SUMMARY
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(Below is the dissenting opinion of Supreme Court Associate Justice Maria Lourdes Sereno in the Feb 9, 2012 SC temporary restraining order on the subpoena issued by the impeachment court to the Philippine Savings Bank, which keeps Chief Justice Renato Corona’s dollar accounts.)
The prayer for a temporary restraining order (TRO) by petitioner Philippine Savings Bank (PSBank) against the Senate Impeachment Court should not have been granted for the following reasons:
(1) the protection of absolute confidentiality under the Foreign Currency Deposits Act (FCDA) or Republic Act (R.A.) No. 6426 can only be invoked by the owner, and in this case, the five (5) Foreign Currency Deposits (FCDs) involved are not being officially claimed by Chief Justice Renato C. Corona at this time;
(2) if indeed those five accounts belong to Chief Justice Corona, there appears to be a constitutionally-generated permission on the latter’s part to disclose the FCDs;
(3) even if the permission to disclose is deemed absent, the subpoena issued by the Impeachment Court is a constitutionally-imposed exception to the secrecy of FCDs. From all three perspectives, the requirements for the issuance of a TRO have not been satisfied.
More important, what the people at the gut level understand to be true is that they have, through the Constitution, enshrined the doctrine on the accountability of public officers, on the fundamental belief that public office is a public trust. It cannot get plainer, but truer, than that.
The Constitution wove, not only in the central motif on public accountability in Article XI of the Constitution, but in every thread of its fabric, this legally demandable notion of public accountability. No interpretation of law nor procedural requirement can be viewed in any manner that negates this bedrock principle of Philippine constitutional governance.
It is disturbing to note that the majority of this Court failed to consider the care with which the Senate Impeachment Court crafted its Resolution directing the issuance of the assailed subpoena.
The decision to lift the cloak of absolute secrecy was categorically pronounced to apply only in the context of the impeachment trial of Chief Justice Corona. There are only thirty-one (31) impeachable officers, and there have been only two (2) impeachment trials since the beginning of Philippine constitutional history.
The care with which the Senate discharged its role is in sharp contrast with the incomprehensible decision of the majority to abandon the clear stand that the Court took in Salvacion v. Central Bank of the Philippines that exceptions in the interest of justice can lift the absolute secrecy of FCDs.
Public accountability
In the scale of constitutional values, nothing can be higher than the requirement of public accountability.
Considering that 31 public officers cannot be removed from office by any other means than impeachment, it is extremely unwise for this Court to enjoin the conduct of the Senate Impeachment Court, especially considering — as pointed out above — the care with which the latter approached the issuance of the subpoena over the alleged FCDs of the Chief Justice.
None of these 31 public officers can, contrary to the implication of the opinion of Justice Arturo D. Brion, assert that their right to privacy over their foreign currency assets should prevail over the power of the Impeachment Court to exact public accountability.
PSBank’s Claims on the Presence of Rule 65 Elements and the Requirements for a TRO in the Assailed Action
PSBank alleges in its Petition for Certiorari that it received a subpoena from the Senate Impeachment Court on 07 February 2012 requiring the former to testify and bring original and certified true copies of, among others, five FCDs in the name of Chief Justice Corona. PSBank believes, however that —
1. The FCDA “bars any inquiry or examination as to the details of such foreign currency accounts.”
2. “If Petitioner Garcia, the President of PSBank testifies and brings the requested bank documents, he will be violating Section 8 of the FCDA and will be exposed to criminal liability for doing so.”
3. “Petitioner PSBank, on the other hand, will suffer the possible revocation or suspension of its authority to accept new foreign currency deposits by the BSP . . . Also there are news reports of a possible ‘bank run’ if the Respondent Impeachment Court proceeds to require bank officials . . . to divulge details of bank accounts of the Chief Justice.”
4. The “Respondent Impeachment Court committed grave abuse of discretion, amounting to lack or excess of jurisdiction when it issued the Assailed Subpoena for the following reasons:
I. The issuance of the Assailed Subpoena clearly violated the prohibition under RA 6426. The cases of Salvacion v. Central Bank of the Philippines (the “Salvacion Case”), China Banking Corporation v. Court of Appeals, et al (the China Bank Case”), and Ejercito v. Sandiganbayan (the “Estrada Case”) cited in the Resolution do not support an exemption from the prohibition in the Impeachment proceedings
II. The Respondent Impeachment Court arbitrarily ignored Petitioners’ Constitutional right to life and property when it issued the Assailed Subpoena for foreign currency deposits. Petitioners will clearly incur criminal liability for violation of RA 6426. Petitioner PS BANK will likewise risk revocation or suspension of its authority to accept new foreign currency deposits by the Bangko Sentral ng Pilipinas (“BSP”) pursuant to Section 87 of the Manual of Regulations on Foreign Exchange Transactions.
5. This Grave Abuse of Discretion was committed by the Senate Impeachment Court in this manner:
30. The Respondent Impeachment Court’s grant of the request for Subpoena of the bank records of foreign currency deposits and the issuance of the Subpoena against Petitioner PS BANK for such bank records contravenes the absolute confidentiality of foreign currency deposits under Section 8 of Republic Act No. 6426, or the Foreign Currency Deposit Act of the Philippines (“RA 6426”) which provides:
“Sec. 8. Secrecy of Foreign Currency Deposits. – All foreign currency deposits authorized under this Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall such foreign currency deposits be examined, inquired or looked into by any person, government official bureau or office whether judicial or administrative or legislative or any other entity whether public or private: Provided, however, that said 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.”
31. As admitted by the Respondent Impeachment Court, RA 6426, which is the recognized law that governs foreign currency deposits, clearly provides for only one exception to the prohibition on disclosure – upon prior written permission of the depositor.
