Foreign Currency Deposit

7/30/2019 Foreign Currency Deposit

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CHINA BANKING CORPORATION, petitioner,

vs.

COURT OF APPEALS, and VALLEY GOLF and COUNTRY CLUB, INC., respondents.

KAPUNAN, J.:

Through a petition for review on certiorariunder Rule 45 of the Revised Rules of Court, petitioner China

Banking Corporation seeks the reversal of the decision of the Court of Appeals dated 15 August 1994

nullifying the Securities and Exchange Commission's order and resolution dated 4 June 1993 and 7

December 1993, respectively, for lack of jurisdiction. Similarly impugned is the Court of Appeals'

resolution dated 4 September 1994 which denied petitioner's motion for reconsideration.

The case unfolds thus:

On 21 August 1974, Galicano Calapatia, Jr. (Calapatia, for brevity) a stockholder of private respondent

Valley Golf & Country Club, Inc. (VGCCI, for brevity), pledged his Stock Certificate No. 1219 to petitioner

China Banking Corporation (CBC, for brevity). 1

On 16 September 1974, petitioner wrote VGCCI requesting that the aforementioned pledge agreement

be recorded in its books. 2

In a letter dated 27 September 1974, VGCCI replied that the deed of pledge executed by Calapatia in

petitioner's favor was duly noted in its corporate books. 3

On 3 August 1983, Calapatia obtained a loan of P20,000.00 from petitioner, payment of which was

secured by the aforestated pledge agreement still existing between Calapatia and petitioner.4

Due to Calapatia's failure to pay his obligation, petitioner, on 12 April 1985, filed a petition for

extrajudicial foreclosure before Notary Public Antonio T. de Vera of Manila, requesting the latter to

conduct a public auction sale of the pledged stock. 5

On 14 May 1985, petitioner informed VGCCI of the above-mentioned foreclosure proceedings and

requested that the pledged stock be transferred to its (petitioner's) name and the same be recorded in

the corporate books. However, on 15 July 1985, VGCCI wrote petitioner expressing its inability to accede

to petitioner's request in view of Calapatia's unsettled accounts with the club.6

Despite the foregoing, Notary Public de Vera held a public auction on 17 September 1985 and petitioneremerged as the highest bidder at P20,000.00 for the pledged stock. Consequently, petitioner was issued

the corresponding certificate of sale.7

On 21 November 1985, VGCCI sent Calapatia a notice demanding full payment of his overdue account in

the amount of P18,783.24. 8Said notice was followed by a demand letter dated 12 December 1985 for

the same amount 9and another notice dated 22 November 1986 for P23,483.24. 10


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On 4 December 1986, VGCCI caused to be published in the newspaper Daily Express a notice of auction

sale of a number of its stock certificates, to be held on 10 December 1986 at 10:00 a.m. Included therein

was Calapatia's own share of stock (Stock Certificate No. 1219).

Through a letter dated 15 December 1986, VGCCI informed Calapatia of the termination of his

membership due to the sale of his share of stock in the 10 December 1986 auction.11

On 5 May 1989, petitioner advised VGCCI that it is the new owner of Calapatia's Stock Certificate No.

1219 by virtue of being the highest bidder in the 17 September 1985 auction and requested that a new

certificate of stock be issued in its name. 12

On 2 March 1990, VGCCI replied that "for reason of delinquency" Calapatia's stock was sold at the public

auction held on 10 December 1986 for P25,000.00. 13

On 9 March 1990, petitioner protested the sale by VGCCI of the subject share of stock and thereafter

filed a case with the Regional Trial Court of Makati for the nullification of the 10 December 1986 auction

and for the issuance of a new stock certificate in its name.14

On 18 June 1990, the Regional Trial Court of Makati dismissed the complaint for lack of jurisdiction over

the subject matter on the theory that it involves an intra-corporate dispute and on 27 August 1990

denied petitioner's motion for reconsideration.

On 20 September 1990, petitioner filed a complaint with the Securities and Exchange Commission (SEC)

for the nullification of the sale of Calapatia's stock by VGCCI; the cancellation of any new stock

certificate issued pursuant thereto; for the issuance of a new certificate in petitioner's name; and for

damages, attorney's fees and costs of litigation.

On 3 January 1992, SEC Hearing Officer Manuel P. Perea rendered a decision in favor of VGCCI, stating inthe main that "(c)onsidering that the said share is delinquent, (VGCCI) had valid reason not to transfer

the share in the name of the petitioner in the books of (VGCCI) until liquidation of

delinquency." 15Consequently, the case was dismissed. 16

On 14 April 1992, Hearing Officer Perea denied petitioner's motion for reconsideration. 17

Petitioner appealed to the SEC en banc and on 4 June 1993, the Commission issued an order reversing

the decision of its hearing officer. It declared thus:

The Commission en banc believes that appellant-petitioner has a prior right over the pledged share and

because of pledgor's failure to pay the principal debt upon maturity, appellant-petitioner can proceedwith the foreclosure of the pledged share.

WHEREFORE, premises considered, the Orders of January 3, 1992 and April 14, 1992 are hereby SET

ASIDE. The auction sale conducted by appellee-respondent Club on December 10, 1986 is declared NULL

and VOID. Finally, appellee-respondent Club is ordered to issue another membership certificate in the

name of appellant-petitioner bank.


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SO ORDERED. 18

VGCCI sought reconsideration of the abovecited order. However, the SEC denied the same in its

resolution dated 7 December 1993. 19

The sudden turn of events sent VGCCI to seek redress from the Court of Appeals. On 15 August 1994,

the Court of Appeals rendered its decision nullifying and setting aside the orders of the SEC and its

hearing officer on ground of lack of jurisdiction over the subject matter and, consequently, dismissed

petitioner's original complaint. The Court of Appeals declared that the controversy between CBC and

VGCCI is not intra-corporate. It ruled as follows:

In order that the respondent Commission can take cognizance of a case, the controversy must pertain to

any of the following relationships: (a) between the corporation, partnership or association and the

public; (b) between the corporation, partnership or association and its stockholders, partners, members,

or officers; (c) between the corporation, partnership or association and the state in so far as its

franchise, permit or license to operate is concerned, and (d) among the stockholders, partners or

associates themselves (Union Glass and Container Corporation vs. SEC, November 28, 1983, 126 SCRA

31). The establishment of any of the relationship mentioned will not necessarily always confer

jurisdiction over the dispute on the Securities and Exchange Commission to the exclusion of the regular

courts. The statement made in Philex Mining Corp. vs. Reyes, 118 SCRA 602, that the rule admits of no

exceptions or distinctions is not that absolute. The better policy in determining which body has

jurisdiction over a case would be to consider not only the status or relationship of the parties but also

the nature of the question that is the subject of their controversy (Viray vs. Court of Appeals, November

9, 1990, 191 SCRA 308, 322-323).

