo0 which may arise from its own or its agentsA fraud, negligence or delay. #ccordingly, ">T8 cannot take refuge under the said conditions. )AR*!E' v. DESIERTO, +59 SCRA ,,2 (1991) DOCTRINE: >efore an in camera inspection by the :mbudsman may be allowed, there must be a pending case before a court of competent 3urisdiction. 9urther, the account must be clearly identified, the inspection limited to the sub3ect matter of the pending case before the court of competent 3urisdiction. The bank personnel and the account holder must benotified to be present during the inspection, and such inspection may cover only the account identified in the pending case. ACTS etitioner is being held in indirect contempt for not allowing in camera inspection of the accounts related to an investigation being done by the :mbudsman relating to pay-offs for the !#-#;#))I scandal. etitioner hopes to nullify order for the in camera investigation and to hold her in contempt. etitioner is the branch manager of ?nion >ank, 'ulio (argas >ranch. "he received an :rder from the )espondent to produce several bank documents for inspection in camera relative to a pending investigation before )espondent 7:mbudsman Desierto6. )espondentHs case is the 9act 9inding and Intelligence >ureau 799I>6 vs. #mado Fagdameo I relative to the '(# between !# and #;#)I. The :rder emphasized )espondentHs power to issue subpoena and subpoena duces tecum and contempt power under )# EBB. aka the :mbudsman #ct of ,<$<. The #ct is a later legislation to )# ,-.% aka "ecrecy of >ank Deposits law/ hence amending some provisions of the latter. J :rderHs ob3ective5 to trail the managers checks purchased by Trivinio respondent in the pending case6 Trivinio purchased %, managers checks worth +B+.,; from Traders )oyal >ank, ?4 #ve. ,, of these checks, B..E;, were deposited to an account handled by etitionerHs branch Though ?nion >ankHs lawyer told etitioner to comply with the :rder, she had some difficulty making her ask for some time e0tensions. "he said the accounts cannot be easily identified and despite diligent efforts and from the account numbers presented, she cannot identify these accounts since the checks were issued in cash or bearer o "urmised that the account has been dormant since it is not covered by the new account number generated by

the ?nion >ank system o @ence, she has to verify from the Interbank records archives for the whereabouts of the account #fter two e0tensions, R-(./%&-%0 1((2-& 03- 4/%05/v-5(1$6 /5&-5 035-$0-%1%7 0/ 3/6& #-0101/%-5 1% 1%&15-40 4/%0-8.0 9/5 4$2(1%7 &-6$:( 1% 03- 1%v-(017$01/%. #-0101/%-5 $%& !%1/% B$%; 916-& 9/5 &-46$5$0/5: 5-61-9 1% 03- RTC /9 )$;$01 0/ 46$519: 03-15 51730( $%& &201-(, (--1%7 4/8.6:1%7 <103 03- O5&-5 8$: 4/%96140 /5 v1/6$0- 03- S-45-4: /9 B$%; D-./(10( 6$<. L/<-5 C/250 D-%1-& 03- #-0101/%, =20 #-0101/%-5 (/2730 5-4/%(1&-5$01/%. 2rounds used by the lower court5 4o great or irreparable in3ury to restrain respondent The :mbudsman would have to file to the )T8 for the indirect contempt charge etitioner failed to show prima facie evidence that the sub3ect matter of the investigation is outside the 3urisdiction of )espondent. )econsideration was likewise denied. # motion to cite etitioner in contempt was filed with the :ffice of the :mbudsman. etitioner asserted that such was premature since there was a pending case in the lower court, but eventually she was held in contempt ISS!E 7:mbudsman act6 whether petitioner may be cited for indirect contempt for her failure to produce the documents re*uested by the :mbudsman. #nd whether the order of the :mbudsman to have an in camera inspection of the *uestioned account is allowed as an e0ception to the law on secrecy of bank deposits 7). #. 