Salvacion vs. Central Bank of the Philippines Case Digest G.R. No. 94723 August 21, 1997

Salvacion vs Central Bank of the Philippines Case Digest 

G.R. No. 94723 ; August 21, 1997

DOCTRINE/S:

Remedial Law

a) Jurisdiction over Petitions for Declaratory Relief

GR: Lower Courts has original jurisdiction over Petitions for Declaratory Relief.

Exception: SC takes cognizance of Petitions for Declaratory Relief and treat it as one for mandamus the petition has far-reaching implications and raises questions that should be resolved.

Banking Law

a) Foreign Currency Deposit Act not appicable to a tourist or a transient

General Rule: Foreign currency deposits are EXEMPT from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. (Sec 8. R.A. 6426)

Exception: Deposits made by a tourist or a transient

Reason: Offshore Banking System and the Foreign Currency Deposit System were designed to draw deposits from foreign lenders and investors. However, the foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged since 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.

b) Foreign Currency Deposit Act if injustice an exists

General Rule: Foreign currency deposits EXEMPT from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. (Sec 8. R.A. 6426)

Exception: The garnishment of a foreign currency deposit should be allowed to PREVENT INJUSTICE and for EQUITABLE GROUNDS.

Reason: If garnishment is not allowed even if there is injustice or for equitable grounds then it 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.

FACTS: Bartelli, an American tourist, detained and raped Salvacion. Salvacion was rescued and Bartelli was arrested. The policemen recovered from Bartelli several dollar checks and a dollar account in China Bank. Bartelli however escaped from prison. In the civil case filed against Bartelli, the trial court awarded Salvacion moral, exemplary and attorney’s fees.

Petitioners tried to execute on Bartelli's dollar deposit with China Bank. But China Bank refused arguing that Section 113 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/S:

1) WON the Supreme Court has jurisdiction over petitions for declaratory relief since the lower coirt has original jurisdiction over such petitions.

2) WON the secrecy of Foreign Currency Deposit Act should be made applicable to a foreign transient?

HELD:

1) YES. The general rule is that lower Courts has original jurisdiction over Petitions for Declaratory Relief. But an exception to this rules is that the SC takes cognizance of Petitions for Declaratory Relief and treat it as one for mandamus is such petition has far-reaching implications and raises questions that should be resolved.

2) NO. The provisions of Section 133 of CB Circular No. 960 are hereby held to be inapplicable to this case because of its peculiar circumstances. 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 Bartelli. Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages that Salvacion and her parents fully deserve. 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.” Hence, 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.

Moreover, the SC ruled that 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 but the law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us.

Furthermore, 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 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.