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.

DECISION

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.

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
₱1,534,135.50 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 ₱1,534,135.50 belonging to BSB
GROUP OF COMPANIES represented by RICARDO BANGAYAN, to the damage and prejudice of said
owner in the aforesaid amount of ₱1,534,135.50, 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 admittedly 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.

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.21The 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 case 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 ₱1,534,135.50. 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, copies 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 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.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 ₱1,534,135.50
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 check
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 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.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. 1405,39otherwise 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 legislation, 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.1avvphi1

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 principally 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 judgmentThus:

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, ₱1,000.00 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 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...
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 only 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 ₱1,534,135.50. 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 ₱1,534,135.50 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.

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.

In sum, we hold that the testimony of Marasigan on the particulars of respondent’s supposed bank
account with Security Bank and the documentary evidence represented by the checks adduced in
support thereof, are not only incompetent for being excluded by operation of R.A. No. 1405. They are
likewise irrelevant to the case, inasmuch as they do not appear to have any logical and reasonable
connection to the 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

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 87600 dated
April 20, 2005, reversing the September 13, 2004 and November 5, 2004 Orders of the Regional Trial
Court of Manila, Branch 36 in Criminal Case No. 02-202158, is AFFIRMED.

SO ORDERED.
G.R. Nos. 157294-95 November 30, 2006

JOSEPH VICTOR G. EJERCITO, Petitioner,

vs.
SANDIGANBAYAN (Special Division) and PEOPLE OF THE PHILIPPINES, Respondents.

DECISION

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 Subpoenas Duces
Tecum/Ad Testificandum, and Resolution dated March 11, 2003 denying his Motion for Reconsideration
of the first two resolutions.

The three resolutions were issued in Criminal Case No. 26558, "People of the Philippines v. Joseph
Ejercito Estrada, et al.," for plunder, defined and penalized in R.A. 7080, "AN ACT DEFINING AND
PENALIZING THE CRIME OF PLUNDER."

In above-stated case of People v. Estrada, et al., the Special Prosecution Panel1 filed on January 20, 2003
before the Sandiganbayan a Request for Issuance of Subpoena Duces Tecum 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 the following documents during the hearings scheduled on
January 22 and 27, 2003:

I. For Trust Account No. 858;

1. Account Opening Documents;

2. Trading Order No. 020385 dated January 29, 1999;

3. Confirmation Advice TA 858;

4. Original/Microfilm copies, including the dorsal side, of the following:

a. Bank of Commerce MC # 0256254 in the amount of ₱2,000,000.00;

b. Urban bank Corp. MC # 34181 dated November 8, 1999 in the amount of

P10,875,749.43;

c. Urban Bank MC # 34182 dated November 8, 1999 in the amount of ₱42,716,554.22;

d. Urban Bank Corp. MC # 37661 dated November 23, 1999 in the amount of
₱54,161,496.52;
 5. Trust Agreement dated January 1999:

Trustee: Joseph Victor C. Ejercito

Nominee: URBAN BANK-TRUST DEPARTMENT

Special Private Account No. (SPAN) 858; and

6. Ledger of the SPAN # 858.

II. For Savings Account No. 0116-17345-9

SPAN No. 858

1. Signature Cards; and

2. Statement of Account/Ledger

III. Urban Bank Manager’s Check and their corresponding Urban Bank Manager’s Check Application
Forms, as follows:

1. MC # 039975 dated January 18, 2000 in the amount of ₱70,000,000.00;

2. MC # 039976 dated January 18, 2000 in the amount of ₱2,000,000.00;

3. MC # 039977 dated January 18, 2000 in the amount of ₱2,000,000.00;

4. MC # 039978 dated January 18, 2000 in the amount of ₱1,000,000.00;

The Special Prosecution Panel also filed on January 20, 2003, a Request for Issuance of Subpoena Duces
Tecum/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 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.

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.

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 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
President of the EIB to produce, on the hearings scheduled on February 3 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 ₱2,000,000 as Bank of Commerce MC #0256256 in the
amount of ₱200,000,000 was instead requested. Moreover, the request covered the following
additional documents:

IV. For Savings Account No. 1701-00646-1:

1. Account Opening Forms;

2. Specimen Signature Card/s; and

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. Letter of authority dated November 23, 1999 re: SPAN [Special Private Account Number] 858;

2. Letter of authority dated January 29, 2000 re: SPAN 858;

3. Letter of authority dated April 24, 2000 re: SPAN 858;

4. Urban Bank check no. 052092 dated April 24, 2000 for the amount of P36, 572, 315.43;

5. Urban Bank check no. 052093 dated April 24, 2000 for the amount of P107,191,780.85; and

6. Signature Card Savings Account No. 0116-17345-9. (Underscoring supplied)

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:

1. Whether petitioner’s Trust Account No. 858 is covered by the term "deposit" as used in R.A.
1405;

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. Whether 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.

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. (Underscoring 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.

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 underscoring 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.

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.

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 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 underscoring 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:

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) Through misappropriation, conversion, misuse, or malversation of public funds or raids on the

public treasury;

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) 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) 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) By establishing agricultural, industrial or commercial monopolies or other combinations

and/or implementation of decrees and orders intended to benefit particular persons or special
interests; or

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 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 examination of the
bank accounts where part of the money was subsequently 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 underscoring 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 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. (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."

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 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, directing 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. 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. 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. 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 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.

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 beforeMarquez 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 prospectivelyand should not apply to parties who relied on the old doctrine and
acted in good faith. (Emphasis and underscoring 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. Purisima17.

Banco Filipino involved subpoenas duces tecum issued by the Office of the Ombudsman, then known as
the Tanodbayan,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

(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:

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 Galithave 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 Melendrez, Peach Osorio, Rowena Lopez, Kevin or Kelvin
Garcia, 727, 737, 747, 757, 777 and 858. (Emphasis and underscoring 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.1âwphi1

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 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. 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 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.

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.

CONCHITA CARPIO MORALES

Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice

REYNATO S. PUNO CONSUELO YNARES-SANTIAGO

Associate Justice Associate Justice

LEONARDO A. QUISUMBING ANGELINA SANDOVAL-GUTIERREZ

Associate Justice Associate Justice

ANTONIO T. CARPIO MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice Associate Justice

RENATO C. CORONA ADOLFO S. AZCUNA

Associate Justice Associate Justice

ROMEO J. CALLEJO, SR. DANTE O. TINGA

Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO CANCIO C. GARCIA

 Associate Justice Associate Justice

PRESBITERO J. VELASCO, JR.

Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the
above Decision were reached in consultation before the case was assigned to the writer of the opinion
of the Court.

ARTEMIO V. PANGANIBAN
Chief Justice

Footnotes

1
Composed of the Ombudsman, the Special Prosecutor, Deputy Special Prosecutor, Assistant
Ombudsman, Special Prosecution Officer III, and Special Prosecution Officer II, (Rollo, pp. 492-
493).

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)

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.

4
Rollo, p. 171

5
Respondent People of the Philippines argue on the premise that Trust Account No. 858 covers
Savings Account No. 0116-17345-9.

6
Rollo, p. 708.

7
122 Phil. 503, 508 (1965).

8
Philippine National Bank v. Gancayco, supra at note 7.

9
378 Phil. 1177, 1182-1183 (1999).

10
412 Phil. 387, 397 (2001).

11
780 F.2d 1461 (1986).

12
936 F.2d 1249 (1991).

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 (1995)].

14
Rollo, pp. 439- 442.

15
"As clarified by the prosecution, the documents listed in the request 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 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.

18
Section 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." (Underscoring
supplied)

19
Vide note 18.

20
Supra at 582.

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, restricted the Ombudsman’s power x x x." (Underscoring supplied)

22
G.R. No. 69971, July 3, 1992, 211 SCRA 36, 49-50, reiterated in Filoteo v. Sandiganbayan, 331
Phil. 531, 573 (1996).

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).

The Lawphil Project - Arellano Law Foundation

CONCURRING OPINION

CALLEJO, SR., J.

I concur in the encompassing ponencia of our esteemed colleague Mme. Justice Conchita Carpio-
Morales, however, I find it imperative to submit my concurring opinion and elucidate on the basis
thereof.

The basic factual and procedural antecedents of the case are restated as follows:

In connection with Criminal Cases Nos. 26558 (Plunder) and 26565 (Illegal Use of Alias) filed against
former President Joseph Ejercito Estrada, and upon the written requests of the Special Prosecution
Panel, the Sandiganbayan issued the subpoenae duces tecum/ad testificandum dated January 21 and 24,
2003 addressed to the respective Presidents of the Export and Industry Bank (EIB, formerly Urban Bank
and Urbancorp Investment, Inc.) and Equitable-PCIBank. The subpoenas directed the said officers, or
their authorized representatives, to appear before the Sandiganbayan and bring with them documents,
among others, pertaining to Trust Account No. 858 (with Urban Bank) and Savings Account No. 0116-
17345-9 (also with Urban Bank), both in the name of petitioner Joseph Victor (JV) G. Ejercito.
The written requests of the Special Prosecution Panel enumerated the following documents to be
subpoenaed as follows:

I. For Trust Account No. 858:

1. Account Opening Documents;

2. Trading Order No. 020385, dated January 29, 1999;

3. Confirmation Advice TA 858;

4. Original/Microfilm copies, including the dorsal side of the following:

a) Bank of Commerce MC#0256254 in the amount of ₱2,000,000;

b) Urban Bank Corp. MC#34181 dated November 8, 1999 in the amount of

₱10,875,749.43;

c) Urban Bank MC#34182 dated November 8, 1999 in the amount of

₱42,716,554.22;

d) Urban Bank MC#37661 dated November 23, 1999 in the amount of

₱54,161,496.52;

5. Trust Agreement dated January 1999

Trustee: Joseph Victor C. Ejercito

Nominee: URBAN BANK-TRUST DEPARTMENT

Special Private Account No. (SPAN) 858; and

6. Ledger of the Span #858

II. For Savings Account No. 0116-17345-9

SPAN #858

1. signature cards; and

2. statement of account/ledger

III Urban Bank Manager’s Check and their corresponding Urban Bank’s Check Application Form
as follows:

1. MC#039975 dated January 18, 2000 in the amount of ₱70,000,000.00;

 2. MC#039976 dated January 18, 2000 in the amount of ₱2,000,000.00;

3. MC#039977 dated January 18, 2000 in the amount of ₱2,000,000.00; and

4. MC#039978 dated January 18, 2000 in the amount of ₱1,000,000.00.

Claiming to have learned about the subpoenae duces tecum/ad testificandum only through news
reports, petitioner JV Ejercito filed motions to quash them alleging that (a) they violated the bank
secrecy laws (Republic Act No. 14051 as amended by Presidential Decree No. 1792 and Republic Act
8791); (b) his case is not one of the recognized exceptions enumerated in the said laws as he is not an
accused in the plunder and illegal use of alias cases; (c) there appears to be a conspiracy between the
bank officials and the prosecution to violate the bank secrecy laws as the requests for the subpoenas
contained particulars which could have been known only if the bank had released in advance the
information containing the details of his bank accounts; (d) under Republic Act No. 30192 inquiry by
subpoena into bank deposits can only be had if it was established that: (1) the accused public official has
been found to have acquired during his incumbency an amount of property manifestly out of proportion
to his salary; (2) the ownership of the property unlawfully acquired is concealed by recording the same
in the name of friends or relatives; and (3) the acquisition through legitimate means of the money so
deposited cannot be satisfactorily shown.

Former President Estrada for himself likewise moved for the quashal of the subpoenas on the same
grounds relied upon by petitioner JV Ejercito and, additionally, that the documents sought were not
relevant to the amended information against him.

Acting thereon, the Sandiganbayan issued the assailed Resolution dated February 7, 2003, denying the
motions to quash the subpoenas holding that its issuance of the same properly falls under one of the
exceptions to the bank secrecy laws, particularly the clause in Section 2 of Republic Act (RA) 1405 thus:
"upon order of a competent court in cases of bribery or dereliction of duty of public officials." The
Sandiganbayan reasoned that the crime of plunder was analogous to the said cases. It opined that the
fact that petitioner JV Ejercito was not an accused in the plunder cases was of no moment because RA
3019 allows the inquiry into the bank deposits not only of the accused public official but also those of his
spouse and children. Further, whether or not the amount of deposits was manifestly out of proportion
to the income need not be proved first before inquiry could be had on the bank deposits, rather such
inquiry could be used in proving the case.

