1
[G.R. No. 135882. June 27, 2001]
LOURDES T. MARQUEZ, in her capacity as Branch
Manager, Union Bank of the Philippines, petitioners, vs.
HON. ANIANO A. DESIERTO, (in his capacity as
OMBUDSMAN, Evaluation and Preliminary
Investigation Bureau, Office of the Ombudsman,
ANGEL C. MAYOR-ALGO, JR., MARY ANN
CORPUZ-MANALAC and JOSE T. DE JESUS, JR., in
their capacities as Chairman and Members of the Panel,
respectively, respondents.
PARDO, J.:
In the petition at bar, petitioner seeks to--
a. Annul and set aside, for having been issued without or in
excess of jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction, respondents order dated
September 7, 1998 in OMB-0-97-0411, In Re: Motion to
Cite Lourdes T. Marquez for indirect contempt, received by
counsel of September 9, 1998, and their order dated October
14, 1998, denying Marquezs motion for reconsideration
dated September 10, 1998, received by counsel on October
20, 1998.
b. Prohibit respondents from implementing their order dated
October 14, 1998, in proceeding with the hearing of the
motion to cite Marquez for indirect contempt, through the
issuance by this Court of a temporary restraining order
and/or preliminary injunction.[1]
The antecedent facts are as follows:
Sometime in May 1998, petitioner Marquez received
an Order from the Ombudsman Aniano A. Desierto dated
April 29, 1998, to produce several bank documents for
purposes of inspection in camera relative to various
accounts maintained at Union Bank of the Philippines, Julia
Vargas Branch, where petitioner is the branch manager. The
accounts to be inspected are Account Nos. 011-37270, 240-
020718, 245-30317-3 and 245-30318-1, involved in a case
pending with the Ombudsman entitled, Fact-Finding and
Intelligence Bureau (FFIB) v. Amado Lagdameo, et. al. The
order further states:
It is worth mentioning that the power of the Ombudsman to
investigate and to require the production and inspection of
records and documents is sanctioned by the 1987 Philippine
Constitution, Republic Act No. 6770, otherwise known as
the Ombudsman Act of 1989 and under existing
jurisprudence on the matter. It must be noted that R. A. 6770
especially Section 15 thereof provides, among others, the
following powers, functions and duties of the Ombudsman,
to wit:
xxx
(8) Administer oaths, issue subpoena and subpoena duces
tecum and take testimony in any investigation or inquiry,
including the power to examine and have access to bank
accounts and records;
(9) Punish for contempt in accordance with the Rules of
Court and under the same procedure and with the same
penalties provided therein.
Clearly, the specific provision of R.A. 6770, a later
legislation, 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.[2]
The basis of the Ombudsman in ordering an in
camera inspection of the accounts is a trail of managers
checks purchased by one George Trivinio, a respondent in
OMB-0-97-0411, pending with the office of the
Ombudsman.
It would appear that Mr. George Trivinio, purchased
fifty one (51) Managers Checks (MCs) for a total amount of
P272.1 Million at Traders Royal Bank, United Nations
Avenue branch, on May 2 and 3, 1995. Out of the 51 MCs,
eleven (11) MCs
in the amount of P70.6 million, were deposited and
credited to an account maintained at the Union Bank, Julia
Vargas Branch.[3]
On May 26, 1998, the FFIB panel met in conference
with petitioner Lourdes T. Marquez and Atty. Fe B.
Macalino at the banks main office, Ayala Avenue, Makati
City. The meeting was for the purpose of allowing petitioner
and Atty. Macalino to view the checks furnished by Traders
Royal Bank. After convincing themselves of the veracity of
the checks, Atty. Macalino advised Ms. Marquez to comply
with the order of the Ombudsman. Petitioner agreed to an in
camera inspection set on June 3, 1998.[4]
However, on June 4, 1998, petitioner wrote the
Ombudsman explaining to him that the accounts in question
cannot readily be identified and asked for time to respond to
the order. The reason forwarded by petitioner was that
despite diligent efforts and from the account numbers
presented, we can not identify these accounts since the
checks are issued in cash or bearer. We surmised that these
accounts have long been dormant, hence are not covered by
the new account number generated by the Union Bank
system. We therefore have to verify from the Interbank
records archives for the whereabouts of these accounts.[5]
The Ombudsman, responding to the request of the
petitioner for time to comply with the order, stated: firstly, it
must be emphasized that Union Bank, Julia Vargas Branch
was the depositary bank of the subject Traders Royal Bank
Managers Checks (MCs), as shown at its dorsal portion and
as cleared by the Philippine Clearing House, not the
International Corporate Bank.
