FIRST DIVISION
[ G.R. No. 170281, January 18, 2008 ]REPUBLIC v. GLASGOW CREDIT +
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE ANTI-MONEY LAUNDERING COUNCIL, PETITIONER, VS. GLASGOW CREDIT AND COLLECTION SERVICES, INC. AND CITYSTATE SAVINGS BANK, INC., RESPONDENTS.
D E C I S I O N
REPUBLIC v. GLASGOW CREDIT +
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE ANTI-MONEY LAUNDERING COUNCIL, PETITIONER, VS. GLASGOW CREDIT AND COLLECTION SERVICES, INC. AND CITYSTATE SAVINGS BANK, INC., RESPONDENTS.
D E C I S I O N
CORONA, J.:
This is a petition for review[1] of the order[2] dated October 27, 2005 of the Regional Trial Court (RTC) of Manila, Branch 47, dismissing the complaint for forfeiture[3] filed by the Republic
of the Philippines, represented by the Anti-Money Laundering Council (AMLC) against respondents Glasgow Credit and Collection Services, Inc. (Glasgow) and Citystate Savings Bank, Inc. (CSBI).
On July 18, 2003, the Republic filed a complaint in the RTC Manila for civil forfeiture of assets (with urgent plea for issuance of temporary restraining order [TRO] and/or writ of preliminary injunction) against the bank deposits in account number CA-005-10-000121-5 maintained by Glasgow in CSBI. The case, filed pursuant to RA 9160 (the Anti-Money Laundering Act of 2001), as amended, was docketed as Civil Case No. 03-107319.
Acting on the Republic's urgent plea for the issuance of a TRO, the executive judge[4] of RTC Manila issued a 72-hour TRO dated July 21, 2003. The case was thereafter raffled to Branch 47 and the hearing on the application for issuance of a writ of preliminary injunction was set on August 4, 2003.
After hearing, the trial court (through then Presiding Judge Marivic T. Balisi-Umali) issued an order granting the issuance of a writ of preliminary injunction. The injunctive writ was issued on August 8, 2003.
Meanwhile, summons to Glasgow was returned "unserved" as it could no longer be found at its last known address.
On October 8, 2003, the Republic filed a verified omnibus motion for (a) issuance of alias summons and (b) leave of court to serve summons by publication. In an order dated October 15, 2003, the trial court directed the issuance of alias summons. However, no mention was made of the motion for leave of court to serve summons by publication.
In an order dated January 30, 2004, the trial court archived the case allegedly for failure of the Republic to serve the alias summons. The Republic filed an ex parte omnibus motion to (a) reinstate the case and (b) resolve its pending motion for leave of court to serve summons by publication.
In an order dated May 31, 2004, the trial court ordered the reinstatement of the case and directed the Republic to serve the alias summons on Glasgow and CSBI within 15 days. However, it did not resolve the Republic's motion for leave of court to serve summons by publication declaring:
Meanwhile, the Republic's motion for leave of court to serve summons by publication remained unresolved. Thus, on August 11, 2005, the Republic filed a manifestation and ex parte motion to resolve its motion for leave of court to serve summons by publication.
On August 12, 2005, the OSG received a copy of Glasgow's "Motion to Dismiss (By Way of Special Appearance)" dated August 11, 2005. It alleged that (1) the court had no jurisdiction over its person as summons had not yet been served on it; (2) the complaint was premature and stated no cause of action as there was still no conviction for estafa or other criminal violations implicating Glasgow and (3) there was failure to prosecute on the part of the Republic.
The Republic opposed Glasgow's motion to dismiss. It contended that its suit was an action quasi in rem where jurisdiction over the person of the defendant was not a prerequisite to confer jurisdiction on the court. It asserted that prior conviction for unlawful activity was not a precondition to the filing of a civil forfeiture case and that its complaint alleged ultimate facts sufficient to establish a cause of action. It denied that it failed to prosecute the case.
On October 27, 2005, the trial court issued the assailed order. It dismissed the case on the following grounds: (1) improper venue as it should have been filed in the RTC of Pasig where CSBI, the depository bank of the account sought to be forfeited, was located; (2) insufficiency of the complaint in form and substance and (3) failure to prosecute. It lifted the writ of preliminary injunction and directed CSBI to release to Glasgow or its authorized representative the funds in CA-005-10-000121-5.
Raising questions of law, the Republic filed this petition.
On November 23, 2005, this Court issued a TRO restraining Glasgow and CSBI, their agents, representatives and/or persons acting upon their orders from implementing the assailed October 27, 2005 order. It restrained Glasgow from removing, dissipating or disposing of the funds in account no. CA-005-10-000121-5 and CSBI from allowing any transaction on the said account.