The Sandiganbayan also held that petitioner JV Ejercito’s reliance on Marquez v. Desierto3 was
misplaced. In Marquez, the Court disallowed the in camera inspection of accounts in connection with a
case pending before the Ombudsman. In the present case, however, the Sandiganbayan held that there
was precisely a pending case before it, a competent court within the meaning of the exception to the
bank secrecy laws. The Sandiganbayan also pointed out that there was nothing irregular in the issuance
of the subpoenas because it was not required that the other party be notified of such requests. No
violation of due process resulted by such lack of notice since the other parties would have ample
opportunity to examine the witnesses and documents subpoenaed once they are presented in court.

A similar motion was filed by petitioner JV Ejercito involving the subpoenae duces tecum/ad
testificandum issued to the representative of the Urban Bank and Mrs. Aurora Baldoz of the Philippine
Deposit Insurance Commission (PDIC). The said motion was denied by Sandiganbayan in the assailed
Resolution dated February 12, 2003. The motions for reconsideration were denied in the assailed
Resolution dated March 11, 2003.

Petitioner JV Ejercito now comes to the Court assailing the Sandiganbayan’s resolutions denying his
motions to quash the subpoenae duces tecum/ad testificandum.

As the petitioner himself submits, the following are the issues for the Court’s resolution:

WHETHER OR NOT RESPONDENT COURT ACTED IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION IN RULING THAT THE SUBPOENA ON PETITIONER’S BANK ACCOUNTS FALLS UNDER THE
EXCEPTIONS PROVIDED UNDER R.A. NO. 1405

WHETHER OR NOT RESPONDENT COURT ACTED IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION IN RULING THAT THE CASES OF PNB VS. GANCAYCO AND BANCO FILIPINO VS. PURISIMA
ARE APPLICABLE TO THE INSTANT CASE

WHETHER OR NOT RESPONDENT COURT ACTED IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION IN RULING THAT THE MARQUEZ VS. DESIERTO CASE IS NOT APPLICABLE TO THE INSTANT
CASE.4

The petitioner does not deny his ownership of Trust Account No. 858 and Savings Account No. 0116-
17345-9. In fact, he expressly admits the same and even explains that these were originally opened at
Urban Bank but are now maintained at Export and Industry Bank.5

The petitioner argues that his accounts do not fall under any of the exceptions enumerated under
Section 2 of RA 1405. The said provision 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 an absolutely confidential nature and may not be
examined, inquired or looked into by any person, government official, bureau or office, except, when
the examination is made in the course of a special or general examination of a bank and 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, or when the examination is 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, or upon written
permission of the depositor, or in case 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 litigation. (As amended by PD No. 1792)

Based on this provision, it has been declared that bank deposits are absolutely confidential except in the
following instances:

(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 litigation.6

The petitioner points out that one of the exceptions mentioned is "upon order of a competent court in
cases of bribery or dereliction of duty of public officials." Since the cases filed against his father, former
President Estrada, are not for these crimes but for plunder and illegal use of alias, then the said
exception does not allegedly apply. Further, his accounts do not fall under exception (6) as they are not
allegedly "subject matter of litigation."

This argument of the petitioner is not persuasive. Former President Estrada is being charged with
plunder as defined and penalized under Section 2 of RA 7080,7 to wit:

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 Fifty
million pesos (₱50,000,000.00) shall be guilty of the crime of plunder and shall be punished by reclusion
perpetua to death. Any person who participated with the said public officer in the commission of an
offense contributing to the crime of plunder shall likewise be punished for such offense. In the
imposition of penalties, the degree of participation and the attendance of mitigating and extenuating
circumstances, as provided by the Revised Penal Code, shall be considered by the court. The court shall
declare any and all ill-gotten wealth and their interest and other incomes and assets including the
properties and shares of stocks derived from the deposit or investment thereof forfeited in favor of the
State. (As amended by Sec. 12, RA 7659).

Section 1(d) of the same law defines "ill-gotten wealth" as "any asset, property, business enterprise or
material possession of any person within the purview of Section 2 thereof, 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. Through misappropriation, conversion, misuse or malversation of public funds or raids on the

public treasury;
 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. 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. By obtaining, receiving or accepting directly or indirectly any shares of stock, equity or any
other form of interest or participation including the promise of future employment in any
business enterprise or undertaking;

5. By establishing agricultural, industrial or commercial monopolies or other combination and/or

implementation of decrees and others intended to benefit particular persons or special
interests; or

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.

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,8 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."9

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."10 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.

The petitioner next contends that Gancayco and Banco Filipino Savings v. Purisima,11 insofar as they
expounded Section 8 of RA 3019 are not applicable to his case. He reasons that in these cases, when the
subpoenas subject thereof were issued, the text of Section 8 of RA 3019 provided that: "x x x Properties
in the name of the spouse and unmarried children of such public official may be taken into consideration
x x x. Bank deposits shall be taken into consideration in the enforcement of this section, notwithstanding
any provision of law to the contrary notwithstanding."

On the other hand, Section 8 of RA 3019, as presently worded upon its amendment by Batas Pambansa
Blg. 195 on March 16, 1986, reads:

SEC. 8. Prima facie evidence of and dismissal due to unexplained wealth. – If in accordance with the
provisions of Republic Act Numbered One thousand three hundred seventy-nine, a public official has
been found to have acquired during his incumbency, whether in his name or in the name of other
persons, an amount of property and/or money manifestly out of proportion to his salary and to his other
lawful income, that fact shall be a ground for dismissal or removal. Properties in the name of the spouse
and dependents of such public official may be taken into consideration, when their acquisition through
legitimate means cannot be satisfactorily shown. Bank deposits in the name of or manifestly excessive
expenditures incurred by the public official, his spouse or any of their dependents including but not
limited to activities in any club or association or any ostentatious display of wealth including frequent
travel abroad of a non-official character by any public official when such activities entail expenses
evidently out of proportion to legitimate income, shall likewise be taken into consideration in the
enforcement of this section, notwithstanding any provision of law to the contrary. The circumstances
hereinabove mentioned shall constitute valid ground for the administrative suspension of the public
official concerned for an indefinite period until the investigation of the unexplained wealth is completed.

The petitioner theorizes that prior to the amendment, the following may be taken into consideration in
the enforcement of Section 8 of RA 3019:

c) properties in the name of the spouse and unmarried children of the public official; and

d) bank deposits (without any qualification by law).12

After its amendment on March 16, 1982, the following may allegedly be taken into consideration in the
enforcement of Section 8 of RA 3019:

c) properties in the name of the spouse and dependents of the public official; and

d) bank deposits in the name of the public official, his spouse or any of their dependents.13

According to the petitioner, although he is the son of former President Estrada, he is absolutely not his
dependent. Petitioner avers that he is in his own right a legitimate businessman having investments in
several entities when he opened the subject accounts in Urban Bank, now Export and Industry Bank.
Further, he is also the Municipal Mayor of San Juan, Manila. He thus urges the Court against applying
the rulings in Gancayco and Banco Filipino in the light of the amendment of Section 8 of RA 3019.

The petitioner’s contention is equally unpersuasive. It should be recalled that the petitioner in Banco
Filipino posited that the inquiry into illegally acquired property should be restricted to property held by
or in the name of the government official or employee or his spouses and unmarried children. The Court
rejected this argument as it pronounced that:

To sustain the petitioner’s theory, and restrict the inquiry only to property held by or in the name of the
government official or employee, or his spouse and unmarried children is unwarranted in the light of the
provisions of the statutes in question, and would make available to persons in government who illegally
acquired property an easy and fool-proof means of evading investigation and prosecution; all they
would have to do would be to simply place the property in the possession or name of persons other
than their spouse and unmarried children. This is an absurdity that we will not ascribe to the
lawmakers.14
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
₱107,191,780.85 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.

Viewed in this context, the petitioner’s assertion that since he is no longer a dependent of his father,
then the rulings in Gancayco and Banco Filipino are not applicable to his case is, to say the least, quite
lame. In fact, to sustain his theory would, as the Court stated in Banco Filipino, "make available to
persons in government who illegally acquired property an easy and fool-proof means of evading
investigation and prosecution; all they would have to do would be to simply place the property in the
possession or name of persons other than their spouse and unmarried children. This is an absurdity that
we will not ascribe to the lawmakers."15

The petitioner bewails the "extremely-detailed" information contained in the Special Prosecution
Panel’s requests for the subpoenae duces tecum/ad testificandum. The information upon which the
requests were based was allegedly illegally and improperly obtained.

The petitioner opines that there had been prior disclosure by the bank and its personnel of data and
information relative to his trust and savings accounts considering the very detailed information
contained in the request for the subpoenas, to wit:

a) Trading Order No. 020385 dated January 29, 1999;

b) Confirmation Advice TA 858;

c) Trust Agreement dated January 1999;

d) Special Private Account No. (SPAN) 858;

e) Savings Account No. 0116-17345-9;

f) Letter of authority dated November 23, 1999 re:SPAN 858;

g) Letter of authority dated January 29, 2000 re: SPAN 858;

h) Letter of authority dated April 24, 2000 re: SPAN 858;

i) Urban Bank check no. 052092 dated April 24, 2000 for the amount of ₱36,572,315.43;
 j) Urban Bank check no. 052093 dated April 24, 2000 the amount of ₱107,191,780.85.

According to the petitioner, the bank officials and personnel are criminally liable for releasing, without
his knowledge, consent and authorization, information relative to his accounts to the prosecution.
Further, since the information used to support the requests for the subpoenas was not secured by court
order, such information was illegally acquired and the requests for subpoenas containing the said
illegally acquired information are already a direct violation of RA 1405. Consequently, such illegally
acquired information cannot be used in any proceeding. He invokes the constitutional provision on the
right of the people to be secure in their persons, houses, papers and effects against unreasonable
searches and seizures of whatever nature and purpose and that any evidence obtained in violation
thereof shall be inadmissible in evidence.16

The petitioner cites the following pronouncement of the Court in Marquez:

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
communication. 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.17

A review of the incidents related to the present case will show why the petitioner’s reliance on Marquez
is misplaced. In the said case, the Office of the Ombudsman issued a subpoena addressed to Marquez, a
bank officer of Union Bank, directing her to bring several bank documents for in camera inspection in
connection with an investigation being conducted by the Office of the Ombudsman.

Marquez refused to comply with the said directive and sought recourse to the Court by filing a petition
and raising therein the issue of whether the order of the Office of the Ombudsman to have an in camera
inspection of the questioned account was allowed as an exception to the law on secrecy of bank
deposits.

According to the Court, notwithstanding Section 15(8) 18 of RA 6770 (The Ombudsman Act), "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."19

Marquez was promulgated by the Court on June 27, 2001. However, as early as February 8, 2001 or
before the promulgation of Marquez, the Office of the Ombudsman, relying on Section 15(8) of RA 6770
and on the basis of information obtained during the impeachment proceedings of former President
Estrada, issued a subpoena addressed to Urban Bank. The documents sought under the subpoena
pertained to numbered accounts 727, 737, 747, 757 and 858 allegedly in the names of Jose Velarde,
Joseph E. Estrada, Laarni Enriquez, Guia Gomez, Joy Melendrez, Peachy Osorio, Rowena Lopez, Kevin or
Kelvin Garcia.

