Case List in Banking Law

Contents
Go vs. BSP G.R. No. 178429, Oct. 23, 2009 (604 SCRA 322).......2
Soriano vs. People, G.R. No. 162336, Feb. 1, 2010, (611 SCRA 191) - 2
Central Bank of the Phils. vs. C.A, G.R. No. 7618, March 30, 1993, 220 SCRA 536 3
BF Savings Bank vs . MB, G.R. Nos. 70054 and 68878, Dec 11, 1991, 204 SCRA 767 4
Central Bank of the Phils. v. CA, G.R. No. 88353, May 8, 1992, 208 SCRA 652, 684-685 5
RB of San Miguel, Inc. v. MB, BSP, G.R. No. 150886, Feb. 16, 2007, 516 SCRA 154, 160 6
Ana Maria A. Koruga vs. Teodoro O. Arcenas, Jr., et. al. G.R. No. 168332/ Teodoro O. Arcenas et. al. vs. Hon. Sixto Marella, Jr. , G.R.
No. 169053, June 19, 2009.............................................................7
Advocates For Truth In Lending, Inc. vs BSP, et. al., G.R. No. 192986, Jan. 15, 2013 7
Banco Filipino Savings Bank vs. Monetary Board, G.R. Nos. 70054, Dec. 11, 1991, 204 SCRA 767 8
Leticia G. Miranda vs. PDIC, G.R. No. 169334 Sept. 8, 2006........8
CB v. Court of Appeals, G.R. No. 76118, March 30, 1993, 220 SCRA 536, 543. 9
BSP and Chuchi Fonacier vs. Hon. Nina G. Valenzuela, et. al., G.R. No. 184778, Oct. 2, 2009 10
Lucia Barrameda Vda. De Ballesteros vs. RB of Canaman Inc., et. al., G.R. No. 176260 Nov. 24, 2010 11
PDIC vs. BIR, G.R. No. 172892, Jun 13, 2013.............................11
GSIS vs. Court of Appeals, et. al, G.R. No. 189206,  June 8, 201112
China Banking Corp. v. Court of Appeals, G.R. No. 140687, 18 Dec. 2006, 511 SCRA 110, 117 12
Intengan v. Court of Appeals, 377 SCRA 63 (2002).....................12
China Banking Corp. v. Ortega 49 SCRA 355 (1973)..................13
Marquez vs. Desierto 359 SCRA 772 (2001)................................13
Karen E. Salvacion, et. al vs. Central Bank, et. al, G.R. No. 94723.  Aug. 21, 1997 14
Ricardo B. Bangayan vs. RCBC, et. al. G.R. No. 149193, April 4, 2011 14
BSB Group, Inc., et. al. vs. Sally Go a.k.a. Sally Go-Bangayan, G.R. No. 168644, Feb. 16, 2010 15
Joseph Victor G. Ejercito vs. Sandiganbayan , G.R. Nos. 157294-95, November 30, 2006 15
People of the Philippines vs. Joseph Ejercito Estrada, et. al., G.R. Nos. 164368-69, April 2, 200916
Republic vs. Hon. Antonio Eugenio, G.R. No. 174629, February 14, 2008 16
Republic vs. Glasgow Credit and Collection Services, Inc., G.R. No. 170281,  Jan. 18, 2008 17
Republic vs. Cabrini Green & Ross, Inc., G.R. No. 154522 June 19, 2009 18
Ret. Lt. Gen. Jacinto C. Ligot, et. al. vs. Republic, G.R. No. 176944, March 6, 2013 18
Republic of the Phils., et. al. vs. First Pacific Network Inc. G.R. No. 156646 Nov. 19, 2014 19
Republic vs. Bloomberry Resorts and Hotels, Inc., G.R. No. 224112, September 2, 2020 20
 of another,  borrow  any of the deposits of funds of such banks, nor
shall he become a guarantor, indorser, or surety for loans from
such bank, to others, or in any manner  be an obligor for money
borrowed from the bank or loaned by it, except with the written
approval of the majority of the directors of the bank, excluding the
director concerned

The Second Paragraph of Section 83 RA 337 does not provide for

an exception to a violation of first paragraph

Section 83 provides three restriction 1. Approval 2 Reportorial 3.

