DEAN’S CIRCLE 2019 – UST FACULTY OF CIVIL LAW

Under R.A. No. 6426 there is only a single exception to the secrecy of foreign currency deposits, that
is, disclosure is allowed only upon the written permission of the depositor. Incidentally, the acts of
private respondents complained of happened before the enactment on September 29, 2001 of R.A.
No. 9160 otherwise known as the Anti-Money Laundering Act of 2001.

 Ejercito vs. Sandiganbayan, G.R. Nos. 157294-95, November 30, 2006

JOSEPH VICTOR G. EJERCITO, Petitioner, vs. SANDIGANBAYAN (Special Division) and PEOPLE
OF THE PHILIPPINES, Respondents.
G.R. Nos. 157294-95, EN BANC, November 30, 2006, Carpio Morales, J

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. 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.

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. 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.

FACTS

Three resolutions were issued in the Criminal Case, "People of the Philippines v. Joseph Ejercito
Estrada, et al.," for plunder.

In said case, the Special Prosecution Panelfiled before the Sandiganbayan a Request for Issuance of
Subpoena DucesTecum for the issuance of a subpoena directing the President of Export and
Industry Bank (EIB, formerly Urban Bank) or his/her authorized representative to produce various
documents during the hearings.

The Special Prosecution Panel also filed a Request for Issuance of Subpoena DucesTecum/Ad
Testificandum directed to the authorized representative of Equitable-PCI Bank to produce
statements of account pertaining to certain accounts in the name of "Jose Velarde" and to testify
thereon.

The SB granted both requests and subpoenas were accordingly issued.

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The Special Prosecution Panel filed still another Request for Issuance of Subpoena Duces
Tecum/Ad Testificandum for the President of EIB or his/her authorized representative to produce
the same documents subject of the first Subpoena DucesTecum and to testify thereon on the
hearings scheduled and subsequent dates until completion of the testimony. The request was
likewise granted by the Sandiganbayan.
Petitioner Filed a Motion to Quash
Petitioner, unassisted by counsel, thus filed a Motion to Quash Subpoena DucesTecum/Ad
Testificandum the subpoenas previously issued to the President of the EIB. 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 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.

Before the Motion to Quash was resolved by the Sandiganbayan, the prosecution filed another
Request for the Issuance of Subpoena DucesTecum/Ad Testificandum, again to direct the President
of the EIB to produce, on the hearings the same documents.

The prosecution also filed a Request for the Issuance of Subpoena DucesTecum/Ad Testificandum
directed to Aurora C. Baldoz, Vice President-CR-II of the PDIC for her to produce the various
documents. The subpoenas prayed for in both requests were issued by the Sandiganbayan.

The petitioner filed various motions to quash the various Subpoenas DucesTecum/Ad
Testificandum previously issued, but were denied.

In connection with the Criminal Case for plunder, the Special Prosecution Panel filed before the
Sandiganbayan a request for issuance of Subpoena DucesTecum/Ad Testificandum for the
production of various documents relating to the said case. Resolutions have been issued by the
Sandiganbayan granting the request. The petitioner filed for Motion to Quash; however, it was
denied. Consequently, petitioner filed Motion for Reconsideration seeking a reconsideration of the
Resolutions, but it was denied. Hence, the present petition for certiorari under Rule 65 assailing the
Sandiganbayan Resolutions denying petitioner Joseph Victor G. Ejercito’s Motions to Quash
Subpoenas DucesTecum/Ad Testificandum, and Resolution denying his Motion for Reconsideration
of the first two resolutions.

ISSUES

1. Whether or not petitioner’s Trust Account No. 858 is covered by the term "deposit" as used
in R.A. 1405; YES

2. Whether or not petitioner’s Trust Account No. 858 and Savings Account No. 0116-17345-9
are protected by R.A. 1405; and NO
3. Whether or not the "extremely-detailed" information contained in the Special Prosecution
Panel’s requests for subpoena was obtained through a prior illegal disclosure of petitioner’s bank
accounts, in violation of the "fruit of the poisonous tree" doctrine.
NO

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RULING

1. Yes, trust account is covered by the term “deposit” as used in RA 1405.

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.
RA/Y05
The policy behind the law is laid down in Section 1. 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.