33. The Respondent Impeachment Court gravely abused its discretion when it went beyond applying RA 6426. The Respondent Impeachment Court did not just unlawfully reinvent RA 6426, but it also contravened existing jurisprudence that it cited to support its grant of the Prosecution Panel’s Request for Subpoena.
33.1. The Salvacion Case does not support the Impeachment Court’s issuance of Subpoena for the foreign currency deposits. No less than this Honorable Court categorically stated that it decided not to uphold the prohibition on disclosure on grounds of equity and justice. The case had very peculiar circumstances and being an exception to the rule, it cannot be applied to the chief Justice Corona’s impeachment trial. It is a sui generis case.
33.1.1. In the Salvacion Case, this Honorable Court allowed, as a strict exception, the inquiry of the foreign currency deposit in question mainly due to the peculiar circumstances of the case such that a strict interpretation of the letter of the law would result to rank injustice. In this case, Greg Bartelli, an American tourist, was charged with criminal cases for serious illegal detention and rape committed against then twelve (12) year-old Karen Salvacion. A separate civil case for damages with preliminary attachment was filed against Greg Bartelli. The trial court issued an Order granting the Salvacions’ application for the issuance of a writ of preliminary attachment. A notice of garnishment was then served on China Bank where Bartelli held a dollar account. China Bank refused, invoking the secrecy of bank deposits. This Honorable Court ruled:
It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as a device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent.
Call it what it may — but is there no conflict of legal policy here? Dollar against Peso? Upholding the final and executory judgment of the lower court against the Central Bank Circular protecting the foreign depositor? Shielding or protecting the dollar deposit of a transient alien depositor against injustice to a national and victim of a crime? This situation calls for fairness against legal tyranny.
We definitely cannot have both ways and rest in the belief that we have served the ends of justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and P.D. No. 1246, insofar as it amends Section 8 of R.A. No. 6426 are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances. Respondents are hereby REQUIRED to COMPLY with the writ of execution issued in Civil Case No. 89-3214, “Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC Makati and to RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y Northcott in such amount as would satisfy the judgment.
33.2 The Respondent Impeachment Court also misconstrued the China Bank Case. The China Bank Case actually highlights the fact that the only exception to the prohibition on disclosure on foreign currency deposits is the prior written permission of the depositor.
33.2.1. In the China Bank Case, respondent accused his daughter of stealing his dollar deposits with Citibank, N.A. (“Citibank”). His daughter allegedly received the checks from Citibank and deposited them to her account in China Bank. The subject checks were presented in evidence. A subpoena was issued to employees of China Bank to testify on these checks. China Bank argued that the Citibank dollar checks with both respondent and/or her daughter as payees, deposited with China Bank, may not be looked into under the law on secrecy of foreign currency deposits. This Honorable court, relying on the exception under RA 6426, as amended, ruled that respondent, as owner of the funds unlawfully taken and which were deposited with China Bank, had the right to inquire into the said deposits because his consent was deemed given. This Honorable Court further expressly stated that “all things considered and in view of the distinctive circumstances attendant to the present case, we are constrained to render a limited pro hac vice ruling,” or a ruling for this one particular occasion.
33.2.2. This Honorable Court emphasized the absolute confidentiality of foreign currency deposits:
“x x x the law provides that all foreign currency deposits authorized under Republic Act No. 6426, as amended by Sec. 8, Presidential Decree No. 1246, Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034 are considered absolutely confidential in nature and may not be inquired into. There is only one exception to the secrecy of foreign currency deposits, that is, disclosure is allowed upon the written permission of the depositor.”
33.3. The Respondent Impeachment Court’s citation of the Estrada Case is utterly misleading, because this case does not involve foreign currency deposit and did not mention RA 6426.
33.3.1. The exceptions to confidentiality provided under another statute, Republic Act No. 1405, The Secrecy of Bank Deposit Laws, as amended, and related laws and jurisprudence, particularly in cases of impeachment, where the money deposited or invested is the subject matter of the litigation and unexplained wealth, do not apply to foreign currency deposits. In GSIS v. Court of Appeals, this Honorable Court explained that the applicable law for foreign currency deposits is RA 6426, and not RA 1405.
33.3.2. Applying Section 8 of RA 6426, as amended, this Honorable Court held that Westmont Bank cannot be compelled to disclose the dollar deposits of Domsat Holdings, Inc. The Honorable Court ruled:
“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. 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.”
34. Based on the foregoing, it is abundantly clear that the Respondent Impeachment Court exercised its power to issue the Assailed Subpoena in a capricious, whimsical, and arbitrary manner. The abuse of discretion demonstrated by the Respondent Impeachment Court is both patent and gross as it clearly violated the law. On this ground alone, there is more than enough reason for this Honorable Court to grant this Petition.
38. It is clear from the foregoing that Petitioners’ disclosure of information related to any foreign currency deposit under circumstances that are not covered by the exemptions provided under RA No. 6426, even if done in good faith or pursuant to an order of the Respondent Impeachment Court, will expose Petitioner Garcia upon conviction to criminal liability and Petitioner PS Bank to possible revocation or suspension of its authority to accept new foreign currency deposits by the BSP.
40. The curtailment of PS Bank’s right to property is also undeniable from the fact that the revocation or suspension of PS Bank’s authority to accept new foreign currency deposits by the BSP will necessarily translate to immediate loss of income for PS Bank. This is in addition to the chilling effect that will be felt by the other banks, whose foreign currency depositors may be alarmed by the Respondent Impeachment Court’s arbitrary and whimsical examination of a foreign currency deposit supposedly protected by RA 6426 and subject to the strict requirement of disclosure under the AMLA.
