G.R. No.

71479
October 18, 1990
MELLON BANK, N.A vs. MAGSINO

FACTS:

Dolores Ventosa requested the transfer of $1,000
from the First National Bank of Moundsville, West
Virginia, U.S.A. to Victoria Javier in Manila through
the Prudential Bank.

To effect the transfer, the First National Bank
requested the petitioner, Mellon Bank, which
mistakenly indicated in its wire sent to
Manufacturers Hanover Bank, a correspondent of
Prudential Bank the amount transferred as
"US$1,000,000.00" instead of US$1,000.00.

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 (No. 343) in the
Prudential Bank and deposited $999,943.70.
Immediately, Victoria Javier and her husband,
Melchor Javier, Jr., 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.

Melchor Javier, requested Jose Marquez, a realtor, to
look for properties for sale in the United States.
Marquez offered a 160-acre lot in the Mojave Desert
in California City which was owned by Honorio
Poblador.

Without having seen the property, Javier agreed to
buy said property. Deeds were issued and one of it
was sent to the Kern County Registrar in California
for registration.

The payment of the purchased property was made
through six cashier's checks withdrawn from dollar
account 434 while the balance of P236,000 was paid
in cash by Javier who did not even ask for a receipt.

Inasmuch as Poblador had requested that the
purchase price should not be paid directly to him, the
payment was coursed through six companies in
which he is financially related with.

Mellon Bank filed a complaint in the Superior Court
of California, County of Kern, against Javier
spouses to impose constructive trust of the property
theyve purchased from the money mistakenly and
erroneously transferred to their account.

Mellon Bank also filed in the Court of First Instance

of Rizal, Branch X, a complaint against the Javier
spouses, Honorio Poblador, etc to recover the
amount they received for the sale of the 160-acre lot
in California City.

In due course, it was found out that the checks
originally issued by Javier spouses were already
negotiated and now were deposited to Account 2825-
1 of the Philippine Veterans Bank in the name of
Cipriano Azada, Poblador's law partner and counsel
to the Javiers.

Mellon Bank then subpoenaed Erlinda Baylosis of
Veterans Bank to show that Azada deposited HSBC
checks No. 339736 and 339737 amounting to
P874,490.75 in his personal current account with
said bank and Pilologo Red, Jr. of HSBC to prove
that said amount was returned by Azada to Hagedorn
one of the companies connected with Poblador.

The testimonies of these witnesses were objected to
by the defense on the grounds of res inter alios acta,
immateriality, irrelevancy and confidentiality and
then moved to strike off the testimonies from the
record of the case in violation of Republic Act No.
1405 the Secrecy of Bank Deposits.

ISSUE:

Whether or not disclosure of bank deposits in cases
where the money is the subject matter of litigation
violates RA 1405.

HELD:

Private respondents' protestations that to allow the
questioned testimonies to remain on record would be
in violation of the provisions of Republic Act No.
1405 on the secrecy of bank deposits, is 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 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.


Prepared by:

Lizglen L. Gliponeo