psb v senate impeachment court 4

6/15/2014 G.R. No. 200238

http://sc.judiciary.gov.ph/jurisprudence/2012/february2012/200238_brion.htm 1/10

G.R. No. 200238 - PHILIPPINE SAVINGS BANK and PASCUAL M. GARCIAIII, as representative of Philippine Savings Bank and his personal capacity,Petitioners, v. SENATE IMPEACHMENT COURT, consisting of the Senators ofthe Republic of the Philippines, acting as Senator Judges, namely Juan PonceEnrile, Jinggoy Ejercito Estrada, Vicente C. Sotto III, Alan Peter S. Cayetano,Edgardo J. Angara, Joker P. Arroyo, Pia S. Cayetano, Franklin M. Drilon,Francis G. Escudero, Teofisto Guingona III, Gregorio B. Honasan II, Panfilo M.Lacson, Manuel M. Lapid, Loren B. Legarda, Ferdinand R. Marcos, Jr., SergioR. Osmeña III, Kiko Pangilinan, Aquilino Pimentel III, Ralph G. Recto, RamonRevilla, Jr., Antonio F. Trillanes IV, Manny Villar, and the Honorable Membersof the Prosecution Panel of the House of Representatives, Respondents. Promulgated: February 9, 2012 X --------------------------------------------------------------------------------------------- X

CONCURRING OPINION BRION, J.:

I concur with the majority’s ruling to issue a temporary restraining order (TRO) infavor of petitioner Philippine Savings Bank against the Senate Impeachment Court.

The Rules of Court declare that a preliminary injunction may be issued when thefollowing grounds are established:

SECTION 3. Grounds for issuance of preliminary injunction.— x x x

(a) That the applicant is entitled to the relief demanded, and the whole or part of suchrelief consists in restraining the commission or continuance of the act or actscomplained of, or in requiring the performance of an act or acts, either for a limitedperiod or perpetually;;

(b) That the commission, continuance or non-performance of the act or acts complainedof during the litigation would probably work injustice to the applicant;; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do,or is procuring or suffering to be done, some act or acts probably in violation of the

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rights of the applicant respecting the subject of the action or proceeding, and tendingto render the judgment ineffectual.

The Rules further require that a hearing be conducted to allow an applicant theopportunity to establish any of the above grounds, and the party sought to be enjoined

(after due notice) to contest the same.[1]

No preliminary injunction may issue until ahearing is conducted. Prior to the hearing, however, prevailing circumstances mayrequire intervention by the Court to at least preserve the status quo until the merits of theprayer for a preliminary injunction is heard. Thus, the Rules authorize the court to issuea temporary restraining order when there is extreme urgency and the applicant will suffergrave injustice and irreparable injury. In other words, the purpose of the temporaryrestraining order goes no further than to preserve the status quo until the hearing of theapplication for preliminary injunction which cannot be issued ex parte. However, theissuance of the TRO should be justified by the existence of extreme urgency and a graveviolation of the applicant’s right that will cause him irreparable injury if the other party isnot enjoined. A review of the facts and the applicable law convinces me that thesestandards prevail in the present case. RA No. 6426 provides for the absolute confidentialityof foreign currency deposits

The subject matter of the subpoenas issued by the Senate sitting as an

Impeachment Court are five foreign deposit accounts with petitioner, all allegedly inthe name of Renato C. Corona. Republic Act (RA) No. 6426, as amended, is the law

applicable to foreign currency deposits.[2]

The law provides for the absoluteconfidentiality of foreign currency deposits, as stated in Section 8:

Section 8. Secrecy of foreign currency deposits. – All foreign currency deposits authorizedunder this Act, as amended by PD No. 1035, as well as foreign currency deposits authorizedunder PD No. 1034, are hereby declared as and considered of an absolutely confidentialnature and, except upon the written permission of the depositor, in no instance shallforeign currency deposits be examined, inquired or looked into by any person, governmentofficial, bureau or office whether judicial or administrative or legislative, or any other entitywhether public or private;; Provided, however, That said foreign currency deposits shall be

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exempt from attachment, garnishment, or any other order or process of any court, legislativebody, government agency or any administrative body whatsoever. (As amended by PD No.1035, and further amended by PD No. 1246, prom. Nov. 21, 1977.)