Senate’s reasons
The Senate Impeachment Court laid down the legal basis for the issuance of the assailed subpoena in its Resolution dated 02 February 2012 under the hand of Senate President Juan Ponce Enrile, and we quote:
The Court has had to consider whether or not the issuance of the subpoenae would violate existing laws on secrecy of bank deposits. Under R.A. No. 1405 as amended and the Anti-Money Laundering Act, the disclosure of information relating to bank accounts in local currency cannot be made except in five (5) instances, namely:
a) upon written permission of the depositor,
(b) in cases of impeachment,
(c) upon order of a competent court in the case of bribery or dereliction of duty of public officials or,
(d) when the money deposited or invested is the subject matter of the litigation, and
(e) in cases of violation of the Anti-Money Laundering Act (AMLA).
However, it appears that for foreign currency bank accounts, the disclosure may be made only upon written permission of the depositor pursuant to Section 8 of Republic Act No. 6426.
However, the Court has taken due notice of the fact that the Supreme Court has, in several decisions, relaxed the rule on the absolute confidential nature of bank deposits, even foreign currency deposit accounts, in the cases of Salvacion vs. Central Bank of the Philippines, G.R. No. 94723, August 21, 1997 and China Banking Corporation v. Court of Appeals, G.R. No. 140687, December 18, 2006 and Ejercito vs. Sandiganbayan, G.R. Nos. 157294-95, November 30, 2006. The majority is of the view that the present impeachment proceedings present a valid exception to the general rule on confidentiality of information on bank accounts even for foreign currency bank accounts.
The Court would like to emphasize that the non-disclosure of information relating to the bank accounts of individuals is still the general rule and it has no intention of going against the public policy on this matter. However, the Court is only issuing the subpoena relating to the bank accounts of Chief Justice Corona because of the pendency of the present impeachment proceedings and for no other reason.
WHEREFORE, IN VIEW OF THE FOREGOING, the majority votes to grant the Prosecution’s Requests for Subpoenae to the responsible officers of Philippine Savings Bank (PSBank) and Bank of Philippine Island (BPI), for them to testify and bring and/or produce before the Court documents on the alleged bank accounts of Chief Justice Corona, only for the purpose of the instant impeachment proceedings, as follows:
b) The Branch Manager (and/or authorized representative) of Philippine Savings Bank, Katipunan Branch, Katipunan Avenue, Loyola Heights, Quezon City, is commanded to bring before the Senate at 2:00 p.m. on February 8, 2012, the original and certified true copies of the account opening forms/documents for the following bank accounts allegedly in the name of Renato C. Corona, and the documents showing the balances of the said accounts as of December 31, 2007, December 31, 2008, December 31, 2009 and December 31, 2010:
089-19100037-3
089-13100282-6
089-121017358
089-121019593
089-121020122
089-121021681
089-141-00712-9
089-141-00746-9
089-14100814-5
089-121-01195-7[6] (Emphasis in the original.)
Essence of PSBank’s attack
PSBank is essentially arguing that the Senate Impeachment Court, in issuing the subpoena, so grossly erred or was so whimsical and arbitrary in its understanding and application of three (3) Decisions of the Supreme Court that its action amounted to exercising a jurisdiction it did not have; or that it exceeded the same as to lose legitimate jurisdiction over the matter in contention.
To succeed in such a line of reasoning, PSBank has to prove that the three cases cited by the Senate are so categorical in their pronouncement on the absolute confidentiality of FCDs, such that the Impeachment Court acted whimsically and arbitrarily or was in gross negligence to such an extent that the Impeachment Court could not justify its reasoning in issuing the subpoena, as found in the following paragraph:
However, the Court has taken due notice of the fact that the Supreme Court has, in several decisions, relaxed the rule on the absolute confidential nature of bank deposits, even foreign currency deposit accounts, in the cases of Salvacion vs. Central Bank of the Philippines, G.R. No. 94723, August 21, 1997 and China Banking Corporation v. Court of Appeals, G.R. No. 140687, December 18, 2006 and Ejercito vs. Sandiganbayan, G.R. Nos. 157294-95, November 30, 2006.
The majority is of the view that the present impeachment proceedings present a valid exception to the general rule on confidentiality of information on bank accounts even for foreign currency bank accounts.
In plain language, was the Senate Impeachment Court so grossly incompetent or malicious in invoking the three Decisions of the Supreme Court to justify the issuance of the subpoena?
Regarding Salvacion, PSBank claims that while the Supreme Court “decided not to uphold the prohibition on disclosure on grounds of equity and justice, [t]he case had very peculiar circumstances and being an exception to the rule, it cannot be applied to the Chief Justice Corona’s impeachment trial.” Salvacion is a sui generis case.[8]
On this score, it must be emphasized that there are, in a country of 96 million people, only thirty-one (31) people[9] as earlier mentioned, who are removable from office by the extraordinary process of impeachment. From the time that impeachment as a mode of removal was provided for in the 1935 Constitution, an impeachment trial has only been seen twice — in the case of former President Joseph Ejercito Estrada and now in that of Chief Justice Corona. It will be extremely difficult to find any other “very peculiar” set of circumstances or sui generis case that would exceed the present impeachment trial in those aspects. The Senate Impeachment Court was superbly careful in ensuring that the issuance of the assailed subpoena does not create any legal effect beyond that of the conduct of the impeachment trial. It thus declared:
The Court would like to emphasize that the non-disclosure of information relating to the bank accounts of individuals is still the general rule and it has no intention of going against the public policy on this matter. However, the Court is only issuing the subpoena relating to the bank accounts of Chief Justice Corona because of the pendency of the present impeachment proceedings and for no other reason.