Notwithstanding the fact that the checks were payable
to cash or bearer, nonetheless, the name of the depositor(s)
could easily be identified since the account numbers x x x
where said checks were deposited are identified in the order.
Even assuming that the accounts xxx were already
classified as dormant accounts, the bank is still required to
 2

preserve the records pertaining to the accounts within a dealt with by the Judge of the First Instance (now RTC)
certain period of time as required by existing banking rules having jurisdiction of the case in a manner provided by law
and regulations. (section 580 of the Revised Administrative Code). Under the
present Constitution only judges may issue warrants, hence,
And finally, the in camera inspection was already
respondent should apply with the Court for the issuance of
extended twice from May 13, 1998 to June 3, 1998, thereby
the warrant needed for the enforcement of his contempt
giving the bank enough time within which to sufficiently
orders. It is in these proceedings where petitioners may
comply with the order.[6]
question the propriety of respondents exercise of his
Thus, on June 16, 1998, the Ombudsman issued an contempt powers. Petitioners are not therefore left without
order directing petitioner to produce the bank documents any adequate remedy.
relative to the accounts in issue. The order states:
The questioned orders were issued with the investigation of
Viewed from the foregoing, your persistent refusal to the case of Fact-Finding and Intelligence Bureau vs. Amado
comply with Ombudsmans order is unjustified, and is merely Lagdameo, et. el., OMB-0-97-0411, for violation of R.A.
intended to delay the investigation of the case. Your act 3019. Since petitioner failed to show prima facie evidence
constitutes disobedience of or resistance to a lawful order that the subject matter of the investigation is outside the
issued by this office and is punishable as Indirect Contempt jurisdiction of the Office of the Ombudsman, no writ of
under Section 3(b) of R.A. 6770. The same may also injunction may be issued by this Court to delay this
constitute obstruction in the lawful exercise of the functions investigation pursuant to Section 14 of the Ombudsman Act
of the Ombudsman which is punishable under Section 36 of of 1989.[10]
R.A. 6770.[7]
On July 20, 1998, petitioner filed a motion for
On July 10, 1998, petitioner together with Union Bank reconsideration based on the following grounds:
of the Philippines, filed a petition for declaratory relief,
a. Petitioners application for Temporary Restraining Order is
prohibition and injunction[8] with the Regional Trial Court,
not only to restrain the Ombudsman from exercising his
Makati City, against the Ombudsman.
contempt powers, but to stop him from implementing his
The petition was intended to clear the rights and duties Orders dated April 29,1998 and June 16,1998; and
of petitioner. Thus, petitioner sought a declaration of her
b. The subject matter of the investigation being conducted by
rights from the court due to the clear conflict between R. A.
the Ombudsman at petitioners premises is outside his
No. 6770, Section 15 and R. A. No. 1405, Sections 2 and 3.
jurisdiction.[11]
Petitioner prayed for a temporary restraining order
On July 23, 1998, the Ombudsman filed a motion to
(TRO) because the Ombudsman and other persons acting
dismiss the petition for declaratory relief[12] on the ground
under his authority were continuously harassing her to
that the Regional Trial Court has no jurisdiction to hear a
produce the bank documents relative to the accounts in
petition for relief from the findings and orders of the
question. Moreover, on June 16, 1998, the Ombudsman
Ombudsman, citing R. A. No. 6770, Sections 14 and 27. On
issued another order stating that unless petitioner appeared
August 7, 1998, the Ombudsman filed an opposition to
before the FFIB with the documents requested, petitioner
petitioners motion for reconsideration dated July 20,
manager would be charged with indirect contempt and
1998.[13]
obstruction of justice.
On August 19, 1998, the lower court denied petitioners
In the meantime,[9] on July 14, 1998, the lower court
motion for reconsideration,[14] and also the Ombudsmans
denied petitioners prayer for a temporary restraining order
motion to dismiss.[15]
and stated thus:
On August 21, 1998, petitioner received a copy of the
After hearing the arguments of the parties, the court finds the
motion to cite her for contempt, filed with the Office of the
application for a Temporary Restraining Order to be without
Ombudsman by Agapito B. Rosales, Director, Fact Finding
merit.
