anti-money laundering 3. republic vs. glasglow

7/23/2019 Anti-Money Laundering 3. Republic vs. Glasglow

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ANTI-MONEY LAUNDERING

3. REPUBLIC OF THE PHILIPPINES, represented ! t"e ANTI-MONEY LAUNDERING

COUNCIL, Pet#t#$ner %s. GLASGO& CREDIT AND COLLECTION SER'ICES, INC. (nd

CITYSTATE SA'INGS BAN), INC., Resp$ndents.

FACTS*

The Republic fled a complaint in the RTC Manila or civil oreiture o assets (with urgent plea

or issuance o temporary restraining order [TRO] andor writ o preliminary in!unction"

against the ban# deposits in account number C$%&&'%&%&&&)%' maintained by *lasgow in

C+,-. The case/ fled pursuant to R$ 01& (the $nti%Money 2aundering $ct o )&&"/ as

amended.

$ter hearing/ the trial court (through then 3residing 4udge Marivic T. ,alisi%5mali" issued an

order granting the issuance o a writ o preliminary in!unction. The in!unctive writ issued

later on.

Meanwhile/ summons to *lasgow was returned unserved as it could no longer be ound at itslast #nown address. 6 6 6 $n a lias summons was issued. 7owever/ no mention was made o

the motion or leave o court to serve summons by publication.

The trial court archived the case allegedly or ailure o the Republic to serve

the alias summons. The Republic fled an ex parte omnibus motion to (a" reinstate the case

and (b" resolve its pending motion or leave o court to serve summons by publication.

The trial court ordered the reinstatement o the case and directed the Republic to serve

the alias summons on *lasgow and C+,- within ' days. 7owever/ it did not resolve the

Republics motion or leave o court to serve summons by publication.

The Republic (through the O8ce o the +olicitor *eneral [O+*]" received a copy o the

sheri9s return stating that the alias summons was returned unserved as *lasgow was no

longer holding o8ce at the given address since 4uly )&&) and let no orwarding address.

Meanwhile/ the Republics motion or leave o court to serve summons by publication

remained unresolved. Thus/ the Republic fled a maniestation and ex parte motion to

resolve its motion or leave o court to serve summons by publication.

The O+* received a copy o *lasgows Motion to :ismiss (,y ;ay o +pecial $ppearance". -t

alleged that (" the court had no !urisdiction over its person as summons had not yet been

served on it< ()" the complaint was premature and stated no cause o action as there was

still no conviction or estaa or other criminal violations implicating *lasgow and (=" there

was ailure to prosecute on the part o the Republic.

The Republic opposed *lasgows motion to dismiss. -t contended that its suit was an

action quasi in rem where !urisdiction over the person o the deendant was not a

prere>uisite to coner !urisdiction on the court. -t asserted that prior conviction or unlawul

activity was not a precondition to the fling o a civil oreiture case and that its complaint

alleged ultimate acts su8cient to establish a cause o action. -t denied that it ailed to

prosecute the case.



The trial court issued the assailed order. -t dismissed the case on the ollowing grounds? ("

improper venue as it should have been fled in the RTC o 3asig where C+,-/ the depository

ban# o the account sought to be oreited/ was located< ()" insu8ciency o the complaint in

orm and substance and (=" ailure to prosecute. -t lited the writ o preliminary in!unction

and directed C+,- to release to *lasgow or its authori@ed representative the unds in C$%

&&'%&%&&&)%'.

Raising >uestions o law/ the Republic fled this petition.

ISSUE* ;hether the complaint or civil oreiture was correctly dismissed on grounds o

improper venue/ insu8ciency in orm and substance and ailure to prosecute.

RULING* AO. The Court agrees with the Republic.

THE COMPLAINT &AS FILED IN THE PROPER 'ENUE

-nasmuch as *lasgow never >uestioned the venue o the Republics complaint or civil

oreiture against it/ how could the trial court have dismissed the complaint or improper

venueB -n Dacoycoy v. Intermediate Appellate Court (reiterated in Rudolf Lietz Holdings, Inc.v. Registry of Deeds of araaque City "/ this Court ruled?