RA No. 6426 guarantees a clear right to the depositors and demands an exactingobligation from banks to maintain the absolute confidentiality of the foreign currencydeposits. The failure of a bank to fulfill its obligation under the law subjects the

bank and its officials to criminal liability under Section 10 of RA No. 6426,[3]

andits authority to accept new foreign currency deposits may be revoked or suspendedby the Bangko Sentral ng Pilipinas under Section 87 of the Manual of Regulations

on Foreign Exchange Transactions.[4]

More than this, the bank’s failure in itsobligation – given media coverage and the non-legal slant it can give – gives rise to areal danger that the bank’s reputation may suffer. In a very bad situation, the effect goesbeyond the bank’s reputation and can adversely affect the economy.

The only exception provided by the law is when there is a written permission bythe depositor. Jurisprudence declares that “[t]here is only a single exception to thesecrecy of foreign currency deposits, that is, disclosure is allowed only upon the written

permission of the depositor.”[5]

This single excepting circumstance, however, does notobtain in the present case;; hence, the bank’s petition.

Given that a subpoena was already issued requiring the petitioner Bank to testify

and to produce before the Senate sitting as an Impeachment Court documents pertainingto the foreign currency deposits in the name of Renato C. Corona (indeed, the on-goingimpeachment proceedings center on this matter as petitioner’s president has been put onthe witness stand), there is extreme urgency for the Court to address the petitioner’sprayer for TRO. The possibility of the prejudice that may result is too real and too far-ranging for this Court to disregard. Refutation of the Dissents In the Court’s discussion, objections have been raised as to the absolute terms of

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the confidentiality that RA No. 6426 guarantees by claims that the Court in several caseshas relaxed or liberalized the application of the rule. These cases in particular are

Salvacion v. Central Bank of the Philippines,[6]

China Banking Corporation v. Court

of Appeals[7]

and Ejercito v. Sandiganbayan.[8]

The cited cases, however, are off-tangent and in fact, did not “relax” or liberalize the rule on absolute confidentiality offoreign deposit accounts.

The impact of the principle of stare decisis that is cited as basis is limited;; specificjudicial decisions are binding only on the parties to the case and on future parties with

similar or identical factual situations.[9]

As will be explained below, the cited cases donot share the same factual antecedents as the present case.

First, the Court in Salvacion made it abundantly clear that because of the

“peculiar circumstances”[10]

obtaining in the case, the rule that exempts dollar deposits(of a transient) from attachment, garnishment, or any other order or process of any court,legislative body, government agency or any administrative body, cannot serve as aninstrument of injustice and deprive a Philippine national who is the victim of a heinouscrime of the damages awarded to her by the court. The “peculiar circumstances” inSalvacion hardly obtains in the present case, so that the ruling cannot be applied to ChiefJustice Corona’s impeachment trial.

Second, in China Bank, the Court ruled that the respondent, as owner of the funds

(dollar deposit checks) unlawfully taken and which were deposited in China Bank, hadthe right to inquire into the said deposits because his consent was deemed given. Fromthis perspective, China Bank is an example of the waiver done by the rightful owner ofthe absolute confidentiality of foreign currency deposits. This situation does not obtainin the present case. At any rate, the Court also admitted that due to the distinctivecircumstances attendant to the case, its ruling was on a limited pro hac vice. This expresslimitation negates any application of the ruling to the present case, save only if the factsof this ruling are similar or identical to Chief Justice Corona’s case, which they are not.

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Third, Ejercito does not involve foreign currency deposits and, therefore, shouldbe rejected outright as a ruling applicable to the present case. In Ejercito, the Court heldthat the petitioner’s accounts are no longer protected by RA No. 1405 (Secrecy of BankDeposits Law) because of the presence of two exceptions, namely: (1) the examinationof bank accounts is upon order of a competent court in cases of bribery or dereliction ofduty of public officials (plunder case against the petitioner is analogous to bribery ordereliction of duty) and (2) the money deposited or invested is the subject matter oflitigation. Aside from the involvement of local currency deposits and the inapplicabilityof RA No. 1405 to a foreign currency deposit situation, the two exceptions are notpresent in the Chief Justice’s present impeachment case.