Ceiling . The approval requirement refers to the written approval of
majority of the bank’s board of directors before bank directors and
officers can in any manner be an obligor for money borrowed and
loaned from the bank Failure to do so will subject them to penalty.
Reportorial refers to any such approval entered upon the
record of the corporation and a copy of an entry be submitted
to appropriate supervising department. Failure to do so subject
it to quo warranto. Lastly. The ceiling requirement, this regulates
the amount of credit accommodations that banks can extend to
their directors by limiting these to an amount equivalent to the
Go vs. BSP G.R. No. 178429, Oct. 23, 2009 (604 SCRA 322) respective outstanding deposit and book value. This requirement is
directed at a bank. Hence, in a prosecution for violation of first
paragraph of Section 83 does not require for an allegation that a
Doctrine: Interpretation of Section 83 of RA 8337
loan exceeded its legal limit. The failure to observe three
FACTS
requirement under Section 83 paves way for the prosecution of
Go was charged with violation of Section 83 of RA
three different offenses with its own set of elements.
337. It was alleged that Go, the director and the president of Orient
Bank took advantage of his position as director by borrowing
money without the approval of majority of the Board of Director. Soriano vs. People, G.R. No. 162336, Feb. 1, 2010, (611 SCRA
Go filed a motion to quash alleging that the charge was vague and 191) -
Section 83 penalized only directors and officers of banking Doctrine: A bank officer violates the DOSRI 2 law when he
institution who acted either as borrower or guarantor and not both. acquires bank funds for his personal benefit, even if such
Further, he claimed that Section 83 allowed banks are allowed to acquisition was facilitated by a fraudulent loan application.
extend credit accommodation to directors, officers and stockholder Directors, officers, stockholders, and their related interests cannot
provided that it is for a listed amount equivalent to the respective be allowed to interpose the fraudulent nature of the loan as a
outstanding deposit and book value in the said bank. defense to escape culpability for their circumvention of Section 83
of Republic Act (RA) No. 337
Issue: Whether Go should be held liable under Section 83 of Facts
RA 337 Sometime in 2000, the OSI of the BSP through its
Held officer transmitted a letter to Jovencito Zuno, Chief State
Yes. Under Section 83, RA 8337, the following constitutes as Prosecutor of the DOJ. The letter attached as annexes five affidavit
element for violation of the first paragraph 1. The offender is a which would allegedly serve as bases for the filing of criminal
director or officer of banking institution 2. The offender charges for estafa through falsification of commercial document in
directly or indirectly for himself or representative performs relation to pd 1689 and for violation of Section 83 of RA 337 as
the ff : 1. Borrows any of the deposit or funds of such bank or 2. amended by PD 1795 against the petitioner.
Becomes a guarantor, indorser, surety for loans from such banks or The information provides that Carlos appeared to have
3. He comes in any manner a debtor for money borrowed from the an outstanding loan of P8,000 ,000 with the rural bank of San
bank or loaned by it.Lastly, if the offender performed any of MIGUEL Bulacan but never applied for nor received such loan as
such acts without the written approval of majority of the it was the petitioner who was then the president of RBSM who
directors, excluding the offender as the director concerned . received such loan and that the P8 M loan had never been
authorized by the RBSM Board of directors and no report has been
Go’s argument that the bank does not penalize both submitted to the Department of Rural Bank Supervision and
capacities must fail ,The essence of the crime is becoming a debtor Examination Sector of the BSP.
of the bank without securing necessary approval. This covers any Two informations were filed one for estafa and the
situation when the director or officer of a bank becomes a debtor other for violation of Section 83 of RA 8337 as amended. This
without the consent and approval of the BOD. The distinction provision refers to the prohibition against the so called DOSRI
between borrowing and guaranteeing is not necessary. Loan. The information alleged that in his capacity as President , the
petitioner indirectly secured an P8 Million loan with RBSM for his
. The prohibition is directed against a bank director or personal use and benefit without the written consent and approval
officer who becomes in any manner an obligor for money of the board of directors without entering the said transaction and
borrowed or loaned by the bank without the approval of board of without transmitting a copy of the transaction to the supervening
directors. To make a distinction between borrowing and department of the bank His ruse was facilitated by placing the loan
guaranteeing is not necessary. The law is broad enough to cover to an unsuspecting depositor Enrico Carlos.
both. The petitioner moved to quash the said information on
the ground that estafa under Article 315 of the RPC is
inherently incompatible with the violation of DOSRI law.
No director or officer of any banking institution shall either Hence the person cannot be charged for both offense. He argue that
directly or indirectly, for himself or as the representative or agent a violation of the DOSRI law requires that the offender obtained a
loan from his bank without complying with the procedural , ceiling Triumph filed a complaint with the RTC in Quezon
requirement. On the other hand , estafa under Paragraph 1 (b) against Central Bank and Ramon to annul the resolution. It also
Article 315 of the RPC requires the offender to misappropriate or challenged the constitutionality of Section 29 of the Central Bank
convert something that he holds or on commission or for act for taking over a banking institution even though there was no
administration . Hence, the petitioner theorized that the charge of violation of any law or is guilty thereof. Petitioner argues
characterization of possession is diffent. Hence, it argued that if he that no prior notice and hearing as to the closure does not cause
acquired the loan as DOSRI, he owned and loaned money and unnecessary delay but provides a bank insider and the stockholder
therefore cannot misapprirate or convert the same as an element of the opportunity to further dissipate the asset of the bank,
estafa.
Issue : Whether a loan transaction within the ambit of DOSRI
Issue
could be subject of Estafa under Article 315 (1) (b)
1. Whether the absence of prior notice and hearing is
Ruling
considered as acts of arbitrariness and bad faith sufficient to
Yes. In criminal case for violation of DOSRI the
annul a monetary board resolution enjoining a bank from
information alleged that the petitioner Soriano was the president of
doing business and placing it under receivership
RBSM and that he was able to indirectly obtain a loan from the
Ruling
RBSM by putting a loan iin the name of Enrico Carlos without
complying with the requisite board approval . In another case,
No. The Central Bank is vested with the authority to access and
Estafa through falsification of commercial document, the
evaluate and determine the condition of any bank ,and if it fines
information alleged that the petitioner took advantage of his
that the condition is one of insolvency and will result to probable
position as president of RBSM and falsified various document to
loss to the depositor forbid the bank or non bank to do business and
make it appear that Enrico Carlso secured a loan of P8 Million
designate a competent person as receiver to take charge of its asset
from RBSM. The court ruled that there is no basis for the quashal
and liability. Section 29 does not contemplate prior notice and
of the information as they contain material allegation that charges
hearing before a bank is directed to stop operation and place it
the accused for violation of DOSRI rules and estafa.
under receivership. Paragraph 4 provides for the filing of a case
Section 83 is broad enough to cover various mode of
within 10 days after the receiver takes charge of bank asset. Hence,
borrowing, it covers loan by a bank director or officer ( like
the action must take precedence over the filing of the case.
peititoner) which are made 1. Directly 2. INDIRECTLY 3. For
himself 4. Or as representative or agent of others.While directors
Hence, Section 29 is designed to protect the ff 1. Depositor 2.
have great powers, they have no special privileges as individuals.
Creditor 3. Stockholder and the bank itself and the general public
They cannot use their asset as own benefit except as permitted by
the interest of all concerned. 1 . Depositor 2. Creditor 3.
law. Thus, stringent restrictions are placed about them so that when
Stockholder 4. Bank itself and 5. General public and the summary
acting both for the bank and for themselves they must keep within
closure pales in comparison to the protection afforded to public
certain prescribed lines regarded by the legislautr as essential.
interest. The bank therefore is given full arbitrariness and bad faith
in placing the bank under receivership in which event the
A direct borrowing is one made in the name of the
resolution may be nullified as the trial court may determine.
DOSRI himself. An indirect borrowing includes one that is made
Therefore, the absence of notice and hearing is not a valid ground
by a third party but the DOSRI has a stake in the transaction. The
to annul a resolution placing a bank under receivership. This can
information alleges that petitioner indirectly borrowed or secured a
only be annulled by a rial court after it determines that the issuance
loan with the RBSM knowing fully well that this was done without
was tainted with arbitrariness and bad faith.
the consent and the approval of majority of the board of directors
and subsequently used the same funds for his own benefit.
Issue: Whether allowing only the receiver to bring suit in
behalf of the bank is valid.
The broad interpretation of the prohibition in Section 83 is justified Held:
by the fact that it even expressly covers loans to third parties where NO. To rule that only the receiver can bring suit on behalf of the
the third parties are aware of the transaction (such as principals bank is asking for the impossible. Only stockholder of the bank can
represented by the DOSRI), and where the DOSRI’s interest does file an action to annul a monetary board resolution placing the
not appear to be beneficial but even burdensome (such as in cases bank under receivership. In requiring the stockholder of record
when the DOSRI acts as a mere guarantor or surety). If the law representing majority of the capital stock and bring the action to set
finds it necessary to protect the bank and the banking system in aside a resolution to place a bank under conservatorship is to
such situations, it will surely be illogical for it to exclude a case ensure that it be not frustrated or defeated by the incumbent board
like this where the DOSRI acted for his own benefit, using the of directors or officers who may immediately resort to court action
name of an unsuspecting person. A contrary interpretation will and prevent its implementation and enforcement.
effectively allow a DOSRI to use dummies to circumvent the
requirements of the law.In sum, the information filed against
petitioner do not negate each other. BF Savings Bank vs . MB, G.R. Nos. 70054 and 68878, Dec 11,
1991, 204 SCRA 767
Doctrine
Facts ‘
Central Bank of the Phils. vs. C.A, G.R. No. 7618, March 30, Top Management and Pilar Development are corporation engaged
in the business of developing residential subdivisions. Top
1993, 220 SCRA 536
Management obtained a loan from Banco Filipino as evidenced by
Doctrine promissory note payable three years from the date. The loan was
FACTS secured by a REM in various properties in Cavite. Pilar
Based on the examination report, the financial condition Development also obtained a loan from Banco Filipino , and to
of Triumph Savings Bank was one of insolvency and its secure a loan various properties were mortgaged.
continuance will cause probable loss to its depositor. Hence the
monetary board issued a resolution ordering the closure of the bank Monetary board issued a resolution finding Banco Filipino as
and placing the same under receivership with Ramon Tiaoqui as insolvent and unable to do business without loss to its creditor and
receiver. depositor. It placed banco Filipino under receivership of Carlota
Valenzuela. The monetary board then filed a petition questioning 2. It shall be disclosed in the examination that the condition of the
the validity of the resolution issued by Monetary Board authorizing bank is insolvency or that the continuance in business would result
receivership and liquidation of Banco Filipino. In a resolution, GR to probable loss to its depositors or creditors.
70054 the court issued a temporary restraining order effective for 3. The department head concerned informs the monetary board in
thirty days . writing of the facts
4. The monetary board find that the statement of the department
Both Top Management and Pilar defaulted on its loan ,hence, it head to be true.
filed a petition for prohibition with prayer for the issuance of writ
of preliminary injunction seeking to enjoin the respondent from Here, Tiaoqui based the report on incomplete examination of the
foreclosing the property. The appellate court ruled in favor of the bank and concluded prematurely that the financial status was one
liquidator and dismissed the petition . of insolvency. It would be drastic to conclude that the bank is
insolvent if the basis for such conclusion is lacking and insufficient
Hence, the petition was filed by the petitioner alleging that Carlota especially if doubt exist as to whether the basis if such finding
who was appointed by the Monetary board as liquidator has no represent the real status of the bank.
authority to proceed with the foreclosure sale of the properties of
the petitioner on the ground that the resolution of the issue on Here the Monetary board closed the bank barely four days after the
validity of the closure and liquidation of Banco Filipino is still conference with the latter on examination partial finding. The CB
pending. manual provides that only after the examination is conducted
. should a pre-closing conference led by examiner in charge be held
Issue: Whether or not the liquidator appointed by the with the officer of the institution on finding and a copy of
respondent Central bank has the authority to prosecute while summary violation should be furnished to the institution so that
the issue of validity of receivership Is still pending resolution. corrective action is taken by them as soon as possible. It is
Held: impossible how a period of four days after the conference could be
Yes. Section 29 of the Central Bank act provides that when a bank reasonable opportunity for a bank to undertake responsive and
is forbidden to do business in the Pilippines ad placed under corrective action based on partial list presented by the examiner.
receivership, the person designated as receiver shall immediately
take charge of the bank’s asset and liabilities as expeditiously as 2ND requisite IS MISSING
possible, collect and gather all assets and administer the same for Section 29 means all realizable asset of the bank or a non bank
the benefit of its creditors and represent the bank personally though financial intermediary performing quasi banking function are
counsel as he may retain in all actions or proceedings for or against determined by Central Bank as insufficient to meet liabilities. The
the institution exercising all powers necessary for these purposes insolvency of a bank occurs when actual cash market value of its
including the brining and the foreclosure of the mortgage in name asset is not sufficient to pay its liabilities not considering the
of the bank. capital stock and surplus which are not liabilities for such purposes
. The contention of the Central Bank that solvency of the bank is
If the monetary board determines that the bank is insolvent and based on unimpaired capital is misplaced
cannot resume business safely to the depositor, creditors and
general public it shall public interest so require order its
liquidation and appoint a liquidator who takes over and
continue the function of the receiver who previously appointed
by the Monetary board. The liquidator institutes such action
necessary I the appropriate court to collect and recover counts and Central Bank of the Phils. v. CA, G.R. No. 88353, May 8, 1992,
assets of such institution or defend any action against the 208 SCRA 652, 684-685
institution. Facts
Central Bank claim that during regular examination ,
Here, the court did not prohibit however acts as receiving the examiners stumbled upon some highly questionable loans
collectibles and receivables or paying off credits or claims and which have been extended by the PBP Management to several
other transaction pertaining to normal operation of the bank. There entities. Upon examination, it was discovered that the loans were
is no doubt that the prosecution of suits collection and the fictitious as they were extended without collateral to certain
foreclosure of mortgage against the debtors the bank by the interest related to PBP owners.
liquidator are among the usual and ordinary transaction pertaining Sometime in August , the nnews triggered a bank run in
to the administration of the bank. PBP resulted to over drawing of the bank deposit account with the
Central Bank .On the basis of the report submitted by the
Issue: Whether the order of receivership and liquidation is Supervision and Examination Sector of the monetary board, placed
valid PBP under conservatorship.
Held: PBP request that the conservatorship be lifted hence the
No Under Section 29 of RA 265 the Monetary board may order the Monetary board issued a resolution 169 directing the principal
cessation of banking operation and place it under receivership upon stockholder of PBP to increase the capital account necessary to
finding of its insolvency or when its continuance in the business eliminate the net worth of PBP. PBP submitted a rehabilitation
will operate a probable loss, is depositors or creditors. If the plan to the Central Bank. But this program is not accepted. No
monetary board shall determine and confirm within sixty days that other rehabilitation program was submitted by PBP for almost
the bank Is insolvent or can no longer resume business, with safety three years , as a result its overdraft with the CB continue to
to its depositor and creditor and the general public it shall order accumulate.
liquidation. Since there is no response on the bank in relation to the
proposed rehabilitation plan. Hence the central bank sent a letter
Requisite before a bank is to be closed that conservatorship will only be lifted after PBP shall have
1. An examination is conducted by the head of appropriate identified new group of stockholder who will put new capital in
supervising or examining department of the examiners or agent PBP and after the Monetary board shall consider the same as
into the condition of the bank acceptable. The stockholder of the PBP have to decide whether to
accept the same or not.
 A few days later, PBP without responding to the as the conservator has the power to take charge of assets, liabilities
communication of the CB, filed complaint with the RTC against and management of the institution.
the CB alleging that the appointment of the conservator was
arbitrary that the petitioner acted in bad faith and that the CB Issue: Whether the granting of the trial court of preliminary
designated conservator committed bank fraud and abuses. The injunction is proper
RTC issued a writ of preliminary injunction to enjoin the petitioner
from implementing the Monetary board resolution for having bene Held:
issued without bad faith. No, There is no arbitrariness nor bad faith in the issuance of the
resolution. Banks are affected with public interest because they
This is an appeal from the CA which provides that Civil received funds from the general public in the form of deposit, due
Case No 17692 on the following grounds a. Lack of legal to their nature of the relationship the bank is under the obligation
personality to bring the action as the same was filed in the name of to treat the same under meticulous care.It is the government’s
PBP without authority of the conservator responsibility to see to it that the financial interest of those who
deal with banks and depositors are likewise protected.
Issue: Whether the respondent gravely abused his discretion when
it issued a writ of preliminary injunction to enjoin the petitioner One appropriate measure adopted by the government to protect the
from Implementing Monetary board resolution No 649 and 751 public against unscrupulous practice of some bankers is to require
have been issued without bad faith. The CA affirmed the order of the banking institution to set up reserves against deposit liabilities.
the RTC These reserves takes a form of a deposit with the Central bank is
one means by which government makes sure that the liquidity of
Held: banking institution is present. The fact that PBP is grossly
No overdrawn on the reserve account with the CB is not disputed by
the PBP. This enormous overdraft evidence the patent inability of
Grounds before conservatorship may be set aside by the court the bank management to keep PBP Liquid. This fact alone justifies
1, The appropriate pleading must be field by the stockholder of the remedial measure of the moentary board.
record representing the majority of capital stock of the bank in
proper
2.. Said pleading must be filed within ten days from the receipt of
The foregoing resolutions refer to a recommended rehabilitation
notice by said majority stockholder or the order placing the bank
plan. What was conveyed to PBP was a mere proposal. There was
under conservatorship
nothing in the resolutions to indicate that the plan was mandatory.
3. There must be convincing proof after hearing that the action is
On the contrary, PBP was given a specific period within which to
plainly arbitray and made in bad faith.
accept or reject the plan. And, as petitioners correctly pointed out,
the plan was not self-implementing. The warning given by the MB
Here, PBP was placed under conservatorship. The original
that should said proposal be rejected, the CB "will take appropriate
complaint in the Civil Case No 17962 was filed on August 27 1987
alternative actions on the matter," does not make the proposed
or three years seven months and seven days later long after the
rehabilitation plan compulsory. Whether or not there is a
expiration of the ten day period. It is also beyond question that the
rehabilitation plan agreed upon between PBP and the MB, the CB
complaint and the amended complaint were not initiated by the
is authorized under R.A. No. 265 to take appropriate measures to
stockholder of record representing majority of the capital stock.
protect the interest of the bank's depositors as well as of the general
Thus ,the order placing PBP under conservatorship had long
public.
become final and validity can no longer be litigated upon.