In compliance with the said subpoena, the PDIC, as then receiver of Urban Bank, issued a certification on
February 13, 2001, 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. Based on the PDIC
certification, the Office of the Ombudsman issued on February 16, 2001 another subpoena directing the
production of documents pertinent to accounts A/C 858 and T/C 858. The PDIC again complied and
furnished the Office of the Ombudsman on February 21, 2001 certified copies of the following
documents:

1. Transaction registers dated 7-02-99, 8-16-99, 9-17-99, 10-18-99, 11-22-99,1-07-00, 01-17-00,

04-03-00 and 04-24-00;

2. Report of Unregularized TAFs & DTs For UR COIN A & B Placements of Various Branches as of
February 29, 2000 and as of December 16, 1999; and

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")20

Upon the request of the Office of the Ombudsman, the PDIC furnished the said office copies of the
manager’s checks. With respect to the other documents described by petitioner JV Ejercito as
"extremely-detailed," the Special Prosecution Panel explains how they came to know about these
documents in this manner:

What is more, Attachment "2-a," the compliance letter from the PDIC, specifically mentioned, as among
the documents transmitted thereby, a LIST (Attachment "2-B") pertaining to the documents available in
connection with Account No. 858, which list and documents (listed therein) were furnished the Office of
the Ombudsman:

In compliance with the Subpoena Duces Tecum dated February 8, 2001 issued by the Office of the
Ombudsman, transmitted are:

1. Certification on available bank documents relating to A/C 858 and T/A 858 contained in a list attached
thereto xxx (emphasis supplied)

There is a list, therefor, apart from the documents themselves (furnished the Office of the Ombudsman)
to which said list is attached, from which details can be lifted. Thus, as to Trading Order No. 020385
dated January 29, 1999, it must be noted that it is the second item in the list (Attachment "2-b" hereof)
under document no. A-2. It is also among the documents furnished by the PDIC.
As to Confirmation Advice TA 858, it must be noted that this is a specific but not detailed document
being sought in the subpoena regarding Account No. 858, in general. For those familiar with banking
practice, such is an expected document of course, or one issued in the course of placements since it has
been previously established that Account No. 858 is a Trust Account. A confirmation advice, therefore, is
a reasonable and expected document to be found in trust accounts to evidence participation in specific
amounts. A sample of said confirmation advice, in the amount of ₱200 Million, and which is among the
documents officially furnished the Office of the Ombudsman during the investigation leading to the
charge for plunder against former President Joseph Estrada, et al., is attached as Attachment "36."

Further, the list (Attachment "2-b" hereof) enumerates a number of confirmation advices sufficient for
the plaintiff to ask for the same in the instant subpoena. However, as earlier explained, even in the
absence of such a list, any person could reasonably expect such a document in Trust Account No. 858 to
evidence participation.

As to the Trust Agreement dated January 1999, since the account had been established as a Trust
Account, it is reasonable to presume and expect that there is such a Trust Agreement on or about
January 1999, coinciding with the date of the Trading Order, existing in the records.

Surely, this needs no stretch of imagination to reckon that such a document should exist in a truth
account.

As to Special Private Account No. (SPAN) 858, SPAN 858 is yet another detail derived from a study of the
documents and list furnished by the PDIC to the Office of the Ombudsman. For example, document no.
C-2 in the list would yield a Trading Order No. 046352 for ₱40 Million with the customer being identified
as SPAN 858.

As to Savings Account No. 0116-17345-9, again, among the documents furnished by the receiver of
Urban Bank to the Office of the Ombudsman pursuant to its constitutional powers is a copy of the
Specimen Signature Card for SPAN 858, opened on March 9, 1999 under Account No. 0116-17345-9. It
must be emphasized that Account No. 0116-17345-9 is an entry in the said document.

As to the Letter of Authority dated November 23, 1999 re: SPAN 858, it is document no. E-3 in the list.

It must be emphasized that this letter of authority dated November 23, 1999 authorized the release of
more than ₱100 Million worth of manager’s checks, where the ultimate recipient, for its deposit to the
Jose Velarde account was, Baby Ortaliza. It must be recalled that prosecution witnesses Teresa
Barcelona and Glyzelyn H. Bejec testified that it was Ortaliza who deposited the manager’s checks
subject of the letter of authority dated November 23, 1999 to the Jose Velarde account via Equitable
PCIBank Greenhills Branch.

It must be recalled that plaintiff has presented voluminous evidence to establish beyond any doubt that
Lucena "Baby" Ortaliza worked for accused Joseph Estrada in the Office of the Vice President, as
testified to by prosecution witness Remedios Aguilar of the Office of the Vice President. The same fact is
also shown by Exhibits "Y5," "Z5," "A6" (Ortaliza’s appoint papers designating her as Vice-Presidential
Staff Officer II signed by then Vice President Jose Estrada), "B6" (Certification of Employment), "C6" (Oath
of Office), "D6" (Position Description Form), "E6" (Notice of Salary Adjustment) "F6" (Certification) and
"G6" (Personal Data Sheet). Ortaliza also worked for accused Joseph Estrada at the Office of the
President as testified to by witness Lita Sison of the Office of the President and as proved by Exhibits "I6"
(Master Personnel Records File), "H6" (Registration letter of Ortaliza from the Office of the President),
"J6" (Personnel Assessment Form), "K6" (appointment papers designating her as Presidential Staff Officer
VI, Internal House, signed by then President Joseph Estrada), "L6" (Oath of Office), "M6" (Certification of
Employment), "N6" (Position Description Form), "O6" (Personal Data Sheet) and "P6" (Ortaliza’s public
service record). The same "Baby" Ortaliza also transacted on behalf of former President Joseph Estrada
with respect to his personal bank accounts. Indeed, Baby Ortaliza, as testified to by numerous
prosecution witnesses and as shown by the documents they identified, is also the same person who
transacted with Equitable PCIBank in connection with the Jose Velarde account and with Citibank in
connection with the conjugal bank account of former President Joseph Estrada and Sen. Luisa Ejercito
wherein the ₱8 Million check of Gov. Luis "Chavit" Singson was deposited. In addition to the foregoing
and the testimonies of Clarissa Ocampo and Manuel Curato of Equitable PCIBank, the documents
relating to Trust Account No. 858, thus, constitute further proof that accused Joseph Estrada is Jose
Velarde.

Indeed, the surfacing of the name Baby Ortaliza in this Account No. 858 and her participation herein,
coupled with the previous evidence presented as to who she worked for, all the more make Trust
Account No. 858 not only relevant and material, but also the very subject matter of litigation in the
instant case. Indeed, her participation herein more than establishes a pattern of behavior, a custom, a
modus operandi among accused Joseph Estrada, herself and the other co-accused in appearing for,
representing, accused Joseph Estrada and transacting with respect to his bank accounts.

As to Letter of Authority dated January 17, 2000 re SPAN 858, it is document no. E-4 in the list.

As to Letter of Authority dated April 24, 2000 re: SPAN 858, it is document no. E-5 in the list.

As to Urban Bank Check No. 052093 dated April 24, 2000 in the amount of P36,572,315.43 and Urban
Bank Check No. 052093 dated April 24, 2000 in the amount of ₱107,191,780.85, the foregoing details
were culled from the contents of the letter of authority dated April 24, 2000. Indeed, said letter of
authority authorizes the issuance of manager’s checks in accordance with the details therein provided:

1) AMOUNT :PHP107,191,780.85

DATE :APRIL 24, 2000

PAYEE :CASH

MC # :052093

2) AMOUNT :PHP36,572,315.43

DATE :APRIL 24, 2000

PAYEE :CASH

MC# :052092
It must be emphasized that the foregoing details were adopted in seeking for the production of the two
(2) Urban Bank manager’s checks.21

As shown by the Special Prosecution Panel, some of the details about the accounts of petitioner JV
Ejercito were obtained from various sources gathered during the impeachment proceedings against
former President Estrada. The various sources included reports, articles and investigative journals, which
are legitimate sources.

The other details were gathered upon compliance by the PDIC and/or Urban Bank with the subpoenas
issued by the Office of the Ombudsman prior to the promulgation by the Court of Marquez. The Office
of the Ombudsman, in issuing the subpoenas relied on Section 15(8) of RA 6770 giving it the power "to
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."

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,22 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.23

Contrary to the petitioner’s contention, therefore, the "extremely-detailed" information of the Office of
the Ombudsman on which it based its requests for subpoenae duces tecum/ad testificandum can hardly
be characterized as "illegal." In any case, even if Marquez were to be given retroactive application, still,
the crux of the Court’s ruling in the said case has no application to the present case. In Marquez, the
Court disallowed the Ombudsman from conducting an in camera inspection of the bank account
because "there was no pending case in court which would warrant the opening of the bank account for
inspection."

On the other hand, it is indubitable that in the present case, the plunder and illegal use of alias cases
against former President Estrada are pending before the Sandiganbayan and, unlike in Marquez, the
Special Prosecution Panel has asked leave of court in accordance with RA 1405 for the production of the
said documents. Consequently, the subpoenae duces tecum/ad testificandum issued by the
Sandiganbayan are allowable exceptions to the bank secrecy laws as they properly fall under the
following categories in Section 2 thereof:

(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 litigation.24

Finally, the petitioner has sought to suppress the "extremely-detailed" information that the Special
Prosecution Panel has requested. He invokes his constitutional right against unreasonable search and
seizures and that any evidence obtained in violation thereof shall be inadmissible in evidence. In her
concurring and dissenting opinion, Mme. Justice Angelina Sandoval-Gutierrez agrees with petitioner JV
Ejercito as she supports his plea to quash the subpoenae duces tecum/ad testificandum issued by the
Sandiganbayan characterizing them as "unreasonable and oppressive" for being based on information
allegedly obtained in violation of his constitutional right to privacy.

To my mind, the application of the exclusionary rule or the "fruit of the poisonous tree" doctrine is not
warranted in the present case not only because, as discussed earlier, there is no "illegally obtained
evidence" to speak of but also because nowhere is it stated in RA 1405, and even in Marquez, that a
violation thereof warrants application of the exclusionary rule. Section 5 of RA 1405 provides 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."

Interestingly, the United States has the Bank Secrecy Act (BSA).25 However, unlike RA 1405, the US BSA
was precisely enacted by the US Congress as a means of providing federal law investigators with an
effective tool to fight criminal financial activity:

The conclusion reached by Congress in the early hearings was summarized by Robert Morgenthau, U.S.
Attorney, Southern District of New York, "Secret numbered foreign bank accounts have become an ever
increasing widespread and versatile tool for the evasion of our laws and regulations and for the
commission of crimes by American citizens and for hiding the fruits of crimes already committed.

This wave of criminal activity is fostered by the failure of fairly complete criminal investigations to ripen
into prosecutions because there has been no disclosure of the real parties in interest; investigators
cannot point to any particular individual. Even if identity is revealed, the evidence remains inadmissible
hearsay. Most modern secrecy law prohibits the banker from coming forth with the disclosure. Thus, the
prosecution lacks the competent and qualified business representative who could state evidence of
account information as a business records exception to the hearsay rule.

In response to the public outcry over this reported criminal activity and as a means of providing federal
law investigators with an effective investigative tool, Congress enacted the Bank Secrecy Act (BSA).26

The important feature of the BSA is its regulatory structure that is designed to be used as an
investigative tool in the fight against white collar crime, and its passage is a broad delegation of
commerce power to the Treasury Department. Title I thereof authorizes the Secretary of the Treasury
Department to require financial institutions to record vast amounts of information on financial
transactions. Title II provides a regulatory access to information via required reporting by the financial
institutions and expressly authorized governmental interagency exchange of the accessed information.27

In California Bankers Association v. Schulz,28 the US Supreme Court held that the BSA is a constitutionally
valid and proper regulatory device. In United States v. Miller,29 the US Supreme Court reaffirmed its
stance by holding that government access to a customer account records is not an unreasonable search
and seizure even if realized through defective legal process and without customer notification.
Miller was convicted of operating an illegal still, functioning as a distiller without having posted bond,
and committing tax evasion. The convictions were based on evidence subpoenaed pursuant to the BSA.
Miller moved to suppress the bank records on the grounds that they were obtained by means of a
defective subpoena duces tecum which resulted in a seizure violative of the fourth amendment.

The US Supreme Court held that Miller had no "protectable" fourth amendment interest in the
subpoenaed documents. Justice Powell, speaking for the US Supreme Court, reasoned that the
subpoenaed documents were not Miller’s "private papers" and that he could assert neither ownership
nor possession. Rather, these were the business records of the bank.

The said Court also debunked Miller’s claim that he had a legitimate "expectation of privacy" concerning
the contents of the bank documents, e.g., checks and deposit slips:

Even if we direct our attention to the original checks and deposit slips, rather than to the microfilm
copies actually viewed and obtained by means of the subpoena, we perceive no legitimate "expectation
of privacy" in their contents. The checks are not confidential communications but negotiable
instruments to be used in commercial transactions. All of the documents obtained, including financial
statements and deposit slips, contain only information voluntarily conveyed to the banks and exposed
to their employees in the ordinary course of business. The lack of any legitimate expectation of privacy
concerning the information kept in bank records was assumed by Congress in enacting the Bank Secrecy
Act, the express purpose of which is to require records to be maintained because they "have a high
degree of usefulness in criminal tax, and regulatory investigations and proceedings."