and Intelligence Bureau (FFIB).[16]
Since the application prays for the restraint of the
On August 31, 1998, petitioner filed with the
respondent, in the exercise of his contempt powers under
Ombudsman an opposition to the motion to cite her in
Section 15 (9) in relation to paragraph (8) of R.A. 6770,
contempt on the ground that the filing thereof was premature
known as The Ombudsman Act of 1989, there is no great or
due to the petition pending in the lower court.[17] Petitioner
irreparable injury from which petitioners may suffer, if
likewise reiterated that she had no intention to disobey the
respondent is not so restrained. Respondent should he decide
orders of the Ombudsman. However, she wanted to be
to exercise his contempt powers would still have to apply
clarified as to how she would comply with the orders without
with the court. x x x Anyone who, without lawful excuse x
her breaking any law, particularly R. A. No. 1405.[18]
x x refuses to produce documents for inspection, when
thereunto lawfully required shall be subject to discipline as Respondent Ombudsman panel set the incident for
in case of contempt of Court and upon application of the hearing on September 7, 1998.[19] After hearing, the panel
individual or body exercising the power in question shall be issued an order dated September 7, 1998, ordering petitioner

and counsel to appear for a continuation of the hearing of the
contempt charges against her.[20]
On September 10, 1998, petitioner filed with the
Ombudsman a motion for reconsideration of the above
order.[21] Her motion was premised on the fact that there was
a pending case with the Regional Trial Court, Makati
City,[22] which would determine whether obeying the orders
of the Ombudsman to produce bank documents would not
violate any law.
The FFIB opposed the motion,[23] and on October 14,
1998, the Ombudsman denied the motion by order the
dispositive portion of which reads:
Wherefore, respondent Lourdes T. Marquezs motion for
reconsideration is hereby DENIED, for lack of merit. Let the
hearing of the motion of the Fact Finding Intelligence
Bureau (FFIB) to cite her for indirect contempt be
intransferrably set to 29 October 1998 at 2:00 oclock p.m. at
which date and time she should appear personally to submit
her additional evidence. Failure to do so shall be deemed a
waiver thereof.[24]
Hence, the present petition.[25]
The issue is whether petitioner may be cited for indirect
contempt for her failure to produce the documents requested
by the Ombudsman. And whether 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 (R. A. No. 1405).
An examination of the secrecy of bank deposits law (R.
A. No. 1405) would reveal the following exceptions:
1. Where the depositor consents in writing;
2. Impeachment case;
3. By court order in bribery or dereliction of duty cases against
public officials;
4. Deposit is subject of litigation;
5. Sec. 8, R. A. No. 3019, in cases of unexplained wealth as held
in the case of PNB vs. Gancayco[26]
The order of the Ombudsman to produce for in
camera inspection the subject accounts with the Union Bank
of the Philippines, Julia Vargas Branch, is based on a
pending investigation at the Office of the Ombudsman
against Amado Lagdameo, et. al. for violation of R. A. No.
3019, Sec. 3 (e) and (g) relative to the Joint Venture
Agreement between the Public Estates Authority and
AMARI.
We rule that before an in camera inspection may be
allowed, there must be a pending case before a court of
competent jurisdiction. Further, 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.
3
In Union Bank of the Philippines v. Court of Appeals, we held
that Section 2 of the Law on Secrecy of Bank Deposits, as
amended, declares bank deposits to be absolutely
confidential except:
(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 exclusive use of the bank,
(3) Upon written permission of the depositor,
(4) In cases of impeachment,
(5) Upon order of a competent court in cases of bribery or
dereliction of duty of public officials, or
(6) In cases where the money deposited or invested is the subject
matter of the litigation[27]
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. In short,
what the Office of the Ombudsman would wish to do is to
fish for additional evidence to formally charge Amado
Lagdameo, et. al., with the Sandiganbayan. Clearly, there
was no pending case in court which would warrant the
opening of the bank account for inspection.
Zones of privacy are recognized and protected in our
laws. The Civil Code provides that "[e]very person shall
respect the dignity, personality, privacy and peace of mind
of his neighbors and other persons" and punishes as
actionable torts several acts for meddling and prying into the
privacy of another. It also holds a public officer or employee
or any private individual liable for damages for any violation
of the rights and liberties of another person, and recognizes
the privacy of letters and other private communications. The
Revised Penal Code makes a crime of the violation of secrets
by an officer, the revelation of trade and industrial secrets,
and trespass to dwelling. 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.[28]
IN VIEW WHEREOF, we GRANT the petition. We
order the Ombudsman to cease and desist from requiring
Union Bank Manager Lourdes T. Marquez, or anyone in her
place to comply with the order dated October 14, 1998, and
similar orders. No costs.
SO ORDERED
 4

G.R. No. 71479 October 18, 1990 of persons other than the one responsible for the illegal
acquisition.
MELLON BANK, N.A. vs. HON. CELSO L.