The motu proprio d#s+#ss( o petitioners complaint by [the] trial court $n t"e

r$nd $/ #+pr$per %ene #s p(#n err$r. (emphasis supplied"

$t any rate/ the trial court was a proper venue.

+upreme Court issued A.M. N$. 01-22-0-SC, t"e Re $/ Pr$4edre #n C(ses $/

C#%# F$r/e#tre, Asset Preser%(t#$n, (nd Free5#n $/ M$net(r! Instr+ent,

Pr$pert!, $r Pr$4eeds Represent#n, In%$%#n, $r Re(t#n t$ (n

Un(6/ A4t#%#t! $r M$ne! L(nder#n O7ense nder RA 8290, (s (+ended :Re

$/ Pr$4edre #n C(ses $/ C#%# F$r/e#tre;. The order dismissing the Republics complaint

or civil oreiture o *lasgows account in C+,- has not yet attained fnality on account o the

pendency o this appeal. Thus/ the Rule o 3rocedure in Cases o Civil oreiture applies to

the Republics complaint. Moreover/ *lasgow itsel !udicially admitted that the Rule o

3rocedure in Cases o Civil oreiture is applicable to the instant case.

+ection =/ Title -- (Civil oreiture in the Regional Trial Court" o the Rule o 3rocedure

in Cases o Civil oreiture provides?

+ec. =. !enue of cases cogniza"le "y t#e regional trial court . $ petition or civil

oreiture shall be fled #n (n! re#$n( tr#( 4$rt $/ t"e <d#4#( re#$n

6"ere t"e +$net(r! #nstr+ent, pr$pert! $r pr$4eeds represent#n,

#n%$%#n, $r re(t#n t$ (n n(6/ (4t#%#t! $r t$ ( +$ne! (nder#n

$7ense (re $4(ted< provided, #o$ever, that where all or any portion o the

monetary instrument/ property or proceeds is located outside the 3hilippines/

the petition may be fled in the regional trial court in Manila or o the !udicial

region where any portion o the monetary instrument/ property/ or proceeds is

located/ at the option o the petitioner. (emphasis supplied"

5nder +ection =/ Title -- o the Rule o 3rocedure in Cases o Civil oreiture/ thereore/ the

venue o civil oreiture cases is any RTC o the !udicial region where the monetary



instrument/ property or proceeds representing/ involving/ or relating to an unlawul activity

or to a money laundering o9ense are located. 3asig City/ where the account sought to be

oreited in this case is situated/ is within the Aational Capital 4udicial Region (AC4R". Clearly/

the complaint or civil oreiture o the account may be fled in any RTC o the AC4R. +ince the

RTC Manila is one o the RTCs o the AC4R/ it was a proper venue o the Republics complaint

or civil oreiture o *lasgows account.

THE COMPLAINT &AS SUFFICIENT IN FORM AND SUBSTANCE

-n a motion to dismiss or ailure to state a cause o action/ the ocus is on the su8ciency/

not the veracity/ o the material allegations. The determination is confned to the our

corners o the complaint and nowhere else.

-n a motion to dismiss a complaint based on lac# o cause o action/ the

>uestion submitted to the court or determination is the su8ciency o the

allegations made in the complaint to constitute a cause o action and not

whether those allegations o act are true/ or said motion must hypothetically

admit the truth o the acts alleged in the complaint.

T"e test $/ t"e s=4#en4! $/ t"e /(4ts (eed #n t"e 4$+p(#nt

#s 6"et"er $r n$t, (d+#tt#n t"e /(4ts (eed, t"e 4$rt 4$d render

( %(#d <d+ent p$n t"e s(+e #n (44$rd(n4e 6#t" t"e pr(!er $/ t"e

4$+p(#nt. (emphasis ours"

-n this connection/ +ection D/ Title -- o the Rule o 3rocedure in Cases o Civil oreiture

provides?

+ec. D. Contents of t#e petition for civil forfeiture. % The petition or civil oreiture shall be

verifed and contain the ollowing allegations?