4o. ,-.%6. R!LING NO, she may not be held in contempt or may the :mbudsman have an in camera inspection. !0amination of the secrecy of bank deposits law 7). #. 4o. ,-.%6 would reveal the following e0ceptions5 ,. 1here the depositor consents in writing/ +. Impeachment case/ =. >y court order in bribery or dereliction of duty cases against public officials/ -. Deposit is sub3ect of litigation/ %. "ec. $, ). #. 4o. =.,<, in cases of une0plained wealth as held in the case of 4> vs. 2ancayco The order of the :mbudsman to produce for 1% 4$8-5$ inspection the sub3ect accounts with the ?nion >ank of the hilippines, 'ulia (argas >ranch, is based on a pending investigation at the :ffice of the :mbudsman against #mado Fagdameo, et. al. for violation of ). #. 4o. =.,<, "ec. = 7e6 and 7g6 relative to the 'oint (enture #greement between the ublic !states #uthority and #;#)I. W- 526- 03$0 =-9/5- $% 1% 4$8-5$ 1%(.-401/% 8$: =- $66/<-&, 03-5- 82(0 =- $ .-%&1%7 4$(- =-9/5- $ 4/250 /9 4/8.-0-%0 >251(&1401/%. 9urther, the account must be clearly identified, the inspection limited to the sub3ect matter of the pending case before the court of competent 3urisdiction. 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 ?nion >ank of the hilippines v. 8ourt of #ppeals, we held that "ection + of the Faw on "ecrecy of >ank Deposits, as amended, declares bank deposits to be $=(/620-6: 4/%91&-%01$6? -@4-.05 7,6 In an e0amination made in the course of a special or general e0amination of a bank that is specifically authorized by the ;onetary >oard 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, 7+) I% $% -@$81%$01/% 8$&- =: $% 1%&-.-%&-%0 $2&10/5 315-& =: 03=$%; 0/ 4/%&240 10( 5-726$5 $2&10 .5/v1&-& 03$0 03- -@$81%$01/% 1( 9/5 $2&10 .25./(-( /%6: $%& 03- 5-(260( 03-5-/9 (3$66 =- 9/5 03-@462(1v- 2(- /9 03- =$%;, 7=6 ?pon written permission of the depositor, 7-6 In cases of impeachment, 7%6 ?pon order of a competent court in cases of bribery or dereliction of duty of public officials, or 7E6 In cases where the money deposited or invested is the sub3ect matter of the litigation I% 03- 4$(- $0 =$5, 03-5- 1( :-0 %/ .-%&1%7 61017$01/% =-9/5- $%: 4/250 /9 4/8.-0-%0 $203/510:. W3$0 1( -@1(01%7 1( $% 1%v-(017$01/% =: 03/9914- /9 03- O8=2&(8$%. In short, what the :ffice of the :mbudsman would wish to do is to fish for additional evidence to formally charge #mado Fagdameo, et. al., with the "andiganbayan. 8learly, there was no pending case in court, which would warrant the opening of the bank account for inspection. BANCO ILI#INO SAAINGS AND )ORTGAGE BANK v. #!RISI)A, 161 SCRA 5,6 (19BB) DOCTRINE: >y enacting "ec. $ of )# =.,<, 8ongress intended to provide an additional ground for the e0amination of bank deposits for without such provision, the prosecutors would be hampered if not altogether frustrated in the prosecution of those charged with having ac*uired une0plained wealth while in public office. ACTS The Tanodbayan issued a subpoenaduces tecum to the >anco 9ilipino "avings K ;ortgage >ank, commanding its representative to appear at a specified time at the :ffice of the Tanodbayan and furnish the latter with duly certified copies of the records in all its branches and e0tension offices, of the loans, savings and time deposits and other banking transactions, dating back to ,<E<, appearing in the names of 8aturla, his wife, urita 8aturla, their children G ;anuel, 'r., ;arilyn and ;ichael G andCor edro !scuyos.