MAGSINO 2) Whether or not the principle of election of remedies bars
recovery of Mellon Bank
Facts:
The spouses Javier’s reliance on the procedural principle of
On May 27, 1977, Dolores Ventosa requested the transfer of
election of remedies as part of their ploy to terminate Civil
$1,000 from the First National Bank of Moundsville, West
Case No. 26899 prematurely. With the exception of the
Virginia, U.S.A. to Victoria Javier in Manila through the
Javiers, respondents failed to raise it as a defense in their
Prudential Bank. Accordingly, the First National Bank
answers and therefore, by virtue of Section 2, Rule 9 of the
requested the petitioner, Mellon Bank, to effect the transfer.
Rules of Court, such defense is deemed
Unfortunately the wire sent by Mellon Bank to
waived. 26 Notwithstanding its lengthy and thorough
Manufacturers Hanover Bank, a correspondent of Prudential
discussion during the hearing and in pleadings subsequent to
Bank, indicated the amount transferred as
the answers, the issue of election of remedies has not,
“US$1,000,000.00” instead of US$1,000.00. Hence
contrary to the lower court’s assertion, been elevated to a
Manufacturers Hanover Bank transferred one million dollars
“substantive one.” Having been waived as a defense, it
less bank charges of $6.30 to the Prudential Bank for the
cannot be treated as if it has been raised in a motion to
account of Victoria Javier.
dismiss based on the nonexistence of a cause of action.
Javier withdrew $475,000 from account No. 343 and
Moreover, granting that the defense was properly raised, it
converted it into eight cashier’s checks made out to the
is inapplicable in this case. In its broad sense, election of
following: (a) F.C. Hagedorn & Co., Inc., two cheeks for the
remedies refers to the choice by a party to an action of one
total amount of P1,000,000; (b) Elnor Investment Co., Inc.,
of two or more coexisting remedial rights, where several
two checks for P1,000,000; (c) Paramount Finance
such rights arise out of the same facts, but the term has been
Corporation, two checks for P1,000,000; and (d) M. Javier,
generally limited to a choice by a party between inconsistent
Jr., two checks for P496,000. Javier also brought several
remedial rights, the assertion of one being necessarily
properties in the United States including the one of his
repugnant to, or a repudiation of, the other. In its technical
lawyer, Poblador.
and more restricted sense, election of remedies is the
Mellon Bank filed a complaint docketed as No. 148056 in adoption of one of two or more coexisting remedies, with the
the Superior Court of California, County of Kern, against effect of precluding a resort to the others.
Melchor Javier, Jane Doe Javier, Honorio Poblador, Jrn, and
Does I through V. In its first amended complaint to impose
constructive trust. The testimonies of these witnesses were
objected to by the defense on the grounds of res inter alios
acta, immateriality, irrelevancy and confidentiality due to
RA 1405. The Javier spouses also contend that inasmuch as
the Mellon Bank had filed in California an action to impose
constructive trust on the California property and to recover
the same.
Issue:
1) 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.
2) Whether or not the principle of election of remedies bars
recovery of Mellon Bank
Ruling:
1) 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.
Yes. Section 2 of said law allows the disclosure of bank
deposits in cases where the money deposited is the subject
matter of the litigation. 24 Inasmuch as 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

G.R. No. 137538 September 3, 2001
OFFICE OF THE OMBUDSMAN vs. HON.
FRANCISCO B. IBAY
QUISUMBING, J.:
This special civil action for certiorari seeks to annul the
Orders of public respondent dated August 19, 1998 and
December 22, 1998, and to dismiss the proceedings in Civil
Case No. 98-1585.
The factual antecedents of this case are as
follows: lawphil.net
Sometime in 1998, petitioner conducted an investigation on
the alleged "scam" on the Public Estates Authority-Amari
Coastal Bay Development Corporation. The case,
entitled Fact-Finding and Intelligence Bureau vs. Amadeo
Lagdameo, et al., was docketed as OMB-0-97-0411. Initial
result of the investigation revealed that the alleged anomaly
was committed through the issuance of checks which were
subsequently deposited in several financial institutions. On
April 29, 1998, petitioner issued an Order directing private
respondent Lourdes Marquez, branch manager of Union
Bank of the Philippines branch at Julia Vargas Avenue,
Pasig City, to produce several bank documents for
inspection relative to Account Nos. 011-37270-5, 240-
020718, 245-30317-3 and 245-303318-1, reportedly
maintained in the said branch. The documents referred to
include bank account application forms, signature cards,
transactions history, bank statements, bank ledgers, debit
and credit memos, deposit and withdrawal slips, application
for purchase of manager's checks, used manager's checks
and check microfilms. The inspection would be done "in
camera" wherein the bank records would be examined
without bringing the documents outside the bank premises.