Indeed, the controversy between petitioner and respondent bank which involves ownership of the stock

that used to belong to Calapatia, Jr. is not within the competence of respondent Commission to decide.It is not any of those mentioned in the aforecited case.

WHEREFORE, the decision dated June 4, 1993, and order dated December 7, 1993 of respondent

Securities and Exchange Commission (Annexes Y and BB, petition) and of its hearing officer dated

January 3, 1992 and April 14, 1992 (Annexes S and W, petition) are all nullified and set aside for lack of

jurisdiction over the subject matter of the case. Accordingly, the complaint of respondent China Banking

Corporation (Annex Q, petition) is DISMISSED. No pronouncement as to costs in this instance.

SO ORDERED. 20

Petitioner moved for reconsideration but the same was denied by the Court of Appeals in its resolutiondated 5 October 1994. 21

Hence, this petition wherein the following issues were raised:

II

ISSUES


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WHETHER OR NOT RESPONDENT COURT OF APPEALS (Former Eighth Division) GRAVELY ERRED WHEN:

1. IT NULLIFIED AND SET ASIDE THE DECISION DATED JUNE 04, 1993 AND ORDER DATED DECEMBER 07,

1993 OF THE SECURITIES AND EXCHANGE COMMISSION EN BANC, AND WHEN IT DISMISSED THE

COMPLAINT OF PETITIONER AGAINST RESPONDENT VALLEY GOLF ALL FOR LACK OF JURISDICTION OVER

THE SUBJECT MATTER OF THE CASE;

2. IT FAILED TO AFFIRM THE DECISION OF THE SECURITIES AND EXCHANGE COMMISSION EN

BANCDATED JUNE 04, 1993 DESPITE PREPONDERANT EVIDENCE SHOWING THAT PETITIONER IS THE

LAWFUL OWNER OF MEMBERSHIP CERTIFICATE NO. 1219 FOR ONE SHARE OF RESPONDENT VALLEY

GOLF.

The petition is granted.

The basic issue we must first hurdle is which body has jurisdiction over the controversy, the regular

courts or the SEC.

P. D. No. 902-A conferred upon the SEC the following pertinent powers:

Sec. 3. The Commission shall have absolute jurisdiction, supervision and control over all corporations,

partnerships or associations, who are the grantees of primary franchises and/or a license or permit

issued by the government to operate in the Philippines, and in the exercise of its authority, it shall have

the power to enlist the aid and support of and to deputize any and all enforcement agencies of the

government, civil or military as well as any private institution, corporation, firm, association or person.

xxx xxx xxx

Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange

Commission over corporations, partnerships and other forms of associations registered with it as

expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear

and decide cases involving:

a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers

or partners, amounting to fraud and misrepresentation which may be detrimental to the interest of the

public and/or of the stockholders, partners, members of associations or organizations registered with

the Commission.

b) Controversies arising out of intra-corporate or partnership relations, between and among

stockholders, members, or associates; between any or all of them and the corporation, partnership orassociation of which they are stockholders, members or associates, respectively; and between such

corporation, partnership or association and the State insofar as it concerns their individual franchise or

right to exist as such entity;

c) Controversies in the election or appointment of directors, trustees, officers, or managers of such

corporations, partnerships or associations.


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d) Petitions of corporations, partnerships or associations to be declared in the state of suspension of

payments in cases where the corporation, partnership or association possesses property to cover all of

its debts but foresees the impossibility of meeting them when they respectively fall due or in cases

where the corporation, partnership or association has no sufficient assets to cover its liabilities, but is

under the Management Committee created pursuant to this Decree.

The aforecited law was expounded upon in Viray v. CA22

and in the recent cases ofMainland

Construction Co.,Inc. v. Movilla23

and Bernardo v. CA,24

thus:

. . . .The better policy in determining which body has jurisdiction over a case would be to consider not

only the status or relationship of the parties but also the nature of the question that is the subject of

their controversy.

Applying the foregoing principles in the case at bar, to ascertain which tribunal has jurisdiction we have

to determine therefore whether or not petitioner is a stockholder of VGCCI and whether or not the

nature of the controversy between petitioner and private respondent corporation is intra-corporate.

As to the first query, there is no question that the purchase of the subject share or membership

certificate at public auction by petitioner (and the issuance to it of the corresponding Certificate of Sale)

transferred ownership of the same to the latter and thus entitled petitioner to have the said share

registered in its name as a member of VGCCI. It is readily observed that VGCCI did not assail the transfer

directly and has in fact, in its letter of 27 September 1974, expressly recognized the pledge agreement

executed by the original owner, Calapatia, in favor of petitioner and has even noted said agreement in

its corporate books. 25In addition, Calapatia, the original owner of the subject share, has not contested

the said transfer.

By virtue of the afore-mentioned sale, petitioner became a bona fide stockholder of VGCCI and,therefore, the conflict that arose between petitioner and VGCCI aptly exemplies an intra-corporate

controversy between a corporation and its stockholder under Sec. 5(b) of P.D. 902-A.

An important consideration, moreover, is the nature of the controversy between petitioner and private

respondent corporation. VGCCI claims a prior right over the subject share anchored mainly on Sec. 3, Art

VIII of its by-laws which provides that "after a member shall have been posted as delinquent, the Board

may order his/her/its share sold to satisfy the claims of the Club. . ." 26It is pursuant to this provision

that VGCCI also sold the subject share at public auction, of which it was the highest bidder. VGCCI caps

its argument by asserting that its corporate by-laws should prevail. The bone of contention, thus, is the

proper interpretation and application of VGCCI's aforequoted by-laws, a subject which irrefutably calls

for the special competence of the SEC.

