Intengan vs. Court of Appeals

Foreign currency deposits are governed exclusively by R.A. No. 6426, which provides a single exception to the secrecy rule — the written permission of the depositor — and the filing of an information for the wrong offense does not toll the prescriptive period for the correct offense.

Petitioners Carmen Ll. Intengan, Rosario Ll. Neri, and Rita P. Brawner were long-standing depositors of Citibank, N.A., maintaining savings, dollar deposit, trust, and money placement accounts. Private respondents Vic Lim and Joven Reyes were Citibank vice-presidents who, in the course of an internal investigation into anomalous activities by two other bank officers — Dante L. Santos and Marilou Genuino — disclosed details of petitioners' dollar deposit accounts to support Citibank's complaint before the prosecutor's office. Private respondents Aziz Rajkotwala and William Ferguson were senior Citibank officers alleged to have participated in the disclosure. The dispute centers on whether the disclosure of petitioners' bank records violated the confidentiality mandated by Philippine banking secrecy laws.

On September 21, 1993, Citibank, N.A. filed a complaint for violation of Section 31 in relation to Section 144 of the Corporation Code against two of its officers, Dante L. Santos and Marilou Genuino, alleging that they had been diverting bank clients' funds to companies in which they had personal financial interests — Torrance Development Corporation and Global Pacific Corporation — for subsequent investment in higher-yielding securities, shares of stock, and debt papers of third parties, from which Santos and Genuino derived substantial financial gains. Attached to the complaint was an affidavit executed by private respondent Vic Lim, a vice-president of Citibank assigned to assist in the investigation. Lim's affidavit detailed the scheme by which Santos and Genuino would persuade clients to transfer their Citibank deposits to the accounts of Torrance and Global, which would then invest the funds elsewhere, return the principal plus earnings to the clients (less spreads), and issue checks representing Santos and Genuino's shares of the margins. Lim identified several bank clients whose funds had been diverted, including petitioners Carmen Intengan, Rosario Neri, and Rita Brawner, and annexed bank records purporting to establish the deception, including an Application for Money Transfer for US$140,000 executed by Intengan, a Money Transfer Slip for US$45,996.30 executed by Brawner, and an Application for Money Transfer for US$100,000 executed by Neri — all debited from their respective dollar accounts.

Private respondent Joven Reyes, vice-president and business manager of the Global Consumer Banking Group, admitted having authorized Lim to disclose the names of the clients involved and to attach the pertinent bank records, including those of petitioners. Reyes stated that private respondents Aziz Rajkotwala and William Ferguson, Citibank's Global Consumer Banking Country Business Manager and Country Corporate Officer, respectively, had no hand in the disclosure, and that he acted upon the advice of counsel. The complaints, docketed as I.S. Nos. 93-9969, 93-10058, and 94-1215, were subsequently amended to include a charge of estafa under Article 315, paragraph 1(b) of the Revised Penal Code. As an incident to the proceedings, petitioners filed motions for the exclusion and physical withdrawal of their bank records attached to Lim's affidavit.

The 2nd Assistant Provincial Prosecutor recommended dismissal of petitioners' complaints, but Provincial Prosecutor Mauro M. Castro overruled the recommendation and, in a Resolution dated August 18, 1994, directed the filing of informations against private respondents for violation of R.A. No. 1405. Private respondents appealed to the DOJ, where Secretary Franklin M. Drilon, on November 17, 1994, ordered the withdrawal of the informations. Petitioners' motion for reconsideration was denied on March 6, 1995. Petitioners then sought relief before the Supreme Court, which referred the matter to the Court of Appeals. The appellate court, on July 8, 1996, dismissed the petition, ruling that the disclosure of petitioners' deposits was necessary to establish the case against Santos and Genuino and fell under the last exception of R.A. No. 1405 — namely, where the money deposited or invested is the subject matter of the litigation. Petitioners' motion for reconsideration was denied on April 16, 1997, prompting the present petition.