Its purpose was to identify the specific bank records prior to
the issuance of the required information not in any manner
needed in or relevant to the investigation.1
Private respondent failed to comply with petitioner's order.
She explained that the subject accounts pertain to
International Corporate Bank (Interbank) which merged
with Union Bank in 1994. She added that despite diligent
efforts, the bank could not identify these accounts since the
checks were issued in cash or bearer forms. She informed
petitioner that she had to first verify from the Interbank
records in its archives the whereabouts of said accounts.2
Petitioner found private respondent's explanation
unacceptable. Petitioner reminded private respondent that
her acts constitute disobedience or resistance to a lawful
order and is punishable as indirect contempt under Section 3
(b), Rule 71 of the Revised Rules of Court, in relation to
Section 15 (9) of R.A. 6770 (Ombudsman Act of 1989). The
same might also constitute willful obstruction of the lawful
exercise of the functions of the Ombudsman, which is
punishable under Section 36 of R.A. 6770. On June 16,
1998, petitioner issued an order to private respondent to
produce the requested bank documents for "in camera"
inspection. In the event of her failure to comply as directed,
5
private respondent was ordered to show cause why she
should not be cited for contempt and why she should not be
charged for obstruction.3
Instead of complying with the order of petitioner, private
respondent filed a petition for declaratory relief with an
application for temporary restraining order and/or
preliminary injunction before the Regional Trial Court of
Makati City, Branch 135, presided by respondent Judge
Francisco Ibay. The petition was docketed as Civil Case No.
98-1585. In her petition, private respondent averred that
under Sections 2 and 3 of R.A. 1405 (Law on Secrecy of
Bank Deposits), she had the legal obligation not to divulge
any information relative to all deposits of whatever nature
with banks in the Philippines. But petitioner's Order cited
Section 15 (8) of R.A. 6770 stating that the Ombudsman had
the power to examine and have access to bank accounts and
records. Private respondents, therefore, sought a definite
ruling and/or guidelines as regards her rights as well as
petitioner's power to inspect bank deposits under the cited
provisions of law. Meanwhile, private respondent filed with
this Court a petition for certiorari and prohibition, assailing
petitioner's order to institute indirect contempt proceedings
against her.4
Petitioner moved to dismiss the aforesaid petition for
declaratory relief on the ground that the RTC has no
jurisdiction over the subject matter thereof. In an order dated
August 19, 1998, now being assailed, public respondent
denied petitioner's motion to dismiss. Petitioner then filed
an ex-parte motion for extended ruling. On December 22,
1998, public respondent issued an order declaring that it has
jurisdiction over the case since it is an action for declaratory
relief under Rule 63 of the Rules of Court.
Seasonably, petitioner filed before this Court the instant
petition assailing the Orders dated August 19, 1998 and
December 22, 1998 of public respondent on the ground that
public respondent assumed jurisdiction over the case and
issued orders with grave abuse of discretion and clear lack
of jurisdiction. Petitioner sought the nullification of the
impugned orders, the immediate dismissal of Civil Case No.
98-1585, and the prohibition of public respondent from
exercising jurisdiction on the investigation being conducted
by petitioner in the alleged PEA-AMARI land "scam".
The only question raised by petitioner for resolution is
whether or not public respondent acted without jurisdiction
and/or with grave abuse of discretion in entertaining the
cited petition for declaratory relief.
Petitioner contends that the RTC of Makati City lacks
jurisdiction over the petition for declaratory relief. It asserts
that respondent judge should have dismissed the petition
outright in view of Section 14 of R.A. 6770.lawphil.net
Section 14 of R.A. 6770 provides:lawphil.net
Restrictions. – No writ of injunction shall be issued by any
court to delay an investigation being conducted by the
Ombudsman under this Act, unless there is a prima
 6

facie evidence that the subject matter of the investigation is jurisdiction. Further, the account must be clearly identified,
outside the jurisdiction of the Office of the Ombudsman. and the inspection limited to the subject matter of the
pending case before the court of competent jurisdiction. The
No court shall hear any appeal or application for remedy
bank personnel and the account holder must be notified to be
against the decision or findings of the Ombudsman, except
present during the inspection, and such inspection may cover
the Supreme Court, on pure question of law.
only the account identified in the pending case. In the present
Petitioner's invocation of the aforequoted statutory provision case, since there is no pending litigation yet before a court of
is misplaced. The special civil action of declaratory relief competent authority, but only an investigation by the
falls under the exclusive jurisdiction of the Regional Trial Ombudsman on the so-called "scam", any order for the
Court.5 It is not among the actions within the original opening of the bank account for inspection is clearly
jurisdiction of the Supreme Court even if only questions of premature and legally unjustified.1âwphi1.nêt
law are involved.6 Similarly, the Rules of Court is explicit
WHEREFORE, the instant petition is DISMISSED.
that such action shall be brought before the appropriate
Regional Trial Court. Section 1, Rule 63 of the Rules of SO ORDERED.