Issue: Whether an action for damages arising from the MB act of Furthermore, the assignment of claims to PDIC and the
placing the PBP under conservatorship and the acts of the subsequent dacion en pago  (payment of credit through shares) do
conservator and to enjoin the MB from implementing the same not divest the present stockholders of control over PBP. As may be
may only be brought for and on behalf of the PBP by the readily observed from the terms of Resolution No. 645, the shares
stockholder on record of majority of capital stock. Or simply upon which shall be issued to PDIC under the dacion are preferred,
the board of chiarman non-voting and non-participating shares. Hence, except for the
instances enumerated in the Corporation Code where holders of
1. For action for damages arising from the placing of PBP under non-voting shares are given the right to vote, PDIC shall have no
conservatorship or acts of the conservator. In this case, the same hand in the bank's operation or business. In any event, these
may be claimed only if the MB action is plainly arbitrary and made preferred shares will eventually be sold to private parties or new
in bad faith and that the action therefore is inseparable form the stockholders as soon as they are identified by PBP and approved
action to set aside conservatorship .In other words, the same is by the CB. Prior approval by the CB of the stockholders is
filed within ten days from the notice of order placing the bank necessary screening purposes.
under conservatorship.
There is nothing objectionable to the actions of the MB. We,
2. As to the injunction in restrain in the enforcement of CB
therefore, find to be completely without legal or evidentiary basis
implementing resolution said fifth paragraph of Section 29 of the
the contention that the impugned resolutions are arbitrary, illegal
Central bank act as amended equally applies because the
and made in bad faith.
questioned act are but incidental to conservatorship.

The original complaint is not initiated by majority of the

stockholder hence it should be dismissed. The petitioner view that
once a bank is under conservatorship no action may be filed on
behalf of the bank without prior approval of the conservator, and RB of San Miguel, Inc. v. MB, BSP, G.R. No. 150886, Feb. 16,
since non approval is present is cannot be dismissed .It must be
2007, 516 SCRA 154, 160
stressed that the bank retains its juridical personality even if placed
Doctrine
under conservatorship it is neither substituted by thee conservator
SECTION 30. Proceedings in Receivership and Liquidation. — and unambigious meaning different from the word examination. A
Whenever, upon report of the head of the supervising or report is a noun that is defined as something that gives information
examining department, the Monetary Board finds that a bank or or usually detailed account or statement but an examination
quasi-bank: contemplates an investigation.

Hence the MB has sufficient basis to arrive in a sound conclusion

(a) is unable to pay its liabilities as they become due in
based on the report of Mr. Domingo ( hed of the supervising and
the ordinary course of business: Provided, That this
examining department that: (1) RBSM was unable to pay its
shall not include inability to pay caused by
liabilities as they became due in the ordinary course of business
extraordinary demands induced by financial panic in the
and (2) that it could not continue in business without incurring
banking community;
probable losses to its depositors and creditors.j The report was a
50-page memorandum detailing the facts supporting those grounds,
(b) has insufficient realizable assets, as determined by an extensive chronology of events revealing the multitude of
the [BSP] to meet its liabilities; or problems which faced RBSM and the recommendations based on
those findings.
(c) cannot continue in business without involving
probable losses to its depositors or creditors; or In short, MB and BSP complied with all the requirements of RA
7653. By relying on a report before placing a bank under
receivership, the MB and BSP did not only follow the letter of the
(d) has willfully violated a cease and desist order under law, they were also faithful to its spirit, which was to act
Section 37 that has become final, involving acts or expeditiously. Accordingly, the issuance of Resolution No. 105
transactions which amount to fraud or a dissipation of was untainted with arbitrariness.
the assets of the institution; in which cases, the
Monetary Board may summarily and without need
for prior hearing forbid the institution from doing
business in the Philippines and designate the
Philippine Deposit Insurance Corporation as Ana Maria A. Koruga vs. Teodoro O. Arcenas, Jr., et. al. G.R.
receiver of the banking institution No. 168332/ Teodoro O. Arcenas et. al. vs. Hon. Sixto Marella,
Jr. , G.R. No. 169053, June 19, 2009
. Facts
Facts Koruga filed a complaint before the RTC for violation
On January 21, 2000 the monetary board issued a of Section 31 to 34 which prohibit the self-dealing conflict of
resolution prohibiting RBSM from doing business here in the interest of directors and officer. ( DOSRI). 1) engaging in unsafe,
Philippines and placing it under receivership and designating PDIC unsound and fraudulent banking practices that have jeopardized the
as receiver. On the basis of the report, it was shown that RBSM is welfare of the bank, its shareholders, including the petitioners and
unable to pay its liabilities as they become due . Based on the depositors, 2) for granting and approving loans and/or loaned sums
report of Ms Cabias, the PDIC implemented a closure order and of money to 6 dummy borrower corporations which had no
took over the management of RBSM and its affairs. financial capacity to justify the loans, 3) for approving and
accepting a dacion en pago, or payment of loans with property
The petitioner claimed that respondent MB and BSP instead of cash, resulting to a diminished future cumulative interest
committed grave abuse of discretion in the closure of the bank income by the bank and a decline in its liquidity position; 4) for
since there is no complete examination that had been knowingly give favorable treatment to borrower corporations in
conducted before it was issued, The petition was dismissed by which some or most of them have interest; and 5) for employing
the CA holding that the closure was based on substantial evidence ( their respective offices and functions, as the bank’s officers and
contropoller report). directors or omitting to perform their functions and duties, with
According to the petitioner Section 30 refers to report negligence, unfaithfulness or abuse of confidence of fiduciary
of Supervising or examining department required under Section 30 duty.
refers to the report on examination of the bank which under
Section 28 must be made to the MB after supervising or examining It was alleged that there was a violation of the
head conducts an examination. stockholder’s right to inspect the records of the corporation such
that there is unlawful refusal to allow the petitioner from
Issue: Whether Section 30 of RA 7653 contemplates a complete inspecting corporate records despite the demand in writing. On
examination of the bank before it can be placed under receivership appeal the CA ruled that the RTC has jurisdiction over the said
case.
Held: Issue: Whether the RTC has jurisdiction over the case at bar
Ruling
No. Under Section 29 of the CBA, the following are the mandatory No. It is the BSP which has jurisdiction over the case. The acts
requirement before a bank is refused to do business. 1. An contemplated thereto pertain to the conduct of the Banco Filipino
examination shall be conducted by the head of appropriate Banking Business. A bank, as defined under the General Banking
supervising or examining department or his examiners or agent law refers to an entity that is engaged in the ledning of funds
into the condition of the bank 2. It shall be disclosed in the obtained in the form of deposit. The banking business is subject to
examination that the condition of the bank is one of insolvency or reasonable regulation under police power of the state because
that its continuance in the business will ivolve probable loss to its banks are affected with public interest and receive funds from the
depositors 3. The department head concerned shall inform the general public in the form of deposit. It is the responsibility of the
monetary board in writing of the facts 4. The monetary board shall government to see to it that financial interest of those who deal
find that the statement of the department be true. with banks are protetected. In this case the BSP is the one
authorized to administer, monetary banking and credit system of
Under RA 7653, only a report of the head of the supervisor or the Philippines.
examining department is necessary. The word report has a definite
Koruga alleges that "the dispute in the trial court involves the 1. No. The CB-MB merely suspended the effectivity of Usury law
manner with which the Directors’ (sic) have handled the Bank’s when it issued circular no 905. The power of the Central Bank to
affairs, specifically the fraudulent loans and dacion en pago effectively suspend the Usury law has been recognized . CB 905
authorized by the Directors in favor of several dummy corporations did not repeal nor in anyway amended the usury law but simply
known to have close ties and are indirectly controlled by the suspended its effectivity. CB Circular No 905 allowed parties to
Directors." Her allegations, then, call for the examination of the freely stipulate regarding any subsequent adjustment in the interest
allegedly questionable loans. Whether these loans are covered by rate and shall accrue on loans of forbearance of money . goods and
the prohibition on self-dealing is a matter for the BSP to determine. credit parties can freely adjust the same. Hence the lifting of the
These are not ordinary intra-corporate matters; rather, they involve interest ceiling , merely upheld the parties freedom to contract and
banking activities which are, by law, regulated and supervised by agree on the rate of interest.
the BSP. The Central Monetary Authority, through the Monetary
Board, is vested with exclusive authority to assess, evaluate and BSP has the authority to enforce the said circular. Section 1 of
determine the condition of any bank, and finding such condition to Circular 905 provides that rate of interest, commission premium
be one of insolvency, or that its continuance in business would fees and other charges on loans of forbearance of money,
involve a probable loss to its depositors or creditors, forbid bank or goods ,and credit regardless of maturity and whether secured or
non-bank financial institution to do business in the Philippines; and unsecured that may be charged or collected by any person whether
shall designate an official of the BSP or other competent person as natural and juridical shall not be subject to any ceiling prescribed .
receiver to immediately take charge of its assets and liabilities.