The petition essentially presents the following issue: whether the complaint for civil forfeiture was correctly dismissed on grounds of improper venue, insufficiency in form and substance and failure to prosecute.
The Court agrees with the Republic.
The Complaint Was Filed
In The Proper Venue
In its assailed order, the trial court cited the grounds raised by Glasgow in support of its motion to dismiss:
On November 15, 2005, this Court issued A.M. No. 05-11-04-SC, the Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing of Monetary Instrument, Property, or Proceeds Representing, Involving, or Relating to an Unlawful Activity or Money Laundering Offense under RA 9160, as amended (Rule of Procedure in Cases of Civil Forfeiture). The order dismissing the Republic's complaint for civil forfeiture of Glasgow's account in CSBI has not yet attained finality on account of the pendency of this appeal. Thus, the Rule of Procedure in Cases of Civil Forfeiture applies to the Republic's complaint.[8] Moreover, Glasgow itself judicially admitted that the Rule of Procedure in Cases of Civil Forfeiture is "applicable to the instant case."[9]
Section 3, Title II (Civil Forfeiture in the Regional Trial Court) of the Rule of Procedure in Cases of Civil Forfeiture provides:
The Complaint Was Sufficient
In Form And Substance
In the assailed order, the trial court evaluated the Republic's complaint to determine its sufficiency in form and substance:
The form and substance of the Republic's complaint substantially conformed with Section 4, Title II of the Rule of Procedure in Cases of Civil Forfeiture.
Moreover, Section 12(a) of RA 9160, as amended, provides:
It is the preliminary seizure of the property in question which brings it within the reach of the judicial process.[16] It is actually within the court's possession when it is submitted to the process of the court.[17] The injunctive writ issued on August 8, 2003 removed account no. CA-005-10-000121-5 from the effective control of either Glasgow or CSBI or their representatives or agents and subjected it to the process of the court.
Since account no. CA-005-10-000121-5 of Glasgow in CSBI was (1) covered by several suspicious transaction reports and (2) placed under the control of the trial court upon the issuance of the writ of preliminary injunction, the conditions provided in Section 12(a) of RA 9160, as amended, were satisfied. Hence, the Republic, represented by the AMLC, properly instituted the complaint for civil forfeiture.
Whether or not there is truth in the allegation that account no. CA-005-10-000121-5 contains the proceeds of unlawful activities is an evidentiary matter that may be proven during trial. The complaint, however, did not even have to show or allege that Glasgow had been implicated in a conviction for, or the commission of, the unlawful activities of estafa and violation of the Securities Regulation Code.
A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture proceeding. Stated otherwise, a finding of guilt for an unlawful activity is not an essential element of civil forfeiture.
Section 6 of RA 9160, as amended, provides:
There Was No Failure
To Prosecute
The trial court faulted the Republic for its alleged failure to prosecute the case. Nothing could be more erroneous.
Immediately after the complaint was filed, the trial court ordered its deputy sheriff/process server to serve summons and notice of the hearing on the application for issuance of TRO and/or writ of preliminary injunction. The subpoena to Glasgow was, however, returned unserved as Glasgow "could no longer be found at its given address" and had moved out of the building since August 1, 2002.
Meanwhile, after due hearing, the trial court issued a writ of preliminary injunction enjoining Glasgow from removing, dissipating or disposing of the subject bank deposits and CSBI from allowing any transaction on, withdrawal, transfer, removal, dissipation or disposition thereof.
As the summons on Glasgow was returned "unserved," and considering that its whereabouts could not be ascertained despite diligent inquiry, the Republic filed a verified omnibus motion for (a) issuance of alias summons and (b) leave of court to serve summons by publication on October 8, 2003. While the trial court issued an alias summons in its order dated October 15, 2003, it kept quiet on the prayer for leave of court to serve summons by publication.
Subsequently, in an order dated January 30, 2004, the trial court archived the case for failure of the Republic to cause the service of alias summons. The Republic filed an ex parte omnibus motion to (a) reinstate the case and (b) resolve its pending motion for leave of court to serve summons by publication.
In an order dated May 31, 2004, the trial court ordered the reinstatement of the case and directed the Republic to cause the service of the alias summons on Glasgow and CSBI within 15 days. However, it deferred its action on the Republic's motion for leave of court to serve summons by publication until a return was made on the alias summons.
Meanwhile, the Republic continued to exert efforts to obtain information from other government agencies on the whereabouts or current status of respondent Glasgow if only to save on expenses of publication of summons. Its efforts, however, proved futile. The records on file with the Securities and Exchange Commission provided no information. Other inquiries yielded negative results.
