G.R. No.
189206 June 8, 2011
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, RULING:
vs.
THE HONORABLE 15th DIVISION OF THE COURT OF APPEALS The Supreme Court ruled in favor of R.A. 6426 and thereby
and INDUSTRIAL BANK OF KOREA, TONG YANG MERCHANT AFFIRMING the decision of Court of Appeals.
BANK, HANAREUM BANKING CORP., LAND BANK OF THE
PHILIPPINES, WESTMONT BANK and DOMSAT HOLDINGS, R.A. 1405 was enacted on 1955 while R.A. 6426 was enacted
INC., Respondents. on 1974. These two laws both support the confidentiality of
bank deposits. There is no conflict between them. Republic
FACTS: Act No. 1405 was enacted for the purpose of giving
encouragement to the people to deposit their money in
On December 13, 1996, a surety bond was agreed banking institutions and to discourage private hoarding so
with DOMSAT HOLDINGS, INC. as the principal and the GSIS that the same may be properly utilized by banks in authorized
as administrator and the obligees are Land Bank of the loans to assist in the economic development of the country. It
Philippines, Tong Yang Merchant Bank, Industrial Bank of covers all bank deposits in the Philippines and no distinction
was made between domestic and foreign deposits. Thus,
Korea and First Merchant Banking Corporation collectively
Republic Act No. 1405 is considered a law of general
known as “The Banks” with the loan granted to DOMSAT of
application. On the other hand, Republic Act No. 6426 was
US $ 11,000,000.00 to be used for the financing of the two- intended to encourage deposits from foreign lenders and
year lease of a Russian Satellite from INTERSPUTNIK. investors. It is a special law designed especially for foreign
currency deposits in the Philippines. A general law does not
Domsat failed to pay the loan and GSIS refused to nullify a specific or special law. Generalia specialibus non
comply with its obligation reasoning that Domsat did not use derogant. Therefore, it is beyond cavil that Republic Act No.
the loan proceeds for the payment of rental for the satellite. 6426 applies in this case.
GSIS alleged that Domsat, with Westmont Bank as the
conduit, transferred the U.S. $11 Million loan proceeds from Intengan v. Court of Appeals affirmed the above-cited
the Industrial Bank of Korea to Citibank New York account of principle and categorically declared that for foreign currency
Westmont Bank and from there to the Binondo Branch of deposits, such as U.S. dollar deposits, the applicable law is
Westmont Bank. The Banks filed a complaint before the RTC Republic Act No. 6426.
of Makati against Domsat and GSIS.
In said case, Citibank filed an action against its officers for
GSIS requested for the issuance of a subpoena duces persuading their clients to transfer their dollar deposits to
tecum to the custodian of records of Westmont Bank to competitor banks. Bank records, including dollar deposits of
produce bank ledger covering the account of Domsat with the petitioners, purporting to establish the deception practiced
Westmont Bank (now United Overseas Bank) and other by the officers, were annexed to the complaint. Petitioners
pertinent documents. The RTC issued the subpoena but now complained that Citibank violated Republic Act No. 1405.
nonetheless, the RTC then granted the second motion for Supreme Court ruled that since the accounts in question are
reconsideration by “The Banks” to quash the subpoena U.S. dollar deposits, the applicable law therefore is not
granted to GSIS. Republic Act No. 1405 but Republic Act No. 6426.
GSIS assailed its case to the CA and CA partially
granted it’s petition allowing it to look into documents but
not the bank ledger because the US $ 11,000,000.00
deposited by Domsat to Westmont Bank is covered by R.A.
6426 or the Bank Secrecy Law.
GSIS now filed a petition for certiorari in the
Supreme Court for the decision of CA allowing the quashal by
the RTC of a subpoena for the production of bank ledger.
ISSUE:
Whether or not the deposited US $ 11,000,000.00 by Domsat,
Inc. to Westmont Bank is covered by R.A. 6426 as what “The
Banks” contend or it is covered by R.A. 1405 as what GSIS
contends.