WHEREFORE, IN VIEW OF THE FOREGOING, the majority votes to grant the Prosecution’s Requests for Subpoenae to the responsible officers of Philippine Savings Bank (PSBank) and Bank of Philippine Island (BPI), for them to testify and bring and/or produce before the Court documents on the alleged bank accounts of Chief Justice Corona, only for the purpose of the instant impeachment proceedings, as follows: xxx (Emphasis supplied.)
On the other hand, while sexual abuse at the hands of anyone, including foreigners, is one of the most cruel experiences a minor can ever undergo as in the Salvacion case, it is not as peculiar nor as sui generis as the ongoing conduct of an impeachment trial. And yet, PSBank considers the Salvacion situation sufficient to justify the disclosure of the details of a foreign national’s FCD. Its own demand that the situation needs to be very peculiar before the cloak of absolute confidentiality can be lifted has been more than met in the context in which the assailed subpoena was issued.
Regarding China Bank, PSBank claims that the case “actually highlights the fact that the only exception to the prohibition on disclosure on foreign currency deposits is the prior written permission of the depositor.” It then went to emphasize that the authority given by the Supreme Court to disclose information on the FCD was a ‘pro hac vice ruling,’ meaning, it applies only to that case.
What PSBank failed to mention, however, was that while China Bank reiterated the statutory privilege of the confidentiality of FCDs, the Supreme Court was careful to balance this privilege with the following considerations:
It is in this light that the court in the case of Salvacion v. Central Bank of the Philippines, allowed the inquiry of the foreign currency deposit in question mainly due to the peculiar circumstances of the case such that a strict interpretation of the letter of the law would result to rank injustice. Therein, Greg Bartelli y Northcott, an American tourist, was charged with criminal cases for serious illegal detention and rape committed against then 12 year-old Karen Salvacion. A separate civil case for damages with preliminary attachment was filed against Greg Bartelli. The trial court issued an Order granting the Salvacions’ application for the issuance of a writ of preliminary attachment. A notice of garnishment was then served on China Bank where Bartelli held a dollar account. China Bank refused, invoking the secrecy of bank deposits. The Supreme Court ruled: “In fine, the application of the law depends on the extent of its justice x x x It would be unthinkable, that the questioned law exempting foreign currency deposits from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatever would be used as a device by an accused x x x for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent.
Petitioners are correct in stating that Ejercito v. Sandiganbayan[10] (which they call the Estrada case) is inapplicable as it does not involve FCDs. Nevertheless, another Estrada case, Estrada v. Desierto,[11] categorically pronounces that the privilege under Section 8 of R.A. 6426 applies only to depositors who are non-residents, and who are not engaged in trade and business in the Philippines. We quote in relevant part:
Finally, with respect to the complaint for violation of Section 8 of Rep. Act No. 6426 (Foreign Currency Deposits Act of the Philippines), public respondent ratiocinated –
At this point, it is worth stressing, that this office in its previous Order dated 20 February 2001, ruled that the absolute confidentiality of foreign currency deposit account provided for under R.A. 6426 does not apply to the foreign currency deposit accounts of herein complainant, since the protection under the said law is intended only for depositors who are non residents and are not engaged in trade and business in the Philippines. In coming out with such ruling, this office has as its basis one of the Whereas clauses of P.D. 1246 which amended Sec. 8 of R.A. 6426. For emphasis, the pertinent provision of the said law is hereby quoted:
WHEREAS, in order to assure the development and speedy growth of the Foreign Currency Deposit System and offshore Banking System in the Philippines, certain incentives were provided for under the two systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the interest of the income of depositors who are non-residents and are not engaged in trade or business in the Philippines.
Considering the previous Order of this Office, it necessarily follows that the accusation for violation of Sec. 8 of R.A. 6426 against herein respondents has no leg to stand on, thus, the dismissal of the charge for violation of Sec. 8 of R.A. 6426 is therefore in order.
And:
In Salvacion v. Central Bank and China Bank, 278 SCRA 27 (1997), the Highest Tribunal adopted the opinion of the Office of the Solicitor General (OSG) that only foreign currency deposits of foreign lenders and investors are given protection and incentives by the law, and further ruled that the Foreign Currency Deposits Act cannot be utilized to perpetuate injustice. Following such pronouncements, it is respectfully submitted that foreign currency deposits of Filipino depositors, including herein complainant, are not covered by the Foreign Currency Deposits Act, and are thus not exempt from the processes duly-issued by the BIR.
We do not perceive any grave abuse of discretion on the part of the public respondent when they issued the aforecited rulings. We, thus, defer to the policy of non-interference in the conduct of preliminary investigations. We have invariably stated that it is not sound practice to depart from the policy of non-interference in the Ombudsman’s exercise of discretion to determine whether or not to file information against an accused. The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman but upon practicality as well. Otherwise, the functions of the courts will be grievously hampered by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it, in much the same way that the courts would be absolutely swamped if they could be compelled to review the exercise of discretion on the part of the fiscals or prosecuting attorneys each time they decided to file an information in court or dismissed a complaint by a private complainant. Thus, in the absence of a clear case of abuse of discretion, this Court will not interfere with the discretion of the Ombudsman, who, depending on his own findings and considered evaluation of the case, either dismisses a complaint or proceeds with it.
Moreover, in this case, the Court en banc unanimously stated that the Ombudsman’s interpretation of R.A. 6426 and Salvacion, should it even be shown to be erroneous, may not be the subject of a Petition for Certiorari, since the exercise of discretion was not so grave as to give this Court the power to interfere with the proceedings therein, thus:
A cautionary word.
