VOL. 49, JANUARY 31, 1973 355
Ortega
China Banking Corporation vs. Ortega
No. L-34964. January 31, 1973.
CHINA BANKING CORPORATION and TAN KIM LIONG,
petitioners-appellants, vs. HON.WENCESLAO ORTEGA, as
Presiding Judge of the Court of First Instance of Manila, Branch
VIII, and VICENTE G. ACABAN, respondents-appellees.
Remedial law; Execution of judgment; Garnishment of bank deposit
of judgment debtor not violative of Republic Act 1405; Case at bar.—–
The lower court did not order an examination of or inquiry into the deposit
of the defendant, as contemplated in the law. It merely required the
cashier of the bank to inform the court whether or not the defendant had
a deposit in the said bank 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.
Same; Same; Same; In passing Republic Act 1405, no intention of
the Legislature to place bank deposits beyond the reach of execution to
satisfy a final judgment.—–It is clear from the discussion of the
conference committee report on Senate Bill No. 351 and House. Bill No.
3977, which later became RepublicAct 1405, that 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.
Indeed there is no real inquiry in such a case, and if existence of the
deposit is disclosed the disclosure is purely incidental to the execution
process. 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.
PETITION FOR REVIEW by Certiorari of orders of the Court of First
Instance of Manila.
The facts are stated in the opinion of the Court.
Sy Santos, Del Rosario & Associates for petitioners-appellants.
Tagalo, Gozar & Associates for respondents-appellees.
356
356 SUPREME COURT REPORTS ANNOTATED
China Banking Corporation vs.
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 a 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’s
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 Lion was ordered “to inform the Court within
five days from receipt of this order whether or not there is a deposit in the
China Bankng 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
_____________________
*
An Act Probihiting Disclosure of or Inquiry into, Deposits with any
Banking Institution and Providing Penalty Therefor.
 357
VOL. 49, JANUARY 31, 1973 357
China Banking Corporation vs. Ortega
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 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.
“See. 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.
358
358 SUPREME COURT REPORTS ANNOTATED
China Banking Corporation vs. Ortega
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 No. 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
to 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 deposited is allowed.
Let us assume, for instance, that there is a preliminary attachment
which is for garnishment or for holding liable all moneys deposited
belonging to a certain individual, but such attachment or garnishment
will bring out into the open the value of such deposit. Is that prohibited
by this amendment or by this law?
“Mr. RAMOS. It is only prohibited to the extent that the inquiry is limited,
or rather, the inquiry is made only for the purpose of satisfying a tax
liability already declared for the protection of the right in favor of the
government; but when the object is merely to inquire whether he has
 a deposit or not for purposes of taxation, then this is fully covered by
the law.
359
VOL. 49, JANUARY 31, 1973
China Banking Corporation vs. Ortega
“Mr. MARCOS. And it protects the depositor, does it not?
“Mr. RAMOS. Yes, it protects the depositor.
“Mr. MARCOS. The law prohibits a mere investigation into the existence
and the amount of the deposit.
“Mr. RAMOS. Into the very nature of such deposit.
“Mr. MARCOS. So I come to my original question. Therefore,
preliminary garnishment or attachment of the deposit is not allowed ?
“Mr. RAMOS. No, without judicial authorization.
“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 or dinary 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?
360
360 SUPREME COURT REPORTS ANNOTATED
China Banking Corporation vs. Ortega
“Mr. RAMOS. That was the question raised by the gentleman from
359 Pangasinan to which I replied that outside the very purpose of this law
it could be reached by attachment.
“Mr. MACAPAGAL. Therefore, in such ordinary civil cases it can be
attached?
“Mr. RAMOS. That is so.
(Vol. II, Congressional Record, House of Representatives, No. 12, pp.
3839-3840, July 27, 1955).
It is sufficiently clear from the foregoing discussion of the conference
committee report of the two houses of Congress that 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. Indeed there is no real inquiry in such a case, and if the
existence of the deposit is disclosed the disclosure is purely incidental to
the execution process. 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.
WHEREFORE, the orders of the lower court dated March 4 and 27,
1972, respectively, are hereby affirmed, with costs against the petitioners-
appellants.
Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and E
sguerra, JJ., concur.
Concepcion, C.J. and Teehankee, J., did not take part.
Orders affirmed.
LEGAL RESEARCH SERVICE
See SCRA Quick Index-Digest, volume 1, page 877 on Execution; and
page 950 on Garnishment.
See also SCRA Quick Index-Digest, volume 2, page 1054 on
Judgments.
 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
G.R. Nos. 157294-95. November 30, 2006.*
JOSEPH VICTOR G. EJERCITO,
petitioner, vs. SANDIGANBAYAN (SPECIAL DIVISION) and
PEOPLE OF THE PHILIPPINES, respondents.
Banks and Banking; Secrecy of Bank Deposits Act (Republic Act
No. 1405); An examination of Republic Act No. 1405 shows that the term
“deposits” used therein is to be understood broadly and not limited only
to accounts which give rise to a creditor-debtor relationship between the
depositor and the bank; If the money deposited under an account may be
used by banks for authorized loans to third
_______________
*
EN BANC.
191
VOL. 509, NOVEMBER 30, 2006
Ejercito vs. Sandiganbayan (Special Division)
persons, then such account, regardless of whether it creates a
creditor-debtor relationship between the depositor and the bank, falls
under the category of accounts which the law precisely seeks to protect
for the purpose of boosting the economic development of the
country.— The contention that trust accounts are not covered by the term
“deposits,” as used in R.A. 1405, by the mere fact that they do not entail
a creditor-debtor relationship between the trustor and the bank, does not
lie. An examination of the law shows that the term “deposits” used therein
is to be understood broadly and not limited only to accounts which give
rise to a creditor-debtor relationship between the depositor and the bank.
The policy behind the law is laid down in Section 1: SECTION 1. It is
hereby declared to be the policy of the Government to give
encouragement to the people to deposit their money in banking
institutions and to discourage private hoarding so that the same may be
properly utilized by banks in authorized loans to assist in the economic
development of the country. (Italics supplied) If the money deposited
under an account may be used by banks for authorized loans to third
persons, then such account, regardless of whether it creates a creditor-
debtor relationship between the depositor and the bank, falls under the
category of accounts which the law precisely seeks to protect for the
purpose of boosting the economic development of the country.
Same; Same; Statutory Construction; Words and Phrases; The
phrase “of whatever nature” proscribes any restrictive interpretation of
“deposits”—Republic Act No. 1405 applies not only to money which is
deposited but also to those which are invested, such as those placed in a
trust account.—Section 2 of the same law in fact even more clearly shows
that the term “deposits” was intended to be understood broadly:
SECTION2.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 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
191 litigation. (Emphasis and italics supplied) The phrase “of whatever
nature” proscribes any restrictive interpretation of “deposits.” Moreover,
it is
192
192 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
clear from the immediately quoted provision that, generally, the law
applies not only to money which is deposited but also to those which
are invested. This further shows that the law was not intended to apply
only to “deposits” in the strict sense of the word. Otherwise, there would
have been no need to add the phrase “or invested.” Clearly, therefore,
R.A. 1405 is broad enough to cover Trust Account No. 858.
Same; Same; The protection afforded by the Secrecy of Bank
Deposits Act law is, however, not absolute, there being recognized
exceptions thereto, as provided for in Section 2 of said law.—The
protection afforded by the law is, however, not absolute, there being
recognized exceptions thereto, as above-quoted Section 2 provides. In the
present case, two exceptions apply, to wit: (1) the examination of bank
accounts is upon order of a competent court in cases of bribery or
dereliction of duty of public officials, and (2) the money deposited or
invested is the subject matter of the litigation.
Same; Same; Public Officers; Plunder; Criminal
Law; Bribery; Cases of unexplained wealth are similar to cases of
bribery or dereliction of duty and no reason why these two classes of
cases cannot be excepted from the rule making bank deposits
confidential—and, undoubtedly, cases for plunder involve unexplained
wealth.— Petitioner contends that since plunder is neither bribery nor
dereliction of duty, his accounts are not excepted from the protection of
R.A. 1405. Philippine National Bank v. Gancayco, 15 SCRA 91, 96
(1965), holds otherwise: 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. Undoubtedly, cases for plunder involve
unexplained wealth. Section 2 of R.A. No. 7080 states so.
Same; Same; Same; Same; Same; Same; The crime of bribery and
the overt acts constitutive of plunder are crimes committed by public
officers, and in either case the noble idea that “a public office is a public
trust and any person who enters upon its discharge does so
193
VOL. 509, NOVEMBER 30, 2006
Ejercito vs. Sandiganbayan (Special Division)
with the full knowledge that his life, so far as relevant to his duty, is
open to public scrutiny” applies with equal force.—All the above-
enumerated overt acts are similar to bribery such that, in each case, it may
be said that “no reason is seen why these two classes of cases cannot be
excepted from the rule making bank deposits confidential.” The crime of
bribery and the overt acts constitutive of plunder are crimes committed
by public officers, and in either case the noble idea 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” applies with equal force.
Same; Same; Same; Same; Same; Same; The plunder case now
pending with the Sandiganbayan necessarily involves an inquiry into the
whereabouts of the amount purportedly acquired illegally by former
President Joseph Estrada, and the subject matter of the litigation cannot
be limited to bank accounts under his name alone, but must include those
accounts to which the money purportedly acquired illegally or a portion
thereof was alleged to have been transferred.— The plunder case now
pending with the Sandiganbayan necessarily involves an inquiry into the
whereabouts of the amount purportedly acquired illegally by former
President Joseph Estrada. In light then of this Court’s pronouncement
in Union Bank, the subject matter of the litigation cannot be limited to
bank accounts under the name of President Estrada alone, but must
include those accounts to which the money purportedly acquired illegally
or a portion thereof was alleged to have been transferred. Trust Account
No. 858 and Savings Account No. 0116-17345-9 in the name of petitioner
fall under this description and must thus be part of the subject matter of
the litigation.
Same; Same; Searches and Seizures; Exclusionary Rule; Fruit of
the Poisonous Tree Doctrine; Where Congress has both established a
right and provided exclusive remedies for its violation, the courts would
be encroaching upon the prerogatives of Congress were they to authorize
a remedy not provided for by statute—absent a specific reference to an
exclusionary rule, it is not appropriate for the courts to read such a
provision into the act; R.A. No. 1405 nowhere provides that an unlawful
examination of bank accounts shall render the evidence obtained
therefrom inadmissible in evidence.—Petitioner’s attempt to make the
193 exclusionary rule applicable to the instant case
194
194 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
fails. R.A. 1405, it bears noting, nowhere provides that an unlawful
examination of bank accounts shall render the evidence obtained
therefrom inadmissible in evidence. Section 5 of R.A. 1405 only states
that “[a]ny violation of this law will subject the 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 case
of U.S. v. Frazin, 780 F.2d 1461 (1986), involving the Right to Financial
Privacy Act of 1978 (RFPA) of the United States, is instructive. Because
the statute, when properly construed, excludes a suppression remedy, it
would not be appropriate for us to provide one in the exercise of our
supervisory powers over the administration of justice. Where Congress
has both established a right and provided exclusive remedies for its
violation, we would “encroach upon the prerogatives” of Congress were
we to authorize a remedy not provided for by statute. United States v.
Chanen, 549 F.2d 1306, 1313 (9th Cir.), cert. denied, 434 U.S. 825, 98
S.Ct. 72, 54 L.Ed.2d 83 (1977). The same principle was reiterated in U.S.
v. Thompson, 936 F.2d 1249 (1991): x x x When Congress specifically
designates a remedy for one of its acts, courts generally presume that it
engaged in the necessary balancing of interests in determining what the
appropriate penalty should be. See Michaelian, 803 F.2d at 1049 (citing
cases); Frazin, 780 F.2d at 1466. Absent a specific reference to an
exclusionary rule, it is not appropriate for the courts to read such a
provision into the act.
Same; Same; Same; Same; Same; Words and Phrases; The “fruit
of the poisonous tree” doctrine presupposes a violation of law—if there
is no violation of R.A. No. 1405, then there would be no “poisonous tree”
to begin with, and, thus, no reason to apply the doctrine.—Even
assuming arguendo, however, that the exclusionary rule applies in
principle to cases involving R.A. 1405, the Court finds no reason to apply
the same in this particular case. Clearly, the “fruit of the poisonous tree”
doctrine presupposes a violation of law. If there was no violation of R.A.
1405 in the instant case, then there would be no “poisonous tree” to begin
with, and, thus, no reason to apply the doctrine.
Same; Same; Same; Same; Same; Judgments; When a doctrine of
the Supreme Court is overruled and a different view is adopted, and more
so when there is a reversal thereof, the new doctrine should be applied
prospectively and should not apply to parties who relied on
195
VOL. 509, NOVEMBER 30, 2006 195
Ejercito vs. Sandiganbayan (Special Division)
the old doctrine and acted in good faith.—For the Ombudsman
issued the subpoenas bearing on the bank accounts of petitioner about
four months before Marquez was promulgated on June 27, 2001. While
judicial interpretations of statutes, such as that made in Marquez with
respect to R.A. No. 6770 or the Ombudsman Act of 1989, are deemed part
of the statute as of the date it was originally passed, the rule is not
absolute. Columbia Pictures, Inc. v. Court of Appeals, 261 SCRA 144
(1996), teaches: It is consequently clear that a judicial interpretation
becomes a part of the law as of the date that law was originally
passed, subject only to the qualification that when a doctrine of this
Court is overruled and a different view is adopted, and more so when
there is a reversal thereof, the new doctrine should be
applied prospectively and should not apply to parties who relied on the
old doctrine and acted in good faith. (Emphasis and italics supplied)
When this Court construed the Ombudsman Act of 1989, in light of the
Secrecy of Bank Deposits Law in Marquez, that “before an in camera
inspection may be allowed there must be a pending case before a court of
competent jurisdiction,” it was, in fact, reversing an earlier doctrine found
in Banco Filipino Savings and Mortgage Bank v. Purisima, 161 SCRA
576 (1988).