On July 12, 2004, the Republic received a copy of the sheriff's return dated June 30, 2004 stating that the alias summons had been returned "unserved" as Glasgow was no longer holding office at the given address since July 2002 and left no forwarding address. Still, no action was taken by the trial court on the Republic's motion for leave of court to serve summons by publication. Thus, on August 11, 2005, the Republic filed a manifestation and ex parte motion to resolve its motion for leave of court to serve summons by publication.
It was at that point that Glasgow filed a motion to dismiss by way of special appearance which the Republic vigorously opposed. Strangely, to say the least, the trial court issued the assailed order granting Glasgow's motion.
Given these circumstances, how could the Republic be faulted for failure to prosecute the complaint for civil forfeiture? While there was admittedly a delay in the proceeding, it could not be entirely or primarily ascribed to the Republic. That Glasgow's whereabouts could not be ascertained was not only beyond the Republic's control, it was also attributable to Glasgow which left its principal office address without informing the Securities and Exchange Commission or any official regulatory body (like the Bureau of Internal Revenue or the Department of Trade and Industry) of its new address. Moreover, as early as October 8, 2003, the Republic was already seeking leave of court to serve summons by publication.
In Marahay v. Melicor,[18] this Court ruled:
Service Of Summons
May Be By Publication
In Republic v. Sandiganbayan,[19] this Court declared that the rule is settled that forfeiture proceedings are actions in rem. While that case involved forfeiture proceedings under RA 1379, the same principle applies in cases for civil forfeiture under RA 9160, as amended, since both cases do not terminate in the imposition of a penalty but merely in the forfeiture of the properties either acquired illegally or related to unlawful activities in favor of the State.
As an action in rem, it is a proceeding against the thing itself instead of against the person.[20] In actions in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to conferring jurisdiction on the court, provided that the court acquires jurisdiction over the res.[21] Nonetheless, summons must be served upon the defendant in order to satisfy the requirements of due process.[22] For this purpose, service may be made by publication as such mode of service is allowed in actions in rem and quasi in rem.[23]
In this connection, Section 8, Title II of the Rule of Procedure in Cases of Civil Forfeiture provides:
The case is hereby REMANDED to the Regional Trial Court of Manila, Branch 47 which shall forthwith proceed with the case pursuant to the provisions of A.M. No. 05-11-04-SC. Pending final determination of the case, the November 23, 2005 temporary restraining order issued by this Court is hereby MAINTAINED.
SO ORDERED.
Puno, C.J., (Chairperson), Sandoval-Gutierrez, Azcuna, and Leonardo-De Castro, JJ., concur.
[1] Under Rule 45 of the Rules of Court.
[2] Penned by Judge Augusto T. Gutierrez. Rollo, pp. 49-58.
[3] Docketed as Civil Case No. 03-107319.
[4] Judge Enrico A. Lanzanas.
[5] Order dated October 27, 2005, supra note 2, p. 49.
[6] G.R. No. 74854, 02 April 1991, 195 SCRA 641.
[7] 398 Phil. 626 (2000).
[8] Section 59, Title IX (Common Provisions) of the Rule of Procedure in Cases of Civil Forfeiture provides:
Sec. 59. Transitory provision. - This Rule shall apply to all pending civil forfeiture cases or petitions for freeze order.
[9] Memorandum dated January 11, 2007 for Glasgow. Rollo, pp. 329-347.
[10] Section 3 of BP 129 (the Judiciary Reorganization Act of 1980, as amended) provides:
Section 13. Creation of Regional Trial Courts. - There are hereby created thirteen (13) Regional Trial Courts, one for each of the following judicial regions:
xxx xxx xxx
The National Capital Judicial Region, consisting of the cities of Manila, Quezon, Pasay, Caloocan and Mandaluyong, and the municipalities of Navotas, Malabon, San Juan, Makati, Pasig, Pateros, Taguig, Marikina, Parañaque, Las Piñas, Muntinlupa, and Valenzuela[.] (emphasis supplied)
[11] Order dated October 27, 2005, supra note 2, pp. 52-53.
[12] Malicdem v. Flores, G.R. No. 151001, 08 September 2006, 501 SCRA 248.
[13] Id.
[14] Id., citing Balo v. Court of Appeals, G.R. No. 129704, 30 September 2005, 471 SCRA 227.
[15] With CSBI impleaded as a co-defendant for being a necessary party.
[16] 36 Am Jur 2d, Forfeiture, Section 30.
[17] Id., Section 28.
[18] G.R. No. 44980, 06 February 1990, 181 SCRA 811.