The depositor takes the risk, in revealing his affairs to another, that the information will be conveyed by
that person to the Government. The Court has held repeatedly that the Fourth Amendment does not
prohibit the obtaining of information revealed to a third party and conveyed by him to Government
authorities, even if the information is revealed on the assumption that it will be used only for a limited
purpose and the confidence placed in the third party will not be betrayed.30

Because the customer had no "protectable" fourth amendment rights, according to the US Supreme
Court, the case was controlled by the general rule that a subpoena issued to a third party, for that
party’s records, does not violate the rights of the third party’s client.

Largely in response to Miller and California Bankers, the US Congress enacted the Right to Financial
Privacy Act of 1978 (RFPA).31 It enumerates the legal processes available for federal agency access to
customer’s account information. Access is conditioned upon one of the following procedures: customer
authorization,32 administrative subpoena or summons,33 search warrant,34 judicial subpoena,35 grand
jury subpoena,36 or formal written agency request.37

Case law provides, however, that a violation of the procedures set forth in RFPA does not warrant
exclusion of the evidence obtained because courts should not imply a suppression remedy unless the
statute expressly refers to the exclusionary rule. The RFPA states that civil penalties are the only
authorized remedy for its violation.38 In United States v. Frazin,39 for example, Frazin and Miller were
charged with mail and wire fraud. During its investigation, banks furnished the Federal Bureau of
Investigation (FBI) information about the account of Frazin without his knowledge or consent and
without warrant. Frazin sought to suppress the bank records and other information obtained in violation
of RFPA. The United States Court of Appeals, Ninth Circuit, held against Frazin ratiocinating that had
Congress intended to authorize a suppression remedy, it surely would have included it among the
remedies it expressly authorized. The said US appellate court likewise refused to suppress the financial
evidence pursuant to its supervisory powers over the administration of justice. It opined that "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 where we to authorize a remedy not provided for by the
statute."

The said ruling in Frazin was reiterated by the US Court of Appeals, Second Circuit, in United States v.
Daccarett,40a civil forfeiture proceeding instituted by the United States Government against monies of
Cali cartel, a Colombian conglomerate headed by Jose Santacruz-Londono, which allegedly imported
3000 kilograms of cocaine a month into the US. The cartel allegedly used bank accounts throughout the
US, Europe, Central and South America to store and move its narcotic proceeds. Funds were moved
through various international banks by means of electronic fund transfers for ultimate deposit into
Colombian bank accounts.

Several associates of Santacruz-Londono were arrested in Luxembourg. Anticipating that the arrests
would trigger an effort by the cartel to move its monies to Colombia, the Luxembourg law enforcement
authorities requested the assistance of several countries to freeze monies related to the cartel. The US
Drug Enforcement Agency (DEA) instructed intermediary banks in New York to attach "all funds" on
deposit in the names of entities and individuals connected with Santacruz-Londono. The DEA also
subpoenaed from the intermediary banks financial records of related accounts.

The entities and individuals who claimed to be the beneficiaries of the seized funds argued, among
others, that their fourth amendment rights against unreasonable searches and seizures were violated
when the government gained access to their financial records from the intermediary banks without a
warrant. They contended that evidence obtained from the subpoenas should have been suppressed at
trial. The US appellate court, in rejecting this argument, cited Frazin and succinctly held that "because
the RFPA states that civil penalties are the only authorized remedy for its violation, it would be
inappropriate for the courts to imply a suppression remedy as well."

Also in United States v. Thompson,41 the US Court of Appeals, Eleventh Circuit, made the following
disquisition:

x x x [T]he defendant would have to show that Congress had provided such a remedy for a violation of
the statute, either specifically or by inference. Clearly Congress intended to place limits on the
Government’s ability to monitor the private activities of individuals when it passed this statute. Congress
did not, however, suggest that any information obtained in violation of the statute’s provisions should
be excluded. Instead the statute only provides for fines and possible imprisonment for knowing
violations. 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. Absent a specific reference to the exclusionary rule, it is not appropriate for the courts to
read such a provision into the act.42

Under prevailing jurisprudence in the United States therefore, violations of the RFPA do not warrant the
application of the exclusionary rule with respect to the evidence obtained.
Nonetheless, in the present case, there is no violation of RA 1405 precisely because petitioner JV
Ejercito’s case properly falls under the recognized exceptions to the rule on confidentiality of bank
deposits. Further, the Special Prosecution Panel has properly requested the Sandiganbayan for the
issuance of the subpoenae duces tecum/ad testificandum for the production of documents relating to
the bank accounts of petitioner JV Ejercito in connection with the plunder and illegal use of alias cases
against former President Estrada. The Sandiganbayan, in issuing the assailed resolutions, clearly
committed no grave abuse of discretion.

ACCORDINGLY, I vote to DISMISS the petition.

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. MAYOR-ALGO, JR., MARY ANN CORPUZ-
MANALAC and JOSE T. DE JESUS, JR., in their capacities as Chairman and Members of the Panel,
respectively, Respondents.

DECISION

PARDO, J.:

In the petition at bar, petitioner seeks to--

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 Marquezs motion
for reconsideration dated September 10, 1998, received by counsel on October 20, 1998.

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.1cräläwvirtualibräry

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:

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

(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;

(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.2cräläwvirtualibräry

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. 3cräläwvirtualibräry

On May 26, 1998, the FFIB panel met in conference with petitioner Lourdes T. Marquez and Atty. Fe B.
Macalino at the banks 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. Marquez to comply with
the order of the Ombudsman. Petitioner agreed to an in camera inspection set on June 3,
1998. 4cräläwvirtualibräry

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 can not
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 Managers 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 xxx 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. 6cräläwvirtualibräry

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 Ombudsmans 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. 6770.7cräläwvirtualibräry

On July 10, 1998, petitioner together with Union Bank of the Philippines, filed a petition for declaratory
relief, prohibition and injunction 8 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 petitioners prayer for a temporary
restraining order and stated thus:

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 respondents 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. el., 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 1989.10cräläwvirtualibräry

On July 20, 1998, petitioner filed a motion for reconsideration based on the following grounds:

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

b. The subject matter of the investigation being conducted by the Ombudsman at petitioners premises is
outside his jurisdiction.11cräläwvirtualibräry

On July 23, 1998, the Ombudsman filed a motion to dismiss the petition for declaratory relief 12 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 petitioners motion for reconsideration dated July 20,
1998. 13cräläwvirtualibräry

On August 19, 1998, the lower court denied petitioners motion for reconsideration, 14 and also the
Ombudsmans motion to dismiss.15cräläwvirtualibräry

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). 16cräläwvirtualibräry

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. 18cräläwvirtualibräry

Respondent Ombudsman panel set the incident for hearing on September 7, 1998. 19 After hearing, the
panel issued an order dated September 7, 1998, ordering petitioner and counsel to appear for a
continuation of the hearing of the contempt charges against her. 20cräläwvirtualibräry

On September 10, 1998, petitioner filed with the Ombudsman a motion for reconsideration of the above
order. 21 Her motion was premised on the fact that there was a pending case with the Regional Trial
Court, Makati City, 22 which would determine whether obeying the orders of the Ombudsman to
produce bank documents would not violate any law.

The FFIB opposed the motion, 23 and on October 14, 1998, the Ombudsman denied the motion by order
the dispositive portion of which reads:

Wherefore, respondent Lourdes T. Marquezs motion for reconsideration is hereby DENIED, for lack of
merit. Let the hearing of the motion of the Fact Finding Intelligence Bureau (FFIB) to cite her for indirect
contempt be intransferrably set to 29 October 1998 at 2:00 oclock p.m. at which date and time she
should appear personally to submit her additional evidence. Failure to do so shall be deemed a waiver
thereof.24cräläwvirtualibräry

Hence, the present petition. 25cräläwvirtualibräry

The issue is whether petitioner may be cited for indirect contempt for her failure to produce the
documents requested by the Ombudsman. And whether the order of the Ombudsman to have an in
camera inspection of the questioned account is allowed as an exception to the law on secrecy of bank
deposits (R. A. No. 1405).

An examination of the secrecy of bank deposits 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.
Gancayco26cräläwvirtualibräry

The order of the Ombudsman to produce for in camera inspection the subject accounts with the Union
Bank of the Philippines, Julia Vargas Branch, is based on a pending investigation at the Office of the
Ombudsman against Amado Lagdameo, et. al. for violation of R. A. No. 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) 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
litigation27cräläwvirtualibräry

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. 28cräläwvirtualibräry

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.

G.R. No. 134699 December 23, 1999

UNION BANK OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS and ALLIED BANK CORPORATION, respondents.
KAPUNAN, J.:

Sec. 2 of the Law on Secrecy of Bank Deposits, 1 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.

Whether or not the case at bar falls under the last exception is the issue in the instant petition.

The facts are not disputed.

On March 21, 1990, a check (Check No. 11669677) dated March 31, 1990 in the amount of One Million
Pesos (P1,000,000.00) was drawn against Account No. 0111-01854-8 with private respondent Allied
Bank payable to the order of one Jose Ch. Alvarez. The payee deposited the check with petitioner Union
Bank who credited the P1,000,000.00 to the account of Mr. Alvarez. On May 21, 1990, petitioner sent
the check for clearing through the Philippine Clearing House Corporation (PCHC). When the check was
presented for payment, a clearing discrepancy was committed by Union Bank's clearing staff when the
amount of One Million Pesos (P1,000,000.00) was erroneously "under-encoded" to One Thousand Pesos
(P1,000.00) only.

Petitioner only discovered the under-encoding almost a year later. Thus, on May 7, 1991, Union Bank
notified Allied Bank of the discrepancy by way of a charge slip for Nine Hundred Ninety-Nine Thousand
Pesos (P999,000.00) for automatic debiting against of Allied Bank. The latter, however, refused to accept
the charge slip "since [the] transaction was completed per your [Union Bank's] original instruction and
client's account is now insufficiently funded."

Subsequently, Union Bank filed a complaint against Allied Bank before the PCHC Arbitration Committee
(Arbicom), praying that:
 . . . judgment be rendered in favor of plaintiff against defendant sentencing it to pay
plaintiff:

1. The sum of NINE HUNDRED NINETY-NINE THOUSAND PESOS (P999,000.00);

2. The sum of THREE HUNDRED SIXTY-ONE AND FOUR HUNDRED EIGHTY AND 20/XX
P361,480.20 as of October 9, 1991 representing reimbursements for opportunity losses
and interest at the rate of 24% per annum arising from actual losses sustained by
plaintiff as of May 21, 1990;

3. The amount for attorney's fees at the rate of 25% of any and all sums due;

4. Penalty Charges at the rate of 1/8 of 1% of P999,000.00 from May 22, 1990 until
payment thereof.

5. Exemplary and punitive damages against the defendant in such amounts as may be
awarded by this Tribunal in order to serve a lesson to all member-Banks under the PCHC
umbrella to strictly comply with the provisions thereof;

6. The costs of suit which includes filing fee in addition to litigation expenses which shall
be proven in the course of arbitration.

7. Such other damages that may be awarded by this Tribunal. 2

Thereafter, Union Bank filed in the Regional Trial Court (RTC) of Makati a petition for the examination of
Account No. 111-01854-8. Judgment on the arbitration case was held in abeyance pending the
resolution of said petition.