Same; Same; Same; Same; Same; Same; The Marquez v. Desierto,
359 SCRA 772 (2001), ruling that “the account holder must be notified to
be present during the inspection” may not be applied retroactively to the
inquiry of the Ombudsman subject of this case since said ruling is not a
judicial interpretation either of R.A. 6770 or R.A. 1405, but a “judge-
made” law which can only be given prospective application.—
The Marquez ruling that “the account holder must be notified to be
present during the inspection” may not be applied retroactively to the
inquiry of the Ombudsman subject of this case. This ruling is not a judicial
interpretation either of R.A. 6770 or R.A. 1405, but a “judge-made” law
which, as People v. Luvendino, 211 SCRA 36 (1992), instructs, can only
be given prospective application: x x x The doctrine that an
uncounselled waiver of the right to counsel is not to be given legal
effect was initially a judgemade one and was first announced on 26
April 1983 in Morales v. Enrile and reiterated on 20 March 1985
in People v. Galit. x x x While the Morales-Galit doctrine eventually
became part of Section 12(1) of the 1987 Constitution, that doctrine
affords no comfort to appellant Luvendino for the requirements and
restric-
196
196 SUPREME COURT REPORTS ANNOTATED
 Ejercito vs. Sandiganbayan (Special Division)
tions outlined in Morales and Galit have no retroactive
effect and do not reach waivers made prior to 26 April 1983 the date of
promulgation of Morales. (Emphasis supplied) In fine, the subpoenas
issued by the Ombudsman in this case were legal, hence, invocation of
the “fruit of the poisonous tree” doctrine is misplaced. AT ALL EVENTS,
even if the challenged subpoenas are quashed, the Ombudsman is not
barred from requiring the production of the same documents based solely
on information obtained by it from sources independent of its previous
inquiry.
Same; Same; Same; Same; Same; Presumption of Regularity; To
presume that the information was obtained in violation of R.A. No. 1405
would infringe the presumption of regularity in the performance of
official functions.—The information on the existence of Bank Accounts
bearing number “858” was, according to respondent People of the
Philippines, obtained from various sources including the proceedings
during the impeachment of President Estrada, related reports, articles and
investigative journals. In the absence of proof to the contrary, this
explanation proffered by respondent must be upheld. To presume that the
information was obtained in violation of R.A. 1405 would infringe the
presumption of regularity in the performance of official functions.
SANDOVAL-GUTIERREZ, J., Dissenting Opinion:
Banks and Banking; Secrecy of Bank Deposits Act (R.A. No.
1405); The rationale for R.A. No. 1405 is to discourage private hoarding
and encourage the people to deposit money in banks to be utilized in
authorized loans.—On September 9, 1955, the Philippine Legislature
enacted R.A. No. 1405. Its rationale is to discourage private hoarding and
encourage people to deposit money in banks to be utilized in authorized
loans. It happened that after World War II, capital and credit facilities for
agricultural and industrial development in the country were lacking.
Rehabilitation of the banking system became a major government thrust.
However, private hoarding of money was rampant because people feared
government inquiry into their bank deposits and bond investments for tax
collection purposes. Thus, even if the members of Congress at that time
recognized the possible danger of R.A. No. 1405, such as providing a
climate conducive to tax evasion, still, they passed the law with the belief
that the benefits accruing to the economy with the influx of
197
VOL. 509, NOVEMBER 30, 2006 197
Ejercito vs. Sandiganbayan (Special Division)
deposits and bond investments would counterbalance immeasurably
the losses of the Government from such tax evasion.
Same; Same; Criminal Law; Plunder; If the criminal acts that make
up the crime of plunder are categorized as exceptions to the
confidentiality rule, with more reason that the more serious crime of
plunder should be considered as falling within the same exception.— A
reading of the provisions of the Revised Penal Code concerning bribery
and dereliction of duty, as well as corrupt practices under R.A. 3019,
readily shows the striking resemblance between them and the predicate
crimes of plunder. Paragraph 2 actually constitutes indirect bribery while
paragraphs 4 and 5 constitute corrupt practices under R.A. No. 3019.
Logically, if the criminal acts that make up the crime of plunder are
categorized as exceptions to the confidentiality rule, with more reason that
the more serious crime of plunder should be considered as falling within
the same exception. All involve dishonesty and lack of integrity in
public service. There is no reason why plunder should be treated
differently.
Same; Same; Searches and Seizures; Right to Privacy; Financial
transactions can reveal much about a person’s affairs, activities, beliefs,
habits and associations—one’s bank account mirrors not only his
finances, but also his debts, his way of life, his family and his civic
commitment, a reality which places a customer’s bank account within the
“expectations of privacy” category.—It cannot be gainsaid that the
customer of a bank expects that the documents which he transmits to the
bank in the course of his business operations, will remain private, and that
such an expectation is reasonable. Financial transactions can reveal much
about a person’s affairs, activities, beliefs, habits and associations.
Indeed, the totality of bank records provides a virtual current biography.
Checks, for instance, in a sense, define a person. By examining them, the
agents get to know his doctors, lawyers, creditors, political allies, social
connections, religious affiliations, educational interests, the papers and
magazines he reads, and so on ad infinitum. In other words, one’s bank
account mirrors not only his finances, but also his debts, his way of life,
his family and his civic commitment. Such reality places a customer’s
bank account within the “expectations of privacy” category. In the
Philippines, the expectation is heightened by the enactment of R.A. No.
1405 which mandates that all deposits of whatever nature are considered
as of an “absolutely confidential nature” and
198
198 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
“may not be examined, inquired or looked into by any
person” except under the instances therein.
Same; Same; Same; Same; The customer’s reasonable expectation
is that, absent customary legal process, the matter he reveals to the bank
will be utilized by the bank only for internal banking purposes.—
Admittedly, a bank customer knowingly and voluntarily divulges his
financial affairs with the bank, but such is immaterial. The fact that one
has disclosed private papers to the bank within the context of confidential
customer-bank relationship, does not mean that one has waived all right
to the privacy of the papers. Like the user of the pay phone in Katz v.
United States, 389 U.S. 347 (1967), who, having paid the toll, was entitled
to “assume that the words he utters into the mouthpiece will not be
broadcast to the world,” so the customer of a bank, having written or
deposited a check, has a reasonable expectation that his check will be
examined for bank purposes only. Practically speaking, a customer’s
disclosure of his financial affairs is not entirely volitional, since it is
impossible to participate in the economic life of contemporary society
without maintaining a bank account. Consequently, the customer’s
reasonable expectation is that, absent customary legal process, the
matter he reveals to the bank will be utilized by the bank only for internal
banking purposes.
Same; Same; Same; Same; The authority of the Ombudsman “to
examine and have access to bank accounts and records” must be read in
conjunction with Section 2 of R.A. No. 1405 providing that deposits of
whatever nature shall be considered confidential except in several
instances already mentioned because bank deposits belong to a protected
zone where government intrusion could infringe legitimate expectation of
privacy.—At this point, it should be emphasized that the authority of the
Ombudsman “to examine and have access to bank accounts and records”
must be read in conjunction with Section 2 of R.A. No. 1405 providing
that deposits of whatever nature shall be considered confidential except
in several instances already mentioned. This is because bank deposits
belong to a protected zone where government intrusion could
infringe legitimate expectation of privacy. An opposite course is
unwarranted. In United States v. United States District Court, 407 U.S.
297, the US Supreme Court held that the potential for abuse is
particularly acute where the legislative scheme permits ac-
199
VOL. 509, NOVEMBER 30, 2006 199
Ejercito vs. Sandiganbayan (Special Division)
cess to information without invocation of the judicial process. In
such instances, the important responsibility for balancing societal and
individual interests is left to unreviewed executive discretion, rather than
the scrutiny of a neutral magistrate. In Katz v. United States, 389 U.S. 347
(1967), the same Court ruled that, “[t[he prosecutors’ duty and
responsibility is to enforce the laws, to investigate and to prosecute. Those
charged with the investigative and prosecutorial duty should not be the
sole judges of when to utilize constitutionally sensitive means in pursuing
their tasks. The historical judgment is that unreviewed executive
discretion may yield too readily to pressures to obtain incriminating
evidence and overlook potential invasions of privacy.” Between the
government and the citizen, there must be a neutral entity that should
balance the former’s claim of authority vis-á-vis the latter’s assertion of
rights.
Same; Same; Same; Same; Ombudsman; By the natural scheme of
things, the Office of the Ombudsman can hardly be characterized as
detached, disinterested and neutral as its mandate is to investigate and
prosecute any act or omission of any public officer or employee, office or
agency that appears to be illegal, unjust, improper or inefficient.—By the
natural scheme of things, the Office of the Ombudsman can hardly be
characterized as detached, disinterested and neutral. Its mandate is to
investigate and prosecute any act or omission of any public officer or
employee, office or agency that appears to be illegal, unjust, improper or
inefficient. In carrying out such mandate, it is expected to act with vigor
and aggressiveness. But to permit such office to have access to bank
records without any judicial control as to relevancy or other traditional
requirements of due process and to allow the evidence to be used in any
subsequent prosecution, opens the door to a vast and unlimited range of
very real abuses of police power. True, there are administrative
summonses for documents recognized in other jurisdictions, but there is
a requirement that their enforcement receives a judicial scrutiny and a
judicial order. In this regard, I am appalled by the “whole sale” subpoena
duces tecum issued by the Ombudsman directing the “President or Chief
Executive Officer of Urban Bank” to produce “bank records and all
documents relative thereto pertaining to all bank accounts (Savings,
Current, Time Deposit, Trust, Foreign Currency Deposits, etc.)
under the account names of Jose Velarde, Joseph E. Estrada, Laarni
Enriquez, Guia Go-
200
200 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
mez, Joy Melendrez, Peachy Osorio, Rowena Lopez, Kevin or
Kelvin Garcia, 727, 737, 747, 757 and 858.” Indubitably, such
blanket subpoena provides occasions for “fishing expedition.”
Same; Same; Same; Same; Same; Due Process; Basic due process
demands that the Office of the Ombudsman furnish the bank account
holder a copy of the subpoena duces tecum it issued.—Above everything
else, however, what strikes us most is the patent unfairness of the process.
First in the Bill of Rights is the mandate that no person shall be deprived
of his life, liberty or property without due process of law. Courts have
held that the right of personal privacy is one aspect of the “liberty”
protected by the Due Process Clause. Basic due process demands that
the Office of the Ombudsman furnish petitioner a copy of the subpoenae
duces tecum it issued. In Marquez v. Desierto, 359 SCRA 772 (2001), this
Court held: “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.” Such notice is
not too much to ask for, after all, an account-holder bears the risk not only
of losing his privacy but, also, his property. Of course, not to mention the
procedural impasse that is encountered by such accountholder who cannot
contest the propriety of the issuance of a subpoena.
Same; Same; Same; Same; Same; Same; Something is inherently
wrong in a public proceeding that allows a holder of bank account,
subject of litigation, to be completely uninformed—every civilized state
adheres to the principle that when a person’s life and liberty are
jeopardized by government action, it behooves a democratic government
to see to it that this jeopardy is fair, reasonable and according to time-
honored tradition.—The proceedings before
respondent Sandiganbayan also leave much to be desired. Neither
respondent Sandiganbayan nor the Special Prosecution Panel nor PDIC
furnished petitioner copies of the subpoenae duces tecum/ad
testificandum or of the requests for their issuance. It bears reiterating that
it was only through the media that petitioner learned about such requests.
Definitely, something is inherently wrong in a public proceeding that
allows a holder of bank account, subject of litigation, to be completely
uninformed. Also not to be overlooked is the
respondent Sandiganbayan’s oral directive to petitioner to file his motion
to quash not later than 12:00 noon of January 28, 2003. This notwith-
201
VOL. 509, NOVEMBER 30, 2006 201
Ejercito vs. Sandiganbayan (Special Division)
standing the fact that it was only the day before, or on January 27,
2003, that petitioner learned about the requests and that he was yet to
procure the services of a counsel. Every civilized state adheres to the
principle that when a person’s life and liberty are jeopardized by
government action, it behooves a democratic government to see to it that
this jeopardy is fair, reasonable and according to time-honored
tradition. The importance of this principle is eloquently underscored
by one observer who said: “The quality of a civilization is largely
determined by the fairness of its criminal trials.”
CALLEJO, SR., J., Concurring Opinion:
Criminal Law; Plunder; Public Officers; It can be readily gleaned
that the gravamen of plunder is the amassing, accumulating or acquiring
of ill-gotten wealth by a public officer, his family or close associates; a
plain reading of the definition of plunder and the manner by which it may
be committed as provided in Republic Act 7080 reveals that its policy also
rests upon the fundamental tenet that “public office is a public trust.”—
It can be readily gleaned that the gravamen of plunder is the amassing,
accumulating or acquiring of ill-gotten wealth by a public officer, his
family or close associates. In Philippine National Bank v. Gancayco, 15
SCRA 91 (1965), the Court explained that “cases of unexplained wealth
are similar to cases of bribery or dereliction of public 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 enters upon its
discharge does so with full knowledge that his life, so far as relevant to
his duty, is open to public scrutiny.” A plain reading of the definition of
plunder and the manner by which it may be committed as provided in RA
7080 reveals that its policy also rests upon the fundamental tenet that
“public office is a public trust.” There is thus no cogent reason to treat
plunder any different from the cases of bribery or dereliction of public
duty for purposes of RA 1405.
Same; Same; Same; Considering the mind-boggling sums of money
that flowed out of the petitioner’s Trust Account and its nexus to former
President Estrada’s alleged Jose Velarde account, it is logical for the
prosecution to pursue the theory that the money in the
202
202 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
said trust account forms part of the unexplained wealth of the
latter.—At this point, it is well to mention that based on the evidence
presented by the prosecution before the Sandiganbayan, hundreds of
millions of pesos flowed from the petitioner’s Trust Account No. 858 to
the alleged Jose Velarde account purportedly maintained by former
President Estrada at Equitable PCIBank. In fact, one manager’s check,
marked as Exhibit “L” for the prosecution, in the amount of
P107,191,780.85 was drawn from, and funded by the said trust account
of petitioner JV Ejercito. Considering the mind-boggling sums of money
that flowed out of the petitioner’s Trust Account No. 858 and its nexus to
former President Estrada’s alleged Jose Velarde account, it is logical for
the prosecution to pursue the theory that the money in the said trust
account forms part of the unexplained wealth of the latter. As such, the
money in the accounts of the petitioner may be properly considered as
“subject matter” of the plunder cases falling under number (6) of the
enumerated exceptions to the absolute confidentiality of bank deposits.
