[03] SALVACION v.
CENTRAL BANK
G.R No. 94723 | 21 August 1997 | Torres, Jr., J.
TOPIC: Foreign Currency Deposit Unit (FCDU)
SUMMARY: Karen Salvacion, then 12 years old, was raped by
Greg Bartelli, an American. A criminal case was filed against him,
but as Bartelli escaped from detention, it was archived. Salvacion
filed a civil case for damages. In that case, the court issued a writ
of preliminary attachment covering certain foreign currency
deposits with Chinabank. The writ of attachment was unsatisfied
because foreign currency deposits are exempt from attachment
under CB Circular No. 960. The trial court eventually ruled in
favor of Salvacion. The writ of execution also remained unsatisfied
in view of the CB Circular. The SC ruled in favor of Salvacion,
holding that the CB Circular does not apply to transient depositors
like Bartelli.
DOCTRINE:
One reason for exempting the foreign currency deposits
from attachment, garnishment or any other order process of
any court, is to assure the development and speedy growth
of the Foreign Currency Deposit System and the Offshore
Banking System in the Philippines.
Another reason is to encourage the inflow of foreign
currency deposits into the banking institutions thereby
placing such institutions more in a position to properly
channel the same to loans and investments in the
Philippines, thus directly contributing to the economic
development of the country.
Obviously, the foreign currency deposit made by a transient
or tourist is not the kind of deposit given incentives and
protection by our laws because such depositor stays only
for a few days in the country and, therefore, will maintain
his deposit in the bank only for a short time.
RELEVANT PROVISIONS:
● Sec 113 of CB Circular No. 960, RA 6426 , amended by
PD 1426
FACTS:
1. On February 4, 1989, respondent Greg Barteli lured
petitioner Karen Salvation to go with him to his
apartment where Barteli detained Salvacion for four
days and repeatedly raped her
a. On February 4, 1989, Karen Salvacion (Salvacion)
was at the Plaza Fair Makati Cinema Square, with
her friend Edna Tangile whiling away her free time
b. She was approached by an American, Greg Bartelli
(Bartelli), who told her that he had a niece about her
age back at his house along Kalayaan Ave.
c. Bartelli gave Salvacion a stuffed toy in order to
convince her to go back to his house with him,
purportedly to teach his niece Filipino
d. When they arrived at his home, there was no niece.
Bartelli tied Salvacion’s hands and covered her
mouth with packing tape. He first inserted his finger
into her sex organ and later proceeded to have
carnal knowledge with her, using Johnson’s Baby
Oil as lubricant.
e. For the following three days, following breakfast
consisting of biscuits and coke, Bartelli raped
Salvacion. The rapes took place thrice a day.
f. On February 6, Salvacion was able to cry for help
through a window in the bathroom of Bartelli’s
house. However, the neighbor who heard her got
angry and called her “istorbo.”
2. Salvacion was rescued and Barteli was arrested bvy the
police. Barteli was detained in Makati Municipal Jail
where the following items were recovered from him:
dollar check, USD 3,903; COCOBANK Bank Book,
peso account; Dollar Acccount, China Banking Corp;
234 pesos
a. Finally, on February 7, 1989, policemen came to
Bartelli’s house and Karen was finally rescued.
Bartelli was arrested and taken to the police station.
Among the items recovered from Bartelli was a
Chinabank passbook for a dollar account.
b. Karen’s sworn statement was taken by the police
and made the basis of a criminal complaint for four
(4) counts of rape filed against Bartelli. An
Information for Serious Illegal Detention was also
filed against him.
3. A criminal case for serious illegal detention and rape
was filed against Barteli. Simultaneously, petitioners
here filed a civil case for damages with the RTC
Makati. However, Barteli escaped from jail. As a result,
the criminal cases were archived.
4. In the civil case, the judge issued an Order dated
February 22, 1989 granting the application of herein
petitioners, for the issuance of the writ of preliminary
attachment.
5. On March 1, 1989, the Deputy Sheriff of Makati served a
Notice of Garnishment on China Banking Corporation.