8aturla moved to *uash the subpoena duces tecum arguing that compliance therewith would result in a violation of "ections + and = of the Faw on "ecrecy of >ank Deposits. Then Tanodbayan (icente !ricta not only denied the motion for lack of merit, and directed compliance with the subpoena, but also e0panded its scope through a second subpoena duces tecum, this time re*uiring production by >anco 9ilipino of the bank records in all its branches and e0tension offices, of "iargao #gro-Industrial 8orporation, edro !scuyos or his wife, !meterio !scuyos, urita 8aturla, Fucia !scuyos or her husband, )omeo !scuyos, !merson !scuyos, 9raterno 8aturla, #mparo ;ontilla, 8esar 8aturla, ;anuel 8aturla or his children, ;anuel 'r., ;arilyn and ;ichael, FTD ubC)estaurant, and 'ose >uo or his wife, !velyn. Two other subpoena of substantially the same tenor as the second were released by the TanodbayanAs :ffice. The last re*uired obedience under sanction of contempt. The >anco 9ilipino "avings K ;ortgage >ank, hereafter referred to simply as >9 >ank, took over from 8aturla in the effort to nullify the subpoenae. It filed a complaint for declaratory relief with the 8ourt of 9irst Instance of ;anila, which was assigned by raffle to the sala of respondent 'udge 9idel urisima. >9 >ank prayed for a 3udicial declaration as to whether its compliance with the subpoenae duces tecum would constitute an infringement of the provisions of "ections + and = of ).#. 4o. ,-.% in relation to "ection $ of ).#. 4o. =.,<. It also asked that pending final resolution of the *uestion, the Tanodbayan be provisionally restrained from e0acting compliance with the subpoenae. )espondent 'udge urisima issued an :rder denying for lack of merit the application by >9 >ank for a preliminary in3unction andCor restraining order. It further argues that subpoenae in *uestion are in the nature of &fishing e0peditions& or &general warrants& since they authorize indiscriminate in*uiry into bank records/ that, assuming that such an in*uiry is allowed as regards public officials under investigation for a violation of the #nti-2raft K 8orrupt ractices #ct, it is constitutionally impermissible with respect to private individuals or public officials not under investigation on a charge of violating said #ct/ and that while prosecution of offenses should not, as a rule, be en3oined, there are recognized e0ceptions to the principle one of which is here present, i.e. to avoid multiplicity of suits, similar subpoenae having been directed to other banks as well. ISS!E: 1hether the &Faw on "ecrecy of >ank Deposits& precludes production by subpoena duces tecum of bank records of transactions by or in the names of the wife, children and friends of a special agent of the >ureau of 8ustoms, accused before the Tanodbayan of having allegedly ac*uired property manifestly out of proportion to his salary and other lawful income, in violation of the &#nti-2raft and 8orrupt ractices #ct.

R!LING The provisions of ).#. 4o. ,-.% sub3ect of >9As declaratory action, read as follows5 "ec. +. #ll deposits of whatever nature with banks or banking institutions in the hilippines including investments in bonds issued by the 2overnment of the hilippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be e0amined, in*uired or looked into by any person, government official, bureau or office, e0cept 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 sub3ect matter of litigation. "ec. =. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned in "ection two hereof any information concerning said deposits The other provision involved in the declaratory action is "ection $ of ).#. 4o. =.,<. It reads5 "ec. $. Dismissal due to une0plained wealth. G If in accordance with the provisions of )epublic #ct 4umbered :ne thousand three hundred seventy-nine, a public official has been found to have ac*uired during his incumbency, whether in his name or in the name of other persons, an amount of property andCor money manifestly out of proportion to this salary and to his other lawful income, that fact shall be a ground for dismissal or removal. roperties in the name of the spouse and unmarried children of such public official may be taken into consideration, when their ac*uisition through legitimate means cannot be satisfactorily shown. >ank deposits shall be taken into consideration in the enforcement of this section, notwithstanding any prohibition of law to the contrary. The only conclusion possible is that section $ of the #nti-2raft Faw is intended to amend section + of )epublic #ct 4o. ,-.