A declaration by this Court that the public respondents did not gravely abuse their discretion in issuing the resolutions dismissing petitioner’s complaint does not necessarily translate to a declaration of assent in the findings of fact and conclusions of law contained therein.
With respect specifically to the resolution for violation of Section 8 of Rep. Act. No. 6426, public respondents relied on the “whereas” clause of P.D. No. 1246 which amended Rep. Act No. 6426 and on the Salvacion case to conclude that only non-residents who are not engaged in trade and business are under the mantle of protection of Section 8 of Rep. Act. No. 6426.
Assuming that such reliance is erroneous as contended by petitioner, this Court, on petition for certiorari, cannot correct the same as the error is not of a degree that would amount to a clear case of abuse of discretion of the grave and malevolent kind. It is axiomatic that not every erroneous conclusion of law or fact is abuse of discretion. As adverted to earlier, this Court will interfere in the Ombudsman’s findings of fact and conclusions of law only in clear cases of grave abuse of discretion.
Justified
In other words, the Senate Impeachment Court was more than amply justified in issuing the assailed subpoena and demonstrated sufficient care to observe the law in defining the parameters of the applicability of its assailed order to PSBank.
This Court is completely wrong to deny the Impeachment Court’s use of the Salvacion case in justifying the assailed subpoena, when this Court in Estrada v. Desierto recognized the Ombudsman’s right to rely on Salvacion.
For a preliminary injunctive relief to issue, three conditions must obtain: (a) the invasion of right sought to be protected is material and substantial; (b) the right of the plaintiff is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious damage.
In the present case, petitioners have miserably failed to show an actual existing right that is violated or threatened with violation. The issuance by the Impeachment Court of a subpoena relating to the alleged FCDs of therein respondent Chief Justice Renato C. Corona does not entitle petitioners to a preliminary injunctive relief.
Since anyone has yet to claim Ownership of the 5 FCDs, PSBank Cannot Prematurely Invoke the Privilege of Absolute Confidentiality
Section 8 of R.A. No. 6426 provides an exception to the absolute confidentiality nature of FCDs, in that the written permission of the depositor may constitute a waiver of this privilege. What can be logically inferred from this provision is that the confidentiality nature of the FCD is extended only in favor of the owner of the account. Stated differently, it is only the depositor who may invoke the confidentiality privilege and the exception thereto. This was precisely the pronouncement of this Court in Van Twest v. Court of Appeals:
[T]he Court holds that the privileges extended by the statute cited by private respondent are actually enjoyed, and are invocable only, by the petitioner, both because private respondent’s transactions fall outside the ambit of the statute, and because petitioner is the owner of the foreign exchange fund subject of this case. This conclusion is anchored on the consistent and contemporaneous administrative construction by the Central Bank of the basic statute, as manifested in the relevant circulars issued by it in implementation of that law, which are entitled to great respect by the courts.
Section 8 of R.A. No. 6426 (the Foreign Currency Deposit Act), as amended by P.D. No. 1246, which is still in force, provides:
Sec. 8. Secrecy of Foreign Currency Deposits — All foreign currency deposits authorized under this Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall such foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office, whether judicial or administrative or legislative or any other entity whether public or private: Provided, however, that said foreign currency shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever.
Circular No. 960 was superseded by Circular No. 1318, Series of 1992, which did not reenact and continue the administrative provision above-mentioned (Section 102). Nevertheless, Section seventy-four, Chapter seven of Circular No. 1318, which deals with the foreign currency deposit system, provides in relevant part:
Section 74. Definition of Terms. As used in this Chapter, the following terms shall have the meaning indicated unless the context clearly indicates otherwise:
The definition of such other terms used in this Chapter shall be consistent with the definition of terms used under the Chapter on Offshore Banking System.
Section forty-nine, Chapter five of the same Circular, dealing with the Offshore Banking System, stated in part:
Section 49. Definition of Terms. . . .
d. ‘Deposits’ shall refer to funds in foreign currencies which are accepted and held by an OBU (offshore banking unit) in the regular course of business, with the obligation to return an equivalent amount to the owner thereof, with or without interest;
In other words, although transfers from one foreign currency deposit account to another foreign currency deposit account in the Philippines are now eligible deposits under the Central Bank’s Foreign Currency Deposit System, private respondent is still not entitled to the confidentiality provisions of the relevant circulars. For, as noted earlier, private respondent is not the owner of such foreign currency funds and her personal deposit account is not, under Section 49 of Circular No. 1318, protected by this Circular.
In the present case, the prosecution alleges that the FCD accounts are owned by the Chief Justice, while the defense denies his ownership of the same. The documents relating to these accounts were in fact subpoenaed to ascertain whether the Chief Justice is the named depositor therein. Thus, until the ownership of these FCDs is established, the confidentiality privilege under R.A. 6426 is yet to attach.
Nowhere in the 28-page Petition of PSBank does it assert that the five FCDs belong to Chief Justice Corona. Indeed, even under intense questioning by the Senator-Judges, petitioner Garcia was not willing to share the slightest information regarding these 5 FCDs. Petitioners in their answer state:
x x x. On 3 February 2012, the Respondent Panel of Prosecutors filed its Supplemental Request for Subpoena/Reply, designating therein the particular bank accounts in PS BANK which allegedly belonged to the Chief Justice x x x
Neither does the Chief Justice categorically claim in his related Petition for Certiorari docketed as G.R. No. 200242 that the five FCDs belong to him.
Corona’s claim
Chief Justice Corona asserts that the documents on the five FCDs are just “alleged” genuine documents, thus conveying the sense that he is unwilling to admit that the FCDs are his. Yet, in the same breath, he vigorously protests that without the owner’s permission, details on those FCDs cannot be disclosed even to the Impeachment Court.