[19] Republic v. Sandiganbayan, 461 Phil. 598 (2003).
[20] Id.
[21] Gomez v. Court of Appeals, G.R. No. 127692, 10 March 2004, 425 SCRA 98.
[22] Id.
[23] Sps. Jose v. Sps. Boyon, 460 Phil. 354 (2003).
On July 18, 2003, the Republic filed a complaint in the RTC Manila for civil forfeiture of assets (with urgent plea for issuance of temporary restraining order [TRO] and/or writ of preliminary injunction) against the bank deposits in account number CA-005-10-000121-5 maintained by Glasgow in CSBI. The case, filed pursuant to RA 9160 (the Anti-Money Laundering Act of 2001), as amended, was docketed as Civil Case No. 03-107319.
Acting on the Republic's urgent plea for the issuance of a TRO, the executive judge[4] of RTC Manila issued a 72-hour TRO dated July 21, 2003. The case was thereafter raffled to Branch 47 and the hearing on the application for issuance of a writ of preliminary injunction was set on August 4, 2003.
After hearing, the trial court (through then Presiding Judge Marivic T. Balisi-Umali) issued an order granting the issuance of a writ of preliminary injunction. The injunctive writ was issued on August 8, 2003.
Meanwhile, summons to Glasgow was returned "unserved" as it could no longer be found at its last known address.
On October 8, 2003, the Republic filed a verified omnibus motion for (a) issuance of alias summons and (b) leave of court to serve summons by publication. In an order dated October 15, 2003, the trial court directed the issuance of alias summons. However, no mention was made of the motion for leave of court to serve summons by publication.
In an order dated January 30, 2004, the trial court archived the case allegedly for failure of the Republic to serve the alias summons. The Republic filed an ex parte omnibus motion to (a) reinstate the case and (b) resolve its pending motion for leave of court to serve summons by publication.
In an order dated May 31, 2004, the trial court ordered the reinstatement of the case and directed the Republic to serve the alias summons on Glasgow and CSBI within 15 days. However, it did not resolve the Republic's motion for leave of court to serve summons by publication declaring:
Until and unless a return is made on the alias summons, any action on [the Republic's] motion for leave of court to serve summons by publication would be untenable if not premature.On July 12, 2004, the Republic (through the Office of the Solicitor General [OSG]) received a copy of the sheriff's return dated June 30, 2004 stating that the alias summons was returned "unserved" as Glasgow was no longer holding office at the given address since July 2002 and left no forwarding address.
Meanwhile, the Republic's motion for leave of court to serve summons by publication remained unresolved. Thus, on August 11, 2005, the Republic filed a manifestation and ex parte motion to resolve its motion for leave of court to serve summons by publication.
On August 12, 2005, the OSG received a copy of Glasgow's "Motion to Dismiss (By Way of Special Appearance)" dated August 11, 2005. It alleged that (1) the court had no jurisdiction over its person as summons had not yet been served on it; (2) the complaint was premature and stated no cause of action as there was still no conviction for estafa or other criminal violations implicating Glasgow and (3) there was failure to prosecute on the part of the Republic.
The Republic opposed Glasgow's motion to dismiss. It contended that its suit was an action quasi in rem where jurisdiction over the person of the defendant was not a prerequisite to confer jurisdiction on the court. It asserted that prior conviction for unlawful activity was not a precondition to the filing of a civil forfeiture case and that its complaint alleged ultimate facts sufficient to establish a cause of action. It denied that it failed to prosecute the case.
On October 27, 2005, the trial court issued the assailed order. It dismissed the case on the following grounds: (1) improper venue as it should have been filed in the RTC of Pasig where CSBI, the depository bank of the account sought to be forfeited, was located; (2) insufficiency of the complaint in form and substance and (3) failure to prosecute. It lifted the writ of preliminary injunction and directed CSBI to release to Glasgow or its authorized representative the funds in CA-005-10-000121-5.
Raising questions of law, the Republic filed this petition.
On November 23, 2005, this Court issued a TRO restraining Glasgow and CSBI, their agents, representatives and/or persons acting upon their orders from implementing the assailed October 27, 2005 order. It restrained Glasgow from removing, dissipating or disposing of the funds in account no. CA-005-10-000121-5 and CSBI from allowing any transaction on the said account.
The petition essentially presents the following issue: whether the complaint for civil forfeiture was correctly dismissed on grounds of improper venue, insufficiency in form and substance and failure to prosecute.
The Court agrees with the Republic.
