G.R. No. 84526 ; January 28, 1991
Philippine Commercial & Industrial Bank and Jose Henares, petitioners, vs. The Hon. Court of Appeals and Marinduque Mining and Industrial Corporation, respondents.

FACTS

Marinduque Mining and Industrial Corporation (MMIC) had a final judgment for backwages rendered against it by the NLRC in favor of a group of laborers. To execute the judgment, Deputy Sheriff Damian Rojas served a writ of execution and subsequently issued a Notice of Garnishment dated April 29, 1976, addressed to several banks in Bacolod City, including petitioner Philippine Commercial & Industrial Bank (PCIB). The notice directed the banks to issue a check for the garnished amount. MMIC’s house lawyer, upon learning of the garnishment, sent a formal letter to PCIB Bank Manager Jose Henares in the afternoon of April 29, requesting a hold on MMIC’s deposit.
Earlier that same morning, the deputy sheriff had presented the Notice of Garnishment and Writ to Henares. In the afternoon, the sheriff demanded the release of the deposit under threat of contempt. After verifying with the Acting Provincial Sheriff that no restraining order was issued by the NLRC and upon advice of bank counsel, Henares issued a debit memo and a manager’s check for P37,466.18—the exact balance of MMIC’s account—payable to the sheriff. The check was encashed the following day. MMIC then sued PCIB and Henares in the RTC, alleging unlawful disclosure and release of its bank deposit.

ISSUE

Whether petitioners PCIB and Henares are liable for damages for disclosing and releasing MMIC’s bank deposit pursuant to the sheriff’s notice of garnishment and writ of execution.

RULING

The Supreme Court ruled in favor of the petitioners, absolving them from liability. The legal logic centers on the interpretation of Republic Act No. 1405 (the Bank Secrecy Law) in relation to lawful court processes. The Court held that the confidentiality of bank deposits under R.A. 1405 is not absolute. It yields when the deposit is the subject of a garnishment issued pursuant to a valid court writ of execution. The bank, in complying with the sheriff’s lawful directive, was performing a duty and could not be held liable for disclosure.
The Court emphasized that the garnishment process itself involves a disclosure to the bank by the sheriff, not a voluntary disclosure by the bank to a third party. The bank’s action was a necessary compliance with a legal order. To rule otherwise would allow judgment debtors to evade lawful execution by merely depositing funds in a bank, thereby frustrating the administration of justice. The Court found that the Court of Appeals misapplied the law in holding the petitioners liable, as their actions were justified under the circumstances of a valid garnishment. Thus, the earlier Court of Appeals decision dismissing the complaint was reinstated.