Philippine National Bank vs. Gancayco Case Digest G.R. No. 18343 September 30, 1965; 15 SCRA 91

Philippine National Bank vs. Gancayco Case Digest 

GR 18343 ; September 30, 1965 ; 15 SCRA 91

DOCTRINE/S:

Banking Law

a) Section 2 of Republic Act 1405

GR: Section 2 of Republic Act 1405 declares bank deposits to be "absolutely confidential,"

Exception:

(1) Upon written permission of the depositor;

(2) In cases of impeachment;

(3) Upon order of a competent court in cases of bribery or dereliction of duty of public officials;

(4) In cases where the money deposited is the subject matter of the litigation.

b) Additional exception of the Bank Secrecy Law: Unexplained wealth in Anti-graft cases

Section 8 of the Anti-Graft Law is intended to amend Section 2 of Republic Act No. 1405 by providing an additional exception to the rule against the disclosure of bank deposits. This is because no reconciliation can be made between the two laws since these laws are si repugnant to each other.

c) Cases of unexplained wealth are similar to cases of bribery or dereliction of duty

The policy as to one cannot be different from the policy as to the other. This policy express the motion 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. Hence unexplained wealth is considered as one of the exceptions of the Bank Secrecy Law.

FACTS:  Defendants Gancayco et al., as special prosecutors of DOJ, required the plaintiff PNB to produce at a hearing the records of the bank deposits of Jimenez. Jimenez was the former administrator of the Agricultural Credit and Cooperative Administratio , who was then under investigation for unexplained wealth. In declining to reveal its records, the plaintiff bank invoked Section 2 of Republic Act No. 1405 (Bank Secrecy Law).

On the other hand, the defendants cited Section 8 of Republic Act 3019 (Anti-Graft and Corrupt Practices Act) which provides that “if a a public official has been found to have acquired during his incumbency an amount of property and/or money manifestly out of proportion to his salary and to his other lawful incomecome, that fact shall be a ground for dismissal or removal… Bank deposits shall be taken into consideration in the enforcement of this section, notwithstanding any provision of law to the contrary.”  Defendants alleged that this provides an additional ground for the examination of bank deposits and demanded that they produce the records or be prosecuted for contempt. Because of the threat of prosecution, plaintiffs filed an action for declaratory judgment with the CFI.

ISSUE/S: 

1) WON the (Anti-Graft and Corrupt Practices Act) which took effect on August 17, 1960 is a general law which cannot be deemed to have impliedly repealed section 2 of RA 1405 (Bank Secrecy Law).

2) WON a bank can be compelled to disclose the records of accounts of a depositor who is under investigation for unexplained wealth.

HELD: 

1) NO. Republic Act No. 1405 and Republic Act No. 3019 are so repugnant to each other than no reconciliation is possible. Republic Act No. 1405 provides that bank deposits are "absolutely confidential ... and [therefore] may not be examined, inquired or looked into," except in those cases enumerated therein. On the other hand, the Anti-Graft Law directs in mandatory terms that bank deposits "shall be taken into consideration in the enforcement of this section, notwithstanding any provision of law to the contrary." Hence, the only conclusion possible is that section 8 of the Anti-Graft Law is intended to amend section 2 of Republic Act No. 1405 by providing additional exception to the rule against the disclosure of bank deposits. Hence unexplained wealth (constitute as an additional exception under the Bank Secrecy Law.

2) YES. The Anti-Graft Law made unexplained wealth in anti-graft cases an additional exception under the Bank Secrecy Law.

With regard to the claim that disclosure would be contrary to the policy making bank deposits confidential, it is enough to point out that while Section 2 of Republic Act No. 1405 declares bank deposits to be “absolutely confidential,” it nevertheless allows such disclosure in the following instances: (1) Upon written permission of the depositor; (2) In cases of impeachment; (3) Upon order of a competent court in cases of bribery or dereliction of duty of public officials; (4) In cases where the money deposited is the subject of the litigation.

Cases of unexplained wealth are similar to cases of bribery or dereliction of duty and no reason is seen why these two classes of cases cannot be excepted from the rule making bank deposits confidential. The policy as to one cannot be different from the policy as to the other. This policy expresses the notion that a public office is a public trust and any person who enters upon its discharge does so with the full knowledge that his life, so far as relevant to his duty, is open to public scrutiny.