The Complaint Was Filed
In The Proper Venue
In its assailed order, the trial court cited the grounds raised by Glasgow in support of its motion to dismiss:
But inasmuch as Glasgow never questioned the venue of the Republic's complaint for civil forfeiture against it, how could the trial court have dismissed the complaint for improper venue? In Dacoycoy v. Intermediate Appellate Court[6] (reiterated in Rudolf Lietz Holdings, Inc. v. Registry of Deeds of Parañaque City),[7] this Court ruled:
- That this [c]ourt has no jurisdiction over the person of Glasgow considering that no [s]ummons has been served upon it, and it has not entered its appearance voluntarily;
- That the [c]omplaint for forfeiture is premature because of the absence of a prior finding by any tribunal that Glasgow was engaged in unlawful activity: [i]n connection therewith[,] Glasgow argues that the [c]omplaint states no cause of action; and
- That there is failure to prosecute, in that, up to now, summons has yet to be served upon Glasgow.[5]
The motu proprio dismissal of petitioner's complaint by [the] trial court on the ground of improper venue is plain error.... (emphasis supplied)At any rate, the trial court was a proper venue.
On November 15, 2005, this Court issued A.M. No. 05-11-04-SC, the Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing of Monetary Instrument, Property, or Proceeds Representing, Involving, or Relating to an Unlawful Activity or Money Laundering Offense under RA 9160, as amended (Rule of Procedure in Cases of Civil Forfeiture). The order dismissing the Republic's complaint for civil forfeiture of Glasgow's account in CSBI has not yet attained finality on account of the pendency of this appeal. Thus, the Rule of Procedure in Cases of Civil Forfeiture applies to the Republic's complaint.[8] Moreover, Glasgow itself judicially admitted that the Rule of Procedure in Cases of Civil Forfeiture is "applicable to the instant case."[9]
Section 3, Title II (Civil Forfeiture in the Regional Trial Court) of the Rule of Procedure in Cases of Civil Forfeiture provides:
Sec. 3. Venue of cases cognizable by the regional trial court. - A petition for civil forfeiture shall be filed in any regional trial court of the judicial region where the monetary instrument, property or proceeds representing, involving, or relating to an unlawful activity or to a money laundering offense are located; provided, however, that where all or any portion of the monetary instrument, property or proceeds is located outside the Philippines, the petition may be filed in the regional trial court in Manila or of the judicial region where any portion of the monetary instrument, property, or proceeds is located, at the option of the petitioner. (emphasis supplied)Under Section 3, Title II of the Rule of Procedure in Cases of Civil Forfeiture, therefore, the venue of civil forfeiture cases is any RTC of the judicial region where the monetary instrument, property or proceeds representing, involving, or relating to an unlawful activity or to a money laundering offense are located. Pasig City, where the account sought to be forfeited in this case is situated, is within the National Capital Judicial Region (NCJR). Clearly, the complaint for civil forfeiture of the account may be filed in any RTC of the NCJR. Since the RTC Manila is one of the RTCs of the NCJR,[10] it was a proper venue of the Republic's complaint for civil forfeiture of Glasgow's account.
The Complaint Was Sufficient
In Form And Substance
In the assailed order, the trial court evaluated the Republic's complaint to determine its sufficiency in form and substance:
At the outset, this [c]ourt, before it proceeds, takes the opportunity to examine the [c]omplaint and determine whether it is sufficient in form and substance.In a motion to dismiss for failure to state a cause of action, the focus is on the sufficiency, not the veracity, of the material allegations.[12]The determination is confined to the four corners of the complaint and nowhere else.[13]
Before this [c]ourt is a [c]omplaint for Civil Forfeiture of Assets filed by the [AMLC], represented by the Office of the Solicitor General[,] against Glasgow and [CSBI] as necessary party. The [c]omplaint principally alleges the following:
(i) Because defendant Glasgow's bank account and deposits are related to the unlawful activities of Estafa and violation of Securities Regulation Code, as well as [to] money laundering offense as aforestated, and being the subject of covered transaction reports and eventual freeze orders, the same should properly be forfeited in favor of the government in accordance with Section 12, R.A. 9160, as amended.[11]
In a motion to dismiss a complaint based on lack of cause of action, the question submitted to the court for determination is the sufficiency of the allegations made in the complaint to constitute a cause of action and not whether those allegations of fact are true, for said motion must hypothetically admit the truth of the facts alleged in the complaint.In this connection, Section 4, Title II of the Rule of Procedure in Cases of Civil Forfeiture provides:
The test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint.[14] (emphasis ours)
Sec. 4. Contents of the petition for civil forfeiture. - The petition for civil forfeiture shall be verified and contain the following allegations:Here, the verified complaint of the Republic contained the following allegations:
(a) The name and address of the respondent;
(b) A description with reasonable particularity of the monetary instrument, property, or proceeds, and their location; and
(c) The acts or omissions prohibited by and the specific provisions of the Anti-Money Laundering Act, as amended, which are alleged to be the grounds relied upon for the forfeiture of the monetary instrument, property, or proceeds; and
[(d)] The reliefs prayed for.
