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.

Mellon Bank vs. Magsino Case Digest G.R. No. 61011 October 18, 1990

Mellon Bank vs. Magsino Case Digest 

G.R. No. 61011 ; October 18, 1990

DOCTRINE/S:

Remedial Law

a) Interlocutory Order

Does not dispose of the case completely but leaves something more to be done upon its merits.

b) Meaning of "election of remedies"

Election of remedies refers to the choice by a party to an action of one of two or more coexisting remedial rights, where several such rights arise out of the same facts, but the term has been generally limited to a choice by a party between inconsistent remedial rights, the assertion of one being necessarily repugnant to, or a repudiation of, the other. In its technical and more restricted sense, election of remedies is the adoption of one of two or more coexisting remedies, with the effect of precluding a resort to the others. 

c) Purpose of "election of remedies"

Purpose of the doctrine of election of remedies to prevent double redress for a single wrong. It is regarded as an application of the law of estoppel, upon the theory that a party cannot, in the assertion of his right occupy inconsistent positions which form the basis of his respective remedies.

c) When "election of remedies" is binding

No binding election occurs before a decision on the merits is had or a detriment to the other party supervenes. This is because the principle of election of remedies is discordant with the modern procedural concepts embodied in the Code of Civil Procedure which Permits a party to seek inconsistent remedies in his claim for relief without being required to elect between them at the pleading stage of the litigation.

Banking Law

a) Section 2 of Republic Act No. 1405 on the secrecy of bank deposits

- Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation

FACTS:

Short version: Mellon Bank made a mistake in transferring $1M to Javier’s account instead of just $1K. Javier with the help of the other respondents appropriated the amount for himself. Mellon then filed a complaint against Javier et al. before Superior Court of California and Court of First Instance in the Philippines.  The RTC at first conditionally allowed the testimonies of Baylosis and Red about the transactiom. But their testimonies were later stricken off the record. RTC dimissed the case. Mellon then filed the instant petition for certiorari.

Long version: Ventosa requested the transfer of $1,000 from the First National Bank Javier in Manila through the Prudential Bank. Accordingly, the First National Bank requested the petitioner, Mellon Bank, to effect the transfer. Unfortunately the wire sent by Mellon Bank to Manufacturers Hanover Bank, a correspondent of Prudential Bank, indicated the amount transferred as “US$1,000,000.00” instead of US$1,000.00. Hence Manufacturers Hanover Bank transferred one million to the Prudential Bank for the account of Javier. Javier then appropriated the amount with the help of the other respondents.

Mellon Bank filed a complaint in the Superior Court of California against Melchor Javier, Jane Doe Javier, Honorio Poblador, Jrn, and Does I through V. Mellon Bank also filed in the Court of First Instance complaint against the Javier spouses, Honorio Poblador, Jr., Domingo L. Jhocson, Jr., Jose Marquez, Roberto Gariño, Elnor Investment Co., Inc., F.C. Hagedorn & Co., Inc. and Paramount Finance Corporation. After its amendment, Rafael Caballero and Tri-Arc Investment & Management Company, Inc. were also named defendants.

The RTC at first conditionally allowed the testimonies of Baylosis and Red about the bank transaction. But their testimonies were later stricken off the record on the grounds of res inter alios acta, immateriality, irrelevancy and confidentiality due to RA 1405. 

The RTC dimissed the case for lack of cause of action. Subsequently, Mellon’s 2 Motions for Reconsideration were denied by the RTC. Hence, Mellon Bank filed the instant petition for certiorari claiming that the resolution of September 10, 1982 and the orders of October 28, 1983 and July 9, 1985 are void for being unlawful and oppressive exercises of legal authority, subversive of the fair administration of justice, and in excess of jurisdiction.

ISSUE/S:

1) WON CFI gravely abused its discretion in ruling that the resolution of September 10, 1982 is a "final and definitive disposition" of petitioner's claim for the purchase price of the Kern property?

2) WON Republic Act No. 1405 on the secrecy of bank deposits prohibits the disclosure of an account deposit which is relevant and material to the resolution of the case?

3) WON the principle of election of remedies bars recovery of Mellon Bank?

HELD:

1)YES. An interlocutory order is one which does not dispose of the case completely but leaves something more to be done upon its merits. In this case, the resolution is interlocutory because the issue resolved therein is merely the admissibility of the plaintiff's evidence.  It only orders that the testimonies of Baylosis and Red and the documents they testified on should be stricken from the record. As such, there are things left undone in Civil Case No. 26899 after the issuance of the September 10, 1982 resolution not only because of its explicit dispositive portion but also due to the fact that even until now, the case is still pending and being heard.

2) NO. Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation. In the instant case, Civil Case No. 26899 is aimed at recovering the amount converted by the Javiers for their own benefit. Necessarily, an inquiry into the whereabouts of the illegally acquired amount extends to whatever is concealed by being held or recorded in the name of persons other than the one responsible for the illegal acquisition. 

