Lectures &

News & Views

Law &



Trust Products
& Practice

About the Guru


Email Feedback

Guest Register










Secrecy of deposits in closed banks

(Article published in the May 13, 2009 issue of Manila Standard Today) 

It was never clear to me how the word “minute” in the phrase “minute resolution” is correctly pronounced.  For many, “minute”, is to be pronounced “min’it”, as in “Minutes of the meeting,” to stress the resolution’s character as a summary but official record of proceedings of the process of an organization or agency.  I however prefer, to say “mī-nyoot,” to indicate its being exceptionally small or short.

Regardless of how it is pronounced, however, the function of a “minute resolution” is beyond debate:  It is used to enable the Supreme Court to focus on the more meaningful cases that annually swamp the tribunal crying for decision.  

It is issued “only in cases where the Court does not find merit in the petitions and. thus, deny them due course for lack of reversible error in the assailed judgments brought to the Court for review.” (B.E. San Diego, Inc. v. Rosario T. Alzul, G.R. No. 169501, 27 Feb. 2008).  Aside from lack of merit, other instances where minute resolutions are issued by the Supreme Court are “where the issues raised are factual in nature, where the decision appealed from is supported by substantial evidence and is in accord with the facts of the case and the applicable laws, where it is clear from the records that the petitions were filed merely to forestall the early execution of judgment and for non-compliance with the rules.” (Rolando B. Montejo v. Sandiganbayan, G.R. Nos. 182625 and 18235, 01 Sept 2008). 


The legal justification for the practice of issuing “minute resolutions” is that “the Court is not duty-bound to render signed decisions all the time. It has ample discretion to formulate decisions and/or minute resolutions, provided a legal basis is given, depending on its evaluation of a case.” (Ibid.)

Probably because Hilario P. Soriano had the habit of elevating his cases to the Supreme Court, most of which have been thrown out to be without merit, a minute resolution was resorted to by the Court to deny, on 24 January 2007, due course to Soriano’s petition for review on certiorari the decision and resolution rendered by the Court of Appeals against him on 30 May 2006 and 27 September 2006 respectively in CA GR SP No. 87634.  The Supreme Court, in its resolution of 24 January 2007 in the case of Hilario P. Soriano vs. Melinda Manuzan, G.R. No. 174944, justified its minute resolution on the basis of Soriano’s failure to sufficient show that the Court of Appeals had committed any reversible error in so disposing of his case that would warrant the exercise by the highest court of its discretionary appellate jurisdiction. 

Technically, the Supreme Court was correct.  I wish, though, that the case had been decided on the merits because at the core of the controversy in the Court of Appeals was the interesting question of whether the mantle of confidentiality by R.A. No. 1405 over bank deposits remained even after the bank had been placed under receivership and already undergoing liquidation.

The case involved an affidavit submitted by the former Head of the Treasury Department of the Rural Bank of San Miguel to the Department of Justice disclosing that Hilario P. Soriano had opened two savings accounts on his own name in his own bank, the Rural Bank of San Miguel. The affidavit was executed and submitted on 29 September 2000, about eight months after the rural bank  had been closed and placed under receivership by the Bangko Sentral on 21 January 2000. Soriano nevertheless felt offended and thus filed a criminal case against the said former official of his rural bank for violation of R.A. No. 1405.  Soriano’s complaint, however, was dismissed and his motion for reconsideration eventually denied.  It was this action of the prosecutors that Soriano wanted the Court of Appeals to set aside and reverse.

The Court of Appeals, aside from citing the procedural flaw of the suit brought by Soriano, refused to countermand the prosecutors and categorically ruled that in as much as the Rural Bank of San Miguel had been forbidden to do banking business and had been continuing its corporate existence only for the purpose of winding up its affairs, it had ceased to be a “banking institution”.  As a consequence, the disclosure of the deposits was no longer prohibited by R.A. No. 1405.

The Court of Appeals, on that point, went no further by way of explanation.  But it is not difficult to unearth the foundations of the ruling. The obvious rationale of the decision, is that, upon closure of the rural bank, the relationship between the depositor and the erstwhile bank had drastically changed.  What had been a special type of liability, enjoying unique treatment, had become an ordinary loan.

Hence, the secrecy of deposits, which as a national policy was premised on the desirability of maintaining the confidence of the public in the banking system, no longer had any relevance with respect to what had been deposited with a particular closed bank.  The closure of a bank in effect took the amounts in the closed bank out of the realm of “money deposited in banks” that had to be given special protection. Instead, the closure poured them into the mass of other ordinary claim against the failed institution.

The claim of the erstwhile depositor, by reason of the closure of the bank, ceases upon such closure to enjoy the privilege of confidentiality that R.A. No. 1405 extends to deposits “with banks or banking institutions.”  The debtor institution falls out of the ambit of the banking system and the creditor claimant, i.e. the depositor, simply falls in line, like the rest of the claimants seeking to salvage whatever they still can, under the circumstances.  As an ordinary creditor of what has become an ordinary institution, the depositor no longer needs, and thus, is not entitled to, the cover of secrecy granted by the law.

        Hopefully, if and when the matter is again raised in the future, the Supreme Court would be disposed to deal with it, in more than just a minute or two.