Upon motion of private respondent, the RTC dismissed Union Bank's petition. The RTC held that:

The case of the herein petitioner does not fall under any of the foregoing exceptions to
warrant a disclosure of or inquiry into the ledgers/books of account of Allied Checking
Account No. 111-01854-8. Needless to say, the complaint filed by herein petitioner
against Allied Banking Corporation before the Philippine Clearing House Corporation
(PCHC) Arbitration Committee and docketed therein as Arb[i]com Case No. 91-068
(Annex "A", petition) is not one for bribery or dereliction of duty of public officials much
less is there any showing that the subject matter thereof is the money deposited in the
account in question. Petitioner's complaint primarily hing[e]s on the alleged deliberate
violation by Allied Bank Corporation of the provisions of the PCHC Rule Book, Sec. 25[.]3,
and as principal reliefs, it seeks for [sic] the recovery of amounts of money as a
consequence of an alleged under-coding of check amount to P1,000,000.00 and
damage[s] by way of loss of interest income. 3

The Court of Appeals affirmed the dismissal of the petition, ruling that the case was not one where the
money deposited is the subject matter of the litigation.
 Petitioner collecting bank itself in its complaint filed before the PCHC, Arbicom Case No.
91-068, clearly stated that its "cause of action against defendant arose from defendant's
deliberate violation of the provisions of the PCHC Rule Book, Sec. 25.3, specifically on
Under-Encoding of check amounting to P1,000,000.00 drawn upon defendant's Tondo
Branch which was deposited with plaintiff herein on May 20, 1990, . . . which was
erroneously encoded at P1,000.00 which defendant as the receiving bank thereof, never
called nor notified the plaintiff of the error committed thus causing actual losses to
plaintiff in the principal amount of P999,000.00 exclusive of opportunity losses and
interest."

Furthermore, a reading of petitioner collecting bank's complaint in the Arbicom case

shows that its thrust is directed against respondent drawee bank's alleged failure to
inform the former of the under-encoding when Sec. 25.3 of the PCHC Rule Book is clear
that it is receiving bank's (respondent drawee bank herein) duty and obligation to notify
the erring bank (petitioner collecting bank herein) of any such under-encoding of any
check amount submitted for clearing within the member banks of the PCHC not later
than 10:00 a.m. of the following clearing day and prays that respondent drawee bank be
held liable to petitioner collecting bank for penalties in view of the latter's violation of
the notification requirement.

Prescinding from the above, we see no cogent reason to depart from the time-honored
general banking rule that all deposits of whatever nature with banks are considered of
absolutely confidential nature and may not be examined, inquired or looked into by any
person, government official, bureau or office and corollarily, that it is unlawful for any
official or employee of a bank to disclose to any person any information concerning
deposits.

Nowhere in petitioner collecting bank's complaint filed before the PCHC does it mention
of the amount it seeks to recover from Account No. 0111-018548 itself, but speaks of
P999,000.00 only as an incident of its alleged opportunity losses and interest as a result
of its own employee's admitted error in encoding the check.

The money deposited in Account No. 0111-018548 is not the subject matter of the
litigation in the Arbicom case for as clearly stated by petitioner itself, it is the alleged
violation by respondent of the rules and regulations of the PCHC. 4

Union Bank is now before this Court insisting that the money deposited in Account No. 0111-01854-8 is
the subject matter of the litigation Petitioner cites the case of Mathay vs. Consolidated Bank and Trust
Company, 5 where we defined "subject matter of the action," thus:

. . . By the phrase "subject matter of the action" is meant "the physical facts, the things
real or personal, the money, lands, chattels, and the like, in relation to which the suit is
prosecuted, and not the delict or wrong committed by the defendant."

Petitioner contends that the Court of Appeals confuses the "cause of action" with the "subject of the
action." In Yusingco vs. Ong Hing Lian, 6 petitioner points out, this Court distinguished the two concepts.
 . . . 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 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. vs. Magsino, 7 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 examination of the
bank accounts where part of the money was subsequently caused to be deposited:

. . . Sec. 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 so deposited was the very thing in dispute. This, however, is not the case here.

Petitioner's theory is that private respondent Allied Bank should have informed petitioner of the under-
encoding pursuant to the provisions of Section 25.3.1 of the PCHC Handbook, which states:

25.3.1. The Receiving Bank should inform the erring Bank about the under-encoding of
amount not later than 10:00 A.M. of the following clearing day.

Failing in that duty, petitioner holds private respondent directly liable for the P999,000.00 and
other damages. It does not appear that petitioner is seeking reimbursement from the account of
the drawer. This much is evident in petitioner's complaint before the Arbicom.

. . . plaintiff's cause of action against defendant arose from defendant's deliberate

violation of the provisions of the PCHC Rule Book, Sec. 25.3, specifically on Under-
Encoding of check amounting to P1,000,000.00 drawn upon defendant's Tondo Branch
which was deposited with plaintiff herein sometime on May 20, 1990. From the check
amount of P1,000,000.00, it was instead erroneously encoded at P1,000.00
which defendant as the receiving bank thereof, never called nor notified the plaintiff of
the error committed thus causing actual losses to plaintiff in the principal amount of
P999,000.00 exclusive of opportunity losses and interest thereon whatsoever. . . . 8

Petitioner even requested private respondent's Branch Manager for reimbursement from
private respondent's account through the automatic debiting system.
 2.7. On May 6, 1991, plaintiff's Senior Vice-President, Ms. ERLINDA V. VALENTON wrote
defendant's Tondo Branch Manager, Mr. RODOLFO JOSE on the incident and requested
assistance in facilitating correction of the erroneous coding with request for
reimbursement thru the industry's automatic debiting of defendant's account. . . . 9

Further, petitioner rejected private respondent's proposal that the drawer issue postdated
checks in favor of petitioner since the identity and credit standing of the depositor were
unknown to petitioner.

2.9. On May 23, 1991, defendant's Branch Manager, the same Mr. Rodolfo Jose wrote
plaintiff's Ms. Erlinda Valenton again insisting on the execution of the Quitclaim and
Release in favor of defendant as the Branch has endeavored to negotiate with its client
for the collection of such amount. Upon a reading of the terms of the Quitclaim and
Release being proposed by defendant, the unmistakable fact lies that again defendant
attempts for the second time to take advantage of plaintiffs plight by indicating that the
terms of the payment of the principal amount of P999,000.00 is by way of several
personal postdated checks up to March 21, 1992 from a person whose identify is not
even disclosed to plaintiff. . . .

To an ordinary person aggrieved already by having been taken advantage of for 620
days more or less, the proposal of defendant could not be acceptable for the reason
that aside from the interest lost already for the use of its money by another party, no
assurance is made as to the actual collection thereof from a party whose credit standing,
the recipient is not at all aware of. . . . 10

Petitioner also believed that it had no privity with the depositor:

2.12. Plaintiff then replied to defendant's letter by requesting that in lieu of the post-
dated checks from defendant's client with whom plaintiff has no privity whatsoever, if
the defendant could tender the full payment of the amount of P999,000.00 in
defendant's own Manager's check and that plaintiff is willing to forego its further claims
for interest and losses for a period of 620 days, more or less. . . . 11

The following argument adduced by petitioner in the Arbicom case leaves no doubt that petitioner is
holding private respondent itself liable for the discrepancy:

Defendant by its acceptance thru the clearing exchange of the check deposit from its
client cannot be said to be free from any liability for the unpaid portion of the
check amount considering that defendant as the drawee bank, is remiss in its duty of
verifying possible technicalities on the face of the check.

Since the provisions of the PCHC Rule Book has so imposed upon the defendant being
the Receiving Bank of a discrepant check item to give that timely notification and
defendant failing to comply with such requirement, then it can be said that defendant is
guilty of negligence. He who is guilty of negligence in the performance of its [sic] duty is
liable for damages. (Art. 1170, New Civil Code.)
 Art. 1172 of the Civil Code provides that:

"Responsibility arising from negligence in the performance of every kind

of obligation is also demandable, but such liability may be regulated by
the courts, according to the circumstances.["] 12

Petitioner points to its prayer in its complaint to show that it sought reimbursement from the drawer's
account. The prayer, however, does not specifically state that it was seeking recovery of the amount
from the depositor's account. Petitioner merely asked that "judgment be rendered in favor of plaintiff
against defendant sentencing it to pay plaintiff: 1. The sum of NINE HUNDRED NINETY-NINE THOUSAND
PESOS (P999,000.00). . . . 13

On the other hand, the petition before this Court reveals that the true purpose for the examination is to
aid petitioner in proving the extent of Allied Bank's liability:

Hence, the amount actually debited from the subject account becomes very material
and germane to petitioner's claim for reimbursement as it is only upon examination of
subject account can it be proved that indeed a discrepancy in the amount credited to
petitioner was committed, thereby, rendering respondent Allied Bank liable to
petitioner for the deficiency. The money deposited in aforesaid account is undeniably
the subject matter of the litigation since the issue in the Arbicom case is whether
respondent Bank should be held liable to petitioner for reimbursement of the amount of
moneyconstituting the difference between the amount of the check and the amount
credited to petitioner, that is, P999,000.00, which has remained deposited in aforesaid
account.

On top of the allegations in the Complaint, which can be verified only by examining the
subject bank account, the defense of respondent Allied Bank that the reimbursement
cannot be made since client's account is not sufficiently funded at the time petitioner
sent its Charge Slip, bolsters petitioner's contention that the money in subject account is
the very subject matter of the pending Arbicom case.

Indeed, to prove the allegations in its Complaint before the PCHC Arbitration Committee,
and to rebut private respondent's defense on the matter, petitioner needs to
determine:

1. how long respondent Allied Bank had wilfully or negligently allowed the difference of
P999,000.00 to be maintained in the subject account without remitting the same to
petitioner;

2. whether indeed the subject account was no longer sufficiently funded when
petitioner sent its charge slip for reimbursement to respondent bank on May 7, 1991;
and

3. whether or not respondent Allied Bank's actuations in refusing to immediately

reimburse the discrepancy was attended by good or bad faith.
 In other words, only a disclosure of the pertinent details and information relating to the
transactions involving subject account will enable petitioner to prove its allegations in
the pending Arbicom
case. . . . . 14

In short, petitioner is fishing for information so it can determine the culpability of private respondent
and the amount of damages it can recover from the latter. It does not seek recovery of the very money
contained in the deposit. The subject matter of the dispute may be the amount of P999,000.00 that
petitioner seeks from private respondent as a result of the latter's alleged failure to inform the former of
the discrepancy; but it is not the P999,000.00 deposited in the drawer's account. By the terms of R.A. No.
1405, the "money deposited" itself should be the subject matter of the litigation.

That petitioner feels a need for such information in order to establish its case against private respondent
does not, by itself, warrant the examination of the bank deposits. The necessity of the inquiry, or the
lack thereof, is immaterial since the case does not come under any of the exceptions allowed by the
Bank Deposits Secrecy Act.

WHEREFORE, the petition is DENIED.

SO ORDERED.

G.R. No. 174629 February 14, 2008

REPUBLIC OF THE PHILIPPINES, Represented by THE ANTI-MONEY LAUNDERING COUNCIL

(AMLC),petitioner,
vs.
HON. ANTONIO M. EUGENIO, JR., AS PRESIDING JUDGE OF RTC, MANILA, BRANCH 34, PANTALEON
ALVAREZ and LILIA CHENG, respondents.

DECISION

TINGA, J.:

The present petition for certiorari and prohibition under Rule 65 assails the orders and resolutions
issued by two different courts in two different cases. The courts and cases in question are the Regional
Trial Court of Manila, Branch 24, which heard SP Case No. 06-1142001 and the Court of Appeals, Tenth
Division, which heared CA-G.R. SP No. 95198.2 Both cases arose as part of the aftermath of the ruling of
this Court in Agan v. PIATCO3 nullifying the concession agreement awarded to the Philippine
International Airport Terminal Corporation (PIATCO) over the Ninoy Aquino International Airport –
International Passenger Terminal 3 (NAIA 3) Project.

I.

