Cases for Sec. 55.1 (b) 1. 2. 3. 4. 5. China Banking Corp. v.

Court of Appeals, 511 SCRA 110 (2006) Salvacion v. Central Bank, 278 SCRA 27 (1997) Van Twest v. Court of Appeals, 230 SCRA 42 (1994) Union Bank v. Court of Appeals, 321 SCRA 563 (1999) Mellon Bank NA v. Magsino, 190 SCRA 633 (1990) only the relevant parts on RA 1405

China Bank Corporation v. Court of Appeals, 511 SCRA 110 (2006)

FACTS: - Jose Gotianuy accused his daughter Mary Margaret Dee of stealing, among his other properties, US dollar deposits with Citibank N.A. amounting to not less than P35,000,000.00 and US$864,000.00. Mary Margaret Dee received these amounts from Citibank N.A. through checks which she allegedly deposited at China Banking Corporation (China Bank). He likewise accused his son-in-law, George Dee, husband of his daughter, Mary Margaret, of transferring his real properties and shares of stock in George Dees name without any consideration. Jose Gotianuy died during the pendency of the case before the trial court. He was substituted by his daughter, Elizabeth Gotianuy Lo. The latter presented the US Dollar checks withdrawn by Mary Margaret Dee from his US dollar placement with Citibank. -Upon motion of Elizabeth Gotianuy Lo, the trial court issued a subpoena to Cristota Labios and Isabel Yap, employees of China Bank, to testify on the case. -China Bank opposed. - TC: The disclosure is only as to the name or whose name the said fund is deposited is not violative of the law - CA: Affirmed TC. The law protects only the deposit itself but not the name of depositor. CBs Contention: -Jose Gotianuy is not the owner of the questioned foreign currency deposit, thus, he cannot invoke the aid of the court in compelling the disclosure of someone elses foreign currency deposit. ISSUE: -Whether or not Jose Gotianuy as co payee of a foreign currency depositor in checks deposited in the account of Mary Margaret Dee is a depositor. HELD: -The law provides that all foreign currency deposits authorized under Republic Act No. 6426, as amended by Sec. 8, Presidential Decree No. 1246, Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034 are considered absolutely confidential in nature and may not be inquired into. There is only one exception to the secrecy of foreign currency deposits, that is, disclosure is allowed upon the written permission of the depositor. -As the owner of the funds unlawfully taken and which are undisputedly now deposited with China Bank, Jose Gotianuy has the right to inquire into the said deposits.

Salvacion v. Central Bank, 278 SCRA 27 (1997)

FACTS -Greg Bartelli, an American tourist coaxed and lured Karen Salvacion, 12 years old to go with him to his apartment and raped her there for several times. However, Bartelli was able to escape from jail and avoid punishment.

-The criminal cases were archived pending the arrest of Bartelli. On the other hand, Karen received a favorable judgment in the civil case for damages -After the decision of the trial court become final, Karen tried to execute on Bartellis dollar account with China Banking Corporation. Accordingly, the sheriff served a Notice of Garnishment on China Banking. -China Banking invoked Section 113 of CB Circular 960 to the effect that the dollar deposits of Bartelli are exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. -Upon inquiry with CB on whether Sec 113 of CB Circular 960 has any exception, CB responded that the provision is ABSOLUTE, the purpose being to encourage dollar accounts within the countrys banking system which would help in the development of the economy and that there is no intention to render futile the basic rights of a person, but it is the law though the law maybe harsh as some perceive it. Compliance is still enjoined. -Hence, this petition for declaratory relief. ISSUE -Whether or not the peculiar circumstances of the case warrants the execution on the foreign currency account despite the exemption from court processes under RA 6426. HELD -The provisions of Sec 113 of CB circular 960 and PD 1246, in so far as it amends Section 8 of RA 6426 are inapplicable to this case because of its peculiar circumstances. CBC is required to comply with the writ of execution and release to Karen the dollar deposit of Bartelli in such amount would satisfy the judgment. -Provisions of The application of the law depend on the extent of its justice. Eventually, 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 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 lawmaking body intended right and justice to prevail. Ninguno non deue enriquecerse tortizerzmente con damo 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. -It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the countrys economy was in a shambles; when foreign investments were minimal and presumably, this was the reason why said statute was enacted. But the realities of the present times show that the country has recovered economically; and even if not, the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. 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. -It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as a device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent.