The GBL specifically deals with loans contracted by bank directors

or officers. Furthermore, the authority to determine whether a bank
is conducting business in an unsafe or unsound manner is also
vested in the MB. Finally, the New Central Bank Act grants the
MB the power to impose administrative sanctions on the erring
bank. It must also be noted that the actions of the MB taken under
this section or under Section 29 of this Act shall be final and
executory, and may not be restrained or set aside by the court Banco Filipino Savings Bank vs. Monetary Board, G.R. Nos.
except on petition for certiorari on the ground that the action taken 70054, Dec. 11, 1991, 204 SCRA 767
was in excess of jurisdiction or with such grave abuse of discretion Facts
as to amount to lack or excess of jurisdiction. The petition for The Monetary board placed Banco Filipino Savings and
certiorari may only be filed by the stockholders of record Mortgaged bank under the conservatorship of Basilio. He was
representing the majority of the capital stock within ten (10) days replaced by Gilbert Teodoro. GIBO submitted a report to the
from receipt by the board of directors of the institution of the order respondent regarding the financial condition of the bank. The
directing receivership, liquidation or conservatorship. The report finds that the bank is one of insolvency. Hence, the
designation of a conservator under Section 29 of this Act or the monetary board ordered the closure of Banco Filipino and
appointment of a receiver under this section shall be vested designated Mrs. Valenzuela as the receiver.
exclusively with the Monetary Board. Furthermore, the designation Banco Filipino filed a complaint with the RTC to set
of a conservator is not a precondition to the designation of a aside the action of Monetary board placing the bank under
receiver. On the strength of these provisions, it is the Monetary receivership and filed with the SC certiorari and mandamus. Banco
Board that exercises exclusive jurisdiction over proceedings for Filipino filed a complaint with the RTC to set aside the action of
receivership of banks. There is no doubt that the RTC has no Monetary board placing the bank under receivership.
jurisdiction to hear and decide a suit that seeks to place Banco The receivers, Carlota, et al submitted a report on the
Filipino under receivership. receivership of the bank and finds that the asset of the bank
continues to be one of insolvency. Banco Filipino filed a motion
before the SC praying that a restraining order or writ of
preliminary injunction be isused to enjoin the respondent from
causing the dismantling of Banco Filipino signs
Advocates For Truth In Lending, Inc. vs BSP, et. al., G.R. No. Issue: Whether the Central Bank acted in bad faith when it
192986, Jan. 15, 2013 ordered the closure of Banco Filipino
Facts Ruling
Advocates for Truth and Lending is a non profit non Yes. The closure was null and void. The monetary
stock corporation engaged in money lending activities. RA No 265 board may order the cessation of operation of a bank in the
created the central bank which empowered Central Bank to set the Philippines and place it under receivership upon the finding of
maximum interest rate that banks may charge on all types of loan. insolvency or when its continuance will involve probable loss to its
Section 109 The Monetary board may within the limits depositor or creditor. If the monetary board can determine within
prescribed in the Usury Law fix the maximum rates of interest 60 days that the bank is insolvent or can no longer resume business
which banks may charge for different types of loan. On March 17 with the safety to its depositor, creditor or general public it shall
, the usury law was amended by PD 1684 givign the Central Bank order its liquidation.
the authority to prescribe different maximum rates of interest to be Under Section 29 of the Central Bank Act, the following are
imposed on loan or renewal thereof or the forbearance of money. the mandatory requirements to be complied with before a bank
In resolution No 2224, the CB issued circular No 905 which found to be insolvent is ordered closed and forbidden to do
removed the ceiling on interest loans or forbearance of money.On business in the Philippines:
June 14 1993, President Fidel Ramos signed into law RA 7653
establishign the BSP to replace the CB. 1. an examination shall be conducted by the head of the
Issue appropriate supervising or examining department or his examiners
2. Whether CB-MB exceed its authority when it issued CB or agents into the condition of the bank;
Circular No 905 which removed all interest ceiling and thus 2. it shall be disclosed in the examination that the condition of the
suspended Act No 2665 bank is one of insolvency, or that its
Ruling continuance in business would involve probable loss to its
depositors or creditors;
3. the department head concerned shall inform the Monetary Board The monetary board has the power to close the bank and liquidate
in writing, of the facts; and them when public interest so requires. Disputed claims refer to all
4. the Monetary Board shall find the statements of the department claims whether against the asset of insolvent bank for specific
head to be true. performance breach or whatsoever.

Here, Tiaoqui based his report on an incomplete

examination of the bank and outrightly concluded that the latter's Here, the claim of the petitioner that involves the payment of two
financial status was one of insolvency or illiquidity. Tiaoqui admits cashiers check does not fall under the ambit of claim against the
the insufficiency and unreliability of the findings of the examiner asset of the insolvent bank. The issuance of the cashier’s check
as to the setting up of recommended valuation reserves from the created a debtor creditor relationship. Therefore, the disputed
assets of the bank. claim must be lodged before the liquidation court by the
petitioner since the closure of the Prime Savings Bank in
The examination contemplated in Sec. 29 of the CB Act relation thereto are threshed with the Liquidation court. The
as a mandatory requirement was not completely and fully complied lawmaking body contemplated that for convenience, only one
with. Despite the existence of the partial list of findings in the court, if possible, should pass upon the claims against the insolvent
examination of the bank, there were still highly significant items to bank and that the liquidation court should assist the Superintendent
be weighed and determined such as the matter of valuation of Banks and regulate his operation
reserves, before these can be considered in the financial condition
of the bank. It would be a drastic move to conclude prematurely Issue: Whether only Prime Savings Bank is liable to pay for the
that a bank is insolvent if the basis for such conclusion is lacking mount of two cashier check
and insufficient, especially if doubt exists as to whether such bases Held
or findings faithfully represent the real financial status of the bank.  Yes. Solidary liability cannot attach to the BSP in its capacity of
regulator of banks and PDIC as statutory receiver under RA 7653
In arriving at the computation of realizable assets of because they are the principal government agency mandated by
Banco Filipino, respondents used its books which undoubtedly are law to determine financial viability of bank, and quasi bank and
not reflective of the actual cash or fair market value of its assets facilitated receivership and liquidation of close financial
which is not the proper procedure contemplated in Sec. 29 of the institution.
Central Bank Act. The receivership of Banco Filipino, indicates
that total liabilities of ₱4,540.84 million does not exceed the total BSP is not a party to the issuance of the check hence it cannot be
assets of ₱4,981.53 million.  held liable for the issuance of the same. The BSP through the
Likewise, the consolidated statement of condition of the bank monetary board was well within its discretion to issue a resolution
prepared by the Central Bank Authorized Deputy Receiver suspending interbak clearing privileges of Prime Savings Bank
Artemio Cruz shows that total assets amounting to having determined that the bank had deficient cash reserves
₱4,981,522,996.22 even exceeds total liabilities amounting to deposited before the BSP.There is no showing that the BSP abused
₱4,540,836,834.15. Based on the foregoing, there was no valid this discretionary power conferred upon it by law.PDIC cannot
reason for the Valenzuela, Aurellano and Tiaoqui report to finally therefore be held directly and solidarily liable for the payment of
recommend the liquidation of Banco Filipino instead of its the two cashier's checks. Sole liability rests with Prime Savings
rehabilitation. Bank.

In the absence of fraud the purchase of the cashier

Leticia G. Miranda vs. PDIC, G.R. No. 169334 Sept. 8, 2006 check creates the relation of creditor and debtor and not principal
FACTS and agent with ther euslt that the purchaser or holder thereof is not
Leticia Miranda, is a depositor of Prime Savings Bank entitled to preference over the general creditors in the asset of the
she withdrew substantial amount in her account and opted for a bank issuing the check. However, when the element of fraud is
cross cashier check. The petitioner deposited two checks in her present the purchase is entitled to preference in the assets of the
account with another bank on the same day, BSP then suspending bank on its liquidation before the check is paid.
the clearing privilege of Prime Savings Bank hence the two checks
of the petitioner remained unpaid. There was fraud or the intent to deceive when the two cashier's
Prime Savings declared a bank holiday, BSP placed checks dated June 3, 1999 were issued by Prime Savings Bank to
Prime Savings under receivership with the PDIC. The petitioner the petitioner.In the distribution of assets of Prime Savings Bank,
filed a civil action for sum of money with the RTC to recover the Section 31 of the New Central Bank Act which provides that "[i]n
funds from unpaid check. The petitioner argues that the case at bar case of liquidation of a bank or quasi-bank, after payment of the
does not pertain to a disputed claim under Section 30 of the NCA cost of proceedings, including reasonable expenses and fees of the
since what she is recovering are assigned funds which are receiver to be allowed by the court, the receiver shall pay the debts
segregated monies of Prime Savings bank hence the Liquidation of such institution, under order of the court, in accordance with the
court does not have jurisdiction over the said claim. rules on concurrence and preference of credit as provided in the
Civil Code," should apply.
Issue
1; Whether the claim ledoged by the petitioner is a disputed
claim under Section 30 RA 7653 otherwise known as the New
Central Bank and therefore under the jurisdiction of the
Liquidation Court. CB v. Court of Appeals, G.R. No. 76118, March 30, 1993, 220
Ruling SCRA 536, 543.
Doctrine
1. Yes. Regular Court do not have jurisdiction over action field by Facts
claimant against the insolvent bank unless there is a clear showing Based on the examination report, the financial condition
that the action taken by the BSP through the Monetary board in the of TSB is one of insolvency and its continuance will result to loss
closure of financial institution was in excess of jurisdiction or with to its depositor. A resolution was then issued by the Monetary
grave abuse of discretion. board ordering the closure of TSB and forbidding it from doing
business and placing it under receivership appoint Tiaoqui as the bank requested that they be given time to obtain BSP approval to
receiver amend their articles of incorporation to seek investor. They also
TSB filed a complaint with the RTC to annul the requested meetings with the BSP audit terms to reconcile audit
resolution with injunction that challenged the constitutionality of figures, in response Fonacier reiterated the bank’s failure to
Section 29 of RA 2669 as it authorized the Central Bank to take comply with the directive for additional capital infusion.
over a banking institution even if it was not charged with violation
of the law or is found guilty. RBPI filed a complaint for nullification of the BSP ROE with
Central Bank alleged that the essence of Section 20 of application with the TRO against Fonacier. RBPI prayed that
RA 265 that prior notice and hearing should not be required since a Fonacier et al be enjoined from submitting the ROE or any similar
hearing will only cause unnecessary delay and give the bank report to the Monetary board or if the ROE has already been
opportunity to dissipate assets submitted the MB be enjoined form acting on the basis of the
ROE., on the ground that failure to furnish the bank with the copy
of the ROE violated the right to due process.
Issue: Whether the monetary board resolution placing a
private bank under receivership may be annulled on the
The RTC ruled that banks were entitled to writ of preliminary
ground of lack of notice and hearing
injunction prayed for . It had held that it had bene the practice of
Ruling
SED to provide ROEs to the bank before the submission of the
No .Section 29 of RA 265, vest the monetary board with the
Monetary board. The CA upheld the decision of the RTC.
authority to assess and evaluate the condition of any bank and
finding such condition to be insolvency it shall then vest the
Issue: Whether the submission of the ROE to the MB is
Central Bank or any other competent person as receiver to
necessary and non submission violates the right to due process
immediately take over its asset and liabilities. Section 29 does not
contemplate prior notice and hearing before a bank may be
Held;
directed to stop operation and place under receivership.
No. The respondent bank failed to show that they are entitled to the
copies of the ROEs. They can point to no provision of the law in
Section 29 does not vest the bank or non bank financial institution
the procedure of the BSP which gives them copies of the ROE.
placed under receivership an opportunity to be heard because
Section 28 of Ra 7653 or the New Central Bank act governs
within ten days from the date the receiver takes charge of the asset
examination of banking institution and provides that ROE shall be
of the bank resort to judicial review may be had with the filing of
submitted to the Monetary board, the bank examined is not
appropriate pleading in court.The absence of prior notice and
mentioned as one who is a recipient of the ROE.
hearing cannot be deemed acts of arbitrariness and bad faith. Thus,
an MB resolution placing a bank under receivership, or
The respondent is aware of what is required of them by the BSP
conservatorship for that matter, may only be annulled after a
and cannot claim violation of right to due process simply because
determination has been made by the trial court that its issuance was
they are not furnished withc copies of the ROE.If sanctions are
tainted with arbitrariness and bad faith. Until such determination is
already impose on banks, they are already aware of the reason for
made, the status quo shall be maintained, i.e., the bank shall
the sanction having bene informed via list of finding and exception
continue to be under receivership
demolishing that particular argument. The ROE would then be
superfluous on the respondent bank’s part and should not be a basis
for writ of preliminary injunction,
Issue: Whether only the receiver may bring a suit on behalf of
the bank
The issuance of the RTC of preliminary injunction is unwarranted
Held:
interference with the power of the Monetary board . Section 29 and
No. In ruling that only the receiver is the one who can bring suit
Section 30 refer to the appointment of a conservator or receiver for
on behalf of the bank will can question his or her appointment,
a bank which id the power of the MB for which they needed ROE
Consequently, the stockholder of the bank can file an action for
done by supervising or examining department. Hence, the acition
annulment of the Monetary board resolution that places the bank
of the monetary board under Section 29 and Section 30 may not be
under receivership. This is to ensure that his interest is not defeated
restrained unless there is grave abuse of discretion amounting to
by the incumbent resort of the BODto court action. Indirectly, it is
lack of excess jurisdiction.
likewise intended to protect and safeguard the rights and interests
As to the third requirement, the respondent banks have shown no
of the stockholders. Common sense and public policy dictate then
necessity for the issuance of the preliminary injunction to prevent
that the authority to decide on whether to contest the resolution
serious damage. The damage contemplated by the trial court was
should be lodged with the stockholders owning a majority of the
the possibility of imposition of sanction upon the respondent bank ,
shares for they are expected to be more objective in determining
even the sanction of closure. Under the law, even in cases of
whether the resolution is plainly arbitrary and issued in bad faith.
closure BSP can impose a sanction even without notice and
hearing. The lack of due process is imam iteral