Following the promulgation of Agan, a series of investigations concerning the award of the NAIA 3
contracts to PIATCO were undertaken by the Ombudsman and the Compliance and Investigation Staff
(CIS) of petitioner Anti-Money Laundering Council (AMLC). On 24 May 2005, the Office of the Solicitor
General (OSG) wrote the AMLC requesting the latter’s assistance "in obtaining more evidence to
completely reveal the financial trail of corruption surrounding the [NAIA 3] Project," and also noting that
petitioner Republic of the Philippines was presently defending itself in two international arbitration
cases filed in relation to the NAIA 3 Project.4 The CIS conducted an intelligence database search on the
financial transactions of certain individuals involved in the award, including respondent Pantaleon
Alvarez (Alvarez) who had been the Chairman of the PBAC Technical Committee, NAIA-IPT3 Project.5 By
this time, Alvarez had already been charged by the Ombudsman with violation of Section 3(j) of R.A. No.
3019.6 The search revealed that Alvarez maintained eight (8) bank accounts with six (6) different banks.7

On 27 June 2005, the AMLC issued Resolution No. 75, Series of 2005,8 whereby the Council resolved to
authorize the Executive Director of the AMLC "to sign and verify an application to inquire into and/or
examine the [deposits] or investments of Pantaleon Alvarez, Wilfredo Trinidad, Alfredo Liongson, and
Cheng Yong, and their related web of accounts wherever these may be found, as defined under Rule
10.4 of the Revised Implementing Rules and Regulations;" and to authorize the AMLC Secretariat "to
conduct an inquiry into subject accounts once the Regional Trial Court grants the application to inquire
into and/or examine the bank accounts" of those four individuals.9 The resolution enumerated the
particular bank accounts of Alvarez, Wilfredo Trinidad (Trinidad), Alfredo Liongson (Liongson) and Cheng
Yong which were to be the subject of the inquiry.10 The rationale for the said resolution was founded on
the cited findings of the CIS that amounts were transferred from a Hong Kong bank account owned by
Jetstream Pacific Ltd. Account to bank accounts in the Philippines maintained by Liongson and Cheng
Yong.11 The Resolution also noted that "[b]y awarding the contract to PIATCO despite its lack of financial
capacity, Pantaleon Alvarez caused undue injury to the government by giving PIATCO unwarranted
benefits, advantage, or preference in the discharge of his official administrative functions through
manifest partiality, evident bad faith, or gross inexcusable negligence, in violation of Section 3(e) of
Republic Act No. 3019."12

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. 05-005.13 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.14 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."15 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.16

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" in
relation to the criminal cases then pending before the Sandiganbayan.17 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."18
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 Prosecutor’s 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."20

Following the December 2005 AMLC Resolution, the Republic, through the AMLC, filed an
application21 before the Manila RTC to inquire into and/or examine thirteen (13) accounts and two (2)
related web of accounts alleged as having been used to facilitate corruption in the NAIA 3 Project.
Among said accounts were the DBS Bank account of Alvarez and the Metrobank accounts of Cheng Yong.
The case was raffled to Manila RTC, Branch 24, presided by respondent Judge Antonio Eugenio, Jr., and
docketed as SP Case No. 06-114200.

On 12 January 2006, the Manila RTC issued an Order (Manila RTC bank inquiry order) granting the Ex
ParteApplication expressing therein "[that] the allegations in said application to be impressed with merit,
and in conformity with Section 11 of R.A. No. 9160, as amended, otherwise known as the Anti-Money
Laundering Act (AMLA) of 2001 and Rules 11.1 and 11.2 of the Revised Implementing Rules and
Regulations."22 Authority was thus granted to the AMLC to inquire into the bank accounts listed therein.

On 25 January 2006, Alvarez, through counsel, entered his appearance23 before the Manila RTC in SP
Case No. 06-114200 and filed an Urgent Motion to Stay Enforcement of Order of January 12,
2006.24 Alvarez alleged that he fortuitously learned of the bank inquiry order, which was issued
following an ex parte application, and he argued that nothing in R.A. No. 9160 authorized the AMLC to
seek the authority to inquire into bank accounts ex parte.25 The day after Alvarez filed his motion, 26
January 2006, the Manila RTC issued an Order26 staying the enforcement of its bank inquiry order and
giving the Republic five (5) days to respond to Alvarez’s motion.

The Republic filed an Omnibus Motion for Reconsideration27 of the 26 January 2006 Manila RTC Order
and likewise sought to strike out Alvarez’s motion that led to the issuance of said order. For his part,
Alvarez filed a Reply and Motion to Dismiss28 the application for bank inquiry order. On 2 May 2006, the
Manila RTC issued an Omnibus Order29 granting the Republic’s Motion for Reconsideration, denying
Alvarez’s motion to dismiss and reinstating "in full force and effect" the Order dated 12 January 2006. In
the omnibus order, the Manila RTC reiterated that the material allegations in the application for bank
inquiry order filed by the Republic stood as "the probable cause for the investigation and examination of
the bank accounts and investments of the respondents."30

Alvarez filed on 10 May 2006 an Urgent Motion31 expressing his apprehension that the AMLC would
immediately enforce the omnibus order and would thereby render the motion for reconsideration he
intended to file as moot and academic; thus he sought that the Republic be refrained from enforcing the
omnibus order in the meantime. Acting on this motion, the Manila RTC, on 11 May 2006, issued an
Order32 requiring the OSG to file a comment/opposition and reminding the parties that judgments and
orders become final and executory upon the expiration of fifteen (15) days from receipt thereof, as it is
the period within which a motion for reconsideration could be filed. Alvarez filed his Motion for
Reconsideration33 of the omnibus order on 15 May 2006, but the motion was denied by the Manila RTC
in an Order34 dated 5 July 2006.
On 11 July 2006, Alvarez filed an Urgent Motion and Manifestation35 wherein he manifested having
received reliable information that the AMLC was about to implement the Manila RTC bank inquiry order
even though he was intending to appeal from it. On the premise that only a final and executory
judgment or order could be executed or implemented, Alvarez sought that the AMLC be immediately
ordered to refrain from enforcing the Manila RTC bank inquiry order.

On 12 July 2006, the Manila RTC, acting on Alvarez’s latest motion, issued an Order36 directing the AMLC
"to refrain from enforcing the order dated January 12, 2006 until the expiration of the period to appeal,
without any appeal having been filed." On the same day, Alvarez filed a Notice of Appeal37 with the
Manila RTC.

On 24 July 2006, Alvarez filed an Urgent Ex Parte Motion for Clarification.38 Therein, he alleged having
learned that the AMLC had began to inquire into the bank accounts of the other persons mentioned in
the application for bank inquiry order filed by the Republic.39 Considering that the Manila RTC bank
inquiry order was issued ex parte, without notice to those other persons, Alvarez prayed that the AMLC
be ordered to refrain from inquiring into any of the other bank deposits and alleged web of accounts
enumerated in AMLC’s application with the RTC; and that the AMLC be directed to refrain from using,
disclosing or publishing in any proceeding or venue any information or document obtained in violation
of the 11 May 2006 RTC Order.40

On 25 July 2006, or one day after Alvarez filed his motion, the Manila RTC issued an Order41 wherein it
clarified that "the Ex Parte Order of this Court dated January 12, 2006 can not be implemented against
the deposits or accounts of any of the persons enumerated in the AMLC Application until the appeal of
movant Alvarez is finally resolved, otherwise, the appeal would be rendered moot and academic or even
nugatory."42 In addition, the AMLC was ordered "not to disclose or publish any information or document
found or obtained in [v]iolation of the May 11, 2006 Order of this Court."43 The Manila RTC reasoned
that the other persons mentioned in AMLC’s application were not served with the court’s 12 January
2006 Order. This 25 July 2006 Manila RTC Order is the first of the four rulings being assailed through this
petition.

In response, the Republic filed an Urgent Omnibus Motion for Reconsideration44 dated 27 July 2006,
urging that it be allowed to immediately enforce the bank inquiry order against Alvarez and that
Alvarez’s notice of appeal be expunged from the records since appeal from an order of inquiry is
disallowed under the Anti money Laundering Act (AMLA).

Meanwhile, respondent Lilia Cheng filed with the Court of Appeals a Petition for Certiorari, Prohibition
and Mandamus with Application for TRO and/or Writ of Preliminary Injunction45 dated 10 July 2006,
directed against the Republic of the Philippines through the AMLC, Manila RTC Judge Eugenio, Jr. and
Makati RTC Judge Marella, Jr.. She identified herself as the wife of Cheng Yong46 with whom she jointly
owns a conjugal bank account with Citibank that is covered by the Makati RTC bank inquiry order, and
two conjugal bank accounts with Metrobank that are covered by the Manila RTC bank inquiry order. Lilia
Cheng imputed grave abuse of discretion on the part of the Makati and Manila RTCs in granting
AMLC’s ex parte applications for a bank inquiry order, arguing among others that the ex
parte applications violated her constitutional right to due process, that the bank inquiry order under the
AMLA can only be granted in connection with violations of the AMLA and that the AMLA can not apply
to bank accounts opened and transactions entered into prior to the effectivity of the AMLA or to bank
accounts located outside the Philippines.47
On 1 August 2006, the Court of Appeals, acting on Lilia Cheng’s petition, issued a Temporary Restraining
Order48enjoining the Manila and Makati trial courts from implementing, enforcing or executing the
respective bank inquiry orders previously issued, and the AMLC from enforcing and implementing such
orders. On even date, the Manila RTC issued an Order49 resolving to hold in abeyance the resolution of
the urgent omnibus motion for reconsideration then pending before it until the resolution of Lilia
Cheng’s petition for certiorari with the Court of Appeals. The Court of Appeals Resolution directing the
issuance of the temporary restraining order is the second of the four rulings assailed in the present
petition.

The third assailed ruling50 was issued on 15 August 2006 by the Manila RTC, acting on the Urgent Motion
for Clarification51 dated 14 August 2006 filed by Alvarez. It appears that the 1 August 2006 Manila RTC
Order had amended its previous 25 July 2006 Order by deleting the last paragraph which stated that the
AMLC "should not disclose or publish any information or document found or obtained in violation of the
May 11, 2006 Order of this Court."52 In this new motion, Alvarez argued that the deletion of that
paragraph would allow the AMLC to implement the bank inquiry orders and publish whatever
information it might obtain thereupon even before the final orders of the Manila RTC could become
final and executory.53 In the 15 August 2006 Order, the Manila RTC reiterated that the bank inquiry
order it had issued could not be implemented or enforced by the AMLC or any of its representatives
until the appeal therefrom was finally resolved and that any enforcement thereof would be
unauthorized.54

The present Consolidated Petition55 for certiorari and prohibition under Rule 65 was filed on 2 October
2006, assailing the two Orders of the Manila RTC dated 25 July and 15 August 2006 and the Temporary
Restraining Order dated 1 August 2006 of the Court of Appeals. Through an Urgent Manifestation and
Motion56 dated 9 October 2006, petitioner informed the Court that on 22 September 2006, the Court of
Appeals hearing Lilia Cheng’s petition had granted a writ of preliminary injunction in her
favor.57 Thereafter, petitioner sought as well the nullification of the 22 September 2006 Resolution of
the Court of Appeals, thereby constituting the fourth ruling assailed in the instant petition.58

The Court had initially granted a Temporary Restraining Order59 dated 6 October 2006 and later on a
Supplemental Temporary Restraining Order60 dated 13 October 2006 in petitioner’s favor, enjoining the
implementation of the assailed rulings of the Manila RTC and the Court of Appeals. However, on
respondents’ motion, the Court, through a Resolution61 dated 11 December 2006, suspended the
implementation of the restraining orders it had earlier issued.

Oral arguments were held on 17 January 2007. The Court consolidated the issues for argument as
follows:

1. Did the RTC-Manila, in issuing the Orders dated 25 July 2006 and 15 August 2006 which
deferred the implementation of its Order dated 12 January 2006, and the Court of Appeals, in
issuing its Resolution dated 1 August 2006, which ordered the status quo in relation to the 1 July
2005 Order of the RTC-Makati and the 12 January 2006 Order of the RTC-Manila, both of which
authorized the examination of bank accounts under Section 11 of Rep. Act No. 9160 (AMLA),
commit grave abuse of discretion?

(a) Is an application for an order authorizing inquiry into or examination of bank

accounts or investments under Section 11 of the AMLA ex-parte in nature or one which
requires notice and hearing?
 (b) What legal procedures and standards should be observed in the conduct of the
proceedings for the issuance of said order?

(c) Is such order susceptible to legal challenges and judicial review?

2. Is it proper for this Court at this time and in this case to inquire into and pass upon the validity
of the 1 July 2005 Order of the RTC-Makati and the 12 January 2006 Order of the RTC-Manila,
considering the pendency of CA G.R. SP No. 95-198 (Lilia Cheng v. Republic) wherein the validity
of both orders was challenged?62

After the oral arguments, the parties were directed to file their respective memoranda, which they
did,63 and the petition was thereafter deemed submitted for resolution.

II.