We reiterate herein the sound policy enunciated by the Court inAbejo v. De la Cruz27:

6. In the fifties, the Court taking cognizance of the move to vest jurisdiction in administrative

commissions and boards the power to resolve specialized disputes in the field of labor (as in

corporations, public transportation and public utilities) ruled that Congress in requiring the Industrial


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Court's intervention in the resolution of labor-management controversies likely to cause strikes or

lockouts meant such jurisdiction to be exclusive, although it did not so expressly state in the law. The

Court held that under the "sense-making and expeditious doctrine of primary jurisdiction . . . the courts

cannot or will not determine a controversy involving a question which is within the jurisdiction of an

administrative tribunal, where the question demands the exercise of sound administrative discretion

requiring the special knowledge, experience, and services of the administrative tribunal to determine

technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes

of the regulatory statute administered.

In this era of clogged court dockets, the need for specialized administrative boards or commissions with

the special knowledge, experience and capability to hear and determine promptly disputes on technical

matters or essentially factual matters, subject to judicial review in case of grave abuse of discretion, has

become well nigh indispensable. Thus, in 1984, the Court noted that "between the power lodged in an

administrative body and a court, the unmistakable trend has been to refer it to the former. 'Increasingly,

this Court has been committed to the view that unless the law speaks clearly and unequivocably, the

choice should fall on [an administrative agency.]'" The Court in the earlier case ofEbon v. De Guzman,noted that the lawmaking authority, in restoring to the labor arbiters and the NLRC their jurisdiction to

award all kinds of damages in labor cases, as against the previous P.D. amendment splitting their

jurisdiction with the regular courts, "evidently, . . . had second thoughts about depriving the Labor

Arbiters and the NLRC of the jurisdiction to award damages in labor cases because that setup would

mean duplicity of suits, splitting the cause of action and possible conflicting findings and conclusions by

two tribunals on one and the same claim."

In this case, the need for the SEC's technical expertise cannot be over-emphasized involving as it does

the meticulous analysis and correct interpretation of a corporation's by-laws as well as the applicable

provisions of the Corporation Code in order to determine the validity of VGCCI's claims. The SEC,therefore, took proper cognizance of the instant case.

VGCCI further contends that petitioner is estopped from denying its earlier position, in the first

complaint it filed with the RTC of Makati (Civil Case No. 90-1112) that there is no intra-corporate

relations between itself and VGCCI.

VGCCI's contention lacks merit.

InZamora v. Court of Appeals, 28this Court, through Mr. Justice Isagani A. Cruz, declared that:

It follows that as a rule the filing of a complaint with one court which has no jurisdiction over it does not

prevent the plaintiff from filing the same complaint later with the competent court. The plaintiff is not

estopped from doing so simply because it made a mistake before in the choice of the proper forum. . . .

We remind VGCCI that in the same proceedings before the RTC of Makati, it categorically stated (in its

motion to dismiss) that the case between itself and petitioner is intra-corporate and insisted that it is

the SEC and not the regular courts which has jurisdiction. This is precisely the reason why the said court

dismissed petitioner's complaint and led to petitioner's recourse to the SEC.


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Having resolved the issue on jurisdiction, instead of remanding the whole case to the Court of Appeals,

this Court likewise deems it procedurally sound to proceed and rule on its merits in the same

proceedings.

It must be underscored that petitioner did not confine the instant petition for review on certiorarion

the issue of jurisdiction. In its assignment of errors, petitioner specifically raised questions on the meritsof the case. In turn, in its responsive pleadings, private respondent duly answered and countered all the

issues raised by petitioner.

Applicable to this case is the principle succinctly enunciated in the case ofHeirs of Crisanta Y. Gabriel-

Almoradie v. Court of Appeals, 29citing Escudero v. Dulay30and The Roman Catholic Archbishop of

Manila v. Court of Appeals. 31

In the interest of the public and for the expeditious administration of justice the issue on infringement

shall be resolved by the court considering that this case has dragged on for years and has gone from one

forum to another.

It is a rule of procedure for the Supreme Court to strive to settle the entire controversy in a single

proceeding leaving no root or branch to bear the seeds of future litigation. No useful purpose will be

served if a case or the determination of an issue in a case is remanded to the trial court only to have its

decision raised again to the Court of Appeals and from there to the Supreme Court.

We have laid down the rule that the remand of the case or of an issue to the lower court for further

reception of evidence is not necessary where the Court is in position to resolve the dispute based on the

records before it and particularly where the ends of justice would not be subserved by the remand

thereof. Moreover, the Supreme Court is clothed with ample authority to review matters, even those

not raised on appeal if it finds that their consideration is necessary in arriving at a just disposition of thecase.

In the recent case ofChina Banking Corp., et al. v. Court of Appeals, et al.,32

this Court, through Mr.

Justice Ricardo J. Francisco, ruled in this wise:

At the outset, the Court's attention is drawn to the fact that since the filing of this suit before the trial

court, none of the substantial issues have been resolved. To avoid and gloss over the issues raised by the

parties, as what the trial court and respondent Court of Appeals did, would unduly prolong this litigation

involving a rather simple case of foreclosure of mortgage. Undoubtedly, this will run counter to the

avowed purpose of the rules, i.e., to assist the parties in obtaining just, speedy and inexpensive

determination of every action or proceeding. The Court, therefore, feels that the central issues of thecase, albeit unresolved by the courts below, should now be settled specially as they involved pure

questions of law. Furthermore, the pleadings of the respective parties on file have amply ventilated their

various positions and arguments on the matter necessitating prompt adjudication.

In the case at bar, since we already have the records of the case (from the proceedings before the SEC)

sufficient to enable us to render a sound judgment and since only questions of law were raised (the


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proper jurisdiction for Supreme Court review), we can, therefore, unerringly take cognizance of and rule

on the merits of the case.

The procedural niceties settled, we proceed to the merits.

VGCCI assails the validity of the pledge agreement executed by Calapatia in petitioner's favor. It

contends that the same was null and void for lack of consideration because the pledge agreement was

entered into on 21 August

1974 33but the loan or promissory note which it secured was obtained by Calapatia much later or only

on 3 August 1983. 34

VGCCI's contention is unmeritorious.