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(a)
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the name and address of the primary defendant therein, Glasgow;[15]
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(b)
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a description of the proceeds of Glasgow's unlawful activities with particularity, as well as the location thereof, account no. CA-005-10-000121-5 in the amount of P21,301,430.28 maintained with CSBI;
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(c)
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the acts prohibited by and the specific provisions of RA 9160, as amended, constituting the grounds for the forfeiture of the said proceeds. In particular, suspicious transaction reports showed that Glasgow engaged in unlawful activities of estafa and
violation of the Securities Regulation Code (under Section 3(i)(9) and (13), RA 9160, as amended); the proceeds of the unlawful activities were transacted and deposited with CSBI in account no. CA-005-10-000121-5 thereby making them appear to have originated from legitimate
sources; as such, Glasgow engaged in money laundering (under Section 4, RA 9160, as amended); and the AMLC subjected the account to freeze order and
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(d)
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the reliefs prayed for, namely, the issuance of a TRO or writ of preliminary injunction and the forfeiture of the account in favor of the government as well as other reliefs just and equitable under the premises.
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The form and substance of the Republic's complaint substantially conformed with Section 4, Title II of the Rule of Procedure in Cases of Civil Forfeiture.
Moreover, Section 12(a) of RA 9160, as amended, provides:
SEC. 12. Forfeiture Provisions. -In relation thereto, Rule 12.2 of the Revised Implementing Rules and Regulations of RA 9160, as amended, states:
(a) Civil Forfeiture. - When there is a covered transaction report made, and the court has, in a petition filed for the purpose ordered seizure of any monetary instrument or property, in whole or in part, directly or indirectly, related to said report, the Revised Rules of Court on civil forfeiture shall apply.
RA 9160, as amended, and its implementing rules and regulations lay down two conditions when applying for civil forfeiture:RULE 12
Forfeiture Provisions
xxx xxx xxx
Rule 12.2. When Civil Forfeiture May be Applied. - When there is a SUSPICIOUS TRANSACTION REPORT OR A COVERED TRANSACTION REPORT DEEMED SUSPICIOUS AFTER INVESTIGATION BY THE AMLC, and the court has, in a petition filed for the purpose, ordered the seizure of any monetary instrument or property, in whole or in part, directly or indirectly, related to said report, the Revised Rules of Court on civil forfeiture shall apply.
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(1)
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when there is a suspicious transaction report or a covered transaction report deemed suspicious after investigation by the AMLC and
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(2)
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the court has, in a petition filed for the purpose, ordered the seizure of any monetary instrument or property, in whole or in part, directly or indirectly, related to said report.
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It is the preliminary seizure of the property in question which brings it within the reach of the judicial process.[16] It is actually within the court's possession when it is submitted to the process of the court.[17] The injunctive writ issued on August 8, 2003 removed account no. CA-005-10-000121-5 from the effective control of either Glasgow or CSBI or their representatives or agents and subjected it to the process of the court.
Since account no. CA-005-10-000121-5 of Glasgow in CSBI was (1) covered by several suspicious transaction reports and (2) placed under the control of the trial court upon the issuance of the writ of preliminary injunction, the conditions provided in Section 12(a) of RA 9160, as amended, were satisfied. Hence, the Republic, represented by the AMLC, properly instituted the complaint for civil forfeiture.
Whether or not there is truth in the allegation that account no. CA-005-10-000121-5 contains the proceeds of unlawful activities is an evidentiary matter that may be proven during trial. The complaint, however, did not even have to show or allege that Glasgow had been implicated in a conviction for, or the commission of, the unlawful activities of estafa and violation of the Securities Regulation Code.
A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture proceeding. Stated otherwise, a finding of guilt for an unlawful activity is not an essential element of civil forfeiture.
Section 6 of RA 9160, as amended, provides:
SEC. 6. Prosecution of Money Laundering. -Rule 6.1 of the Revised Implementing Rules and Regulations of RA 9160, as amended, states:
(a) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as herein defined.
(b) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any offense or violation under this Act without prejudice to the freezing and other remedies provided. (emphasis supplied)
Rule 6.1. Prosecution of Money Laundering -Finally, Section 27 of the Rule of Procedure in Cases of Civil Forfeiture provides:
(a) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as defined under Rule 3(i) of the AMLA.