6. Chinabank resisted, it invoked invoked Section 113 of
Central Bank Circular No. 960 to the effect that the
dollar deposits of defendant Greg Bartelli are exempt
from attachment, garnishment, or any other order or
process of any court, legislative body, government
agency or any administrative body, whatsoever.
a. The Circular provides:
Exemption from attachment. — Foreign currency
deposits shall be exempt from attachment,
garnishment, or any other order or process of any
court, legislative body, government agency or any
administrative body whatsoever.
7. The Salvacions wrote to the Central Bank (CB) seeking
clarification on whether Section 113 of CB Circular No.
960 has any exception or whether said section has been
repealed or amended.
a. In reply, the CB stated that the cited provision is
absolute in application. It does not admit of any
exception, nor has the same been repealed nor
amended.
8. Bartelli was declared in default and judgment was
rendered in favor of Salvacion, awarding a total of P1
million in moral damages, P100k in exemplary
damages, 25% attorney’s fees, litigation expenses of
P10,000 and the costs of the suit.
9. The Salvacions petitioners tried to execute on Bartelli’s
dollar deposit with China Banking Corporation.
Likewise, the bank invoked Section 113 of Central Bank
Circular No. 960.
10. Hence, this petition.
ISSUE/S, HOLDING & RATIO:
(MAIN) W/N Section 113 of Central Bank Circular No. 960
may be invoked to defeat the garnishment of Bartelli’s foreign
currency deposits - NO
THE RULE IS THAT FOREIGN CURRENCY DEPOSITS
MADE BY A TRANSIENT OR TOURIST IS NOT THE
KIND OF DEPOSIT GIVEN INCENTIVES AND
PROTECTION BY OUR LAWS BECAUSE SUCH
DEPOSITOR STAYS ONLY FOR A FEW DAYS IN THE
COUNTRY AND, THEREFORE, WILL MAINTAIN HIS
DEPOSIT IN THE BANK ONLY FOR A SHORT TIME.
1. §113 was copied from §8 of RA 6426, as amended by PD
1426, which authorized certain banks to accept foreign
currency deposits.
2. The purpose of the exemption from garnishment under
RA 6426 (as amended by PD 1426, and PD 1034,
authorizing the establishment of an offshore banking
system in the PH), was to assure the development and
speedy growth of the Foreign Currency Deposit System
and the Offshore Banking System in the Philippines.
o To encourage the inflow of foreign currency
deposits into the banking institutions authorized
to accept such deposits in the Philippines thereby
placing such institutions more in a position to
properly channel the same to loans and
investments in the Philippines, thus directly
contributing to the economic development of the
country;
o To have as wide access as possible to the sources of
capital funds for economic development;
o To develop the Philippines as another financial
center in Asia, among others.
3. Obviously, the foreign currency deposit made by a
transient or a tourist is not the kind of deposit
encouraged by PD Nos. 1034 and 1035 and given
incentives and protection by said laws because such
depositor stays only for a few days in the country and,
therefore, will maintain his deposit in the bank only for
a short time.
o Respondent Greg Bartelli, as stated, is just a tourist
or a transient. He deposited his dollars with
respondent China Banking Corporation only for
safekeeping during his temporary stay in the
Philippines.
4. Moreover, the law was passed during a time when
foreign currency deposits in the country were low. That
is not the case at the present
5. If the Court rules that the Circular is applicable to a foreign
transient, injustice would result especially to a citizen
aggrieved by a foreign guest like accused Greg Bartelli.
o This would negate Article 10 of the New Civil Code
which provides that “in case of doubt in the
interpretation or application of laws, it is presumed
that the lawmaking body intended right and justice
to prevail.”
W/N the Court has original jurisdiction over a petition for
declaratory relief - NO
● Salvacion deserves to receive the damages awarded to her
by the court. But this petition for declaratory relief can only
be entertained and treated as a petition for mandamus to
require respondents to honor and comply with the writ of
execution in the civil case.
● The Court has no original and exclusive jurisdiction over a
petition for declaratory relief. There are, however,
exceptions to this rule.
● Thus, where the petition has far-reaching implications and
raises questions that should be resolved, it may be treated
as one for mandamus.
RULING: The provisions of Section 113 of CB Circular No. 960
and PD No. 1246, insofar as it amends Section 8 of R.A. 6426 are
hereby held to be INAPPLICABLE to this case because of its
peculiar circumstances.