Same; Same; Same; Judgments; Marquez v. Desierto, 359 SCRA
772 (2001), which applied and interpreted the power of the Office of the
Ombudsman under Section 15(8) of RA 6770 cannot be given retroactive
application—“judge-made” laws are to be applied prospectively.—
The Marquez ruling, it bears reiterating, came after the subpoenas were
issued by the Office of the Ombudsman and the PDIC and Urban Bank
had already complied therewith by furnishing it the necessary
information. The said information cannot thus be considered “illegal”
because Marquez, which applied and interpreted the power of the Office
of the Ombudsman under Section 15(8) of RA 6770, cannot be given
retroactive application. In Filoteo, Jr. v. Sandiganbayan, 263 SCRA 222
(1996), the Court emphasized that “judge-made” laws are to be applied
prospectively: The prospective application of “judge-made” laws was
underscored in Co v. Court of Appeals, where the Court ruled thru Chief
Justice Andres R. Narvasa that in accordance with Article 8 of the Civil
Code which provides that “(j)udicial decisions applying or interpreting
the laws or the Constitution shall form part of the legal system of the
Philippines,” and Article 4 of the same Code which states that “(l)aws
shall have no retroactive effect unless the contrary is provided,” the
principle of prospectivity of statutes, original or amendatory, shall apply
to judicial decisions, which, although in themselves are not laws, are
nevertheless evidence of what the law means.
203
VOL. 509, NOVEMBER 30, 2006 203
Ejercito vs. Sandiganbayan (Special Division)
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Rufus B. Rodriguez & Associates for petitioner.
The Solicitor General for respondents.
CARPIO-MORALES, J.:
The present petition for certiorari under Rule 65 assails
the Sandiganbayan Resolutions dated February 7 and 12, 2003 denying
petitioner Joseph Victor G. Ejercito’s Motions to Quash 2. b.Urban bank Corp. MC # 34181 dated November 8, 1999 in the
Subpoenas Duces Tecum/Ad Testificandum, and Resolution dated March amount of P10,875,749.43;
11, 2003 denying his Motion for Reconsideration of the first two 3. c.Urban Bank MC # 34182 dated November 8, 1999 in the
resolutions. amount of P42,716,554.22;
The three resolutions were issued in Criminal Case No. 26558, 4. d.Urban Bank Corp. MC # 37661 dated November 23, 1999 in
“People of the Philippines v. Joseph Ejercito Estrada, et al.,” for plunder, the amount of P54,161,496.52;
defined and penalized in R.A. 7080, “AN ACT DEFINING AND
PENALIZING THE CRIME OF PLUNDER.” 1. 5.Trust Agreement dated January 1999:
In above-stated case of People v. Estrada, et al., the Special Trustee: Joseph Victor C. Ejercito
Prosecution Panel1 filed on January 20, 2003 before Nominee: URBAN BANK-TRUST DEPARTMENT
the Sandiganbayan a Request for Issuance of Subpoena Duces Tecum Special Private Account No. (SPAN) 858; and
for the issuance of a subpoena directing the President of Export and 2. 6.Ledger of the SPAN # 858.
Industry Bank (EIB, formerly Urban Bank) or his/her authorized
representative to produce the following documents during the hearings II. For Savings Account No. 0116-17345-9
scheduled on January 22 and 27, 2003:
I. For Trust Account No. 858; SPAN No. 858

1. 1.Account Opening Documents; 1. 1.Signature Cards; and

2. 2.Trading Order No. 020385 dated January 29, 1999; 2. 2.Statement of Account/Ledger
3. 3.Confirmation Advice TA 858;
III. Urban Bank Manager’s Check and their corresponding Urban
_______________ Bank Manager’s Check Application Forms, as follows:
1 Composed of the Ombudsman, the Special Prosecutor, Deputy
1. 1.MC # 039975 dated January 18, 2000 in the amount of
Special Prosecutor, Assistant Ombudsman, Special Prosecution Officer
P70,000,000.00;
III, and Special Prosecution Officer II, (Rollo, pp. 492-493).
2. 2.MC # 039976 dated January 18, 2000 in the amount of
204 P2,000,000.00;
204 SUPREME COURT REPORTS ANNOTATED 3. 3.MC # 039977 dated January 18, 2000 in the amount of
P2,000,000.00;
Ejercito vs. Sandiganbayan (Special Division) 4. 4.MC # 039978 dated January 18, 2000 in the amount of
P1,000,000.00;
1. 4.Original/Microfilm copies, including the dorsal side, of the
following: The Special Prosecution Panel also filed on January 20, 2003, a Request
for Issuance of Subpoena Duces Tecum/Ad Testificandum directed to the
1. a.Bank of Commerce MC # 0256254 in the amount of authorized representative of Equitable-PCI Bank to produce statements of
P2,000,000.00; account per-
205
 VOL. 509, NOVEMBER 30, 2006
Ejercito vs. Sandiganbayan (Special Division)
taining to certain accounts in the name of “Jose Velarde” and to testify
thereon.
The Sandiganbayan granted both requests by Resolution of January
21, 2003 and subpoenas were accordingly issued.
The Special Prosecution Panel filed still another Request for Issuance
of Subpoena Duces Tecum/Ad Testificandum dated January 23, 2003 for
the President of EIB or his/her authorized representative to produce the
same documents subject of the Subpoena Duces Tecum dated January 21,
2003 and to testify thereon on the hearings scheduled on January 27 and
29, 2003 and subsequent dates until completion of the testimony. The
request was likewise granted by the Sandiganbayan. A Subpoena Duces
Tecum/Ad Testificandum was accordingly issued on January 24, 2003.
Petitioner, claiming to have learned from the media that the Special
Prosecution Panel had requested for the issuance of subpoenas for the
examination of bank accounts belonging to him, attended the hearing of
the case on January 27, 2003 and filed before the Sandiganbayan a letter
of even date expressing his concerns as follows, quoted verbatim:
Your Honors:
It is with much respect that I write this court relative to the concern of
subpoenaing the undersigned’s bank account which I have learned
through the media.
I am sure the prosecution is aware of our banking secrecy laws
everyone supposed to observe. But, instead of prosecuting those who may
have breached such laws, it seems it is even going to use supposed
evidence which I have reason to believe could only have been illegally
obtained.
The prosecution was not content with a general request. It even lists
and identifies specific documents meaning someone else in the bank
illegally released confidential information.
If this can be done to me, it can happen to anyone. Not that anything
can still shock our family. Nor that I have anything to hide. Your Honors.
206
206 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
205 But, I am not a lawyer and need time to consult one on a situation that
affects every bank depositor in the country and should interest the bank
itself, the Bangko Sentral ng Pilipinas, and maybe the Ombudsman
himself, who may want to investigate, not exploit, the serious breach that
can only harm the economy, a consequence that may have been
overlooked. There appears to have been deplorable connivance.
xxxx
I hope and pray, Your Honors, that I will be given time to retain the
services of a lawyer to help me protect my rights and those of every
banking depositor. But the one I have in mind is out of the country right
now.
May I, therefore, ask your Honors, that in the meantime, the issuance
of the subpoena be held in abeyance for at least ten (10) days to enable
me to take appropriate legal steps in connection with the prosecution’s
request for the issuance of subpoena concerning my accounts. (Emphasis
supplied)
From the present petition, it is gathered that the “accounts” referred to by
petitioner in his above-quoted letter are Trust Account No.
858 and Savings Account No. 0116-17345-9.2
In open court, the Special Division of the Sandiganbayan, through
Associate Justice Edilberto Sandoval, advised petitioner that his remedy
was to file a motion to quash, for which he was given up to 12:00 noon
the following day, January 28, 2003.
_______________
2 “Petitioner is the owner of Trust Account No. 858 which was
originally opened at Urban Bank but which is now maintained at Export
and Industry Bank, which is the purchaser and owner now of the former
Urban Bank and Urbancorp Investment, Inc. Petitioner is also the owner
of Savings Account No. 0116-17345-9 which was originally opened at
Urban Bank but which is now maintained at Export and Industry Bank,
which is the purchaser and owner of the former Urban Bank and
Urbancorp Investment, Inc. x x x” (Petition, pp. 3-4, Rollo, pp. 10-11)
207
VOL. 509, NOVEMBER 30, 2006 207
Ejercito vs. Sandiganbayan (Special Division)
Petitioner, unassisted by counsel, thus filed on January 28, 2003 a Motion
to Quash Subpoena Duces Tecum/Ad Testificandum praying that the
subpoenas previously issued to the President of the EIB dated January 21
and January 24, 2003 be quashed.3
In his Motion to Quash, petitioner claimed that his bank accounts are
covered by R.A. No. 1405 (The Secrecy of Bank Deposits Law) and do
not fall under any of the exceptions stated therein. He further claimed that
the specific identification of documents in the questioned subpoenas,
including details on dates and amounts, could only have been made
_______________
3 President of the EIB to produce, on the hearings scheduled on February 3
The first paragraph of the motion identifies the subpoenas sought to
be quashed as those allegedly issued on January 24, 2003 directed to the
representative/s of the Urban Bank (now EIB) and to Ms. Aurora C.
Baldoz, Vice-President-CR-II of the Philippine Deposit Insurance
Corporation. However, the second motion to quash later filed by
petitioner with the assistance of counsel stated that the subpoenas subject
of the previous motion to quash were those issued on January 21, 2003,
addressed to the President of the EIB and to the President of Equitable-
PCI Bank, or their representatives.
Despite the apparent conflict, it may be inferred that the first motion
to quash covered the subpoenas directed to the President of the EIB dated
January 21, 2003 and January 24, 2003, the January 24 subpoena being a
mere reiteration of the January 21 subpoena. As there is nothing in the
records before this Court which show that a subpoena dated January 24,
2003 was ever issued to Ms. Baldoz, the Court will consider petitioner’s
first Motion to Quash as concerned only with the subpoenas directed to
the President of the EIB.
The statement in the second motion to quash that the first motion
covered the January 21 subpoenas issued to the President of EIB and to
the President of Equitable-PCI Bank may only be an error arising from
the fact that a subpoena to each of these officers were granted by the
Sandiganbayan through the same Resolution dated January 21, 2003. The
petitioner could not have been referring to the subpoena directed to the
President of Equitable-PCI Bank since the subject thereof were the Jose
Velarde accounts which he has never claimed to be his, even in the present
petition.
208
208 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
possible by an earlier illegal disclosure thereof by the EIB and the
Philippine Deposit Insurance Corporation (PDIC) in its capacity as
receiver of the then Urban Bank.
The disclosure being illegal, petitioner concluded, the prosecution in
the case may not be allowed to make use of the information.
Before the Motion to Quash was resolved by the Sandiganbayan, the
prosecution filed another Request for the Issuance of Subpoena Duces
Tecum/Ad Testificandum dated January 31, 2003, again to direct the
and 5, 2003, the same documents subject of the January 21 and 24, 2003
subpoenas with the exception of the Bank of Commerce MC #0256254 in
the amount of P2,000,000 as Bank of Commerce MC #0256256 in the
amount of P200,000,000 was instead requested. Moreover, the request
covered the following additional documents:
IV. For Savings Account No. 1701-00646-1:
1. 1.Account Opening Forms;
2. 2.Specimen Signature Card/s; and
3. 3.Statements of Account.
The prosecution also filed a Request for the Issuance of Subpoena Duces
Tecum/Ad Testificandum bearing the same date, January 31, 2003,
directed to Aurora C. Baldoz, Vice President-CR-II of the PDIC for her
to produce the following documents on the scheduled hearings on
February 3 and 5, 2003:
1. “1.Letter of authority dated November 23, 1999 re: SPAN
[Special Private Account Number] 858;
2. 2.Letter of authority dated January 29, 2000 re: SPAN 858;
3. 3.Letter of authority dated April 24, 2000 re: SPAN 858;
4. 4.Urban Bank check no. 052092 dated April 24, 2000 for the
amount of P36, 572, 315.43;
209
VOL. 509, NOVEMBER 30, 2006 209
 Ejercito vs. Sandiganbayan (Special Division)
210
1. 5.Urban Bank check no. 052093 dated April 24, 2000 for the
amount of P107,191,780.85; and
2. 6.Signature Card Savings Account No. 0116-17345-9.” (Italics
supplied)
210
SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
1. through a prior illegal disclosure of petitioner’s bank accounts,
in violation of the “fruit of the poisonous tree” doctrine.

The subpoenas prayed for in both requests were issued by
the Sandiganbayan on January 31, 2003.
On February 7, 2003, petitioner, this time assisted by counsel, filed an
Urgent Motion to Quash Subpoenae Duces Tecum/Ad Testificandum
praying that the subpoena dated January 31, 2003 directed to Aurora
Baldoz be quashed for the same reasons which he cited in the Motion to
Quash4 he had earlier filed.
On the same day, February 7, 2003, the Sandiganbayan issued a
Resolution denying petitioner’s Motion to Quash Subpoenae Duces
Tecum/Ad Testificandum dated January 28, 2003.
Subsequently or on February 12, 2003, the Sandiganbayan issued a
Resolution denying petitioner’s Urgent Motion to Quash Subpoena Duces
Tecum/Ad Testificandum dated February 7, 2003.
Petitioner’s Motion for Reconsideration dated February 24, 2003
seeking a reconsideration of the Resolutions of February 7 and 12, 2003
having been denied by Resolution of March 11, 2003, petitioner filed the
present petition.
Raised as issues are:
Respondent People posits that Trust Account No. 8585 may be inquired
into, not merely because it falls under the exceptions to the coverage of
R.A. 1405, but because it is not even contemplated therein. For, to
respondent People, the law applies only to “deposits” which strictly
means the money delivered to the bank by which a creditor-debtor
relationship is created between the depositor and the bank.
