O. China Banking Corporation v.

CA
G.R. No. 140687 December 18, 2006

Facts:
1. The case stems from a complaint for a recovery of sums of money and annulment of
sales of real property and shares of stocks filed by Jose Gotianuy against his son-in-law
George Dee and his daughter Mary Margaret Dee.

2. Gotianuy accused his daughter of stealing his properties, US Dollar deposits with
Citybank amounting to P35M and $864,000. Margaret Dee obtained these amounts
through check issued by Citybank naming her as a co-payee of Gotianuy. She allegedly
deposited the checks with petitioner bank. Gotianuy died during the pendency of the case
and was substituted by his daughter Elizabeth.

3. Subsequently, employees of China Bank were sent subpoena to testify re:

bank deposits of Margaret Dee but petitioner invoked RA 1405 (Bank Secrecy Law).
The lower court held that the disclosure of the name only of a depositor does not
constitute a violation of RA 1405. The CA affirms the lower court's decision.

Issue: Whether or not the petitioner can validly invoke the bank secrecy law to prevent
the disclosure

HELD: No.

Jose Gotianuy is a co-payee of the checks deposited in China Bank hence, he is deemed
also a depositor. A depositor is one who pays money into the bank in the usual course of
business to be placed to his credit and subject to his check of the beneficiary of the funds
held by the bank as trustee. As such, no written consent from Margaret Dee is needed in
order to inquire into the said deposits. Moreover, there was no issue as to the real source
of the funds since even Marygaret Dee declared that Gotianuy was the source of the
Citibank US Dollar checks. As the owner of the funds unlawfully taken and now
deposited with the petitioner bank, Gotianuy has the right to inquire into the said deposit.
Clearly, it was not the intention of the lawmakers to perpetrate injustice when it enacted
the Bank Secrecy Law or RA 1405.

P. BSB GROUP V. SALLY GO

G.R. NO. 168644 FEBRUARY 16, 2010

Facts:
Petitioner is a duly organized domestic corporation presided by its representative, Ricardo
Bangayan, husband of herein respondent Sally Go. Respondent was employed as a cashier, and
was engaged, among others, to receive and account for the payments made by the various
customers of the company. Bangayan filed with the Manila Prosecutor’s Office a complaint for
estafa/qualified theft against respondent alleging that several checks 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. Accordingly, respondent was charged and the prosecution moved
for the issuance of subpoena duces tecum/ad testificandum against the respective managers or
records custodians of Security Bank and Asian Savings Bank. Respondent opposed and
meanwhile, prosecution was able to present in court the testimony of one Security Bank
representative. Petitioner moved to exclude the testimony but was denied by the trial court. CA
reversed and set aside the order.

Issue:
Whether or not the 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.

Ruling: YES.
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.

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, 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. 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 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.

It comes clear that the admission of testimonial and documentary evidence relative to
respondent’s Security Bank account serves no other 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 impermissible inquiry into a bank deposit account the privacy and confidentiality of which is
protected by law. On this score alone, the objection posed by respondent in her motion to
suppress should have indeed put an end to the controversy at the very first instance it was raised
before the trial court.
Q. Republic v Judge Eugenio
G.R. No. 174629, February 14, 2008

Sec. 2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank accounts
may be examined by any person, government official, bureau or offial; namely when: (1)
upon written permission of the depositor; (2) in cases of impeachment; (3) the examination of
bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of
public officials; and (4) the money deposited or invested is the subject matter of the litigation.
Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act, has been recognized
by this Court as constituting an additional exception to the rule of absolute confidentiality,
and there have been other similar recognitions as well.[

Facts: Under the authority granted by the Resolution, the AMLC filed an application to inquire
into or examine the deposits or investments of Alvarez, Trinidad, Liongson and Cheng Yong
before the RTC of Makati, Branch 138, presided by Judge (now Court of Appeals Justice) Sixto
Marella, Jr. The application was docketed as AMLC No. 05-005. The Makati RTC heard the
testimony of the Deputy Director of the AMLC, Richard David C. Funk II, and received the
documentary evidence of the AMLC. Thereafter, on 4 July 2005, the Makati RTC rendered an
Order (Makati RTC bank inquiry order) granting the AMLC the authority to inquire and examine
the subject bank accounts of Alvarez, Trinidad, Liongson and Cheng Yong, the trial court being
satisfied that there existed p]robable cause [to] believe that the deposits in various bank accounts,
details of which appear in paragraph 1 of the Application, are related to the offense of violation
of Anti-Graft and Corrupt Practices Act now the subject of criminal prosecution before the
Sandiganbayan as attested to by the Informations, Exhibits C, D, E, F, and G Pursuant to the
Makati RTC bank inquiry order, the CIS proceeded to inquire and examine the deposits,
investments and related web accounts of the four.

