Title
China Banking Corp. vs. Ortega
Case Decision Date
G.R. No. L-34964 Jan 31, 1973
China Banking Corporation and Tan Kim Liong petition against the Court of First
Instance of Manila's order to disclose bank deposit information, claiming it
violated Republic Act No. 1405, but the court rules in favor of the plaintiff, stating
that the disclosure is necessary for execution and does not violate the law.
Case Digest (G.R. No. L-34964)
Comprehensive
Facts:
The case involves China Banking Corporation and its cashier, Tan Kim Liong, as
petitioners-appellants, against Hon. Wenceslao Ortega, Presiding Judge of the Court of
First Instance of Manila, Branch VIII, and Vicente G. Acaban, as respondents-appellees.
On December 17, 1968, Vicente Acaban filed a complaint in the Court of First Instance of
Manila against Bautista Logging Co., Inc., B & B Forest Development Corporation, and
Marino Bautista for the collection of a sum of money. The trial court declared the
defendants in default for failing to answer within the reglementary period and
authorized the Branch Clerk of Court and/or Deputy Clerk to receive the plaintiff's
evidence. Consequently, a judgment by default was rendered against the defendants on
January 20, 1970. To satisfy the judgment, Acaban sought the garnishment of the bank
deposit of B & B Forest Development Corporation with China Banking Corporation. A
notice of garnishment was issued by the Deputy Sheriff and served on the bank through
its cashier, Tan Kim Liong. The bank's cashier, citing Republic Act No. 1405, refused to
disclose any information about the deposit. Acaban then filed a motion to cite Tan Kim
Liong for contempt of court. The trial court denied the motion but ordered Tan Kim
Liong to inform the court whether B & B Forest Development Corporation had a deposit
in the bank and to hold the deposit intact. Tan Kim Liong's motion for reconsideration
was denied, and he was directed to comply with the order or face arrest and
confinement. The petitioners then filed the instant petition for certiorari to review the
trial court's orders dated March 4, 1972, and March 27, 1972.
Issue:
1. Can a banking institution validly refuse to comply with a court process garnishing
the bank deposit of a judgment debtor by invoking the provisions of Republic Act No.
1405?
Ruling:
The Supreme Court ruled that the orders of the lower court dated March 4 and 27, 1972,
are affirmed, with costs against the petitioners-appellants.
Ratio:
The Supreme Court held that the lower court did not order an examination or inquiry
into the deposit of B & B Forest Development Corporation as contemplated by Republic
Act No. 1405. Instead, it merely required Tan Kim Liong to inform the court whether the
defendant had a deposit in the bank for the purposes of garnishment, so the bank would
hold the deposit intact and not allow any withdrawal until further order. The Court
clarified that the prohibition against examination or inquiry into a bank deposit under
Republic Act No. 1405 does not preclude its garnishment to ensure satisfaction of a
judgment. The disclosure of the existence of the deposit is purely incidental to the
execution process. The Court emphasized that it was not the intention of Congress to
enable debtors to evade payment of their just debts by converting their assets into cash
and depositing them in a bank. The legislative discussions during the enactment of
Republic Act No. 1405 indicated that bank deposits could be reached by attachment or
garnishment to satisfy a final judgment. Therefore, the orders of the lower court were
affirmed.