Court provides:
Section 1. Who may file petition. – Any person interested
under a deed, will, contract or other written instrument,
whose rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental regulation
may, before breach or violation thereof, bring an action in
the appropriate Regional Trial Court to determine any
question of construction or validity arising, and for a
declaration of his rights or duties, thereunder.
xxx xxx xxx
The requisites of an action for declaratory relief are: (1) there
must be a justiciable controversy must be between persons
whose interests are adverse; (3) that the party seeking the
relief has a legal interest in the controversy; and (4) that the
issue is ripe for judicial determination.7 In this case, the
controversy concerns the extent of the power of petitioner to
examine bank accounts under Section 15 (8) of R.A.
6770 vis-à-vis the duty of banks under Republic Act 1405
not to divulge any information relative to deposits of
whatever nature. The interests of the parties are adverse
considering the antagonistic assertion of a legal right on one
hand, that is the power of Ombudsman to examine bank
deposits, and on the other, the denial thereof apparently by
private respondent who refused to allow petitioner to
inspect in camera certain bank accounts. The party seeking
relief, private respondent herein, asserts a legal interest in the
controversy. The issue invoked is ripe for judicial
determination as litigation is inevitable. Note that petitioner
has threatened private respondent with "indirect contempt"
and "obstruction" charges should the latter not comply with
its order.
Circumstances considered, we hold that public respondent
has jurisdiction to take cognizance of the petition for
declaratory relief. Nor can it be said that public respondent
gravely abused its discretion in doing so. We are thus
constrained to dismiss the instant petition for lack of merit.
In any event, the relief being sought by private respondent in
her action for declaratory relief before the RTC of Makati
City has been squarely addressed by our decision
in Marquez vs. Desierto.8 In that case, we ruled that before
an in camera inspection of bank accounts may be allowed,
there must be a pending case before a court of competent
 7

Banco Filipino Savings and Mortgage Bank v. Purisima name of, of held by, respondent’s spouse, ascendants,
descendants, relatives or any other persons.
GR No. 56429, 28 May 1988 (Bank Secrecy)
In PNB v. Gancayco, we ruled that: “while Section 2 of
The inquiry into illegally acquired property – or property
Republic Act No. 1405 provides that bank deposits are
not legitimately acquired –, under the exception under RA
“absolutely confidential … and, therefore, may not be
1405 extends to cases where such property is concealed by
examined, inquired or looked into,” except in those cases
being held by or recorded in the name of other persons. This
enumerated therein, Section 8 of Republic Act No. 3019
proposition is made clear by RA 3019 which quite
(Anti-graft law) directs in mandatory terms that bank
categorically states that the term “legitimately acquired
deposits “shall be taken into consideration in the
property of a public officer or employee shall not include …
enforcement of this section, notwithstanding any provision
property unlawfully acquired by the respondent, but its
of law to the contrary.” The only conclusion possible is that
ownership is concealed by its being recorded in the name of,
Section 8 of the Anti-Graft Law is intended to amend Section
of held by, respondent’s spouse, ascendants, descendants,
2 of Republic Act No. 1405 by providing an additional
relatives or any other persons.
exception to the rule against the disclosure of bank deposits.”

Facts:
To sustain the petitioner’s theory, and restrict the inquiry
The Bureau of Internal Revenue accused Customs special only to property held by or in the name of the government
agent Manuel Caturla before the Tanodbayan of having official or employee, or his spouse and unmarried children is
illegal acquired property manifestly out of proportion to his unwarranted in the light of the provisions of the statutes in
salary and other lawful income. During the preliminary question, and would make available to persons in
investigation, the Tanodbayan issued a subpoena duces government who illegally acquire property an easy and fool-
tecum to the Banco Filipino Savings and Mortgage Bank, proof means of evading investigation and prosecution; all
commanding its representative to appear at a specified time they have to do would be to simply place the property in the
at the Office of the Tanodbayan and furnish the latter with possession or name of persons other than their spouse and
duly certified copies of the records in all its branches and unmarried children. This is an absurdity that we will not
extension offices of the loans, savings and time deposits and ascribe to the lawmakers.
other banking transactions, in the names of Caturla, his wife,
Purita, their children, and/or Pedro Escuyos.