BSP and Chuchi Fonacier vs. Hon. Nina G. Valenzuela, et. al., The closure of the bank is an exercise of police power, The action
G.R. No. 184778, Oct. 2, 2009 of the MB is final and executory such exercise may however be set
Facts aside in excess of jurisdiction or with such grave abuse of
The Supervision and Examination department of the discretion amounting to lack of excess jurisdiction. The respondent
BSP conducted an investigation on the books of the several banks. cannot through seeking a writ of preliminary injunction appeal the
After examination, exist conference were held with the officers or closure of the MB.
representative of the banks were SED examiners provided them
with copies of list and finding containing deficiencies discovered
during the examination. These banks were required to comment The remedy is to appeal the same due to lack of due process,
and undertake the remedial measure stated in these list within Judicial review then enters into a picture only after MB has taken
thirty days from the receipt thereof which remedial measure action, it cannot prevent such action by the MB. The threat of the
included the infusion of additional capital. Though the banks imposition of sanction even that of closure do not violate the right
claimed that they made additional capital infusion , the petitioner of due process and cannot be a basis of writ of preliminary
failed to carry out the required remedial measure. In response, the injunction.
The "close now, hear later" doctrine has already been justified as a bank. Regular courts do not have jurisdiction over actions filed by
measure for the protection of the public interest. Swift action is the claimant against the insolvent bank unless there is a showing
called for on the part of the BSP when it finds that a bank is in dire that actions taken by the BSP through the monetary board in the
straits. Unless adequate and determined efforts are taken by the closure of the financial institution were in excess of jurisdiction
government against distressed and mismanaged banks, public faith which is not present in the case at bar.  Therefore, consolidation is
in the banking system is certain to deteriorate to the prejudice of proper, considering that the liquidation court has jurisdiction over
the national economy itself, not to mention the losses suffered by its action of Lucia. It would be more in equity if the case of Lucia
the bank depositors, creditors, and stockholders, who all deserve is consolidated with the Liquidation case to determine whether she
the protection of the governmen is entitled to recover the property from RBCI.

1) Leticia G. Miranda vs. PDIC et. al., G.R. No.

169334 Sept. 8, 2006
Lucia Barrameda Vda. De Ballesteros vs. RB of Canaman Inc., et.
al., G.R. No. 176260 Nov. 24, 2010 - Repeated case
Facts: 

Barrameda alleged that her deceased husband left two parcels of

land located in Camarines Sur. She alleged that her children Issue
without her knowledge and consent executed a deed of Ruling
extrajudicial partition and waiver where all the heirs including
Lucia agreed to allot parcel of land to Rico. Rico then mortgaged PDIC vs. BIR, G.R. No. 172892, Jun 13, 2013
parcel B of the estate in favor of RCBI.Lucia prays that the deed of Facts
extrajudicial partition and waiver in favor of RBCI be declared as Monetary board of Bangko Sentral prohibited RBTI
null and void since it was executed without knowledge and from doing business in the Philippines by placing it under
consent, receivership under the New Central Bank Act and PDIC as
receiver. PDIC conducted an evaluation of the RBTI financial
RCBC claimed that Lucia sold one of the two parcels of land to condition and determined that RBTI is insolvent. Hence the
Rico. The extrajudicial partition, waiver, and mortgage were monetary board directed the PDIC to proceed with the liquidation
executed with the knowledge and consent of Lucia although she of the RBTI. Pursuant to Section 30, PDIC filed with the RTC a
was not able to sign the document. RCBI further claimed that petition for assistance in liquidation.
Parcel B had already been foreclosed. As one of the creditors of RBTI. BIR prayed that the
proceeding be suspended until PDIC secured a tax clearance
required under Section 52 c of the tax reform act. PDIC insist that
The case was set to pre-trial, and the counsel of RCBC filed a Section 52 c of the tax code is not applicable to banks ordered to
motion to withdraw after being informed that the PDIC would be placed under liquidation by the Monetary board.
handle the case as RBCI had already been placed under
receivership of the PDIC. RBCI through PDIC filed a motion to
dismiss pursuant to Section 30 RA 7653 that the case at bar fell Issue: Whether Section 52 ( c) of the tax code applies to banks
within the jurisdiction of the liquidation court and that RTC-Iriga ordered placed under liquidation by Monetary board
has no jurisdiction over the subject matter of the action, as it is the Ruling
RTC Makati which was constituted as a liquidation court to assist No. Section 52 is not applicable to banks ordered and placed under
the PDIC in constituting itself as the liquidation court to assist liquidation by the Monetary board, hence a tax clearance is not a
PDIC. Upon appeal to the CA, the court ordered the consolidation pre-requisite for the approval of distribution of asset under
of the civil case and liquidation case ( SPECPRO No 5290) liquidation.
pending RTC Makati

Issue: 
Section 52 New Central Bank act
1. Whether the Liquidation court ( RTC- Makati) has
jurisdiction over the case at bar ( Civil case)
1. This pertains only to the 1. A special case covered by
2. Whether the CA gravely abused its discretion in
regulation of relationship Section 30 of the NCA
ordering the consolidation of Civil Case with the
between SEC and BIR with 2. Only a final tax return is
Liquidation case pending in RTC Makati
respect to corporation required to satisfy the interest
Held:  contemplating dissolution of the BIR

1 .Yes. After the declaration of the Monetary board that

the bank is insolvent the board becomes the trustee of its assets for To secure a tax clearance as proof that a taxpayer had
the equal benefit of all creditors and depositors. These assets of paid of his tax liability Is contrary to the intent of the law as PDIC
insolvent banking institution are held in trust for the benefit of the will be compelled to settle and pay all tax liabilities and
creditor and one cannot obtain an advantage or preference over deficiencies regardless of order of preference . The position of the
another.To allow the case at bar to proceed independently of the BIR would ignore section 30 of the NCBA and disregard Article
liquidation case will give rise to favorable judgment and execution 2244 of the Civil Code which is not what the law seeks to
thereof against the assets of RBCI, it will not only prejudice other implement
creditors but also the purpose of the liquidation court.

2. No. The complaint of Lucia involving the annulment

of the deed of mortgage falls within the disputed claim under
Section 30 of RA 7653. The liquidation court has jurisdiction GSIS vs. Court of Appeals, et. al, G.R. No. 189206,  June 8, 2011
over all claims including that of Lucia against the insolvent
Facts currency fund deposted with Chinabank the disclosure is only
A surety agreement was entered into by Domsat and as to the name to whom the name funds is deposited is not
GSIS to secure the payment of the loan from the bank, When violative of the law. Justice will be better served if the name or
Domsat failed to pay, GSIS failed to comply with its obligation o names of depositor of the said fund shall be disclosed because such
the ground that Domsat did not use the loan proceed for payment disclosure is material and important to the issues between the
of Satellite rental. There was an allegation that Westmont Bank as parties in case at bar. The CA affirmed the decision of the RTC.
a conduit transferred million dollar proceed from industrial bank of Issue: Whether the Subpoena can prosper
Citibank Korea to Citibank New York to Binondo branch. GSIS Ruling
then requested for the issuance of subpoena duces tecum to the No. PD 1246 provides that in foreign currency account deposit can
custodian of the records of Westmont. only be had upon written permission of the depositor. Under this
provision, the law provides that foreign currency deposit are
The RTC issued a subpoena duces tecum, a motion to quash was considered as absolutely confidential in nature and may not be
filed by the banks on three ground 1. Subpoena is unreasonable 2. inquired into except to the secrecy of foreign currency deposit that
Request for document will violate the Law on Secrecy of Bank is disclosure is allowed upon the written permission of the
deposit 3. GSIS failed to advance reasonable cause of production depositor.
of documents. The trial court granted the second motion for
reconsideration field by the banks. The trial court invoked the
ruling that foreign currency deposit are absolutely confidential and The peculiar circumstance doctrine apply. Here Jose Gotianuy is
may be examined only with written permission from the depositor. also named as the co-depositor of Mary Margaret dee, it reasoned
that since Jose Gotianuy is named as the co-payee of the Margaret
On appeal GSIS insist that the deposit of Domsat with West,ont in the subject check, hence he is also considered to be the depositor
bank can be inquired into since it is the subject matter of litigation thereof.
and the refusal to disclose the whereabout of the $11 Million will
prejudice and burden the GSIS pension fund . The bank on the One more point. It must be remembered that in the complaint of
other hand argues that the present case is a foreign currency bank Jose Gotianuy, he alleged that his US dollar deposits with Citibank
deposit and disclosure can only be had through written consent of were illegally taken from him. On the other hand, China Bank
the petitioner. employee Cristuta Labios testified that Mary Margaret Dee came
to China Bank and deposited the money of Jose Gotianuy in
Issue: Whether the court can compel the banks to disclose the Citibank US dollar checks to the dollar account of her sister
deposit Adrienne Chu.20 This fortifies our conclusion that an inquiry into
Ruling the said deposit at China Bank is justified. At the very least, Jose
Gotianuy as the owner of these funds is entitled to a hearing on the
NO. Since the case pertains to foreign currency dollar account the whereabouts of these funds
applicable law is RA 1405 which provided that all deposit of
whatever nature with banks or banking institution may not be
examined or looked into by any person ,government , bureau or
office except when there is written consent on the part of the Intengan v. Court of Appeals, 377 SCRA 63 (2002)
depositor. Doctrine:
.1 . Foreign currency disclosure may only be effected through
For foreign currency deposit such as US dollar deposit, the written consent.
applicable law is Republic Act 6426. Republic Act 1405 was 2, Note that the disclosure without any consent is a criminal
enacted providing that all deposit of whatever nature with banks or violation of the law being mala prohibita intent is not material
banking Facts
. Citibank filed a complaint for violation of Section 31
and Section 144 of the corporation code against two of its offices
Applying Section 8 of RA 6426, absent the written permission Dante Santos and Marilou Genuino.The investigation resulted to
from Domsat, Westmont Bank cannot be legally compelled to evidence showing that Santos and Genuino appeared to have
disclose the bank deposit of Domsat otherwise it might expose actively engaged in the business endeavors that is in conflict with
itself to criminal liability under the same act. the business of the bank. It was found that with the use of two
companies which they have personal interest, namely Torrance
Development and Global Pacific, they managed to cause existing
bank clients or depositors to divert their money from Citibank to
China Banking Corp. v. Court of Appeals, G.R. No. 140687, 18 Torrance and Global which had higher yields.
Dec. 2006, 511 SCRA 110, 117 Charges for estafa under Article 315 paragraph 10 was
Doctrine: Here the court allowed the exception to apply in foreign made. Petitioner filed its respective motion for exclusion. The
currency bank deposit since Jose Gotianuy is a co-payee of the US prosecutor directed the filing of the information against the
dollar check account with Margaret. Also in this cae there is a respondent for the alleged violation of bank secreacy law. The
testimony that the money of Jose was deposited to the account of respondent filed an appeal with the DOJ this was a denied. The CA
Margaret to another account. Jose has the right to know where his rendered a judgment ruling that the disclosure of the deposit is
money is necessary to establish the allegation that Santos had violated
Facts Section 31 of the Corporation Code acquiring any interest that is
Jose Gotianuy accused his daughter Mary Margaret Dee adverse to the corporation in respect of any matter which was
from stealing his US Dollar Deposit with Citibank amounting to reposed to him in confidence. Hence, there is a need to present
not less than P35,000 and US $864,000. Through this, Mary was records or moneys which the bank records are petitioner.
able to receive this amount from Citibank which she was able to Issue: Whether the disclosure is allowed
deposit in China Bank. Jose here was substituted by Elizabeth his Ruling
daughter. No. The CA overlooked the single fact that the accounts in
The trial court issued a subpoena to employees of china question are US dollar deposit , consequently the applicable law is
bank to testify on the case. The trial court ruled that foreign RA 6426 whichp provides that foreign currency deposit may not be
looked into, examined inquired by any person, government
official , bureau or office whether judicial or administrative or the pending investigation at the Office of Ombudsman against
legislative or any other entitly whether private of public except Lagdameo for violation of RA 3019 relative to the joint venture
when there is written consent. agreement between Public Estate Authority and AMARI.