A further objection to the application of the absolute confidentiality rule of RA

No. 6426 posits that it is intended only to benefit foreign investors. The “whereas”clauses in Presidential Decree No. 1246 (1977), the amendatory law of RA No. 6426, iscited, and these clauses state:

WHEREAS, in order to assure the development and speedy growth of the Foreign

Currency Deposit System and the Offshore Banking System in the Philippines, certainincentives were provided for under the two Systems such as confidentiality of depositssubject to certain exceptions and tax exemptions on the interest income of depositors whoare nonresidents and are not engaged in trade or business in the Philippines;;

WHEREAS, making absolute the protective cloak of confidentiality over such

foreign currency deposits, exempting such deposits from tax, and guaranteeing the vestedrights of depositors would better encourage the inflow of foreign currency deposits into thebanking institutions authorized to accept such deposits in the Philippines thereby placingsuch institutions more in a position to properly channel the same to loans and investments inthe Philippines, thus directly contributing to the economic development of the country;;

Reference to the “whereas” clause to justify the non-application of the absoluteconfidentiality rule, however, is unnecessary and inappropriate in light of the clearlanguage of RA No. 6426. “Preambles, or ‘whereas clauses’ x x x are not part of the actx x x and consequently ‘cannot enlarge or confer powers, nor control the words of the

act, unless they are doubtful or ambiguous.’”[11]

Stated otherwise, as a tool forstatutory construction, preambles and “whereas” clauses may be utilized only if an

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ambiguity exists in the statute. In Echegaray v. Secretary of Justice,[12]

this Court hadoccasion to declare:

a preamble is not really an integral part of a law. It is merely an introduction to show itsintent or purposes. It is merely an introduction to show its intent or purposes. It cannot bethe origin of rights and obligations. Where the meaning of a statute is clear andunambiguous, the preamble can neither expand nor restrict its operation, much less prevailover its text. RA No. 6426, by its plain terms, is clear that all foreign currency deposits are

considered to be absolutely confidential. The law expressly refers to deposits not to theidentity, nationality, or residence of the depositors. Thus, to claim that the depositorsmust be considered is misplaced. Also, to so claim is to read into the clear words of thelaw exemptions that its literal wording does not support. To so claim may even amountto judicial legislation.

In light of the express and clear terms of the law, the basic rule of statutory

construction should therefore apply: “legislative intent is to be determined from thelanguage employed, and where there is no ambiguity in the words, there is no room for

construction.”[13]

In the absence of ambiguity, the Court may not construe a law’sprovisions by taking into account questions of expediency, good faith, practical utility

and other similar reasons so as to relax non-compliance therewith.[14]

Yet another objection cites the statutory developments, which according to

proponents, indicate that the secrecy guaranteed by the law has steadily declined: “whilethe general rule facially appears to be secrecy, the voluminous exceptions have, in

substance, created a rule of exceptions.”[15]

This thesis is supported by Tajan’s ArticleEmerging from Secrecy Space: From Bank Secrecy to Financial Transparency, whichdiscusses the recent trend in the international arena pertaining the international taxstandard on exchange of information (requiring banking information to be madeavailable upon request of foreign tax authorities) and the enactment of RA No. 10021 orthe Exchange of Information on Tax Matters Act of 2009. The article “surveysPhilippine bank secrecy law as it has evolved and how it relates to the present global

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movement towards financial transparency.”[16]

From this survey, the Article argues thatdespite pronouncements by the Courts, “the actuations by both the Court and the

Legislature indicate that the secrecy guaranteed by the law has steadily declined.”[17]

Itnotes that “while the general rule appears to be secrecy, the voluminous exceptions have,

in substance, created a rule of exceptions.”[18]

Despite this position, the article significantly recognizes that jurisprudence ofthe Court points to the other direction. In short, the article at the same time admits

that “bank secrecy remains the general rule.”[19]

Indeed, the Court essentiallydebunked the Article’s premises by stating, in the 2008 case of Republic of the

Philippines v. Eugenio,[20]

that:

Because of the Bank Secrecy Act, the confidentiality of bank deposits remains abasic state policy in the Philippines. Subsequent laws, including the AMLA, may haveadded exceptions to the Bank Secrecy Act, yet the secrecy of bank deposits still lies as thegeneral rule. It falls within the zones of privacy recognized by our laws. The framers of the1987 Constitution likewise recognized that bank accounts are not covered by eitherthe right to information under Section 7, Article III or under the requirement of fullpublic disclosure under Section 28, Article II. Unless the Bank Secrecy Act is repealedor amended, the legal order is obliged to conserve the absolutely confidential nature ofPhilippine bank deposits. [Emphasis supplied.]

Notably, the Court declared that bank accounts laws are not covered by the right toinformation under Article III, Section 7 and the requirement of full publicdisclosure under Article II, Section 28 of the Constitution, which is statutorilyimplemented through RA No. 6713 (Code of Conduct and Ethical Standards for PublicOfficials and Employees). The Constitution in fact declares that the public’s right to

information is “subject to such limitations as may be provided by law.”[21]

The implied

repeal of inconsistent laws that RA No. 6713 mandates[22]

cannot be interpreted as arepeal of the express substantive right granted to confidentiality under Section 8 of RANo. 6426, even if the latter was enacted earlier. Implied repeals are not favored;; thepresumption is against inconsistency or repugnance and, accordingly, against implied

Vanessa Vergara

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repeals.[23]

The ruling in Republic v. Eugenio,[24]

to my mind, reflects the prevailing viewunder our jurisprudence pointing towards the retention and dominance of the absoluteconfidential nature of bank deposits. In the recent case of BSB Group, Inc. v. Go (a

2010 case),[25]

the Court reiterated the importance of “financial privacy.” As observedby Tajan, despite the multiplication of the exceptions to bank secrecy, the Courtdeclared that bank secrecy, which falls within the legally-recognized zones of privacy,remains the general rule and that the “present legal order is obliged to conserve theabsolutely confidential nature of bank deposits.” The Court found disfavor inconstruing the exceptions in a manner that authorizes unwarranted and unbridled

inquiry into bank accounts:[26]

A final note. In any given jurisdiction where the right of privacy extends its scope to

include an individual’s financial privacy rights and personal financial matters, there is anintermediate or heightened scrutiny given by courts and legislators to laws infringing suchrights. Should there be doubts in upholding the absolutely confidential nature of bankdeposits against affirming the authority to inquire into such accounts, then suchdoubts must be resolved in favor of the former. This attitude persists unless congresslifts its finger to reverse the general state policy respecting the absolutely confidentialnature of bank deposits.

The view expressed that the majority’s TRO is “a mockery of all existing laws

designed to insure transparency and good governance in public service”[27]

is likewisenot well taken. This view declares that “the majority ruling advises all governmentofficials and employees that they can legally evade reporting their actual assets in theirStatement of Assets, Liabilities, and Net Worth x x x by simply opening foreign

currency deposit accounts with local banks.”[28]

The majority makes no such ruling in granting the TRO. The question the Courthas resolved for now is whether the facts and the law justify the issuance of a TRO. Theobject of a TRO, as earlier mentioned, is to simply maintain the status quo. The TRO,

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to be sure, is not a ruling encouraging public officials to use foreign deposits to legallyevade the correct SALN report. To so claim is to extend the import of TRO beyond itsclear objective to maintain the status quo.

In light of these considerations, I reiterate my vote for the grant of the petitioner’sprayer for the issuance of the TRO.

[1] RULES OF COURT, Rule 58, Section 5.

[2] In Government Service Insurance System v. Court of Appeals, G.R. No. 189206, June 8, 2011, 651 SCRA 661, the Courtdeclared that RA No. 6426 is the applicable law for foreign currency deposits, and not RA No. 1405 or An Act ProhibitingDisclosure of or Inquiry Into, Deposits with Any Banking Institution and Providing Penalty Therefor. See also Intengan v.Court of Appeals, G.R. No. 128996, February 15, 2002, 377 SCRA 63.