Caturla moved to quash the subpoena for violating Sections
2 and 3 of RA 1405 which was denied by the Tanodbayan.
In fact, the Tanodbayan issued another subpoena which
expanded its scope including the production of bank records
not only of the persons enumerated above but of additional
persons and entities as well. The Banco Filipino filed an
action for declaratory relief with the CFI of Manila which
was denied by the lower court.
Issue:
Whether or not the Law on Secrecy of Bank Deposits
precludes production by subpoena duces tecumof bank
records of transactions by or in the names of the wife,
children and friends of a special agent of the Bureau of
Customs accused before the Tanodbayan of having allegedly
acquired property manifestly out of proportion to his salary
and other lawful income in violation of RA 3019.
Ruling:
The inquiry into illegally acquired property – or property not
legitimately acquired – extends to cases where such property
is concealed by being held by or recorded in the name of
other persons. This proposition is made clear by RA 3019
which quite categorically states that the term “legitimately
acquired property of a public officer or employee shall not
include … property unlawfully acquired by the respondent,
but its ownership is concealed by its being recorded in the

G.R. No. L-34964 January 31, 1973
CHINA BANKING CORPORATION and TAN KIM
LIONG vs.
HON. WENCESLAO ORTEGA
MAKALINTAL, J.:
The only issue in this petition for certiorari to review the
orders dated March 4, 1972 and March 27, 1972,
respectively, of the Court of First Instance of Manila in its
Civil Case No. 75138, is whether or not a banking institution
may validly refuse to comply with a court process garnishing
the bank deposit of a judgment debtor, by invoking the
provisions of Republic Act No. 1405. *
On December 17, 1968 Vicente Acaban filed a complaint in
the court a quo against Bautista Logging Co., Inc., B & B
Forest Development Corporation and Marino Bautista for
the collection of a sum of money. Upon motion of the
plaintiff the trial court declared the defendants in default for
failure to answer within the reglementary period, and
authorized the Branch Clerk of Court and/or Deputy Clerk
to receive the plaintiff's evidence. On January 20, 1970
judgment by default was rendered against the defendants.
To satisfy the judgment, the plaintiff sought the garnishment
of the bank deposit of the defendant B & B Forest
Development Corporation with the China Banking
Corporation. Accordingly, a notice of garnishment was
issued by the Deputy Sheriff of the trial court and served on
said bank through its cashier, Tan Kim Liong. In reply, the
bank' cashier invited the attention of the Deputy Sheriff to
the provisions of Republic Act No. 1405 which, it was
alleged, prohibit the disclosure of any information relative to
bank deposits. Thereupon the plaintiff filed a motion to cite
Tan Kim Liong for contempt of court.
In an order dated March 4, 1972 the trial court denied the
plaintiff's motion. However, Tan Kim Liong was ordered "to
inform the Court within five days from receipt of this order
whether or not there is a deposit in the China Banking
Corporation of defendant B & B Forest Development
Corporation, and if there is any deposit, to hold the same
intact and not allow any withdrawal until further order from
this Court." Tan Kim Liong moved to reconsider but was
turned down by order of March 27, 1972. In the same order
he was directed "to comply with the order of this Court dated
March 4, 1972 within ten (10) days from the receipt of copy
of this order, otherwise his arrest and confinement will be
ordered by the Court." Resisting the two orders, the China
Banking Corporation and Tan Kim Liong instituted the
instant petition.
The pertinent provisions of Republic Act No. 1405 relied
upon by the petitioners reads:
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 absolutely confidential nature and may not
8
be examined, inquired or looked into by any person,
government official, bureau or office, except upon written
permission 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.
Sec. 5. Any violation of this law will subject offender upon
conviction, to an imprisonment of not more than five years
or a fine of not more than twenty thousand pesos or both, in
the discretion of the court.
The petitioners argue that the disclosure of the information
required by the court does not fall within any of the four (4)
exceptions enumerated in Section 2, and that if the
questioned orders are complied with Tan Kim Liong may be
criminally liable under Section 5 and the bank exposed to a
possible damage suit by B & B Forest Development
Corporation. Specifically referring to this case, the position
of the petitioners is that the bank deposit of judgment debtor
B & B Forest Development Corporation cannot be subject to
garnishment to satisfy a final judgment against it in view of
the aforequoted provisions of law.