• Violation of R.A. No. 1405: Petitioner argued that private respondents illegally disclosed petitioners' confidential bank deposits for their own selfish ends in prosecuting the complaint against Santos and Genuino, a case that did not involve petitioners.
• Inapplicability of the Fourth Exception: Petitioner maintained that the disclosures do not fall under the fourth exception of R.A. No. 1405 ("in cases where the money deposited or invested is the subject matter of the litigation") or any other exception, because there was no litigation between petitioners and respondents, much less one involving petitioners' deposits as the subject matter.
• Requisite Court Order: Petitioner argued that even assuming arguendo that there was a litigation involving petitioners' deposits as the subject matter, the disclosures were nevertheless illegal for want of the requisite court order, in violation of R.A. No. 1405.
• Entitlement to Prosecute: Petitioner asserted entitlement to prosecute private respondents for violations of R.A. No. 1405 for having illegally disclosed petitioners' confidential bank deposits and records, and prayed that the DOJ be directed to order the Provincial Prosecutor of Rizal to file the corresponding informations.

• Applicable Law: Whether R.A. No. 1405 (Bank Secrecy Law) or R.A. No. 6426 (Foreign Currency Deposit Act) governs the disclosure of petitioners' bank records.
• Legality of Disclosure: Whether the disclosure of petitioners' dollar deposits without their written permission constitutes a violation of R.A. No. 6426.
• Prescription: Whether the offense for violation of R.A. No. 6426 has already prescribed, and whether the filing of informations for the wrong offense (R.A. No. 1405) tolls the prescriptive period for the correct offense.

• Applicable Law: No — R.A. No. 1405 does not govern. The accounts in question are U.S. dollar deposits; the applicable law is R.A. No. 6426 (Foreign Currency Deposit Act of the Philippines), which provides a single exception to the secrecy of foreign currency deposits: disclosure upon the written permission of the depositor.
• Legality of Disclosure: Yes — the disclosure would constitute a violation of R.A. No. 6426. Private respondents Lim and Reyes admitted disclosing details of petitioners' dollar deposits without the latter's written permission, and the necessity of the disclosure for Citibank's case against Santos and Genuino does not matter, the offense being malum prohibitum.
• Prescription: Yes — the offense had prescribed. Under Act No. 3326, the violation prescribes in eight years, and the filing of informations for the wrong offense (R.A. No. 1405) did not toll the prescriptive period for the correct offense under R.A. No. 6426.

• Applicable Law: All parties, the DOJ, the Solicitor General, and the Court of Appeals overlooked a single dispositive fact: the accounts in question are U.S. dollar deposits. Because the deposits are foreign currency deposits, R.A. No. 1405 (the Bank Secrecy Law) does not apply. Instead, R.A. No. 6426, the Foreign Currency Deposit Act of the Philippines, governs. Section 8 of R.A. No. 6426 declares all foreign currency deposits absolutely confidential and provides only one exception: disclosure upon the written permission of the depositor. This absolute confidentiality, subject to the lone exception, was introduced by Presidential Decree No. 1246 promulgated as far back as 1977. The acts complained of occurred before the enactment of R.A. No. 9160 (Anti-Money Laundering Act of 2001) on September 29, 2001, so that statute does not apply.

• Legality of Disclosure: Private respondents Lim and Reyes admitted that they disclosed details of petitioners' dollar deposits without the latter's written permission. Under R.A. No. 6426, such disclosure is prohibited regardless of purpose or necessity. It does not matter that the disclosure was necessary to establish Citibank's case against Santos and Genuino. The act of disclosing details of foreign currency deposits without the depositor's written permission belongs to the species of criminal acts punishable by special laws called malum prohibitum. Citing U.S. vs. Siy Cong Bieng, the Court reiterated that when a statute plainly forbids an act and the offense is not made to depend upon willful intent, the law implies conclusively the guilty intent, and nothing is left to interpretation. The offender's honest mistake as to the meaning of the law is no defense.