Petitioner’s general advocacy is that the bank inquiry orders issued by the Manila and Makati RTCs are
valid and immediately enforceable whereas the assailed rulings, which effectively stayed the
enforcement of the Manila and Makati RTCs bank inquiry orders, are sullied with grave abuse of
discretion. These conclusions flow from the posture that a bank inquiry order, issued upon a finding of
probable cause, may be issued ex parte and, once issued, is immediately executory. Petitioner further
argues that the information obtained following the bank inquiry is necessarily beneficial, if not
indispensable, to the AMLC in discharging its awesome responsibility regarding the effective
implementation of the AMLA and that any restraint in the disclosure of such information to appropriate
agencies or other judicial fora would render meaningless the relief supplied by the bank inquiry order.

Petitioner raises particular arguments questioning Lilia Cheng’s right to seek injunctive relief before the
Court of Appeals, noting that not one of the bank inquiry orders is directed against her. Her "cryptic
assertion" that she is the wife of Cheng Yong cannot, according to petitioner, "metamorphose into the
requisite legal standing to seek redress for an imagined injury or to maintain an action in behalf of
another." In the same breath, petitioner argues that Alvarez cannot assert any violation of the right to
financial privacy in behalf of other persons whose bank accounts are being inquired into, particularly
those other persons named in the Makati RTC bank inquiry order who did not take any step to oppose
such orders before the courts.

Ostensibly, the proximate question before the Court is whether a bank inquiry order issued in
accordance with Section 10 of the AMLA may be stayed by injunction. Yet in arguing that it does,
petitioner relies on what it posits as the final and immediately executory character of the bank inquiry
orders issued by the Manila and Makati RTCs. Implicit in that position is the notion that the inquiry
orders are valid, and such notion is susceptible to review and validation based on what appears on the
face of the orders and the applications which triggered their issuance, as well as the provisions of the
AMLA governing the issuance of such orders. Indeed, to test the viability of petitioner’s argument, the
Court will have to be satisfied that the subject inquiry orders are valid in the first place. However, even
from a cursory examination of the applications for inquiry order and the orders themselves, it is evident
that the orders are not in accordance with law.

III.
A brief overview of the AMLA is called for.

Money laundering has been generally defined by the International Criminal Police Organization
(Interpol) `as "any act or attempted act to conceal or disguise the identity of illegally obtained proceeds
so that they appear to have originated from legitimate sources."64 Even before the passage of the AMLA,
the problem was addressed by the Philippine government through the issuance of various circulars by
the Bangko Sentral ng Pilipinas. Yet ultimately, legislative proscription was necessary, especially with the
inclusion of the Philippines in the Financial Action Task Force’s list of non-cooperative countries and
territories in the fight against money laundering.65 The original AMLA, Republic Act (R.A.) No. 9160, was
passed in 2001. It was amended by R.A. No. 9194 in 2003.

Section 4 of the AMLA states that "[m]oney laundering is a crime whereby the proceeds of an unlawful
activity as [defined in the law] are transacted, thereby making them appear to have originated from
legitimate sources."66 The section further provides the three modes through which the crime of money
laundering is committed. Section 7 creates the AMLC and defines its powers, which generally relate to
the enforcement of the AMLA provisions and the initiation of legal actions authorized in the AMLA such
as civil forefeiture proceedings and complaints for the prosecution of money laundering offenses.67

In addition to providing for the definition and penalties for the crime of money laundering, the AMLA
also authorizes certain provisional remedies that would aid the AMLC in the enforcement of the AMLA.
These are the "freeze order" authorized under Section 10, and the "bank inquiry order" authorized
under Section 11.

Respondents posit that a bank inquiry order under Section 11 may be obtained only upon the pre-
existence of a money laundering offense case already filed before the courts.68 The conclusion is based
on the phrase "upon order of any competent court in cases of violation of this Act," the word "cases"
generally understood as referring to actual cases pending with the courts.

We are unconvinced by this proposition, and agree instead with the then Solicitor General who
conceded that the use of the phrase "in cases of" was unfortunate, yet submitted that it should be
interpreted to mean "in the event there are violations" of the AMLA, and not that there are already
cases pending in court concerning such violations.69 If the contrary position is adopted, then the bank
inquiry order would be limited in purpose as a tool in aid of litigation of live cases, and wholly inutile as a
means for the government to ascertain whether there is sufficient evidence to sustain an intended
prosecution of the account holder for violation of the AMLA. Should that be the situation, in all
likelihood the AMLC would be virtually deprived of its character as a discovery tool, and thus would
become less circumspect in filing complaints against suspect account holders. After all, under such set-
up the preferred strategy would be to allow or even encourage the indiscriminate filing of complaints
under the AMLA with the hope or expectation that the evidence of money laundering would somehow
surface during the trial. Since the AMLC could not make use of the bank inquiry order to determine
whether there is evidentiary basis to prosecute the suspected malefactors, not filing any case at all
would not be an alternative. Such unwholesome set-up should not come to pass. Thus Section 11 cannot
be interpreted in a way that would emasculate the remedy it has established and encourage the
unfounded initiation of complaints for money laundering.

Still, even if the bank inquiry order may be availed of without need of a pre-existing case under the
AMLA, it does not follow that such order may be availed of ex parte. There are several reasons why the
AMLA does not generally sanction ex parte applications and issuances of the bank inquiry order.
 IV.

It is evident that Section 11 does not specifically authorize, as a general rule, the issuance ex parte of the
bank inquiry order. We quote the provision in full:

SEC. 11. Authority to Inquire into Bank Deposits. ― Notwithstanding the provisions of Republic
Act No. 1405, as amended, Republic Act No. 6426, as amended, Republic Act No. 8791, and
other laws, the AMLC may inquire into or examine any particular deposit or investment with any
banking institution or non bank financial institution upon order of any competent court in cases
of violation of this Act, when it has been established that there is probable cause that the
deposits or investments are related to an unlawful activity as defined in Section 3(i) hereof or
a money laundering offense under Section 4 hereof, except that no court order shall be
required in cases involving unlawful activities defined in Sections 3(i)1, (2) and (12).

To ensure compliance with this Act, the Bangko Sentral ng Pilipinas (BSP) may inquire into or
examine any deposit of investment with any banking institution or non bank financial institution
when the examination is made in the course of a periodic or special examination, in accordance
with the rules of examination of the BSP.70 (Emphasis supplied)

Of course, Section 11 also allows the AMLC to inquire into bank accounts without having to obtain a
judicial order in cases where there is probable cause that the deposits or investments are related to
kidnapping for ransom,71certain violations of the Comprehensive Dangerous Drugs Act of
2002,72 hijacking and other violations under R.A. No. 6235, destructive arson and murder. Since such
special circumstances do not apply in this case, there is no need for us to pass comment on this proviso.
Suffice it to say, the proviso contemplates a situation distinct from that which presently confronts us,
and for purposes of the succeeding discussion, our reference to Section 11 of the AMLA excludes said
proviso.

In the instances where a court order is required for the issuance of the bank inquiry order, nothing in
Section 11 specifically authorizes that such court order may be issued ex parte. It might be argued that
this silence does not preclude the ex parte issuance of the bank inquiry order since the same is not
prohibited under Section 11. Yet this argument falls when the immediately preceding provision, Section
10, is examined.

SEC. 10. Freezing of Monetary Instrument or Property. ― The Court of Appeals,

upon application ex parte by the AMLC and after determination that probable cause exists that
any monetary instrument or property is in any way related to an unlawful activity as defined in
Section 3(i) hereof, may issue a freeze order which shall be effective immediately. The freeze
order shall be for a period of twenty (20) days unless extended by the court.73

Although oriented towards different purposes, the freeze order under Section 10 and the bank inquiry
order under Section 11 are similar in that they are extraordinary provisional reliefs which the AMLC may
avail of to effectively combat and prosecute money laundering offenses. Crucially, Section 10 uses
specific language to authorize an ex parte application for the provisional relief therein, a circumstance
absent in Section 11. If indeed the legislature had intended to authorize ex parte proceedings for the
issuance of the bank inquiry order, then it could have easily expressed such intent in the law, as it did
with the freeze order under Section 10.
Even more tellingly, the current language of Sections 10 and 11 of the AMLA was crafted at the same
time, through the passage of R.A. No. 9194. Prior to the amendatory law, it was the AMLC, not the Court
of Appeals, which had authority to issue a freeze order, whereas a bank inquiry order always then
required, without exception, an order from a competent court.74 It was through the same enactment
that ex parte proceedings were introduced for the first time into the AMLA, in the case of the freeze
order which now can only be issued by the Court of Appeals. It certainly would have been convenient,
through the same amendatory law, to allow a similar ex parte procedure in the case of a bank inquiry
order had Congress been so minded. Yet nothing in the provision itself, or even the available legislative
record, explicitly points to an ex parte judicial procedure in the application for a bank inquiry order,
unlike in the case of the freeze order.

That the AMLA does not contemplate ex parte proceedings in applications for bank inquiry orders is
confirmed by the present implementing rules and regulations of the AMLA, promulgated upon the
passage of R.A. No. 9194. With respect to freeze orders under Section 10, the implementing rules do
expressly provide that the applications for freeze orders be filed ex parte,75 but no similar clearance is
granted in the case of inquiry orders under Section 11.76 These implementing rules were promulgated by
the Bangko Sentral ng Pilipinas, the Insurance Commission and the Securities and Exchange
Commission,77 and if it was the true belief of these institutions that inquiry orders could be issued ex
parte similar to freeze orders, language to that effect would have been incorporated in the said Rules.
This is stressed not because the implementing rules could authorize ex parte applications for inquiry
orders despite the absence of statutory basis, but rather because the framers of the law had no
intention to allow such ex parte applications.

Even the Rules of Procedure adopted by this Court in A.M. No. 05-11-04-SC78 to enforce the provisions
of the AMLA specifically authorize ex parte applications with respect to freeze orders under Section
1079 but make no similar authorization with respect to bank inquiry orders under Section 11.

The Court could divine the sense in allowing ex parte proceedings under Section 10 and in proscribing
the same under Section 11. A freeze order under Section 10 on the one hand is aimed at preserving
monetary instruments or property in any way deemed related to unlawful activities as defined in Section
3(i) of the AMLA. The owner of such monetary instruments or property would thus be inhibited from
utilizing the same for the duration of the freeze order. To make such freeze order anteceded by a
judicial proceeding with notice to the account holder would allow for or lead to the dissipation of such
funds even before the order could be issued.

On the other hand, a bank inquiry order under Section 11 does not necessitate any form of physical
seizure of property of the account holder. What the bank inquiry order authorizes is the examination of
the particular deposits or investments in banking institutions or non-bank financial institutions. The
monetary instruments or property deposited with such banks or financial institutions are not seized in a
physical sense, but are examined on particular details such as the account holder’s record of deposits
and transactions. Unlike the assets subject of the freeze order, the records to be inspected under a bank
inquiry order cannot be physically seized or hidden by the account holder. Said records are in the
possession of the bank and therefore cannot be destroyed at the instance of the account holder alone
as that would require the extraordinary cooperation and devotion of the bank.

Interestingly, petitioner’s memorandum does not attempt to demonstrate before the Court that the
bank inquiry order under Section 11 may be issued ex parte, although the petition itself did devote some
space for that argument. The petition argues that the bank inquiry order is "a special and peculiar
remedy, drastic in its name, and made necessary because of a public necessity… [t]hus, by its very
nature, the application for an order or inquiry must necessarily, be ex parte." This argument is
insufficient justification in light of the clear disinclination of Congress to allow the issuance ex parte of
bank inquiry orders under Section 11, in contrast to the legislature’s clear inclination to allow the ex
parte grant of freeze orders under Section 10.

Without doubt, a requirement that the application for a bank inquiry order be done with notice to the
account holder will alert the latter that there is a plan to inspect his bank account on the belief that the
funds therein are involved in an unlawful activity or money laundering offense.80 Still, the account
holder so alerted will in fact be unable to do anything to conceal or cleanse his bank account records of
suspicious or anomalous transactions, at least not without the whole-hearted cooperation of the bank,
which inherently has no vested interest to aid the account holder in such manner.

V.