Meanwhile, the Special Prosecutor of the Office of the Ombudsman, Dennis Villa-Ignacio, wrote
a letter dated 2 November 2005, requesting the AMLC to investigate the accounts of Alvarez,
PIATCO, and several other entities involved in the nullified contract. The letter adverted to
probable cause to believe that the bank accounts were used in the commission of unlawful
activities that were committed a in relation to the criminal cases then pending before the
Sandiganbayan. Attached to the letter was a memorandum on why the investigation of the
[accounts] is necessary in the prosecution of the above criminal cases before the Sandiganbayan.
In response to the letter of the Special Prosecutor, the AMLC promulgated on 9 December 2005
Resolution No. 121 Series of 2005,[19] which authorized the executive director of the AMLC to
inquire into and examine the accounts named in the letter, including one maintained by Alvarez
with DBS Bank and two other accounts in the name of Cheng Yong with Metrobank. The
Resolution characterized the memorandum attached to the Special Prosecutors letter as
extensively justif[ying] the existence of probable cause that the bank accounts of the persons and
entities mentioned in the letter are related to the unlawful activity of violation of Sections 3(g)
and 3(e) of Rep. Act No. 3019, as amended.

Issue: Whether or not the bank accounts of respondents can be examined.

Held: Any exception to the rule of absolute confidentiality must be specifically legislated.
Section 2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank accounts may
be examined by any person, government official, bureau or offial; namely when: (1) upon written
permission of the depositor; (2) in cases of impeachment; (3) the examination of bank accounts
is upon order of a competent court in cases of bribery or dereliction of duty of public officials;
and (4) the money deposited or invested is the subject matter of the litigation. Section 8 of R.A.
Act No. 3019, the Anti-Graft and Corrupt Practices Act, has been recognized by this Court as
constituting an additional exception to the rule of absolute confidentiality, and there have been
other similar recognitions as well.
The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the AMLC
may inquire into a bank account upon order of any competent court in cases of violation of the
AMLA, it having been established that there is probable cause that the deposits or investments
are related to unlawful activities as defined in Section 3(i) of the law, or a money laundering
offense under Section 4 thereof. Further, in instances where there is probable cause that the
deposits or investments are related to kidnapping for ransom,[certain violations of the
Comprehensive Dangerous Drugs Act of 2002,hijacking and other violations under R.A. No.
6235, destructive arson and murder, then there is no need for the AMLC to obtain a court order
before it could inquire into such accounts. It cannot be successfully argued the proceedings
relating to the bank inquiry order under Section 11 of the AMLA is a litigation encompassed in
one of the exceptions to the Bank Secrecy Act which is when money deposited or invested is the
subject matter of the litigation. The orientation of the bank inquiry order is simply to serve as a
provisional relief or remedy. As earlier stated, the application for such does not entail a full-
blown trial. Nevertheless, just because the AMLA establishes additional exceptions to the Bank
Secrecy Act it does not mean that the later law has dispensed with the general principle
established in the older law that all deposits of whatever nature with banks or banking
institutions in the Philippines x x x are hereby considered as of an absolutely confidential
nature. Indeed, by force of statute, all bank deposits are absolutely confidential, and that nature is
unaltered even by the legislated exceptions referred to above.