The contention that trust accounts are not covered by the term
“deposits,” as used in R.A. 1405, by the mere fact that they do not entail
a creditor-debtor relationship between the trustor and the bank, does not
lie. An examination of the law shows that the term “deposits” used therein
is to be understood broadly and not limited only to accounts which give
rise to a creditor-debtor relationship between the depositor and the bank.
The policy behind the law is laid down in Section 1:
“SECTION 1. It is hereby declared to be the policy of the Government to
give encouragement to the people to deposit their money in banking
institutions and to discourage private hoarding so that the same may be
properly utilized by banks in authorized loans to assist in the economic
development of the country.” (Italics supplied)

1. 1.Whether petitioner’s Trust Account No. 858 is covered by the
term “deposit” as used in R.A. 1405;
2. 2.Whether petitioner’s Trust Account No. 858 and Savings
Account No. 0116-17345-9 are excepted from the protection of
R.A. 1405; and
3. 3.Whether the “extremely-detailed” information contained in the
Special Prosecution Panel’s requests for subpoena was obtained
_______________
4
Rollo, p. 171.
If the money deposited under an account may be used by banks for
authorized loans to third persons, then such account, regardless of
whether it creates a creditor-debtor relationship between the depositor and
the bank, falls under the category of accounts which the law precisely
seeks to protect for the purpose of boosting the economic development of
the country.
_______________
5
Respondent People of the Philippines argue on the premise that Trust
Account No. 858 covers Savings Account No. 0116-17345-9.
211
 VOL. 509, NOVEMBER 30, 2006
Ejercito vs. Sandiganbayan (Special Division)
Trust Account No. 858 is, without doubt, one such account. The Trust
Agreement between petitioner and Urban Bank provides that the trust
account covers “deposit, placement or investment of funds” by Urban
Bank for and in behalf of petitioner.6 The money deposited under Trust
Account No. 858, was, therefore, intended not merely to remain with the
bank but to be invested by it elsewhere. To hold that this type of account
is not protected by R.A. 1405 would encourage private hoarding of funds
that could otherwise be invested by banks in other ventures, contrary to
the policy behind the law.
Section 2 of the same law in fact even more clearly shows that the
term “deposits” was intended to be understood broadly:
SECTION 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 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.” (Emphasis and italics supplied)
The phrase “of whatever nature” proscribes any restrictive interpretation
of “deposits.” Moreover, it is clear from the immediately quoted provision
that, generally, the law applies not only to money which is deposited but
also to those which are invested. This further shows that the law was not
intended to apply only to “deposits” in the strict sense of the word.
Otherwise, there would have been no need to add the phrase “or invested.”
Clearly, therefore, R.A. 1405 is broad enough to cover Trust Account
No. 858.
_______________
6
Rollo, p. 708.
212
212 SUPREME COURT REPORTS ANNOTATED
211 Ejercito vs. Sandiganbayan (Special Division)
The protection afforded by the law is, however, not absolute, there being
recognized exceptions thereto, as abovequoted Section 2 provides. In the
present case, two exceptions apply, to wit: (1) the examination of bank
accounts is upon order of a competent court in cases of bribery or
dereliction of duty of public officials, and (2) the money deposited or
invested is the subject matter of the litigation.
Petitioner contends that since plunder is neither bribery nor dereliction
of duty, his accounts are not excepted from the protection of R.A.
1405. Philippine National Bank v. Gancayco7 holds otherwise:
“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.”
Undoubtedly, cases for plunder involve unexplained wealth. Section 2 of
R.A. No. 7080 states so.
“SECTION 2. Definition of the Crime of Plunder; Penalties.—Any public
officer who, by himself or in connivance with members of his family,
relatives by affinity or consanguinity, business associates, subordinates
or other persons, amasses, accumulates or acquires ill-gotten
wealth through a combination or series of overt or criminal acts as
described in Section 1(d) hereof, in the aggregate amount or total value
of at least Seventy-five million pesos (P75,000,000.00), shall be guilty of
the crime of plunder and shall be punished by life imprisonment with
perpetual absolute disqualification from holding any public office. Any
person who participated with said public officer in the commission of
plunder shall likewise be punished. In the imposition of penalties, the
degree of participation and the attendance of mitigating and extenuating
circumstances
_______________
7
122 Phil. 503, 508; 15 SCRA 91, 96 (1965).
213
 VOL. 509, NOVEMBER 30, 2006
Ejercito vs. Sandiganbayan (Special Division)
shall be considered by the court. The court shall declare any and all ill-
gotten wealth and their interests and other incomes and assets including
the properties and shares of stock derived from the deposit or investment
thereof forfeited in favor of the State. (Emphasis and italics supplied)
An examination of the “overt or criminal acts as described in Section
1(d)” of R.A. No. 7080 would make the similarity between plunder and
bribery even more pronounced since bribery is essentially included
among these criminal acts. Thus Section 1(d) states:
1. d)“Ill-gotten wealth” means any asset, property, business
enterprise or material possession of any person within the
purview of Section Two (2) hereof, acquired by him directly or
indirectly through dummies, nominees, agents, subordinates
and or business associates by any combination or series of the
following means or similar schemes.
1. 1)Through misappropriation, conversion, misuse, or
malversation of public funds or raids on the public treasury;
2. 2)By receiving, directly or indirectly, any commission, gift,
share, percentage, kickbacks or any other form of
pecuniary benefit from any person and/or entity in
connection with any government contract or project or by
reason of the office or position of the public officer
concerned;
3. 3)By the illegal or fraudulent conveyance or disposition of assets
belonging to the National Government or any of its
subdivisions, agencies or instrumentalities or government-
owned or -controlled corporations and their subsidiaries;
4. 4)By obtaining, receiving or accepting directly or indirectly any
shares of stock, equity or any other form of interest or
participation including promise of future employment in any
business enterprise or undertaking;
5. 5)By establishing agricultural, industrial or commercial
monopolies or other combinations and/or implementation of
213 decrees and orders intended to benefit particular persons or
special interests; or
214
214 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
1. 6)By taking undue advantage of official position, authority,
relationship, connection or influence to unjustly enrich himself
or themselves at the expense and to the damage and prejudice
of the Filipino people and the Republic of the Philippines.”
(Emphasis supplied)
Indeed, all the above-enumerated overt acts are similar to bribery such
that, in each case, it may be said that “no reason is seen why these two
classes of cases cannot be excepted from the rule making bank deposits
confidential.”8
The crime of bribery and the overt acts constitutive of plunder are
crimes committed by public officers, and in either case the noble idea 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” applies with equal force.
Plunder being thus analogous to bribery, the exception to R.A. 1405
applicable in cases of bribery must also apply to cases of plunder.
Respecting petitioner’s claim that the money in his bank accounts is
not the “subject matter of the litigation,” the meaning of the phrase
“subject matter of the litigation” as used in R.A. 1405 is explained
in Union Bank of the Philippines v. Court of Appeals,9 thus:
“Petitioner contends that the Court of Appeals confuses the “cause of
action” with the “subject of the action.” In Yusingco v. Ong Hing Lian,
petitioner points out, this Court distinguished the two concepts.
x x x “The cause of action is the legal wrong threatened or committed,
while the object of the action is to prevent or redress the wrong by
obtaining some legal relief; but the subject of the action is neither of these
since it is not the wrong or the relief demanded, the subject of the action
is the matter or thing with respect to which the controversy has arisen,
concerning
_______________
8
Philippine National Bank v. Gancayco, supra at note 7.
9
378 Phil. 1177, 1182-1183; 321 SCRA 563, 568-569 (1999).
215
VOL. 509, NOVEMBER 30, 2006 215
Ejercito vs. Sandiganbayan (Special Division)
which the wrong has been done, and this ordinarily is the property or the
contract and its subject matter, or the thing in dispute.”
The argument is well-taken. We note with approval the difference
between the ‘subject of the action’ from the ‘cause of action.’ We also
find petitioner’s definition of the phrase ‘subject matter of the action’ is
consistent with the term ‘subject matter of the litigation’, as the latter is
used in the Bank Deposits Secrecy Act.
In Mellon Bank, N.A. v. Magsino, where the petitioner bank
inadvertently caused the transfer of the amount of US$1,000,000.00
instead of only US$1,000.00, the Court sanctioned the examina tion of
the bank accounts where part of the money was subse quently caused to
be deposited:
‘x x x Section 2 of [Republic Act No. 1405] allows the disclosure of bank
deposits in cases where the money deposited is the subject matter of the
litigation. 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 of
persons other than the one responsible for the illegal acquisition.”
Clearly, Mellon Bank involved a case where the money deposited was
the subject matter of the litigation since the money deposited was the very
thing in dispute. x x x” (Emphasis and italics supplied)
The plunder case now pending with the Sandiganbayan necessarily
involves an inquiry into the whereabouts of the amount purportedly
acquired illegally by former President Joseph Estrada.
In light then of this Court’s pronouncement in Union Bank, the subject
matter of the litigation cannot be limited to bank accounts under the name
of President Estrada alone, but must include those accounts to which the
money purportedly acquired illegally or a portion thereof was alleged to
have been transferred. Trust Account No. 858 and Savings Account No.
0116-17345-9 in the name of petitioner fall under this
216
216 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
description and must thus be part of the subject matter of the litigation.
In a further attempt to show that the subpoenas issued by
the Sandiganbayan are invalid and may not be enforced, petitioner
contends, as earlier stated, that the information found therein, given their
“extremely detailed” character, could only have been obtained by the
Special Prosecution Panel through an illegal disclosure by the bank
officials concerned. Petitioner thus claims that, following the “fruit of the
poisonous tree” doctrine, the subpoenas must be quashed.
Petitioner further contends that even if, as claimed by respondent
People, the “extremely-detailed” information was obtained by the
Ombudsman from the bank officials concerned during a previous
investigation of the charges against President Estrada, such inquiry into
his bank accounts would itself be illegal.
Petitioner relies on Marquez v. Desierto10 where the Court held:
“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.” (Italics supplied)
As no plunder case against then President Estrada had yet been filed
before a court of competent jurisdiction at the time the Ombudsman
conducted an investigation, petitioner concludes that the information
about his bank accounts were acquired illegally, hence, it may not be
lawfully used to facilitate a subsequent inquiry into the same bank
accounts.
_______________
10
412 Phil. 387, 397; 359 SCRA 772, 781 (2001).
 217
VOL. 509, NOVEMBER 30, 2006
Ejercito vs. Sandiganbayan (Special Division)
Petitioner’s attempt to make the exclusionary rule applicable to the instant
case fails. R.A. 1405, it bears noting, nowhere provides that an unlawful
examination of bank accounts shall render the evidence obtained
therefrom inadmissible in evidence. Section 5 of R.A. 1405 only states
that “[a]ny violation of this law will subject the 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 case of U.S. v. Frazin,11 involving the Right to Financial Privacy
Act of 1978 (RFPA) of the United States, is instructive.
“Because the statute, when properly construed, excludes a suppression
remedy, it would not be appropriate for us to provide one in the exercise
of our supervisory powers over the administration of justice. Where
Congress has both established a right and provided exclusive remedies for
its violation, we would “encroach upon the prerogatives” of Congress
were we to authorize a remedy not provided for by statute. United States
v. Chanen, 549 F.2d 1306, 1313 (9th Cir.), cert. denied, 434 U.S. 825, 98
S.Ct. 72, 54 L.Ed.2d 83 (1977).”
The same principle was reiterated in U.S. v. Thompson:12
“x x x When Congress specifically designates a remedy for one of its acts,
courts generally presume that it engaged in the necessary balancing of
interests in determining what the appropriate penalty should be. See
Michaelian, 803 F.2d at 1049 (citing cases); Frazin, 780 F.2d at
1466. Absent a specific reference to an exclusionary rule, it is not
appropriate for the courts to read such a provision into the act.”
Even assuming arguendo, however, that the exclusionary rule applies in
principle to cases involving R.A. 1405, the
_______________
11
780 F.2d 1461 (1986).
12
936 F.2d 1249 (1991).
218
218 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
217 Court finds no reason to apply the same in this particular case.
Clearly, the “fruit of the poisonous tree” doctrine13 presupposes a
violation of law. If there was no violation of R.A. 1405 in the instant case,
then there would be no “poisonous tree” to begin with, and, thus, no
reason to apply the doctrine.
How the Ombudsman conducted his inquiry into the bank accounts of
petitioner is recounted by respondent People of the Philippines, viz.:
“x x x [A]s early as February 8, 2001, long before the issuance of
the Marquez ruling, the Office of the Ombudsman, acting under the
powers granted to it by the Constitution and R.A. No. 6770, and acting on
information obtained from various sources, including impeachment (of
then Pres. Joseph Estrada) related reports, articles and investigative
journals, issued a Subpoena Duces Tecum addressed to Urban Bank.
(Attachment “1-b”) It should be noted that the description of the
documents sought to be produced at that time included that of numbered
accounts 727, 737, 747, 757, 777 and 858 and included such names as
Jose Velarde, Joseph E. Estrada, Laarni Enriquez, Guia Gomez, Joy
Melendrez, Peachy Osorio, Rowena Lopez, Kevin or Kelvin Garcia.
The subpoena did not single out account 858.
xxxx
Thus, on February 13, 2001, PDIC, as receiver of Urban Bank,
issued a certification as to the availability of bank documents relating to
A/C 858 and T/A 858 and the non-availability of bank records as to the
other accounts named in the subpoena. (Attachments “2,” “2-1” and “2-
b)
Based on the certification issued by PDIC, the Office of the
Ombudsman on February 16, 2001 again issued a Subpoena Duces
Tecum directed to Ms. Corazon dela Paz, as Interim Receiver, direct-
_______________
13
“According to this rule, once the primary source (the “tree”) is
shown to have been unlawfully obtained, any secondary or derivative
evidence (the “fruit”) derived from it is also inadmissible.” [People v.
Alicando, 321 Phil. 656, 690; 251 SCRA 293, 314 (1995)].