A careful perusal of the pledge agreement will readily reveal that the contracting parties explicitly

stipulated therein that the said pledge will also stand as security for any future advancements (or

renewals thereof) that Calapatia (the pledgor) may procure from petitioner:

xxx xxx xxx

This pledge is given as security for the prompt payment when due of all loans, overdrafts, promissory

notes, drafts, bills or exchange, discounts, and all other obligations of every kind which have heretofore

been contracted, or which may hereafter be contracted, by the PLEDGOR(S) and/or DEBTOR(S) or any

one of them, in favor of the PLEDGEE, including discounts of Chinese drafts, bills of exchange,

promissory notes, etc., without any further endorsement by the PLEDGOR(S) and/or Debtor(s) up to the

sum of TWENTY THOUSAND (P20,000.00) PESOS, together with the accrued interest thereon, as

hereinafter provided, plus the costs, losses, damages and expenses (including attorney's fees) which

PLEDGEE may incur in connection with the collection thereof. 35(Emphasis ours.)

The validity of the pledge agreement between petitioner and Calapatia cannot thus be held suspect by

VGCCI. As candidly explained by petitioner, the promissory note of 3 August 1983 in the amount of

P20,000.00 was but a renewal of the first promissory note covered by the same pledge agreement.

VGCCI likewise insists that due to Calapatia's failure to settle his delinquent accounts, it had the right to

sell the share in question in accordance with the express provision found in its by-laws.

Private respondent's insistence comes to naught. It is significant to note that VGCCI began sending

notices of delinquency to Calapatia afterit was informed by petitioner (through its letter dated 14 May

1985) of the foreclosure proceedings initiated against Calapatia's pledged share, although Calapatia has

been delinquent in paying his monthly dues to the club since 1975. Stranger still, petitioner, whom

VGCCI had officially recognized as the pledgee of Calapatia's share, was neither informed nor furnished

copies of these letters of overdue accounts until VGCCI itself sold the pledged share at another public

auction. By doing so, VGCCI completely disregarded petitioner's rights as pledgee. It even failed to give

petitioner notice of said auction sale. Such actuations of VGCCI thus belie its claim of good faith.


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In defending its actions, VGCCI likewise maintains that petitioner is bound by its by-laws. It argues in this

wise:

The general rule really is that third persons are not bound by the by-laws of a corporation since they are

not privy thereto (Fleischer v. Botica Nolasco, 47 Phil. 584). The exception to this is when third persons

have actual or constructive knowledge of the same. In the case at bar, petitioner had actual knowledgeof the by-laws of private respondent when petitioner foreclosed the pledge made by Calapatia and

when petitioner purchased the share foreclosed on September 17, 1985. This is proven by the fact that

prior thereto, i.e., on May 14, 1985 petitioner even quoted a portion of private respondent's by-laws

which is material to the issue herein in a letter it wrote to private respondent. Because of this actual

knowledge of such by-laws then the same bound the petitioner as of the time when petitioner

purchased the share. Since the by-laws was already binding upon petitioner when the latter purchased

the share of Calapatia on September 17, 1985 then the petitioner purchased the said share subject to

the right of the private respondent to sell the said share for reasons of delinquency and the right of

private respondent to have a first lien on said shares as these rights are provided for in the by-laws very

very clearly.36

VGCCI misunderstood the import of our ruling in Fleischer v. Botica Nolasco Co.: 37

And moreover, the by-law now in question cannot have any effect on the appellee. He had no knowledge

of such by-law when the shares were assigned to him. He obtained them in good faith and for a valuable

consideration. He was not a privy to the contract created by said by-law between the shareholder

Manuel Gonzales and the Botica Nolasco, Inc. Said by-law cannot operate to defeat his rights as a

purchaser.

An unauthorized by-law forbidding a shareholder to sell his shares without first offering them to the

corporation for a period of thirty days is not binding upon an assignee of the stock as a personalcontract, although his assignor knew of the by-law and took part in its adoption. (10 Cyc., 579; Ireland

vs. Globe Milling Co., 21 R.I., 9.)

When no restriction is placed by public law on the transfer of corporate stock, a purchaser is not

affected by any contractual restriction of which he had no notice. (Brinkerhoff-Farris Trust & Savings Co.

vs. Home Lumber Co., 118 Mo., 447.)

The assignment of shares of stock in a corporation by one who has assented to an unauthorized by-law

has only the effect of a contract by, and enforceable against, the assignor; the assignee is not bound by

such by-law by virtue of the assignment alone. (Ireland vs. Globe Milling Co., 21 R.I., 9.)

A by-law of a corporation which provides that transfers of stock shall not be valid unless approved by

the board of directors, while it may be enforced as a reasonable regulation for the protection of the

corporation against worthless stockholders, cannot be made available to defeat the rights of third

persons. (Farmers' and Merchants' Bank of Lineville vs. Wasson, 48 Iowa, 336.) (Emphasis ours.)


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In order to be bound, the third party must have acquired knowledge of the pertinent by-laws at the time

the transaction or agreement between said third party and the shareholder was entered into, in this

case, at the time the pledge agreement was executed. VGCCI could have easily informed petitioner of its

by-laws when it sent notice formally recognizing petitioner as pledgee of one of its shares registered in

Calapatia's name. Petitioner's belated notice of said by-laws at the time of foreclosure will not suffice.

The ruling of the SEC en banc is particularly instructive:

By-laws signifies the rules and regulations or private laws enacted by the corporation to regulate, govern

and control its own actions, affairs and concerns and its stockholders or members and directors and

officers with relation thereto and among themselves in their relation to it. In other words, by-laws are

the relatively permanent and continuing rules of action adopted by the corporation for its own

government and that of the individuals composing it and having the direction, management and control

of its affairs, in whole or in part, in the management and control of its affairs and activities. (9 Fletcher

4166, 1982 Ed.)

The purpose of a by-law is to regulate the conduct and define the duties of the members towards the

corporation and among themselves. They are self-imposed and, although adopted pursuant to statutory

authority, have no status as public law. (Ibid.)

Therefore, it is the generally accepted rule that third persons are not bound by by-laws, except when

they have knowledge of the provisions either actually or constructively. In the case ofFleisher v.Botica

Nolasco, 47 Phil. 584, the Supreme Court held that the by-law restricting the transfer of shares cannot

have any effect on the transferee of the shares in question as he "had no knowledge of such by-law

when the shares were assigned to him. He obtained them in good faith and for a valuable

consideration. He was not a privy to the contract created by the by-law between the shareholder. . .and

the Botica Nolasco, Inc. Said by-law cannot operate to defeat his right as a purchaser. (Emphasis

supplied.)