The proper case to be filed is a violation under RA 642, Private In camera inspection may be allowed, there must be a pending
respondent Lim and Reyes admitted that they had disclosed details case before the court of competent jurisdiction. The account
of the petitioner dollar deposit without the latter’s written must be clearly identified , the inspection must be limited to the
permission, It does not matter if the disclosure was necessary to subject matter of the pending case before the court of
establish the case of Citibank against Santos and Genuino. The act competent jurisdiction. Lastly, the bank personnel and the
of Lim in disclosing details of bank record regarding bank deposit account holder must be notified to be present during the inspection
are criminal act punishable under special laws. In such case, the and such inspection may cover only the account identified in the
offense is not made to depend on the positive, willful intent or pending cae.
purpose of the partis being mala prohibita.
Here, there is no pending litigation before the court of competent
China Banking Corp. v. Ortega 49 SCRA 355 (1973) authority what existed here is an investigation by the office of
Doctrine: garnishment can be effected in local currency account Ombudsman .It short, what the office of Ombudsman would do is
Facts to fish additional evidence to formally charge Lagmadeo with the
Vicente Acaban filed a complaint in the against Sandiganbayan, there was no pending case in court which would
Bautsita Logging for the collection of sum of money. Upon motion warrant the opening the bank account for inspection
of the plaintiff , the trial court declared the defendant default for
failure to answer within reglementary period and authorized the
Branch Clerk of Court to receive the plaintiff evidence. To satisfy
the judgment, the plaintiff sought the garnishment of bank deposit
of the defendant B&B forest development. Accordingly a notice
of garnishment was issued by the Deputy Sheriff and served on
the said bank. In reply, the bank cashier invited the attention of Karen E. Salvacion, et. al vs. Central Bank, et. al, G.R. No.
Deputy sheriff to provision of RA 1405 which prohibited 94723.  Aug. 21, 1997
disclosure of any information relative to bank deposit.
General Rule : Foreign currency deposit are exempt from
Issue: Whether or not a banking institution may validly refuse
attachment , garnishment or any other order or process of any
to comply with a court process garnishing the bank deposit of a
court,legislative body , government agency or any administrative
judgement debtor by invoking the provision of Republic Act
body
1405
Ruling
Exception:
No. The lower court did not order an examination of inquiry into
1. Deposit by tourist or transient. As offshore banking system and
the deposit of B &B Forest development, it merely required Tan
foreign currency deposit system are designed to draw deposit from
Kim liong to inform the court whether defendant B &B Forrest had
foreign lender and investor . However if the foreigner is merely a
a deposit in China bank for the purpose of garnishment issued by it
transcient this is discouraged since the depositor only stays for a
, so that the bank would hold it intact and not allow any withdrawal
new days in the country and therefore will maintain his accont for
a short time.
The prohibition against examination on inquiry into a bank
deposit under Republic Act 1405 does not preclude its being
2. Garnishment based on equitable grounds. If garnishment is not
garnished into satisfaction of judgment. There is no real inquiry
allowed even if there is injustice or for equitable ground then it
in garnishment , and if the existence of deposit is disclosed, the
would negate article 10 of the NCC which provides that in cas of
disclosure is purely incidental to the execution process.
doubt , interpretation or application of law it is presumed that
lawmaking body intended the right and justice to prevail
Marquez vs. Desierto 359 SCRA 772 (2001)
Facts
Facts Greg Bartelli an American tourist Loured Karen
Marquez received a letter from the Ombudsman to Salvacion to his apartment. He then detained Karen for four days
produce several bank documents for purpose of inspection in up to February 7 1989 and was able to rape the child multiple
camera relative to various accounts maintained in Union Bank times. Upon arrest, the fiscal filed a case against Greg for serious
where the petitioner is bank manager.It is worth mentioning that illegal detention and four counts of rape. On the same day, the
the power of the Ombudsman to investigate and require the petitioner filed with the RTC damages with preliminary attachment
production and inspection of record is sanctioned by the 1987 against Greg Bartelli.The judge issued an order granting the writ of
Philippine Constitution , RA 6770 and other jurisprudence. preliminary attachment,FGU then issued a writ of preliminary
Marquez refused to comply with the in camera examination. attachment. Chinabank invoked 1405 as answer to notice of
Issue: Whether the order of the Ombudsman to have an in garnishment. The deputy sheriff sent a message that the
camera inspection of the questioned acocutn is allowed as an garnishment did not violate the bank secrecy since disclosure is
exception on the law on secrecy of bank deposit merely incidental to garnishment.
Ruling
Issue: Whether bank secrecy law applies.
NO . An examination of secrecy of bank deposit would reveal that Ruling
the following exception 1. Where the depositor consents in writing
2. Impeachment case 3. By court order in bribery of duty cases  Note that this is a pro hac vice case
against public official 4. The deposit is subject to litigation 5,
Unexplained wealth Section 8 of RA 3019. No . In the case at bar a 12 year old girl was lured due to the
gesture of a stranger and raped ten times and detained for four
The order of the Ombudsman to produce in camera inspection the days. When the RTC rendered a decision awarding the child
subject account with Union Bank , Julia Vargas Brach is based on
P1,000,000 from a civil case due to besmirched reputation he could information in violation of the bank secrecy act damages cannot be
not get the money due to bank secrecy act. awarded/

Note however that the application of the law depends on justice.

Hence even if Section 113 of the Bank Circular exempts form
attachment, garnishment or any other order ,process , legislative
body, government agency from garnishment this will negate article
1o of the NCC, Hence, Section 113 of the Central Bank cannot be
used by Greg Bartelli to conceal his wrongdoing BSB Group, Inc., et. al. vs. Sally Go a.k.a. Sally Go-Bangayan,
G.R. No. 168644, Feb. 16, 2010

Facts
A complaint for estafa and qualified theft was field by Bangayan
Ricardo B. Bangayan vs. RCBC, et. al. G.R. No. 149193, April 4, against the respondent which alleged that the aggregate amount
2011 issued by the company’s customer in payment of the obligation
were deposited to the personal account of the respondent with
Doctrine: Nothing in the affidavit of the BOC showed detains of
Security Bank. Hence, qualified theft was filed.
the petitioner bank account with the respondent bank was
disclosed. What was idslcosed was merely his function as an
During trial the petitioner moved for the issuance of subpoena
account officer in the respondent bank
duces tecum and ad testificadum against the branch managers of
security bank This was granted by the trial court. The respondent
Facts
filed a motion to quash arguing that the absolute confidential
Ricardo Bangayan had a savings account and a current
nature of MetroBank.This was not sustained, hence the employee
account with one of the branches of RCBC. The two accounts had
was able to testify that the respondent ran away with the checks
an automatic transfer condition wherein the checks issued by the
issued to the company by its customers
depositor are funded by any of the two accounts. The petitioner
then signed a surety agreement with the RCBC in favor of nine
Issue:
corporation. Under the Surety agreement, the funds in the account
1. Whether the testimony of Marasigan dealing with the
of the petitioner with RCBC are used as security to guarantee any
respondent Deposit account with Security Bank must be
existing future loan obligation including any and all expenses that
striked out. For violating RA 1405
these corporation may incur with the bank .
Ruling
On the day of surety agreement, two corporations
whose performance were guaranteed were issued separate
Yes. To be a subject matter of litigation is determined form the
commercial letters of credit (LBZ and peaks) Three days later,
indictment of the respondent and not from the evidence sought by
RCBC issued third letter of credit in favor of another corporation.
the prosecution. In a criminal case filed with the trial court, the
After the arrival of shipment of the first three corporation the BOC
respondent is charged with qualified theft by abuse of trust
demanded the import duties from RCBC. The RCBC
and confidence. The said information makes no factual allegation
representative called the petitioner in relation to demand of
as to the involvement of the check subject to the testimonial and
payment of import duties.
documentary evidence sought to be suppressed , neither did it
RCBC decided to put on hold the funds of the petitioner
mention the supposed bank account where the checks were kept.
account by virtue of its authority, The respondent bank refused
dawn payment from the petitioner deposit account unless there was
Hence, the bank account in the case at bar is not the subject matter
an orde from the BOC. Petiioner refused this contesting that the
of litigation .Here, the subject matter of litigation is the money
bank did not present any writ of garnishment authorizing the
that is alleged to be stolen and not money equivalent to the
freezing of the funds,
check which is to be admitted as evidence. Therefore, the
Since the shipments were not paid, the parties agreed
testimony of the bank officers serves no other purpose than to
that the BOC likewise conducted an investigation covering the
establish such account and amount kept in it. Hence, it must be
importation of three corporation that were opened through the
strike out
letters of credit issued by the RCBC. The accounting officer of the
respondent later executed a statement before the BOC on the
bank’s letter of credit. As a result, the petitioner argued that this
disclosure violates the bank secrecy act which the respondent
denied

Issue: Whether the disclosure of the RCBC to the BOC of Joseph Victor G. Ejercito vs. Sandiganbayan , G.R. Nos. 157294-
classified information regarding the identity and the nature of 95, November 30, 2006
the transaction and deposit violates the bank secrecy act Doctrine: The crime of bribery is the constitutive act of plunder
hence it falls under the exception of bank secrecy law.
Ruling
1. No. The respondent did not violate the bank secrecy act. The FACTS
petitioner claims that respondent Saria divulged confidential The Special prosecution panel filed before the
information submitted to the BOC. Nothing in the affidavit of the Sandiganbayan a request for the issuance of Subpoena directing the
BOC showed details of the petitioner’s bank account with the President of Export industry to produce the document during a
respondent bank was disclosed, If at all what was disclosed was hearing. The later also filed a request for the issuance of subpoena
merely his function as an account officer in the respondent bank duces tecum and ad testificandum directing the representative of
and identified the petitioner as the one who guaranteed payment of PCI bank to produce the account of Jose Velarde.
the importer under the Surety agreement. The failing to A motion to quash was filed by the petitioner on the
substantiate the claim that the defendant bank gave any ground that the subject bank accounts were covered under RA
1405 , hence the disclosure is illegal. Respondent argues that the
term deposit is limited to those money delivered pursuant to the conceal his identity represented himself as Jose Velarde.
creditor-debtor relationship created by the depositor and the bank . Sandiganbayan then issued a warrant against Estrada.