219
VOL. 509, NOVEMBER 30, 2006 219
 Ejercito vs. Sandiganbayan (Special Division)
ing the production of documents pertinent to account A/C 858 and T/C
858. (Attachment “3”)
In compliance with the said subpoena dated February 16, 2001, Ms.
Dela Paz, as interim receiver, furnished the Office of the Ombudsman
certified copies of documents under cover latter dated February 21,
2001:
1. 1.Transaction registers dated 7-02-99, 8-16-99, 9-17-99, 10-18-
99, 11-22-99, 1-07-00, 04-03-00 and 04-24-00;
2. 2.Report of Unregularized TAFs & TDs for UR COIN A & B
Placements of Various Branches as of February 29, 2000 and
as of December 16, 1999; and
3. 3.Trading Orders Nos. A No. 78102 and A No. 078125.
Trading Order A No. 07125 is filed in two copies—a white copy which
showed “set up” information; and a yellow copy which showed “reversal”
information. Both copies have been reproduced and are enclosed with this
letter.
We are continuing our search for other records and documents
pertinent to your request and we will forward to you on Friday, 23
February 2001, such additional records and documents as we might find
until then. (Attachment “4”)
The Office of the Ombudsman then requested for the manger’s (sic)
checks, detailed in the Subpoena Duces Tecum dated March 7,
2001. (Attachment “5”)
PDIC again complied with the said Subpoena Duces Tecum dated
March 7, 2001 and provided copies of the manager’s checks thus
requested under cover letter dated March 16, 2001. (Attachment
“6”)14 (Emphasis in the original)
The Sandiganbayan credited the foregoing account of respondent
People.15 The Court finds no reason to disturb this finding of fact by
the Sandiganbayan.
_______________
14
Rollo, pp. 439-442.
“As clarified by the prosecution, the documents listed in the request
15
were obtained in February 2001, pursuant to the power conferred on the
Ombudsman under Section 15(8) of R.A. 6770, long before the Supreme
Court promulgated the Marquez v. Desierto
220
220 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
The Marquez ruling notwithstanding, the above-described examination
by the Ombudsman of petitioner’s bank accounts, conducted before a case
was filed with a court of competent jurisdiction, was lawful.
For the Ombudsman issued the subpoenas bearing on the bank
accounts of petitioner about four months before Marquez was
promulgated on June 27, 2001.
While judicial interpretations of statutes, such as that made
in Marquez with respect to R.A. No. 6770 or the Ombudsman Act of
1989, are deemed part of the statute as of the date it was originally passed,
the rule is not absolute.
Columbia Pictures, Inc. v. Court of Appeals16 teaches:
“It is consequently clear that a judicial interpretation becomes a part of
the law as of the date that law was originally passed, subject only to the
qualification that when a doctrine of this Court is overruled and a
different view is adopted, and more so when there is a reversal thereof,
the new doctrine should be applied prospectively and should not apply
to parties who relied on the old doctrine and acted in good faith.”
(Emphasis and italics supplied)
When this Court construed the Ombudsman Act of 1989, in light of the
Secrecy of Bank Deposits Law in Marquez, that “before an in camera
inspection may be allowed there must be a pending case before a court of
competent jurisdiction,” it was, in fact, reversing an earlier doctrine found
in Banco Filipino Savings and Mortgage Bank v. Purisima.17
Banco Filipino involved subpoenas duces tecum issued by the Office
of the Ombudsman, then known as the Tanodba-
_______________
case.” (Sandiganbayan Resolution dated February 7, 2003, Rollo, p.
72)
 16
G.R. No. 110318, August 28, 1996, 261 SCRA 144, 168.
17 G.R. No. L-56429. May 28, 1988, 161 SCRA 576.
221
VOL. 509, NOVEMBER 30, 2006
Ejercito vs. Sandiganbayan (Special Division)
yan,18 in the course of its preliminary investigation of a charge of
violation of the Anti-Graft and Corrupt Practices Act.
While the main issue in Banco Filipino was whether R.A. 1405
precluded the Tanodbayan’s issuance of subpoena duces tecum of bank
records in the name of persons other than the one who was charged, this
Court, citing P.D. 1630,19 Section 10, the relevant part of which states:
(d) He may issue a subpoena to compel any person to appear, give sworn
testimony, or produce documentary or other evidence the Tanodbayan
deems relevant to a matter under his inquiry,
held that “The power of the Tanodbayan to issue subpoenae ad
testificandum and subpoenae duces tecum at the time in question is
not disputed, and at any rate does not admit of doubt.”20
As the subpoenas subject of Banco Filipino were issued during a
preliminary investigation, in effect this Court upheld the power of the
Tandobayan under P.D. 1630 to issue subpoenas duces tecum for bank
documents prior to the filing of a case before a court of competent
jurisdiction.
Marquez, on the other hand, practically reversed this ruling in Banco
Filipino despite the fact that the subpoena power of the Ombudsman
under R.A. 6770 was essentially the same as that under P.D. 1630. Thus
Section 15 of R.A. 6770 empowers the Office of the Ombudsman to
_______________
18Section 2 of P.D. 1630 entitled “FURTHER REVISING
PRESIDENTIAL DECREE NO. 1487, AS REVISED BY
PRESIDENTIAL DECREE NO. 1607, CREATING THE OFFICE OF
THE TANODBAYAN” states: “An independent Office of the
Ombudsman, to be called the Office of the Tanodbayan, is hereby created.
The Chief of said Office of the Tanodbayan shall be called the
Tanodbayan who shall have two (2) deputies for Luzon, one for the
Visayas and one for Mindanao.” (Italics supplied)
19
Vide note 18.
20 Supra at p. 582.
222
221 222 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
(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;
A comparison of this provision with its counterpart in Sec. 10(d) of P.D.
1630 clearly shows that it is only more explicit in stating that the power
of the Ombudsman includes the power to examine and have access to
bank accounts and records which power was recognized with respect to
the Tanodbayan through Banco Filipino.
The Marquez ruling that there must be a pending case in order for the
Ombudsman to validly inspect bank records in camera thus reversed a
prevailing doctrine.21 Hence, it may not be retroactively applied.
The Ombudsman’s inquiry into the subject bank accounts prior to the
filing of any case before a court of competent jurisdiction was therefore
valid at the time it was conducted.
Likewise, the Marquez ruling that “the account holder must be
notified to be present during the inspection” may not be applied
retroactively to the inquiry of the Ombudsman subject of this case. This
ruling is not a judicial interpretation either of R.A. 6770 or R.A. 1405, but
a “judge-made” law which, as People v. Luvendino22 instructs, can only
be given prospective application:
_______________
21 Vide RAFAEL A. MORALES, THE PHILIPPINE GENERAL
BANKING LAW (ANNOTATED), 2nd ed. (2004), page 145: “It used to
be believed too that the Secrecy of Bank Deposits Law did not apply to
the Ombudsman, on account of his authority, under Section 15(8) of the
Ombudsman Act of 1989 (Republic Act No. 6770), to ‘examine and have
access to bank accounts and records.’ However, the Supreme Court in
Marquez vs. Hon. Aniano A. Desierto, et al., G.R. No. 135882, June 27,
2001, 359 SCRA 772 restricted the Ombudsman’s power x x x.” (Italics
supplied)
 22
G.R. No. 69971, July 3, 1992, 211 SCRA 36, 49-50, reiterated
in Filoteo v. Sandiganbayan, 331 Phil. 531, 573; 263 SCRA 222, 259-260
(1996).
223
VOL. 509, NOVEMBER 30, 2006 223
Ejercito vs. Sandiganbayan (Special Division)
“x x x The doctrine that an uncounselled waiver of the right to counsel
is not to be given legal effect was initially a judge-made one and was
first announced on 26 April 1983 in Morales v. Enrile and reiterated
on 20 March 1985 in People v. Galit. x x x
While the Morales-Galit doctrine eventually became part of Section
12(1) of the 1987 Constitution, that doctrine affords no comfort to
appellant Luvendino for the requirements and restrictions outlined
in Morales and Galit have no retroactive effect and do not reach
waivers made prior to 26 April 1983 the date of promulgation
of Morales. (Emphasis supplied)
In fine, the subpoenas issued by the Ombudsman in this case were legal,
hence, invocation of the “fruit of the poisonous tree” doctrine is
misplaced.
AT ALL EVENTS, even if the challenged subpoenas are quashed, the
Ombudsman is not barred from requiring the production of the same
documents based solely on information obtained by it from
sources independent of its previous inquiry.
In particular, the Ombudsman, even before its inquiry, had already
possessed information giving him grounds to believe that (1) there are
bank accounts bearing the number “858,” (2) that such accounts are in the
custody of Urban Bank, and (3) that the same are linked with the bank
accounts of former President Joseph Estrada who was then under
investigation for plunder.
Only with such prior independent information could it have been
possible for the Ombudsman to issue the February 8, 2001 subpoena
duces tecum addressed to the President and/or Chief Executive Officer
of Urban Bank, which described the documents subject thereof as
follows:
(a) bank records and all documents relative thereto pertaining to all
bank accounts (Savings, Current, Time Deposit, Trust, Foreign Currency
Deposits, etc…) under the account names of Jose Velarde, Joseph E.
Estrada, Laarni Enriquez, Guia Gomez, Joy
224
224 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
Melendrez, Peach Osorio, Rowena Lopez, Kevin or Kelvin Garcia, 727,
737, 747, 757, 777 and 858.” (Emphasis and italics supplied)
The information on the existence of Bank Accounts bearing number
“858” was, according to respondent People of the Philippines, obtained
from various sources including the proceedings during the impeachment
of President Estrada, related reports, articles and investigative
journals.23 In the absence of proof to the contrary, this explanation
proffered by respondent must be upheld. To presume that the information
was obtained in violation of R.A. 1405 would infringe the presumption of
regularity in the performance of official functions.
Thus, with the filing of the plunder case against former President
Estrada before the Sandiganbayan, the Ombudsman, using the above
independent information, may now proceed to conduct the same
investigation it earlier conducted, through which it can eventually obtain
the same information previously disclosed to it by the PDIC, for it is an
inescapable fact that the bank records of petitioner are no longer
protected by R.A. 1405 for the reasons already explained above.
Since conducting such an inquiry would, however, only result in the
disclosure of the same documents to the Ombudsman, this Court, in
avoidance of what would be a time-wasteful and circuitous way of
administering justice,24 upholds the challenged subpoenas.
Respecting petitioner’s claim that the Sandiganbayan violated his
right to due process as he was neither notified of the requests for the
issuance of the subpoenas nor of the grant thereof, suffice it to state that
the defects were cured when
_______________
23
Rollo, p. 439.
24
Amunategue Vda. de Gentugao v. Court of Appeals (G.R. No. L-
30340. June 30, 1976, 71 SCRA 565, 574); vide Ortigas and Co. Ltd.
Partnership v. Velasco (G.R. No. 109645, July 25, 1994, 234 SCRA 455,
501).
225
VOL. 509, NOVEMBER 30, 2006
Ejercito vs. Sandiganbayan (Special Division)
petitioner ventilated his arguments against the issuance thereof through
his earlier quoted letter addressed to the Sandiganbayan and when he
filed his motions to quash before the Sandiganbayan.
IN SUM, the Court finds that the Sandiganbayan did not commit
grave abuse of discretion in issuing the challenged subpoenas for
documents pertaining to petitioner’s Trust Account No. 858 and Savings
Account No. 0116-17345-9 for the following reasons:
1. 1.These accounts are no longer protected by the Secrecy of Bank
Deposits Law, there being two exceptions to the said law
applicable in this case, namely: (1) the examination of bank
accounts is upon order of a competent court in cases of bribery
or dereliction of duty of public officials, and (2) the money
deposited or invested is the subject matter of the litigation.
Exception (1) applies since the plunder case pending against
former President Estrada is analogous to bribery or dereliction
of duty, while exception (2) applies because the money
deposited in petitioner’s bank accounts is said to form part of
the subject matter of the same plunder case.
2. 2.The “fruit of the poisonous tree” principle, which states that
once the primary source (the “tree”) is shown to have been
unlawfully obtained, any secondary or derivative evidence (the
“fruit”) derived from it is also inadmissible, does not apply in
this case. In the first place, R.A. 1405 does not provide for the
application of this rule. Moreover, there is no basis for applying
the same in this case since the primary source for the detailed
information regarding petitioner’s bank accounts—the
investigation previously conducted by the Ombudsman—was
lawful.
3. 3.At all events, even if the subpoenas issued by
the Sandiganbayan were quashed, the Ombudsman may
conduct on its own the same inquiry into the subject bank
accounts that it earlier conducted last February-March 2001,
there being a plunder case already pending against former
President Estrada. To quash the challenged subpoenas would,
225 226
226 SUPREME COURT REPORTS ANNOTATED
Ejercito vs. Sandiganbayan (Special Division)
therefore, be pointless since the Ombudsman may obtain thesame
documents by another route. Upholding the subpoenasavoids an
unnecessary delay in the administration of justice.
WHEREFORE, the petition is DISMISSED.
The Sandiganbayan Resolutions dated February 7 and 12, 2003 and
March 11, 2003 are upheld.
The Sandiganbayan is hereby directed, consistent with this Court’s
ruling in Marquez v. Desierto, to notify petitioner as to the date the subject
bank documents shall be presented in court by the persons subpoenaed.
SO ORDERED.
Panganiban (C.J.), Puno, Quisumbing, Austria-
Martinez, Corona, Tinga and Velasco, Jr., JJ., concur.
Ynares-Santiago, J., I join dissenting opinion of J. Angelina
Gutierrez.
Sandoval-Gutierrez, J., Pls. see my Dissent.
Carpio, J., No Part—prior inhibition.
Callejo, Sr., J., Pls. see my Concurring Opinion.
Azcuna, J., I take no part—my former law office acted as counsel
for a party.
Chico-Nazario, J., No Part.
Garcia, J., I join the dissenting opinion of J. Gutierrez.

SUPREME COURT REPORTS ANNOTATED
Marquez vs. Desierto
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.
MAYORALGO, JR., MARY ANN CORPUZ-MANALAC and JOSE T.
DE JESUS, JR., in their capacities as Chairman and Members of the
Panel, respectively, respondents.