Van Twest v. Court of Appeals, 230 SCRA 42 (1994)

FACTS -Alexander Van Twest and Gloria Anacleto opened a joint foreign currency savings account with Interbank to hold funds which "belonged entirely and exclusively" to Van Twest, to "facilitate the

funding of certain business undertakings" of both of them and which funds were to be "temporarily (held) in trust" by Gloria Anacleto, who "shall turnover the same to plaintiff upon demand." -Van Twest further alleged that withdrawals from the account were always made through their joint signatures; that when his business relationship with Gloria Anacleto turned sour, the latter unilaterally closed their joint account, withdrew the remaining balance of and placed the money in her own personal account with the same bank. -Van Twest thus sought an injunctive writ to prevent Gloria Anacleto from withdrawing the money at any time and thereby defeat Van Twest's main and pending action. -The RTC granted the writ of preliminary injunction. -CA reversed the order holding that Anacleto is a co-owner of the funds who could unilaterally control the application thereof. -Hence, petition for review seeking the reinstatement of writ of preliminary injunction. -Anacleto contends for the first time that the personal currency deposit she is maintaining is exempt from process issued by courts pursuant to RA 6426. ISSUE -Whether or not Anacleto may invoke RA 6426 (AN ACT INSTITUTING A FOREIGN CURRENCY DEPOSIT SYSTEM IN THE PHILIPPINES HELD - Anacletos contentions do not persuade. Her belated invocation of the provisions of R.A. No. 6426 as amended violates basic procedural due process by interposing a new matter before this Court the consideration of which would further delay a final disposition on the propriety of petitioner of petitioner's application for an injunctive writ. -On a substantive, the Court holds that the privileges extended by the statute cited by private respondent are actually enjoyed, and are invocable only, by the petitioner, both because private respondent's transactions fall outside the ambit of the statute, and because petitioner is the owner of the foreign exchange fund subject of this case. This conclusion is anchored on the consistent and contemporaneous administrative construction by the Central Bank of the basic statute, as manifested in the relevant circulars issued by it in implementation of that law, which are entitled to great respect by the courts.

UNIONBANK OF THE PHILIPPINES, petitioner, vs. THE COURT OF APPEALS and ALLIED BANK CORPORATION, respondents.
FACTS - A check in the amount of One Million Pesos (P1,000,000.00) was drawn against Account No. 011101854-8 with Allied Bank payable to the order of one Jose Ch. Alvarez. The payee deposited the check with Union Bank who credited the P1,000,000.00 to the account of Mr. Alvarez. -Union Bank sent the check for clearing through the Philippine Clearing House Corporation (PCHC). When the check was presented for payment, a clearing discrepancy was committed by Union Banks clearing staff when the amount of One Million Pesos (P1,000,000.00) was erroneously unde r-encoded to One Thousand Pesos (P1,000.00) only. -Union Bank only discovered the under-encoding almost a year later. -Thus, Union Bank Notified Allied Bank of the discrepancy by way of a charge slip for Nine Hundred Ninety-Nine Thousand Pesos (P999,000.00) for automatic debiting against the account of Allied Bank. The latter, however, refused to accept the charge slip since [the] transaction was completed per your [Union Banks] original instruction and clients account is now insufficiently funded.

