Facts:

Vicente Acaban won in a civil case for sum of money against B & B Forest Development Corporation. To satisfy the judgment, the Acaban sought the garnishment of the bank deposit of the B & B Forest Development Corporation with the China Banking Corporation (CBC). Accordingly, a notice of garnishment was issued by the Deputy Sheriff of the trial court and served on said bank through its cashier, Tan Kim Liong. Liong was ordered to inform the Court whether or not there is a deposit in the CBC of B & B Forest Development Corporation, and if there is any deposit, to hold the same intact and not allow any withdrawal until further order from the Court. CBC and Liong refuse to comply with a court process garnishing the bank deposit of a judgment debtor by invoking the provisions of Republic Act No. 1405 ( Secrecy of Bank Deposits Act) which allegedly prohibits the disclosure of any information concerning to bank deposits.

Issue:

Whether or not a banking institution may validly refuse to comply with a court processes garnishing the bank deposit of a judgment debtor, by invoking the provisions of Republic Act No. 1405.

Held:

No. The lower court did not order an examination of or inquiry into deposit of B & B Forest Development Corporation, as contemplated in the law. It merely required Tan Kim Liong to inform the court whether or not the defendant B & B Forest Development Corporation had a deposit in the China Banking Corporation only for the purposes 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 sufficiently clear that the prohibition against examination of or inquiry into bank deposit under RA 1405 does not preclude its being garnished to insure satisfaction of a judgment. Indeed there is no real inquiry in such a case, and the existence of the deposit is disclosed the disclosure is purely incidental to the execution process. It is hard to conceive that it was ever within the intention of Congress to enable debtors to evade payment of their just debts, even if ordered by the Court, through the expedient of converting their assets into cash and depositing the same in a bank. (China Banking Corporation vs Ortega, G.R. No. L-34964, 31 January 1973)