Salvacion vs.

Central Bank (1997)

Summary Cases:

● Salvacion vs. Central Bank of the Philippines (CB) 278 SCRA 27

Subject: Petition for declaratory relief treated as a petition for mandamus; Exemption from
garnishment/attachment of foreign currency deposits not applied to protect foreign transient as the same
would lead to injustice, a consequence not presumed intended under the law

Facts:

In February 4, 1989, Karen Salvacion, then 12 years old, was at the Plaza Fair Makati Cinema Square
with a friend when Greg Bartelli y Northcott, an American tourist, approached her and introduced himself
as a Math teacher. He told her that he has a sister who is a nurse in New York who has a daughter who
is about Karen's age staying with him in his house along Kalayaan Avenue. The American asked Karen
what was her favorite subject and she told him it's Pilipino. He then invited her to go with him to his
house where she could teach Pilipino to his niece. He even gave her a stuffed toy to persuade her to
teach his niece

Upon reaching his apartment, Greg Bartelli led Karen upstairs. Upon entering the bedroom, Greg locked
the door and proceeded to tie up and undress Karen. Greg committed several acts of rape on the child
over the period of four days. Greg raped Karen once on February 4, and three times each day on
February 5, 6, and 7. During this time, she was kept locked in the bedroom and merely fed with biscuit
and coke.

On the fourth day of her ordeal (Feb 7), Karen was able to alert the attention of some neighbors by
calling for help through the bathroom window. Policemen arrived and Karen was rescued.

Greg Bartelli was arrested and detained at the Makati Municipal Jail. The policemen recovered from
Bartelli the following items: (a) Dollar Check for US 3,903.20 (b) COCOBANK Bank Book (Peso Acct.) (c)
Dollar Account China Banking Corp (d) a Teddy Bear used in seducing Karen, and some other personal
items.

Informations were filed against Greg Bartelli charging him with Serious Illegal Detention and four (4)
counts of Rape.
On February 24, 1989, the day there was a scheduled hearing for Bartelli's petition for bail, the latter
escaped from jail.

Meanwhile, petitioners also filed with the RTC a civil suit for damages with preliminary attachment
against Greg Bartelli.
A Writ of Preliminary Attachment was granted and issued by the trial court. The Deputy Sheriff served a
Notice of Garnishment on China Banking Corporation.

China Banking Corp. invoked the secrecy of bank deposits under Republic Act No. 1405. The bank also
invoked Section 113 of Central Bank Circular No. 960 to the effect that the dollar deposits (of Greg
Bartelli) are exempt from attachment, garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body, whatsoever.

When petitioners made an inquiry with the Central Bank regarding the application of Section 113 of CB
Circular No. 960, the Central Bank replied that the provision is absolute in application and admits of no
exception.
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In the civil case, summons was served upon defendant Bartelli by publication in the Manila Times, but
the latter failed to file an answer. Thus, the trial court rendered judgment in default against Greg Bartelli
and ordered payment of moral, exemplary, and other damages in the amount of more than P1,000,000
to Karen Salvacion and her parents.

Petitioners thereafter filed a petition for declaratory relief directly with the Supreme Court.

The issues presented are (a) whether the Supreme Court may entertain the petition for declaratory relief
despite the fact that original jurisdiction thereof rests with the lower court; and (b) Should Section 113 of
CB Circular No. 960 and Section 8 of R.A. 6426, as amended by P.D. 1246, otherwise known as the
Foreign Currency Deposit Act, be made applicable to a foreign transient?

Held:

Petition for declaratory relief treated as a petition for mandamus

1. The Supreme Court has no original and exclusive jurisdiction over a petition for declaratory relief.
However, exceptions to this rule have been recognized. Thus, where the petition has far-reaching
implications and raises questions that should be resolved, it may be treated as one for mandamus.

Exemption from garnishment/attachment of foreign currency deposits not applied to protect

foreign transient as the same would lead to injustice, a consequence not presumed intended
under the law

2. Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic Act No. 6426. It is worth
noting that RA 6426 was enacted in 1983 or at a time when the country's economy was in a shambles;
when foreign investments were minimal and presumably, this was the reason why said statute was
enacted. The intention of the questioned law may be good when enacted. The law failed to anticipate the
iniquitous effects producing outright injustice and inequality such as the case before us.

3. The purpose of PD 1246 (which amended RA 6426) in according protection against attachment,
garnishment and other court process to foreign currency deposits, as stated in its “whereas clauses”, is
to “ better encourage the inflow of foreign currency deposits into the banking institutions” of the country
and to “to assure the development and speedy growth of the Foreign Currency Deposit System [PD. No.
1035]and the Offshore Banking System [PD No. 1034] in the Philippines.”

4. It is evident from the “Whereas clauses” of PD No. 1034 and PD No. 1034 that the Offshore Banking
System and the Foreign Currency Deposit System were designed to draw deposits from foreign lenders
and investors. It is these deposits that are induced by the two laws and given protection and incentives
by them. Obviously, the foreign currency deposit made by a transient or a tourist is not the kind of
deposit encouraged by PD Nos. 1034 and 1035 and given incentives and protection by said laws
because such depositor stays only for a few days in the country and, therefore, will maintain his deposit
in the bank only for a short time. Greg Bartelli, as stated, is just a tourist or a transient. He deposited his
dollars with respondent China Banking Corporation only for safekeeping during his temporary stay in the
Philippines.

5. The application of the law depends on the extent of its justice. Eventually, if it is ruled that Section 113
of Central Bank Circular No. 960 (which exempts foreign currency deposits from attachment and
garnishment) 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
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lawmaking body intended right and justice to prevail. "Ninguno non deue enriquecerse tortizeramente
con dano de otro." Simply stated, when the statute is silent or ambiguous, this is one of those
fundamental solutions that would respond to the vehement urge of conscience.

6. The Supreme Court ruled that the provisions of Section 113 of CB Circular No. 960 and PD No. 1246,
insofar as it amends Section 8 of R.A. No. 6426 are held to be inapplicable to the present case because
of its peculiar circumstances. China Banking Corp. was ordered to comply with the writ of execution and
to release to petitioners the dollar deposit of Greg Bartelli y Northcott in such amount as would satisfy
the judgment.

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