-Subsequently, Union Bank filed a complaint against Allied Bank before the PCHC Arbitration Committee (Arbicom), alleging that Allied Bank should have informed it of the under coding pursuant to the Section 25 of PCHC handbook which states that: The receiving bank should inform the erring bank about the under coding of the amount not later than 10am of the following clearing day. -The judgment on the arbitration case was held in abeyance pending the resolution of the petition filed by Union Bank. -RTC, affirmed by CA dismissed the petition holding that case of Union Bank does not fall under any of the exceptions to warrant a disclosure of or inquiry into the ledger/books of account in dispute. -CA held that the case was not one where the money deposited is the subject matter of the litigation, particularly nowhere in Union Banks complaint does it mention of the amount it seeks to recover from the Account itself, but seeks of P999,000 only as an incident of its alleged opportunity losses and interest as a result of its own employees admitted error in encoding the check. Hence, this petition. ISSUE -Whether or not the case at bar falls under the last exception. HELD -A collecting bank which sued the drawee bank to recover the deficiency between the amount credited to the account of the depositor and the amount obtained from the drawee bank because the latter had erroneously undercoded the amount of the check it presented for clearing from P1M to P1,000 is not entitled to examine the account of the drawer of the check, because the money in the account of the drawer is not the subject matter of the litigation. The collecting bank was only fishing for information so it could determine the culpability of the drawee bank and the amounts of damages it could recover from the latter. It does not seek the recovery of the very money contained in the deposit. The subject matter of the dispute may be the amount of P999,000 that the collecting bank seeks from the drawee bank as a result of the latters alleged failure to inform the former of the discrepancy ; but it is not the P999,000 deposited in the drawers account. By the terms of RA 1405, the money deposited itself should be the subject matter of the litigation.

Mellon Bank v. Magsino et. al. GR No. 71479, 18 October 1990

RA 1405 : "Sec 2 All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written per-mission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials. or in cases where the money deposited or invested is the subject matter of the litigation," "Sec. 3. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned in Section two hereof any information concerning said deposits."

This case involves the erroneous transfer of US $1,000,000 to Victoria Javier instead of US $1,000 only. Dolores Ventosa requested the transfer of $1000 from the First National Bank of West Virginia, USA to Victoria 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 dollars less bank charges of $6.30 to the Prudential Bank for the account of Victoria Javier.

Javier opened a new dollar account in Prudential Bank and deposited $999,943. Immediately, thereafter, Javier and her husband made withdrawals from the account deposited them in several banks only to withdraw them later in an apparent plan to conceal, launder and dissipate the erroneously sent amount. One of the things they bought was real property in California, USA which was the subject of an action for recovery by Mellon Bank. Later, it filed a case in the Philippines for the recovery of the whole amount, including the purchase price of the real property located in the US. Among other things, private respondents raised the issue of whether or not, by virtue of the principle of election of remedies, an action filed in California, USA, to recover real property located therein and to constitute a constructive trust on said property precludes the filing in our jurisdiction of an action to recover the purchase price of said real property. SC ruled that the filing of a recovery suit in the US does not preclude the filing of an action in the Philippines for the recovery of the purchase price. With regard to our subject matter, Erlinda Baylosis of the Philippine Veterans Bank and Pilologo Red, Jr. of Hongkong and Shanghai Banking Corporation were required to give testimonies with regard to the deposits and checks issued by the private respondents Javier, et. al.. These testimonies were questioned for being immaterial and irrelevant as well as covered by RA 1405 on confidentiality. SC said: Private respondents protestations that to allow the questioned testimonies to remain on record would be in violation of the provisions of RA 1405 on the secrecy of bank deposits are unfounded. Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation. Inasmuch as the civil case 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. 2. VERSION 2 Dolores Ventosa, on May 27, 1977, requested the First National Bank in U.S.A. to transfer $1,000.00 to Victoria Javier through Prudential Bank. First National Bank requested Mellon Bank to effect the transfer; it wired to Manufacture Hanover Bank a correspondence of Prudential Bank. However, Mellon Bank erroneously indicated there $ 1,000,000.00 as the amount to be transferred instead of $1,000.00 only. Prudential Bank chief accountant, Roberto Grio immediately informed Javier spouses of such transfer though he knew of such mistake in the transfer of the amount. The spouses without wasting their time opened a new dollar account No. 343 in Prudential Bank. They withdrew the money and converted it into a cashiers check. There were 6 cashiers check amounting P 1,000,000.00 each with a payee of different companies, these were delivered to Jose Marquez and Honorio Poblador, Jr. Melchor Javier, Jr. requested Marues to look for a real property for sale in U.S.A. as an agent of Poblador, Jr., Marquez offered the formers real property, a 160- acre, in Mojave Desert, California City, or P 3, 268,800 ( $437,405), without having seen the said property he agreed to buy the same. Deeds were issued in favor of Javier the other one of which was sent to Kern County Registrar in California for Registration. For the payment of which, Poblador, Jr. requested it shall not be directed to him, instead to the companies, thus the checks were delivered to companies each with different instructions from Poblador, Jr. Mellon filed a complaint in California, against the Javier spouses to imposed constructive trust of the property from the money erroneously transferred to their account. They, the spouses and each of them must be held as an involuntary or constructive trustee of the property. Mellon also filed a complaint before the Court of first Instance of Rizal, Branch X, to recover the proceeds of the California property. In order to trace the whereabouts the portion of the funds, witnesses Boylasis and Red made to testify that in PVB there was a transaction made by Azada which involved checks No. 339736 and339737 for the total amount of P874, 490,75 and this was transferred to Hagedorn one of the companies which is in connection with Poblador, Jr. T he defendants averred that such testimonies must be stricken from the record because this was against R.A. No. 1405 the secrecy of bank deposit.

