China Banking Corporation v. CA, G.R. No. 140687, December 18, 2006

D E C I S I O N

(1^st Division)

CHICO-NAZARIO, J.:

I.      THE FACTS

A complaint for recovery of sums of money and annulment of sales of real properties and shares of stock was filed by Jose Gotianuy against his son-in-law, George Dee, and his daughter, Mary Margaret Dee. Jose Gotianuy accused his daughter Mary Margaret Dee of stealing, among his other properties, US dollar deposits with Citibank N.A. amounting to not less than P35,000,000.00 and US$864,000.00. Mary Margaret Dee received these amounts from Citibank N.A. through checks which she allegedly deposited at China Banking Corporation (China Bank). 

Jose Gotianuy died during the pendency of the case before the trial court. He was substituted by his other daughter, Elizabeth Gotianuy Lo. The latter presented six US Dollar checks withdrawn by Mary Margaret Dee from Jose Gotianuy’s US dollar placement with Citibank. In the course of the trial, the lower court ordered two employees of petitioner China Bank to testify and disclose in whose name the dollar fund was deposited. The CA affirmed the trial court’s order; thus, China Bank appealed to the Supreme Court.

II.    THE ISSUE

May the Citibank dollar checks with Jose Gotianuy and/or Mary Margaret Dee as payees, which were deposited with petitioner China Bank, be looked into notwithstanding the law on secrecy of foreign currency deposits? Corollarily, may Jose Gotianuy be considered a depositor who is entitled to seek an inquiry over the said foreign currency deposits?

III.   THE RULING

[The Supreme Court DENIED the petition, AFFIRMED the decision of the CA pro hac vice, and REMANDED the case to the trial court for continuation of hearing with utmost dispatch consistent with this ruling.]

YES, the Citibank dollar checks with Jose Gotianuy and/or Mary Margaret Dee as payees, which were deposited with petitioner China Bank, may be looked into notwithstanding the law on secrecy of foreign currency deposits.

Sec. 8 of R.A. 6426, the Foreign Currency Deposit Act, provides that all authorized foreign currency deposits are considered absolutely confidential in nature and may not be inquired into. Under the same provision, there is only one exception to this rule, that is, when disclosure is allowed upon the written permission of the depositor.

In this case, Jose Gotianuy was considered by the Court as a co-depositor of Mary Margaret Dee. The Court reasoned that since Jose Gotianuy is the named co-payee of Mary Margaret Dee in the subject checks, which were deposited in China Bank, then Jose Gotianuy is likewise a depositor thereof. On that basis, no written consent from Mary Margaret Dee is necessary for the examination of the foreign currency deposits. As the owner of the funds unlawfully taken and which are undisputably now deposited with China Bank, Jose Gotianuy has the right to inquire into the said deposits.

A depositor, in cases of bank deposits, is one who pays money into the bank in the usual course of business, to be placed to his credit and subject to his check or the beneficiary of the funds held by the bank as trustee. On this score, the observations of the Court of Appeals are worth reiterating:

Furthermore, it is indubitable that the Citibank checks were drawn against the foreign currency account with Citibank, NA. The monies subject of said checks originally came from the late Jose Gotianuy, the owner of the account. Thus, he also has legal rights and interests in the CBC account where said monies were deposited. More importantly, the Citibank checks (Exhibits "AAA" to "AAA-5") readily demonstrate (sic) that the late Jose Gotianuy is one of the payees of said checks. Being a co-payee thereof, then he or his estate can be considered as a co-depositor of said checks. Ergo, since the late Jose Gotianuy is a co-depositor of the CBC account, then his request for the assailed subpoena is tantamount to an express permission of a depositor for the disclosure of the name of the account holder. The April 16, 1999 Order perforce must be sustained. (Emphasis supplied.)

In the complaint of Jose Gotianuy, he alleged that his US dollar deposits with Citibank were illegally taken from him. On the other hand, China Bank employee Cristuta Labios testified that Mary Margaret Dee came to China Bank and deposited the money of Jose Gotianuy in Citibank US dollar checks to the dollar account of her sister Adrienne Chu. This fortifies the Court’s conclusion that an inquiry into the said deposit at China Bank is justified. At the very least, Jose Gotianuy as the owner of these funds is entitled to a hearing on the whereabouts of these funds.

All things considered and in view of the distinctive circumstances attendant to the present case, the Court was constrained to render a limited pro hac vice ruling. Clearly it was not the intent of the legislature when it enacted the law on secrecy on foreign currency deposits to perpetuate injustice. This Court is of the view that the allowance of the inquiry would be in accord with the rudiments of fair play, the upholding of fairness in our judicial system and would be an avoidance of delay and time-wasteful and circuitous way of administering justice.