After a draft of this Opinion was circulated among the members of this Court on 10 February 2011, a newspaper report came out the following day referring to a public admission by the Chief Justice with respect to the dollar accounts in question and a promise that he will make the disclosures in due time. This however, is not the claim of ownership contemplated in Van Twest.
Additionally, defense counsel tells the media that they are standing by the accuracy of the SALNs of the Chief Justice. Explicitly, Tranquil Salvador III, a defense spokesperson, said that the answer to the basic issue of the accuracy of the details of Chief Justice Corona’s SALN was the basic defense, and to the question “Is it accurate?” he responded: “Yes, it is accurate.”
Until therefore, there is a clear claim by the Chief Justice of ownership of the 5 FCDs, this Court has to consider that there exists an implied denial of ownership of any bank account containing money beyond what is disclosed in the Chief Justice’s SALN.
What we have here is a situation in which a person seeks to have his cake and eat it too. On the one hand, there is denial or at the very least, no outright claim of ownership of the alleged FCDs; and yet, on the other, the person seeks the absolute protection from disclosure that can only be granted to an owner.
Considering that it is still premature for the Chief Justice to avail of the confidentiality privilege as he continues to be vague on the ownership of the FCDs, neither is it ripe for petitioners to invoke it on his behalf.
Mere compliance with the Impeachment Court’s subpoena to bring the documents will not engender petitioners’ perceived criminal liability or risk revocation of the bank’s license to operate or suspension for violation of R.A. 6426, precisely because the rule on secrecy has not yet attached.
It is for the same reason why this Court should treat as absurd petitioner Garcia’s contention that the resulting exposure to imprisonment will deprive him of the right to life.
In the present case, because of the fact that the Chief Justice is a public officer, he is constitutionally and statutorily mandated to perform a positive duty to disclose all of his assets and liabilities. This already operates as the consent required by law.
The Offices of the Chief Justice and of the 14 Associate Justices of the Supreme Court are an express creation of the Constitution, which vests them with explicit powers[20] necessary for the proper functioning of a democratic government.
Foremost is the principle that public office is by virtue of the people’s mandate to exercise a sovereign function of the government. Hence, a public office is a public trust or agency.
Appended to the constitutional principle that public office is a public trust is the tenet that public officers occupy very delicate positions that exact certain standards generally not demanded from or required of ordinary citizens.
Those who accept a public office do so cum onere, or with a burden, and are considered as accepting its burdens and obligations, together with its benefits. They thereby subject themselves to all constitutional and legislative provisions relating thereto, and undertake to perform all the duties of their office. The public has the right to demand the performance of those duties.
One of these burdens or duties is explicitly articulated in Sec. 17 of Art. XI of the 1987 Constitution, viz:
A public officer or employee shall, upon assumption of office and as often thereafter as may be required by law, submit a declaration under oath of his assets, liabilities, and net worth. In the case of the President, the Vice-President, the Members of the Cabinet, the Congress, the Supreme Court, the Constitutional Commissions and other constitutional offices, and officers of the armed forces with general or flag rank, the declaration shall be disclosed to the public in the manner provided by law. (Emphasis supplied.)
This provision requires all public officers and employees, regardless of rank, to declare their assets and liabilities upon their assumption of office, as may be required by law. However, it likewise imposes a positive duty – and a heavier onus – on the President; the Vice-President; and members of the Cabinet, Congress, the Supreme Court, Constitutional Commissions and other Constitutional offices and officers of the Armed Forces with general or flag ranks – to publicly disclose their assets and liabilities.
Even prior to the 1987 and the 1973 Constitution, our laws have already imposed the obligation to disclose ownership of properties and assets.
Thus, as early as 1960, R.A. 3019, otherwise known as the “Anti-Graft and Corrupt Practices Act,” was promulgated, requiring from every public officer a detailed and sworn statement of their assets and liabilities. Under this law, failure to comply is prima facie evidence of unexplained wealth, which may result in the dismissal from service of the public officer, viz:
SECTION 7. Statement of assets and liabilities. — Every public officer, within thirty days after assuming office and, thereafter, on or before the fifteenth day of April following the close of every calendar year, as well as upon the expiration of his term of office, or upon his resignation or separation from office, shall prepare and file with the office of the corresponding Department Head, or in the case of a Head of Department or Chief of an independent office, with the Office of the President, a true, detailed and sworn statement of assets and liabilities, including a statement of the amounts and sources of his income, the amounts of his personal and family expenses and the amount of income taxes paid for the next preceding calendar year; Provided, That public officers assuming office less than two months before the end of the calendar year, may file their first statement on or before the fifteenth day of April following the close of the said calendar year.
SECTION 8. Prima facie evidence of and dismissal due to unexplained wealth. — If in accordance with the provisions of Republic Act Numbered One thousand three hundred seventy-nine, a public official has been found to have acquired during his incumbency, whether in his name or in the name of other persons, an amount of property and/or money manifestly out of proportion to his salary and to his other lawful income, that fact shall be a ground for dismissal or removal. Properties in the name of the spouse and dependents of such public official may be taken into consideration, when their acquisition through legitimate means cannot be satisfactorily shown. Bank deposits in the name of or manifestly excessive expenditures incurred by the public official, his spouse or any of their dependents including but not limited to activities in any club or association or any ostentatious display of wealth including frequent travel abroad of a non-official character by any public official when such activities entail expenses evidently out of proportion to legitimate income, shall likewise be taken into consideration in the enforcement of this section, notwithstanding any provision of law to the contrary. The circumstances hereinabove mentioned shall constitute valid ground for the administrative suspension of the public official concerned for an indefinite period until the investigation of the unexplained wealth is completed.
