Digest Mellon Bank vs Magsino

G.R. No. 71479 October 18, 1990 MELLON BANK, N.A vs. MAGSINO

of Rizal, Branch X, a complaint against the Javier spouses, Honorio Poblador, etc to recover the amount they received for the sale of the 160-acre lot in California City.

FACTS: Dolores Ventosa requested the transfer of $1,000 from the First National Bank of Moundsville, West Virginia, U.S.A. to Victoria Javier in Manila through the Prudential Bank. To effect the transfer, the First National Bank requested the petitioner, Mellon Bank, which mistakenly indicated in its wire sent to Manufacturers Hanover Bank, a correspondent of Prudential Bank the amount transferred as "US$1,000,000.00" instead of US$1,000.00. Manufacturers Hanover Bank transferred one million dollars less bank charges of $6.30 to the Prudential Bank for the account of Victoria Javier. Javier opened a new dollar account (No. 343) in the Prudential Bank and deposited $999,943.70. Immediately, Victoria Javier and her husband, Melchor Javier, Jr., made withdrawals from the account, deposited them in several banks only to withdraw them later in an apparent plan to conceal, "launder" and dissipate the erroneously sent amount. Melchor Javier, requested Jose Marquez, a realtor, to look for properties for sale in the United States. Marquez offered a 160-acre lot in the Mojave Desert in California City which was owned by Honorio Poblador. Without having seen the property, Javier agreed to buy said property. Deeds were issued and one of it was sent to the Kern County Registrar in California for registration. The payment of the purchased property was made through six cashier's checks withdrawn from dollar account 434 while the balance of P236,000 was paid in cash by Javier who did not even ask for a receipt. Inasmuch as Poblador had requested that the purchase price should not be paid directly to him, the payment was coursed through six companies in which he is financially related with. Mellon Bank filed a complaint in the Superior Court of California, County of Kern, against Javier spouses’ to impose constructive trust of the property they’ve purchased from the money mistakenly and erroneously transferred to their account. Mellon Bank also filed in the Court of First Instance

In due course, it was found out that the checks originally issued by Javier spouses were already negotiated and now were deposited to Account 28251 of the Philippine Veterans Bank in the name of Cipriano Azada, Poblador's law partner and counsel to the Javiers. Mellon Bank then subpoenaed Erlinda Baylosis of Veterans Bank to show that Azada deposited HSBC checks No. 339736 and 339737 amounting to P874,490.75 in his personal current account with said bank and Pilologo Red, Jr. of HSBC to prove that said amount was returned by Azada to Hagedorn one of the companies connected with Poblador. The testimonies of these witnesses were objected to by the defense on the grounds of res inter alios acta, immateriality, irrelevancy and confidentiality and then moved to strike off the testimonies from the record of the case in violation of Republic Act No. 1405 the Secrecy of Bank Deposits. ISSUE: Whether or not disclosure of bank deposits in cases where the money is the subject matter of litigation violates RA 1405. HELD: Private respondents' protestations that to allow the questioned testimonies to remain on record would be in violation of the provisions of Republic Act No. 1405 on the secrecy of bank deposits, is unfounded. Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation. Inasmuch as Civil Case is aimed at recovering the amount converted by the Javiers for their own benefit, necessarily, an inquiry into the whereabouts of the illegally acquired amount extends to whatever is concealed by being held or recorded in the name of persons other than the one responsible for the illegal acquisition.

Prepared by: Lizglen L. Gliponeo