3) NO. Respondents, with the exception of the Javiers, failed to raise “election of remedies” as a defense in their answers and therefore, by virtue of Section 2, Rule 9 of the Rules of Court, such defense is deemed waived.  Having been waived as a defense, it cannot be treated as if it has been raised in a motion to dismiss based on the nonexistence of a cause of action.

Moreover, granting that the defense was properly raised, it is inapplicable in this case. Election of remedies refers to the choice by a party to an action of one of two or more coexisting remedial rights, where several such rights arise out of the same facts, but the term has been generally limited to a choice by a party between inconsistent remedial rights, the assertion of one being necessarily repugnant to, or a repudiation of, the other. In its technical and more restricted sense, election of remedies is the adoption of one of two or more coexisting remedies, with the effect of precluding a resort to the others. 

It should be noted that the remedies pursued in the California case and in Civil Case No. 26899 are not exactly repugnant or inconsistent with each other. If ever, they are merely alternative in view of the inclusion of parties in the latter case who are not named defendants in the former. The causes of action, although they all stem from the erroneous transmittal of dollars, are distinct as shown by the complaints lengthily set out above. The bar of an election of remedies does not apply to the assertion of distinct causes of action against different persons arising out of independent transactions.

Rural Bank of San Miguel vs. Monetary Board Case Digest G.R. No. 150886 February 16, 2007

Rural Bank of San Miguel vs. Monetary Board Case Digest 

G.R. No. 150886 ; February 16, 2007

DOCTRINE/S:

Banking Law

a) Report is the only thing necessary to place a bank under receivership or liquidation. (Section 30 of RA 7653)

- Examination, which was the requirement under the RA 265, is already repealed by RA 7653

Statutory Construction

a) Plain meaning rule (verba legis)

-A rule in statutory construction that means where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.

- This rule rests on the valid presumption that the words employed by the legislature in a statute correctly express its intention or will and preclude the court from construing it differently. The legislature is presumed to know the meaning of the words, to have used words advisedly, and to have expressed its intent by use of such words as are found in the statute. Verba legis non est recedendum, or from the words of a statute there should be no departure.

b) Exception to the “Plain Meaning Rule”

- Court may consider the spirit and reason of the statute, where a literal meaning would lead to absurdity, contradiction, injustice, or would defeat the clear purpose of the lawmakers

FACTS: Petitioner bank was prohibited by the Monetray Board (MB) from doing business in the Philippines and was placed under receivership with PDIC, as its receiver, on the basis of reports prepared by the PDIC.  This was done by MB through a Resolution.  On the basis of another set of reports prepared by PDIC stating that RBSM could not resume business with sufficient assurance of protecting the interest of its depositors, creditors and the general public, the MB passed a Resolution directing PDIC to proceed with the liquidation of the bank under Section 30 of RA 7653. Hence, petitioner files this instant petition for review on certiorari of a decision and resolution of the CA.

ISSUE/S: WON Section 30 of RA 7653 require a current and complete examination of the bank before it can be closed and placed under receivership.

HELD: NO. Section 30 of RA 7653 provides that “upon report of the head of the supervising or examining department” the Monetary Board may place a bank under receivership or liquidation. Hence, RA 7653 only requires a "report” of the head of the supervising or examining department". Examination is no longer needed. The Bank’s reliance on Section 29 of the old law (RA 265), which required examination, is misplaced since such law has been repealed by the current RA 7653 (The New Central Bank).

Furthermore, to make the meaning of “report” as “examination” would be wrong since it is an established rule in statutory construction that where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation (plain meaning rule or verba legis). The word "report" has a definite and unambiguous meaning which is clearly different from "examination." A report, as a noun, may be defined as "something that gives information" or "a usually detailed account or statement.” On the other hand, an examination is "a search, investigation or scrutiny." Hence it is it clear that RA 7653 no longer requires that an examination be made before the MB can issue a closure order

Marquez vs. Desierto Case Digest G.R. No. 135882 June 27, 2001

Marquez vs. Desierto Case Digest 

G.R. No. 135882 ; June 27, 2001

DOCTRINE/S:

Banking Law

a) Bank deposits are “absolutely confidential”; Exceptions.

GR: bank deposits are “absolutely confidential” (Section 2 of the Secrecy of Bank Deposits Law, as amended)

Exceptions:

1. In an examination made in the course of a special or general examination of a bank that is specifically authorized by the Monetary Board 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,

2. In an examination made by an independent auditor hired by the bank to conduct its regular audit provided that the examination is for audit purposes only and the results thereof shall be for the

3. Where the depositor consents in writing;

4. Impeachment case;

5. By court order in bribery or dereliction of duty cases against public officials;

6. Deposit is subject of litigation;

7. Sec. 8, R. A. No. 3019, in cases of unexplained wealth (PNB vs. Gancayco)

b) Requisites for an in camera inspection

1. There must be a pending case before a court of competent jurisdiction.

2. The account must be clearly identified.

3. The inspection is  limited to the subject matter of the pending case before the court of competent jurisdiction. 

4. The bank personnel and the account holder must be notified to be present during the inspection.

5.  Inspection may cover only the account identified in the pending case.

c) Invasion of privacy is an offense in special laws like the Anti-Wiretapping Law, the Secrecy of Bank Deposits Act, and the Intellectual Property Code.