On 13 November 1961, R.A. 3047 amended R.A. 3019 to the extent of providing (a) the period within which a public official should make the disclosure and (b) a specification of certain public officials who are exempted from the said requirement.
On 20 February 1989, R.A. 6713, otherwise known as the “Code of Conduct and Ethical Standards for Public Officials and Employees,” expanded the disclosure obligation by (a) specifically enumerating the information required to be disclosed as regards the assets, liabilities, business interests and financial connections; (b) requiring the identification and disclosure of relatives in government; (c) making the statements and disclosures available and accessible to the public; and (d) prohibiting certain acts.
Even during the martial law years, all public employees were required to declare their assets and liabilities, as mandated by Presidential Decree (P.D.) No. 379.[26] It was later amended by P.D. 417,[27] enlarging the coverage of the mandatory disclosure. It was further amended by P.D. 555,[28] providing for stiffer penalties for the violation thereof.
It is clear from these laws that it has been the thrust of the State to foster transparency and accountability of public officers through the mandatory disclosures of their assets and liabilities. Thus, in Office of the Court Administrator v. Usman,[29] we said:
From the foregoing, it is imperative that every public official or government employee must make and submit a complete disclosure of his assets, liabilities and net worth in order to suppress any questionable accumulation of wealth. This serves as the basis of the government and the people in monitoring the income and lifestyle of public officials and employees in compliance with the constitutional policy to eradicate corruption, to promote transparency in government, and to ensure that all government employees and officials lead just and modest lives, with the end in view of curtailing and minimizing the opportunities for official corruption and maintaining a standard of honesty in the public service.
In the present case, respondent clearly violated the above-quoted laws when he failed to file his SALN for the years 2004-2008. He gave no explanation either why he failed to file his SALN for five (5) consecutive years. While every office in the government service is a public trust, no position exacts a greater demand on moral righteousness and uprightness of an individual than a seat in the Judiciary. Hence, judges are strictly mandated to abide with the law, the Code of Judicial Conduct and with existing administrative policies in order to maintain the faith of our people in the administration of justice.
Additionally, all Members of the judiciary are bound by the Code of Judicial Conduct to make a full financial disclosure, as required by law.
Further, and more importantly, the Chief Justice, as any other public officer, took a solemn oath of office, which he signed, and is couched, more or less in the following language:
Ako … ay taimtim na nanunumpa na tutuparin ko nang buong husay at katapatan, sa abot ng aking kakayahan, ang mga tungkulin ng aking kasalukuyang katungkulan at ng iba pang pagkaraan nito’y gagampanan ko sa ilalim ng Republika ng Pilipinas; na aking itataguyod at ipagtatanggol ang Saligang Batas ng Pilipinas na tunay; na mananalig at tatalima ako rito; na susundin ko ang mga batas, mga kautusang legal, at mga dekretong pinaiiral ng mga sadyang itinakdang maykapangyarihan ng Republika ng Pilipinas; at kusa kong babalikatin ang pananagutang ito nang walang anumang pasubali o hangaring umiwas.
Kasihan nawa ako ng Diyos.
When a public officer affixes his signature on his Oath of Office, he embraces all his constitutional and statutory duties as a public officer, one of which is the positive duty to disclose all of his assets and liabilities. Thus, for all public officers, what is absolute is not the confidentiality privilege, but the obligation of disclosure.
Public interest
Even if this Court were to accept the mistaken view of petitioners that they need to secure a written consent to disclose the alleged FCD accounts, the circumstances of this case would nevertheless warrant their exemption from the confidentiality rule of Sec. 8 of R.A. 6426.
Petitioners, as well as the assailed Resolution, maintain that this Court’s previous rulings[31] on the interpretation of Sec. 8 of R.A. 6426 are inapplicable, and they stubbornly cling to the theory that the secrecy of FCDs is absolute. This erroneous contention behooves a review of the subject jurisprudence, which establishes two salient points: (a) the law was enacted purely for economic considerations, and (b) the application of the confidentiality privilege is not absolute.
In Salvacion v. Central Bank of the Philippines, China Banking Corporation v. Court of Appeals, and Government Service Insurance System v. Court of Appeals, this Court held that R.A. 6426 was enacted in the midst of a financial downturn as a result of the Martial Law years, when foreign investments were minimal. Thus, the legislation sought to address this economic trough by attracting FCDs that can, in turn, be channelled to loans and investments in the Philippines.
More significantly, in Salvacion, this Court categorically established that the prohibition under Sec. 8 of R.A. 6426 is not absolute. In that case, this Court weighed the interests of a rape victim and those of the accused foreigner by determining the hierarchy of interests in this wise:
In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli.
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. “Ninguno non deue enriquecerse tortizeramente con dano de otro.” Simply stated, when the statute is silent or ambiguous, this is one of those fundamental solutions that would respond to the vehement urge of conscience. (Padilla vs. Padilla, 74 Phil. 377).
It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as a device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent.
Call it what it may — but is there no conflict of legal policy here? Dollar against Peso? Upholding the final and executory judgment of the lower court against the Central Bank Circular protecting the foreign depositor? Shielding or protecting the dollar deposit of a transient alien depositor against injustice to a national and victim of a crime? This situation calls for fairness against legal tyranny.
We definitely cannot have both ways and rest in the belief that we have served the ends of justice.
Similarly in the present case, this Court is faced with the task of balancing two interplaying interests.
On the one hand is the opinion of petitioners that they will be held accountable for criminal and administrative liability, should they follow the Subpoena issued by the Impeachment Court.