By analogy of the above-cited case, the Commission en banc is of the opinion that said case is applicable

to the present controversy. Appellant-petitioner bank as a third party can not be bound by appellee-

respondent's by-laws. It must be recalled that when appellee-respondent communicated to appellant-

petitioner bank that the pledge agreement was duly noted in the club's books there was no mention of

the shareholder-pledgor's unpaid accounts. The transcript of stenographic notes of the June 25, 1991

Hearing reveals that the pledgor became delinquent only in 1975. Thus, appellant-petitioner was in

good faith when the pledge agreement was contracted.

The Commission en banc also believes that for the exception to the general accepted rule that thirdpersons are not bound by by-laws to be applicable and binding upon the pledgee, knowledge of the

provisions of the VGCI By-laws must be acquired at the time the pledge agreement was contracted.

Knowledge of said provisions, either actual or constructive, at the time of foreclosure will not affect

pledgee's right over the pledged share. Art. 2087 of the Civil Code provides that it is also of the essence

of these contracts that when the principal obligation becomes due, the things in which the pledge or

mortgage consists maybe alienated for the payment to the creditor.


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any other transaction." 40In the case at bar, the subscription for the share in question has been fully

paid as evidenced by the issuance of Membership Certificate No. 1219. 41What Calapatia owed the

corporation were merely the monthly dues. Hence, the aforequoted provision does not apply.

WHEREFORE, premises considered, the assailed decision of the Court of Appeals is REVERSED and the

order of the SEC en banc dated 4 June 1993 is hereby AFFIRMED.

SO ORDERED.


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G.R. No. 189206 June 8, 2011

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,vs.THE HONORABLE 15th DIVISION OF THE COURT OF APPEALS and INDUSTRIAL BANK OF

KOREA, TONG YANG MERCHANT BANK, HANAREUM BANKING CORP., LAND BANK OF

THE PHILIPPINES, WESTMONT BANK and DOMSAT HOLDINGS, INC., Respondents.

D E C I S I O N

PEREZ, J .:

The subject of this petition for certiorari is the Decision1of the Court of Appeals in CA-G.R. SP No.82647 allowing the quashal by the Regional Trial Court (RTC) of Makati of a subpoena for theproduction of bank ledger. This case is incident to Civil Case No. 99-1853, which is the main casefor collection of sum of money with damages filed by Industrial Bank of Korea, Tong Yang MerchantBank, First Merchant Banking Corporation, Land Bank of the Philippines, and Westmont Bank (nowUnited Overseas Bank), collectively known as "the Banks" against Domsat Holdings, Inc. (Domsat)

and the Government Service Insurance System (GSIS). Said case stemmed from a LoanAgreement,2whereby the Banks agreed to lend United States (U.S.) $11 Million to Domsat for thepurpose of financing the lease and/or purchase of a Gorizon Satellite from the InternationalOrganization of Space Communications (Intersputnik).3

The controversy originated from a surety agreement by which Domsat obtained a surety bond fromGSIS to secure the payment of the loan from the Banks. We quote the terms of the Surety Bond inits entirety.4

Republic of the PhilippinesGOVERNMENT SERVICE INSURANCE SYSTEM

GENERAL INSURANCE FUNDGSIS Headquarters, Financial Center

Roxas Boulevard, Pasay City

G(16) GIF Bond 027461

S U R E T Y B O N D

KNOW ALL MEN BY THESE PRESENTS:

That we, DOMSAT HOLDINGS, INC., represented by its President as PRINCIPAL, and theGOVERNMENT SERVICE INSURANCE SYSTEM, as Administrator of the GENERAL INSURANCEFUND, a corporation duly organized and existing under and by virtue of the laws of the Philippines,with principal office in the City of Pasay, Metro Manila, Philippines as SURETY, are held and firmlybound unto the OBLIGEES: LAND BANK OF THE PHILIPPINES, 7th Floor, Land Bank Bldg. IV. 313Sen. Gil J. Puyat Avenue, Makati City; WESTMONT BANK, 411 Quintin Paredes St., Binondo,Manila: TONG YANG MERCHANT BANK, 185, 2-Ka, Ulchi-ro, Chungk-ku, Seoul, Korea;INDUSTRIAL BANK OF KOREA, 50, 2-Ga, Ulchi-ro, Chung-gu, Seoul, Korea; and FIRSTMERCHANT BANKING CORPORATION, 199-40, 2-Ga, Euliji-ro, Jung-gu, Seoul, Korea, in the sum,of US $ ELEVEN MILLION DOLLARS ($11,000,000.00) for the payment of which sum, well and trulyto be made, we bind ourselves, our heirs, executors, administrators, successors and assigns, jointlyand severally, firmly by these presents.
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THE CONDITIONS OF THE OBLIGATION ARE AS FOLLOWS:

WHEREAS, the above bounden PRINCIPAL, on the 12th day of December, 1996 entered into acontract agreement with the aforementioned OBLIGEES to fully and faithfully

Guarantee the repayment of the principal and interest on the loan granted the PRINCIPAL to be

used for the financing of the two (2) year lease of a Russian Satellite from INTERSPUTNIK, inaccordance with the terms and conditions of the credit package entered into by the parties.

This bond shall remain valid and effective until the loan including interest has been fully paid andliquidated,

a copy of which contract/agreement is hereto attached and made part hereof;

WHEREAS, the aforementioned OBLIGEES require said PRINCIPAL to give a good and sufficientbond in the above stated sum to secure the full and faithful performance on his part of saidcontract/agreement.

NOW, THEREFORE, if the PRINCIPAL shall well and truly perform and fulfill all the undertakings,covenants, terms, conditions, and agreements stipulated in said contract/agreements, then thisobligation shall be null and void; otherwise, it shall remain in full force and effect.

WITNESS OUR HANDS AND SEALS this 13th day of December 1996 at Pasay City, Philippines.

