REPUBLIC v. GLASGOW CREDIT AND COLLECTION SERVICES G.R. No.

170281
18 January 2008 Corona, J.
TOPIC IN SYLLABUS: Anti-Money Laundering Act (RA 9160)  Unlawful Activities or Predicate Crimes
SUMMARY: Repiblc filed a complaint for civil forfeiture of assets against the bank deposits maintained by Glasgow in
CSBI. CSBI filed a Motion to Dismiss, alleging (among others) that the complaint was premature since there was still no
conviction for criminal violations implicating Glasgow. RTC granted MTD, by SC reversed. Complaint was not
premature. Since the account of Glasgow in CBCI was (1) covered by several suspicious transaction reports and (2)
placed under the control of the trial court upon the issuance of the writ of preliminary injunction, the conditions
provided for in RA 9160, Sec 12(a) were satisfied. A criminal conviction for an unlawful activity is not a prerequisite
for the institution of a civil forfeiture proceedings. A finding of guilt for an anlawful activity is not an essential
element of civil forfeiture.

FACTS:
 18 July 2003: Republic filed a complaint for civil forfeiture of assets against the bank deposits maintained by
Glasgow Credit and Collection Services (Glasgow) in Citystate Savings Bank Inc (CSBI).
o 8 Aug 2003: RTC-Manila issued an order granting the issuance of a writ of preliminary injunction.
 There was a lot of issue with respect to the serving of summons to Glasgow. This includes having the initial
summons “unserved” because Glasgow could no longer be found at its last address.
o Republic filed a motion for the issuance for alias summons and leave of court to serve by publication. This was
not acted upon so RTC archived the case. When it was reinstated, it directed Republic to serve the alias
summons but did not resolve the motion for leave of court (premature until a return is made on the alias
summons). The alias summons was still unserved.
 12 Aug 2005: OSG received Glasgow’s Motion to Dismiss. Grounds include: (1) lack of jurisdiction over the person,
(2) complaint was premature and stated no cause of action as there was still no conviction for estafa or other
criminal violations implicating Glasgow, and (3) failure to prosecute.
o Republic’s opposition: (1) suits is quasi in rem where jurisdiction over defendant is not a prerequisite, (2) prior
conviction for unlawful activity not a precondition to the filing of a civil forfeiture case, and (3) complaint
alleged ultimate facts sufficient to establish a cause of action.
 RTC-Manila: dismissed the case for (1) improper venue (should have been filed in Pasig, where CSBI is located), (2)
insufficiency of complaint in form and substance, and (3) failure to prosecute.

ISSUES:
1. W/N venue was proper? YES.
2. [RELEVANT] W/N complaint for civil forfeiture was sufficient in form and substance? YES.
3. W/N the Republic failed to prosecute this case? NO.
4. W/N service of summons may be done via publication? YES.

HELD:
1. Complaint was filed in the proper venue.
 First, a motu proprio dismissal of a complaint on the ground of improper venue is plain error.
 At any rate, RTC-Manila was a proper venue pursuant to the Rule of Procedure in Cases of Civil Forfeiture (AM
No. 05-11-04-SC). This is applicable because the complaint for civil forfeiture has not yet attained finality on
account of the pendency of the appeal.
o Title 3 Sec 3. A petition for civil forfeiture shall be filed in any RTC of the judicial region where the monetary
instrument, property or proceeds representing, involving, or relating to an unlawful activity or to a money
laundering offense are located.
o Since Pasig City is located within the National Capital Judicial Region, the complaint for civil forfeiture
may be filed with any RTC of the NCJR, including RTC-Manila.

2. [RELEVANT] The complaint was sufficient in form and in substance.

 Long discussion on what constitutes a proper complaint. Republic’s complaint complies with the substantial
and formal requirements provided by the Rule of Procedure in Cases of Civil Forfeiture.
SULIT PAGE 1 OF 2 CASE #111
  RA 9160 Sec 12(a) also provides “When there is a covered transaction report made, and the court has, in a
petition filed for the purpose, ordered seizure of any monetary instrument or property, in whole or in part,
directly or indirectly, related to said report, the Revised Rules on civil forfeiture shall apply.”
o IRR of RA 9160, Rule 12.2: When Civil Forfeiture May be Applied. - When there is a suspicious transaction
report or a covered transaction report deemed suspicious after AMLC investigation, and the court has,
in a petition filed for the purpose, ordered the seizure of any monetary instrument or property, in whole or
in part, directly or indirectly, related to said report, the Revised Rules of Court on civil forfeiture shall apply.
 Thus, there are two conditions when applying for civil forfeiture:
(1) when there is a suspicious transaction report or a covered transaction report deemed suspicious after
investigation by the AMLC and
(2) the court has, in a petition filed for the purpose, ordered the seizure of any monetary instrument or
property, in whole or in part, directly or indirectly, related to said report.
o It is the preliminary seizure of the property which brings it within the reach of the judicial process. It is
within the curt’s possession when it is submitted to the process of the court.
 When the writ of preliminary injunction was issued on 8 Aug 2003, the CSBI account subject of such
WPI was removed from the effective control of Glasgow or CSBI.
 Thus, the Republic met the 2 conditions enumerated above, and properly instituted the complaint for
civil forfeiture.
 Whether or not there is truth in the allegation that the CSBI account contains the proceeds of unlawful activities
is an evidentiary matter that may be proven during trial. The complaint, however, did not even have to show or
allege that Glasgow had been implicated in a conviction for, or the commission of, the unlawful activities.
o A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture
proceeding. A finding of guilt for an unlawful activity is not an essential element of civil forfeiture.
o Regardless of the absence, pendency or outcome of a criminal prosecution for the unlawful activity or for
money laundering, an action for civil forfeiture may be separately and independently prosecuted and
resolved.

3. No failure to prosecute on the part of the Republic.

 No pattern or scheme on the part of the Republic to delay disposition of the case, or a wanton failure to observe
the mandatory requirement of the rules.
 While there was a delay in the proceedings, it could not be ascribed to the Republic.
o That Glasgow's whereabouts could not be ascertained was not only beyond the Republic's control, it was
also attributable to Glasgow which left its principal office address without informing the SEC or any official
body of its new address.
o Also, by 8 Oct 2003, the RP was already seeking leave of court to serve summons by publication.

4. Service of summons may be done by publication.

 Forfeiture proceedings, including civil forfeiture proceedings under RA 9160, are actions in rem.
o In actions in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to
conferring jurisdiction on the court, provided that the court acquires jurisdiction over the res.
o Summons must nonetheless be served upon the defendant in order to satisfy the requirement of due
process – and service of these summons may be made by publication.

PETITION GRANTED.
RTC DECISION SET ASIDE. (MOTION TO DISMISS DENIED)
COMPLANT BY REPUBLIC IS REINSTATED.
CASE IS REMANDED TO RTC-MANILA.

SULIT PAGE 2 OF 2 CASE #111