[3] Section 10. Penal provisions. – Any willful violation of this Act or any regulation duly promulgated by the MonetaryBoard pursuant hereto shall subject the offender upon conviction to an imprisonment of not less than one year nor morethan five years or a fine of not less than five thousand pesos nor more than twenty-five thousand pesos, or both such fineand imprisonment at the discretion of the court.

[4] Section 87. Sanctions.

1. Any willful violation of Republic Act No. 6426, as amended, or any regulation duly promulgated by theMonetary Board pursuant thereto shall subject the offender upon conviction to an imprisonment of not less thanone (1) year nor more than five (5) years or a fine of not less than Five Thousand Pesos (PHP5,000.00) nor morethan Twenty-Five Thousand Pesos (PHP25,000.00), or both such fine and imprisonment at the discretion of thecourt.

2. The BSP may revoke or suspend the authority of a bank to accept new foreign currency deposits forviolation of Republic Act No. 6426, as amended, or these regulations, or if such bank ceases to possess theminimum qualifications required.

3. Delayed submission of report by a bank and/or submission of erroneous/incomplete report shall be subject to themonetary penalties under Section 103.

4. Any violation of the provisions of this Chapter shall be subject to Section 37 of Republic Act No. 7653. Theguidelines for the imposition of monetary penalty for violations/offenses with sanctions falling under Section 37of Republic Act No. 7653 on banks, their directors and/or officers are shown in Appendix 67 of the MORB.

[5] Intengan v. Court of Appeals, 427 Phil. 293, 305 (2002).

[6] 343 Phil. 539 (1997).

[7] G.R. No. 140687, December 18, 2006, 511 SCRA 110.

[8] G.R. Nos. 157294-95, November 20, 2006, 509 SCRA 190.

[9] Theodore O. Te, Stare In (Decisis): Reflections on Judicial Flip-flopping in League of Cities v. Comelec and Navarro v.Ermita, 85 PHIL. L. J. 784, 787 (2011) citing Negros Navigation Co., Inc. v. Court of Appeals, G.R. No. 110398, 281 SCRA534, 542-543, Nov. 7, 1997.

[10] Salvacion involved the rape of a 12-year old child by an American tourist. The dollar deposit account of the American

tourist with China Banking Corporation was the subject of a notice of garnishment to enforce a final judgment for damagesin favor of the victim. The Court ruled that to exempt the dollar deposits from garnishment (which will necessarily requiredisclosure of the deposits) would be to use the law as device for injustice and deprived the victim of what is rightfully dueto her.

[11] Dennis B. Funa. Canons of Statutory Construction (2011 ed.), p. 367, citing Yule Kim, Statutory Interpretation:

General Principles, Congressional Research Service, p. CRS-32, August 31, 2008.[12]

361 Phil. 73 (1999).

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[13] Id. at 188, citing Veroy v. Layague, et al., G.R. No. L-95630, June 18, 1992 and Provincial Board of Cebu v. Presiding

Judge of Cebu, CFI, Br. IV, G.R. No. 34695, March 7, 1989, 171 SCRA 1. [14]

Mariano v. COMELEC, G.R. Nos. 118577 and 118627, March 7, 1995.[15]

Joy Stephanie C. Tajan. Emerging from Secrecy Space: From Bank Secrecy to Financial Transparency, 55 ATENEO L.J.447 (2010).

[16] Ibid.

[17] Id.

[18] Id.

[19] Id.

[20] G.R. No. 174629, February 14, 2008, 545 SCRA 384.

[21] Section 7. The right of the people to information on matters of public concern shall be recognized. Access to official

records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government researchdata used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.[22]

Section 11, RA No. 6713, as amended.[23]

Agujetas v. Court of Appeals, G.R. No. 106560, August 23, 1996, citing Iloilo Palay & Corn Planters' Assn., Inc. vs.Feliciano, G.R. No. 24022, March 3, 1965, 13 SCRA 377.

[24] Supra note 20.

[25] G.R. No. 168644, February 16, 2010. 612 SCRA 596.

[26] Supra note 15, citing BSB Group, Inc. v. Go.

[27] Dissenting Opinion of Justice Carpio, p. 1.

[28] Ibid.

psb v senate impeachment court 4

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