(b) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any offense or violation under the AMLA without prejudice to the application ex-parte by the AMLC to the Court of Appeals for a freeze order with respect to the monetary instrument or property involved therein and resort to other remedies provided under the AMLA, the Rules of Court and other pertinent laws and rules. (emphasis supplied)
Sec. 27. No prior charge, pendency or conviction necessary. - No prior criminal charge, pendency of or conviction for an unlawful activity or money laundering offense is necessary for the commencement or the resolution of a petition for civil forfeiture. (emphasis supplied)Thus, regardless of the absence, pendency or outcome of a criminal prosecution for the unlawful activity or for money laundering, an action for civil forfeiture may be separately and independently prosecuted and resolved.
There Was No Failure
To Prosecute
The trial court faulted the Republic for its alleged failure to prosecute the case. Nothing could be more erroneous.
Immediately after the complaint was filed, the trial court ordered its deputy sheriff/process server to serve summons and notice of the hearing on the application for issuance of TRO and/or writ of preliminary injunction. The subpoena to Glasgow was, however, returned unserved as Glasgow "could no longer be found at its given address" and had moved out of the building since August 1, 2002.
Meanwhile, after due hearing, the trial court issued a writ of preliminary injunction enjoining Glasgow from removing, dissipating or disposing of the subject bank deposits and CSBI from allowing any transaction on, withdrawal, transfer, removal, dissipation or disposition thereof.
As the summons on Glasgow was returned "unserved," and considering that its whereabouts could not be ascertained despite diligent inquiry, the Republic filed a verified omnibus motion for (a) issuance of alias summons and (b) leave of court to serve summons by publication on October 8, 2003. While the trial court issued an alias summons in its order dated October 15, 2003, it kept quiet on the prayer for leave of court to serve summons by publication.
Subsequently, in an order dated January 30, 2004, the trial court archived the case for failure of the Republic to cause the service of alias summons. The Republic filed an ex parte omnibus motion to (a) reinstate the case and (b) resolve its pending motion for leave of court to serve summons by publication.
In an order dated May 31, 2004, the trial court ordered the reinstatement of the case and directed the Republic to cause the service of the alias summons on Glasgow and CSBI within 15 days. However, it deferred its action on the Republic's motion for leave of court to serve summons by publication until a return was made on the alias summons.
Meanwhile, the Republic continued to exert efforts to obtain information from other government agencies on the whereabouts or current status of respondent Glasgow if only to save on expenses of publication of summons. Its efforts, however, proved futile. The records on file with the Securities and Exchange Commission provided no information. Other inquiries yielded negative results.
On July 12, 2004, the Republic received a copy of the sheriff's return dated June 30, 2004 stating that the alias summons had been returned "unserved" as Glasgow was no longer holding office at the given address since July 2002 and left no forwarding address. Still, no action was taken by the trial court on the Republic's motion for leave of court to serve summons by publication. Thus, on August 11, 2005, the Republic filed a manifestation and ex parte motion to resolve its motion for leave of court to serve summons by publication.
It was at that point that Glasgow filed a motion to dismiss by way of special appearance which the Republic vigorously opposed. Strangely, to say the least, the trial court issued the assailed order granting Glasgow's motion.
Given these circumstances, how could the Republic be faulted for failure to prosecute the complaint for civil forfeiture? While there was admittedly a delay in the proceeding, it could not be entirely or primarily ascribed to the Republic. That Glasgow's whereabouts could not be ascertained was not only beyond the Republic's control, it was also attributable to Glasgow which left its principal office address without informing the Securities and Exchange Commission or any official regulatory body (like the Bureau of Internal Revenue or the Department of Trade and Industry) of its new address. Moreover, as early as October 8, 2003, the Republic was already seeking leave of court to serve summons by publication.
In Marahay v. Melicor,[18] this Court ruled:
While a court can dismiss a case on the ground of non prosequitur, the real test for the exercise of such power is whether, under the circumstances, plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude. In the absence of a pattern or scheme to delay the disposition of the case or a wanton failure to observe the mandatory requirement of the rules on the part of the plaintiff, as in the case at bar, courts should decide to dispense with rather than wield their authority to dismiss. (emphasis supplied)We see no pattern or scheme on the part of the Republic to delay the disposition of the case or a wanton failure to observe the mandatory requirement of the rules. The trial court should not have so eagerly wielded its power to dismiss the Republic's complaint.
Service Of Summons
May Be By Publication
In Republic v. Sandiganbayan,[19] this Court declared that the rule is settled that forfeiture proceedings are actions in rem. While that case involved forfeiture proceedings under RA 1379, the same principle applies in cases for civil forfeiture under RA 9160, as amended, since both cases do not terminate in the imposition of a penalty but merely in the forfeiture of the properties either acquired illegally or related to unlawful activities in favor of the State.