Issue Whether or not an account deposit which is relevant and material to the resolution of the case may be covered under R.A. No. 1405. Held No, sec. 2 of R.A. No. 1405 states that it allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation. Inasmuch as in this case, it aimed the recovery of the amount converted by Javier for their own benefit, necessarily, an inquiry to the whereabouts of the illegally acquired amount extend to whatever is concealed by being held or recorded in the name of the persons other than the one responsible for the illegal acquisition.

AlsoEN BANC RESOLUTION AM No. 99-10-05-O, Re: Procedure in Extrajudicial Or Judicial Foreclosure of Real Estate Mortgages, February 20, 2007 RE: PROCEDURE IN EXTRAJUDICIAL OR JUDICIAL FORECLOSURE OF REAL ESTATE MORTGAGES Acting on the recommendation of the Committee on Revision of the Rules of Court, the Court RESOLVED to adopt the following additional rules with respect to Extrajudicial or Judicial Foreclosure of Real Estate Mortgages: (1) No temporary restraining order or writ of preliminary injunction against the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that the loan secured by the mortgage has been paid or is not delinquent unless the application is verified and supported by evidence of payment. (2) No temporary restraining order or writ of preliminary injunction against the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that the interest on the loan is unconscionable, unless the debtor pays the mortgagee at least twelve percent per annum interest on the principal obligation as stated in the application for foreclosure sale, which shall be updated monthly while the case is pending.

(3) Where a writ of preliminary injunction has been issued against a foreclosure of mortgage, the disposition of the case shall be speedily resolved. To this end, the court concerned shall submit to the Supreme Court, through the Office of the Court Administrator, quarterly reports on the progress of the cases involving ten million pesos and above. (4) All requirements and restrictions prescribed for the issuance of a temporary restraining order/writ of preliminary injunction, such as the posting of a bond, which shall be equal to the amount of the outstanding debt, and the time limitation for its effectivity, shall apply as well to a status quo order.

Upon effectivity of these additional rules, all rules, resolutions, orders and circulars of this Court, which are inconsistent therewith, are hereby repealed or modified accordingly. These additional Rules in the Procedure in Extrajudicial or Judicial Foreclosure of Real Estate Mortgages shall take effect on March 10, 2007 following their publication in a newspaper of general circulation not later than February 28, 2007. (Sgd.) REYNATO S. PUNO Chief Justice