Gsis vs.

Ca
Facts:

In this case DOMSAT obtained a loan in the amount of 11 million dollars from
the banks
Banks- industrial bank of korea, tong yang merchant bank, first merchant
banking corp, land bank of the Philippines, and Westmont bank.
The purpose of the loan is the renewal of the lease or acquisition of a gorizon
satellite from intersputnik.
Part of the loan agreement was that gsis would be made a surety.
Domsat failed to make payments. Gsis was then being pressured by the
banks to make the payments for DOMSAT.
Gsis refused.
Gsis claims- that domsat did not use the loan proceeds for the payment of
rental for the satellite. Gsis further claims that domsat through Westmont
bank, transferred the 11 million dollars loan proceeds from the industrial bank
of korea to Citibank new York account of Westmont bank and from there to
the binondo branch of Westmont bank.
Due to the refusal of gsis, the banks were forced to file a complaint with the
rtc.
Gsis then requested the court to issue a subpoena duces tecum with regards
the bank accounts of DOMSAT with Westmont bank.
Initially the rtc granted the subpoena, but upon the second mr of Westmont,
this was then denied.
Documents requested by gsis:
o Ledgers of domsat with Westmont bank
o Application for cashiers check of domsat
o Ledger covering the account of Philippine agila satellite with
Westmont.
Ca ruling: that the bank accounts that is covered with the requested
subpoena is under ra 6426. As such, the accounts cannot be examined,
inquired, or looked into without the written consent of its owner
The ca further referred to the case of intengan vs ca. In that case the sc
declared that under ra 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

Issue: is the ruling of the ca correct in stating that the bank accounts in Westmont
bank is covered by the bank secrecy law?
Sc ruling: yes

The position of gsis would want the court to think that there is a conflict
between ra 1405 and ra 6426
Gsis believes that the banks account are under ra 1405.

Ra 1405o That bank deposits are thereby considered confidential and may not be
examined or inquired into y any person, government official. Bureau or
office except:
Upon written permission of the depositor
In cases of impeachment
Upon order of a competent court in the case of bribery or
dereliction of duty of public officials
When the money deposited or invested is the subject matter of
litigation
In cases of violation of AMLA
The lone exception for the bank secrecy law (ra 6426), for the none disclosure
of foreign currency deposits is disclosure upon the written permission of the
depositor.
Ra 6426 solely pertains to foreign currency deposits.
The sc stated: there is no conflict between the 2 laws.
Ra 1405 was enacted for the purpose of giving 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.
There was no distinction as to whether ra 1405 pertains to local currency or
foreign currency.
Ra 6426 on the other hand was intended to encourage deposits from foreign
lenders and investors.
Ra 6426 is a special law, while ra 1405 is a general law
Therefore, since the subject matter of the subpoena pertains to foreign
currency, then ra 6426 is applicable. Hence, gsis may not inspect such
accounts, unless the depositor would give its consent.