Banks and Banking; Secrecy of Bank Deposits Law (Republic Act
[RA] No. 1405); Exceptions.—An examination of the secrecy of bank de-
_______________
*
EN BANC.
773
VOL. 359, JUNE 27, 2001
Marquez vs. Desierto
posits 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.
Same; Same; Before an in camera inspection by the Ombudsman
may be allowed, there must be a pending case before a court of competent
jurisdiction.—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.
Same; Same; Exceptions to the Absolute Confidentiality of Bank
Deposits.—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.”
Same; Same; Right to Privacy; Zones of privacy are recognized and
protected in our laws.—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
773 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
774
774 SUPREME COURT REPORTS ANNOTATED
Marquez vs. Desierto
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.
PETITION for review of a decision of the Ombudsman.
The facts are stated in the opinion of the Court.
Fortun, Navasa Law Office for petitioner.
The Solicitor General for respondents.
PARDO, J.:
In the petition at bar, petitioner seeks to—
1. 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 Marquez’s motion for reconsideration dated
September 10, 1998, received by counsel on October 20, 1998.
2. 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:
_______________
1 Petition, Rollo, pp. 8-29.
775
VOL. 359, JUNE 27, 2001
Marquez vs. Desierto
“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
1. (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;
2. (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 bank’s 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.
775 _______________
 2
Ibid,, p. 10.
3 Ibid.
776
776 SUPREME COURT REPORTS ANNOTATED
Marquez vs. Desierto
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 cannot 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 Manager’s 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 x x x were already classified as
“dormant accounts,” the bank is still required to preserve the records
pertaining to the accounts within a certain period of time as required by
existing banking rules and regulations.
And finally, the in camera inspection was already extended twice
from May 13, 1998 to June 3, 1998, thereby, giving the bank enough time
within which to sufficiently comply with the order.”6
_______________
4
Motion to Cite LOURDES T. MARQUEZ, Union Bank Julia Vargas
Branch Manager for Indirect Contempt, Rollo, pp. 79-80, at p. 80.
5
Petition, Annex “D,” Letter of Ms. Lourdes Marquez, Rollo, pp. 39-
40.
6
Ibid., Annex “E,” Order, pp. 41-42.
777
VOL. 359, JUNE 27, 2001 777
Marquez vs. Desierto
Thus, on June 16, 1998, the Ombudsman issued an order directing
petitioner to produce the bank documents relative to the accounts in issue.
The order states:
Viewed from the foregoing, your persistent refusal to comply with
Ombudsman’s order is unjustified, and is merely intended to delay the
investigation of the case. Your act constitutes disobedience of or
resistance to a lawful order issued by this office and is punishable as
Indirect Contempt under Section 3(b) of R.A. 6770. The same may also
constitute obstruction in the lawful exercise of the functions of the
Ombudsman which is punishable under Section 36 of R.A. 6770.7
On July 10, 1998, petitioner together with Union Bank of the Philippines,
filed a petition for declaratory relief, prohibition and injunction8 with the
Regional Trial Court, Makati City, against the Ombudsman.
The petition was intended to clear the rights and duties of petitioner.
Thus, petitioner sought a declaration of her rights from the court due to
the clear conflict between R.A. No. 6770, Section 15 and R.A. No. 1405,
Sections 2 and 3.
Petitioner prayed for a temporary restraining order (TRO) 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, on June 16, 1998, the Ombudsman issued
another order stating that unless petitioner appeared before the FFIB with
the documents requested, petitioner manager would be charged with
indirect contempt and obstruction of justice.
In the meantime,9 on July 14, 1998, the lower court denied petitioner’s
prayer for a temporary restraining order and stated thus:
_______________
7 Ibid., at p. 42.
 8
Docketed as Civil Case No. 98-1585, Union Bank of the Philippines
and Lourdes T. Marquez vs. Hon. Aniano A. Desierto, in his capacity as
Ombudsman.
9
Petition, Annex “G,” Order dated July 14, 1998 in Civil Case No.
98-1585, Rollo, pp. 54-55.
778
778 SUPREME COURT REPORTS ANNOTATED
Marquez vs. Desierto
“After hearing the arguments of the parties, the court finds the application
for a Temporary Restraining Order to be without merit.
“Since the application prays for the restraint of the respondent, in the
exercise of his contempt powers under Section 15 (9) in relation to
paragraph (8) of R.A. 6770, known as “The Ombudsman Act of 1989,”
there is no great or irreparable injury from which petitioners may suffer,
if respondent is not so restrained. Respondent should he decide to exercise
his contempt powers would still have to apply with the court, x x x
Anyone who, without lawful excuse x x x refuses to produce documents
for inspection, when thereunto lawfully required shall be subject to
discipline as in case of contempt of Court and upon application of the
individual or body exercising the power in question shall be dealt with by
the Judge of the First Instance (now RTC) having jurisdiction of the case
in a manner provided by law (section 580 of the Revised Administrative
Code). Under the present Constitution only judges may issue warrants,
hence, respondent should apply with the Court for the issuance of the
warrant needed for the enforcement of his contempt orders. It is in these
proceedings where petitioners may question the propriety of respondent’s
exercise of his contempt powers. Petitioners are not therefore left without
any adequate remedy.
“The questioned orders were issued with the investigation of the case
of Fact-Finding and Intelligence Bureau vs. Amado Lagdameo, et al.,
OMB-0-97-0411, for violation of R.A. 3019. 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 this Court to delay this investigation pursuant
to Section 14 of the Ombudsman Act of 1989.”10
On July 20, 1998, petitioner filed a motion for reconsideration based on
the following grounds:
1. a.Petitioners’ application for Temporary Restraining Order is not
only to restrain the Ombudsman from exercising his contempt
powers, but to stop him from implementing his Orders dated
April 29, 1998 and June 16, 1998; and
2. b.The subject matter of the investigation being conducted by the
Ombudsman at petitioners’ premises is outside his
jurisdiction.11
_______________
10
Ibid., p. 12.
11
Petition, Annex “H,” Rollo, pp. 56-65.
779
VOL. 359, JUNE 27, 2001 779
Marquez vs. Desierto
On July 23, 1998, the Ombudsman filed a motion to dismiss the petition
for declaratory relief12 on the ground that the Regional Trial Court has no
jurisdiction to hear a petition for relief from the findings and orders of the
Ombudsman, citing R.A. No. 6770, Sections 14 and 27. On August 7,
1998, the Ombudsman filed an opposition to petitioner’s motion for
reconsideration dated July 20, 1998.13
On August 19, 1998, the lower court denied petitioner’s motion for
reconsideration,14 and also the Ombudsman’s motion to dismiss.15
On August 21, 1998, petitioner received a copy of the motion to cite
her for contempt, filed with the Office of the Ombudsman by Agapito B.
Rosales, Director, Fact Finding and Intelligence Bureau (FFIB).16
On August 31, 1998, 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.17 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 R.A. No. 1405.18
 Respondent Ombudsman panel set the incident for hearing on The issue is whether petitioner may be cited for indirect contempt for
September 7, 1998.19 After hearing, the panel issued an order dated her failure to produce the documents requested by the Ombudsman. And
September 7, 1998, ordering petitioner and counsel to appear for a whether the order of the Ombudsman to have an in camera inspection of
continuation of the hearing of the contempt charges against her.20 the questioned account is allowed as an exception to the law on secrecy
On September 10, 1998, petitioner filed with the Ombudsman a of bank deposits (R.A. No. 1405).
motion for reconsideration of the above order.21 Her motion was An examination of the secrecy of bank deposits law (R.A. No. 1405)
_______________ would reveal the following exceptions:
12
Ibid., Annex “I,” Rollo, pp. 66-70. 1. 1.Where the depositor consents in writing;
13
Ibid., Annex “J,” Rollo, pp. 71-76. 2. 2.Impeachment case;
14 Ibid., Annex “K,” Rollo, p. 77.
3. 3.By court order in bribery or dereliction of duty cases against
15 Ibid., Annex “L,” Rollo, p. 78.
public officials;
16
Ibid., Rollo, p. 13. 4. 4.Deposit is subject of litigation;
17
In Civil Case No. 98-1585. 5. 5.Sec 8, R.A. No. 3019, in cases of unexplained wealth as held
18 Ibid., Rollo, p. 13.
in the case of PNB vs. Gancayco.26
19 Ibid., Rollo, p. 14.
20 Petition, Annex “A,” Rollo, pp. 30-32.
21 Petition, Annex “O,” Rollo, pp. 88-92.
_______________
22 In Civil Case No. 98-1585.
780 23 Petition, Annex “P,” Rollo, pp. 93-97.
780 SUPREME COURT REPORTS ANNOTATED 24 Petition, Annex “B,” Rollo, 33-34.
Marquez vs. Desierto 25 Filed on October 28, 1998, Petition, Rollo, pp. 8-26. On November
premised on the fact that there was a pending case with the Regional Trial 16, 1998, we required respondents to comment on the petition (Rollo, p.
Court, Makati City,22 which would determine whether obeying the orders 98). On March 26, 1999, respondents filed their comment (Rollo, pp. 116-
of the Ombudsman to produce bank documents would not violate any law. 132). We now give due course to the petition.
The FFIB opposed the motion,23 and on October 14, 1998, the 26 Philippine National Bank vs. Gancayco, 122 Phil. 503, 508; 15
Ombudsman denied the motion by order the dispositive portion of which SCRA 91 (1965).
reads:
“Wherefore, respondent Lourdes T. Marquez’s motion for 781
reconsideration is hereby DENIED, for lack of merit. Let the hearing of VOL. 359, JUNE 27, 2001 781
the motion of the Fact Finding Intelligence Bureau (FFIB) to cite her for Marquez vs. Desierto
indirect contempt be intransferrably set to 29 October 1998 at 2:00 The order of the Ombudsman to produce for in camera inspection the
o’clock p.m. at which date and time she should appear personally to subject accounts with the Union Bank of the Philippines, Julia Vargas
submit her additional evidence. Failure to do so shall be deemed a waiver Branch, is based on a pending investigation at the Office of the
thereof.”24 Ombudsman against Amado Lagdameo, et al. for violation of R.A. No.
Hence, the present petition.25 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.
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. (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. (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. (3)Upon written permission of the depositor;
4. (4)In cases of impeachment;
5. (5)Upon order of a competent court in cases of bribery or
dereliction of duty of public officials; or
782
782 SUPREME COURT REPORTS ANNOTATED
Marquez vs. Desierto
1. (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.
Davide,
Jr. (C.J.), Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiba
n, Quisumbing, Buena, Gonzaga-Reyes, Ynares-Santiago, De Leon,
Jr., and Sandoval-Gutierrez, JJ., concur.
_______________
27
Union Bank of the Philippines vs. Court of Appeals, 321 SCRA
563, 564-565 (1999).
28 Ople vs. Torres, 354 Phil. 948, 973-974; 293 SCRA 141 (1998).
78

G.R. No. 168644. February 16, 2010.*
BSB GROUP, INC., represented by its President, Mr. RICARDO
BANGAYAN, petitioner, vs. sally go a.k.a. SALLY GO-
BANGAYAN, respondent.
Criminal Law; Theft; Qualified Theft; Elements; Theft is present
when a person, with intent to gain but without violence against or
intimidation of persons or force upon things, takes the personal property
of another without the latter’s consent—it is qualified when, among
others, and as alleged in the instant case, it is committed with abuse of
confidence.—Fundamental is the precept in all criminal prosecutions, that
the constitutive acts of the offense must be established with unwavering
exactitude and moral certainty because this is the critical and only
requisite to a finding of guilt. Theft is present when a person, with intent
to gain but without violence against or intimidation of persons or force
upon things, takes the personal property of another without the latter’s
consent. It is qualified when, among others, and as alleged in the instant
case, it is committed
_______________
* THIRD DIVISION.
597with abuse of confidence. The prosecution of this offense
necessarily focuses on the existence of the following elements: (a) there
was taking of personal property belonging to another; (b) the taking was
done with intent to gain; (c) the taking was done without the consent of
the owner; (d) the taking was done without violence against or
intimidation of persons or force upon things; and (e) it was done with
abuse of confidence. In turn, whether these elements concur in a way that
overcomes the presumption of guiltlessness, is a question that must pass
the test of relevancy and competency in accordance with Section 3 Rule
128 of the Rules of Court.
Same; Same; Estafa; Checks; The allegation of theft of money
necessitates that evidence presented must have a tendency to prove that
the offender has unlawfully taken money belonging to another; Where the
complainant tries to draw a connection between the evidence subject of
the instant review, and the allegation of theft in the Information by
claiming that the respondent had fraudulently deposited the checks in her
own name, it in effect seeks to establish the commission, not of theft, but
rather of some other crime—probably estafa.—In theft, the act of
unlawful taking connotes deprivation of personal property of one by
another with intent to gain, and it is immaterial that the offender is able
or unable to freely dispose of the property stolen because the deprivation
relative to the offended party has already ensued from such act of
execution. The allegation of theft of money, hence, necessitates that
evidence presented must have a tendency to prove that the offender has
unlawfully taken money belonging to another. Interestingly, petitioner
has taken pains in attempting to draw a connection between the evidence
subject of the instant review, and the allegation of theft in the Information
by claiming that respondent had fraudulently deposited the checks in her
own name. But this line of argument works more prejudice than favor,
because it in effect, seeks to establish the commission, not of theft, but
rather of some other crime—probably estafa.
Same; Same; Same; Same; In estafa by conversion, whether the
thing converted is cash or check is immaterial in relation to the formal
allegation in an information for that offense—a check, after all, while not
regarded as legal tender, is normally accepted under commercial usage
as a substitute for cash, and the credit it represents in stated monetary
value is properly capable of appropriation; Where the
598Information accuses the respondent of having stolen cash, proof
tending to establish that respondent has actualized her criminal intent by
indorsing the checks and depositing the proceeds thereof in her personal
account, becomes not only irrelevant but also immaterial and, on that
score, inadmissible in evidence.—That there is no difference between
cash and check is true in other instances. In estafa by conversion, for
instance, whether the thing converted is cash or check, is immaterial in
relation to the formal allegation in an information for that offense; a
check, after all, while not regarded as legal tender, is normally accepted
under commercial usage as a substitute for cash, and the credit it
represents in stated monetary value is properly capable of appropriation.