A.Sps. Pereña vs. Sps. Zarate

G.R. No. 157917, August 29, 2012

FACTS:

Sps. Zarate, parents of Aaron Zarate, engaged the services of Sps. Pereña for the
adequate and safe transportation carriage of the former spouses’ son from their residence to his
school. During the effectivity of the contract of carriage, Aaron Zarate died in connection
with a vehicular/train collision which occurred while Aaron was riding the contracted
carrier. At the time of the said collision, there were no safety warning signs and
railings at the site commonly used for railroad crossing. The site of the collision was
not intended by the railroad operator for railroad crossing at the time of the collision. PNR
refused to acknowledge any liability for the collision. In Sps. Pereña’s defense, they adduces
evidence to show that they had exercised the diligence of a good father of a family in
the selection and supervision of Alfaro, the driver, by making sure that Alfaro had been issued a
driver’s license and had not been involved in any vehicular accident prior to the collision.
The RTC ruled in favor of Sps. Zarate and held the Pereñas and PNR jointly and
severally liable for the death of Aaron plus damages. The CA upheld the award for the
loss of Aaron’s earning capacity, plus damages, and the award for Attorney’s fees was deleted.
Hence, this petition.
.
ISSUE: WON the Pereñas and PNR are jointly and severally liable for damages.
HELD: YES
.
The defense of the Pereñas that they exercised the diligence of a good father of a
family has no merit because they operated as common carriers and that their
standard of care was extraordinary diligence, not the ordinary diligence of a good father
of a family. The Pereñas, acting as a common carrier, were already presumed to be
negligent at the time of the accident because death had occurred to their passenger. The
presumption for negligence, being a presumption of law, laid the burden of evidence on
their shoulders to establish that they had not been negligent. There is no question that
the Pereñas did not overturn the presumption of their negligence by credible evidence.

Their defense of having observed the diligence of a good father of a family in the selection and
supervision of their driver was not legally sufficient. PNR was also found guilty of negligence
because it did not ensure the safety of others through the placing of crossbars, signal lights,
warning signs, and other permanent safety barriers to prevent vehicles or pedestrians from
crossing there. Hence, the Pereñas and PNR should jointly and severally be liable for the death
of Aaron Zarate.

B. MINDANAO TERMINAL AND BROKERAGE SERVICE, INC.

Vs . PHOENIX ASSURANCE COMPANY OF NEW YORK/MCGEE & CO., INC.
G.R. No. 162467. May 8, 2009.

FACTS:
Del Monte Phils. Contracted Mindanao Terminal, a stevedoring company, to load and stow a
shipment of fresh green bananas and pineapples into the vessel M/V Mistrau docked at the port
Of Davao City and bound for Incheon, South Korea. The goods were insured with Phoenix
Assurance. Upon discharge of the cargo in Korea, several cartons of the fresh green bananas and
Pineapples were damaged and no longer had any commercial value. Del Monte filed an
insurance claim and was paid by Phoenix Assurance. The latter sued Mindanao Terminal for
damages before the RTC of Davao City. The RTC dismissed the complaint for lack of cause of
Action against Mindanao Terminal because its services were contracted by Del Monte and not by
The insurer; in addition to that, Mindanao had acted merely as a labor provider. The CA
reversed the ruling and held Mindanao Terminal to be liable for damages.

ISSUE/S: Whether or not Phoenix and McGee have a cause of action and whether
Mindanao Terminal is liable for not having exercise extraordinary diligence in the transport
and storage of the cargo.

HELD/RULING: No.

It was neither alleged nor proven by Phoenix and McGee that Mindanao Terminal was
bound by contractual stipulation to observe a higher degree of diligence than that required of a
good father of a family. Hence, the Supreme Court concluded that following Article 1173,
Mindanao Terminal was required to observe ordinary diligence only in loading and
stowing the cargoes of Del Monte Produce aboard M/V Mistrau. There is a distinction
between an arrastre and a stevedore.

Arrastre, a Spanish word which refers to hauling of cargo, comprehends the handling of
cargo on the wharf or between the establishment of the consignee or shipper and the ship’s
tackle. The responsibility of the arrastre operator lasts until the delivery of the cargo to the
consignee. The service is usually performed by longshoremen. On the other hand,
stevedoring refers to the handling of the cargo from the pier to the ship’s cargo hold. The
responsibility of the stevedore ends upon the loading and stowing of the cargo in the
vessel. It is not disputed that Mindanao Terminal was performing purely stevedoring
function while the private respondent in the summarized case was performing arrastre
function.