(a" The name and address o the respondent<

(b" $ description with reasonable particularity o the monetary instrument/

property/ or proceeds/ and their location< and

(c" The acts or omissions prohibited by and the specifc provisions o the $nti%

Money 2aundering $ct/ as amended/ which are alleged to be the grounds

relied upon or the oreiture o the monetary instrument/ property/ or

proceeds< and

[(d"] The relies prayed or.

7ere/ the verifed complaint o the Republic contained the ollowing allegations?

(a" the name and address o the primary deendant therein/ *lasgow<[']

(b" a description o the proceeds o *lasgows unlawul activities with particularity/

as well as the location thereo/ account no. C$%&&'%&%&&&)%' in the amount

o 3)/=&/D=&.)E maintained with C+,-<

(c" the acts prohibited by and the specifc provisions o R$ 01&/ as amended/

constituting the grounds or the oreiture o the said proceeds. -n particular/

http://sc.judiciary.gov.ph/jurisprudence/2008/jan2008/170281.htm#_ftn15

http://sc.judiciary.gov.ph/jurisprudence/2008/jan2008/170281.htm#_ftn15



suspicious transaction reports showed that *lasgow engaged in unlawul

activities o estaa and violation o the +ecurities Regulation Code (under +ection

=(i"(0" and (="/ R$ 01&/ as amended"< the proceeds o the unlawul activities

were transacted and deposited with C+,- in account no. C$%&&'%&%&&&)%'

thereby ma#ing them appear to have originated rom legitimate sources< as such/

*lasgow engaged in money laundering (under +ection D/ R$ 01&/ as amended"<

and the $M2C sub!ected the account to ree@e order and

(d" the relies prayed or/ namely/ the issuance o a TRO or writ o preliminary

in!unction and the oreiture o the account in avor o the government as well as

other relies !ust and e>uitable under the premises.

The orm and substance o the Republics complaint substantially conormed with +ection D/

Title -- o the Rule o 3rocedure in Cases o Civil oreiture.

Moreover/ +ection )(a" o R$ 01&/ as amended/ provides?

+FC. ). %orfeiture rovisions.

(a" Civil %orfeiture. ;hen there is a covered transaction report made/ and the

court has/ in a petition fled or the purpose ordered sei@ure o any monetary

instrument or property/ in whole or in part/ directly or indirectly/ related to

said report/ the Revised Rules o Court on civil oreiture shall apply.

-n relation thereto/ Rule ).) o the Revised -mplementing Rules and Regulations o R$

01&/ as amended/ states?

R52F )

oreiture 3rovisions

666 666 666

Rule ).). &#en Civil %orfeiture 'ay "e Applied. ;hen there is a +5+3-C-O5+

TR$A+$CT-OA RF3ORT OR $ COGFRF: TR$A+$CT-OA RF3ORT :FFMF:

+5+3-C-O5+ $TFR -AGF+T-*$T-OA ,H T7F $M2C/ and the court has/ in a

petition fled or the purpose/ ordered the sei@ure o any monetary instrument

or property/ in whole or in part/ directly or indirectly/ related to said report/ the

Revised Rules o Court on civil oreiture shall apply.

R$ 01&/ as amended/ and its implementing rules and regulations lay down two conditions

when applying or civil oreiture?

(" when there is a suspicious transaction report or a covered transaction report

deemed suspicious ater investigation by the $M2C and

()" the court has/ in a petition fled or the purpose/ ordered the sei@ure o any

monetary instrument or property/ in whole or in part/ directly or indirectly/ related

to said report.

-t is the preliminary sei@ure o the property in >uestion which brings it within the reach o the

!udicial process. -t is actually within the courts possession when it is submitted to the

http://www.chanrobles.com/rulesofcourt.htm

http://www.chanrobles.com/rulesofcourt.htm



process o the court. The in!unctive writ issued removed account no. C$%&&'%&%&&&)%'

rom the e9ective control o either *lasgow or C+,- or their representatives or agents and

sub!ected it to the process o the court.