DOMSAT HOLDINGS, INC.Principal

GOVERNMENT SERVICE INSURANCE SYSTEMGeneral Insurance Fund

By:

CAPT. RODRIGO A. SILVERIO

President

By:

AMALIO A. MALLARI

Senior Vice-PresidentGeneral Insurance Group

When Domsat failed to pay the loan, GSIS refused to comply with its obligation reasoning thatDomsat did not use the loan proceeds for the payment of rental for the satellite. GSIS alleged thatDomsat, with Westmont Bank as the conduit, transferred the U.S. $11 Million loan proceeds from theIndustrial Bank of Korea to Citibank New York account of Westmont Bank and from there to theBinondo Branch of Westmont Bank.5The Banks filed a complaint before the RTC of Makati againstDomsat and GSIS.

In the course of the hearing, GSIS requested for the issuance of a subpoena duces tecum to thecustodian of records of Westmont Bank to produce the following documents:

1. Ledger covering the account of DOMSAT Holdings, Inc. with Westmont Bank (now UnitedOverseas Bank), any and all documents, records, files, books, deeds, papers, notes andother data and materials relating to the account or transactions of DOMSAT Holdings, Inc.with or through the Westmont Bank (now United Overseas Bank) for the period January1997 to December 2002, in his/her direct or indirect possession, custody or control (whetheractual or constructive), whether in his/her capacity as Custodian of Records or otherwise;
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2. All applications for cashiers/ managers checks and bank transfers funded by the accountof DOMSAT Holdings, Inc. with or through the Westmont Bank (now United Overseas Bank)for the period January 1997 to December 2002, and all other data and materials coveringsaid applications, in his/her direct or indirect possession, custody or control (whether actualor constructive), whether in his/her capacity as Custodian of Records or otherwise;

3. Ledger covering the account of Philippine Agila Satellite, Inc. with Westmont Bank (nowUnited Overseas Bank), any and all documents, records, files, books, deeds, papers, notesand other data and materials relating to the account or transactions of Philippine AgilaSatellite, Inc. with or through the Westmont bank (now United Overseas Bank) for the periodJanuary 1997 to December 2002, in his/her direct or indirect possession, custody or control(whether actual or constructive), whether in his/her capacity as Custodian of Records orotherwise;

4. All applications for cashiers/managers checks funded by the account of Philippine AgilaSatellite, Inc. with or through the Westmont Bank (now United Overseas Bank) for the periodJanuary 1997 to December 2002, and all other data and materials covering said applications,in his/her direct or indirect possession, custody or control (whether actual or constructive),whether in his/her capacity as Custodian of Records or otherwise.6

The RTC issued a subpoena decus tecum on 21 November 2002.7A motion to quash was filed bythe banks on three grounds: 1) the subpoena is unreasonable, oppressive and does not establishthe relevance of the documents sought; 2) request for the documents will violate the Law on Secrecyof Bank Deposits; and 3) GSIS failed to advance the reasonable cost of production of thedocuments.8Domsat also joined the banks motion to quash through its Manifestation/Comment.9On9 April 2003, the RTC issued an Order denying the motion to quash for lack of merit. We quote thepertinent portion of the Order, thus:

After a careful consideration of the arguments of the parties, the Court did not find merit in themotion.

The serious objection appears to be that the subpoena is violative of the Law on Secrecy of BankDeposit, as amended. The law declares bank deposits to be "absolutely confidential" except: x x x(6) In cases where the money deposited or invested is the subject matter of the litigation.

The case at bench is for the collection of a sum of money from defendants that obtained a loan fromthe plaintiff. The loan was secured by defendant GSIS which was the surety. It is the contention ofdefendant GSIS that the proceeds of the loan was deviated to purposes other than to what the loanwas extended. The quashal of the subpoena would deny defendant GSIS its right to prove itsdefenses.

WHEREFORE, for lack of merit the motion is DENIED.10

On 26 June 2003, another Order was issued by the RTC denying the motion for reconsideration filedby the banks.11On 1 September 2003 however, the trial court granted the second motion forreconsideration filed by the banks. The previous subpoenas issued were consequentlyquashed.12The trial court invoked the ruling in Intengan v. Court of Appeals,13where it was ruled thatforeign currency deposits are absolutely confidential and may be examined only when there is awritten permission from the depositor. The motion for reconsideration filed by GSIS was denied on30 December 2003.
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Hence, these assailed orders are the subject of the petition for certiorari before the Court of Appeals.GSIS raised the following arguments in support of its petition:

I.

Respondent Judge acted with grave abuse of discretion when it favorably considered respondent

banks (second) Motion for Reconsideration dated July 9, 2003 despite the fact that it did not containa notice of hearing and was therefore a mere scrap of paper.

II.

Respondent judge capriciously and arbitrarily ignored Section 2 of the Foreign Currency Deposit Act(RA 6426) in ruling in his Orders dated September 1 and December 30, 2003 that theUS$11,000,000.00 deposit in the account of respondent Domsat in Westmont Bank is covered bythe secrecy of bank deposit.

III.

Since both respondent banks and respondent Domsat have disclosed during the trial theUS$11,000,000.00 deposit, it is no longer secret and confidential, and petitioner GSIS right toinquire into what happened to such deposit can not be suppressed.14

The Court of Appeals addressed these issues in seriatim.

The Court of Appeals resorted to a liberal interpretation of the rules to avoid miscarriage of justicewhen it allowed the filing and acceptance of the second motion for reconsideration. The appellatecourt also underscored the fact that GSIS did not raise the defect of lack of notice in its opposition tothe second motion for reconsideration. The appellate court held that failure to timely object to theadmission of a defective motion is considered a waiver of its right to do so.

The Court of Appeals declared that Domsats deposit in Westmont Bank is covered by Republic ActNo. 6426 or the Bank Secrecy Law. We quote the pertinent portion of the Decision:

It is our considered opinion that Domsats deposit of $11,000,000.00 in Westmont Bank is coveredby the Bank Secrecy Law, as such it cannot be examined, inquired or looked into without the writtenconsent of its owner. The ruling in Van Twest vs. Court of Appeals was rendered during theeffectivity of CB Circular No. 960, Series of 1983, under Sec. 102 thereof, transfer to foreigncurrency deposit account or receipt from another foreign currency deposit account, whether forpayment of legitimate obligation or otherwise, are not eligible for deposit under the System.