We do not view the situation in that light. The lower court
did not order an examination of or inquiry into the deposit of
B & B Forest Development Corporation, as contemplated in
the law. It merely required Tan Kim Liong to inform the
court whether or not the defendant B & B Forest
Development Corporation had a deposit in the China
Banking Corporation only for purposes of the garnishment
issued by it, so that the bank would hold the same intact and
not allow any withdrawal until further order. It will be noted
from the discussion of the conference committee report on
Senate Bill No. 351 and House Bill No. 3977, which later
became Republic Act 1405, that it was not the intention of
the lawmakers to place bank deposits beyond the reach of
execution to satisfy a final judgment. Thus:
Mr. MARCOS. Now, for purposes of the record, I should
like the Chairman of the Committee on Ways and Means to
clarify this further. Suppose an individual has a tax case. He
is being held liable by the Bureau of Internal Revenue for,
say, P1,000.00 worth of tax liability, and because of this the
deposit of this individual is attached by the Bureau of
Internal Revenue.
Mr. RAMOS. The attachment will only apply after the court
has pronounced sentence declaring the liability of such
person. But where the primary aim is to determine whether
he has a bank deposit in order to bring about a proper
assessment by the Bureau of Internal Revenue, such inquiry
is not authorized by this proposed law.
Mr. MARCOS. But under our rules of procedure and under
the Civil Code, the attachment or garnishment of money
 9

deposited is allowed. Let us assume, for instance, that there Mr. RAMOS. That was the question raised by the gentleman
is a preliminary attachment which is for garnishment or for from Pangasinan to which I replied that outside the very
holding liable all moneys deposited belonging to a certain purpose of this law it could be reached by attachment.
individual, but such attachment or garnishment will bring
Mr. MACAPAGAL. Therefore, in such ordinary civil cases
out into the open the value of such deposit. Is that prohibited
it can be attached?
by this amendment or by this law?
Mr. RAMOS. That is so.
Mr. RAMOS. It is only prohibited to the extent that the
inquiry is limited, or rather, the inquiry is made only for the (Vol. II, Congressional Record, House of Representatives,
purpose of satisfying a tax liability already declared for the No. 12, pp. 3839-3840, July 27, 1955).
protection of the right in favor of the government; but when
It is sufficiently clear from the foregoing discussion of the
the object is merely to inquire whether he has a deposit or
conference committee report of the two houses of Congress
not for purposes of taxation, then this is fully covered by the
that the prohibition against examination of or inquiry into a
law.
bank deposit under Republic Act 1405 does not preclude its
Mr. MARCOS. And it protects the depositor, does it not? being garnished to insure satisfaction of a judgment. Indeed
there is no real inquiry in such a case, and if the existence of
Mr. RAMOS. Yes, it protects the depositor.
the deposit is disclosed the disclosure is purely incidental to
Mr. MARCOS. The law prohibits a mere investigation into the execution process. It is hard to conceive that it was ever
the existence and the amount of the deposit. within the intention of Congress to enable debtors to evade
payment of their just debts, even if ordered by the Court,
Mr. RAMOS. Into the very nature of such deposit.
through the expedient of converting their assets into cash and
Mr. MARCOS. So I come to my original question. depositing the same in a bank.
Therefore, preliminary garnishment or attachment of the
WHEREFORE, the orders of the lower court dated March 4
deposit is not allowed?
and 27, 1972, respectively, are hereby affirmed, with costs
Mr. RAMOS. No, without judicial authorization. against the petitioners-appellants.
Mr. MARCOS. I am glad that is clarified. So that the
established rule of procedure as well as the substantive law
on the matter is amended?
Mr. RAMOS. Yes. That is the effect.
Mr. MARCOS. I see. Suppose there has been a decision,
definitely establishing the liability of an individual for
taxation purposes and this judgment is sought to be executed
... in the execution of that judgment, does this bill, or this
proposed law, if approved, allow the investigation or
scrutiny of the bank deposit in order to execute the
judgment?
Mr. RAMOS. To satisfy a judgment which has become
executory.
Mr. MARCOS. Yes, but, as I said before, suppose the tax
liability is P1,000,000 and the deposit is half a million, will
this bill allow scrutiny into the deposit in order that the
judgment may be executed?
Mr. RAMOS. Merely to determine the amount of such
money to satisfy that obligation to the Government, but not
to determine whether a deposit has been made in evasion of
taxes.
xxx xxx xxx
Mr. MACAPAGAL. But let us suppose that in an ordinary
civil action for the recovery of a sum of money the plaintiff
wishes to attach the properties of the defendant to insure the
satisfaction of the judgment. Once the judgment is rendered,
does the gentleman mean that the plaintiff cannot attach the
bank deposit of the defendant?