As an action in rem, it is a proceeding against the thing itself instead of against the person.[20] In actions in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to conferring jurisdiction on the court, provided that the court acquires jurisdiction over the res.[21] Nonetheless, summons must be served upon the defendant in order to satisfy the requirements of due process.[22] For this purpose, service may be made by publication as such mode of service is allowed in actions in rem and quasi in rem.[23]
In this connection, Section 8, Title II of the Rule of Procedure in Cases of Civil Forfeiture provides:
Sec. 8. Notice and manner of service. - (a) The respondent shall be given notice of the petition in the same manner as service of summons under Rule 14 of the Rules of Court and the following rules:WHEREFORE, the petition is hereby GRANTED. The October 27, 2005 order of the Regional Trial Court of Manila, Branch 47, in Civil Case No. 03-107319 is SET ASIDE. The August 11, 2005 motion to dismiss of Glasgow Credit and Collection Services, Inc. is DENIED. And the complaint for forfeiture of the Republic of the Philippines, represented by the Anti-Money Laundering Council, is REINSTATED.
1. The notice shall be served on respondent personally, or by any other means prescribed in Rule 14 of the Rules of Court;
2. The notice shall contain: (i) the title of the case; (ii) the docket number; (iii) the cause of action; and (iv) the relief prayed for; and
3. The notice shall likewise contain a proviso that, if no comment or opposition is filed within the reglementary period, the court shall hear the case ex parte and render such judgment as may be warranted by the facts alleged in the petition and its supporting evidence.
(b) Where the respondent is designated as an unknown owner or whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, be effected upon him by publication of the notice of the petition in a newspaper of general circulation in such places and for such time as the court may order. In the event that the cost of publication exceeds the value or amount of the property to be forfeited by ten percent, publication shall not be required. (emphasis supplied)
The case is hereby REMANDED to the Regional Trial Court of Manila, Branch 47 which shall forthwith proceed with the case pursuant to the provisions of A.M. No. 05-11-04-SC. Pending final determination of the case, the November 23, 2005 temporary restraining order issued by this Court is hereby MAINTAINED.
SO ORDERED.
Puno, C.J., (Chairperson), Sandoval-Gutierrez, Azcuna, and Leonardo-De Castro, JJ., concur.
[1] Under Rule 45 of the Rules of Court.
[2] Penned by Judge Augusto T. Gutierrez. Rollo, pp. 49-58.
[3] Docketed as Civil Case No. 03-107319.
[4] Judge Enrico A. Lanzanas.
[5] Order dated October 27, 2005, supra note 2, p. 49.
[6] G.R. No. 74854, 02 April 1991, 195 SCRA 641.
[7] 398 Phil. 626 (2000).
[8] Section 59, Title IX (Common Provisions) of the Rule of Procedure in Cases of Civil Forfeiture provides:
Sec. 59. Transitory provision. - This Rule shall apply to all pending civil forfeiture cases or petitions for freeze order.
[9] Memorandum dated January 11, 2007 for Glasgow. Rollo, pp. 329-347.
[10] Section 3 of BP 129 (the Judiciary Reorganization Act of 1980, as amended) provides:
Section 13. Creation of Regional Trial Courts. - There are hereby created thirteen (13) Regional Trial Courts, one for each of the following judicial regions:
The National Capital Judicial Region, consisting of the cities of Manila, Quezon, Pasay, Caloocan and Mandaluyong, and the municipalities of Navotas, Malabon, San Juan, Makati, Pasig, Pateros, Taguig, Marikina, Parañaque, Las Piñas, Muntinlupa, and Valenzuela[.] (emphasis supplied)
[11] Order dated October 27, 2005, supra note 2, pp. 52-53.
[12] Malicdem v. Flores, G.R. No. 151001, 08 September 2006, 501 SCRA 248.
[13] Id.
[14] Id., citing Balo v. Court of Appeals, G.R. No. 129704, 30 September 2005, 471 SCRA 227.
[15] With CSBI impleaded as a co-defendant for being a necessary party.
[16] 36 Am Jur 2d, Forfeiture, Section 30.
[17] Id., Section 28.
[18] G.R. No. 44980, 06 February 1990, 181 SCRA 811.
[19] Republic v. Sandiganbayan, 461 Phil. 598 (2003).
[20] Id.
[21] Gomez v. Court of Appeals, G.R. No. 127692, 10 March 2004, 425 SCRA 98.
[22] Id.
[23] Sps. Jose v. Sps. Boyon, 460 Phil. 354 (2003).