CB Circular No. 960 has since been superseded by CB Circular 1318 and later by CB Circular 1389.Section 102 of Circular 960 has not been re-enacted in the later Circulars. What is applicable now is

the decision in Intengan vs. Court of Appeals where the Supreme Court has ruled that the underR.A. 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. Petitioner, therefore, hadinappropriately invoked the provisions of Central Bank (CB) Circular Nos. 343 which has alreadybeen superseded by more recently issued CB Circulars. CB Circular 343 requires the surrender tothe banking system of foreign exchange, including proceeds of foreign borrowings. This requirement,however, can no longer be found in later circulars.
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18/22

In its Reply to respondent banks comment, petitioner appears to have conceded that what isapplicable in this case is CB Circular 1389. Obviously, under CB 1389, proceeds of foreignborrowings are no longer required to be surrendered to the banking system.

Undaunted, petitioner now argues that paragraph 2, Section 27 of CB Circular 1389 is applicablebecause Domsats $11,000,000.00 loan from respondent banks was intended to be paid to a foreign

supplier Intersputnik and, therefore, should have been paid directly to Intersputnik and not depositedinto Westmont Bank. The fact that it was deposited to the local bank Westmont Bank, petitionerclaims violates the circular and makes the deposit lose its confidentiality status under R.A. 6426.However, a reading of the entire Section 27 of CB Circular 1389 reveals that the portion quoted bythe petitioner refers only to the procedure/conditions of drawdown for service of debts using foreignexchange. The above-said provision relied upon by the petitioner does not in any manner prescribethe conditions before any foreign currency deposit can be entitled to the confidentiality provisions ofR.A. 6426.15

Anent the third issue, the Court of Appeals ruled that the testimony of the incumbent president ofWestmont Bank is not the written consent contemplated by Republic Act No. 6426.

The Court of Appeals however upheld the issuance of subpoena praying for the production ofapplications for cashiers or managers checks by Domsat through Westmont Bank, as well as acopy of an Agreement and/or Contract and/or Memorandum between Domsat and/or Philippine AgilaSatellite and Intersputnik for the acquisition and/or lease of a Gorizon Satellite. The appellate courtbelieved that the production of these documents does not involve the examination of Domsatsaccount since it will never be known how much money was deposited into it or withdrawn therefromand how much remains therein.

On 29 February 2008, the Court of Appeals rendered the assailed Decision, the decretal portion ofwhich reads:

WHEREFORE, the petition is partially GRANTED. Accordingly, the assailed Order dated December30, 2003 is hereby modified in that the quashal of the subpoena for the production of Domsats bankledger in Westmont Bank is upheld while respondent court is hereby ordered to issue subpoenaduces tecum ad testificandum directing the records custodian of Westmont Bank to bring to court thefollowing documents:

a) applications for cashiers or managers checks by respondent Domsat through WestmontBank from January 1997 to December 2002;

b) bank transfers by respondent Domsat through Westmont Bank from January 1997 toDecember 2002; and

c) copy of an agreement and/or contract and/or memorandum between respondent Domsatand/or Philippine Agila Satellite and Intersputnik for the acquisition and/or lease of a Gorizon

satellite.

No pronouncement as to costs.16

GSIS filed a motion for reconsideration which the Court of Appeals denied on 19 June 2009. Thus,the instant petition ascribing grave abuse of discretion on the part of the Court of Appeals in rulingthat Domsats deposit with Westmont Bank cannot be examined and in finding that the bankssecond motion for reconsideration in Civil Case No. 99-1853 is procedurally acceptable.17
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This Court notes that GSIS filed a petition for certiorari under Rule 65 of the Rules of Court to assailthe Decision and Resolution of the Court of Appeals. Petitioner availed of the improper remedy asthe appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 andnot a special civil action under Rule 65.18Certiorari under Rule 65 lies only when there is no appeal,nor plain, speedy and adequate remedy in the ordinary course of law. That action is not a substitutefor a lost appeal in general; it is not allowed when a party to a case fails to appeal a judgment to the

proper forum.19

Where an appeal is available, certiorari will not prosper even if the ground therefor isgrave abuse of discretion. Accordingly, when a party adopts an improper remedy, his petition maybe dismissed outright.20lauuphil

Yet, even if this procedural infirmity is discarded for the broader interest of justice, the petition sorelylacks merit.

GSIS insists that Domsats deposit with Westmont Bank can be examined and inquired into. Itanchored its argument on Republic Act No. 1405 or the "Law on Secrecy of Bank Deposits," whichallows the disclosure of bank deposits in cases where the money deposited is the subject matter ofthe litigation. GSIS asserts that the subject matter of the litigation is the U.S. $11 Million obtained byDomsat from the Banks to supposedly finance the lease of a Russian satellite from Intersputnik.Whether or not it should be held liable as a surety for the principal amount of U.S. $11 Million, GSIScontends, is contingent upon whether Domsat indeed utilized the amount to lease a Russian satelliteas agreed in the Surety Bond Agreement. Hence, GSIS argues that the whereabouts of the U.S. $11Million is the subject matter of the case and the disclosure of bank deposits relating to the U.S. $11Million should be allowed.

GSIS also contends that the concerted refusal of Domsat and the banks to divulge the whereaboutsof the U.S. $11 Million will greatly prejudice and burden the GSIS pension fund considering that asubstantial portion of this fund is earmarked every year to cover the surety bond issued.

Lastly, GSIS defends the acceptance by the trial court of the second motion for reconsideration filedby the banks on the grounds that it is pro forma and did not conform to the notice requirements ofSection 4, Rule 15 of the Rules of Civil Procedure.21

Domsat denies the allegations of GSIS and reiterates that it did not give a categorical or affirmativewritten consent or permission to GSIS to examine its bank statements with Westmont Bank.

The Banks maintain that Republic Act No. 1405 is not the applicable law in the instant case becausethe Domsat deposit is a foreign currency deposit, thus covered by Republic Act No. 6426. Undersaid law, only the consent of the depositor shall serve as the exception for the disclosure of his/herdeposit.

The Banks counter the arguments of GSIS as a mere rehash of its previous arguments before theCourt of Appeals. They justify the issuance of the subpoena as an interlocutory matter which may bereconsidered anytime and that the pro forma rule has no application to interlocutory orders.

