Karen E. Salvacion v.

Central Bank of the Philippines

August 21, 1997
J. Torres, Jr.
FACTS:
Greg Bartelli, an American tourist, coaxed and lured Karen Salvacion, age 12, to go with
him to his apartment. He detained Karen there for four days and raped her ten times
during the duration of her detainment.
After Karen was rescued by policemen and people living nearby, Bartelli was charged with
Serious Illegal Detention and four counts of Rape. Bartell was also sued civilly by Karen,
through her parents, for damages with preliminary attachment.
On the day of Bartellis the bail hearing, Bartelli escaped from jail. A Warrant of Arrest was
issued, and the criminal cases were archived pending the arrest.
In the civil case, a writ of preliminary attachment was issued after Petitioners gave a bond.
The Deputy Sheriff of Makati served a Notice of Garnishment on China Banking
Corporation (CBC).
o China Bank refused the garnishment, invoking RA 1405 (Bank Secrecy Act).
o The Deputy Sheriff replied that the garnishment did not violate the secrecy of bank
deposits since the disclosure is merely incidental to a garnishment by a court order
which placed the subject deposits in custodia legis.
o China Bank replied that the dollar deposits of Bartelli were exempt from attachment,
invoking Section 113 of Central Bank Circular No. 960.
o So, Petitioners made an inquiry with the Central Bank on whether Section 113 of the
Circular has any exception or has been repealed or amended.
o The Central Bank replied that Section 113 is absolute in application, its purpose to
encourage dollar accounts within the countrys banking system.
Summons was served on Bartelli by publication. After Bartelli failed to file his answer, he
was declared in default. The trial court heard the case ex-parte, and rendered judgment in
favor of Petitioners.
The decision of the trial court became final, so Petitioners tried to execute on Bartellis
dollar deposit with China Bank.
o China Bank refused, again invoking Section 113 of Central Bank Circular No. 960.
ISSUE: WON Section 113 of Central Bank Circular No. 960 should be made applicable to a
foreign transient NO
RATIO:
Karen deserved to receive the damages awarded to her by the court. The questioned law makes
futile the favorable judgment and award of damages that she and her parents fully deserve. It
would be difficult to fathom how the incentive for foreign currency deposit could be more
important than a childs right to an award of damages in sad cases such as Karens. The
questioned law is unreasonable and oppressive.
The Solicitor General correctly opined that the questioned law applies when the deposit does
comes from a lender or investor, but not when it comes from a mere transient who is not
expected to maintain the deposit in the bank for long. The Foreign Currency Deposit System was
designed to draw deposits from foreign lenders and investors. Obviously, the foreign currency
deposit made by a transient tourist is not the kind of deposit encouraged by the law.
To rule otherwise would be to negate Article 10 of the Civil Code which provides, In case of
doubt in the interpretation or application of laws, it is presumed that the lawmaking body
intended right and justice to prevail.

DISPOSITIVE: Section 113 of Central Bank Circular 113 is inapplicable to the present case.
Respondents are required to comply with the writ of execution and to release the dollar deposit
of Bartelli in such amount as would satisfy the judgment.
alyanna apacible