And it is in this respect that what the offender does with the check
subsequent to the act of unlawfully taking it becomes material inasmuch
as this offense is a continuing one. In other words, in pursuing a case for
this offense, the prosecution may establish its cause by the presentation
of the checks involved. These checks would then constitute the best
evidence to establish their contents and to prove the elemental act of
conversion in support of the proposition that the offender has indeed
indorsed the same in his own name. Theft, however, is not of such
character. Thus, for our purposes, as the Information in this case accuses
respondent of having stolen cash, proof tending to establish that
respondent has actualized her criminal intent by indorsing the checks and
depositing the proceeds thereof in her personal account, becomes not only
irrelevant but also immaterial and, on that score, inadmissible in evidence.
Banks and Banking; Bank Secrecy Act (R.A. No. 1405); While the
fundamental law has not bothered with the triviality of specifically
addressing privacy rights relative to banking accounts, there,
nevertheless, exists in our jurisdiction a legitimate expectation of privacy
governing such accounts—the source of this right of expectation is
statutory, and it is found in the Bank Secrecy Act of 1955.—It is conceded
that while the fundamental law has not bothered with the triviality of
specifically addressing privacy rights relative to banking accounts, there,
nevertheless, exists in our jurisdiction a legitimate expectation of privacy
governing such accounts. The source of this right of expectation is
statutory, and it is found in R.A. No. 1405, otherwise known as the Bank
Secrecy Act of 1955. R.A. No. 1405 has two allied purposes. It hopes to
discourage private hoarding and at the same time encourage the people to
deposit their
599money in banking institutions, so that it may be utilized by way
of authorized loans and thereby assist in economic development. Owing
to this piece of legislation, the confidentiality of bank deposits remains to
be a basic state policy in the Philippines. Section 2 of the law
institutionalized this policy by characterizing as absolutely confidential
in general all deposits of whatever nature with banks and other financial
institutions in the country.
Same; Same; The inquiry into bank deposits allowable under
Republic Act No. 1405 must be premised on the fact that the money
deposited in the account is itself the subject of the action.—What indeed
constitutes the subject matter in litigation in relation to Section 2 of R.A.
No. 1405 has been pointedly and amply addressed in Union Bank of the
Philippines v. Court of Appeals, 321 SCRA 563 (1999) in which the Court
noted that the inquiry into bank deposits allowable under R.A. No. 1405
must be premised on the fact that the money deposited in the account
is itself the subject of the action. Given this perspective, we deduce that
the subject matter of the action in the case at bar is to be determined from
the indictment that charges respondent with the offense, and not from the
evidence sought by the prosecution to be admitted into the records. In the
criminal Information filed with the trial court, respondent, unqualifiedly
and in plain language, is charged with qualified theft by abusing
petitioner’s trust and confidence and stealing cash in the amount of
P1,534,135.50. The said Information makes no factual allegation that in
some material way involves the checks subject of the testimonial and
documentary evidence sought to be suppressed. Neither do the allegations
in said Information make mention of the supposed bank account in which
the funds represented by the checks have allegedly been kept. In other
words, it can hardly be inferred from the indictment itself that the Security
Bank account is the ostensible subject of the prosecution’s inquiry.
Without needlessly expanding the scope of what is plainly alleged in the
Information, the subject matter of the action in this case is the money
amounting to P1,534,135.50 alleged to have been stolen by respondent,
and not the money equivalent of the checks which are sought to be
admitted in evidence. Thus, it is that, which the prosecution is bound to
prove with its evidence, and no other.
Same; Same; In any given jurisdiction where the right of privacy
extends its scope to include an individual’s financial privacy
600rights and personal financial matters, there is an intermediate
or heightened scrutiny given by courts and legislators to laws infringing
such rights.—A final note. In any given jurisdiction where the right of
privacy extends its scope to include an individual’s financial privacy
rights and personal financial matters, there is an intermediate or
heightened scrutiny given by courts and legislators to laws infringing such
rights. Should there be doubts in upholding the absolutely confidential
nature of bank deposits against affirming the authority to inquire into such
accounts, then such doubts must be resolved in favor of the former. This
attitude persists unless congress lifts its finger to reverse the general state
policy respecting the absolutely confidential nature of bank deposits.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Manalo-ang & Associates Law Firm for petitioner.
Mauricio Law Office for respondent.
PERALTA, J.:
This is a Petition for Review under Rule 45 of the Rules of Court
assailing the Decision of the Court of Appeals in CA-G.R. SP No.
876001 dated April 20, 2005, which reversed and set aside the September
13, 20042 and November 5, 20043 Orders issued by the Regional Trial
Court of Manila, Branch 364 in Criminal Case No. 02-202158 for
qualified theft. The said orders, in turn, respectively denied the motion
filed by herein respondent Sally Go for the suppression of the testimonial
and documentary evidence relative to a Security Bank account, and
denied reconsideration.
_______________
1 Penned by Associate Justice Delilah Vidallon-Magtolis, with
Associate Justices Perlita J. Tria Tirona and Jose C. Reyes, Jr.,
concurring, CA Rollo, pp. 136-145.
2 Records, Vol. 2, p. 369.
3 Id., at pp. 379-381.
4 Presided by Judge Wilfredo D. Reyes.
601
The basic antecedents are no longer disputed.
Petitioner, the BSB Group, Inc., is a duly organized domestic
corporation presided by its herein representative, Ricardo Bangayan
(Bangayan). Respondent Sally Go, alternatively referred to as Sally Sia
Go and Sally Go-Bangayan, is Bangayan’s wife, who was employed in
the company as a cashier, and was engaged, among others, to receive and
account for the payments made by the various customers of the company.
In 2002, Bangayan filed with the Manila Prosecutor’s Office a
complaint for estafa and/or qualified theft5 against respondent, alleging
that several checks6 representing the aggregate amount of P1,534,135.50
issued by the company’s customers in payment of their obligation were,
instead of being turned over to the company’s coffers, indorsed by
respondent who deposited the same to her personal banking account
maintained at Security Bank and Trust Company (Security Bank) in
Divisoria, Manila Branch.7 Upon a finding that the evidence adduced was
uncontroverted, the assistant city prosecutor recommended the filing of
the Information for qualified theft against respondent.8
Accordingly, respondent was charged before the Regional Trial Court
of Manila, Branch 36, in an Information, the inculpatory portion of which
reads:
“That in or about or sometime during the period comprised (sic)
between January 1988 [and] October 1989, inclusive, in the City of
Manila, Philippines, the said accused did then and there willfully,
unlawfully and feloniously with intent [to] gain and without the
knowledge and consent of the owner thereof, take, steal and carry away
cash money in the total amount of P1,534,135.50 belonging to BSB
GROUP OF COMPANIES represented by RICARDO BAN-
_______________
5 Records, Vol. 1, p. 6.
6 Id., at pp. 12-21.
7 Id., at pp. 6-8.
8 Id., at pp. 3-4.
602GAYAN, to the damage and prejudice of said owner in the aforesaid
amount of P1,534,135.50, Philippine currency.
That in the commission of the said offense, said accused acted with
grave abuse of confidence, being then employed as cashier by said
complainant at the time of the commission of the said offense and as such
she was entrusted with the said amount of money.
Contrary to law.”9
Respondent entered a negative plea when arraigned.10 The trial
ensued. On the premise that respondent had allegedly encashed the
subject checks and deposited the corresponding amounts thereof to her
personal banking account, the prosecution moved for the issuance of
subpoena duces tecum/ad testificandum against the respective managers
or records custodians of Security Bank’s Divisoria Branch, as well as of
the Asian Savings Bank (now Metropolitan Bank & Trust Co.
[Metrobank]), in Jose Abad Santos, Tondo, Manila Branch.11 The trial
court granted the motion and issued the corresponding subpoena.12
Respondent filed a motion to quash the subpoena dated November 4,
2003, addressed to Metrobank, noting to the court that in the complaint-
affidavit filed with the prosecutor, there was no mention made of the said
bank account, to which respondent, in addition to the Security Bank
account identified as Account No. 01-14-006, allegedly deposited the
proceeds of the supposed checks. Interestingly, while respondent
characterized the Metrobank account as irrelevant to the case, she, in the
same motion, nevertheless waived her objection to the irrelevancy of the
Security Bank account mentioned in the same complaint-affidavit,
inasmuch as she was
_______________
9 Supra note 5, at 1.
10 Id., at pp. 137-138.
11 Id., at pp. 161-162.
12 Id., at pp. 163-164.
603admittedly willing to address the allegations with respect thereto.13
Petitioner, opposing respondent’s move, argued for the relevancy of
the Metrobank account on the ground that the complaint-affidavit showed
that there were two checks which respondent allegedly deposited in an
account with the said bank.14 To this, respondent filed a supplemental
motion to quash, invoking the absolutely confidential nature of the
Metrobank account under the provisions of Republic Act (R.A.) No.
1405.15 The trial court did not sustain respondent; hence, it denied the
motion to quash for lack of merit.16
Meanwhile, the prosecution was able to present in court the testimony
of Elenita Marasigan (Marasigan), the representative of Security Bank. In
a nutshell, Marasigan’s testimony sought to prove that between 1988 and
1989, respondent, while engaged as cashier at the BSB Group, Inc., was
able to run away with the checks issued to the company by its customers,
endorse the same, and credit the corresponding amounts to her personal
deposit account with Security Bank. In the course of the testimony, the
subject checks were presented to Marasigan for identification and
marking as the same checks received by respondent, endorsed, and then
deposited in her personal account with Security Bank.17 But before the
testimony could be completed, respondent filed a Motion to
Suppress,18 seeking the exclusion of Marasigan’s testimony and
accompanying documents thus far received, bearing on the subject
Security Bank account. This time respondent invokes, in addition to
irrelevancy, the privilege of confidentiality under R.A. No. 1405.
_______________
13 Supra note 5 at 165-169.
14 Id., at pp. 173-174.
15 Id., at pp. 176-178.
16 Id., at pp. 219-221.
17 TSN, January 8, 2004, pp. 8-50; TSN, August 20, 2004, pp. 4-65;
TSN, September 22, 2004, pp. 27-54.
18 Supra note 2, at 358-359.
604 The trial court, nevertheless, denied the motion in its September
13, 2004 Order.19 A motion for reconsideration was subsequently filed,
but it was also denied in the Order dated November 5, 2004.20 These two
orders are the subject of the instant case.
Aggrieved, and believing that the trial court gravely abused its
discretion in acting the way it did, respondent elevated the matter to the
Court of Appeals via a petition for certiorari under Rule 65. Finding
merit in the petition, the Court of Appeals reversed and set aside the
assailed orders of the trial court in its April 20, 2005 Decision.21 The
decision reads:
“WHEREFORE, the petition is hereby GRANTED. The assailed
orders dated September 13, 2004 and November 5, 2004 are REVERSED
and SET ASIDE. The testimony of the SBTC representative is ordered
stricken from the records.
SO ORDERED.”22
With the denial of its motion for reconsideration,23 petitioner is now
before the Court pleading the same issues as those raised before the lower
courts.
In this Petition24 under Rule 45, petitioner averred in the main that the
Court of Appeals had seriously erred in reversing the assailed orders of
the trial court, and in effect striking out Marasigan’s testimony dealing
with respondent’s deposit account with Security Bank.25 It asserted that
apart from the fact that the said evidence had a direct relation to the
subject matter of the case for qualified theft and, hence, brings the
_______________
19 Supra note 2, at 369.
20 Id., at pp. 379-381.
21 CA Rollo, pp. 136-145.
22 Id., at p. 145.
23 Id., at p. 173.
24 Rollo, pp. 3-30.
25 Id., at p. 14.
605case under one of the exceptions to the coverage of confidentiality
under R.A. 1405.26 Petitioner believed that what constituted the subject
matter in litigation was to be determined by the allegations in the
information and, in this respect, it alluded to the assailed November 5,
2004 Order of the trial court, which declared to be erroneous the limitation
of the present inquiry merely to what was contained in the information.27
For her part, respondent claimed that the money represented by the
Security Bank account was neither relevant nor material to the case,
because nothing in the criminal information suggested that the money
therein deposited was the subject matter of the case. She invited particular
attention to that portion of the criminal Information which averred that
she has stolen and carried away cash money in the total amount of
P1,534,135.50. She advanced the notion that the term “cash money”
stated in the Information was not synonymous with the checks she was
purported to have stolen from petitioner and deposited in her personal
banking account. Thus, the checks which the prosecution had Marasigan
identify, as well as the testimony itself of Marasigan, should be
suppressed by the trial court at least for violating respondent’s right to
due process.28 More in point, respondent opined that admitting the
testimony of Marasigan, as well as the evidence pertaining to the Security
Bank account, would violate the secrecy rule under R.A. No. 1405.29
In its reply, petitioner asserted the sufficiency of the allegations in the
criminal Information for qualified theft, as the same has sufficiently
alleged the elements of the offense charged. It posits that through
Marasigan’s testimony, the Court would be able to establish that the
checks involved,
_______________
26 Id., at pp. 17-18.
27 Rollo, p. 20.
28 Rollo, pp. 173-178.
29 Rollo, pp. 179-181.
606copies of which were attached to the complaint-affidavit filed with the
prosecutor, had indeed been received by respondent as cashier, but were,
thereafter, deposited by the latter to her personal account with Security
Bank. Petitioner held that the checks represented the cash money stolen
by respondent and, hence, the subject matter in this case is not only the
cash amount represented by the checks supposedly stolen by respondent,
but also the checks themselves.30
We derive from the conflicting advocacies of the parties that the issue
for resolution is whether the testimony of Marasigan and the
accompanying documents are irrelevant to the case, and whether they are
also violative of the absolutely confidential nature of bank deposits and,
hence, excluded by operation of R.A. No. 1405. The question of
admissibility of the evidence thus comes to the fore. And the Court, after
deliberative estimation, finds the subject evidence to be indeed
inadmissible.