Issue: During trial people presented testimonial and

1. Whether the Trust account 858 is covered by the term documentary evidence to prove the allegation of information for
deposit under RA 1405 plunder , illegal use of alias and perjury. The people argued that
Ruling RA 1405 does not applyto trust account as such this only applies to
Yes. The term deposit used therein is to be understood broadly and traditional deposit. A trust account according to people may not be
not limited to account that gives rise to creditor -debtor considered as a deposit since it is separate and distinct from
relationship . The purpose of the law is to discourage hoarding so
banking practice and is not covered by the PDIC.
that in the same may be properly utilized by banks in authorized
loans to assist in the economic development in the country. Further, the people argue that an interpretation under
CA 142 and RA 1405 shows that a person who signs in a public or
Trust account No 858 is without a doubt one such account. The
trust agreement covers deposit, placement and investment of funds private transaction a name or alias other than his original name is
by Urban Bank for an in behalf of the petitioner. The money liable under CA No 142 while bank employee are bound by
deposited under Trust Account was therefore intended not merely confidentiality of bank transaction except in circumstance
to remain to be with the bank but to be deposited elsewhere, to enumerated in RA 1405. At most People argue that RA 1405
hold that this is not covered under RA 14-5 would encourage covers bank employees only and not Estrada , as the law does not
private hoarding of funds that could otherwise be invested by prohiibte Estrada from disclosing and making public his use of an
banks in other venture contrary to the policy behind the law. alias to other people.

Section 2 of the same law provides that All deposits of whatever Issue: Whether the trust accounts are covered by the term
nature with banks or banking institutin in the Philippines deposit under RA 1405 by the mere fact that there is no
including bonds issued by the Government of the Philippines, creditor and debtor relationship between the trustor and the
political subdivision and instrumentalities are considered as bank
absolutely confidential and may not be looked into except upon
written permission of the depositor, or in impeachment or upon Ruling
order of the competent court in case of bribery, dereliction of
duty of public official or in cases where the money deposited is Yes. Trust accounts are covered under RA 1405, Section 1 or the
subject matter of litigation. bank secrecy law was created to discourage private hoarding so
that the same may be properly utilized by banks in authorized loan
The word whatever nature means that any restrictive interpretation to assist in the economic development of the country. If money
of the word deposit. It is clear that the law applies not only to deposited under an account may be used by the bank for authorized
money which is deposited but also to those which are invested.
loan to third person then such account regardless of creditor and
This further shows that the law was not intended to apply only to
debtor relationship falls under the category of account which the
deposit. Hence, RA 1405 is enough to cover trust account 858.
law seeks to protect for the purpose of boosting the economic
Issue: Whether Plunder is not bribery hence it does not fall under development of the country,
the ambit of protection granted by RA 1405
Held: No. The overt act of plunder is similar to bribery in such Here, trust account No 858 is one of the same. The trust agreement
case the court cannot differentiate why these two cases cannot be between the petitioner and Urban bank provides that the trust
considered as exception under the bank secrecy law.The crime of account covers deposit placement of investment of funds by Urban
bribery and the constitutive act of plunder are crimes that are Bank for an behalf of the petitioner. The money deposited was
committed by public officer, Since Plunder is analogous to therefore not intended to merely remain with the bank but to be
bribery the exception under RA 11405 is likewise applicable to a invested elsewhere.
plunder case. Hence, the Ombudsman may conduct the
investigation Lastly, Section 2 of the same law provides thatAlll deposit of
whatever nature with the bank or banking institution in the
Philippines are herby considered as absolutely confidential and
Hence, the Ombudmsman may now proceed to conduct the same may not be examined , inquired or looked into by any person
investigation and obtain competent investigation as the bank record or government. The phrase whatever nature proscribe any
of thepetitioner are no longer protected under RA 1405 restrictive interpretation of the word deposit, moreover it is clear
that the law applies not only to money which is deposited but also
to those which is invested

People of the Philippines vs. Joseph Ejercito Estrada, et. al.,

G.R. Nos. 164368-69, April 2, 2009
Doctrine : Trust accounts are covered under RA 1405 of the Bank
Secrecy law. Section 2 provides that all accounts of whatever
nature are absolutely confidential

Facts

Two information was field against Estrada one for

plunder and the other for illegal use of alias. Estrada was alleged to
take advantage of the position in committing of the offense and to
 AMLC to inquire into the bank accounts without having to obtain a
judical order in caes where there is probable cause that the deposits
are related to 1. Kidnapping for ransom 2. Certain violation of
Comprehensive drug act 3. Hijacking and other violation 4,
Destructive arson and murder. These exception do not apply in the
case at bar.
The AMLA also provides for exception to the Bank
Secrecy act. Under Section 11 the AMLC may inquire into the
bank account upon the order of the comptent court having been
established the exception. Here the proceeding relating to bank
inquiry under AMLA is not a litigation encompassed under the
bank secrecy law. The orientation of the bank inquiry is merely to
serve as a provisional relief. Hence, even if AMLC establishes
additional exception to the Bank Secrecy act it does not men that it
dispensed with the rule that app deposit are considered absolutely
confidential

The freeze order under Section 10 and the bank inquiry order under
Section 11 are similar in that they are extraordinary provisional
relief which the AMLC may avail to prosecute money laundering
offense. Section 10 ( freeze) allows the ex parte application for
provisional relief , this is absne under r Section 11 ( bank inquiry).
Hence , AMLA does not contemplate ex parte proceeding in the
application of bank inquiry order.  There is a need for
AMLA application of bank inquiry order

A freeze order under Section 10 is one aimed to preserve the

monetary instrument or property in a way deemed as unlawful. On
the other hand, Section 11 does not necessitate any form of
Republic vs. Hon. Antonio Eugenio, G.R. No. 174629, February physical seizure, what the bank order authorizes is the examination
14, 2008 of particular deposit and investment. The money are not seized in a
Facts physical sense but are examined on particular details such as the
A series of investigation concerning the award of the holder’s record of the deposit.
NAIA 3 Contract to PIATCO were undertaken by the Compliance
and Investigation staff of the petitioner AMLC. The OSG then 2. No. Section 11 cannot be interpretated in a way that would
requested AMLC for its assistance in order to obtain more emasculate the remedy it has established to encourage the
evidence in relation to the corruption surrounding the NAIA 3 unfounded initiation of complaint for money laundering. Hencem
Project. The CIS conducted a database search on the transactions bank inquiry order can be availed of without the pre-existing case
and by that time Alvarez was charged with violation of RA 3019. under the AMLA. It does not follow that such order may be
AMLC issued a resolution to authorize its executive granted ex parte. The reason why AMLA does not generally
director to sign an application in order to inquire into the deposits sanction ex parte application was due to the nature of bank inquiry
of Pantaleon Alvarez et al in relation to violation of RA 3019. order
Under this authority, AMLC filed an application to inqure into the
deposit of Alvarez, Trinidad , Liiongson and Yong before the RTC. Republic vs. Glasgow Credit and Collection Services, Inc., G.R.
The RTC issued an order granting AMLC the authority to inquire No. 170281,  Jan. 18, 2008
and examine the subject bank account of Alvarez as the trial court Facts
is satisfied that there exist probable cause to believe that the bank Republic filed a complaint with the RTC for civil
account are related to the violation of the Anti Graft act. forfeiture of assets and issuance of TRO ofagainst bank depoit
mainted by Glasgow in CSBI. Acting on the republic’s urgent plea
On January 12, the Manila RTC issued an order for issuance of the TRO , the RTC manila issued a TRO . After the
granting Ex parte application expressing that the allegation are hearing , trial court issuedan order granting the isusance of a writ
impressed with merit and in conformity of Section 11 of RA 9160 of preliminary injunction. Summons to Glasgow was returned as
or otherwise known as AMLC. ALVAREZ argued that nothing unserved as it could no longer be found at its last knwon address.
in RA 9160 authorized AMLC to seek the authority to inquire into Trial court issued an assiled order dismissing the case
bank accounts ex parte. The day Alvarez filed its motion, the RTC based on improper vene u1, It must be filed with the RTC in Pasig
ordered the stay of enforcement. where CSBI the depositary bank of the account soguht to be
forfeited was located 2. Insufficiency of the complaint in form
Issue: and substance 3. Failure to prosecute.
1. Whether an order authorizing inquire into the examination
of bank account or investment under Section 11 of the AMLA Issue: Whether the complaint for civil forfeiture was corrctly
ex parte in nature or one that requires the notice and hearing dismissed on the ground of improper venue, insufficiency in
form nad substance and failure to prosecute.
2. Whether the bank inquiry order under Section 11 may only Ruling
be obtained upon the pre-existence of money laundering case No, The Complaint was filed with the proper venue. A petition for
already filed before the court cvil fofetiure shall be filed in any regional trial court of the judical
region where any of the money, insturment or propoerty or
Held: proceeds representing or involving an activity or to where the
1. No. As a general rule, an ex parte application of the bank inquiry money laundering offense is located provided however that
order is not authorized. However Section 11 also allows the
where all or any portion of the moneyary insturment is lcoated with it the power to extend the freeze order. AMLC interpreted
outside the Philippines, the petitin may be filed where any of the upon the order of the court to refer to the CA.
monetary instrument is located at the option of the petitioner. CA disagreed with AMLC and dismissed the petition. It
uniformly ruled that it was not vested by RA 9160 of the power to
Under Section 3 Title II , it provides that the venue of extend a freeze order issued by AMLC
the civil forfeiture case is any of the RTC or judical region where Issue: Which court has the jurisdiction to extend the effectivity
the money, insturment or property relating to unlawful activity of a freeze order
or to a money laundering case is lcoated. Pasig city is where the Ruling
acocunt sought is situated. In this case the accout sought to be CA.
forfeited is within the Natinoal Capital Region , clearly the
complaint of forfeiture can be filed in any of the RTC of the NCJR.
SEC. 7. Section 10 of [RA 9160] is hereby amended to read as
Hence, since RTC Manila is one of the RTC, it is a proper venue
follows:
for complaint of civil proceudre.