The necessary implication of this finding that Section 11 of the AMLA does not generally authorize the
issuance ex parte of the bank inquiry order would be that such orders cannot be issued unless notice is
given to the owners of the account, allowing them the opportunity to contest the issuance of the order.
Without such a consequence, the legislated distinction between ex parte proceedings under Section 10
and those which are not ex parte under Section 11 would be lost and rendered useless.

There certainly is fertile ground to contest the issuance of an ex parte order. Section 11 itself requires
that it be established that "there is probable cause that the deposits or investments are related to
unlawful activities," and it obviously is the court which stands as arbiter whether there is indeed such
probable cause. The process of inquiring into the existence of probable cause would involve the function
of determination reposed on the trial court. Determination clearly implies a function of adjudication on
the part of the trial court, and not a mechanical application of a standard pre-determination by some
other body. The word "determination" implies deliberation and is, in normal legal contemplation,
equivalent to "the decision of a court of justice."81

The court receiving the application for inquiry order cannot simply take the AMLC’s word that probable
cause exists that the deposits or investments are related to an unlawful activity. It will have to exercise
its

own determinative function in order to be convinced of such fact. The account holder would be certainly
capable of contesting such probable cause if given the opportunity to be apprised of the pending
application to inquire into his account; hence a notice requirement would not be an empty spectacle. It
may be so that the process of obtaining the inquiry order may become more cumbersome or prolonged
because of the notice requirement, yet we fail to see any unreasonable burden cast by such
circumstance. After all, as earlier stated, requiring notice to the account holder should not, in any way,
compromise the integrity of the bank records subject of the inquiry which remain in the possession and
control of the bank.

Petitioner argues that a bank inquiry order necessitates a finding of probable cause, a characteristic
similar to a search warrant which is applied to and heard ex parte. We have examined the supposed
analogy between a search warrant and a bank inquiry order yet we remain to be unconvinced by
petitioner.
The Constitution and the Rules of Court prescribe particular requirements attaching to search warrants
that are not imposed by the AMLA with respect to bank inquiry orders. A constitutional warrant requires
that the judge personally examine under oath or affirmation the complainant and the witnesses he may
produce,82 such examination being in the form of searching questions and answers.83 Those are
impositions which the legislative did not specifically prescribe as to the bank inquiry order under the
AMLA, and we cannot find sufficient legal basis to apply them to Section 11 of the AMLA. Simply put, a
bank inquiry order is not a search warrant or warrant of arrest as it contemplates a direct object but not
the seizure of persons or property.

Even as the Constitution and the Rules of Court impose a high procedural standard for the
determination of probable cause for the issuance of search warrants which Congress chose not to
prescribe for the bank inquiry order under the AMLA, Congress nonetheless disallowed ex
parte applications for the inquiry order. We can discern that in exchange for these procedural standards
normally applied to search warrants, Congress chose instead to legislate a right to notice and a right to
be heard— characteristics of judicial proceedings which are not ex parte.Absent any demonstrable
constitutional infirmity, there is no reason for us to dispute such legislative policy choices.

VI.

The Court’s construction of Section 11 of the AMLA is undoubtedly influenced by right to privacy
considerations. If sustained, petitioner’s argument that a bank account may be inspected by the
government following an ex parteproceeding about which the depositor would know nothing would
have significant implications on the right to privacy, a right innately cherished by all notwithstanding the
legally recognized exceptions thereto. The notion that the government could be so empowered is cause
for concern of any individual who values the right to privacy which, after all, embodies even the right to
be "let

alone," the most comprehensive of rights and the right most valued by civilized people.84

One might assume that the constitutional dimension of the right to privacy, as applied to bank deposits,
warrants our present inquiry. We decline to do so. Admittedly, that question has proved controversial in
American jurisprudence. Notably, the United States Supreme Court in U.S. v. Miller85 held that there was
no legitimate expectation of privacy as to the bank records of a depositor.86 Moreover, the text of our
Constitution has not bothered with the triviality of allocating specific rights peculiar to bank deposits.

However, sufficient for our purposes, we can assert there is a right to privacy governing bank accounts
in the Philippines, and that such right finds application to the case at bar. The source of such right is
statutory, expressed as it is in R.A. No. 1405 otherwise known as the Bank Secrecy Act of 1955. The right
to privacy is enshrined in Section 2 of that law, to wit:

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 natureand 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 supplied)

Because of the Bank Secrecy Act, the confidentiality of bank deposits remains a basic state policy in the
Philippines.87 Subsequent laws, including the AMLA, may have added exceptions to the Bank Secrecy Act,
yet the secrecy of bank deposits still lies as the general rule. It falls within the zones of privacy
recognized by our laws.88The framers of the 1987 Constitution likewise recognized that bank accounts
are not covered by either the right to information89 under Section 7, Article III or under the requirement
of full public disclosure90 under Section 28, Article II.91 Unless the Bank Secrecy Act is repealed or

amended, the legal order is obliged to conserve the absolutely confidential nature of Philippine bank
deposits.

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 office"; 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,92 and there have been other similar recognitions as well.93

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,94 certain violations of the Comprehensive Dangerous Drugs Act of
2002,95 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
"the 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
"[a]ll deposits of whatever nature with banks or banking institutions in the Philippines x x x are hereby
considered as of an absolutely confidential nature."96 Indeed, by force of statute, all bank deposits are
absolutely confidential, and that nature is unaltered even by the legislated exceptions referred to above.
There is disfavor towards construing these exceptions in such a manner that would authorize unlimited
discretion on the part of the government or of any party seeking to enforce those exceptions and
inquire into bank deposits. If there are 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. Such a stance would persist unless Congress passes a law reversing the
general state policy of preserving the absolutely confidential nature of Philippine bank accounts.
The presence of this statutory right to privacy addresses at least one of the arguments raised by
petitioner, that Lilia Cheng had no personality to assail the inquiry orders before the Court of Appeals
because she was not the subject of said orders. AMLC Resolution No. 75, which served as the basis in
the successful application for the Makati inquiry order, expressly adverts to Citibank Account No.
88576248 "owned by Cheng Yong and/or Lilia G. Cheng with Citibank N.A.,"97 whereas Lilia Cheng’s
petition before the Court of Appeals is accompanied by a certification from Metrobank that Account Nos.
300852436-0 and 700149801-7, both of which are among the subjects of the Manila inquiry order, are
accounts in the name of "Yong Cheng or Lilia Cheng."98 Petitioner does not specifically deny that Lilia
Cheng holds rights of ownership over the three said accounts, laying focus instead on the fact that she
was not named as a subject of either the Makati or Manila RTC inquiry orders. We are reasonably
convinced that Lilia Cheng has sufficiently demonstrated her joint ownership of the three accounts, and
such conclusion leads us to acknowledge that she has the standing to assail via certiorari the inquiry
orders authorizing the examination of her bank accounts as the orders interfere with her statutory right
to maintain the secrecy of said accounts.

While petitioner would premise that the inquiry into Lilia Cheng’s accounts finds root in Section 11 of
the AMLA, it cannot be denied that the authority to inquire under Section 11 is only exceptional in
character, contrary as it is to the general rule preserving the secrecy of bank deposits. Even though she
may not have been the subject of the inquiry orders, her bank accounts nevertheless were, and she thus
has the standing to vindicate the right to secrecy that attaches to said accounts and their owners. This
statutory right to privacy will not prevent the courts from authorizing the inquiry anyway upon the
fulfillment of the requirements set forth under Section 11 of the AMLA or Section 2 of the Bank Secrecy
Act; at the same time, the owner of the accounts have the right to challenge whether the requirements
were indeed complied with.

VII.

There is a final point of concern which needs to be addressed. Lilia Cheng argues that the AMLA, being a
substantive penal statute, has no retroactive effect and the bank inquiry order could not apply to
deposits or investments opened prior to the effectivity of Rep. Act No. 9164, or on 17 October 2001.
Thus, she concludes, her subject bank accounts, opened between 1989 to 1990, could not be the subject
of the bank inquiry order lest there be a violation of the constitutional prohibition against ex post
facto laws.

No ex post facto law may be enacted,99 and no law may be construed in such fashion as to permit a
criminal prosecution offensive to the ex post facto clause. As applied to the AMLA, it is plain that no
person may be prosecuted under the penal provisions of the AMLA for acts committed prior to the
enactment of the law on 17 October 2001. As much was understood by the lawmakers since they
deliberated upon the AMLA, and indeed there is no serious dispute on that point.

Does the proscription against ex post facto laws apply to the interpretation of Section 11, a provision
which does not provide for a penal sanction but which merely authorizes the inspection of suspect
accounts and deposits? The answer is in the affirmative. In this jurisdiction, we have defined an ex post
facto law as one which either:

(1) makes criminal an act done before the passage of the law and which was innocent when
done, and punishes such an act;
 (2) aggravates a crime, or makes it greater than it was, when committed;

(3) changes the punishment and inflicts a greater punishment than the law annexed to the crime
when committed;

(4) alters the legal rules of evidence, and authorizes conviction upon less or different testimony
than the law required at the time of the commission of the offense;

(5) assuming to regulate civil rights and remedies only, in effect imposes penalty or deprivation
of a right for something which when done was lawful; and

(6) deprives a person accused of a crime of some lawful protection to which he has become
entitled, such as the protection of a former conviction or acquittal, or a proclamation of
amnesty. (Emphasis supplied)100

Prior to the enactment of the AMLA, the fact that bank accounts or deposits were involved in activities
later on enumerated in Section 3 of the law did not, by itself, remove such accounts from the shelter of
absolute confidentiality. Prior to the AMLA, in order that bank accounts could be examined, there was
need to secure either the written permission of the depositor or a court order authorizing such
examination, assuming that they were involved in cases of bribery or dereliction of duty of public
officials, or in a case where the money deposited or invested was itself the subject matter of the
litigation. The passage of the AMLA stripped another layer off the rule on absolute confidentiality that
provided a measure of lawful protection to the account holder. For that reason, the application of the
bank inquiry order as a means of inquiring into records of transactions entered into prior to the passage
of the AMLA would be constitutionally infirm, offensive as it is to the ex post facto clause.

Still, we must note that the position submitted by Lilia Cheng is much broader than what we are willing
to affirm. She argues that the proscription against ex post facto laws goes as far as to prohibit any
inquiry into deposits or investments included in bank accounts opened prior to the effectivity of the
AMLA even if the suspect transactions were entered into when the law had already taken effect. The
Court recognizes that if this argument were to be affirmed, it would create a horrible loophole in the
AMLA that would in turn supply the means to fearlessly engage in money laundering in the Philippines;
all that the criminal has to do is to make sure that the money laundering activity is facilitated through a
bank account opened prior to 2001. Lilia Cheng admits that "actual money launderers could utilize
the ex post facto provision of the Constitution as a shield" but that the remedy lay with Congress to
amend the law. We can hardly presume that Congress intended to enact a self-defeating law in the first
place, and the courts are inhibited from such a construction by the cardinal rule that "a law should be
interpreted with a view to upholding rather than destroying it."101

Besides, nowhere in the legislative record cited by Lilia Cheng does it appear that there was an
unequivocal intent to exempt from the bank inquiry order all bank accounts opened prior to the passage
of the AMLA. There is a cited exchange between Representatives Ronaldo Zamora and Jaime Lopez
where the latter confirmed to the former that "deposits are supposed to be exempted from scrutiny or
monitoring if they are already in place as of the time the law is enacted."102 That statement does
indicate that transactions already in place when the AMLA was passed are indeed exempt from scrutiny
through a bank inquiry order, but it cannot yield any interpretation that records of transactions
undertaken after the enactment of the AMLA are similarly exempt. Due to the absence of cited authority
from the legislative record that unqualifiedly supports respondent Lilia Cheng’s thesis, there is no cause
for us to sustain her interpretation of the AMLA, fatal as it is to the anima of that law.

IX.

We are well aware that Lilia Cheng’s petition presently pending before the Court of Appeals likewise
assails the validity of the subject bank inquiry orders and precisely seeks the annulment of said orders.
Our current declarations may indeed have the effect of preempting that0 petition. Still, in order for this
Court to rule on the petition at bar which insists on the enforceability of the said bank inquiry orders, it
is necessary for us to consider and rule on the same question which after all is a pure question of law.

WHEREFORE, the PETITION is DISMISSED. No pronouncement as to costs.

SO ORDERED.