FACTS:

SHORT VERSION: Petitioner Marquez, a Branch Manager of Union Bank. received an Order from the Ombudsman to produce several bank documents for purposes of inspection in camera relative to various accounts maintained at said Bank.  The accounts to be inspected were involved in a case pending with the Ombudsman. Marquez agreed to an in camera inspection.  But later on, Marquez wrote the Ombudsman that he could not comply with the in camera inspection since the accounts in question could not readily be identified. Marquez asked for time to respond to the order. But the Ombudsman issued an order directing Marquez to produce the said bank documents stating that her persistent refusal to comply with the order is unjustified and is punishable as Indirect Contempt. Petitioner Marquez received a copy of the motion to cite her for contempt. Petitioner filed with the Ombudsman an opposition to the motion to cite her in contempt on the ground that the filing thereof was premature due to the petition pending in the lower court.

LONG VERSION: Petitioner Marquez received an Order from the Ombudsman Ato produce several bank documents for purposes of inspection in camera relative to various accounts maintained at Union Bank where petitioner was the branch manager.  The accounts to be inspected were involved in a case pending with the Ombudsman entitled. The Order was grounded on Section 15 of RA 6770 (Ombudsman Act of 1989) which modifies the law on the Secrecy of Bank Deposits (R.A. 1405) and places the office of the Ombudsman in the same footing as the courts of law in this regard.”

The basis of the Ombudsman in ordering an in camera inspection of the accounts was a trail of managers checks (MCs) purchased by one Trivinio, a respondent in the case pending with the office of the Ombudsman. It appeared that Trivinio purchased MCs at Traders Royal Bank (TRB) and 11 of MCs in were deposited and credited to an account maintained at Union Bank.

Petitioner agreed to an in camera inspection.  However, later on, Marquez wrote the Ombudsman that the accounts in question could not readily be identified since the checks were issued in cash or bearer, and asked for time to respond to the order. Marquez surmised that these accounts had long been dormant, hence were not covered by the new account number generated by the UB system, thus sought to verify from the Interbank records archives for the whereabouts of these accounts.

The Ombudsman, responding to the request of Marquez for time to comply with the order, stated that UBP-Julia Vargas, not Interbank, was the depositary bank of the subject TRB MCs as shown at its dorsal portion and as cleared by the Philippine Clearing House.  Notwithstanding the fact that the checks were payable to cash or bearer, the name of the depositor(s) could easily be identified since the account numbers where said checks were deposited were identified in the order. Even assuming that the accounts were already classified as dormant accounts, the bank was still required to preserve the records pertaining to the accounts within a certain period of time as required by existing banking rules and regulations.

The Ombudsman issued an order directing Marquez to produce the bank documents relative to the accounts in issue, stating that her persistent refusal to comply with the order is unjustified and is punishable as Indirect Contempt.

Marquez together with UBP filed a petition for declaratory relief, prohibition and injunction with the RTC against the Ombudsman allegedly because the Ombudsman and other persons acting under his authority were continuously harassing her to produce the bank documents relative to the accounts in question. Moreover, , the Ombudsman issued another order stating that unless she appeared before the FFIB with the documents requested, Marquez would be charged with indirect contempt and obstruction of justice.

The lower court denied petitioner’s prayer for a temporary restraining order stating that since petitioner failed to show prima facie evidence that the subject matter of the investigation is outside the jurisdiction of the Office of the Ombudsman, no writ of injunction may be issued by the RTC to delay the investigation pursuant to Section 14 of the Ombudsman Act of 1989.

Petitioner filed a motion for reconsideration but was denied.

Petitioner received a copy of the motion to cite her for contempt. Petitioner then filed with the Ombudsman an opposition to the motion to cite her in contempt on the ground that the filing thereof was premature due to the petition pending in the lower court. Petitioner likewise reiterated that she had no intention to disobey the orders of the Ombudsman. However, she wanted to be clarified as to how she would comply with the orders without her breaking any law, particularly RA 1405.

ISSUE/S: WON the order of the Ombudsman to have an in camera inspection of the questioned account is allowed as an exception to the law on secrecy of bank deposits (RA 1405).

HELD: NO. The requisites in order for an In camera inspection to be allowd are: there must be a pending case before a court of competent jurisdiction; the account must be clearly identified; the inspection limited to the subject matter of the pending case before the court of competent jurisdiction; 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 the case at bar, there is yet no pending litigation before any court of competent authority. What is existing is an investigation by the office of the Ombudsman. Clearly, there was no pending case in court which would warrant the opening of the bank account for inspection.

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.

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.