It appears that only GSIS appealed the ruling of the Court of Appeals pertaining to the quashal of thesubpoena for the production of Domsats bank ledger with Westmont Bank. Since neither Domsatnor the Banks interposed an appeal from the other portions of the decision, particularly for theproduction of applications for cashiers or managers checks by Domsat through Westmont Bank, aswell as a copy of an agreement and/or contract and/or memorandum between Domsat and/orPhilippine Agila Satellite and Intersputnik for the acquisition and/or lease of a Gorizon satellite, thelatter became final and executory.


20/22

GSIS invokes Republic Act No. 1405 to justify the issuance of the subpoena while the banks citeRepublic Act No. 6426 to oppose it. The core issue is which of the two laws should apply in theinstant case.

Republic Act No. 1405 was enacted in 1955. Section 2 thereof was first amended by PresidentialDecree No. 1792 in 1981 and further amended by Republic Act No. 7653 in 1993. It now reads:

Section 2. All deposits of whatever nature with banks or banking institutions in the Philippinesincluding investments in bonds issued by the Government of the Philippines, its political subdivisionsand its instrumentalities, are hereby considered as of an absolutely confidential nature and may notbe examined, inquired or looked into by any person, government official, bureau or office, exceptupon written permission of the depositor, or in cases of impeachment, or upon order of a competentcourt in cases of bribery or dereliction of duty of public officials, or in cases where the moneydeposited or invested is the subject matter of the litigation.

Section 8 of Republic Act No. 6426, which was enacted in 1974, and amended by PresidentialDecree No. 1035 and later by Presidential Decree No. 1246, provides:

Section 8. Secrecy of Foreign Currency Deposits. All foreign currency deposits authorized underthis Act, as amended by Presidential Decree No. 1035, as well as foreign currency depositsauthorized under Presidential Decree No. 1034, are hereby declared as and considered of anabsolutely confidential nature and, except upon the written permission of the depositor, in noinstance 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 otherentity whether public or private; Provided, however, That said foreign currency deposits shall beexempt 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, andfurther amended by PD No. 1246, prom. Nov. 21, 1977.)

On the one hand, Republic Act No. 1405 provides for four (4) exceptions when records of depositsmay be disclosed. These are under any of the following instances: a) upon written permission of thedepositor, (b) in cases of impeachment, (c) upon order of a competent court in the case of bribery ordereliction of duty of public officials or, (d) when the money deposited or invested is the subjectmatter of the litigation, and e) in cases of violation of the Anti-Money Laundering Act (AMLA), the

Anti-Money Laundering Council (AMLC) may inquire into a bank account upon order of anycompetent court.22On the other hand, the lone exception to the non-disclosure of foreign currencydeposits, under Republic Act No. 6426, is disclosure upon the written permission of the depositor.

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 todeposit their money in banking institutions and to discourage private hoarding so that the same maybe properly utilized by banks in authorized loans to assist in the economic development of thecountry.23It 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 generalapplication. On the other hand, Republic Act No. 6426 was intended to encourage deposits fromforeign lenders and investors.24It is a special law designed especially for foreign currency deposits inthe Philippines. A general law does not nullify a specific or special law. Generalia specialibus nonderogant.25Therefore, it is beyond cavil that Republic Act No. 6426 applies in this case.

Intengan v. Court of Appeals affirmed the above-cited principle and categorically declared that forforeign currency deposits, such as U.S. dollar deposits, the applicable law is Republic Act No. 6426.


21/22

In said case, Citibank filed an action against its officers for persuading their clients to transfer theirdollar deposits to competitor banks. Bank records, including dollar deposits of petitioners, purportingto establish the deception practiced by the officers, were annexed to the complaint. Petitioners nowcomplained that Citibank violated Republic Act No. 1405. This Court ruled that since the accounts inquestion are U.S. dollar deposits, the applicable law therefore is not Republic Act No. 1405 butRepublic Act No. 6426.

The above pronouncement was reiterated in China Banking Corporation v. Court of Appeals,26whererespondent accused his daughter of stealing his dollar deposits with Citibank. The latter allegedlyreceived the checks from Citibank and deposited them to her account in China Bank. The subjectchecks were presented in evidence. A subpoena was issued to employees of China Bank to testifyon these checks. China Bank argued that the Citibank dollar checks with both respondent and/or herdaughter as payees, deposited with China Bank, may not be looked into under the law on secrecy offoreign currency deposits. This Court highlighted the exception to the non-disclosure of foreigncurrency deposits, i.e., in the case of a written permission of the depositor, and ruled thatrespondent, as owner of the funds unlawfully taken and which are undisputably now deposited withChina Bank, he has the right to inquire into the said deposits.

Applying Section 8 of Republic Act No. 6426, absent the written permission from Domsat, WestmontBank cannot be legally compelled to disclose the bank deposits of Domsat, otherwise, it mightexpose itself to criminal liability under the same act.27

The basis for the application of subpoena is to prove that the loan intended for Domsat by the Banksand guaranteed by GSIS, was diverted to a purpose other than that stated in the surety bond. TheBanks, however, argue that GSIS is in fact liable to them for the proper applications of the loanproceeds and not vice-versa. We are however not prepared to rule on the merits of this case lest wepre-empt the findings of the lower courts on the matter.

The third issue raised by GSIS was properly addressed by the appellate court. The appellate courtmaintained that the judge may, in the exercise of his sound discretion, grant the second motion forreconsideration despite its being pro forma. The appellate court correctly relied on precedents where

this Court set aside technicality in favor of substantive justice. Furthermore, the appellate courtaccurately pointed out that petitioner did not assail the defect of lack of notice in its opposition to thesecond motion of reconsideration, thus it can be considered a waiver of the defect.

WHEREFORE, the petition for certiorari is DISMISSED. The Decision dated 29 February 2008 and19 June 2009 Resolution of the Court of Appeals are hereby AFFIRMED.

SO ORDERED.

JOSE PORTUGAL PEREZAssociate Justice

WE CONCUR:

RENATO C. CORONAChief JusticeChairperson

PRESBITERO J. VELASCO, JR.Associate Justice

TERESITA J. LEONARDO-DE CASTROAssociate Justice
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22/22

MARIANO C. DEL CASTILLOAssociate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in

the above Decision were reached in consultation before the case was assigned to the writer of theopinion of the Court.

RENATO C. CORONAChief Justice

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Foreign Currency Deposit