• Prescription: R.A. No. 6426 being a special law, the prescriptive periods under Act No. 3326, as amended by Act No. 3763, apply. A violation of R.A. No. 6426 subjects the offender to imprisonment of not less than one year nor more than five years, or a fine of not less than ₱5,000 nor more than ₱25,000, or both. Under Act No. 3326, Section 1(c), offenses punished by imprisonment for two years or more but less than six years prescribe in eight years. The alternative penalty of a fine cannot be used as the basis for determining prescription, as Article 90 of the Revised Penal Code does not apply to offenses under special laws. Prescription begins to run from the day of the commission of the violation, or if not known at the time, from discovery thereof and the institution of judicial proceedings. Lim made the disclosure in September 1993; Intengan learned of it on October 14, 1993; Neri on October 24, 1993; and Brawner on January 5, 1994. Based on any of these dates, prescription had set in by the time of the decision. Critically, the filing of the complaint or information for alleged violation of R.A. No. 1405 did not toll the prescriptive period, because it is the filing of the complaint or information corresponding to the correct offense that produces that effect. The Court noted that nothing prevented petitioners from filing a complaint charging the correct offense even during the pendency of the appeal, but this was not done, as all parties were content to litigate on the basis of an incorrectly invoked statute.

• Secrecy of Foreign Currency Deposits (R.A. No. 6426) — Foreign currency deposits are absolutely confidential and may be examined, inquired into, or looked into by any person, government official, bureau, or office — whether judicial, administrative, or legislative — only upon the written permission of the depositor. This is a single, narrow exception, in contrast to the multiple exceptions under R.A. No. 1405. The Court applied this doctrine by holding that the disclosure of petitioners' dollar deposits without their written permission was unlawful, regardless of the purpose or necessity of the disclosure.

• Malum Prohibitum — Acts made criminal by special laws are frequently not immoral or obviously criminal in themselves; when the statute plainly forbids an act and the offense is not made to depend upon willful intent, the law implies conclusively the guilty intent, and the offender's honest mistake as to the meaning of the law is no defense. The Court applied this principle to hold that Lim's disclosure of petitioners' foreign currency deposit details, though made in furtherance of a legitimate corporate investigation, constituted a criminal act under R.A. No. 6426.

• Prescription of Offenses Under Special Laws (Act No. 3326) — Violations penalized by special acts prescribe in accordance with the rules in Act No. 3326, unless otherwise provided in the special act. Prescription begins to run from the day of the commission of the violation, or if unknown at the time, from discovery thereof and the institution of judicial proceedings. Prescription is interrupted when proceedings are instituted against the guilty person and begins to run again if the proceedings are dismissed for reasons not constituting jeopardy. The Court applied this doctrine by holding that the eight-year prescriptive period had lapsed, and that the filing of informations for the wrong offense (R.A. No. 1405) did not toll prescription for the correct offense (R.A. No. 6426).

• Filing of Wrong Offense Does Not Toll Prescription — It is the filing of the complaint or information corresponding to the correct offense that tolls the prescriptive period. Filing an information for a different offense does not produce that effect. The Court relied on this principle to conclude that the criminal liability of private respondents for violation of R.A. No. 6426 had prescribed.

• "Thus, under R.A. No. 6426 there is only a single exception to the secrecy of foreign currency deposits, that is, disclosure is allowed only upon the written permission of the depositor." — This passage articulates the fundamental distinction between the secrecy regime governing foreign currency deposits under R.A. No. 6426 and that governing peso deposits under R.A. No. 1405, and is the ratio decidendi of the Court's ruling on the applicable law.