Prefatorily, fundamental is the precept in all criminal prosecutions,
that the constitutive acts of the offense must be established with
unwavering exactitude and moral certainty because this is the critical and
only requisite to a finding of guilt.31 Theft is present when a person, with
intent to gain but without violence against or intimidation of persons or
force upon things, takes the personal property of another without the
latter’s consent. It is qualified when, among others, and as alleged in the
instant case, it is committed with abuse of confidence.32 The prosecution
of this offense necessarily focuses on the existence of the following
elements: (a) there was taking of personal property belonging to another;
(b) the taking was done with intent to gain; (c) the taking was done
_______________
30 Supra note 24, at 193-210.
31 Catuiran v. People, G.R. No. 175647, May 8, 2009, 587 SCRA
567; and People v. Obmiranis, G.R. No. 181492, December 16, 2008, 574
SCRA 140.
32 Reyes, Revised Penal Code, Book II, 15th ed., 685, 708-709
(2001).
607without the consent of the owner; (d) the taking was done without
violence against or intimidation of persons or force upon things; and (e)
it was done with abuse of confidence.33 In turn, whether these elements
concur in a way that overcomes the presumption of guiltlessness, is a
question that must pass the test of relevancy and competency in
accordance with Section 334 Rule 128 of the Rules of Court.
Thus, whether these pieces of evidence sought to be suppressed in this
case—the testimony of Marasigan, as well as the checks purported to have
been stolen and deposited in respondent’s Security Bank account—are
relevant, is to be addressed by considering whether they have such direct
relation to the fact in issue as to induce belief in its existence or non-
existence; or whether they relate collaterally to a fact from which, by
process of logic, an inference may be made as to the existence or non-
existence of the fact in issue.35
The fact in issue appears to be that respondent has taken away cash in
the amount of P1,534,135.50 from the coffers of petitioner. In support of
this allegation, petitioner seeks to establish the existence of the elemental
act of taking by adducing evidence that respondent, at several times
between 1988 and 1989, deposited some of its checks to her personal
account with Security Bank. Petitioner addresses the incongruence
between the allegation of theft of cash in the Information, on the one hand,
and the evidence that respondent had first stolen the checks and deposited
the same in her banking account, on the other hand, by impressing upon
the Court that there obtains no difference between cash and
_______________
33 Id., at p. 686.
34 Section 3. Admissibility of evidence.—Evidence is admissible
when it is relevant to the issue and is not excluded by the law or these
rules.
35 Sec. 4, Rule 128, Rules of Court; Fishman v. Consumer’s Brewing
Co., 78 N.J.L. 300, 302, cited in EVIDENCE RULES 128-134, R.J.
Francisco, 3rd ed., 17 (1996).
608check for purposes of prosecuting respondent for theft of cash.
Petitioner is mistaken.
In theft, the act of unlawful taking connotes deprivation of personal
property of one by another with intent to gain, and it is immaterial that
the offender is able or unable to freely dispose of the property stolen
because the deprivation relative to the offended party has already ensued
from such act of execution.36 The allegation of theft of money, hence,
necessitates that evidence presented must have a tendency to prove that
the offender has unlawfully taken money belonging to another.
Interestingly, petitioner has taken pains in attempting to draw a
connection between the evidence subject of the instant review, and the
allegation of theft in the Information by claiming that respondent had
fraudulently deposited the checks in her own name. But this line of
argument works more prejudice than favor, because it in effect, seeks to
establish the commission, not of theft, but rather of some other crime—
probably estafa.
Moreover, that there is no difference between cash and check is true
in other instances. In estafa by conversion, for instance, whether the thing
converted is cash or check, is immaterial in relation to the formal
allegation in an information for that offense; a check, after all, while not
regarded as legal tender, is normally accepted under commercial usage as
a substitute for cash, and the credit it represents in stated monetary value
is properly capable of appropriation. And it is in this respect that what the
offender does with the check subsequent to the act of unlawfully taking it
becomes material inasmuch as this offense is a continuing one.37 In other
words, in pursuing a case for this offense, the prosecution may establish
its cause by the presentation of the checks
_______________
36 Valenzuela v. People, G.R. No. 160188, June 21, 2007, 525 SCRA
306, 343.
37 Galvez v. Court of Appeals, G.R. No. L-22760, November 29,
1971, 42 SCRA 278.
609involved. These checks would then constitute the best evidence to
establish their contents and to prove the elemental act of conversion in
support of the proposition that the offender has indeed indorsed the same
in his own name.38
Theft, however, is not of such character. Thus, for our purposes, as
the Information in this case accuses respondent of having stolen cash,
proof tending to establish that respondent has actualized her criminal
intent by indorsing the checks and depositing the proceeds thereof in her
personal account, becomes not only irrelevant but also immaterial and, on
that score, inadmissible in evidence.
 We now address the issue of whether the admission of Marasigan’s
testimony on the particulars of respondent’s account with Security Bank,
as well as of the corresponding evidence of the checks allegedly deposited
in said account, constitutes an unallowable inquiry under R.A. 1405.
It is conceded that while the fundamental law has not bothered with
the triviality of specifically addressing privacy rights relative to banking
accounts, there, nevertheless, exists in our jurisdiction a legitimate
expectation of privacy governing such accounts. The source of this right
of expectation is statutory, and it is found in R.A. No. 1405,39 otherwise
known as the Bank Secrecy Act of 1955.40
R.A. No. 1405 has two allied purposes. It hopes to discourage private
hoarding and at the same time encourage the people to deposit their
money in banking institutions, so that it may be utilized by way of
authorized loans and thereby assist in economic development.41 Owing to
this piece of legis-
_______________
38 Id.
39 It carries the title “An Act Prohibiting Disclosure of or Inquiry Into
Deposits With Any Banking Institution And Providing Penalty Therefor.”
The law was approved on September 9, 1955.
40 Republic v. Eugenio, G.R. No. 174629, February 14, 2008, 545
SCRA 384, 414.
41 Section 1, Republic Act No. 1405.
610lation, the confidentiality of bank deposits remains to be a basic state
policy in the Philippines.42 Section 2 of the law institutionalized this
policy by characterizing as absolutely confidential in general all deposits
of whatever nature with banks and other financial institutions in the
country. It declares:
“Section 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 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.”
Subsequent statutory enactments43 have expanded the list of
exceptions to this policy yet the secrecy of bank deposits still lies as the
general rule, falling as it does within the legally recognized zones of
privacy.44 There is, in fact, much disfavor to construing these primary and
supplemental exceptions in a manner that would authorize unbridled
discretion, whether governmental or otherwise, in utilizing these
exceptions as authority for unwarranted inquiry into bank accounts. It is
then perceivable that the present legal order is obliged to conserve the
absolutely confidential nature of bank deposits.45
The measure of protection afforded by the law has been explained
in China Banking Corporation v. Ortega.46 That case
_______________
42 Id.
43 Presidential Decree No. 1972, later on modified by R.A. No. 7653;
R.A. No. 3019; R.A. No. 9160.
44 Supra note 40.
45 Id.
46 G.R. No. L-34964, January 31, 1973, 49 SCRA 355.
611principally addressed the issue of whether the prohibition against an
examination of bank deposits precludes garnishment in satisfaction of a
judgment. Ruling on that issue in the negative, the Court found guidance
in the relevant portions of the legislative deliberations on Senate Bill No.
351 and House Bill No. 3977, which later became the Bank Secrecy Act,
and it held that the absolute confidentiality rule in R.A. No. 1405 actually
aims at protection from unwarranted inquiry or investigation if the
purpose of such inquiry or investigation is merely to determine the
existence and nature, as well as the amount of the deposit in any given
bank account. Thus,
“x x x 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.
3977which later became Republic Act No. 1405, that it was not the
intention of the lawmakers to place banks deposits beyond the reach of
execution to satisfy a final judgment. Thus:
x x x 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 [(BIR)] or, say,
P1,000.00 worth of tax liability, and because of this the deposit of
this individual [has been] attached by the [BIR].
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
[BIR], such inquiry is not allowed by this proposed law.
Mr. Marcos: But under our rules of procedure and under the
Civil Code, the attachment or garnishment of money deposited is
allowed. Let us assume for instance that there is a pre-
612liminary attachment which is for garnishment or for holding
liable all moneys deposited belonging to a certain individual, but
such attachment or garnishment will bring out into the open the
value of such deposit. Is that prohibited by... the law?
Mr. Ramos: It is only prohibited to the extent that the inquiry...
is made only for the purpose of satisfying a tax liability already
declared for the protection of the right in favor of the
government; but when the object is merely to inquire whether
he has a deposit or not for purposes of taxation, then this is
fully covered by the law. x x x
Mr. Marcos: The law prohibits a mere investigation into the
existence and the amount of the deposit.
Mr. Ramos: Into the very nature of such deposit. x x x47
In taking exclusion from the coverage of the confidentiality rule,
petitioner in the instant case posits that the account maintained by
respondent with Security Bank contains the proceeds of the checks that
she has fraudulently appropriated to herself and, thus, falls under one of
the exceptions in Section 2 of R.A. No. 1405—that the money kept in said
account is the subject matter in litigation. To highlight this thesis,
petitioner avers, citing Mathay v. Consolidated Bank and Trust Co.,48 that
the subject matter of the action refers to the physical facts; the things real
or personal; the money, lands, chattels and the like, in relation to which
the suit is prosecuted, which in the instant case should refer to the money
deposited in the Security Bank account.49 On the surface, however, it
seems that petitioner’s theory is valid to a point, yet a deeper treatment
tends to show that it has argued quite off-tangentially. This, because,
while Mathay did explain what the subject matter of an action is, it
nevertheless did so
_______________
47 Supra note 46, at 358-359. The portion of the discussion was lifted
from Vol. II, Congressional Record, House of Representatives, No. 12,
pp. 3839-3840, July 27, 1955. (Emphasis supplied.)
48 G.R. No. L-23136, August 26, 1974, 58 SCRA 559.
49 Supra note 47, at 571.
613only to determine whether the class suit in that case was properly
brought to the court.
What indeed constitutes the subject matter in litigation in relation to
Section 2 of R.A. No. 1405 has been pointedly and amply addressed
in Union Bank of the Philippines v. Court of Appeals,50 in which the Court
noted that the inquiry into bank deposits allowable under R.A. No. 1405
must be premised on the fact that the money deposited in the account
is itself the subject of the action.51 Given this perspective, we deduce that
the subject matter of the action in the case at bar is to be determined from
the indictment that charges respondent with the offense, and not from the
evidence sought by the prosecution to be admitted into the records. In the
criminal Information filed with the trial court, respondent, unqualifiedly
and in plain language, is charged with qualified theft by abusing
petitioner’s trust and confidence and stealing cash in the amount of
P1,534,135.50. The said Information makes no factual allegation that in
some material way involves the checks subject of the testimonial and
documentary evidence sought to be suppressed. Neither do the allegations
in said Information make mention of the supposed bank account in which
the funds represented by the checks have allegedly been kept.
In other words, it can hardly be inferred from the indictment itself that
the Security Bank account is the ostensible subject of the prosecution’s
inquiry. Without needlessly expanding the scope of what is plainly
alleged in the Information, the subject matter of the action in this case is _______________
the money amounting to P1,534,135.50 alleged to have been stolen by
respondent, and not the money equivalent of the checks which are sought 52 16B Am Jur 2d $605, pp. 73-74. See citation 83 therein.
to be admitted in evidence. Thus, it is that, which the prosecution is bound 53 Supra note 40.
to prove with its evidence, and no other.
_______________ 615 WHEREFORE, the petition is DENIED. The Decision of the
Court of Appeals in CA-G.R. SP No. 87600 dated April 20, 2005,
50 G.R. No. 134699, December 23, 1999, 321 SCRA 563. reversing the September 13, 2004 and November 5, 2004 Orders of the
51 Id., at p. 573. (Emphasis supplied.) Regional Trial Court of Manila, Branch 36 in Criminal Case No. 02-
202158, is AFFIRMED.
614 SO ORDERED.
It comes clear that the admission of testimonial and documentary Corona (Chairperson), Velasco, Jr., Nachura and Mendoza, JJ.,
evidence relative to respondent’s Security Bank account serves no other concur.
purpose than to establish the existence of such account, its nature and the
amount kept in it. It constitutes an attempt by the prosecution at an Petition denied, judgment affirmed.
impermissible inquiry into a bank deposit account the privacy and Notes.—The allegation that what was taken was a registered letter
confidentiality of which is protected by law. On this score alone, the categorizes the crime to qualified theft. (Avecilla vs. People, 209 SCRA
objection posed by respondent in her motion to suppress should have 466 [1992])
indeed put an end to the controversy at the very first instance it was raised In the determination of the penalty for Qualified Theft, note is taken
before the trial court. of the value of the property taken, and where the value exceeds 22,000.00,
In sum, we hold that the testimony of Marasigan on the particulars of the basic penalty is prision mayor in its minimum and medium periods to
respondent’s supposed bank account with Security Bank and the be imposed in the minimum period, and to determine the additional years
documentary evidence represented by the checks adduced in support of imprisonment, the amount is deducted from the total amount, the
thereof, are not only incompetent for being excluded by operation of R.A. difference being then divided by 10,000.00, disregarding any amount less
No. 1405. They are likewise irrelevant to the case, inasmuch as they do than 10,000.00. (Astudillo vs. People, 509 SCRA 302 [2006])
not appear to have any logical and reasonable connection to the ——o0o——
prosecution of respondent for qualified theft. We find full merit in and
affirm respondent’s objection to the evidence of the prosecution. The
Court of Appeals was, therefore, correct in reversing the assailed orders
of the trial court.
A final note. In any given jurisdiction where the right of privacy
extends its scope to include an individual’s financial privacy rights and
personal financial matters, there is an intermediate or heightened scrutiny
given by courts and legislators to laws infringing such rights.52 Should
there be doubts in upholding the absolutely confidential nature of bank
deposits against affirming the authority to inquire into such accounts, then
such doubts must be resolved in favor of the former. This attitude persists
unless congress lifts its finger to reverse the general state policy
respecting the absolutely confidential nature of bank deposits.53