SEC. 10. Freezing of Monetary Instrument or Property. –

The Complaint is sufficient in form and substance The Court of Appeals, upon application ex parte by the AMLC
and after determination that probable cause exists that any
monetary instrument or property is in any way related to an
RA 9160, as amended, and its implementing rules and regulations
unlawful activity as defined in Sec. 3(i) hereof, may issue a freeze
lay down two conditions when applying for civil forfeiture:
order which shall be effective immediately. The freeze order shall
be for a period of twenty (20) days unless extended by the
(1) when there is a suspicious transaction report or a court.7 (emphasis supplied)
covered transaction report deemed suspicious after
investigation by the AMLC and
Section 12 of RA 9194 further provides:

(2) the court has, in a petition filed for the purpose,

SEC 12. Transitory Provision. – Existing freeze orders issued by
ordered the seizure of any monetary instrument or
the AMLC shall remain in force for a period of thirty (30) days
property, in whole or in part, directly or indirectly,
after the effectivity of this Act, unless extended by the Court of
related to said report.
Appeals. (emphasis supplied)

Since account no. CA-005-10-000121-5 of Glasgow in CSBI was

(1) covered by several suspicious transaction reports and (2) placed
The amendment by RA 9164 of RA 9160 erased any doubt as to
under the control of the trial court upon the issuance of the writ of
the jurisdiction of the CA over the extension of freeze order. It is
preliminary injunction, the conditions provided in Section 12(a) of
solely the CA which has the authority to issue a freeze order as
RA 9160, as amended, were satisfied. Hence, the Republic,
well as to extend its effectivity. The CA has exclusive jurisdiction
represented by the AMLC, properly instituted the complaint for
to extend and freeze orders previously issued by the AMLC vis a
civil forfeiture.
vis account and deposit related to money laundering activities.

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 Ret. Lt. Gen. Jacinto C. Ligot, et. al. vs. Republic, G.R. No.
evidentiary matter that may be proven during trial. The complaint, 176944, March 6, 2013
however, did not even have to show or allege that Glasgow had
been implicated in a conviction for, or the commission of, the
Facts
unlawful activities of estafa and violation of the Securities
Regulation Code.
Republic filed an ex parte application for issuance of a
freeze order with the CA against certain monetary instrument and
A criminal conviction for an unlawful activity is not a properties pursuant to Section 10 of RA 9160.This application was
prerequisite for the institution of a civil forfeiture proceeding. based on the letter of the Office of Ombudsman to the AMLC
Stated otherwise, a finding of guilt for an unlawful activity is not recommending that the latter conduct an investigation on LT Gen
an essential element of civil forfeiture.Thus, regardless of the Ligot and his family for violation of RA 9160.
absence, pendency or outcome of a criminal prosecution for the In support of this recommendation, the Ombudsman
unlawful activity or for money laundering, an action for civil attached a complaint filed against Ligot for perjury under
forfeiture may be separately and independently prosecuted and Article 183 of the Revised Penal Code and for violation of
resolved. Section 8 of RA 6713 and RA 3019. The Ombudsman alleges that
Lt Gen Ligot alleged that the assets registered in the name of
General Ligot and his family were illegally acquired. The
Ombudsman conducted an investigation as to the younger brother
Republic vs. Cabrini Green & Ross, Inc., G.R. No. 154522 June of Mrs. Ligot and concluded that the latter acted as a dummy the
Ligot Spouses and that all the properties registered in the former’s
19, 2009
name were actually owned by the spouses.
Facts
Under RA 9160 ,a freeze order issued by the AMLC is As a result, the AMCL conducted an investigation and
effective for a period not exceeding 15days unless extended upon hold that there is probable cause to show that LT Ligot violated
the order of the court. Accordingly before the lapse of the freeze Section 8 in relation to Section 11 hence AMLC directed the
order, AMLC filed with the CA various petition for extension of secretariat to issue a freeze order. Upon application , the CA issued
effectivity freeze order. ALMC invoked the jurisdiction of the CA , a freeze order against Ligot and Yamabao effective for a period of
for the latter issue a temporary restraining order or writ of twenty days.
injunction against any freeze order issued by the ALMC carried
 The freeze order over the properties of Ligot have bene in effect
since 2005 while the Civil Forfeiture case was filed only on 2011.
Hence, this means that the petitioner have not been able to access
The Republic filed an extension of the freeze order.The CA grante their properties subject to freeze order for a period of six years
the motion to extend the sme until appropriate proceeding have simply because of a freeze order that was initially intended to be a
been terminated. The petitioner argued that the CA committed pre-emptive remedy which the law does not aim to do.
grave abuse of discretion when it extended the freeze order issued
against him despite the crime not proven pr established. Republic of the Phils., et. al. vs. First Pacific Network Inc. G.R.
No. 156646 Nov. 19, 2014
Respondent
The CA can issue a freeze order upon determination that probable
Facts
cause exist showing that the monetary instrument or property
AMC received a report from Reynaldo that respondent
subject to the freeze order are related to the activity under RA
is involved in illegal securities trading and maintains a bank in
9160 and it is not necessary that a formal charge must be field
Standard Chartered bank . Three warrants were issued , the raiding
before freeze order is issued. Republic also argues that the CA
team was able to seize the document including false buy and sell
September 20 2005 resolution is final and executory and could no
confirmation slips, client file document. Upon investigation, it was
longer be challenged.
discovered that the respondent was not registered with the SEC to
Issue:
engage in the buying and selling of securities.After evaluating,
1. Whether the CA acted with grave abuse of discretion when it
AMLC found reasonable doubt that the money deposited by the
extended the freeze order
respondent was related to an illegal activity. AMLC then issued a
Ruling
service of freeze order upon First Pacific ( respondent )
1. No. ( but the period must not be for a indefinite time)

Probable Cause to Support the freeze order Before the lapse of the freeze order, AMLA requested
RA 9160 as amended: Freezing of Monetary Instrument of before the CA to extend the effectivity of the freeze order until
Property: The CA upon application ex parte by way of the AMLC proper legal actions are allowed against the respondent First
and after determination that probable cause exist that any monetary Pacific Network. The Court of appeals granted the extension
instrument or property is in way defined as unrelated activity in provided that it is not more than 30 days. AMLA appealed
Section 3 (i). The court did not sustain any merit in the claim of the
ligot that a criminal case must first be filed. AMLC argued that the extension must be more than
thirty days due to the intricacy and magnitude of the transaction
There are two requisite for the issuance of a freeze order 1. involved. The advanced technology of electronic banking enables
Application ex parte by the AMLC 2. The determination of the depositor to transfer and remove any deposit or even close the
probable cause by the CA. Probable cause is required for the account, hence there is a need to extend the period of the freeze
issuance of freeze order is different from the probable cause in order.
criminal action. This refers to facts and circumstance that will lead
a reasonable and prudent man to believe that an unlawful activity Recently, RA 10365 further amended Section 10 of RA
or money laundering offense is about to be committed or being 9160 by mandating that the CA may issue a freeze order the
committed and that the money or property subject to be frozen is in duration of which shall not exceed six months otherwise it would
any way related to the money laundering offense. Therefore, to be considered lifted. If no case is filed against the person whose
determine probable cause is based on whether bank account or account is frozen the case must be lifted
monetary instrument sought to be frozen are related in any activity
enumerated under RA 9160 Issue: Whether the freeze order issued against respondent bank
account should be further extended beyond the thirty day period
Here, based on the ex parte application of the granted by the CA and until the appropriate case has been filed
Ombudsman the petitioner itself admitted that his income came against the respondent.
from his salary as an officer. Yet the investigation revealed that his
asset is more than P50,000,0000 which is grossly disproportionate Held:
to his income as a officer. Hence, the CA was correct when it No. There is no error on the decision of the CA to extend the
found probable cause freeze order to a definite period of thirty days. The state of law and
jurisprudence at the time of the issuance of the assailed ruling of
the CA gave the appellate court discretion to extend a freeze order
only for a reasonable time which was later clarified as not
Freeze Order cannot be issued for indefinite period exceeding more than six months.
A freeze order is a relief to temporarily preserve the monetary
instrument or property that are in any way related to unlawful Section 10 RA 9160 as amended :
activity or money laundering. Under Section 10 of the AMLC the The Court of appeals may issue a freeze order which shall be
freeze order shall be for a period of 20 days unless extended. effective immediately and which shall not exceed sic months
The rules on civil forfeiture qualifies the grant of extension for depending upon the circumstance of the case provided that if there
a period not exceeding six months. is no case field against a person whose account has been frozen
within a period determined by the court, the freeze order is deemed
The freeze order is intended to have a temporarily effect it was as ipso facto lifted.
never intended to replace the actual forfeiture cases where the
provisional remedy is adjunct to the main action.Here,the AMLC prayer that the freeze order at issue be extend until proper
extension of the CA of the period was beyond the intent and legal action area allowed under RA 9160 shall have been taken
purpose of the freeze order which is solely an interim relief. The against the respondent cannot be accommodated considering that
extension of the CA boarders on inflicting punishment to the both the congress ad the court declared that freeze order cannot be
petitioner. extended for indefinite period of time
Republic vs. Bloomberry Resorts and Hotels, Inc., G.R. No.
224112, September 2, 2020
Under RA 9160, a freeze order may only be effective for a
period of six months . The court should acto n the petition to
freeze within twenty four hours from the filing of the petition.
A person whose accounts are frozen may filed a motion to lift
the freeze order within the six month period.

Facts
Bangladesh Bank Governor Atiur Rahman sought the
assistance of the Bagko Sentral ng Pilipinas Governor Armando
Tetangco regarding the loss of million of US dollars from
Bangladesh Bank Account with New York Fed. According to
Governor Rahman some of the payment transaction were made to
New York Fed in favor of RCBC. Governor Rahman asked
Tetangco to conduct an immediate inquiry into the matter and
asked help to recover money.

Upon finding of probable cause, that BRHI account related to

unlawful activity of hacking AMLA issued a resolution authorizing
the AMLA secretariat to file an ex parte petition for freeze order
against the account. The CA ordered the freeze order for thirty
days.The CA also held that based on the facts, there is a prima
facie ground to believe that BDO account is related to unlawful
activity of hacking. Hence, the CA granted application for bank
inquiry.

BRHI , upon receiving the freeze order filed an urgent motion to

lift the freeze order, while AMLC filed an urgent motion to extend
the period. The CA granted the motion to freeze. Hence this appeal

Issue: Whether the CA erred in lifting the freeze order earlier

issued against BRHI

Held:
No, A freeze order may only be effective for a period of six
months, even assuming that urgent motion for additional period of
Freeze order should have been granted the six month period has
elapsed. RA 9160 otherwise known as AMLA , provides that the
Court of appeals

may issue a freeze order which shall be effective immediately and

which shall not exceed six months depending on the
circumstance of the case. In any case, the court should act on the
petition to freeze within twenty four hours from the filing of the
petition.If the application is field a day before a non-working day,
the computation of the twenty four hours exclude the non working
day. A person whose account has been frozen may file a motion to
lift the freeze order and the court must resolve this motion before
the expiration of the freeze order. No court shall issue a TRO or
writ of injunction against freeze order except the SC.

Here the freeze order was issued by the CA on March 15 2016,

even if the Ca erred to issue an extension to the freeze, the period
of six months had already lapsed, if the petition is granted it had
been more than four years from the issuance of the freeze order.
Therefore, the claim is now moot and academic.

 Note that BDO cannot just re-freeze the account upon

the granting of the petition as it would put BRHI in an
unfair situation where the bank account is being frozen
for a transaction which happened four years ago and
where its participation in money laundering is not yet
proven