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