China Banking Corporation vs. Ortega Case Digest G.R. No. 34964 January 31, 1973

China Banking Corporation vs. Ortega Case Digest

 G.R. No. 34964 ; January 31, 1973

DOCTRINE/S:

Banking Law

a) Inquiry into existence if bank deposits and garnishment not covered by the Bank Secrecy Law provided under nder Republic Act 1405

- Prohibition against examination of or inquiry into a bank deposit under Republic Act 1405 does not preclude its being garnished to insure satisfaction of a judgment.

- It is not the intention of the lawmakers to place bank deposits beyond the reach of execution to satisfy a final judgment through Republic Act 1405.It is hard to conceive that it was ever within the intention of Congress to enable debtors to evade payment of their just debts, even if ordered by the Court, through the expedient of converting their assets into cash and depositing the same in a bank.

FACTS: Acaban won in a civil case for collection of a sum of money against B & B Forest Development Corporation. To satisfy the judgment, the Acaban sought the garnishment of the bank deposit of the B & B Forest with the China Bank. A notice of garnishment was issued by the Deputy Sheriff of the trial court and served on said bank through its cashier, Liong. Liong was ordered to inform the Court whether or not there is a deposit in the China Bank of B & B and if there is any deposit, to hold the same intact and not allow any withdrawal until further order from the Court. China Bank and Liong refused to comply with a court order since they alleged that Republic Act No. 1405 (An Act Prohibiting Disclosure of or Inquiry into Deposits with any Banking Institution) prohibits the disclosure of any information concerning to bank deposits. China Bank further alleges that Section 2 of Republic Act No. 1405 enumerates the exception to the Bank Secrecy law but the disclosure of the information required by the court does not fall within any of the four (4) exceptions.

ISSUE/S: WON 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 prohibition against examination of or inquiry into a bank deposit under Republic Act 1405 does not preclude its being garnished to insure satisfaction of a judgment. In the present case, there was no inquiry as to how much the actual deposits are. The only inquiry that the court had was whether or not there are deposits of the then defendants in China bank and if there are, for the Bank hold the same intact and not allow any withdrawal until further order.

It is not the intention of the lawmakers to place bank deposits beyond the reach of execution to satisfy a final judgment through Republic Act 1405.It is hard to conceive that it was ever within the intention of Congress to enable debtors to evade payment of their just debts, even if ordered by the Court, through the expedient of converting their assets into cash and depositing the same in a bank.