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. 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.
RA1405
Section 2 of the same law in fact even more clearly shows that the term “deposits” was intended to
be understood broadly. 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.

2. No, it is not protected by such law.

Petitioner contends that since plunder is neither bribery nor dereliction of duty, his accounts are
not excepted from the protection of R.A. 1405. The Court disagrees. Cases for plunder involve
unexplained wealth.

Furthermore, 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.
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.

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Plunder being thus analogous to bribery, the exception to R.A. 1405 applicable in cases of bribery
must also apply to cases of plunder.

3. No, the application of fruit of poisonous tree doctrine is misplaced.

Petitioner relies on Marquez v. Desierto 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. (Underscoring 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.

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."
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.

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. 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. 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

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since the primary source for the detailed information regarding petitioner’s bank accounts – the
investigation previously conducted by the Ombudsman – was lawful.

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, therefore, be pointless since the Ombudsman
may obtain the same documents by another route. Upholding the subpoenas avoids an unnecessary
delay in the administration of justice.

 Sibayan v. Alda, G.R. No. 233395, [January 17, 2018]

SIBAYAN V. ALDA
G.R. No. 233395, January 17, 2018 THIRD DIVISION, Velasco, Jr., J.

The denial of the motion for production of bank documents is justified as the bank accounts sought to
be examined are privileged. Section 2 of Republic Act No. 1405, otherwise known as The Law on
Secrecy of Bank Deposit, provides that all deposits of whatever nature with banks or banking
institutions in the Philippines may not be examined, inquired or looked into by any person, government
official, bureau or office, except upon written permission of the depositor, among others.

In fine, the OGCLS-BSP's issuance of the assailed orders did not violate Norlina' s right to due process
and was in accord with the summary nature of administrative proceedings before the BSP. The
opportunity accorded to Norlina was enough to comply with the requirements of due process in an
administrative case. The formalities usually attendant in court hearings need not be present in an
administrative investigation, as long as the parties are heard and given the opportunity to adduce
their respective sets of evidence.

FACTS

Respondent Elizabeth, through her daughter Ruby O. Aida (Ruby) charged Norlina of unauthorized
deduction of her BDO Savings Account as well as for failure to post certain check deposits to the
said accountwith the Office of Special Investigation of the Bangko Sentral ng Pilipinas (OSI-BSP).
Norlina argued that the charges were only meant to harass her and BDO as Norlina previously filed
a criminal case against Elizabeth, Ruby, and their cohorts, for theft, estafa, and violation of the
Access Devise Regulation Act of 1998.

Meanwhile, during the investigation, parties submitted their respective pleadings. The OSI-BSP
issued a Resolution finding a prima facie case against Norlina for Conducting Business in an Unsafe
or Unsound Manner under The General Banking Law of 2000. OGCLS-BSP then directed Norlina to
submit her sworn answer to the formal charge filed by the OSI-BSP.

Norlina then filed a Request to Answer Written Interrogatories addressed to Elizabeth. She likewise
filed a Motion for Production of Documents praying that the bank to allow her inspect and copy the
Statement of Account of Ruby. She alleged that Ruby is the legal and beneficial owner of said
account in connection to the earlier case of theft Norlina filed against the her.