% by providing an additional e0ception to the rule against the disclosure of bank desposits. T3- 1%C215: 1%0/ 166-7$66: $4C215-& .5/.-50: D /5 .5/.-50: NOT E6-71018$0-6: $4C215-&E D-@0-%&( 0/ 4$(-( <3-5- (243 .5/.-50: 1( 4/%4-$6-& =: =-1%7 3-6& =: /5 5-4/5&-& 1% 03- %$8- /9 /03-5.-5(/%(. T31( .5/./(101/% 1( 8$&- 46-$5 =: R.A. N/. +019 <3143 C210- 4$0-7/514$66: (0$0-( 03$0 03- 0-58, E6-71018$0-6: $4C215-& .5/.-50: /9 $ .2=614 /9914-5 /5 -8.6/:-- (3$66 %/0 1%462&- .. .5/.-50: 2%6$<9266: $4C215-& =: 03- 5-(./%&-%0, =20 10( /<%-5(31. 1( 4/%4-$6-& =: 10( =-1%7 5-4/5&-& 1% 03- %$8- /9, /5 3-6& =:, 5-(./%&-%0F( (./2(-, $(4-%&$%0(, &-(4-%&$%0(, 5-6$01v-( /5 $%: /03-5 .-5(/%(. To sustain the petitionerAs theory, and restrict the in*uiry only to property held by or in the name of the government official or employee, or his spouse and unmarried children is unwarranted in the light of the provisions of the statutes in *uestion, and would make available to persons in government who illegally ac*uire property an easy and fool-proof means of evading investigation and prosecution/ all they would have to do would be to simply place the property in the possession or name of persons other than their

spouse and unmarried children. This is an absurdity that we will not ascribe to the lawmakers. )ELON v(. )AGSINO ACTS: :n ;ay +B, ,<BB, Dolores (entosa re*uested the transfer of L,,... from the 9irst 4ational >ank of ;oundsville, 1est (irginia, ?.".#. to (ictoria 'avier in ;anila through the rudential >ank. #ccordingly, the 9irst 4ational >ank re*uested the petitioner, ;ellon >ank, to effect the transfer. ?nfortunately the wire sent by ;ellon >ank to ;anufacturers @anover >ank, a correspondent of rudential >ank, indicated the amount transferred as &?"L,,...,......& instead of ?"L,,....... @ence ;anufacturers @anover >ank transferred one million dollars less bank charges of LE.=. to the rudential >ank for the account of (ictoria 'avier. :n 'une =, ,<BB, 'avier opened a new dollar account 74o. =-=6 in the rudential >ank and deposited L<<<,<-=.B.. Immediately (ictoria 'avier and her husband, ;elchor 'avier, 'r., 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. ;eanwhile, in 'uly, ,<BB, ;ellon >ank filed a complaint docketed as 4o. ,-$.%E in the "uperior 8ourt of 8alifornia, 8ounty of Mern, against ;elchor 'avier, 'ane Doe 'avier, @onorio oblador, 'r, and Does I through (. In its first amended complaint to impose constructive trust dated 'uly ,-, ,<BB, 1 ;ellon >ank alleged that it had mistakenly and inadvertently cause the transfer of the sum of L<<<,...... to 'ane Doe 'avier/ that it believes that the defendants had withdrawn said funds/ that &the defendants and each of them have used a portion of said funds to purchase real property located in Mern 8ounty, 8alifornia&/ and that because of defendantsA knowledge of ;ellon >ankAs mistake and inadvertence and their use of the funds to purchase the property, they and &each of them are involuntary or constructive trustees of the real property and of any profits there from, with a duty to convey the same to plaintiff forthwith.& It prayed that the defendants and each of them be declared as holders of the property in trust for the plaintiff/ that defendants be compelled to transfer legal title and possession of the property to the plaintiff/ that defendants be made to pay the costs of the suit, and that other reliefs be granted them. The amended and supplemental complaint alleged the facts set forth above and added that )oberto 2ariNo, chief accountant of rudential >ank, and who was the reference of ;rs. (entosaAs dollar remittances to (ictoria 'avier, immediately informed the 'aviers of the receipt of ?"L,,...,....../ that knowing the financial circumstances of ;rs. (entosa and the fact that a mistake had been committed, the 'aviers, with undue haste, took unlawful advantage of the mistake, withdrew the whole amount and transferred the same to a &=-= dollar account&/ that, aided and