+ince account no. C$%&&'%&%&&&)%' o *lasgow in C+,- was (" covered by several

suspicious transaction reports and ()" placed under the control o the trial court upon the

issuance o the writ o preliminary in!unction/ the conditions provided in +ection )(a" o R$01&/ as amended/ were satisfed. 7ence/ the Republic/ represented by the $M2C/ properly

instituted the complaint or civil oreiture.

;hether or not there is truth in the allegation that account no. C$%&&'%&%&&&)%' contains

the proceeds o unlawul activities is an evidentiary matter that may be proven during trial.

The complaint/ however/ did not even have to show or allege that *lasgow had been

implicated in a conviction or/ or the commission o/ the unlawul activities o estaa and

violation o the +ecurities Regulation Code.

$ criminal conviction or an unlawul activity is not a prere>uisite or the institution o a civiloreiture proceeding. +tated otherwise/ a fnding o guilt or an unlawul activity is not an

essential element o civil oreiture.

+ection 1 o R$ 01&/ as amended/ provides?

+FC. 1. rosecution of 'oney Laundering.

(a" $ny person may be charged with and convicted o both the o9ense o

money laundering and the unlawul activity as herein defned.

(b" $ny proceeding relating to the unlawul activity shall be given precedence

over the prosecution o any o9ense or violation under this $ct 6#t"$t

pre<d#4e t$ t"e ree@ing and $t"er re+ed#es pr$%#ded. (emphasis

supplied"

Rule 1. o the Revised -mplementing Rules and Regulations o R$ 01&/ as amended/

states?

Rule 1.. rosecution of 'oney Laundering

(a" $ny person may be charged with and convicted o both the o9ense o

money laundering and the unlawul activity as defned under Rule =(i" o the

$M2$.

(b" $ny proceeding relating to the unlawul activity shall be givenprecedence over the prosecution o any o9ense or violation under the

$M2$ 6#t"$t pre<d#4e t$ t"e application ex(parte by the $M2C to the

Court o $ppeals or a ree@e order with respect to the monetary instrument or

property involved therein and res$rt t$ $t"er re+ed#es pr$%#ded nder

t"e AMLA, t"e Res $/ C$rt (nd $t"er pert#nent (6s (nd res .

(emphasis supplied"



inally/ +ection )I o the Rule o 3rocedure in Cases o Civil oreiture provides?

+ec. )I. )o prior c#arge, pendency or conviction necessary . N$ pr#$r 4r#+#n(

4"(re, penden4! $/ $r 4$n%#4t#$n /$r (n n(6/ (4t#%#t! or money

laundering o9ense #s ne4ess(r! /$r t"e 4$++en4e+ent or the resolution o a

petition or civil oreiture. (emphasis supplied"

Thus/ regardless o the absence/ pendency or outcome o a criminal prosecution or the

unlawul activity or or money laundering/ an action or civil oreiture may be separately and

independently prosecuted and resolved.

JJOther issues? T7FRF ;$+ AO $-25RF TO 3RO+FC5TF< +FRG-CF O +5MMOA+ M$H ,F ,H

35,2-C$T-OA (because it is an action in rem"

&HEREFORE/ the petition is hereby GRANTED. The October )I/ )&&' order o the Regional

Trial Court o Manila/ ,ranch DI/ in Civil Case Ao. &=%&I=0 is SET ASIDE. The $ugust /

)&&' motion to dismiss o *lasgow Credit and Collection +ervices/ -nc. is DENIED. $nd the

complaint or oreiture o the Republic o the 3hilippines/ represented by the $nti%Money

2aundering Council/ is REINSTATED.

The case is hereby REMANDED to the Regional Trial Court o Manila/ ,ranch DI which shall

orthwith proceed with the case pursuant to the provisions o $.M. Ao. &'%%&D%+C. 3ending

fnal determination o the case/ the Aovember )=/ )&&' temporary restraining order issued

by this Court is hereby MAINTAINED.

anti-money laundering 3. republic vs. glasglow

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