Salvacion v Central Bank, G.R. No.

94723, August 21, 1997

FACTS:
On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured
petitioner Karen Salvacion, then 12 years old to go with him to his apartment. Greg
detained Karen Salvacion for four days, or up to February 7, 1989 and was able to rape
the child once on February 4, and three times each day on February 5, 6, and 7, 1989. On
February 7, 1989, after policemen and people living nearby rescued Karen, Greg Bartelli
was arrested and detained at the Makati Municipal Jail.
On February 16, 1989, Makati Investigating Fiscal Edwin G Condaya filed against Greg
Bartelli, a criminal case for Serious Illegal Detention and criminal cases for four (4)
counts of Rape. On the same day, petitioners filed with the RTC of Makati a civil case for
damages with preliminary attachment against Greg Bartelli.
On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Garnishment on
China Banking Corporation. In a letter dated March 13, 1989 to the Deputy Sheriff of
Makati, China Banking Corporation invoked Republic Act No. 1405 as its answer to the
notice of garnishment served on it. On March 15, 1989, Deputy Sheriff of Makati sent his
reply to China Banking Corporation saying that the garnishment did not violate the
secrecy of bank deposits since the disclosure is merely incidental to a garnishment
properly and legally made by virtue of a court order which has placed the subject deposits
in custodia legis. The China Banking Corporation invoked Section 113 of the Central
Bank Circular No. 960 to the effect that the dollar deposits or 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.
ISSUE: Should Section 113 of Central Bank Circular No. 960 and Section 8 of RA 6426,
as amended by PD 1246, otherwise known as the Foreign Currency Deposit Act be made
applicable to a foreign transient?
RULING:
Yes. It is evident that the Offshore Banking System and the Foreign Currency Deposit
System were designed to draw deposits from foreign lenders and investors. It is these
deposits that are induced by the two laws and given protection and incentives by them.
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.
Respondent Greg Bartelli 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.

The Solicitor General thus submits that the dollar deposit of respondent Greg Bartelli is
not entitled to the protection of Section 113 of Central Bank Circular No. 960 and PD no.
1246 against attachment, garnishment or other court processes.

Answer to question #8 (a):

One of the principal purposes of the protection accorded to foreign currency deposits is
to assure the development and speedy growth of the Foreign Currency Deposit System
and the Offshore Banking in the Philippines
In Salvacion v Central Bank, the Court ruled that it is evident that the Offshore Banking
System and the Foreign Currency Deposit System were designed to draw deposits from
foreign lenders and investors.
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.
The Court also states that if a foreign transient is exempted from attachment,
garnishment, or any other order or process of any court, legislative body, government
agency or any administrative body would result to injustice. 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.