They allege that Sec. 10 of R.A. 6426 provides that any wilful violation of the law shall expose them to criminal liability of imprisonment of not less than one (1) year nor more than five (5) years or a fine of not less than five thousand pesos (₱5,000), nor more than twenty-five thousand pesos (₱25,000), or both such fine and imprisonment at the discretion of the court. They further allege that the Bangko Sentral ng Pilipinas (BSP) may also revoke or suspend their authority to accept new foreign currency deposits, pursuant to the second paragraph of Sec. 87(1) of the Manual of Regulations for Foreign Exchange Transactions.
On the other hand is the interest of the public in ensuring accountability of public officers. Without a doubt, the scale of balance must tilt in favor of public interest.
First, the purpose of R.A. 6426 can never, even for the longest stretch of imagination, defeat the purpose of the constitutionally established process of impeachment.
As stated earlier, upon its passage, the purpose of R.A. 6426 was merely to encourage foreign investments from foreign entities. It is therefore inconceivable to sacrifice the people’s will expressed in the Constitution in favor of a private interest.
Second, petitioners presume that liability will automatically attach upon their production of the alleged foreign currency deposit accounts, despite such compliance being pursuant to a lawful order of the Impeachment Court. To say that they will inevitably become criminally liable is to presume the filing of a Complaint for the violation of R.A. 6426. The contention of petitioners is highly speculative and preemptive.
Also tenuous are their fears that the intrusion upon the FCD accounts may cause a “chilling effect” on other banks or may cause a bank run.
Petitioners have not denied lack of knowledge of Art. 11 of the Revised Penal Code that enumerates the justifying circumstances that would ultimately exculpate an accused from liability. Applicable to petitioners is paragraph (6), to wit:
Any person who acts in obedience to an order issued by a superior for some lawful purpose.
This provision alone renders the fears of petitioners unfounded. To insist that they will be held criminally liable for the acts that the subpoena ordered them to do is to say that either the Impeachment Court is not a superior body, or that the impeachment proceedings are not a lawful purpose, or both.
This particular rule in criminal law was brought to the attention of petitioner Garcia by Senator Francis Pangilinan during the impeachment proceedings on 8 February 2012.
Art. 11(6) was again explained by Senator Alan Peter Cayetano to petitioner Garcia the following day. In the course of his questioning, Senator Cayetano asked petitioner if the latter had read Salvacion. Petitioner Garcia replied, “Yes.” Later, while he was again being questioned on this matter by Senator Pia Cayetano, it was evident that he knew that the Court in Salvacion did not hold the bank employees criminally liable for following the lawful order of the court, since he himself pointed out that the disclosure in Salvacion was pursuant to a lawful order of the court therein. Throughout the proceedings, petitioner Garcia repeatedly informed the Impeachment Court that he was under advice of counsel, and that his options and the legal ramifications of the subpoena had sufficiently been explained to him and to petitioner PS Bank. Petitioners cannot claim innocence or ignorance of the rules on criminal liability.
It is also noteworthy that in Estrada v. Desierto,[38] this Court did not find any grave abuse of discretion when the bank employees of Citibank were absolved from any criminal liability, stating thus:
In dismissing petitioner’s complaint for Usurpation of Official Function against private respondents, public respondents reasoned –
With the establishment of respondent Hefti’s authority in the issuance of the constructive distraint, the subsequent act of respondent Dagdag in serving the said distraint to the Citibank, as well as the act of respondents Equillos and Albiento in witnessing the service of the same to the said bank, can not (sic) be construed as act in agreement to commit the crime of Usurpation of Authority in the light of the foregoing discussion.
The same thing holds true to the bank officers who were made respondents in this case, considering that their act in informing complainant regarding the existence of the constructive distraint as well as in implementing the said distraint against the latter’s account with the said bank, [were] merely in compliance to an order issued by a competent authority.
We do not perceive any grave abuse of discretion on the part of the public respondents when they issued the aforecited rulings.
Equally speculative is petitioner’s fear that PSBank’s authority to operate an FCD account will be revoked.
It must be emphasized that the Impeachment Court is a special accountability mechanism reserved for the highest officials of the State: the President, the Vice-President, the Members of the Supreme Court, the Members of the Constitutional Commissions and the Ombudsman. It is the only process by which the public, represented by the House of Representatives, demand from the Senate the prosecution of public officials for culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes, or betrayal of public trust. Thus, it is a method of national inquest into the conduct of public officers.[39]
Granting the prayer of petitioners for injunctive relief is tantamount to endorsing their position on absolute confidentiality, so much so that higher values, such as public accountability, cannot even be considered as a valid exception to the said privilege.
This contention pushes the law to an absurdity, as the adherence to this absolutist stance invites unscrupulous public officers to convert their peso deposits to foreign currency accounts in order to hide from the law and evade criminal liability. As a result, R.A. 6426 is used as a shield to conceal malfeasance and other unlawful conduct. This Court’s Resolution has therefore created a safe haven for criminal acts and cultivated an atmosphere of impunity. Certainly, this was never the intendment of the law.
In the end, this Court’s Resolution results in an iniquitous situation, where the supreme interest of the public to maintain accountability among public officers is relegated to the sidelines in favor of a statutory privilege that arose purely out of economic considerations. Considering that petitioners’ alleged entitlement to the injunctive relief is based on mere news reports, exaggerated theories of a possible bank run, or stubborn fears of culpability, this Court has no basis to enjoin the Impeachment Court from exercising its constitutional mandate to require the production of documents and the rendering of testimony before it under the assailed subpoena.
Accordingly, I vote to deny the application for a temporary restraining order. – Rappler.com
(Source: http://sc.judiciary.gov.ph/)
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