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Joseph Ejercito Case

The Supreme Court ruled on whether trust accounts fall under the protection of the Bank Secrecy Law. The Sandiganbayan issued subpoenas to produce bank statements from accounts in the name of "Jose Velarde" from Urban Bank for a corruption case against President Estrada. The petitioner claimed the subpoenas violated the Bank Secrecy Law. The Supreme Court found that the Bank Secrecy Law uses the term "deposits" broadly to include any money deposited or invested in banks. Trust accounts would fall under this broad definition. Therefore, trust accounts are covered by the protections of the Bank Secrecy Law and the subpoenas were valid.

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207 views2 pages

Joseph Ejercito Case

The Supreme Court ruled on whether trust accounts fall under the protection of the Bank Secrecy Law. The Sandiganbayan issued subpoenas to produce bank statements from accounts in the name of "Jose Velarde" from Urban Bank for a corruption case against President Estrada. The petitioner claimed the subpoenas violated the Bank Secrecy Law. The Supreme Court found that the Bank Secrecy Law uses the term "deposits" broadly to include any money deposited or invested in banks. Trust accounts would fall under this broad definition. Therefore, trust accounts are covered by the protections of the Bank Secrecy Law and the subpoenas were valid.

Uploaded by

Dave Lumasag Canumhay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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JOSEPH VICTOR G.

EJERCITO
vs.
SANDIGANBAYAN (Special Division) and PEOPLE OF THE PHILIPPINES

FACTS:

The Special Prosecution Panel requested the Sandiganbayan to issue subpoena duces
tecum against the Urban Bank relative to the case against President Joseph Estrada and
Equitable-PCI Bank to produce statements of account pertaining to certain accounts in the
name of "Jose Velarde". The Sandiganbayan granted both requests and subpoenas were issued.

Upon learning the same through the media, as he alleged, he filed a motion to quash
petitioner claiming that his bank accounts are covered by R.A. No. 1405 (The Secrecy of Bank
Deposits Law) and do not fall under any of the exceptions stated therein. He further claimed
that the specific identification of documents in the questioned subpoenas, including details on
dates and amounts, could only have been made possible by an earlier illegal disclosure thereof
by the EIB and the Philippine Deposit Insurance Corporation (PDIC) in its capacity as receiver of
the then Urban Bank. The disclosure being illegal, petitioner concluded, the prosecution in the
case may not be allowed to make use of the information.

The Sandiganbayan issued a resolution denying petitioner’s Motion to Quash


Subpoenae Duces Tecum/Ad Testificandum. And compliance thereof Ms. Dela Paz, receiver of
the Urban Bank, furnished the Office of the Ombudsman certified copies of manager checks
detailed in the subpoena duces tecum.

However, he claims that the subpoenas are invalid because they directed to his trust
accounts are not within the purview of R. A. 1405 since the term “deposit” does not include
trust account. Therefore excepted from inquiry.

Ejercito further claims that the subpoenas issued by the Sandiganbayan are invalid and
may not be enforced, petitioner contends, as earlier stated, that the information found therein,
given their "extremely detailed" character, could only have been obtained by the Special
Prosecution Panel through an illegal disclosure by the bank officials concerned. Petitioner thus
claims that, following the "fruit of the poisonous tree" doctrine, the subpoenas must be
quashed.

ISSUE:

Whether or not trust accounts are not covered from the protection of Bank Secrecy
Law.

RULING:

The contention that trust accounts are not covered by the term "deposits," as used in
R.A. 1405, by the mere fact that they do not entail a creditor-debtor relationship between the
trustor and the bank, does not lie. An examination of the law shows that the term "deposits"
used therein is to be understood broadly and not limited only to accounts which give rise to a
creditor-debtor relationship between the depositor and the bank.

SECTION 2. All deposits of whatever nature with banks or banking institutions in the
Philippines including investments in bonds issued by the Government of the Philippines, its
political subdivisions and its instrumentalities, are hereby considered as of an absolutely
confidential nature and may not be examined, inquired or looked into by any person,
government official, bureau or office, except upon written permission of the depositor, or in
cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of
duty of public officials, or in cases where the money deposited or invested is the subject
matter of the litigation.

The phrase "of whatever nature" proscribes any restrictive interpretation of "deposits."
Moreover, it is clear from the immediately quoted provision that, generally, the law applies not
only to money which is deposited but also to those which are invested. This further show that
the law was not intended to apply only to "deposits" in the strict sense of the word. Otherwise,
there would have been no need to add the phrase "or invested."

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