1. Garnishment
SEC. 9 (C), RULE 39: Garnishment of debts and credits. -
The officer may levy on debts due the judgment obligor and other credits, including bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery in the posssession or control of third parties. Levy shall be made by serving notice upon the person owing such debts or having in his possession or control such credits to which the judgment obligor is entitled. The garnishment shall cover only such amount as will satisfy the judgment and all lawful fees. The garnishee shall make a written report to the court within five (5) days from service of the notice of garnishment stating whether or not the judgment obligor has sufficient funds or credits to satisfy the amount of the judgment. If not, the report shall state how much funds or credits the garnishee holds for the judgment obligor. The garnished amount in cash, or certified bank check issued in the name of the judgment obligee, shall be delivered directly to the judgment obligee within ten (10) working days from
service of notice on said garnishing requiring such delivery, except the lawful fees which shall be paid directly to the court. In the event there are two or more garnishees holding deposits or credits sufficient to satisfy the judgment, the judgment obligor, if available, shall have the right to indicate the garnishee or garnishees who shall be required to deliver the amount due; otherwise, the choice shall be made by the judgment obligee. The executing sheriff shall observe the same procedure under paragraph (a) with respect to delivery of payment to the judgment obligee.
Cases
CHINA BANKING CORPORATION v. ORTEGA, 49 SCRA 356 (1973) DOCTRINE: Garnishment of bank deposit judgment debtor is not violative of RA 1405. The Court merely required the cashier of the bank to inform the court whether or not the defendant had a deposit in said bank only for purposes of the garnishment issued by it, so that the bank would hold the same intact and not allow any withdrawal until further order.
FACTS
In 1968, Acaban filed a complaint against Bautista Logging Co., Inc., B & B Forest Development Corporation and Marino Bautista for the collection of sum of money. RTC declared the defendants in default for failure to file their responsive pleadings within the reglementary period.
To satisfy the judgment, Acaban sought the garnishment of the bank deposit of B & B Forest Development Corporation with China Banking Corporation. Accordingly, a notice of garnishment was issued and served on the bank’s cashier, Tan Kim Liong.
In reply, Tan Kim Liong invoked the provisions of the Bank Secrecy Law prohibiting the disclosure of any information relative to bank deposits. RTC, in denying Acaban’s motion to cite Tan Kim Liong in contempt, nevertheless ordered the latter to inform the court whether or not there is a deposit with China Banking Corporation of B & B Forest Development Corporation, and if any, to hold the same intact and not to allow any withdrawal until further orders.
ISSUE
Whether there was a violation of the provisions of the Bank Secrecy Law prohibiting the disclosure of any information relative to bank deposits
HELD
NO. The lower court did not order an examination of or inquiry into the deposit of B&B Forest Development Corporation. It merely required Tan Kim Liong to inform the court of the existence of B&B Forest Development Corporation’s deposit in said bank only for the purpose of the garnishment
issued by it, so that the bank would hold the same intact and not allow any withdrawal until further order.
It is clear from the discussion of the conference committee report of the 2 houses of Congress that the prohibition against examination of or inquiry into a bank deposit under RA 1405 does NOT preclude its being garnished to insure satisfaction of a judgment. There is no real inquiry in this case, and if the existence of the bank account is disclosed, the disclosure is purely incidental to the execution process.
2. Preliminary Attachment
SEC. 10, RULE 57: Examination of party whose property is attached and persons indebted to him or controlling his property; delivery of property to sheriff.
Any person owing debts to the party whose property is attached or having in his possession or under his control any credit or other personal property belonging to such party, may be required to attend before the court in which the action is pending, or before a commissioner appointed by the court, and be examine on oath respecting the same. The party whose property is attached may also be required to attend for the purpose of giving information respecting his property, and may be examined on oath. The court may, after such examination, order personal property capable of manual delivery belonging to him, in the possession of the person so required to attend before the court, to be delivered to the clerk of the court or sheriff on such terms as may be just, having reference to any lien thereon or claim against the same, to await the judgment in the action.
d. Penalty for Violation
SEC. 5, LAW ON SECRECY OF BANK DEPOSITS: Any violation of this law will subject offender upon conviction, to an imprisonment of not more than five years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.
3. Rules for Foreign Currency Deposits a. Coverage
SEC. 8, FCDA: Secrecy of foreign currency deposits. – All foreign currency deposits authorized under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD 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 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. (As amended by PD
No. 1035, and further amended by PD No. 1246, prom. Nov. 21, 1977.)
Cases