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Republic of the Philippines v. **7. Where the Case was Filed:** The case was
filed in the Supreme Court of the Philippines, the
Sandiganbayan, Joseph Estrada, and
highest court in the country.
Salvador Laurel
**8. Case Filed Before the Lower Court:** The
**2. Parties to the Case:** case originated before the Sandiganbayan, a
- Petitioner: Republic of the Philippines, special anti-graft court in the Philippines, where
represented by the Office of the Ombudsman the legality of the subpoenas and the examination
- Respondents: Sandiganbayan (a special anti- of bank accounts were initially decided.
graft court), Joseph Estrada (former President of
the Philippines), and Salvador Laurel (a former **9. Decision of the Lower Court
government official) (Sandiganbayan):** The Sandiganbayan upheld
the legality of the subpoenas issued by the
**3. Nature of the Case:** This case involves Ombudsman, allowing the examination of the
issues related to the confidentiality of bank bank accounts in question.
deposits under Republic Act No. 1405 (Secrecy
of Bank Deposits Law) and the authority of the **10. Decision of the Court of Appeals (if any):**
Ombudsman to issue subpoenas for bank There is no specific mention of a decision by the
records. The central question revolves around Court of Appeals in the provided information.
whether certain bank accounts, particularly Trust
Account No. 858, are protected by the law or **11. Case Filed Before the Supreme Court:** The
subject to exceptions. case was elevated to the Supreme Court of the
Philippines for review, where the highest court in
**4. Doctrine of the Case:** The doctrine the land would make a final determination.
emphasized in this case is that while bank
deposits are generally protected by the law, **12. Contention of the Petitioner:** The
exceptions apply, allowing for the examination of petitioner, the Republic of the Philippines, argued
bank accounts in specific circumstances, such as that the bank accounts, particularly Trust Account
cases involving bribery, dereliction of duty by No. 858, were protected by Republic Act No.
public officials, or litigation where the money 1405, and thus, the subpoenas issued by the
deposited is a subject of the case. Ombudsman were illegal.

**5. Cause of Action:** The primary cause of **13. Contention of the Respondent:** The
action is the examination of certain bank respondents, including the Sandiganbayan,
accounts by the Ombudsman in relation to a argued that the examination of the bank accounts
plunder case against Joseph Estrada. The case was lawful due to exceptions under Republic Act
revolves around whether these bank accounts are No. 1405 and other legal provisions.
protected by Republic Act No. 1405 or if
exceptions apply. **14. Answer of the Supreme Court to the
Petitioner's Contentions:** The Supreme Court
**6. Pertinent Facts:** ruled that the bank accounts, including Trust
- The Ombudsman initiated an inquiry into several Account No. 858, were no longer protected by
bank accounts, including Trust Account No. 858 Republic Act No. 1405 due to specific exceptions
and Savings Account No. 0116-17345-9, in related to the examination of bank accounts.
connection with a plunder case against Joseph
Estrada. **15. Answer of the Supreme Court to the
- The Ombudsman issued subpoenas to obtain Respondent's Contentions:** The Supreme Court
bank records for the purpose of the investigation. upheld the authority of the Ombudsman to issue
- The petitioner contested the legality of the subpoenas and conduct an inquiry into the bank
subpoenas, arguing that the accounts were accounts in connection with the plunder case
protected by Republic Act No. 1405, which against Joseph Estrada.
ensures the secrecy of bank deposits.
**16. Issue/s in this Case:** The primary issue in
this case was whether the bank accounts,
particularly Trust Account No. 858, were
protected by Republic Act No. 1405 or if
exceptions allowed for their examination.

**17. Answer of the Supreme Court to the Issue/

s:** The Supreme Court determined that the
exceptions to Republic Act No. 1405 applied in
this case, permitting the examination of the bank
accounts.

**18. Decision of the Supreme Court:** The

Supreme Court affirmed the legality of the
subpoenas issued by the Ombudsman and
allowed the examination of the bank accounts in
question.

**19. Cite Legal Basis on the Answer of the

Supreme Court:** The legal basis for the Supreme
Court's decision included Republic Act No. 1405
(Secrecy of Bank Deposits Law) and
jurisprudence interpreting the law, such as
Marquez v. Desierto, Union Bank of the
Philippines v. Court of Appeals, and Philippine
National Bank v. Gancayco.

**20. Enumerate the Important Provisions and

Jurisprudence Cited in the Case:**
- Republic Act No. 1405 (Secrecy of Bank
Deposits Law