abetted by oblador and Domingo F. 'hocson, the 'aviers &compounded and completed the conversion& of the funds by withdrawing from the account dollars or pesos e*uivalent to ?" L<B%,.../ that by force of law, the 'aviers had been constituted trustees of an implied trust for the benefit of ;ellon >ank with a clear duty to return to said bank the moneys mistakenly paid to them/ that, upon re*uest of ;ellon >ank and ;anufacturers @anover >ank, rudential >ank informed the 'aviers of the erroneous transmittal of one million dollars first orally and later by letter-demand/ that conferences between the representatives of the 'aviers, led by 'hocson and oblador, in the latterAs capacity as legal and financial counsel, and representatives of ;ellon >ank, proved futile as the 'aviers claimed that most of the moneys had been irretrievably spent/ that the 'aviers could only return the amount if the ;ellon >ank should agree to make an absolute *uitclaim and waiver of future rights against them, and that in a scheme to conceal and dissipate the funds, through the active participation of 'ose ;ar*uez, the 'aviers bought the 8alifornia property of oblador. The checks issued for the sale of the property in 8alifornia was traced by ;ellon bank to the account in (> of 8ipriano #zada, obladorHs law partner and counsel of the 'aviers. #n employee of the hilippine (eterans >ank thereafter introduced the specimen signature cards for #ccount 4o. +$+%-, thereby confirming #zadaAs ownership of the account. Defendants ob3ected to this testimony on the grounds of #zadaAs absence, the confidentiality of the bank account, and the best evidence rule. ;ellon >ank then subpoenaed (> employees to show that #zada deposited @">8 checks in his personal current account with said bank. It also subpoenaed ilologo )ed, 'r. of @ongkong K "hanghai >anking 8orporation to prove that said amount was returned by #zada to @agedorn. The testimonies of these witnesses were ob3ected to by the defense on the grounds of res inter alios acta, immateriality, irrelevancy and confidentiality. I""?!5 1:4 "ecrecy of bank deposits allows the disclosure in cases where the money deposited is the sub3ect matter of the litigation. @!FD5 rivate respondentsA protestations that to allow the *uestioned testimonies to remain on record would be in violation of the provisions of )epublic #ct 4o. ,-.% on the secrecy of bank deposits, is unfounded. "ection + of said law allows the disclosure of bank deposits in cases where the money deposited is the sub3ect matter of the litigation. 24 Inasmuch as 8ivil 8ase 4o. +E$<< is aimed at recovering the amount converted by the 'aviers for their own benefit, necessarily, an in*uiry into the whereabouts of the illegally

ac*uired amount e0tends to whatever is concealed by being held or recorded in the name of persons other than the one responsible for the illegal ac*uisition. ONATE v(. ABROGAR ACTS: "un Fife filed a complaint with a writ of preliminary attachment against petitioners. etitioners filed an urgent motion to discharge the writ of attachment. "un Fife on the other hand filed a another motion for e0amination of bank accounts of the petitioners with > I and the records of 4> with regards to the checks payable to >runner. "un Fife asked the court to order both banks to comply with the notice of garnishment. The respondent 3udge issued an order denying petitioners motion and granting the motion to e0amine > I and 4> account. etitioners argue that the respondent 3udge had acted with grave abuse of discretion amounting to lack or in e0cess of 3urisdiction in allowing the e0amination of the bank records though no notice was given to them. ISS!E: 1:4 the order in allowing the e0amination of accounts without prior notice is invalid. "ELD: etitionersA second ground assail the acts of respondent 'udge in allowing the e0amination of ?rban >anksA records and in ordering that the e0amination of the bank records of > I and 4> as invalid since no notice of said e0aminations were ever given them. "un Fife grounded its re*uests for the e0amination of the bank