• "It does not matter if that such disclosure was necessary to establish Citibank's case against Dante L. Santos and Marilou Genuino. Lim's act of disclosing details of petitioners' bank records regarding their foreign currency deposits, with the authority of Reyes, would appear to belong to that species of criminal acts punishable by special laws, called malum prohibitum." — This passage establishes that necessity or good faith is not a defense to violations of special laws where the statute plainly forbids the act, applying the malum prohibitum doctrine to the disclosure of foreign currency deposits.

• "The filing of the complaint or information in the case at bar for alleged violation of Republic Act No. 1405 did not have the effect of tolling the prescriptive period. For it is the filing of the complaint or information corresponding to the correct offense which produces that effect." — This passage defines the rule that prescription is tolled only by the filing of an information for the correct offense, a principle that proved decisive in barring any further prosecution of private respondents.

• Mellon Bank, N.A. vs. Magsino, 190 SCRA 633 — Cited by the Court of Appeals for the proposition that bank deposits material or relevant to the allegations in a complaint may be disclosed even if the depositor is not a party to the case, under the exceptions in R.A. No. 1405. The Supreme Court implicitly overruled the applicability of this reasoning by holding that R.A. No. 1405 does not govern foreign currency deposits at all.

• U.S. vs. Siy Cong Bieng, 30 Phil. 577 (1915) — Cited for the doctrine that when a statute plainly forbids an act and the offense does not depend upon willful intent, the law implies conclusively the guilty intent, and the offender's honest mistake as to the meaning of the law is no defense. Applied to characterize the unauthorized disclosure of foreign currency deposits as malum prohibitum.

• Presidential Ad Hoc Fact-Finding Committee on Behest Loans vs. Desierto, 317 SCRA 272 (1999) — Cited for the rule that when the violation of a special law is not known at the time, prescription begins to run only from discovery of the unlawful nature of the act, citing People vs. Duque, 212 SCRA 607 (1992).

• People vs. Abuy, 5 SCRA 222 (1962) — Cited for the principle that the filing of the complaint or information corresponding to the correct offense tolls the prescriptive period.

• People vs. Basalo, 101 Phil. 57 (1957) — Distinguished; the Court noted that the alternative penalty of a fine under R.A. No. 6426 cannot be used as the basis for determining prescription, as Article 90 of the Revised Penal Code does not apply to offenses punishable under special laws, citing People vs. Ching Lak, 103 Phil. 1149 (1958).

• Section 8, Republic Act No. 6426 (Foreign Currency Deposit Act of the Philippines) — Declares all foreign currency deposits absolutely confidential and provides that, except upon the written permission of the depositor, such deposits shall not be examined, inquired into, or looked into by any person, government official, bureau, or office, whether judicial, administrative, or legislative, or any other entity, public or private. Applied as the governing law because the accounts in question were U.S. dollar deposits.

• Sections 31 and 144, Corporation Code (Batas Pambansa Blg. 68) — Section 31 defines the liability of directors, trustees, or officers who acquire any interest adverse to the corporation in respect of any matter reposed in confidence; Section 144 penalizes violations of the Code not otherwise specifically penalized. These provisions were the basis of Citibank's original complaint against Santos and Genuino, which prompted the disclosure of petitioners' bank records.

• Article 315, paragraph 1(b), Revised Penal Code — Defines estafa by misappropriating or converting money, goods, or personal property received in trust or on commission. The complaints against Santos and Genuino were amended to include this charge.

• Section 1, Act No. 3326, as amended by Act No. 3763 — Establishes prescriptive periods for violations penalized by special acts. Applied to determine that a violation of R.A. No. 6426, punishable by imprisonment of not less than one year nor more than five years, prescribes in eight years under Section 1(c).

• Section 10, Republic Act No. 6426 — Prescribes the penalty for violation of the Act: imprisonment of not less than one year nor more than five years, or a fine of not less than ₱5,000 nor more than ₱25,000, or both. Used to determine the applicable prescriptive period under Act No. 3326.

Bellosillo (Chairman), Mendoza, Quisumbing, and Buena, JJ., concurred.