accounts on "ection ,., )ule %B of the )ules of 8ourt, which provided, to wit5 "ec. ,.. !0amination of party whose property is attached and persons indebted to him or controlling his property/ delivery of property to officer. G #ny person owing debts to the party whose property is attached or having in his possession or under his control any credit or other personal property belonging to such party, may be re*uired to attend before the court in which the action is pending, or before a commissioner appointed by the court and be e0amined on oath respecting the same. The party whose property is attached may also be re*uired to attend for the purpose of giving information respecting his property, and may be e0amined on oath. The court may, after such e0amination, order personal property capable of manual delivery

belonging to him, in the possession of the person so re*uired to attend before the court, to be delivered to the clerk or court, sheriff, or other proper officer on such terms as may be 3ust, having reference to any lien thereon or claim against the same, to await the 3udgment in the action. 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 re*uire that notice be furnished the defendant himself, e0cept when there is a need to e0amine said defendant &for the purpose of giving information respecting his property. 9urthermore, "ection ,. )ule %B is not incompatible with )epublic #ct 4o. ,-.%, as amended, &#n #ct rohibiting Disclosure or In*uiry Into, Deposits 1ith #ny >anking Institution and roviding enalty Therefore,& for "ection + therefore provides an e0ception &in cases where the money deposited or invested is the sub3ect matter of the litigation.& The e0amination of the bank records is not a fishing e0pedition, but rather a method by which "un Fife could trace the proceeds of the check it paid to petitioners. C"INA BANKING COR#ORATION v. ORTEGA, 49 SCRA +56 (19,+) DOCTRINE: 2arnishment of bank deposit 3udgment debtor is not violative of )# ,-.%. The 8ourt merely re*uired the cashier of the bank to inform the court whether or not the defendant had a deposit in said bank only for purposes of the garnishment issued by it, so that the bank would hold the same intact and not allow any withdrawal until further order. ACTS In ,<E$, #caban filed a complaint against >autista Fogging 8o., Inc., > K > 9orest Development 8orporation and ;arino >autista for the collection of sum of money. )T8 declared the defendants in default for failure to file their responsive pleadings within the reglementary period. To satisfy the 3udgment, #caban sought the garnishment of the bank deposit of > K > 9orest Development 8orporation with 8hina >anking 8orporation. #ccordingly, a notice of garnishment was issued and served on the bankHs cashier, Tan Mim Fiong. In reply, Tan Mim Fiong invoked the provisions of the >ank "ecrecy Faw prohibiting the disclosure of any information relative to bank deposits. )T8, in denying #cabanHs motion to cite Tan Mim Fiong in contempt, nevertheless ordered the latter to inform the court whether or not there is a deposit with 8hina >anking 8orporation of > K > 9orest Development 8orporation, and if any, to hold the same intact and not to allow any withdrawal until further orders.

ISS!E 1hether there was a violation of the provisions of the >ank "ecrecy Faw prohibiting the disclosure of any information relative to bank deposits "ELD NO. The lower court did not order an e0amination of or in*uiry into the deposit of >K> 9orest Development 8orporation. It merely re*uired Tan Mim Fiong to inform the court of the e0istence of >K> 9orest Development 8orporationHs deposit in said bank only for the purpose of the garnishment issued by it, so that the bank would hold the same intact and not allow any withdrawal until further order. It is clear from the discussion of the conference committee report of the + houses of 8ongress that the prohibition against e0amination of or in*uiry into a bank deposit under )# ,-.% does 4:T preclude its being garnished to insure satisfaction of a 3udgment. There is no real in*uiry in this case, and if the e0istence of the bank account is disclosed, the disclosure is purely incidental to the e0ecution process.